Welcome to Marketing Management!
In this chapter, we are diving into Setting Marketing Objectives. Think of marketing objectives as the "GPS" for a business. Without them, a company might have a great product but no idea where they are going or how to measure if they've arrived!
Don't worry if some of these terms seem like business-speak at first. We will break them down using simple examples like pizza shops and smartphone brands to make sure it all clicks. By the end of this, you’ll understand why businesses set these goals and exactly what they look like.
What are Marketing Objectives?
A marketing objective is a specific target or goal set by the marketing department. These goals help the business achieve its overall corporate objectives (the big goals for the whole company).
Example: If a company’s corporate objective is to become the most profitable tech firm, the marketing objective might be to "increase brand loyalty by 20% over the next year."
Why bother setting objectives?
Setting goals isn't just about "wishing" for success. It provides direction, helps coordinate different teams, and gives the business a way to measure success at the end of the year. It also helps motivate employees because they know exactly what they are working towards.
Quick Review: Objectives give a business a "target" to aim for. Without them, marketing is just guesswork!
Key Marketing Objectives You Need to Know
The AQA syllabus identifies six main types of marketing objectives. Let's look at each one:
1. Sales Volume and Sales Value
These are two different ways of looking at how much you sell:
- Sales Volume: The number of units sold (e.g., selling 500 pairs of trainers).
- Sales Value: The total amount of money received from sales (e.g., \( 500 \text{ pairs} \times \$60 = \$30,000 \)).
Analogy: If you have a lemonade stand, Volume is how many cups you sold. Value is how much money is in your jar at the end of the day.
2. Market Size
Market size is the total value or volume of sales in the entire market. Businesses might set an objective to move into a market that is growing in size (like the electric car market). If the "total pie" is getting bigger, there is more opportunity for everyone.
3. Market and Sales Growth
- Market Growth: The percentage increase in the size of the whole market.
- Sales Growth: The percentage increase in the sales of a specific business.
Businesses often aim for their sales to grow faster than the market. If the market grows by 5% but your sales grow by 10%, you are winning!
4. Market Share
Market share is the percentage of total sales in a market that is held by one business.
The formula for market share is:
\( \text{Market Share} = \frac{\text{Sales of one business}}{\text{Total sales in the market}} \times 100 \)
Example: If total pizza sales in a town are \$100,000 and "Pete’s Pizza" sells \$25,000, Pete has a 25% market share.
5. Brand Loyalty
Brand loyalty is when customers keep coming back to buy from the same brand again and again. It is much cheaper to keep an old customer than to find a new one! Objectives here might focus on increasing "repeat purchases" or improving customer satisfaction scores.
Memory Aid: The "S.S.S.G.V.L" Checklist
Share (Market Share)
Size (Market Size)
Sales Volume
Growth (Sales/Market)
Value (Sales Value)
Loyalty (Brand Loyalty)
Key Takeaway: Businesses don't just want "more sales." They use specific metrics like market share and brand loyalty to see exactly how they are performing against competitors.
The Value of Setting Marketing Objectives
Setting these objectives adds value in several ways. Don't let the word "value" confuse you; it just means "why is this useful?"
1. Decision Making: When managers have clear objectives, they can make better choices. If the goal is "Brand Loyalty," they might spend money on a better customer service app. If the goal is "Sales Volume," they might choose to run a "Buy One Get One Free" promotion.
2. Coordination: It ensures the Marketing team, the Finance team, and the Operations team are all on the same page.
3. Performance Review: At the end of the year, the business can look at the numbers. Did we hit the 15% market share target? If yes, great! If no, why not?
Did you know? Many businesses use the SMART acronym for objectives (Specific, Measurable, Achievable, Realistic, Time-bound). While AQA doesn't explicitly list it in this section, it's a great "extra" to remember for your exams!
Influences on Marketing Objectives
Why does one business choose "Market Share" while another chooses "Brand Loyalty"? It depends on several factors:
Internal Influences (Inside the business)
- Finance: Does the business have enough money to run a massive ad campaign to increase market share?
- Human Resources: Do the staff have the skills to improve brand loyalty through better service?
- Corporate Objectives: If the main company goal is "Survival," the marketing objective will likely focus on immediate Sales Value rather than long-term Brand Loyalty.
External Influences (Outside the business)
- Market Conditions: If the economy is in a recession, people have less money. A business might change its objective from "Growth" to just maintaining its current "Market Share."
- Technology: The rise of social media might make "Brand Loyalty" a more achievable objective through direct engagement with customers.
- Competitors: If a new rival enters the market, your objective might shift to "defending market share."
Key Takeaway: Marketing objectives don't exist in a vacuum. They change based on what’s happening both inside the office and out in the real world.
Common Pitfalls to Avoid
Mistake 1: Confusing Sales Volume and Sales Value. Remember, volume is "how many," and value is "how much money." If you lower your price, your volume might go up (more people buy), but your total value might go down if the price drop was too big!
Mistake 2: Forgetting the Competition. You can have great sales growth, but if your competitors are growing even faster, your market share is actually shrinking. Always look at the big picture!
Quick Review Box:
- Objectives = Targets.
- Sales Value = Price x Quantity.
- Market Share = Your slice of the pie.
- Internal influences = Finance, HR, Corporate goals.
- External influences = Economy, Tech, Competitors.
Don't worry if this seems like a lot of definitions! The best way to learn these is to apply them to brands you know. Next time you see an Apple ad or a McDonald's deal, ask yourself: "Are they trying to increase their Volume, or are they building Brand Loyalty?"