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Internal and External Factors that influence the setting of business objectives

The following article was aimed to use for CIM preparation.

Morning Coffee

1. Internal Factor:

1.1. Corporate Objectives: The overall aims of the organization are a key influence on functional objectives. The marketing department must therefore ensure that its objectives are consistent with the corporate objectives of the business

1.2. Financial background: A business with a healthy financial background can afford to put more resources into its marketing, and therefore can set more challenging objectives. In contrast, a business under financial pressures may find it more rational to take small steps when setting objectives 

1.3. Man Power: Marketing objectives must take into account the size and capabilities of the workforce. A motivated, efficient and productive workforce will affect marketing. Marketing objectives such as higher market share and improved reputation depend on the quality of the human resources within the business.

1.4. The nature of the product (the offer): This factor acts as both an opportunity and a constraint on marketing objectives. The popularity of the product is the key factor.

2. External Factors:

2.1. Market factors: The growth or decline of a market will have a major impact on marketing objectives. For instance, social network companies such as Facebook, LinkedIn, YouTube can set high objectives since the market capacity and market growth rate is quite high. In contrast, the video game companies should not set very high targets when their market is not as potential. 

2.2. Competitors’ actions and performance: If the market is highly competitive, , it is difficult for an individual to achieve a high market share. Convenience goods market is a good example

2.3. Technology situation: Technology is a major cause of rapid changes in consumer tastes and markets nowadays. Businesses that can use technology effectively in their marketing (social viral marketing for instance) will benefit by attracting more customers. As results, they have reasons to set a more ambitious marketing objectives

2.4. Economic factors: This is a very important influence on marketing objectives for most businesses. Detailed coverage of economic factorsSome economic factors that companies should always take into account are: economic crisis, inflation rate, exchange rates, interest rates…

2.5. Suppliers: Different companies have different extent of interacting and involving with suppliers. Not all companies need suppliers to run their business but when they do, it is important to ensure the suppliers will deliver needed materials and resources on time for production.

2.6. Political factors & Legal factors: Government’s policies and other legal factors always have impact on how organizations set their business objectives and ways to achieve those objectives. Companies that deal with imports and exports should always care about political agreements among counties, importing quotas and taxes, etc.

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