Marketing Aims & Objectives Flashcards
The purpose of marketing aims & objectives
Helps businesses grow or increase turnover and profitability.
What are aims and objectives?
An objective is a simple yet short term goal
An aim is a complicated, longer-term goal
The six main marketing aims & objectives
Understand customer needs & wants: objective
Develop new products: objective
Improve profitability: aim
Increase market share: aim
Diversification: aim
Increased brand awareness & loyalty: aim
Why should a business understand customer needs and wants?
As part of its marketing role, a business needs to identify its typical customer. Understanding customer behaviour enables a business to operate and develop to serve its customers.
For example, supermarkets and other large retailers offer online shopping, home delivery and customer collection. They often have
24-hour opening. This matches customer needs and wants.
Why should businesses develop new products?
When customers’ needs and demands are identified the business may find that a new product or service is required. Being the first to offer a product or service can mean massive sales and profits.
Example: A tech company creates a smartwatch with advanced health tracking to cater to fitness enthusiasts, this will give the tech company a huge advantage over its competitors.
How & why should businesses improve profitability?
More sales can mean more profit. Greater profits can also be made by setting the selling price much higher than the cost of making the product or delivering the service. Marketing can help to convince customers that a higher price means a better quality product.
For example, branded petrol and diesel such as Shell or BP is usually more expensive than unbranded fuel from Asda, Tesco or Morrisons. The branded fuel is sold as a premium product.
Another example, a retailer improves profitability by introducing a loyalty program that increases repeat purchases and boosts overall sales.
Describe why being innovative is so important for a business?
Being innovative is crucial for a business because it drives growth, helps stay ahead of competitors, and meets evolving customer needs. Innovation can lead to new products, services, or processes that improve efficiency and market appeal. Being the first to innovate these new products or services can give a competitive edge.
Why do businesses want to increase market share?
All businesses have competitors and must fight for their share of the sales. Increasing market share even by less than 1 per cent can mean a huge leap in sales and profits. Businesses increase market share by attracting more customers through strategies like improving product quality, lowering prices, expanding marketing efforts, or entering new markets.
Example: a smartphone company might offer competitive pricing and innovative features to attract more customers, thereby increasing its share of the smartphone market.
Another example: Around 1 billion smartphones were sold worldwide in 2015. Samsung has a 21 per cent market share compared to Apple with 14 per cent. Samsung sold 210 million smartphones.
If Samsung’s market share increased by 1 per cent, it would sell another 10 million smartphones.
Why do businesses want diversification?
A business does may not want to rely on sales of one product in one market as demands could fall; competitors might take their market share. Offering different products and services in different markets is a good way to make sure that the business survives and continues to grow.
Example: Clothing designers such as Diesel sell a wide range of fashions in difterent markets. They have also diversified to sell perfume.
Another example: A clothing retailer diversifies by starting a new line of home goods, such as furniture and decor, to reach customers beyond fashion and reduce reliance on clothing sales.
Why do businesses want to increase brand awareness & loyalty?
A brand is a product or service which has a recognisable name and packaging. Marketing aims to ensure that customers instantly recognise the brand and choose to buy it rather than a competitor’s brand.
What is brand loyalty?
Brand loyalty is a measure of how likely a customer is to buy a brand compared to competing brands. High loyalty means continued and regular sales.
Example: For businesses to maintain customer loyalty, most of the major supermarket chains have customer loyalty cards. They reward customers for their brand loyalty by offering deals and discounts.
An established car sales business wants to grow and increase its turnover and profitability. Identify possible ways of achieving these aims and objectives.
Think about each of the six marketing aims and objectives and match them to what the business wants to achieve.
- Increase Market Share: Offer competitive pricing and financing.
- Develop New Products: Introduce new car models or features.
- Diversify: Add services like car maintenance or parts sales.
- Improve Profitability: Optimize operations and reduce costs.
- Stimulate Demand: Run promotions and special offers.
- Satisfy Demand: Stock popular car models and accessories.
Market share vs value share
Market Share: Percentage of total sales a company controls.
Example: Selling 30 out of 100 units of the market = 30% market share.
Value Share: Percentage of total revenue a company earns within the market.
Example: Earning $300 out of $1,000 total revenue of the market = 30% value share.
