3.3.1 Setting marketing objectives.

Question 1

What are marketing objectives?

Answer 1

The goals of the marketing department or function.

Question 2

Define sales volume.

Answer 2

Measures the number of items sold or produced.

Question 3

Define sales value.

Answer 3

Measures the financial worth of the items sold.

Question 4

What is the purpose of both sales value and volume?

Answer 4

To show the size of the business, based on its level of sales.

Question 5

What is the value of using sales volume as a marketing objective?

Answer 5

It is easy to measure and understand and it is useful for comparisons.

Question 6

Which is more valuable to multi-product firms?

Answer 6

Sales value.

Question 7

Outline market size.

Answer 7

Measured by volume as it is easier for people to identify with an item than a sum of money.

Indicates the potential sales for a firm. A larger market size provides a greater opportunity for an individual business to achieve high sales volume or sales value, so firms will wish to operate within a sizeable market.

Question 8

Define the term market size.

Answer 8

The volume of sales of a product, or the value of sales of a product.

Question 9

Formula for market growth:

Answer 9

market size in previous year.

Question 10

Why do businesses set market growth as an objective?

Answer 10

A business that is active in a market that has potential for fast growth, it is likely to benefit from this growth, thus achieving a rapid increase in its sales volume and value.

Question 11

Factors influencing market growth.

Answer 11

Economic growth.

The nature of the product.

Changes in taste.

Social changes.

Fashion.

Question 12

Outline social changes.

Answer 12

The way people live e.g. a greater tendency to stay home will assist sales of digital televisions.

Question 13

Outline fashion.

Answer 13

Recent television programmes highlighting home cooking, garden design and do it yourself are likely to influence the number of people pursuing those activities.

Question 14

Formula for sales growth.

Answer 14

Sales that year - sales in previous years.
________________ x100
sales in previous year.

Question 15

Define sales growth.

Answer 15

The percentage change in sales (volume or value) for a specific business or product over a period of time.

Question 16

Give an example of sales growth objectives.

Answer 16

1) A given increase in the level of sales volume e.g. increase sales by at least 8,000 units by 2022.

Question 17

Define market share.

Answer 17

The percentage or proportion of the total sales of a product or service achieved by a firm or a specific brand of a product.

Question 18

Market share formula.

Answer 18

Sales of one product or brand or company.
___________________ x100
Total sales in the market.

Question 19

Give an example of market share objectives.

Answer 19

A target percentage market share (e.g. Ford targeting a 14% share of the UK car market).

Question 20

Why is market share often used as a marketing objective?

Answer 20

Many analysts believe that market share is an excellent measure of marketing performance.

Question 21

What does an increase in market share indicate?

Answer 21

That a business is out-performing its rivals, usually by taking customers away from competitors but sometimes by proving to be more attractive to new customers when the market is growing.

Question 22

What are downsides of market share?

Answer 22

May not always be a reliable indicator of success. It can be very difficult to define ‘a market’. Supermarkets re always broadening their product range, consequently, it can be difficult to measure the size of a market accurately.

Question 23

How can a business increase brand loyalty?

Answer 23

Gain regular repeat purchases from loyal customers.

Spend less money on promotions and advertising, as customers do not need further persuasion.

Charge higher prices as loyal customers will be less concerned about the price of the product or brand.

Question 24

Why is brand loyalty an important marketing objective?

Answer 24

High brand loyalty enables a business to sell more and charge higher prices.

Question 25

What are the values of setting marketing objectives?

Answer 25

To act as a focus for decision making and effort.

To prove as a yardstick against which success and failure can be measured.

To improve co-ordination, by giving teams and departments a common purpose.

To improve efficiency, by examining the reasons for success and failure in different areas.

To motivate staff and improve their performance by setting challenging, realistic, targets.

To establish priorities, so that staff understand the relative importance of business objectives.

Question 26

Outline external influences on marketing objectives and decisions.

Answer 26

Market factors.

Competitors actions and performance.

Technological change.

Economic factors:
- Growth or recession in the
economy.
- Interest rates.

Suppliers.

Ethical and environmental factors.

Question 27

Outline internal influences on marketing objectives and decisions.

Answer 27

Finance.

Business/corporate objectives.

HR.

Operational issues.

Resources available.

Nature of the product.