Marketing Objectives (AQA A-Level Business): Revision Notes
External and Internal Influences on Objectives and Decisions
When businesses set their marketing objectives, they cannot do so in isolation. These goals must take into account a range of factors both outside and inside the organisation. Understanding these influences helps businesses make realistic and achievable marketing decisions.
Marketing objectives are targets that the marketing function aims to achieve, such as increasing sales or building brand awareness. However, what a business can realistically achieve depends on both external factors (outside the business's control) and internal factors (within the business's control).
Key Distinction
External influences are factors in the wider environment that businesses must respond to but cannot control. Internal influences are factors within the business that can potentially be changed, though this may require time and resources.
External influences on marketing objectives
External influences are factors in the wider business environment that affect what marketing objectives a company can set. Businesses must respond to these external pressures when making marketing decisions.
Market conditions and competition
The state of the market plays a crucial role in shaping marketing objectives. Whether a market is growing or static (not growing) will determine what targets are realistic. In a growing market, businesses might set ambitious objectives for increasing sales. However, in a static or declining market, objectives may focus more on maintaining current market position rather than expansion.
Competition also heavily influences marketing objectives. The actions of rival businesses can force a company to adjust its targets. For example, if competitors launch aggressive price cuts or new products, a business may need to revise its market share objectives downward or change its strategy entirely.
Exam tip: Be prepared to explain how the same objective (e.g., increasing market share by 5%) might be realistic in one market context but unrealistic in another. Context is everything when evaluating marketing objectives.
Economic factors
The broader economic cycle significantly affects consumer behaviour and spending patterns. During periods of economic growth, consumers typically have more disposable income and confidence to spend. This creates opportunities for businesses to set growth-focused marketing objectives.
Conversely, during economic downturns or recessions, consumer spending tends to fall. Interest rates also influence spending – higher interest rates make borrowing more expensive and saving more attractive, reducing consumer expenditure. In such conditions, businesses may need to set more conservative marketing objectives, perhaps focusing on maintaining sales rather than growing them.
Real-World Example: Economic Crisis Impact
During the 2008 financial crisis, many UK retailers had to abandon growth objectives and instead focus on survival and maintaining customer loyalty. Businesses shifted from expansion targets to defensive strategies aimed at protecting their existing customer base.
Social factors
Consumer tastes and preferences are constantly evolving. What was fashionable or desirable last year may not appeal to consumers today. Fashion trends, lifestyle changes, and shifting cultural values all influence what products consumers want to buy.
Businesses must regularly review their marketing objectives to ensure they reflect these changing social trends. Failing to adapt to changing consumer preferences can result in declining sales and loss of market relevance.
Social Trend Example: Plant-Based Revolution
The growing consumer preference for plant-based foods has led many UK supermarkets and food manufacturers to revise their marketing objectives to include targets for expanding vegan and vegetarian product ranges. This represents a successful adaptation to changing social values around health, environment, and animal welfare.
Ethics
Modern consumers are increasingly conscious of ethical issues in business. Many customers now consider how products are made, where they come from, and whether the companies behind them operate responsibly.
This heightened ethical awareness has prompted numerous businesses to revise their marketing objectives. Companies now incorporate ethical considerations into their marketing strategies to meet consumer expectations and maintain brand reputation.
Ethical Marketing Examples
Fair Trade Movement: Many UK coffee shops and supermarkets have set objectives around increasing their range of fair trade products, responding to consumer demand for ethically sourced goods.
Labour Practices: Fashion retailers have revised objectives to ensure they do not exploit workers in developing countries, following consumer campaigns against sweat shop labour. Brands now include ethical sourcing targets as core marketing objectives.
Technology
Technological change has transformed how businesses both produce and sell their products and services. Technology influences marketing objectives in several significant ways.
The growth of online sales has been particularly impactful. E-commerce has opened up new markets and customer segments, enabling businesses to set objectives around digital sales channels that would have been impossible previously.
Technology has also enabled mass customisation – allowing consumers to personalise and design their own products. This capability has created opportunities for businesses to set differentiation-focused marketing objectives.
Technology-Driven Objectives
Many UK retailers like Next and ASOS have had to adjust their marketing objectives to include specific targets for online sales growth, reflecting the shift in consumer shopping behaviour toward digital channels. Some retailers now set objectives where 50% or more of sales must come from online channels.
Internal influences on marketing objectives
Internal influences are factors within the business that either enable or constrain what marketing objectives can realistically be achieved. These are generally within the business's control to change, though doing so may take time and resources.
Finance available
All marketing activities require funding. The budget allocated to the marketing function directly constrains what objectives can be pursued. A business with healthy finances can allocate larger amounts to marketing, enabling more ambitious objectives such as entering new markets or launching major promotional campaigns.
Conversely, businesses facing financial difficulties must set more modest marketing objectives that can be achieved with limited resources. The marketing department must work within its allocated budget, regardless of what it might ideally want to achieve.
Financial Reality Check
Remember that even a great marketing idea cannot be pursued if the business lacks the financial resources to implement it. The finance available acts as a hard constraint on marketing ambitions, making this one of the most critical internal influences.
Production capacity
Marketing objectives must be realistic in terms of what the business can physically produce and deliver. The operations function must be able to support any sales growth targets set by marketing.
There is no point in setting an objective to increase sales by 50% if the business lacks the production capacity to manufacture that many additional units. Before finalising marketing objectives, the marketing team must liaise with operations to ensure targets are physically achievable.
Production Constraint Example
A small UK bakery cannot set an objective to double sales within a month if it only has one oven and cannot produce more than its current output. The business would first need to invest in additional ovens or expand its premises before such a sales objective becomes realistic.
Human resources
Marketing objectives must also consider the size and capabilities of the workforce. Achieving certain objectives may require additional staff or new skills within the team.
For instance, if a business sets an objective to increase market share significantly, this might require recruiting more sales staff or training existing employees. Without adequate human resources, even well-planned marketing objectives may fail.
Workforce Planning Example
A UK estate agency setting an objective to expand into three new towns will need to consider whether it has enough qualified estate agents to staff these new branches, or whether recruitment and training will be necessary. The business must align its HR strategy with its marketing objectives.
Nature of product
The characteristics of the product itself influence what marketing objectives are realistic. Different products have different potential for growth and market expansion.
Innovative products often have considerable scope for growth. New or unique products can attract customers and gain market share relatively quickly, making ambitious growth objectives feasible.
In contrast, mature products such as basic commodities like bread or fuel have limited growth potential. Markets for these products are typically stable, with little room for individual businesses to grow significantly. For such products, marketing objectives might focus more on maintaining market share rather than rapid expansion.
Product Lifecycle Impact
A UK company launching an innovative new technology product might realistically set an objective of 200% sales growth in the first year, capitalising on novelty and market excitement.
However, a petrol station would find such a growth objective unrealistic given the mature, stable nature of the fuel market. For this business, objectives around customer loyalty or slight market share gains would be more appropriate.
Key Points to Remember
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External influences are factors outside the business's control (market conditions, economy, social trends, ethics, technology) that affect what marketing objectives are realistic.
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Internal influences are factors within the business (finance, production capacity, human resources, product nature) that enable or constrain marketing objectives.
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Marketing objectives must be set with both external and internal influences in mind – ignoring either can lead to unrealistic or unachievable targets.
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Businesses need to regularly review their marketing objectives as both external and internal influences change over time.
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Understanding these influences helps explain why different businesses in different situations set very different marketing objectives, even when operating in the same industry.