Marketing objectives
Objectives are what we attempt, or wish, to achieve. As should always be the case, the marketing objectives of a business should relate to the hierarchy of objectives that the enterprise has. The hierarchy of objectives is:
mission statement;
long-term objectives;
short-term objectives;
departmental objectives;
set strategy;
set tactics.
The marketing objectives should come under the heading of departmental objectives and they should reflect the aims of the whole organization and attempt to aid the achievement of the objectives above them in the hierarchy. The marketing objectives are the outcomes that an organization is trying to attain through its marketing.
The long- and short-term objectives of the business will have an influence on the marketing objectives. For example, if a firm is attempting to maximize profits, then the emphasis of the marketing strategy will reflect this. In the same way, if a firm is attempting to enter a market and gain a sizeable market share, then its marketing objectives will be different from the previous example.
It is fair to say that whatever the greater aims of an organization, its marketing objectives will normally be achieved through an appropriate blending of marketing variables. These make up the marketing mix. Marketing objectives would normally involve six aspects and we can look at each of these in turn.
Market segmentation
The marketing objectives of a business ought to include an analysis of which market segments the firm wishes to operate in and which market segments they might aim for in the future. It is unusual for a firm to be large enough to attempt to satisfy all of a market, unless the market is a relatively small, usually specialist, one. Because of this, firms usually identify their prime market segments and one of their objectives would be to enter those segments. Thus, a shoe company may decide to aim at the sports shoe and leisure wear segments of the shoe market. They may hope, in time, to move into the work boots segment.
Market share
Once markets, or market segments, have been identified, then firms will normally set objectives relating to the amount of market share that they might hope to gain. Thus, the shoe firm above might set themselves a target of achieving 5% of the sports shoe market and 10% of the leisure shoe market within a period of three years. Obviously, if these market-share objectives are achieved, then new ones emerge. The firm will have to decide whether to attempt to maintain its share, increase the share or move into a new market.
Product development and product range
Firms must set objectives relating to the type, and range of products or services that they wish to develop. This will give them specific areas upon which to focus. In the beginning, our shoe firm might decide to try to develop three different styles of sports shoe and a range of beach shoes. In some ways, the more specific the product development, the more the market is being segmented.
Price versus quality analysis
Objectives may be set balancing the quality of the product against the price for which it can be sold. Quality will obviously have an effect upon cost and this, in turn, affects price. Put the other way around, the price that a business thinks it can get for a product may put a restraint on costs and quality. For example, an objective of the shoe firm may be to make the best quality pair of training shoes that can be sold below a price of £30. No-one would pretend that they would be the best shoes on the market, but the point would be that they were the best quality available at that price.
Sales performance, revenue and profit
Marketing objectives may be set relating to sales (in either volume or revenue terms), revenue gained from specific products or profit gained from particular products.
Distribution strategy
Objectives may be set in terms of how well distributed, or 'placed1, the product is going to be. A large pharmaceutical firm may aim to have its products in every chemist shop in the country within a space of two years, or a coffee shop chain may aim to have an outlet in every town with a population over 20,000 in the South East of England.
Segmenting the marketing
Market segmentation is a vital element of marketing. It is customer orientated and is thus consistent with the concept of marketing. It occurs when the total demand in a market is analysed, so that specific sets of buyers, with distinct characteristics, can be identified.
Once this has been done, then it is possible to design products and services that will apply directly to specific market segments. After this, it is possible to design marketing plans that will then aim the specific products directly at the segments chosen. The act of market segmentation enables organisations to: