3.1.1 S ETTING MARKETING OBJECTIVES AQA Business 3 D ECISION MAKING TO IMPROVE MARKETING PERFORMANCE What are the similarities and differences between these 2 markets? What do you think are the marketing objectives of these two businesses?

3.1.1 *S ETTING MARKETING OBJECTIVES  In this topic you will learn about  The value of setting marketing objectives  External and internal influences on marketing objectives and decisions

M ARKETING O BJECTIVES Corporate Objectives Functional Objectives Marketing Objectives The targets that the marketing function of a business wants to achieve in a given time period.

*M ARKETING O BJECTIVES  Marketing objectives are likely to be informed by research and potentially constrained by budgets  They will be used to select the marketing strategy and develop a marketing plan  Marketing objectives may focus on: 1. Sales volume and value 2. Market size 3. Market and sales growth 4. Market share 5. Brand loyalty

M ARKETING OBJECTIVES 1. Sales volume and sales value  Sales volume is the amount of sales expressed as a number of units sold e.g. 20 tonnes of wool  Sales value is the amount of sales expressed as the total sum of money spent by consumers e.g. £3 million expenditure on clothing With reference to the supermarket and retail industries explain what is meant by the terms sales volume and sales value. Would it be possible for a business to set an objective to increase sales value whilst reducing sales volume?

M ARKETING OBJECTIVES 2. Market size is the total sales value or sales volume in a given market  Market size can be calculated as:  Number of units sold x price  e.g. If there are 2 million cars sold at an average price of £ then the market size is (2 million x £15 000) £30 billion

M ARKETING OBJECTIVES  3. Market and sales growth is the percentage increase in the size of the market by value or volume over a period of time  Growth can be calculated as:  Change in size of market/original size x100  e.g. If the fashion market grows from £30 billion to £33 billion it has grown by (£3 billion /£30 billion) x 100) 10% What is the growth in the automotive industry forecast to be between 2012 and 2017?

M ARKETING OBJECTIVES  4. Market share is the proportion of total market sales that a firm has  Market share can be calculated as:  Business A sales/market sales x 100 Analyse the benefits to a firm such as Facebook of increasing market share. Why might any business set an objective of maintaining or increasing market share?

M ARKETING OBJECTIVES  5. Brand loyalty exists when customers keep returning to buy a recognised brand  Branding is a promotional method that involves the creation of an identity for a business that distinguishes it and its products from competitors

I N PAIRS  Prepare a short presentation about the confectionery market  Show your understanding of all the terminology covered under marketing objectives Mondelez wins with share bags but Mars suffers after downsizing

I NTERNAL I NFLUENCES ON M ARKETING OBJECTIVES  Finance  Marketing budget  Cash flow targets Timing and quantity of sales  Return on investment targets Revenue is generated through marketing activities  HR  Are staff trained to respond to marketing activities? Why would a business want to plot marketing expenditure against sales? What would you expect the correlation to be?

I NTERNAL I NFLUENCES ON M ARKETING OBJECTIVES  Operational issues  Ability to meet demand Little point in generating increased demand if stocks are not available  Implementation of marketing decisions Ability to physically produce a new or changed product  Logistics of a new market Distribution and stock issues  Corporate objectives  Always the driving force behind other functional objectives Why is it important for the marketing function to understand capacity utilisation?

E XTERNAL I NFLUENCES ON M ARKETING OBJECTIVES  Competitors’ actions  Marketing budget  Promotional activities  Pricing policies  Product development  Aggressive marketing  Market factors  Degree and relative power of competitors  Social factors  Legislation  Demographics

E XTERNAL I NFLUENCES ON M ARKETING OBJECTIVES  Technological change  E commerce  Digital marketing  Social media  Global markets  Production capabilities  Ethical and environmental influences  Consumers’ expectations  Pressure groups How have ethical and environmental influences impacted on the marketing objectives of Nestle?

3.1.1 S ETTING MARKETING OBJECTIVES  In this topic you have learnt about  The value of setting marketing objectives  External and internal influences on marketing objectives and decisions