setting-marketing-objectives as

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Exam code:7131

Marketing decisions and their relationship to other business functions

The role of marketing is to discover what customers want and to set the right product, price, place and promotion (the 4 Ps)
Every decision the marketing team makes has a knock‑on effect on other departments — and vice versa
- Marketing is the voice of the customer — but it needs the muscle of production, the wallet of finance and the people power of HR to turn ideas into reality

The relationship between marketing and other business functions

Four coloured, intersecting circles labelled Marketing, Operations, Finance and Human resources, illustrating their interconnection. — **Marketing decisions have an effect upon — and are affected by — other functional areas in a business**

Examples of the impact of marketing decisions on other business functions

Marketing decision	Functional area impact
Launch a limited‑edition product	Operations must tweak machinery or source new materials Potential for a high margin per unit, but finance will prepare sales forecasts to see if customers will pay more Selling a new product may require HR to organise staff retraining
Big TV advertising campaign	Operations may need faster workflows and perhaps extra shifts to meet higher demand Finance must budget for high upfront costs — cash flow planning is critical HR may need to recruit extra sales staff

The value of setting marketing objectives

Marketing objectives are clear, measurable targets that guide a business’s marketing efforts
Marketing objectives can help a business in several ways:
1. Give direction
  - Teams know exactly what to aim for, avoiding untargeted campaigns that have little chance of success
2. Allow measurement and learning
  - The results of marketing activities can be compared with the objective and improved next time
3. Help win budget and support
  - Clear, data‑backed objectives can reassure senior managers and investors and motivate employees

Examples of marketing objectives

Focus	Definition	Example
Sales volume	The number of units sold by a business	Greggs sells about 140m sausage rolls a year and has set an objective to increase that to 150m next year
Sales value	The money earned from sale of units	Domino’s Pizza Group has set the objectives of increasing UK and Ireland sales from £1.57bn in 2023 to £2bn by 2028
Sales growth	The percentage rise in sales volume or value over time	One of Starbucks‘ objectives is to achieve 7%–9 % yearly sales growth
Market growth	The increase in the size of a market as a whole	Vegan businesses Beyond Meat and Oatly are looking to grow the UK plant‑based market to 9.6 % by 2027
Market share	The portion of a market controlled by a particular company, brand or product	Samsung‘s objective is to maintain its position as the number one smartphone brand, with a 20% global market share
Brand loyalty	The share of customers who rebuy and recommend a business, brand or product	Nike‘s objective to build brand loyalty relies on its NikePlus programme members, who spend much more than non‑members do

Calculating sales volume, sales value and sales growth

Sales volume is the number of units sold by a business
- E.g. the number of Harry Styles album download purchases

1. Calculating sales value

Sales value is the money earned from sale of units
- E.g. the money earned by Apple Music from sales of music downloads
- Sales value is also known as sales revenue
- Sales revenue is a key business performance measure and must be calculated to identify profit
- It is calculated using the formula

$Sales space value space stretchy left parenthesis revenue stretchy right parenthesis equals space Selling space price space cross times space Number space of space units space sold$

When a firm sells one product, it is easy to calculate the sales value
- Computer systems make it easier to track sales value when multiple products are sold by a business

Worked Example

Fotherhill Organics Limited sold 39,264 packs of its specialist compost to mail-order customers in 2024. The price per pack was £8.75. In addition, it sold 4,280 tonnes to gardening businesses for £123.95 per tonne.

Calculate the value of Fotherhill Organics sales for 2024.

[3]

Answer:

Step 1: Calculate the income from sales to mail-order customers

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