Marketing objectives are the firm's defined and measurable aims for a given period. As with any other form of objective they must support the overall corporate objectives.
Marketing objectives, as with other objectives, need to be achievable and realistic. They will be based on an analysis of the marketing audit that has taken place. This, along with the corporate objectives will help the firm identify which products should be sold in which markets. From the identification of marketing objectives, the firm can then develop a marketing strategy. This will determine how they achieve these objectives. It is important not to confuse marketing objectives and marketing strategy.
Let's look a little deeper into what makes up the marketing objectives. Remember they are the long-term marketing goals of the organisation. Normally, they focus on the following:
- Market size and share - to increase market share or sales.
- Position in market - to focus on a particular section (segment) of the market and note its characteristics.
- Product range and innovation - to introduce new products to the range.
- Developing brand loyalty - to develop ways of gaining customer loyalty and repeat purchases.
- Aiming to survive to build a customer base that is big enough to make the business secure.
- Widening product appeal - to move into new sections (segments) of existing markets or enter new markets.
- Corporate image - to use marketing to convey a certain corporate image. For example, the firm may stress the ethical nature of the business or a degree of environmental responsibility.
- Diversification - developing new products in new markets.
Market leadership and competitive advantage
A key objective may be to become market leader i.e. the largest single player in the market. If the firm is the market leader, then they can determine the pace and direction of the market and act as the benchmark against which others view their products. The firm can then aim to expand the market and as a result increase their share of the market. This will be built into competitive advantage, which is a combination of the following:
- Selling what is considered to be the best product in the market.
- Providing features that competitor products do not possess.
- Being able to gain maximum advantages of economies of scale, so operating at the least cost point. It is now widely accepted that, in some markets, a certain critical mass is needed in order to be competitive.
- Being protected by good patents onour products and other legal devices, such as copyrights on our ideas.
- Having excellent market information to provide a basis for future marketing actions and control of markets. This allows us to be proactive to gain 'first mover advantage', by being the first to sell a product or service that customers want.
Few products can enjoy the luxury of being market leaders. Most products will be in the category known as challengers. These will adopt strategies that aim to increase market share:
- Setting aggressive pricing strategies.
- Being innovative.
- Aiming to push quality and let this be known.
- Improving and developing distribution channels.
- Hitting hard with advertising.
- Getting into new markets.
The remaining category contains the market followers. These tend to select what they do well and follow based on the market success of others. They may come later into the market with 'me-too' products. These often are refined versions of existing products, sold at lower prices as the price does not need to cover high research and development costs.
Setting marketing objectives does not mean they will be achieved, especially if the market is dynamic. External and internal factors may constrain performance:
- Competitor behaviour - competitors may amend their marketing mix and/or develop new products.
- Changing economic conditions - these may be positive or negative for the firm depending on what it produces. For example, low priced goods may do well in a recession, whereas demand for luxury items is likely to fall.
- Tastes and fashions - Fashion items are transitory and tastes can change dramatically in the short term. This may be the result of some good or bad news story or simply because the market believes it is time for a change.
- New governments will come into power with their own agenda. This is likely to be supported through spending plans and supporting legislation. Cuts in public spending can have significant effects on suppliers in the market, especially in developed countries where the public sector represents a high proportion of national income.
- Finance - marketing plans are normally expensive. These funds are generated from sales revenue for the most part, so any fall in demand will negatively affect the marketing budget.
- Human resources - labour turnover may reduce the skills base of a business which will affect levels of service and quality. Recruitment and training are expensive and time consuming and this may reduce the ability of the firm to meet its marketing objectives.
- Costs - unexpected increases in energy and material costs will affect the marketing mix, in particular price.
Markets are unpredictable and no business can predict the future. There will always be risk, but what firms will seek to do is to reduce that risk, by increasing knowledge. One way of minimising risk is through effective market research.