Overview of the module
In the final module of section 1, marketing objectives, we build on our previous discussions [the marketing philosophy, the marketing definition, and the evolution of marketing] to discuss marketing from a marketing practitioner’s perspective. Although this is a short module, it is critically important as it provides the foundation for remainder of the e-book.
From a finance perspective, marketing is directed towards short-term and long-term revenue management and a focus is on building profitable exchange relationships. Therefore, marketing objectives go beyond financial objectives and include strategic and communication objectives. We can identify 9 key objectives assigned to marketing practitioners.
Although this is the smallest module it is crucial as the 9 key objectives of marketing practitioners runs through every aspect of marketing.
Whilst, the marketing concept, a marketing philosophy, the many marketing concepts, and the 4 marketing quests provide strategic direction and help nurture an organisational culture they are difficult to quantify/measure. The ever present situational factors [COMP factors] influence consumer decision-making and, collectively, influence organisational decision-making and therefore need to be measured in order to be managed. In many regards the situational factors provide the context to judge past organisational performance and help marketing practitioners to identify and shape future marketing objectives. The marketing objectives quantitatively measure the organisation’s performance and are generally managed through everyday research and marketing action plans that address the appropriate marketing metrics. This relationship is why marketing, from an organisational perspective, is described as an iterative process.
The 9 key objectives of marketing practitioners
In this slide we identify the 9 key objectives of marketing practitioners and arrange them into a 3X3 format. It should be highlighted that in many regards everything we discuss throughout this unit is directed towards the achievement of these objectives – it is easy to think ‘just another slide’, however, you will realise just how important they are in the 3rd section.
Financial marketing objectives:
The premise is that by improving the unique product value proposition [UPVP] customers will perceive the organisation’s product as more desirable – consequently, be willing to pay a price premium – sales revenue will increase. By focusing on customer satisfaction repeat business, referrals, reputation will produce a reduction of costs as a % of sales. Consequently, brand equity and the overall business value will increase. We will elaborate and outline the step when we discuss the circle of satisfaction.
Product leaders are products that are distinct, distinguishable, and discernible from alternative products and provide meaningful benefits at a cost which customers are comfortable with. Generally, product leaders enjoy better margins and are the basis on which other products in a segment are priced. Organisations that focus on customer intimacy generally have a customer lifetime value [CLV] approach and sales are generally more stable over time. Operational excellence means producing a product and taking it to market more effectively and efficiently than competitors. [The strategic objectives were adapted from Treacy and Wiersema (1997)]
Communication objectives recognise that attracting, retaining and enhancing relationships requires both internal and external communication strategies and tactics. And the recognition that to meet an organisation’s communication objectives an organisation must begin with internal marketing and a focus on quality value and satisfaction. Attract the right people – This means – attract the best staff and customers; Retain the right people – This means – retain the best staff and customer; Enhance relationships with customers, staff, channel partners, and society – This means – that all parties must profit and that relationships are synergistic, symbiotic, sustainable, and strategic
Consider both the organisation and the customer
We have stated that the marketing concept is built on the premise that if and organisation best satisfies the needs of a customer it is then best placed to satisfy it own need. Take a few minutes to consider the needs of the customer and the organisation in the following examples.
This slide shows a magnificent shop in Aosta in northern Italy. Why would a customer shop at this store and not the local supermarket?
Vendor at the Trevi Fountain
This pop-up street vendor is within 25 metres of the Trevi Fountain. The customers would be generally tourists. If you were the vendor how would you select your range of products and would it vary according to the seasons?
This slide provides a glimpse of a winter clothing store in a ski resort. If this was your store – how would you select the clothing and how would you vary your range according to the seasons?
The right mix
This slide shows a specialty bread shop. Given the shelf life of bread how important would it be to manage your stock levels. If you were to visit a shop such as this as a customer what qualities would entice you to send more than in the local supermarket.
Needs of the organisation and the customer
The previous 5 slides [activities] should help to identify that customer satisfaction is critical for the customer and the organisation – however, the needs of the customer and the organisation are different [why we introduced two marketing definitions]. Consider: In what ways do organisations and customer needs vary?
Organisations and the marketing concept
Consider: How the 9 key objectives of marketing practitioners come together to be part of the circle of satisfaction and provide an exploded view of the marketing concept?
The situational factors that influence one customer and influence that customer’s decision-making when collectively combined are the situational factors that influence organisational decision-making. COMP factors can be viewed through the eyes of buyers and sellers. We will discuss COMP factors as we progress, firstly how COMP factors influence the buyer decision process in section 2 and then the business-marketing planning process in section 3.
Best satisfying the customer & the organisation
What we have discovered so far is that marketing is about buyers and sellers coming together in a marketplace to best satisfy their needs. We have discussed how the situation factors effect/affect both the consumer/customer and the organisation. That the prevailing conditions or situational factors that influence one customer’s decision making during the buyer decision process when considered collectively will be the situational factors that influence the organisational decision-making during the business-marketing planning process. We unpack the buyer decision process in section 2 and the business-marketing planning process in section 3. This highlights the marketing concept which is built on the premise that organisations that best satisfy the needs of the customer are best placed to best satisfy their own needs. When an organisation adopts and practices the marketing concept the idea is that the sales baseline will increase and therefore the organisation is less dependent on discounting and sales promotional tactics. This is why some [e.g., Kotler] have long argued that marketing is philosophically the opposite of the production and selling concepts. As you study the 9 objectives of marketing practitioners you will see that they all interact. Organisational needs are outlined in the financial, strategic, and communication objectives of marketing practitioners.
introducing the 9 key objectives of marketing practitioners
We will now build on our previous discussions [the marketing philosophy, the marketing definition, and the evolution of marketing] to discuss marketing objectives from a marketing practitioner’s perspective. Understanding the objectives of marketing practitioners is of critical importance.
From a finance perspective, marketing is directed towards short-term and long-term revenue management and a focus is on building profitable exchange relationships. Therefore marketing objectives go beyond financial objectives and include strategic and communication objectives. We can identify 9 key objectives assigned to marketing practitioners.
the 3 financial objectives
financial marketing objectives:
There are 3 financial objectives that most concern marketing practitioners. The premise is, that by improving the unique product value proposition customers will see the product as more desirable and be willing to pay a price premium, therefore, sales revenue will be increased. This means that sales revenue may increase without increasing sales volume, [i.e., sales revenue is not entirely dependent on sales volume]. Furthermore, with an increase in sales revenue costs generally increase, however, the marketing objective is to ensure that costs are reduced as a percentage of sales. Overall cost reductions that result in a reduction in quality are likely to have long-term impact on the organisation and are generally viewed as de-marketing. Reducing costs as a percentage of sales may flow from increased customer satisfaction and loyal behaviour – which in turn will build the long-term value of the business. Costs as a percentage of sales may also be reduced when fixed costs are spread over higher sales volumes.
The 3 financial objectives of marketing practitioners are:
- To increase sales revenue: Not to be confused with sales volume often achieved through discounting
- To reduce costs as a percentage of sales: Cost may increase as revenue increases, but it is critical that they are reduced as a percentage of sales
- To build the value of the business: That the business fundamentals demonstrate a strong, healthy business and an attractive long-term investment
the 3 stategic objectives
strategic marketing objectives
There are three strategic marketing objectives that most concern marketing practitioners. The marketing concept suggests that organisations with the best satisfying products in any market segment are generally recognised as the leader in that market segment, are generally the most innovative and most responsive to trends.
Product leaders are more influential in determining the strategic direction of their organisation and driving change within an industry; they also are more likely to focus on customer education. Product leaders generally enjoy more recognisable brands and better margins and are the basis on which other products in that segment are priced. Organisations that have a strong customer service focus and have a thorough understanding of their customer’s needs and then through customer satisfaction build long-term relationships are generally the customers preferred product. Organisations that focus on customer intimacy generally have a customer lifetime value approach and sales are generally more stable over time. Although product leadership and customer intimacy may permit a price premium, operational excellence is needed to ensure that products are produced and efficiently delivered to market at minimum cost and therefore the organisation is rewarded with appropriate margins. Operational excellence requires staff development and a constant focus on quality and costs.
- Product leadership: Products that are distinct, distinguishable, and discernible from alternative products and provide meaningful benefits at a cost which customers are comfortable with.
- Customer intimacy: Understanding customers’ dreams, desires, and demands and building quality relationships, and creating customer ambassadors
- Operational excellence: Producing a product and taking it to market more effectively and efficiently than competitors
[The strategic objectives were adapted from Treacy and Wiersema (1997)]
the 3 communication objectives
communication marketing objectives
At first glance readers could be excused for thinking that the communication objectives are about advertising and public relations and if you look at most introductory marketing textbooks that is what they cover, however, keep in mind what we stated in the introduction that the e-book is intended to be an introductory text and a strategic text. Section 3 is for more advanced readers and explores the application of a marketing philosophy and marketing theory. Therefore, the communication objectives will cover internal and external communications. Of course, the 9 objectives of marketing practitioners all involve communication, however, the starting point is clearly internal communication.
To achieve this the marketing practitioner needs to clearly communicate the value of the marketing concept to the organisation. Engage the organisation to design and develop a marketing philosophy [how an organisation will go to market]. Then be a part of the business planning process, the marketing planning process, then design and develop a series of marketing plans and communicate to ensure that all the organisation objectives are achieved.
The 3 communications objectives of marketing practitioners are:
- Attract the right people: This means attract the best staff and customers
- Retain the right people: This means retain the best staff and customers
- Enhance relationships with customers, staff, channel partners, and society: This means that all parties must profit and that relationships are synergistic, symbiotic, sustainable, and strategic.
In this activity [we revisit this activity later with different learning in mind] we follow 4 university friends as they chat about life and work since leaving university. After participating in this activity you should recognise that organisations have different size and structures and this influences the marketing tasks that marketing practitioners will be involved in. From this an understanding of strategies and tactics should emerge.
In section 3 we will discuss how the marketing objectives become the basis for Collecting & Analysing organisational data [think marketing metrics or marketing analytics]. Obviously, this is super important, however, the depth to which each marketing objective is measured will vary according to the characteristics of the customer, the organisation, the market, and the product – the philosophy, size, and structure of the organisation should will influence the degree to which marketing metrics are collected and analysed. For example: if an organisation is a traditional bricks and mortar retailer the COMP data they collect and analyse would be quite different to an online retailer, and quite different to a contemporary omni-channel retailer.