7. Marketing Objectives

A prerequisite for beginning a new product definition is to clearly understand marketing objectives. For most situations a generic understanding of marketing objectives for commercial product marketing organisations is all that is needed at the outset.

Generic Objectives

The generic objectives of most organisations can be summarised as:

To Profit

The profit objective is a universal theme in most businesses although revenue optimisation is important to many public service organisations. The implication for the product definition is that it must have the objective of making a net profit contribution to the business.

For strategic reasons a particular product may of itself be allowed to make losses when judged on a purely local basis, however its contribution must be seen as enhancing the overall prospects of profit for the organisation.

To Continue In Business

An objective often overlooked but vitally important when considering a new product is the longevity of life of the investing business. An ill advised new product development programme can cripple a company.

This objective implies that risks of both failure and success must be assessed when considering a new product development. Generally for large, multi-product businesses it is advisable that no single product failure should adversely affect the survival of the company. For smaller organisations this may be impossible to ensure, however for these organisations it is important to ensure failure risks are minimised.

It is therefore vital to know why previous products have achieved less or more than expectation. If the factors that caused differences between planned and actual performance have not been corrected, then it is likely that the same factors will influence the success of a new product introduction and therefore, potentially, the survivability of the business.

Products can fail to achieve marketing objectives for a myriad of reasons. It can be very difficult to obtain an objective view of why a product has failed as the reasons are often attributable to the individuals making the judgements. Product development and marketing programmes are however at their most healthy when individuals can step back and criticise performance or decisions without involving personalities.