3.1 Setting marketing objective notes

Question 1

What is a businesses marketing function?

Answer 1

It provides the link between the business and the consumer.

Question 2

What exchange does marketing normally involve?

Answer 2

• Marketing involves a mutually beneficial exchange, the business provides a good or service in exchange for something else- generally money.
• The process should be beneficial to both sides!

Question 3

Who does marketing aim to satisfy and what does this involve?

Answer 3

• Aims to satisfy or ideally delight customers so they want to come back!
• It is about building a relationship with customers so they are loyal to your organisation and will return for more and be willing to try other products offered rather than a one-off transaction!

Question 4

What is “relationship marketing”?

Answer 4

Marketing which attempts to build a long term partnership with customers, it aims to retain customers and build the connection with the business.

Question 5

What financial products will a bank want you to buy over time?

Answer 5

Savings account

Borrowing

Insuring your house and possessions

Buying shares

Changing currency

Question 6

What did philip Kotler define marketing as?

Answer 6

“the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer value.”

Question 7

Explain the reasons behind Philip Kotlers definition of marketing.

Answer 7

• A science- because it is data driven- decisions are based on evidence.
• An art because it has a creative element towards it.
• It involves choosing the right target market.
• About building relationships so that customers are retained and end up buying more over time.
• Involves developing a product that is better value for money than rivals and being able to communicate and deliver this.

Question 8

What does the marketing process involve?

Answer 8

• Set marketing objectives
• Analyse marketing data
• Make marketing decisions
• Implement decisions
• Review

Question 9

When setting marketing objectives, what do they need to ensure when selling the product?

Answer 9

• The right product

IS

• Sold at the right place

AND

• At the right time

Question 10

What are some ethical issues that a business will need to be aware of when making marketing decisions?

Answer 10

• Should a business promote its products at children?
• Should a business promote and produce harmful products such as alcohol?
• Should a business that provides a new drug for a serious illness charge high prices because it can?
• Should a business distribute chocolate near schools, given the level of obesity in the UK?

Question 11

What are some marketing objectives?

Answer 11

• Sales volume and sales value
• Increase market size / sales growth
• Market share
• Brand loyalty

Question 12

What is sales volume and sales value?

Answer 12

Sales volume- The number of units sold e.g. 3 million cars.

Sales value- Is how much the sales are worth, e.g. £10,000

Question 13

What does having knowledge of market size enable businesses to do?

Answer 13

A knowledge of a market size will give an indication of a potential market. This would enable realistic targets to be set for sales, growth and share.

Question 14

What does market and sales growth objectives include?

Answer 14

• Involves targeting an increase in overall sales in order to either maintain market share (in a growing market) or improve it.
• E.g. an increase in the volume or value of the sales.

Question 15

What is market share?

What is the equation for market share?

What benefits is increasing market share likely to bring?

Answer 15

• This is the proportion of a particular market that is controlled by an individual business.
• Market share= (sales of product/ total market sales) x 100
• Increasing market share is likely to bring benefits for a business such as brand loyalty and greater revenue.

Question 16

Brand loyalty- objective?

Answer 16

• Achieving sales is one thing, but what businesses want is for customers to come back time after time.
• In other words- businesses want to achieve brand loyalty!
• Therefore its measuring how many customers use the business again.

Question 17

Why would a business want high market share ?

Answer 17

• Relatively high sales- and therefore high 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.

Question 18

What are the internal influences on marketing objectives?

Answer 18

Finance available

Human resources

Operations

Existing position

Overall strategy and business objectives

Production capacity

Nature of product.

Question 19

Internal influences- finance?

Answer 19

All marketing functions need to operate within the budget allocated, although a business whose finances are in a healthy state will be able to allocate larger amounts to marketing.

Question 20

Internal influences- Production capacity?

Answer 20

The marketing function must liaise with the operations function in order to ensure that it is physically possible to achieve any targets set for sales growth.

Question 21

Internal influences- Human Resources?

What must these objectives take into account?

What will increasing market share be difficult without?

Answer 21

• Objectives set must also take into account the size and capabilities of the workforce.
• Increasing market share might be difficult without further recruitment and training.

Question 22

Internal influences- nature of the product?

Answer 22

Any objectives set need to reflect the nature of the product.

Innovative products might have considerable scope for growth, whereas products such as bread and fuel will have little scope.

Question 23

Internal influences on marketing objectives?

Answer 23

• Overall strategy of the business.
• The ambitions of the managers- they may set high and demanding objectives to push the business forward.
• The existing position of the business.
• The amount the business can produce- productive capacity.
• Finance.
• The employees of the business- skillset.

Question 24

What are the external influences on marketing objectives?

Answer 24

• Political
• Economic
• Social
• Technological
• Competitive- market and competition
• Ethics

Question 25

External influences- Economic factors?

Answer 25

Factors such as the **stage of the economic cycle** and **interest rates** will influence objectives as they will affect **consumer spending**.

Question 26

External influences- social factors?

Answer 26

* Over time, **consumer tastes** and **fashion change** and this needs to be reflected in the **marketing objectives**. * Involves **customer views** of what is **acceptable** and **expected** of a product.

Question 27

External influences- ethics?

Answer 27

* Since customers are more aware of ethical issues, many businesses have reviewed their marketing objectives to reflect this. * This can be seen in the move to promote fair trade products and the fact that they do not exploit workers in sweat shops.

Question 28

External influences- technology?

Answer 28

* This has had a big impact on the way businesses both **produce** and **sell** their **goods** and **services**. * **Growth of online sales** and the **facility** for consumers to **design their own products ( mass customisation)** have had a **major impact** on **marketing objectives.** * It has also changed how businesses **communicate** and **track** **customers behaviour**.

Question 29

External influences- market and competition- why are these objectives likely to vary?

Answer 29

Marketing objectives are likely to vary according to whether the market is growing or static, and depending onm the actions of the competitors.

Question 30

Calculation- market share

Answer 30

(sales of firm/ total market sales) x 100

Question 31

Calculation- sales growth?

Answer 31

(Difference in sales/ earliest year) x 100

Question 32

Calculation- market growth?

Answer 32

Market growth= (difference in sales/ earliest year) x100

Question 33

Calculation- market size?

Answer 33

(sales/ market share) x 100

Question 34

What are the 5 things that objectives must be?

Answer 34

**S**pecific **M**easurable **A**chievable **R**ealistic **T**ime based.

Question 35

The value of setting marketing objectives include what?

Answer 35

* **Target setting**- this gives the business a focus and sense of direction. * **Motivation**- objectives can be motivating for those responsible. * **Evaluation of performance**- objectives need to be SMART!