The process of setting goals is integral to the strategic planning process (Berkowitz, Fredrick, Roger, Steven and William, 1998); this is because goals are very important to an organization because they help in controlling the planning process, motivate individuals and teams effort towards a common goal.
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They also enable a consistent approach on all the functions of the organization as they guide the formulation of strategies and tactics and form the basis of the budgeting process (Pearce and Robinson, 2009). Thus, because of their critical importance in the planning process and its impact on the success of an organization, goals must be carefully identified and selected.
The SMART criterion is valuable tool that guide organization in the goal setting process; SMART is an acronym for specific, measurable, attainable, relevant and time bound, which are considered the characteristics of effective goals (Prather, 2005). In the following section let us discuss each of these elements of SMART goals.
Specific: This attribute states that goals should be clearly defined and unambiguous; its involves what is expected, the importance of the goals, who is involved in its implementation, what attributes are important and in what areas are the goal expected to take place (Prather, 2005).
Thus, a good goal should provide precise information on what it wants to achieve; an example of a good specific goal is for example “to achieve 25% return on capital employed by year 2012”. Such a goal states specifically what the organization wishes to achieve which is 25% growth, in which area and by when.
An example of an ambiguous ineffective goal would be “to grow our return on investments that will satisfy investors”; it is ineffective because it does not satisfy all the features of a SMART goal.
Measurable: this element states that all goals should be quantifiable so that progress can be established; this means that the inputs and outputs should be easily measured in order to establish how successful an organization is (Prather, 2005).
An example of an effective measureable goal would be “to gain 25% markets share in the sport shoe segment by April 2015” while an ineffective goal would be ”to be a successful sport shoe company in the near future”.
Attainable: this attribute states that goals should be achievable and should consider the organization’s current circumstance (Prather, 2005). That is, goals should be realistic such that those who are expected to achieve those goals should have the necessary skills and experience supported by the organization financial capacity necessary to achieve them.
An effective attainable goal would be “to achieve 10% growth on our flagship brand in the next financial year while an unattainable goal would be “to achieve 40% growth in sales during a recession”.
Relevance: a good goal should add value to the organization and to its employees (Prather, 2005); this makes it essential for them to be linked to the goals of the organization, departments, teams and individuals.
They should also be relevant to the challenges that face the organization and should motivate and inspire the employees.
An effective relevant goal would be “to increase the brand awareness of our product in the market from 12%-25% for a new product that has entered the market during our first year of operation” while an irrelevant goal would be “to create the awareness of HIV to our consumers”. Such a goal adds no value to the firm.
Time Bound: goals should specify the time period within which they are to be achieved with (Prather, 2005); this is necessary to control for resource overuse or avoid the danger of goals becoming obsolete due to environmental changes.
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A good goal would be “to increase the size of our Chinese market operations from $ 200m to $1billion between year 2011 and 2015”. An ineffective goal would be to “to triple our operations in China”.
Goals setting process
Goal: 1. To create and raise the awareness of the J Boag and Sons company fine premium beer brands in Western Australia to 70% in the first one year in order to achieve high brand recognition and recall.
This goal has the following qualities that make it SMART; it is specific in that it states clearly what is to be achieved so as to create and raise awareness of the company’s brands. This is because it specifically states the product that is to be promoted and what it will accomplish i.e. to achieve high brand recognition and recall.
The goal is attainable because the company is indeed a producer of fine premium beer brands; it’s a company that is entering the Western Australian market through use of intensive marketing campaign and use of integrated marketing communication tools such as advertising and sales promotion and is possible for J. Boag and Sons Co to raise the awareness of the market to over 70%.
The goal is relevant to the firm because it’s entering a new market where it is relatively unknown and the level of differentiation between premium beer brands is low.
In addition, the important parameters of the goal are all measurable and they include the desired level of brand awareness and the time period in which the activity will take place. Finally, the goal is time bound as it states clearly that it the goal should be achieved within one year.
This goal addresses the company’s position as identified by the SWOT analysis. The SWOT analysis identified as a critical weakness, the low level of brand recognition and recall of the company’s brands in the Western Australian market.
This limits the company’s ability to position its product in a distinct manner in that market. Additionally as a company that is entering a new market, it is expected that its products would be relatively unknown. Thus the objective to create brand awareness in the market is a suitable and relevant first step for J Boag and So. Co. Ltd.
Goal: 2. to capture 15% of the rapidly growing market among young males for premium beers in Perth in the first two years. This goal has SMART attributes in that it specifically states what the company intends to do and identifies the geographical area where the company intends to achieve this goal.
It also clearly states the market that the company is targeting and is measureable as it defines the metrics that will be used to determine the effectiveness of the goal i.e. to achieve a 15% market share in the premium beer market. The goal is attainable because there is a rapid growing opportunity in the segment of young male of ages 18-30 years and the existing market is sizeable.
The company has a realistic opportunity to capture the 15% market share because it has the resources to make the finest beer in Australia. The goal is relevant because the company is seeking to establish its presence in the new market and is time-bound as it states that this goal has to be achieved in two years.
The goal also addresses the strengths and opportunities of J Boags and Sons co. as they were identified in the SWOT analysis. The opportunity presented by the growing market in Perth and its sizeable nature is attractive enough for the company to pursue.
To achieve this, the company will use its unique capabilities of its control of the strategic resources of the finest water and hops in the world which it will use to produce the fine premium beer to compete in the new market. The target of capturing 15% of the market share is achievable and the market share is expected to grow rapidly in the next five year.
Goal: 3. To challenge the dominant position of Swan lager in the premium beer market in Western Australia and to counter its marketing campaign, it is necessary to position J. Boag and Sons Co. beer as the finest premium beer that is made in Australia in the first year of operation and to make it the preferred brand amongst 18-30 year olds.
This goal is specific as it states what the organization seeks to achieve and how it will do so, it also defines in which markets and geographical area the company will challenge Swan lager and the duration it intends to do so. The goal is measurable because it states the variable that the company will be targeting in its activity namely the dominant market position of Swan lager.
The goal is relevant to the company because the competitor has vowed to defend its territory and market share by invoking the made in Western Australia sentiments among its lucrative consumer base in Perth.
The goal is attainable because the young male generation is less attached to their traditional Western Australia roots compared to the older generations. Again they are likely to embrace the new brand due to its finesse and the made in Australia label.
Finally, the goal is time-bound as it defines the period within with the goal is to be achieved. This goal addresses the threat identified in the SWOT analysis and uses its strength to counter the threat.
The SWOT analysis identified Swan lager as the market leader in Perth with market intentions to vigorously defend its market share. The company will use its strategic resources of fine water and hops and its position as the brewer of the finest premium brew in Australia to counter the threat posed by Swan Lager.
Formal and informal controls
To achieve the objectives and goals set out in the marketing plan, a set of controls are established at the planning stage that define expected performance and behavior within the firm (Ferrell and Hartline, 2011).
These controls are both formal and informal; formal controls refer to any official protocols established and enforced by the firm that exist specifically to ensure that the planned strategy is achieved (Ferrell and Hartline, 2011). They include official company policies, official reporting mechanisms, performance management regimes, compensation schemes, training and development systems amongst others.
Formal controls are classified in three basic categories.
Input Controls: these define the type, amount and quality of inputs that must be available before the marketing plan can be implemented (Ferrell and Hartline, 2011).
They include financial resources, capital expenditures, additional research and development and human resources (Ferrell and Hartline, 2011) that must be secured in order to effectively implement the marketing plan.
Process Controls refer to the mechanisms that are required for the execution of the plans and include controls that govern and motivate individual behavior and performance towards achieving the marketing plan objectives (Ferrell and Hartline, 2011).
They include management training, management commitment to the marketing plan and to employees, employees’ compensation, evaluation systems, employees discipline management, and the internal communication system (Ferrell and Hartline, 2011).
Output controls refer to mechanisms used to measure performance and compare it to stated marketing objectives during and after the implementation of the marketing plan (Ferrell and Hartline, 2011).
- Overall performance standards which measure how well the overall goals have been achieved and include sales revenues, sales volumes, market share, profitability, customer satisfaction amongst other market related metrics.
- Product performance standards measure the quality and performance of output; they include product specification, core product quality, experiential quality, innovation, branding and positioning.
- Price performance standards refer to the degree at which the desired price standards are achieved; they include revenues targets, supply and demand balance and price elasticity.
- Distribution standards measure the achievement of distribution goals and they include the effectiveness of distribution, supply chain integration, value arising from time, place, possession utility, collaboration with channel participants, and effectiveness of direct distribution (Ferrell and Hartline, 2011).
- Integrated marketing communication standards measure how well communication objectives are achieved and include brand awareness, recognition and recall, public relations and sales promotion effectiveness.
Informal controls refer to unofficial company policy or influences that can be used to control the behaviour and performance of individuals and organization towards the achievement of stated objectives (Ferrell and Hartline, 2011). Informal controls are classified into three categories, individual self controls, social controls and organization wide cultural controls (Ferrell and Hartline, 2011).
Employee self control is related to individual and they include employee satisfaction, employee commitment to the company, its objectives and employee’s confidence in their skills. Social controls relate to group dynamics and they include shared organizational values, work group relationships, informal communication process and peer influence amongst others.
Cultural controls refer to organization culture and rituals that have a profound effect on the implementation of the marketing plan. Organization should often audit their informal environment to ensure that it is conducive for the successful implementation of marketing strategies.
After the planning process has been completed an organization undertakes to implement the plan, it is during the implementation stage that deviations often arise which had not been anticipated.
Both the internal and external environments are very dynamic and as such they constantly present a challenge to the marketing planning process. A key variable may change and it can affect the whole planning process negatively or positively.
One of the major cause of deviation is because organization lack perfect information during planning which comes into light during its implementation (McGrath and McMillan, 1995)
Craven and Piercy (2006) identified the following factors which managers can use to identify problems and issues during the implementation stage by observing the following:
- Whether the budget of the project is within the budget limits
- If the progress of the project is according to the time plan
- If the project is functioning as expected
- The view of key stakeholders have been met
- The opinion or reaction of end users to the product must be considered as feedback from end users is very important because they are the ultimate determinants of whether the product or service will be a success. A low level of adoption of a new product or service is a definite sign of problems to come
- If an ordinary problem grows and become a complex problem during the implementation process, then it is clear that there are underlying problems that were not detected during the planning process.
Another important tool for detecting problems is the marketing planning audits; organization should implement regular audits whereby they undertake an in-depth analysis of the organization marketing activities as they are likely to identify problems and resolve them in a timely fashion.
When a problem is identified as being caused by internal failures of an organization, a re-evaluation of the SWOT analysis can help the organization to re-organize itself and its resources. The internal analysis of an organization in the SWOT analysis relates to the strengths and weaknesses elements (Jain, 2004) and a strategy failure would indicate that the SWOT analysis was not properly carried out.
A re-evaluation of the SWOT and the proper identification of strengths and weaknesses can enable an organization to come up with the proper set of strategies needed to compete effectively in the market place.
If the change in environment is caused by a major external variable such as change in government regulation, rapid technological change or a shift in consumers’ tastes and preferences, the company should re-evaluate the SWOT and re-develop its strategies once more.
The external environment is covered in the opportunity and threats side of the SWOT analysis (Jain, 2004). When the elements of the SWOT changes for instance, a new analysis should be carried out and new strategies developed. The new strategies developed after the review of the SWOT could either be intensive investment, divestiture, or diversification (Porter, 1980).
Based on this a company can use the marketing mix element to competitively react to changes in the marketing environment that is caused by external variables (Kotler, 2000). These include adjusting prices, increased promotional activities, changing the product or adjusting product variables amongst others (Kotler, 2000).
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