Marketing Aims and Objectives - with examples from major companies.

Unit AO1 Task 1

Unit 1 – Marketing Aims and Objectives

An aim is what businesses want to do in the future. It is a statement of purpose, for example Express Diner wants to expand worldwide in the next few years, attract new customers or eliminate rival competitors. A business can have more than one aim but they have to be appropriate according to the business and their size. For example a local grocery store or off licence aiming to make £1 million profit in the end of the week is unsuitable because it is a small business, carrying out small activities and is highly unlikely to generate that much profit. The aims of a business most likely include creating a profit, or to just survive, to stay in existence this aim is most likely for small companies surrounded by rival competitors with larger businesses and customers. For example making profit as an aim is a general term, it is easy to understand and interpret but can be confusing to carry out the objectives to help reach and meet this aim.

An objective is the targets or steps that organisations need to take to help achieve their aims, these objectives are set up by the businesses themselves.. All objectives should be measurable so the achievement can be checked and monitored regularly. For example, Lex Transfleet set an aim to increase sales and the objective to completing this aim can be for the employees to increase customer service skills and guarantee customer satisfaction, leading to happier customers purchasing more goods and returning to the store. If a businesses aim was to increase reputation, the business can set an objective of providing high quality after-sales service, giving the business a reputable reputation and a customer favourite. Marketing involves understanding the target market and its potential and existing customer’s needs. Marketing departments also look at ways to influence the behaviour of customers’ e.g. persuasive advertising. The primary aim of marketing is to enable businesses to meet their customers’ needs, whether they’re in it for profit or not. Marketing objectives are an essential part of the marketing plan as they provide direction for marketing activities to follow. Without objectives is in very vague and indistinct whether a plan has been successful or effective. The marketing team must ensure that the businesses activities and operations are carried out in specific ways to ensure that they meet their marketing objectives. For example if the businesses aim is to become the top rated vehicle hire service in the UK, the marketing department will set their objectives to help them get closer to achieving the overall aim of becoming the most popular vehicle hire service in the UK. Marketing objectives are a starting point and help get the ball rolling for the organisation to carry out its marketing activities to help accomplish the objectives. Marketing is the process of gaining knowledge and thinking like the customers and competitors, allowing businesses to sell the right product, in the right place, at the right time and at the right price. Marketers intend to change and influence their customers’ behaviour and actions by advertising their products and services, persuading the customers to buy the product. Nearly all businesses aim to make profit and to be able to achieve this aim they need to be successful in selling their goods and services, this is where the marketing department comes in, the marketing department helps sell these products to the right market and the right customers by advertising the goods using the right methods, in the right places and to the right people. An aim is the final destination to what the business wants to achieve and reach in the long term and the objective helps break down this aim into smaller segments, applying short term goals which will contribute to reaching the aim. For example sole traders aim may be to survive as a business and the objectives may include provide a good reputable service and increase the quality of products. Marketing departments will conduct research into their target market and into their competitors because they need to ensure that their products are competitive in many aspects e.g. competitive price, features and variety etc. marketers need to enhance the businesses competitive edge, monitor their market and identify upcoming trends. As businesses evolve, managers across the organisation need to be aware on how their department is serving the needs of the customers and contributing to the aim. For example, the manager of the operations department or human resources will want to know how well their activities and operations are helping the business meet its aims. E.g. meeting customers’ needs or keeping ahead of competition. The operations manager will want to know whether the products are being created and manufactured to a high enough standard to satisfy the customers’ needs, HR managers will be interested to see whether the staff are effectively trained enough to carry out activities that help the business stay ahead of competition. Aims provide the business with a purpose and a focus, with something to work towards e.g. survival, maximisation of profits, break even, growth, service provision and expansion of market share etc. Aims will help highlight key areas of development and achievement, showing stakeholders and shareholders which areas are successful and which areas need more improvement. When the marketing objectives are written and created a SMART approach needs to be used. SMART objectives are:

Specific – the objectives need to relate to the issues and markets in which the organisation is involved. E.g. a hotel might have an objective of filling 60% of its beds a night during October or giving a 10% discount to customers which have only been shopping online at Next for over 2 years.

Measurable – allows evaluation and helps managers decide if it was successful or not by measurements. E.g. % or £ - increase sales by 10 % or £20 million

Achievable – objectives need to be realistic and achievable. E.g. setting sales targets that are too high would create a lot of pressure upon a business and will do more damage than good. For example objectives can be achieved with the help of external influences and resources, such as banks providing loans or shareholders buying more shares, providing more finance and spending capital.

Realistic – objectives need to be realistic and reasonable for the organisation. They can’t be too ambitious, for example, a newsagent wanting to make a million pounds in the 1st three yrs of opening up.

Time-Bound – planning and setting a deadline to how and when the objectives will be achieved. Use of year, month and date etc. is common. For example, improving customer satisfaction levels by February 2007 by reducing prices on all canned goods.

Setting objectives are important, it focuses the company on specific aims over a period of time and can motivate staff to meet the objectives set. Setting SMART objectives is exceedingly important because it focuses on gaols, plans and enhances performance. SMART objectives will increase efficiency of operations because staff will know exactly what they are working towards and will know that it is achievable. Employee motivation is the key to happy workers and a positive atmosphere in the workplace leading to increased customer service and customer satisfaction because employees will be in a positive mood. Also brings employees closer and builds relationships because all employees have been set a common goal and will all be working towards it, after completion of objective every department and employee will feel as if they have contributed to the completion of the objectives. Large businesses will set marketing objectives to help complete their aims, these objectives include:

Understanding consumer needs and ensuring quality products/ services
Understanding and keeping ahead of competition
Communicating effectively with customers to satisfy expectations
The need to be inventive and enterprising when identifying opportunities in the market place
Being aware of internal and external constraints on marketing activities

Understanding consumer needs and ensuring quality products/services

This objective focuses on discovering what the customer needs are and ensuring that those needs are met with high quality products and services. For example, if customers want quality and value for money goods, the business will then sell low-value products cheaply but in high volumes. The marketing department sets the goal to understand that all customers different and will want different things. Some businesses will be able to meet each and every individual customers needs and provide products or a service specifically designed for each individual customer e.g. tailors or a firm of architects etc. However, most businesses will find it too costly to meet the needs of each individual customer. Instead, the marketing activities will be designed and aimed at meeting the needs of a certain group of customers in the target market. For example, New Look is a retail fashion outlet and they will understand consumer trends and needs because otherwise their products won’t sell. New Look sell their own brand of jeans, t-shirts etc. they will have to ensure that they know and understand what their market is looking for in t-shirts and jeans. The marketing department conduct research into other retail competitors e.g. river island, topman etc. this research can be used to check what other businesses are selling and creating, allowing New Look to create their products with the same desirable features but adding in a few additional ones, to ensure the product sells and seems appealing. For example if Topman are selling bright multi-coloured Y-neck t-shirts and it is proven to be popular and fast selling, New Look can then adapt their Y-neck t-shirts by adding new colour combinations, small pockets and additional buttons to attract customers and divert them away from the competition. Another business which will have the objective of understanding consumer needs is Reebok. For example, the marketing department will help anticipate trends and changes in customers’ preferences. This can be done by researching rival companies and monitoring which type of footwear and trainer is selling well. This will give Reebok an idea of what their customers want and what they are prepared to buy, Reebok can then make their footwear at a satisfactory standard for customers, meeting their needs and standards. This will help attract customers, increase market share, increase sales and achieve their overall aim of making profit. Achieving this objective is crucial for many businesses because if a business is unable to identify what their customers needs are they cannot adapt and create their products and services to meet their target customers’ requirements. If the products and services are not up to scratch the businesses will end up making huge losses and waste a lot of valuable time creating products that will not even sell or appeal to their customers. If products are manufactured, launched and released at a poor quality the businesses reputation will suffer and the business will struggle to break-even as sales decline, due to the fact that customers are unsatisfied and disappointed in the service or goods. For example if a takeaway situated in a local area in England selling only prawns, fish, noodles, seafood etc. this will not appeal to most customers in that area, the business needs to either relocate or conduct research as to what their customers are interested in. Also if Toys ‘r’ us released a new action figure but it broke and fell apart within the first 2 weeks, customers will be unsatisfied because of the quality of the item and Toys ‘r’ us’ high reputation will plummet. Businesses need to ensure they provide high quality products and services which meet the needs of their customers. If a customer was looking for a thin stylish t-shirt for the summer but the business manufactured the t-shirt using a thick and heavy material, it will not meet the customers needs and will most likely be left on the shelf or returned to the store after purchased.

Understanding and keeping ahead of competition

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Understanding and keeping ahead of competition

This objective focuses on marketing managers constantly thinking of new ideas to keep ahead of the competition. For example, lowering the price of similar products, competing with rival companies , drawing customers away from them. This objective has been set because new and existing competition is always a constant threat to the business and its success. Competitors have the manpower and finance to steal existing and potential customers from businesses. If a business is competing with a much larger firm with more resources, finance etc. it will be very difficult to compete because the competition will do everything they can to stay ahead and increase their market share and profits. Research is the key to avoid being dominated by competition and keeping ahead. Businesses will have to identify new trends. E.g. if everyone began wearing blue combat jeans with many pockets, then manufacturers and businesses will begin to create their own brand or type of jeans, knowing that it will sell and increase income. Businesses will also have to monitor the market to see what their market is interested in and whether trends emerge. Market research will also consist of the business enhancing their competitive edge. Improving their competitive edge will allow the business to stay in the competition and take part in healthy competition. Competing sometimes also motivates employees and employers because they want to be in the lead. Improving the competitive edge will involve carrying out activities which will put the business ahead of their competition and at a slight advantage. For example, creating similar products at a cheaper manufacturing price and selling for lower amounts, increasing sales, profits and getting ahead of competition. Businesses can also release products into the market at much wider varieties, giving customers more choice. E.g. different colours of the same product. A wider variety of products allows more chance of gaining a good reputation because customers will have a wide choice of products from the same producer to choose from and purchase. The advantages of this is that a larger product line means that different products are at different prices and customers have more flexibility to choose a product. For example, Cadburys sell Dairy Milk chocolate bars, Dairy Milk Crème Eggs, Dairy Milk Mini Eggs, Dairy Milk Chocolate Buttons etc. all of these products are priced differently and appeal to many markets. As organisations develop their marketing proposal, managers will begin thinking about understanding their customers and methods to stay ahead of competition. New competitors are a huge external factor to all businesses because they will compete for the same customers, sell similar products and may have more finance, resources, larger workforce, bigger premises etc. a business maybe extremely successful one year but the year after just as soon as competitors arrive the business can plummet if they do not stay ahead of the competition. If the business is in direct competition then many actions and incentives will need to be carried out to ensure that they keep a steady income and their market share. Organisations will use research to understand their customers and their competition. For example if a business researches their customers effectively before their competitors and spots an upcoming trend, they can then develop their product before their competition to gain the upper hand and stay ahead in the competition. The research carried out on the competitors can also be used to develop and enhance products to ensure that they offer slightly more than their competitors. For example, if the research stated that the competition are selling or planning to sell their bags at £15, the business can then undercut their competition and sell their bags at £12. This will increase sales, market share and profits. Product development allows businesses to alter and create products according to their competition. For example, if trends show that customers want 50 hrs battery life on their walkman, the competition will already have this information and create walkmans with at least 50 hrs of battery life, intending to satisfy customers and increase sales. However, then the organisation can use this research and create their walkmans with 60 or 70 hrs of battery life, beating their competition and making their products seem more appealing. Other activities to help businesses stay ahead of their competition will include, improving knowledge on their consumers and competitors so that changes in trends can be identified, use trends to forecast activities and monitor market position to aid the development of plans. Businesses such as Lex Transfleet will have the objectives to understand and stay ahead of their competition because they are a vehicle hire service. This objective is essential because Lex Transfleet has many competitors e.g. Ryder, T.N.T etc. these are all huge international organisations which offer similar services to Lex Transfleet. Without this objective Lex Transfleet will not be able to monitor their competitors activities e.g. expansions, new vehicles, new offers etc. and will fall behind in competition. This will be very difficult to recover from and will damage Lex Transfleets reputation as the UK’s top vehicle hire service. JD Sports will also have this objective to keep ahead of competition because they are in very close competition with JJB Sports. Both organisations are huge and sell similar items. At the moment JJB Sports has the upper hand because they sell, more sports equipment, pool cues, hockey sticks, baseball bats, cricket bats, weights etc. JD Sports will need to understand how JJB Sports operate and sell their sportswear at a cheaper cost because they cannot compete with JJB’s sports equipment or bicycles because they do not sell these types of products. As JD Sports specialise in sportswear and footwear they can compete with JJB Sports because they also sell these products, JD Sports will have to ensure that their footwear is cheaper or of a more higher quality than JJB Sports footwear. JD Sports can also design customer loyalty schemes and a reward system for customers as an incentive to help keep ahead of the competition and increase their market share. As both stores are situated close to each other and in the same area, they are in direct competition and will be forced to reduce to prices or create huge sales promotions to increase market share, profits and customers. Achieving the objective of staying ahead and understating the competition is very important for a business because unless businesses stay ahead of their competition they will fail to increase and maintain their market share, fail to generate profit and will not become successful. The importance of understanding the competitors is essential because businesses can then react and provide responses to competitors’ activities. For example, if the competitors released a new product or employed new workers to increase their workforce, the business can then react to these operations and try and keep up with the competition. For example, releasing a new product will attract a lot of customers, large businesses can react to this by lowering their prices during the launch of the new product. This will decrease profits, but in return it will increase and maintain customers and stop them from using the competitors’ service or goods. Large businesses can afford to lower prices during the release of a competitors new product because they can easily regain this capital, the advantages of lowering prices during the product launch is that it will steal the spotlight from the competitors new product and increase their market share. If businesses fail to meet their objectives of keeping up with the competition and understanding their activities, they will lose their market share, reputation and will also see a significant decrease in sales and profits. This will lead to the end of a business and will allow their competitors to increase their market share. For example, if a business falls behind in competition, it will be very hard to recover because the competitors will make most of their customers and will provide new offers and promotions to keep customers with their business. If these objectives are not met businesses will be forced to close up and may even go bankrupt, this will attract a mass of negative media attention and will also damage the businesses reputation because of the bad PR.

The need to be innovative and enterprising when identifying opportunities in the market place

This objective focuses on the aspect of customers wanting good products and value for money over other products on the market. For example, a new product should replace an old product e.g. mp3 players were replaced by iPods and walkmans/music players were built into mobile phones. A new product should also open up into a new market and broaden an existing market. For example, iPods were only used for music to begin with but as technology and products enhanced iPods were released with care and video recording capabilities. This will broaden the market of customers only interested in gadgets for the application of music but will also appeal to those customers who enjoy video recording, taking pictures and also listening to music. E.g. iPods began to be launched with touch screen interfaces, cameras, larger storage capabilities and allowing videos and movies to be watched etc. This objective involves businesses coming up with new ideas for products, using and applying new technology to existing products, changing an existing brand, product or placing the existing product into a new market can also be innovative. For example when new technology was created and discovered, it was applied to existing electronics and inserted into the upcoming products. For example, shake control, motion sensors, accelerometers, touch sensitive buttons etc. were added to mobile phones and many other gadgets. Marketing is a discipline which needs to know all the activities the business engages in. As managers create their marketing proposal, they will be thinking about how to appear innovative as well as how to develop new business opportunities for the firm. For example marketers can turn an old product into a new one just by finding a new market for them. Technological breakthroughs allow further improvement to products and will excite customers the most because everyone wants something new and different. There are 6 distinct stages in the development process for new products. These stages demonstrate that by introducing new products into the market, the business is then innovative and being enterprising. These stages are:

Ideas
Screening of ideas
Marketing analysis
Product development
Testing
The launch and commercialisation

As new products go through this process continuing to work through the stages of development there is a mortality rate. The fall out rate shows that the business removes many ideas and product samples as they progress through the development process, product ideas continue to decrease until the business reaches the end and finds the perfect idea for a new product.

Product Development Process

Step 1 – Ideas

Research and development – involves product development and market research working together. For example, technological breakthroughs and innovations given from the research and development department are very useful for the product development.

Mind storming – involving a few employees and employers developing and generating ideas from words and concepts.

Suggestions box – will encourage employees to input their own suggestions and contribute their own ideas. This allows employees to apply their own personal twist on a product and see whether it passes the development stage.

Sales force – working close to customers, understanding their needs and requirements.

Forced relationships – one or more existing products can be joined together to form new product concepts. For example, shampoo and conditioner.

Competitors – monitoring the activities of competitors may provide a profitable source of new ideas.

Step 2 – Screening Ideas

After the creation of ideas, these ideas need to screened to mark the likeliness of success and others need to be rejected. How well the product fits with other products in its range, the unique elements of the idea which make it competitive, the potential demand for the product and whether it could be manufactured economically all come into consideration when screening the ideas.

Step 3 – Marketing Analysis

After screening further marketing analysis begins. This will consist of a thorough analysis of the products market potential. This analysis provides the amount of sales expected from the product and the market volume (units that could be sold).

Step 4 – Product development

After being analysed for marketing potential, the concept is now transformed into a product. Design, innovation and the uses of technology are vital during the product development. The products packaging and branding will also be assessed.

Step 5 – Testing

Testing is a critical stage in the product development process. Will involve identifying valuable information by conducting market research, which reduces the risks and fine tunes the venture. The product may also be tested on the market and given a trial to see if it meets customers’ needs and brings in customers.

Step 6 – Launch and commercialisation

During this stage the business will launch the final product to its customers. Many businesses tend to provide sneak glimpses of the product before the release of the product and upcoming to the launch. This keeps customers eager and interested in the product.

Apple will have the objective to be innovative and enterprising when identifying opportunities because it will allow them to continuously release popular products which have been developed. For example the Apple iPhone, iPhone 3gs and the iPhone 4 are all examples of developed products using the breakthroughs in technology to increase the features and make them appeal to customers. Apple will not release their iPhones during another products release because it will go into direct competition and Apple will not get as many customers if they released their product when there are no upcoming launches from other companies. E.g. Nokia, LG, Samsung etc. are creating and releasing touch screen phones, if Apple decided to launch their product at the same time as another product, customers will have the choice to choose which product to go for. However, this is not always the case because the iPhone has outstanding features and customers who really want the iPhone will purchase it although a cheaper alternative with the same purpose has been released at the same time. If there is a gap in the market for a new product Apple can develop a product and by identifying the opportunity, they can then release a product immediately, which will attract many customers and increase their market share significantly. Another business which will set the objective to be innovative and enterprising is Adidas because they will constantly need to keep up with the fashion trends and produce new products which will replace old ones and will stretch their existing market. For example, Adidas manufacture and create a lot of footwear, they will constantly need to identify opportunities in the market and create new products to satisfy customers. For example when research and trends show that average teenagers are more interested in hi-top trainers rather than football boots, Adidas can then stop the production of a new upcoming Adidas f-50 football boot and replace it with a new casual and trendy hi-top trainer which contains a lot more colour and seems more appealing to the customers. Replacing old products is essential because once the products go out of fashion or become 1 or 2 yrs old no one will buy them anymore. For example Adidas began with Adidas F-10’s and after the market lost interest in this product, Adidas released, F-20’s, F-30’s and F-50’s etc. This will help keep customers interested and maintain their market share against rival companies such as Nike. Achieving the objective of being innovative and enterprising when identifying opportunities in the market place is essential because if businesses cannot identify these opportunities they will lose their customers interest and will end up losing many customers. If a business does not replace any of their old products, it will just sit on the shelf and not sell. The business will continue spending capital producing and manufacturing these products but customers will not buy them. If the business successfully develops a product and launches it into the market it will receive a lot of new customers, increases in sales, profits and market share. New products and new technologies will lead to increased reputations and market share. Increased reputation allows businesses to easily negotiate bank loans and investments for finance and further developments. The completion of this objective will ensure that business broaden their market because if new products are released with additional features, it would guarantee an increase in customers and awareness. The knock on effects to this is that the products will sell more easily than their old products because customers have lost interest in the previous products.

Communicating effectively with customers to satisfy their expectations

This objective focuses on businesses using effective methods of communication to communicate with their customers and ensure that all their expectations are met. Promotional campaigns can be vital to succeed and play a crucial role in portraying the businesses image. Advertisements through media can be used to communicate with customers and Public Relations can also be used by non-personal communications taking place via the media. An effective network of communication is essential for any type of promotional activity. E.g. internet, television etc. these methods not only allow businesses to effectively communicate with its customers and satisfy their expectations but also enables the firm to build a world wide image. A positive image will help others make judgements and statements as to what the business stands for and will hopefully do business with it. Communication of products and services contribute to the persuasion process which encourages and persuades customers to purchase items which are on offer. Customers are persuaded and easily influenced because they believe that this offer will only come along once and the product will be out of stock soon or the offer will end, forcing them to make purchases in large volumes. The variety of tools used to communicate effectively with consumers and satisfying their needs fall within the promotional mix. The promotional mix includes:

Advertisements – these are messages sent via the media with the aim to influence and inform the audience.

Direct mail – types of advertisements which are personally addressed and sent through the mail, to inform and advertise.

Public Relations – non personal communications using the media.

Sales Promotions – incentives designed to boost sales. E.g. coupons, discounts, reward points etc.

Sponsorship – financing or funding a project, event or activity in order to gain consumer awareness and media coverage. For example, football teams are sponsored by O’2 etc.

Product presentation – enhancing a brands visibility by changing the packaging, the use of labels, merchandising and branding.

Direct Selling – completion of sales with an emphasis upon the importance of salesmanship.

Kellogg’s is an organisation which would set this marketing objective of communicating effectively with customers because, in-order to increase sales and raise awareness, customers need to acknowledge the products and find them appealing. Kellogg’s will most likely use advertisements via digital television because it provides profitable exposure to a huge market, nearly every household has a television in it and advertising the brand via television is very beneficial. Kellogg’s also advertise their new products such as the Kellogg’s cereal bar via newspapers. Kellogg’s gave away free cereal bars to those customers who bought a certain type of newspaper, the cereal bar was a free gift if the paper was bought. Along with this cereal bar, Kellogg's will provide information and advertise their new products. Kellogg’s communicates with its customers through branding because special K is a brand with a unique heritage. Over many years Kellogg's has perfected its image and has not attempted to release any new products. However in order to keep customers interested and keep the brand fresh, Kellogg's launched their new cereal bars, aiming to re-vitalise the brand name and appeal to a wider market. Another business which would aim to communicate effectively with customers to satisfy their expectations is Vauxhall, Ford, Honda, Nissan etc. these businesses will aim to communicate with their customers through any means possible, new cars and products will be advertised via, internet, television ads, newspapers, magazines, direct mail and public relations. All of these methods will ensure that the message is portrayed to a whole range of customers. For example, if Honda were releasing a new environmentally friendly vehicle, it will receive a lot of media coverage and good PR. This will portray Hondas message to all of the customers about their new product and will also increase their reputation as a car manufacturer. If the manufacturer and product receives a lot of praise and good reviews, customers will be persuaded and purchase the product because of its many benefits. E.g. CO2 emissions, carbon footprint, storage, weight, price etc. large film companies and cinemas will also use many methods of promotion to advertise new upcoming films. Customers will want to know which films are being released, which are in 3D, what are the ratings etc. the films will be advertised in newspapers, television ads, internet etc. customers will be satisfied with the adverts (trailers etc.) because it provides an insight to the movie and meets their needs because it states when the film is released in cinemas, whether it is in 3D or not and what are the age ratings. Achieving the objective of communicating with customers is crucial because if businesses do not satisfy the customers with the promotions, adverts etc. the customers will be unaware of what products are on offer and what the business sells. This will cause the business to lose customers and they may go to competitors instead, making life even more difficult for the business. if businesses accomplish the marketing objective of satisfying customers through communications then they will be able to expose their products to the market and also increase market share at the same time. If the business increases its market share and builds an image, the reputation will increase rapidly and will eventually boost sales and external interests. E.g. stakeholders and shareholders. Banks will be more willing to provide loans and venture capitalists will also be willing to go into partnerships. If the communications are successful and the business increases it reputation and profits then they will know that they’ve achieved their objective of effective communications and satisfying customers’ needs. For example when sales promotions and clearances are taking place, the customers will want to be effectively informed and told. This means the business will have to ensure that all the customers are receiving advertisements and reminders about the promotion, if the promotion is advertised effectively and all the customers are aware of the sales and offers, then they’ll be satisfied and the business will become more successful. If objectives are completed the employees will receive recognition and feel good about themselves, if campaigns, promotions, products and services were successful. Every employee will feel that they did a bit and will become motivated, creating a positive working atmosphere and enhancing relationships. However, if businesses do not achieve this objective then there will be a negative atmosphere in the workplace because the promotions and products did not sell or attract customers, this can casue employees to fallout and damage relationships. The business will suffer because they would have lost capital on advertising fees, if the communications and marketing was not effective the employees will feel de-motivated, the business will lose customers and market share and will also lose reputation.

Be aware of internal and external constraints on marketing activities

This marketing objective focuses on businesses being aware and prepared for the internal and external constraints on their marketing activities. Internal constraints consist of funding issues e.g. businesses not having the funding to experiment and trial new products. Resources are also another internal constraint e.g. not having sufficient resources to carry out operations and activities at high standards, along with labour/manpower or no expertise to move forward. For example Samsung is a mobile phone company who has no expertise to move forward and penetrate the market with a new breath-taking new product, Samsung continuously produce average products with same features as other phones on the market and which do not stick out from others. External marketing constraints consist of consumer fashions and trends because they determine whether the business will succeed or not. For example if the market is not interested in the products the business is making and selling then the business will fail. For example, if a footwear shop sold purple and green sports trainers but the customers trends were casual white plimsolls, the business will sell any of their products or attract any of their customers. The business has no control over the consumer trends but can attempt to use persuasive advertising or sales promotions to get rid of stock and boost sales, breaking even or making a slight profit. Competitors is another external factor which influences the marketing activities because if competitors situate close to the business the business will have to compete and ensure that they attract more customers and sell more products. This can lead to a decrease in the marketing budgets because capital will be used elsewhere to help compete with the competitors and maintain market share and profits. For example, if the competitors lower their prices or invest in new equipment, businesses will have to respond and will have to also spend capital on resources, assets etc. in order to compete and try and dominate the market. When competitors compete for businesses market shares and customers, other businesses will have to respond by designing new marketing campaigns, sales promotions and other incentive schemes in attempt to win over customers and increase profits. Competitors provide constraints to marketing activities because if the marketing team decide upon a campaign or promotion to advertise but their competitors have already done it, this restrains the marketing department from proceeding with their campaign. This will lead to the marketing team going back to the drawing board and thinking of another concept which is different form their competitor and will appeal to their market. Economy, recession, tax, interest, unemployment, inflation rates, exchange rates and VAT will also affect the marketing activities of businesses. For example, global warming and pressure groups will pressure the marketing department into changing their operations to more efficient and environmentally healthy methods. E.g. begin to recycle, share vehicles etc. an increase in inflation rates and interest rates will force customers to spend less and save more, this means that the marketing departments will have to try and cut costs otherwise, they will be spending huge amounts of capital on advertising, when no one is even going to purchase the products. This will cause the marketing department to design and create new marketing campaigns which will try and attract customers even though they are saving their money. E.g. selling products at high volumes, good value for money. As people tend to buy less during high inflation rates, prices of products and services tend to increase, meaning that the marketing department will have to change their advertisements and campaigns to make the products seem appealing even after the price increase. The marketing departments wages may also be cut back due to high inflation rates, this will de-motivate staff and may affect the efficiency of their work. Due to increases in tax and interest rates some businesses may have to release their premises because they cannot afford to pay the mortgage or the business will hardly be making any profit due to the high costs e.g. VAT. This means that the marketing department will have to get used to working in smaller premises. Higher interest rates can also affect businesses if they are leasing or hiring assets and equipment. For example if the marketing department was hiring machinery they may have to give it up because costs are too high due to increased interest rates. If interest rates are too high then businesses will not takeout any bank loans, restricting ant further expansion or purchases of new equipment, software and machinery etc. this will directly affect the marketing team because the business will not have enough funding to purchase the latest technology or resources for effective marketing campaigns and advertisements, this means that the marketing department will have limited resources and cannot perform to the best of their ability. This will affect the marketing activities and the customers because the marketing campaigns will not be to the best standard and employees may be made redundant due to the recession. For example costs may be too high, and the finance department may show calculation and charts showing that the business will struggle in the next few months if costs don’t decrease. To reduce costs and wages, employees may be made redundant, reducing the marketing team which will lead to a smaller workforce and less efficient operations. Another external factor which will restrain marketing activities is the law because the law determines how businesses operate. For example, in UK cannot have a credit card unless you reach the age of 18, whereas in third world countries children can work for hours on end without the business getting prosecuted. Child labour is very common in poverty stricken countries but in England people have to reach the age of 16 to work for minimum wage, in third world countries there is no minimum wage and children are getting paid pennies for hours of manual labour. For example, a law such as trade description acts, ensuring that all descriptions of products must be accurate and conform to the law. This restricts the marketing department from adding false values and features to the advertisements to attract more customers, increase sales and make the product seem more appealing. The data protection act also relates to marketing departments because they have to ensure that they gain consumers and the publics’ permission to release market research results into the public for viewing. This is very time consuming and can be very costly for businesses. Businesses need to be aware of all these constraints and learn and develop effective methods of how to overcome them and still achieve their aims. During the period of an economic recession, customers will have deteriorating incomes and will not be able to purchase luxury items. This constrains the marketing department from marketing a luxury product to their customers because no-one will be interested and the capital will go to waste if the luxury goods are advertised during the recession. All businesses need to be market focused as well as customer focused because they’ll need to research and plan ahead for all of these constraints and try and find solutions and on how to avoid them or overcome them. The advantages of planning ahead before the recessions hit and interest rates increase is that they can be prepared to transform weaknesses into strengths and threats into opportunities. Pizza Hut is a business which will have to deal with this objective because when unemployment rates increase and recession hits, consumers are going to eat out less and spend money on more valuable items. Pizza Hut will have to prepare for internal and external constraints because they have to abide with food and hygiene, health and safety laws etc. Pizza Hut has many competitors and they will constrain the marketing activities because if they re-invent or enhance a classic flavour or food then Pizza Hut cannot do it and promote it. For example if another restaurant thought of the square sliced pizza and marketed it, Pizza Hut will not be able to because the idea won’t be unique and the customers will have already seen it before. Lex Transfleet may also set this marketing objective because they’ll have to deal with internal and external marketing constraints. For example if costs were at an all time high then Lex Transfleet will nit be able to purchase the best resources and softwares for the marketing. This will constrain their activities and will make the marketing employees jobs harder to perform because they will have to make the most out of the resources available. The marketing department of Lex Transfleet may not be able to develop any new products or trial any because of funding internal funding issues. If interest rates are high then Lex Transfleet will avoid taking out loans form the banks due to the high interest repayments. If Lex Transfleets marketing department are not able to trial and develop products then customer satisfaction levels will decrease because products will not have been adapted or developed. This will lead to decreases in market share and reputation if Lex Transfleet cannot release a new product or service for a while. The advantages of setting this objective are that it informs employees that they need to prepare and draw up a plan for the internal and external constraints. Achieving this objective is essential because it keeps employees motivated if they overcome problems and will help make the business more successful. For example, if the competitors did not set this objective and were unprepared for the upcoming constraints they will fall and suffer, whilst the other businesses dominate and find solutions to the problems. Achieving this objective will progress onto achieving the aim of increasing customers and will help make businesses ready for the next time these problems and constraints occur. If businesses fail to achieve this objective then they will lose out on many opportunities and will fall behind in competition. During the recession, business will be slow and businesses will be doing everything they can to try and make consumers spend their money on them but if this objective is failed then the business cannot do that because their marketing department will be struggling to advertise the correct products and at the right times. If they fail to deal with the internal and external constraints the business will fall apart because the research will unreliable, due to the lack of resources and funding etc. and the whole workforce will be de-motivated as the business seems to go nowhere.

Why is it important for a business to set and aim to achieve marketing objectives?

Setting aims and objectives will help businesses measure their success. This means that the employees will know whether the business is doing well or not. The benefits of this is that if the employees are motivated and the business is not doing as well as it is supposed to be, the employees and employers will work harder to try and improve the business and meet their objectives. For example when Lex Transfleet sets their objectives, the benefit of being ambitious is that their employees want to learn more by having the desire and opportunity to develop and become the best rental company in the UK. This objective cannot be measured efficiently it provides the employees with a mental image to become the best rental company in the UK, this can have a lot of different effects on the employees because some employees will feel honoured and happy to be working at the best rental company in the UK when others will be working harder and pushing themselves further to try and become the best rental company. The disadvantage of this objective is that some employees’ state of mind might be that they are already at the best rental company in the UK so they can lay back and not input the same amount of effort as before. Achieving marketing objectives helps ensure businesses that they become market-focused not only customer-focused. If a business id market focused it will understand and research all the problems and obstacles which will present themselves, market-focused organisations will know how to and aim to overcome these constraints. Marketing objectives also play a crucial role in the employees motivation levels because if things are going well then employees will become more efficient, marketing objectives also lead onto achieving the businesses overall aims and when these aims are achieved the business will be highly reputable and will gradually expand, increase market share, profits and sales. Aiming to achieve marketing objectives provide a direction for employees to work towards and will help understand their competition, their market, their customers, their opportunities and their problems.

Marketing Aims and Objectives - with examples from major companies.

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