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The value of setting marketing objectives • Businesses must set marketing objectives to determine what they must do in their marketing strategy to help achieve their overall company objectives. • Marketing objectives: The specific goals/targets of the marketing department. They must be in line with the firm’s overall corporate objectives. Discuss potential examples of marketing objectives a firm may set. Increase sales volume and sales value Brand image and awareness Market and sales growth Increase market share Build brand loyalty 1 What are the similarities and differences between these 2 markets? What do you think are the marketing objectives of these two businesses? Marketing Objectives • Marketing objectives are likely to be informed by research and potentially constrained by budgets • Marketing objectives may focus on: • Sales volume and value • Market size • Market and sales growth • Market share • Brand loyalty Sales volume and sales value Would it be possible for a business to set an objective to increase sales value whilst reducing sales volume? • Sales volume is the amount of sales expressed as a number of units sold • e.g. 20 tonnes of wool • Sales value is the amount of sales expressed as the total sum of money spent by consumers • e.g. £3 million expenditure on clothing With reference to the supermarket and retail industries explain what is meant by the terms sales volume and sales value. Market size • Total sales value or sales volume in a given market • Market size can be calculated as: • Number of units sold x price • e.g. If there are 2 million cars sold at an average price of £15 000 then the market size is (2 million x £15 000) £30 billion Market and sales growth • The percentage increase in the size of the market by value or volume over a period of time • Growth can be calculated as: • Change in size of market/original size x100 • e.g. If the fashion market grows from £30 billion to £33 billion it has grown by (£3 billion /£30 billion) x 100) 10% What is the growth in the automotive industry forecast to be between 2012 and 2017? Market share • The proportion of total market sales that a firm has • Market share can be calculated as: • Business A sales/market sales x 100 Analyse the benefits to a firm such as Facebook of increasing market share. Why might any business set an objective of maintaining or increasing market share? Marketing objectives • Brand loyalty exists when customers keep returning to buy a recognised brand • Branding is a promotional method that involves the creation of an identity for a business that distinguishes it and its products from competitors Activity EasyGym is run in the same way as EasyJet. Customers are offered a very basic, low-cost service at a very low price. EasyGym is an example of how much an organisation’s corporate aims can limit its scope for marketing strategies. Its philosophy is based on minimising costs through eliminating unnecessary expenditure. This allows the firm to charge low prices to customers. Marketing costs must also be minimised. Ryanair and Primark are companies that operate on a similar philosophy. 1. Select two marketing objectives that you believe would be unsuitable for budget companies such as Easy jet/Ryanair. Explain why you believe this. 2. Select three marketing objectives that you believe would be suitable for budget companies such as Easy jet/Ryanair. Explain why you believe this. Marketing objectives: Group activity In pairs you must decide on a new company. Some ideas could include, a T-shirt or clothes brand, mobile phone and tablet or PC firm, drinks company, etc. Group tasks: 1. Decide on a brand name and company type. 2. Who would your main rivals be? 3. Decide who the target audience would be and why 4. What would your marketing objectives be? Set at least 5. 5. What marketing methods would you use to reach and appeal to your target audience and establish brand loyalty? Research task: Research online the cost of retaining customers compared with attracting new customers.