Dr Philip Kotler defines marketing as “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines measures and quantifies the size of the identified market and the profit potential. It pinpoints which segments the company is capable of serving the best, and it designs and promotes the appropriate products and services.”
Marketing objectives are goals set by business houses to promote its goods and services to its consumers within a specific timeframe. Marketing objectives are the strategy’s set to attain the overall growth of the organisation.
When it comes to a particular product, a company’s marketing strategy may include increasing product awareness, providing information about product features, and reducing consumer resistance.
A marketing audit is performed, which lets a business firm to establish its strengths, weaknesses, opportunities, and goals, after which the organisation may redefine its objectives.
The marketing objectives are significant as they assist us in realising how effective we are and they help us stay focused. Objectives are useful only if they are grounded and realistic.
Marketing objectives are short-term achievements to help achieve long-term goals, which are mostly set on a weekly or a monthly timeline. These objectives should help a business analyze what a business wants to achieve from its marketing strategy. As Tony Robbins says “setting goals is the first step in turning the invisible into visible” It is not about setting unrealistic marketing goals you will never meet. The goals have to eventually walk the talk. The process of setting goals gives a clear picture of what needs to be accomplished and setting positive results. Marketing goals properly planned and executed are the stepping stones to financial achievement.
TYPES OF MARKETING OBJECTIVES
Evaluating and considering the marketing plan is essential while determining your marketing objectives. There are various types of marketing objectives, but the four main types are profitability+ objective, market share objective, promotional objective, and growth objective.
A profitability objective is a marketing objective that regulates the amount of expected income based on the promotional strategy. Profitability is a business’s ability to earn a profit as an objective in doing business. Businesses that are not financially profitable are likely to struggle, fail and ultimately close their doors. Profitability defines an organisations ability to sustain a business. There are four profitability objectives:
1. Net profit Margin
A business net profit margin tells how much a retailer makes after the business has paid its expenses, salaries and taxes. This is displayed in ratio to net sales and shows how much a retailer is making for every dollar of merchandise sold.
2. Asset turnover
Asset turnover is an equation that explains what a retailer can make annually for each dollar it invests in the business assets. It involves taking retailers total sales and dividing it by total assets.
3. Return on assets
Return on assets is the equation formed when you divide a retailer’s net profit by his total assets.
4. Financial Leverage
Financial Leverage explains its use of debt in its overall capital structure. To determine this, divide total assets by net worth.
- A common business goal is to run a profitable organisation, which typically means increasing revenue limiting expenses.
- The goal of a profitability objective could consist of increasing annual sales by 15 percent or gaining five new accounts each month.
- Return on assets shows the percentage of profits a company makes relative to its resources.
- An expense objective could involve finding a new operating facility that decreases the rent by $2000 a month or cutting monthly phone and utility bills by 10 percent.
- If a business has a net profit margin of 40 percent, they are making 40 cents for each dollar of sales generated.
- A retailer who has an asset turnover rate of 6.0 is earning $6 in sales for each dollar it invests in assets.
- A retailer with $20,000 in assets and a $3,500 in net income would have a return on assets of 1.75 percent.
- At the end of 2016, Marcy’s had $15.53 billion in debt and $4.32 in equity, leaving it with a 3.59 score in financial leverage.
MARKET SHARE OBJECTIVE
A market share objective determines the percentage of market share an organisation aims to capture. Increasing market share is one of the most important objectives of the business. The main advantage of using market share as a measure of business performance is that it is less dependent on macro environmental variables like the state of the economy or changes in tax policy.
Goals of market share objectives
- Increasing market share is the ultimate goal of any business. Market share growth is an unavoidable objective of a comprehensive marketing plan.
- Tracking the company’s rate of new customer acquisition is an effective way to gauge a marketing plans contribution to growing market share.
Examples of market share objective
- A market share objective can be to achieve a market share of 25 percent for product ‘A’ within three years of launch.
- The objective could also be to increase the percentage of customers who rate services as excellent from 75%to 80% within two years.
A promotional objective aims at promoting its goods and services. It is the desired level of awareness of the product. The promotional objective is a part of the overarching strategy. Creating a brand identity with imagery and punchlines is the first stage of a marketing campaign, followed by expanded messaging, either through email or social media.
Promotional objectives need to be defined and planned. You should first decide what you want to accomplish and then decide what you want to offer as incentives.
- Increase business- The primary objective of business is to attract new customers. This can be done through a variety of promotional actions like running targeted advertising campaigns, holding special events, launching a social media blitz, etc. The objective is to reach potential new customers and give them an incentive to encourage business.
- Increase sales- Once the organisation has its set of clients, the next promotional activity is to increase their spending, which means that the objective is to get customers to buy additional products or more expensive products than the ones that initially brought them to business.
- Encourage repeat business- This objective aims at converting one-time customers into regular customers by providing special offers, notice of sales, special perks, and two for one offers designed to keep them coming back.
- Brand awareness- Brand awareness is also one of the significant goals of marketing. This can be accomplished in part by being consistent in all marketing messages and using inexpensive promotional products.
- New product Introduction-The objective of promoting a new product launch is to expand a company’s reach into new markets, while still retaining its existing customer base.
- Using customer rewards cards that track what the customer purchases and generate coupons for similar products.
- Collecting customer contact information and putting the one-time buyers on a mail advertising list.
- Give away items such as fridge magnets, pens, cups with a company logo or image.
- A cleaning company might introduce home repairs; the objective is to attract new customers seeking home repair services while cross-selling existing customers who already use the company for their cleaning needs.
A growth objective analyses the current business size and determines or plans the growth strategies to achieve the desired amount of growth. Growth is an essential objective that contributes to increased revenue. By developing business strategies focused on growth, companies can increase their market share, realise sales efficiencies, and increase brand awareness, all of which translate to greater profits.
- The goal of any enterprise is to grow your business operation. Goals which include decision making in a firm so that it can narrow the gap between the present and projected earnings.
- Competitive landscape- Some organisations aim at growth to react to changes in the competitive landscape. Growth is a strategic objective that helps a company to position itself better against its competitors.
- Customer preferences and attitudes- Customers preferences and attitudes change regularly. The goal of a growth objective of a company may be to react to those changes.
- If you own a franchise unit. The goal might be to open five more units within a five year period. In such a case the objective includes exploring a new city every quarter or reducing your franchise fees by fifteen percent for the next six months.
- Providing better products or service than its competitors.
- Maintaining or developing a strong market position for a specific product or in a particular market where competition is high.
- Companies seek to provide better services through economies of scale.
Marketing goals are not the same as marketing objectives. Marketing goals can be long-term and short-term goals. Marketing goals should fit into your company’s financial objectives which can be expressed in units sold, dollars, market share, sales, ROI on advertising expenditures, awareness, sales conversion rates etc. Marketing goals are long-term achievements. Objectives are smaller steps within the marketing goals. Marketing goals are about being realistic considering what can be achieved, how motivated you are, the resources you have at your disposal. Motivation and capability are the keys to set realistic, achievable goals.