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Setting Marketing Objectives

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Business Studies

The best marketing strategy is to destroy your industry before the competition does."

- Seth Godin

'Destroying the industry' might be an example of a marketing objective. Setting marketing objectives, however, is not that simple. It comes with certain challenges but it may also provide a lot of value to a company's strategy.

Main types of marketing objective

First, let's take a look at common marketing objectives that different types of organisations might set.

Marketing objectives outline the goals a business wants to achieve through its marketing practices.

There are usually five main marketing objectives that firms set for themselves:

  1. Increasing sales volume: where the business objective is to sell more of their product or service.

  2. Increasing sales value: where the business objective is to increase revenues.

  3. Sales growth: where the business objective is to increase the size of the business through sales.

  4. Increasing market share: where the business objective is to increase the percentage of the market that they dominate.

  5. Loyalty: where the business objective is to increase customer retention (customers keep coming back).

You can find calculations related to marketing objectives in the market calculations explanation.

The process behind setting marketing objectives

Marketing managers need to make numerous decisions to become successful at addressing customer wants and needs.

First, they have to identify what a specific customer segment needs through initial screening and market research.

They also have to anticipate customers' future wants and needs. They can do this by interpreting and analysing the data they have gathered during the market research phase.

Marketing managers also need to target the right customer segment. This can be done by conducting extensive customer segmentation and coming up with a plan for marketing campaigns.

Marketing decision-makers then have to satisfy their target customers' wants and needs by positioning products appropriately and by implementing the marketing plan successfully.

Finally, they need to make sure that this entire process is profitable.

The value of setting marketing objectives

There are numerous reasons why a business sets marketing objectives. The reasons might include the following:

  1. Marketing objectives are useful as they keep the marketing team focused on the firm's main objectives. This helps the team identify marketing priorities and stick to the main objectives of the business.
  2. Marketing objectives provide an incentive for the marketing team and allow them to measure success (or failure) through clear, effective means.
  3. Marketing objectives can also be important for making sure that marketing strategy is aligned with the corporate mission and company vision.
  4. Marketing objectives can also be used as effective tools to help with budgeting and allocating resources appropriately.

SMART marketing objectives

One way to make sure that your marketing objectives are realistic is by setting SMART goals.

SMART is an acronym that stands for:

  • Specific: the objective should be stated in enough detail - what exactly do we want to achieve? A company should avoid setting broad objectives, as these can end up causing confusion.

  • Measurable: objectives should be quantitatively or qualitatively measurable. This is useful for determining how much of the objective a company has achieved.

  • Actionable/Achievable: the objective should be considered achievable by those carrying out set tasks.

  • Relevant: is the goal relevant to the business's overall mission? Objectives should also be relevant and understandable to the people who are working on achieving the objective.

  • Time-bound: a specific deadline should be set.

The limitations of setting marketing objectives

Unfortunately, businesses may face some difficulties when setting marketing objectives.

Potential problems

One of the limitations arises when marketing objectives are not aligned with the company's corporate mission. A misalignment between different departments can lead to a huge issue with the image a business portrays to stakeholders.

In certain situations, there may also be some conflict between different market objectives.

If the company's main objective is to increase sales volume (sell more of its products), one of the ways it can do this is by decreasing the price at which the product is sold. However, this can lead to problems if the cost of goods sold is greater than the sales revenue.

This may damage the profitability of the business even though the specific marketing objective was achieved.

Businesses can sometimes set objectives that are too ambitious. For example, a small business may aim to own 50% of the market share of a certain industry by the end of the year. This objective, however, could prove to be unattainable if they do not have the right resources and capabilities to do so.

External influences

External influences are influences that a business cannot directly control. Sometimes these can also cause conflict with marketing objectives. An example of an external influence is competition.

Imagine a company decides that its main objective will be increasing sales growth. However, a competitor brand enters the market with a newer, more innovative product that satisfies the wants and needs of the target customer segment. In this case, the competitor brand is most likely to experience the sales growth our company hoped for.

Competitors are an external influence that our business has no control over.

Another example of an external influence is legislation. Legislation is created by governments and other official bodies. Legislation can include new advertising regulations, environmental regulations, or other legislation that can impact whole industries. Such regulations can substantially impact the operations and marketing outcomes of a business.

Finally, average customer income is also an example of an external influence that can affect marketing objectives. A firm may have set all the correct objectives, targeted the right customer segment, and mastered their marketing decision making, yet with decreasing customer incomes, customers are likely to cut back on their consumption - especially when it comes to luxury or non-essential products .

Benefits of Setting Marketing Objectives
Limitations to Setting (Bad) Marketing Objectives
Keeps focus on objectives.Could lead to issues with the corporate image.
An incentive for the marketing team.Could result in conflict between different market objectives.
Allows you to measure success/failure.Damage to profitability.
For budgeting and allocating resources.Objectives that are too ambitious.
To make sure marketing strategy is aligned with corporate objectives.External influences.

Table 1. Benefits and Limitations of Marketing objectives

Table 1 above summarises the advantages of setting appropriate marketing objectives and the downfalls of setting bad marketing objectives. Marketing objectives can have a significant impact on organisations, which is why it is important to set them in a specific, measurable, relevant and achievable way.

Setting Marketing Objectives - Key takeaways

  • There are five main marketing objectives firms usually set. These objectives revolve around sales, market share and loyalty.
  • Marketing managers need to identify, anticipate, target and satisfy the wants and needs of customers profitably.
  • There are numerous reasons a business might want to set marketing objectives. A company, however, needs to make sure that the objectives are realistic and achievable.
  • Marketing objectives can help improve focus, help with allocating resources, and provide attainable incentives for the marketing team.
  • One way to make sure that your marketing objectives are realistic is by setting SMART objectives.
  • Potential problems with marketing objectives can occur when there is conflict between different objectives or if the objectives set are too ambitious.
  • External influences can also limit marketing objectives. These influences are beyond the control of the company.

Setting Marketing Objectives

Marketing managers set marketing objectives to address customer wants and needs. First, they have to identify what a specific customer segment needs. They also have to anticipate customers' future wants and needs. They can do this by interpreting and analyzing the data they have gathered during the market research phase. Marketing managers also need to target the right customer segment, which can be done by conducting customer segmentation and coming up with a plan for marketing campaigns. Marketing decision-makers then have to satisfy their target customers' wants and needs by positioning products appropriately and by implementing the marketing plan successfully. Finally, they need to make sure that this entire process is profitable for the business. 

There are usually five main marketing objectives firms set for themselves. The objective could be increasing sales volume (the number of products sold) or sales value (increasing revenues). Another objective of marketing could be increasing sales growth and market share (the percentage of the market that the firm holds). Finally, an important objective in marketing is to increase brand awareness and brand loyalty - the objective is to increase customer retention (encourage customers to return).

An example of a marketing objective would be increasing sales volume. A business would decide that during the upcoming year they will increase their sales volume of Product X by 10%. This is an example of a marketing objective that is specific, measurable, achievable, relevant and time-bound. In this example, the marketing team would focus their attention on this specific goal throughout the year and implement different types of marketing activities to achieve this goal.  

Marketing objectives outline the goals a business wants to achieve through its marketing practices. As a result, setting marketing objectives is essential as they help the marketing team stay focused on the firm's main objectives, they provide incentives for employees, they help measure marketing success (or failure) and they can be used as effective tools to help with budgeting and allocating resources.

Final Setting Marketing Objectives Quiz

Question

What are marketing objectives?

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Answer

Marketing objectives outline the goals a business wants to achieve through its marketing practices.

Show question

Question

Name two common marketing objectives. 


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Answer

  • Increasing sales growth 

  • Increasing brand loyalty 

Show question

Question

Explain the first two steps of the process behind setting marketing objectives. 


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Answer

First, marketing managers have to identify what a specific customer segment needs through initial screening and market research. They also have to anticipate customers' future wants and needs. They can do this by interpreting and analyzing the data they have gathered during the market research phase.

Show question

Question

Name an advantage of setting marketing objectives. 


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Answer

  • Help the marketing team stay focused on marketing goals. 

  • Provides the marketing team with a clear and measurable incentive.

Show question

Question

Which of the following statements is correct? 


  1. Marketing objectives can be useful for budgeting. 

  2. Marketing objectives should be aligned with corporate objectives.

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Answer

Both statements are correct.

Show question

Question

Which one of the following actions is not part of the process behind setting marketing objectives?

  1. Identify

  2. segment 

  3. Satisfy 

  4. Anticipate 

Show answer

Answer

B.

Show question

Question

What does the acronym SMART stand for?


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Answer

Specific, Measurable, Achievable, Relevant, Time-bound.

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Question

Why do businesses aim to set SMART objectives?


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Answer

To make sure marketing goals are realistic and attainable.

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Question

What is an external influence? 


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Answer

An external influence is a factor beyond the control of the business that can impact its marketing objectives and strategy.

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Question

What is an external influence? 


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Answer

An external influence is a factor beyond the control of the business that can impact its marketing objectives and strategy.

Show question

Question

Name two external influences that could limit marketing objectives.


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Answer

  • Competition 

  • Legislation

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Question

Name two potential problems that can occur when setting marketing objectives. 


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Answer

  • Objectives are not aligned with the corporate mission. 

  • Objectives are too ambitious.

Show question

Question

Which of the following is not an external influence?

  1. Legislation 

  2. Competition

  3. Advertising regulations

  4. Corporate mission. 

Show answer

Answer

D.

Show question

Question

Marketing objectives outline the goals a business wants to achieve through its marketing practices.  

Show answer

Answer

True

Show question

Question

Is "increasing sales volume" a marketing objective? 

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Answer

No

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Question

One of the marketing objectives is to increase sales value. 

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Answer

True

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Question

Is "Increasing market share" a marketing objective? 

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Answer

No

Show question

Question

How do marketers anticipate customers' future wants and needs?

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Answer

By conducting and analyzing market research. 

Show question

Question

What is the aim of customer segmentation?

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Answer

To target the right customer segments. 

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Question

What is the main aim of setting marketing objectives?

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Answer

To ensure increased profits. 

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Question

  1. Marketing objectives are important for ensuring that marketing strategy is aligned with the corporate mission and company vision. 

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Answer

True

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Question

Can a business control external influences? 

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Answer

Yes

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Question

Is customer retention also a marketing objective? 

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Answer

Yes

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Question

Customer retention means attracting new customers. 

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Answer

True

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Question

Potential problems with marketing objectives can occur when there is a conflict between different objectives or if the objectives set are too ambitious. 

Show answer

Answer

True

Show question

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