After identifying a strategic focus, the marketing manager may have some ideas about potential marketing activities that can be used to leverage the firm’s competitive advantages relative to the opportunities available in the market. At this stage, however, there are likely to be many different goals and objectives that coincide with the anticipated strategic direction. Because most firms have limited resources, it is typically difficult to accomplish everything in a single planning cycle. At this point, the manager must prioritize the firm’s strategic intentions and develop specific goals and objectives for the marketing plan.
We reiterate that marketing goals and objectives must be consistent with the overall mission and vision of the firm. Once the firm has a mission statement that clearly delineates what it is, what it stands for, and what it does for others, the marketing manager can then begin to express what he or she hopes to achieve in the firm’s marketing program. These statements of desired accomplishments are goals and objectives. Some use the terms “goals” and “objectives” interchangeably. However, failure to understand the key differences between them can severely limit the effectivenessof the marketing plan. Goals are general desired accomplishments, while objectives provide specific, quantitative benchmarks that can be used to gauge progress toward the achievement of the marketing goals.
Developing Marketing Goals
As statements of broad, desired accomplishments, goals are expressed in general terms and do not contain specific information about where the organization presently stands or where it hopes to be in the future. Home Depot, for example, has a goal of having lower prices than the competition. This goal is not specific, however, because it does not specify a benchmark that defines what a lower price is. To achieve this goal, Home Depot offers a price guarantee that matches then beats competitors’ prices by 10 percent. Goals like these are important because they indicate the direction in which the firm attempts to move, as well as the set of priorities it will use in evaluating alternatives and making decisions.
It is also important that all functional areas of the organization be considered in the goal-setting process. In developing goals for the marketing plan, it is important to keep in mind that marketing goals should be attainable, consistent, comprehensive, and involve some degree of intangibility. Failure to consider these issues will result in goals that are less effective, and perhaps even dysfunctional. Let’s look more closely at these characteristics.
Attainability
We reiterate that marketing goals and objectives must be consistent with the overall mission and vision of the firm. Once the firm has a mission statement that clearly delineates what it is, what it stands for, and what it does for others, the marketing manager can then begin to express what he or she hopes to achieve in the firm’s marketing program. These statements of desired accomplishments are goals and objectives. Some use the terms “goals” and “objectives” interchangeably. However, failure to understand the key differences between them can severely limit the effectivenessof the marketing plan. Goals are general desired accomplishments, while objectives provide specific, quantitative benchmarks that can be used to gauge progress toward the achievement of the marketing goals.
Developing Marketing Goals
As statements of broad, desired accomplishments, goals are expressed in general terms and do not contain specific information about where the organization presently stands or where it hopes to be in the future. Home Depot, for example, has a goal of having lower prices than the competition. This goal is not specific, however, because it does not specify a benchmark that defines what a lower price is. To achieve this goal, Home Depot offers a price guarantee that matches then beats competitors’ prices by 10 percent. Goals like these are important because they indicate the direction in which the firm attempts to move, as well as the set of priorities it will use in evaluating alternatives and making decisions.
It is also important that all functional areas of the organization be considered in the goal-setting process. In developing goals for the marketing plan, it is important to keep in mind that marketing goals should be attainable, consistent, comprehensive, and involve some degree of intangibility. Failure to consider these issues will result in goals that are less effective, and perhaps even dysfunctional. Let’s look more closely at these characteristics.
Attainability
Setting realistic goals is important because the key parties involved in reaching them must see each goal as reasonable. Determining whether a goal is realistic requires an assessment of both the internal and external environments. For example, it would not be unrealistic for a firm in second place in market share, trailing the leading brand by just 2 percent, to set a goal of becoming the industry leader. Other things being equal, such a goal could help motivate employees toward becoming “number one.” In contrast, a firm in sixth place, trailing the fifth place firm by 5 percent and the leader by 30 percent, could set the same goal—but it would not be realistic. Unrealistic goals can be demotivational because they show employees that management is out of touch. Since one of the primary benefits of having goals is to motivate employees toward better performance, setting unrealistic goals can cause major problems.
Consistency
Consistency
In addition to being realistic, management must work to set goals that are consistent with one another. Enhancing market share and working to have the highest profit margins in the industry are both reasonable goals by themselves, but together they are inconsistent. Goals to increase both sales and market share would be consistent, as would goals to enhance customer service and customer satisfaction. However, setting goals to reduce inventory levels and increase customer service are usually incompatible. Goals across and within functional areas should also mesh together. This is a major concern in large organizations, and it highlights the need for a great deal of information sharing during the goal-formulation process.
Comprehensiveness
Comprehensiveness
The goal-setting process should also be comprehensive. This means that each functional area should be able to develop its own goals that relate to the organization’s goals. For example, if goals are set only in terms of advancing the technology associated with a firm’s products, members of the marketing department may wonder what role they will play in this accomplishment. The goal should be stated so that both marketing and research and development can work together to help advance the organizational goal of offering the most technologically advanced products. Marketing will need to work on the demand side of this effort (measuring customer needs and staying attuned to trends in the external environment), while research and development will focus on the supply side (conducting basic and applied research, as well as staying abreast of all major technological innovations). Goals should help clarify the roles of all parties in the organization. Functional areas that do not match any of the organization’s goals should question their need for future resources and their ability to acquire them.
Intangibility
Intangibility
Finally, goals should involve some degree of intangibility. Some planners have been known to confuse strategies, and even tactics, with goals. A goal is not some action the firm can take; rather, it is an outcome the organization hopes to accomplish. Actions such as hiring 100 new salespeople or doubling the advertising budget are not goals, as any firm with adequate resources can accomplish both tasks. However, having “the best-trained sales force in the industry” or “the most creative and effective advertising campaign in the industry” are suitable goals. Note the intangibility associated with the use of terms such as best trained, most creative, and most effective. These terms are motivational because they promote comparisons with rival firms. They also continually push for excellence, as their open-ended nature always leaves room for improvement.
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