Objectives provide specific and quantitative benchmarks that can be used to gauge progress toward the achievement of the marketing goals. In some cases, a particular goal may require several objectives for its progress to be adequately monitored, usually across multiple business functions. For example, a goal of “creating a high-quality image for the firm” cannot be accomplished by better inventory control if accounts receivable makes mistakes and customer complaints about the firm’s salespeople are on the rise. Similarly, the marketing department alone could not have accomplished Home Depot’s phenomenal growth from two Atlanta-based stores in 1979 to over 2,200 worldwide stores today. Such anendeavor requires a carefully coordinated effort across many departments.
Goals without objectives are essentially meaningless because progress is impossible to measure. A typical marketing objective might be: “The sales division will decrease unfilled customer orders from 3 percent to 2 percent between January and June of this fiscal year.” Note that this objective contains a high degree of specificity. It is this specificity that sets goals and objectives apart. Objectives involve measurable, quantitative outcomes, with specifically assigned responsibility for their accomplishment, and a definite time period for their attainment. Let’s look at the specific characteristics of marketing objectives.
Attainability As with goals, marketing objectives should be realistic given the internal and external environments identified during the situation and SWOT analyses. A good objective is one that is attainable with a reasonable amount of effort. Easily attainable objectives will not motivate employees to achieve higher levels of performance. Likewise, good objectives do not come from false assumptions that everything will go as planned or that every employee will give 110 percent effort. In some cases, competitors will establish objectives that include taking customers and sales away from the firm. Setting objectives that assume inanimate or inept competitors, when history has proven otherwise, creates objectives that quickly lose their value as employees recognize them as being unreasonable
Continuity The need for realism brings up a second consideration, that of continuity. Marketing objectives can be either continuous or discontinuous. A firm uses continuous objectives when its current objectives are similar to objectives set in the previous planning period. For example, an objective “to increase market share from 20 to 22 percent in the next fiscal year” could be carried forward in a similar fashion to the next period: “to increase market share from 22 to 24 percent in the next fiscal year.” This would be a continuous objective because the factor in question and the magnitude of change are similar, or even identical, from period to period
An important caveat about continuous objectives: Objectives that are identical, or only slightly modified, from period to period often do not need new strategies, increased effort, or better implementation to be achieved. Marketing objectives should lead employees to perform at higher levels than would otherwise have been the case. Employees naturally tend to be objective oriented. Once they meet the objective, the level of creativity and effort tends to fall off. There are certainly circumstances where continuous objectives are appropriate, but they should not be set simply as a matter of habit.
Discontinuous objectives significantly elevate the level of performance on a given outcome factor, or bring new factors into the set of objectives. If sales growth has been averaging 10 percent, and the SWOT analysis suggests that this is an easily obtainable level, an example of a discontinuous objective might be “to increase sales 18 percent during the next fiscal year.” This would require new strategies to sell additional products to existing customers, to expand the customer base, or at the very least to develop new tactics and/or enhance the implementation of existing strategies. Discontinuous objectives require more analysis and linkage to strategic planning than continuous objectives.
Developing discontinuous objectives is one of the major benefits a company can gain from applying for the Malcolm Baldrige National Quality Award. Exhibit 4.10 identifies the performance criteria for the Baldrige Award. To demonstrate proficiency in these areas, a firm must first establish benchmarks, which typically are the quantitative performance levels of the leaders in an industry. The firm then develops objectives that center on improving performance in each area. Many companies feel that simply applying for the Baldrige Award has positive effects on performance, if for no other reason than the process forces the company to set challenging discontinuous objectives. This is also true for organizations that use the Baldrige guidelines as a planning aid.
Time Frame Another key consideration in setting objectives is the time frame for their achievement. Although companies often establish marketing plans on an annual basis, marketing objectives may differ from this period in their time frame. Sales volume, market share, customer service, and gross margin objectives may be set for terms less than, equal to, or greater than one year. The time frame should be appropriate and allow for accomplishment with reasonable levels of effort. To set a target of doubling sales for a well-established company within six months would likely be unreasonable. On the other hand, objectives having an excessively long time frame may be attained without any increased effort or creativity. The combination of managerial expertise and experience, along with the information acquired during the situation and SWOT analyses, should lead to the establishment of an appropriate time frame.
For objectives with longer time frames, it is important to remind employees of the objective on a regular basis and to provide feedback on progress toward its achievement. For example, employees at FedEx’s terminal in Memphis, Tennessee can see a real-time accuracy gauge that displays the company’s current performance in terms of getting packages to their rightful destinations. FedEx also uses a nightly countdown clock to remind employees of the speed needed to turnaround packages and load them onoutbound cargo planes. Whether a weekly announcement, a monthly newsletter, or a real-time gauge on the wall that charts progress toward the objective, feedback is a critical part of the objective-setting process, particularly for longer-term objectives
Goals without objectives are essentially meaningless because progress is impossible to measure. A typical marketing objective might be: “The sales division will decrease unfilled customer orders from 3 percent to 2 percent between January and June of this fiscal year.” Note that this objective contains a high degree of specificity. It is this specificity that sets goals and objectives apart. Objectives involve measurable, quantitative outcomes, with specifically assigned responsibility for their accomplishment, and a definite time period for their attainment. Let’s look at the specific characteristics of marketing objectives.
Attainability As with goals, marketing objectives should be realistic given the internal and external environments identified during the situation and SWOT analyses. A good objective is one that is attainable with a reasonable amount of effort. Easily attainable objectives will not motivate employees to achieve higher levels of performance. Likewise, good objectives do not come from false assumptions that everything will go as planned or that every employee will give 110 percent effort. In some cases, competitors will establish objectives that include taking customers and sales away from the firm. Setting objectives that assume inanimate or inept competitors, when history has proven otherwise, creates objectives that quickly lose their value as employees recognize them as being unreasonable
Continuity The need for realism brings up a second consideration, that of continuity. Marketing objectives can be either continuous or discontinuous. A firm uses continuous objectives when its current objectives are similar to objectives set in the previous planning period. For example, an objective “to increase market share from 20 to 22 percent in the next fiscal year” could be carried forward in a similar fashion to the next period: “to increase market share from 22 to 24 percent in the next fiscal year.” This would be a continuous objective because the factor in question and the magnitude of change are similar, or even identical, from period to period
An important caveat about continuous objectives: Objectives that are identical, or only slightly modified, from period to period often do not need new strategies, increased effort, or better implementation to be achieved. Marketing objectives should lead employees to perform at higher levels than would otherwise have been the case. Employees naturally tend to be objective oriented. Once they meet the objective, the level of creativity and effort tends to fall off. There are certainly circumstances where continuous objectives are appropriate, but they should not be set simply as a matter of habit.
Discontinuous objectives significantly elevate the level of performance on a given outcome factor, or bring new factors into the set of objectives. If sales growth has been averaging 10 percent, and the SWOT analysis suggests that this is an easily obtainable level, an example of a discontinuous objective might be “to increase sales 18 percent during the next fiscal year.” This would require new strategies to sell additional products to existing customers, to expand the customer base, or at the very least to develop new tactics and/or enhance the implementation of existing strategies. Discontinuous objectives require more analysis and linkage to strategic planning than continuous objectives.
Developing discontinuous objectives is one of the major benefits a company can gain from applying for the Malcolm Baldrige National Quality Award. Exhibit 4.10 identifies the performance criteria for the Baldrige Award. To demonstrate proficiency in these areas, a firm must first establish benchmarks, which typically are the quantitative performance levels of the leaders in an industry. The firm then develops objectives that center on improving performance in each area. Many companies feel that simply applying for the Baldrige Award has positive effects on performance, if for no other reason than the process forces the company to set challenging discontinuous objectives. This is also true for organizations that use the Baldrige guidelines as a planning aid.
Time Frame Another key consideration in setting objectives is the time frame for their achievement. Although companies often establish marketing plans on an annual basis, marketing objectives may differ from this period in their time frame. Sales volume, market share, customer service, and gross margin objectives may be set for terms less than, equal to, or greater than one year. The time frame should be appropriate and allow for accomplishment with reasonable levels of effort. To set a target of doubling sales for a well-established company within six months would likely be unreasonable. On the other hand, objectives having an excessively long time frame may be attained without any increased effort or creativity. The combination of managerial expertise and experience, along with the information acquired during the situation and SWOT analyses, should lead to the establishment of an appropriate time frame.
For objectives with longer time frames, it is important to remind employees of the objective on a regular basis and to provide feedback on progress toward its achievement. For example, employees at FedEx’s terminal in Memphis, Tennessee can see a real-time accuracy gauge that displays the company’s current performance in terms of getting packages to their rightful destinations. FedEx also uses a nightly countdown clock to remind employees of the speed needed to turnaround packages and load them onoutbound cargo planes. Whether a weekly announcement, a monthly newsletter, or a real-time gauge on the wall that charts progress toward the objective, feedback is a critical part of the objective-setting process, particularly for longer-term objectives
Assignment of Responsibility One final aspect of objectives that sets them apart from goals is that the marketing manager must identify the person, team, or unit responsible for achieving each objective. By explicitly assigning responsibility, the firm can limit the problems of stealing credit and avoiding responsibility. A bank might give the marketing department the responsibility of achieving an objective of “having 40 percent of its customers list the bank as their primary financial institution within one year.” If by the end of the year, 42 percent of all customers list the bank as their primary financial institution, the marketing department gets credit for this outcome. If the figure is only 38 percent, the marketing department must provide an explanation.
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