BUSS3 Chapter 7 Marketing Strategies Understanding marketing objective

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Teacher presentation AQA Unit 3

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Chapter 7 Understanding Marketing Objectives:

Chapter 7 Understanding Marketing Objectives At A2 we develop your AS knowledge of marketing to consider the marketing objectives and strategies developed by larger organisations At the end of this chapter you will be able to Describe the range of marketing objectives typically set by larger businesses Explain and analyse how internal and external factors can influence marketing objectives

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Setting the scene Read Parkdean Holidays case study Class discussion

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Marketing Objectives Successful organisations base their functional objectives and strategies on the corporate objectives N o area of the business can work in isolation - there will be a range of internal and external factors that have an impact on the objectives Although the marketing objectives will develop from the corporate objectives they are likely to include some of the following To maintain or increase market share To maintain it needs to stop competitors taking its customers To increase it will need to take its competitors customers To target a new market segment of an existing or new market New market segment? A different target audience New market? The same market in another country To develop new goods and services as a result of market research findings or technological development A product may be coming to the end of its life cycle The business may be facing fierce competition Marketing objectives – the goals of the marketing function which come from, and are designed to help achieve, the corporate objectives

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Marketing Objective

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Internal factors influencing the Marketing Objectives However well conceived objectives do not automatically lead to success Various factors may occur that restrict the chances of the objectives succeeding These are known as constraints They may occur within the firm (internal) or be outside of its control (external) Constraints – factors that limit a firm’s ability to achieve its objectives Examiner’s tip – the impact on the business of these factors will vary and each scenario should be considered individually. The important thing is to understand how the plans of each functional area must complement each other

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Influence of Finance on Marketing Objectives The amount of money available to the marketing department (their budget) will determine what it can do The organisation’s overall financial position is very important It might be that the marketing budget will be high because the business is successful It might also be the case that if the firm is in difficulty it may need to increase its marketing budget The expected return is another important factor If their previous objectives have been successfully achieved they are more likely to get their desired budget If the expected return on a marketing project is relatively low there is less chance of funding being made available

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Other internal influences Human Resources What can be achieved depends on the skills and abilities of the workforce There is no point in planning to make use of technological developments if employees do not know how to use it The workforce might be under-utilised and have the potential to give the company a competitive advantage Operational Issues Marketing must take into consideration quality and capacity when setting objectives If a decision is made to introduce a new product the business must have the capacity to cope with additional customers In the same way, an operational objective of quality improvement needs to be incorporated into marketing planning activity – how might internal factors influence the marketing objectives set by Parkdean Holidays?

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External influences on marketing objectives As well as internal factors the firm will need to think about external factors when setting marketing objectives

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External influences (from outside) Competitors’ actions Current and/or future competitors’ actions have to be considered Assess their marketing mix (4 P’s) E.g. if a major competitor is developing an e-commerce channel the business will not be able to ignore it without losing market share Major promotional campaigns are often followed by equally large scale campaigns by rivals Technological change Technological developments can shorten product life cycles or to make products obsolete Computer aided manufacturing can reduce production times and labour costs – could allow entry into low cost markets Examiner’s tip – don’t assume that you have to include all possible factors when analysing internal and external influences on marketing objectives – ask yourself ‘how relevant is this to the scenario I have been given

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External influences (from outside) These include economic climate, social change, legislation and consumers’ need Economic climate e.g. recession or growth will have an affect on demand Social change e.g. fair trade issues that may increase demand from fair trade producers Legislation – e.g. regulations on recycled packaging have encouraged firms to change the materials they use for packaging Consumers needs change e.g. children staying in the family home longer changes the type of housing demanded Marketing objectives need to anticipate changes in all of the above

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Strike a balance between what is achievable and what is challenging Objectives work best when they are challenging but achievable In 1997 Unilever set an objective of obtaining 1/3 of its sales from Asia This was based on rapid growth in economies such as china In 2001 only 22% came from Asia Even in 2007 the figure had not been achieved In 2008 after ten years of sales decline the Guinness management invested £2.5 million in Guinness Red hoping things would turn around Cadbury has had 30% of the UK market share for decades – setting a target of 35% in 2 years would be implausible

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Section assessment Complete Case study and summary questions A2 Analysis – well structured and well developed arguments showing a clear sense of cause (why did it happen?)

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Analysis A2 Analysis – well structured and well developed arguments showing a clear sense of cause (why did it happen?) Understanding marketing objectives analysis Themes for analysis Explaining why a business might choose to adopt a particular marketing objective Examining the possible advantages and disadvantages to a business of adopting a particular marketing objective Considering the major influences on a business’s choice of marketing objective

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