This may seem like an easy question but it is difficult to answer. The reply you give will present a whole picture about you and your plans with the company. How you respond to this can either make or break your interview session.
The interviewer needs to know that you are driven; that you have aspirations and that you're not looking to "skate by". Your answer will tell the interviewer whether you have the required attitude and loyalty to be a good resource in the long term. A good answer to this question tells the interviewer that-
You may not want to sound as overly ambitious. You could mention few appraisals and promotions within the same organization but it will be disastrous if you express that you would like to be the CEO while applying for an entry level job position.
As mentioned earlier, the hiring manager would not like to hear that you hope to get a higher-position job within a year of job here or you would like to take his job.
Don't intimidate anybody else's career let them know that you are willing to spend time, energy and a lot of hard work before you get there. Make a point to work and polish your personal and professional skills.
You need to show the interviewer that you are ambitious and thought about this. That you have a plan mapped out as well.
Life is unpredictable and everyone understands that it can change any minute so you will have to explain that to the interviewer as well that though you are set on where you want to reach but you also understand that the path may divert too.
Companies tend to utilize resources and time in hiring and training the employees. They don't want to waste the company's resources by wasting time on a candidate who doesn't plan to stick around for long.
Avoid answering that you would like to be at another company or industry or even a remotely different job post than the one you are applying for even if it is the truth.
Ensure that the answer you provide is based on the job role you are applying for. They would like it if you make point to mention this post as the initial step (if performed well) to achieve your long term plans.
The interviewer would like to know how you can contribute to the company in the form of your skills and grow with it.