Unit 3.1 - Setting Marketing Objectives

Marketing function

Provides the link between the customer and the business. Requires marketing managers to understand the nature of the market to know how est to convince customers to purchase from the business

A market

Where buyers and seller meet, involved a mutually beneficial transaction between buyers and sellers

Relationship marketing

Approach to marketing in which a company seeks to build long term connections with its customers by providing consistent satisfaction. Focus on customer retention rather than one off sales

Process of marketing decision making

Set marketing objectives

Analyse marketing data

Make marketing decisions

Implement the decision

Review

The same as general decision making process but of course focused on functional area of marketing

Process of marketing decision making (diagram)

Business ethics

Refers to whether a business decision is perceived as morally right or wrong

How can business ensure its marketing is ethical

Ensure the product is as advertised

Avoid spamming customers

Ensure all information is factual

Avoid advertising for harmful products or producing them

Avoid aiming products at vulnerable people / children

Make all fees / prices clear

Avoid false advertising

Avoid misleading sales

Charge a fair price

Possible marketing objectives

- sales volume and sales value

- market size

- market and sales growth

- market share

- brand loyalty

Sales volume

The number of units sold by the business over a period of time i.e 50,000 pairs of shoes, 5 million tonnes of steel

Sales value

The monetary worth of sales made by a business over a period of time (how much customer have spent on the product) i.e £50,000 worth of sales

Sales growth

The increase in sales volume or value of sales over a given period of time i.e sales volume to increase by 5%

Sales growth formula

(Change in sales/original sales) x 100

i.e 2024 sales = £50,000 2025 sales = £60,000

Change from £50,000 to £60,000 = +£10,000

(£10,000/£50,000) x 100 = 20% change in sales value

Factors influencing possible rate of sales growth and target

- Overall market growth i.e higher market growth overall = likely higher growth target for business

- Current level of sales - easier to have higher increases in sales from a smaller amount

- Type of business

- Size of business

Market share

Measures the sales of one brand or business as a percentage of total market sales in a given period

Market share formula

(sales of product/total market sales) x 100

Why a business wants relatively high market share

- Relatively high sales and therefore possibly profit

- Relatively high outputs - may give the business power over suppliers

- Relatively high prominence in the market - raise the profile, strengthen the brand and make launching new products easier

Brand loyalty

Customers who return to use the business again - brand loyalty can be measured by customer retention

Benefits of creating a strong brand

- Increased customer loyalty - cheaper to retain customers then acquire new ones

- Charge a higher price

- Recognition for new product developments and launches

- Easier to gain distribution through retailers

- May attract publicity or endorsement making promotion cheaper

Internal influences on setting marketing objectives

- Overall strategy of the business (corporate objectives)

- The ambitions/attitudes of the managers

- The existing position of the business

- Finance

- The amount the business can produce - productive capacity

- The employees of the business - skill set

- Other functional areas

External influences on setting marketing objectives

PESTLE-C

Political/legal - i.e packaging, promotion or distribution restrictions, changes in trade blocks (EU)

Economic - Real incomes, globalisation, interest rates, employment

Social - Demographic changes, lifestyles, urbanisation, people beliefs and morals change, fashion and tastes

Technological - Communication, tracking customers, big data, reviews, social media, e-commerce

Competition - reacting to competitors promotion and pricing, more competition = more pressure

Globalisation

Increased interconnectedness and interdependence of world economies - for businesses this generally means increased trade between countries and internationalisation of businesses