Market Interpretation: Strategy and Objectives
- Articles, Blog

Market Interpretation: Strategy and Objectives


let’s discuss the competency — market interpretation — further. we’ve already discussed the concepts of segmentation, targeting, and positioning. now that we know the
market segments what would be a good target? and how should we position our product. let’s discuss the
concept marketing strategy a little more.
first of all, as a review, remember that market
share is the ratio of individual or company brand sales to industry wide sales. previously we looked at the entire cigarette market and
looked at demand for specific brands — that
being selective demand — and and we calculated market share — the ratio of individual sales to industry wide sales of a particular
product category. so let’s move on to the concept of marketing strategy. a
beginning concept is to establish what your marketing objectives
are. my question for you is — would it be a good marketing objective to perhaps increase market share? of course. even in times of poor economy or increased competition, your
marketing objective might be to maintain market
share. what about the concept of increasing your sales in terms the number unit you sell or in terms of your overall sales revenue? would that be a good marketing objectives? yes, of course that
would. what about the concept of increasing profits? would that be a good
marketing objective? yes it would. and of course there other marketing objectives too. my question
for you now — if you were a marketer which these 3 — market share, sales, or profitability — would you least want to be held accountable for? I think
all three are valid, but let me
illustrate why you might be less interested in being held
accountable for profitability than for sales or
market share. remember your profit from sales is equal to your total sales
revenue which comes from the number of units you sell times your price. the marketers hope to determine the price — that’s one of the elements of the
marketing mix. when you do marketing research you
find out how price sensitive your potential consumers
are at different prices and you decide what the best price for your product would be
in the market. also you make product, distribution, and promotion decisions. so even though you can’t control the amount sold, the marketer above any other person within a business organization
helps determine the amount sold more than anyone else. so off the marketer
has — because of the decisions they make — most influence on how many units sold and on the price, it seems to me like it would be fair
for them to be held accountable for sales — either in terms units sold or sales revenue. well back to this concept of not being held
accountable for profits. where do profits come from? we’ve already indicated that they come from sales revenue minus total expenses. so
what are your expenses? obviously there are a lot of marketing expenses but there are also a lot of other
expenses associated with a business that marketers have no control over. what about production costs or at lease negotiations? what about overtime expenses or the cost of buying some the raw materials other departments with an organization have more control over than marketers? so if I were a marketer — while it makes sense to me to be held
accountable for profit because I have a large input into profit because I have some influence on the units sold, the
price and marketing expenses, I would rather be
held accountable for sales or market share than profit because I don’t have control over a big aspect of our expenses being non- marketing expenses. obviously all three of these are appropriate marketing because
the whole reason we market is to make a profit unless of course you’re in a
not-for-profit organization which still practicesmarketing. so in conclusion all three are appropriate marketing objectives. if I had my choice I would be rather be held accountable for market share or
sales than profit. so let’s move on and talk a little bit more about writing
marketing objectives. marketing objectives must be measurable. so if you’re a marketing manager and your boss says he wants you to be great marketer, that’s not measurable. what does it mean to be a great
marketer? is it to increase sales? increase profit? increase market share? all 3 those are measurable. but in addition they must be specific. so if they tell you they want you to
increase sales but they don’t tell you by how much, that’s not good marketing objective. so we
need to say that we need to increase sales by a certain percent or by a certain dollar or by a
certain number of units sold. otherwise I’m it’s not specific and measurable. additionally marketing objectives must be time oriented. if you thought you had five years to
increase sales by five percent and your boss thought you knew you only had one year to increase sales by 5 percent, you can see where you may disagree on your performance
because your marketing objectives are not time oriented. so let’s look at
some marketing objectives and see if they meet these three
qualifications. first, increase sales by 3 percen by January 1 2015. is it measurable? yes increasing sales is measurable. we can measure units sold or dollar sold. is it specific? yes, it says 3 percent. Is it time oriented? a deadline is given. maintain market share during the
upcoming fiscal year. apparently you’re expecting competitors or change in the economic or technological or social
forces so we feel that simply maintaining market share would be
doing good. is measurable? certainly market share
is measurable. it is specific? yes you want to keep your
market share the same. is time oriented. yes, during the upcoming fiscal year. let’s look at
last one. increase profits to five hundred
thousand dollars between July 1 2016 and June 30 in 2017. is it measurabe? yes increasing the of profit you have is measurable. is it specific? yes its five hundred thousand dollars. is
time oriented? yes. one thing I want to point out is that things like changing your target market or changing your product or changing
your price or developing a new advertising campaign or a new distribution outlet — all those
things are what we would call marketing strategy to achieve our marketing objective. what i’ve illustrated here in writing are our marketing objectives. check talk a little bit more about how we can sell more. look at a model here which looks at different ways to sell more. one-way is to sell our existing product. if we try to sell our existing product in existing markets we call that simply penetrating the market or market penetration. when people say we need to sell more that’s usually what they think about if they don’t really understand marketing. another way sell more is to take your existing product to a New market — and that could be a new geographic market or a new demographic or perhaps even a new behavior or psychographic market. so when we take an
existing product to any New market, we call market that market development. another way to sell more is to stay within an existing market whether that be a geographic market or
demographic market — and come up a new products for that existing market. we could call that product development instead of market development — you developing a new product. and sometimes we can come up with a new
product targeted to a New market and we call that diversification. when Ford decides that it needs to sell more by selling more of its F 150s — an existing product in america — an existing market — we would call market penetration. when ford wants to sell more by selling its Ford Fiesta in a new market in India, we have an existing product in a
New market so we would call that market development. when ford decides that it wants to sell more by selling more the United States — an
existing market– but they come up with a brand new product
— the CMax which was launched in 2013 — we now have a new product in an existing American market so we have what’s called product development. when ford wants to reach the new market India but they do so by coming up with a product
specifically for that market like the EcoSport that’s called diversification. so ford can increase sales in a
variety of ways — by penetrating the market, by developing a new market, by developing a
new product, or by diversification. I hope you can see how selling more is not as easy as always just selling more of an existing product in an existing market.

About Ralph Robinson

Read All Posts By Ralph Robinson

Leave a Reply

Your email address will not be published. Required fields are marked *