- Created by: sophie98campbell
- Created on: 07-04-17 19:42
Value of setting marketing objectives
A marketing target/goal an organisation hopes to achieve.
Steer direction of business. Operating business w/o knowing objectives like driving car w/o knowing where you want to go. Degree of success can be achieved w/o setting marketing objectives, but involves relying on chance - not a good idea.
MO's must be compatible w/ overall objectives of company - cannot be set only by marketing dept.
Should be quanitfiable + measurable + should have a time frame.
Eg for Nestle - to achieve a 9% increasein sales of Kit Kat by end of next year
Value of setting MO's - sales volume + value
Setting sales volume targets can be important due to high amount of fixed costs a business can build up. Eg BMW - Increase number of BMW 3 series sold in Chinda from 250,000 to 400,000 over next 12 months. High fixed costs of operating spread across greater number of units of output - reducing fixed costs per unit. Lower unit costs - wider profit margins, which will give MBW opp to increase research + development budgets.
Sales value - Nike. No1 supplier of football boots + kit (objective). At time (1996), Nike minor player in this area, Adidas no1. In 1996, Nike generated sales of $40m from football. 2014, $2,000m. Outsold Adidas in German homeland
Value of setting MO's - market size
If large market share, may worry boosting share furture may bring investigations from Competition + Markets Authority. Best way to achieve further growth - encouraging growth in market sector as whole.
Business may sponsor research by academics.
Eg Wrigley's - In UK, 90% share chewing gum sales. By boosting size of market, boosting own sales.
Value of setting MO's - market + sales growth
For plc's especially, pressure from outside shareholders forces them to keep pushing for more growth. Presses company to find new opps + may lead marketing dept to overreach, eg by 'stretching' brands by developing more + more variants based on single brand. Eg Nestle - stretch Kit Kat by adding varieties eg Cookie Dough.
Growth treated with caution. Valid objective, but can cause own difficulties. Eg Ted Baker - sales gew annually (2003-2014). Opened opps eg opening shops in Japan, America + China. Never overstretched itself. Tesco - America - overstretching.
Value of setting MO's - market share
Largely controlled by internal factors - success/failure of marketing dept. Need to be cautiously optimistic, eg aiming to push brand eg Snicjets frim 2.5% share to 3% share in next 2 years. Ambitious, but conceivable. As UK chocolate market £3.6bn, increasue would generate annual sales of £108m - making marketing budges affordable (around £10m).
Value of setting MO's - brand loyalty
Exists when consumers repeat-purchase brand rather than switching between brands. Widely agreed more expensive to find new customer than keep existing customer happy, so BL crucial for achieving high profit margins.
Marketing objectives - internal influences
- New corporate objectives set by new chief executive - may want to boost sales volume, perhaps in response to perceived short-term opp eg 2016 Brazil olympics, or may be marketing requirement to strengthen brand loyalty
- Development of innovative product - Apple, iPod 2001, ended up forcing entire business to refocus from IT to consumer electronics. Marketing dept needed to gain understanding of new consumer, set objectives based on this
- New financial objectives - if new finance director demands higher profit margins, will have impact on marketing depts objectives + decision making
Markting objectives - external influences
- Changes in fashion/consumer tastes - basis for banks' selling + marketing programmes once resred on high street branches.
- Chaning competitive pressures - eg Colgate world's biggest toothpaste maker, 45% global market share. Fiercest competitor recently Oral-B, partly through digital advertising. Colgate had to rething marketing, deciding to increase budget for digital advertising.
- Changing economic pressures - 2013 + 2014 continuing pressure on real incomes gave Aldi + Lidl huge UK market share bost. Forced Morrisons to rethink marketing objectives - went for 'we're cheaper' approach -> delaying to cut operating costs.
- Changing natural environment - growing consensus about global warming, more companies placing environmental greenness on list of marketing objectives.