download instant at www.easysemester.com
Chapter 2
Objectives
Chapter Introduction· Objectives are declared at the beginning of the marketing plan.
· Clear, actionable objectives are vital to the successful execution of the marketing plan.
· Murky objectives lead to indecisive strategy, which in turn will be difficult to implement through the tactics of the marketing mix.
Lecture OutlineOrganizational Mission and Competitive Advantage
· Mission
o The mission is the overall purpose of the organization. It describes the general scope of activities for the firm, and often includes fundamental principles of the manner in which the organization intends to do business.
· Competitive Advantage
o The competitive advantage of an organization is its set of distinctive capabilities that give it a cost advantage or a differentiation advantage over the competition.
o Each element in the Michael Porter’s value chain model can be transformed into a competitive advantage. Refer to figure 2.1.
Setting Objectives
· Objectives are items that focus organizational effort toward improving the organization’s competitive strength and its long-term market position.
· Limiting the number of objectives to only one will definitely improve the plan’s focus. Trying to implement more than three objectives at once can be counterproductive, because the organization’s efforts gets scattered in too many directions.
· Organizations generally have five types of objectives:
o Financially Related Objectives: Addressing monetary results
o Market Share-related Objectives: Focusing on the organization’s size of the market
o Product or Service-related Objectives: Concentrating on the organization’s offering to the market
o Customer-related Objectives: Engaging in customer-related issues
Clear Objectives
· Objectives should be clear to ensure their success.
· Objectives should follow the S.M.A.R.T. objective framework:
o Specific: Specific objectives are precise about what they intend to achieve.
o Measurable: Measurable objectives are quantified.
o Achievable: Achievable objectives are possible and leverage existing abilities and skills.
o Realistic: Realistic objectives are rational and allocate an adequate amount of resources to support their completion.
o Time-based: Time-based objectives state when the objective will be completed.
Practical Planning
· As an aid to understanding the marketing plan process, the preparation of a typical plan is demonstrated by creating a marketing plan for Expedia, Inc., an organization that provides online travel agency (OTA) services.
· Expedia started in 1996 as a small division in Microsoft to give consumers a new way to research, plan, and book their comprehensive travel needs. Over time, Expedia added capabilities by acquiring travel-related firms, and now Expedia-branded websites feature airline tickets, hotel reservations, car rental, cruises, and many other in-destination services from a broad selection of partners.
· Expedia’s mission is “To become the largest seller of travel in the world, by helping everyone everywhere plan and purchase everything in travel.”
· Expedia’s competitive advantage is the power of its four critical assets: its portfolio of travel brands, technology and content innovation, global reach, and breadth of service offerings.
· Expedia’s objective can be “Increase sales of new travel services, such as new vacation packages (where new services are defined as those introduced within past 3 years), from 10% of total revenue to 15%, to be completed by end of calendar year 2012”
· The objective reflects Expedia’s mission and competitive advantage. Also, the objective meets the S.M.A.R.T. framework.
Discussion questions1. Who should set the marketing objectives for the organization? Should that task be left exclusively to the marketing department?
Answer: Students’ answers will vary. Who sets the marketing objectives for an organization may vary from organization to organization. Generally, the marketing manager will set marketing objectives by taking into consideration the inputs from other departments and the senior management. While setting marketing objectives, it is important to take into consideration inputs from other departments because capabilities of these departments affect achievement of the marketing objectives. For example, the finance department can give information regarding the amount of money that can be invested in the manufacturing of the product and budget for the marketing activities. Also, cross-functional collaboration helps gain buy-in on the objectives.
2. How should the confidentiality of marketing objectives be treated? How do we weigh the advantages of having the entire team working together when they all know the objectives versus the disadvantage of having the objectives leak to competitors?
Answer: Students’ answers will vary. The answers may include following points:
· Objectives are items that focus organizational effort toward improving the organization’s competitive strength and its long-term market position.
· In order to achieve the objectives it is important that all the team members are aware of the objectives so that each individual knows what he or she is supposed to do.
· If all the team members know the objectives, there is a possibility that some of the members may not be willing to accept the objectives due to internal politics.
· As more and more people know about the objectives, it increases the risk that the objectives might leak to competitors.
3. What are the consequences for incorrect objectives? For example, if we had specified an objective to grow market share, but in hindsight realize we should have devoted our efforts to developing a new service instead, how does that impact the organization?
Answer: Objectives should be clear to ensure their success. Murky objectives invite confusion. Setting objectives is one of the initial steps in the marketing planning process. So if the objectives are incorrect then it hampers the entire marketing process.
Exercises1. Develop a set of objectives, strategy, and (draft) marketing mix tables for the marketing plan you are currently developing. Follow the model shown in the Practical Planning section.
Answer: Students' answers will vary.
Students should first determine the mission and the competitive advantage of the selected organization. Then the students can determine an objective for the organization which suits its mission and competitive advantage. The objective should meet the S.M.A.R.T. framework. Based on the objective, the students can design a strategy and determine the marketing mix.
2. Repeat Exercise 1 for a different set of objectives, strategies, and marketing mix elements that could also be relevant to the organization.
Answer: Students can repeat the steps mentioned in the answer of Question 1 and determine a different set of objectives, strategies, and marketing mix.
3. State the advantages and disadvantages of the two sets of objectives, strategies, and marketing mix elements. Which set comes closer to the organization’s stated mission and competitive advantages?
Answer: Students answers will vary. Students can compare the two sets of objectives, strategies, and marketing mix and then determine which of these two sets comes closer to the organization’s stated mission and competitive advantages.
In Class Activities1. The class can be divided in two groups. Each group should come up with an imaginary organization. The group should specify the business of the organization and the market in which the organization operates and other relevant details. Then each group should determine mission and marketing objectives for the imaginary organization created by the other group and the other group should evaluate the mission and the objectives based on the SMART frame work.
With the help of this activity students will learn how to develop mission and marketing objectives and how to evaluate them according to the SMART frame work.
Homework Assignments1. Students can be asked to read the ‘Marketing Myopia’ paper written by Theodore Levitt. It will help students to look beyond the current business activities performed by their organization and think "outside the box". This in turn will help the students in determining better marketing objectives for their marketing plans. The following article gives a summary of this paper:
http://en.wikipedia.org/wiki/Marketing_myopia
download instant at www.easysemester.com