3.3.1 - Marketing objectives and market measures

The purpose of marketing objectives

A marketing objective states what a business wants to achieve through its relationship with a market over a specified period.

Marketing involves understanding customer needs and satisfying them in a way that supports the business's aims. An objective provides direction: a team targeting repeat purchases will make different decisions from a team trying to enter a new market. A measurable target also helps allocate a budget, coordinate departments and compare actual performance with the intended result. Without it, a campaign can generate attention without anyone knowing whether that attention achieved something useful.

Sales volume is the number of units sold; sales value is the money received from sales, also called sales revenue. Increasing volume from 1,000 to 1,200 units does not necessarily raise value if the price falls substantially. Conversely, a price rise can raise value while volume falls. A target should identify which measure matters and the period involved.

Market size is total sales in a defined market over a period, measured either by volume or value. It describes the business's opportunity, although a single business usually cannot control the whole market. Market growth is the change in that market's size. Sales growth is the change in the business's own sales. Market share is the proportion of market sales accounted for by one business. Defining the market matters: a bakery can have a high share of one town's artisan bread market and a tiny share of all UK bread sales. Those are different claims.

Brand loyalty concerns customers repeatedly choosing a particular brand. A loyalty objective might be to raise the proportion of customers who make a second purchase within six months. It is useful where retaining customers lowers the need for expensive acquisition campaigns. Repeat purchase alone does not prove commitment: buyers may lack alternatives or be locked into a contract.

Illustrative case: a small bicycle repair business wants profitable local growth. “Raise repair bookings from 800 to 920 in the next calendar year while maintaining service quality” gives the marketing team a clear volume target. An additional repeat-booking target can support loyalty. These targets help the operations manager plan mechanics' hours and the finance manager judge whether the proposed advertising budget is affordable.

Objectives can conflict. Discounting may raise volume and market share while reducing revenue per sale and profit. An ambitious growth objective may require spending now for benefits later. Managers should therefore connect marketing targets to the overall purpose, resources and time horizon rather than automatically choosing the largest number.

Calculating market performance

Market comparisons are meaningful only when the business and market figures use the same product definition, geographical area, period and measurement basis.

The table gives annual sales in a reusable bottle market. All figures are sales value in millions of pounds and cover the same country and product category.

Share and growth in a growing market

1. Divide Larch's sales by the corresponding market total:

1. Divide each sales increase by its original value:

1. Larch grew more slowly than its market, explaining the lower share despite higher sales. Growth is rounded to one decimal place.

Higher share while sales fall

A supplier's sales fall from £18 million to £16 million while its market falls from £120 million to £80 million.

1. Calculate each share using that year's market:

1. Calculate each growth rate:

1. Share rose by 5 percentage points because the supplier's sales contracted more slowly than the market. Higher share does not establish higher revenue.

Tesco's 2024/25 results reported UK grocery market share of 28.3%, up 67 basis points over the year. Since 100 basis points equal one percentage point, that gain is 0.67 percentage points rather than 67% growth. The company also reported UK Clubcard sales penetration of 84%, a different measure concerning its own sales rather than the whole market. Tesco's 2024/25 results.

The share fell by one percentage point, from 15% to 14%. Its percentage fall relative to its original share is $(14-15)\div15\times100=-6.7\%$. Percentage points measure the difference between two percentages; percentage change compares that difference with the original figure. Describing this as a “1% fall” would leave the meaning unclear.

Market size can be found by adding the sales of all suppliers where the list is complete. Alternatively, a firm selling £6 million with a 20% market share implies a market size of $£6\text{ million}\div0.20=£30\text{ million}$. Dividing by 20 rather than 0.20 would produce an implausibly small market. A share is a fraction: 20% means one fifth, so the market should be five times the firm's sales.

Volume share and value share can differ. A premium bottle supplier might sell 10% of all bottles but receive 18% of total sales value because its average price is higher. Use the basis specified; do not divide units by pounds. If a market sells 50,000 bottles with total revenue of £500,000, the mean selling price is $£500{,}000\div50{,}000=£10$ per bottle. That average may conceal very different segments.

Loyalty, competitiveness and functional links

A marketing target improves competitiveness when the rest of the business can deliver the customer value needed to achieve it.

Brand loyalty can make demand more predictable and reduce customer switching. A reliable experience builds trust; customers may then tolerate a modest price premium or recommend the brand. However, loyalty must be earned repeatedly. A familiar name cannot indefinitely compensate for poor quality, misleading claims or a better competitor's offer. A loyalty scheme can also reward people who would have returned anyway, adding cost without changing behaviour.

Illustrative case: a subscription food-box business aims to increase repeat orders. Marketing proposes personalised reminders, but operations must deliver fresh products accurately and on time. Human resources must train staff to resolve complaints. Finance must fund packaging and customer support and compare the extra revenue with the cost of the retention programme. If promotion increases orders beyond packing capacity, late deliveries can damage loyalty precisely when the business is trying to build it.

The links operate in both directions. Operational improvements such as reliable delivery can become a credible promotional message. Cash shortages can limit how much a campaign spends. Recruiting skilled staff may enable a new service, while labour shortages may force marketing to slow demand. A realistic objective takes these constraints into account.

Ethical and environmental objectives can affect marketing choices. A business may aim to make product claims verifiable, reduce unnecessary packaging or avoid promotions that exploit vulnerable customers. These choices may build stakeholder trust and distinguish the brand, but their value depends on credible delivery and customers' priorities. An unsupported “environmentally friendly” claim can damage trust; extra spending on recyclable packaging may not be recovered immediately through a higher price.

Managers can use several indicators together: repeat purchase, complaint rates, market share and profit from the customer relationship. Each answers a different question. A rising repeat-purchase rate alongside falling profit may indicate that discounts are buying retention too expensively. The appropriate objective is one that supports the business's wider aims and can be delivered consistently.