Download Marketing planning - setting marketing objectives

Marketing strategies and objectives
Marketing planning - setting marketing objectives
Introduction
Objectives set out what the business is trying to achieve.
Objectives can be set at two levels:
(1) Corporate level
These are objectives that concern the business or organisation as a whole
Examples of “corporate objectives might include:
• We aim for a return on investment of at least 15%
• We aim to achieve an operating profit of over £10 million on sales of at least
£100 million
• We aim to increase earnings per share by at least 10% every year for the
foreseeable future
(2) Functional level
e.g. specific objectives for marketing activities
Examples of functional marketing objectives” might include:
• We aim to build customer database of at least 250,000 households within the
next 12 months
• We aim to achieve a market share of 10%
• We aim to achieve 75% customer awareness of our brand in our target markets
Both corporate and functional objectives need to conform to the commonly used
SMART criteria.
The SMART criteria (an important concept which you should try to remember and
apply in exams) are summarised below:
Specific - the objective should state exactly what is to be achieved.
Measurable - an objective should be capable of measurement – so that it is
possible to determine whether (or how far) it has been achieved.
Achievable - the objective should be realistic given the circumstances in which it
is set and the resources available to the business.
Relevant - objectives should be relevant to the people responsible for achieving
them.
Time Bound - objectives should be set with a time-frame in mind. These
deadlines also need to be realistic.
Marketing strategies and objectives
Marketing planning - the link with strategic planning
Introduction
Businesses that succeed do so by creating and keeping customers. They do this by
providing better value for the customer than their competitors. Marketing
management constantly have to assess which customers they are trying to reach
and how they can design products and services that provide better value
(“Competitive advantage”).
The main problem with this process is that the “environment” in which businesses
operate is constantly changing. So a business must adapt to reflect changes in the
environment and make decisions about how to change the marketing mix in order
to succeed. This process of adapting and decision-making is known as marketing
planning.
Where does marketing planning fit in with the overall strategic planning
of a business?
Strategic planning (which you will cover in “Using objectives and strategy”
section 3.1, pages 1 to 7 of your textbook) is concerned with the overall direction
of the business. It is concerned with marketing, of course. But it also involves
decision-making about production and operations, finance, human resource
management and other business issues.
The objective of a strategic plan is to set the direction of a business and
create its shape so that the products and services it provides meet the
overall business objectives.
Marketing has a key role to play in strategic planning, because it is the job of
marketing to understand and manage the links between the business and the
“environment”.
Sometimes this is quite a straightforward task. For example, in many small
businesses there is only one geographical market and a limited number of products
(perhaps only one product!). However, consider the challenge faced by marketing
management in a multinational business, with hundreds of business units located
around the globe, producing a wide range of products. How can such management
keep control of marketing decision-making in such a complex situation? This calls
for well-organised marketing planning.
Marketing strategies and objectives
What are the key issues that should be addressed in a marketing
strategy?
The following questions lie at the heart of any marketing (or indeed strategic)
planning process:
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•
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Where are we now?
How did we get there?
Where are we heading?
Where would we like to be?
How do we get there?
Are we on course?
Why is a marketing strategy essential?
Businesses operate in hostile and increasingly complex environments. The ability of
a business to achieve profitable sales is impacted by many external factors, many
of which are inter-connected. It makes sense to try to bring some order to this
chaos by understanding the commercial environment and bringing some strategic
sense to the process of marketing products and services.
A marketing strategy is useful to many people in a business. It can help to:
• Identify sources of competitive advantage
• Gain commitment to a strategy
• Get resources needed to invest in and build the business
• Inform stakeholders in the business
• Set objectives and strategies
• Measure performance
Marketing strategies and objectives
Marketing objectives set out what a business wants to achieve from its marketing
activities. They need to be consistent with overall aims and objectives of the
business. They also provide an important focus for the marketing team.
What makes a good marketing objective? It is often said that an effective
marketing objective meets the SMART criteria:
Some examples of marketing objectives which meet these criteria would be:
• Increase company sales by 10% in 2011.
• Achieve 25% market share within the smartphone market for I-phone 4 within 2
years of launch.
• Increase the percentage of customers who rate service as “excellent” from 80%
to 85% within 18 months at Premier Inn.
Marketing strategies and objectives
It is important that marketing objectives and marketing plans support the overall
objectives of the business. Below is an example of how business objectives
translate into marketing objectives and activities:
It is also important to note that beyond internal factors influencing the marketing
objectives external factors can also have an impact. The three key external factors
are as follows:
1) Competitors’ actions. For example if Tesco’s launch a new sales
promotion on their finest range how will its leading rivals respond?
2) Technological change. For example Apple launches a new I-pad with
new features each year how will this affect the marketing objectives of rival
tablet manufacturers?
3) Market factors. For example the economic climate (business cycle), social
change (i.e Fair trade issues), legislation (when and where and how
products can be promoted) and lastly changes in consumer lifestyles and
buying habits.