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Vision statement: This is the general practise of the business. It is what the business aims to do in the future, For example, the mission statement of Microsoft is to “Put a computer on every desk”

Mission statement: This is the reason for the business being created in the first case. It might be that they want to “provide a quality product” or “provide even cheaper car insurance”.

There are 6 keys to a successful vision or mission statement:

1. It must provide direction. The aim must statement must demonstrate what the company wants to do so that the employees understand what they are working towards.
2. Express a consumer benefit. It must show why/how the business will benefit those who buy its product (it is a useful tool for PR and advertising)
3. It must be realistic. An unrealistic statement can lead to false belief and poor morale amongst employees.
4. Motivating. A motivating statement means that employees are more likely to support the business and do their most productive work and obviously this is of great benefit to the business.
5. Fully communicated. A poor or unclear business statement can cause confusion amongst consumers and employees. It could lead to consumers using other companies and to poor morale and uncertainty amongst employees.
6. Consistently followed. The mission statement/vision statement must always be followed by the business because it gives the employees direction and allows understanding of the business for consumers/customers.

Marketing objectives are how the business intends to achieve is Vision and Mission statements as well as its aims. As a result it must be ensured that the objectives conform to the aims of the business. Marketing objectives can range from increasing customer satisfaction (most important for businesses that have lots of dealing with the general public, face to face). Alternatively it could be to increase sales by 5% for a business that is looking to expand in the coming years. Finally, if a business has just been formed a marketing objective could be to sell 2000 products this year, thereby building up a customer base and securing the company for the coming year.

There are constraints which may mean that the company is unable to achieve its objectives. If constraints are internal then they are within the businesses control. For example, the marketing strategy might be limited due to the company’s financial reserves. This is within the businesses control because they are able to extend their financial reserves by taking out loans. Other internal constraints could include condition/age of machines, number of employees, employee strikes (should be able to prevent them from happening) management style, motivation and communication between team members.

External constraints are limiting factors over which the business has no control. For example, a downturn in the economy would restrict or change the marketing strategy because the company would start cutting back costs. Also, strikes by suppliers’ employees cannot be controlled by the business yet without the supply coming in the marketing of the products will be entirely different. Other examples of external constraints would be inflation rates, interest rates, competitors strategy, the willingness of banks to loan money, size of the market, trends/fashions and the actions of pressure groups.

The Decision Making Model

In order for a company to make decisions on the launching and marketing of a product they should go through each of the following steps in the model.

1. Set out the Corporate Objectives. This gives the company and employees a sense of direction as well as telling the public what the business aims to do.
2. Set marketing objectives. These must be in line with the corporate objectives to avoid any confusion for customers and employees.
3. Gather data on the market, the potential of the product, whether it would be bought by consumers. (Market Research). Needs to be done to ensure that millions are not wasted in launching a bad product.
4. Form a hypothesis of what would happen if the product was to be launched/changes implemented.
5. Test the options available to the business. Check whether a regional launch would be better than a national launch in the first instance.
6. Decide on the strategy and implement it. Launch the product, make the alterations and release into the market.
7. Control and review. Check the progress is as expected. Investigate how performance could be improved. Then return to stage 3 in order to make continual improvements to the product.

Also See

Read these other AQA A2 Business Studies Unit 4 revision notes:

• Privatisation
• SWOT Analysis of the UK
• Balance Sheets
• Limitations of Accounts
• Profit and Loss Accounts
• Revenue and Capital Expenditure
• Market Analysis and Decision Making
• Marketing Maths
• Marketing Objectives and Decision Making
• Marketing Budgets
• Corporate Planning
• Management of Change
• Invention, Innovation and Design
• Network and Critical Path Analysis
• Business and the Law
• Employee Participation
• Human Resource Management
• Performance Measurement

Comments

These notes are aimed at people studying for AQA A2 Business Studies Unit 4, but will also be suitable for other courses and exam boards.

Originally submitted by eksman on TSR Forums.