PRINCIPLES OF MARKETING -These are firms/business houses and individuals who provides

resources needed by the company to produce goods and services.

Module 4-Macro & Micro-environment
and Their Influence to Marketing -The developments in the supply’s environment have a substantial
impact on the marketing operations of the company.
-Companies can lower their supply costs and increase product quality to
The Marketing Environment gain competitive advantage in the market.
-Supply shortages have to be fully monitored and plans in order to
avoid it.
EXAMPLES:
▪ Some hotels have contracted with restaurant companies to supply
their food and beverages.
▪ Retail stores have contracted distributor of products or wholesalers.
▪ Some bakeries contracted suppliers of the raw materials for their
bread.
 Marketing Intermediaries
-It helps promote, sell, and distribute its goods to the final
buyers/customers.
Figure 1. Six Interesting Difference between Micro and Macro
-They act as middlemen, distributing agencies, market service agencies
Environment (Business Environment) - Core Differences
and financial institution.
-The Internet as a booking engine has created many opportunities, but it
The two types of marketing environment:
has also made interactions with intermediaries more complex.
• Micro – environment
-Marketing services agencies are suppliers that help formulate and
- Consists of factors close to the company that affect its ability to serve
implement marketing strategy and tactics.
its customers. The company itself, marketing channel firms, customers
 COSTUMERS
markets and a broad range of publics.
• Macro – environment o The target market of the company is usually of the five types:
- Consists of the larger societal forces that affect the entire
-Consumer market like individual and householders.
microenvironment.
- Broad forces which shape the character of opportunities and threats. -Individual market like organizations buying or producing other and
services.
- Demographic, economic, natural, technological, political, and cultural
forces -Reseller market like organizations buying goods and services with a
view to sell them to other (retail stores)
Importance of Macro- and Microenvironment -Government and other non-profit markets like those buying goods
1. An understanding of macro and micro marketing environment forces and services to produce public services.
is essential for planning.
-International market like individuals and organizations of nations
2. Helps a business to compete more effectively against its rivals.
other than homeland who buy for either consumption or
3. Assists in the identification of opportunities and threats. industrialization.
4. Enables an organization to take advantage of emerging strategic • Competitors
opportunities. o The marketing concept holds a successful company must satisfy the
needs and wants of consumers better than its competitors.
Company’s Microenvironment o No company stands alone in serving and satisfying the needs of a
• Marketing management’s job is to build relationships by creating customer. It will always face competition.
customer value and satisfaction. o The company to come out successfully must adopt means which may
help it to outmaneuver.
• The success of marketing plans requires working closely with the
o The competitive environment consists of certain basic things which
company’s microenvironment. every marketing manager has to take note of.
o Both large and small firm must find marketing strategies that give
them specific advantages over competitors operating in their markets.
• Public - It is defined as ‘any group that has an actual or potential
interest in or impact on a company’s ability to achieve its objective.
o The actions of the company do affect the interest of other groups i.e.,
those who form general public for the company who much be satisfied
along with consumers of the company.
Company’s Macro-Environment
• It comprises general forces that affect all business activities in market.
• The company and all of the other actors operate in a larger macro-
environment of forces that shape opportunities and pose threats to the
 COMPANY company.
-Marketing managers must work closely with top management and the • It refers to those factors which are external to company’s activities
various company departments. and do not concern the immediate environment.

-The finance department is concerned with finding and using funds

required to carry out the marketing plan.
-Top management sets the company mission, broad strategies,
objectives, and policies.
-Under the marketing concept, all managers, supervisors, and
employees should work in harmony to provide superior customer value
and satisfaction. • Demographic forces
 Suppliers
o Demography is the study of human populations in terms of size, o Legislation and regulation affecting business have been enacted for
location, age, gender, race, occupation, and other statistics. three reasons.
o The demographic environment is of major interest to marketers ▪ Protects companies from each other
because it involves people, and people make up markets ▪ Customer from unfair business practices
o Demographic data helps in preparing geographical marketing plans, ▪ Society’s interest against unrestrained business behavior.
household marketing plans, age, and sex wise plans. • Cultural / Social Forces
o It influences behavior of consumers which in turn will have direct o Core beliefs and values are passed on from generation to generation
impact on marketplace. and are reinforced by schools, churches, business, and government.
o A marketer must communicate with consumers anticipate problems, o The cultural environment includes institution and other forces that
respond to complaints and make sure that the firm operates properly. affect society’s basic values, perceptions, preferences, and behaviors.
• Economic forces o Social responsibility has crept into the marketing literature as an
o Factors influencing consumer buying power and strategies (stage of alternative to the market concept.
the business cycle, inflation, unemployment, resources, income etc.) o Socially responsible marketing is that business firms should take the
o Affecting consumer purchasing power and spending patterns. lead in eliminating socially harmful products.
o Marketers must pay close attention to major trends and consumer Elements of Culture
spending patterns both across and within their world markets. a. Language
Under economic environment manager generally studies b. Manners and Customs
1. Trends of gross national product. c. Technology and Material Culture
2. Patterns of real growth in income. d. Social Institutions – business, family
3. Variations in geographical income distribution. e. Education – transmitting values, skills, attitudes etc.
4. Borrowing pattern, trends and governmental and legal restrictions. f. Aesthetics – attitude toward beauty, art, music etc.
5. Major economic variables. g. Religion
Inflation and Deflation There are lots of elements in the macro environment but to help break
➢ Inflation: The devaluation of money by reducing what it can buy down this complexity into more digestible parts, mnemonics is created.
through continued price increases. One of the most popular mnemonics is PEST, which stands for:
➢ Deflation: Falling prices • Political. According to A.B. Ilano of Principles of Marketing, “What are
Unemployment the different pieces of legislation, including tax rates, that affect the
The proportion of people in the economy who do not have jobs and are business? How likely is it for the government to intervene in the
actively looking for work. industry? How stable is the working environment in terms of political
Income stability and overall predictability?”
-Discretionary Income: the amount of money people have spend after • Economic. According to A.B. Ilano of Principles of Marketing, “Is the
paying bills and necessities. market growing or shrinking? What is the savings rate of the population,
Resource Availability and how is the employment situation? Is the consumer spending
-Demarketing: reducing consumer demand for a good or service to a increasing or decreasing? Do people feel that their quality of life is
level that the firm can supply improving? How volatile is the exchange rate, the interest rate, and
• Natural Forces other essential indicators?”
o The natural environment consists of many amenities that attract • Social. According to A. B. Ilano of Principles of Marketing, “Is the
tourists, such as conserve natural habitats, resources, endangered population growing or shrinking? Is it aging or the broad demographic is
species, minimize environmental impact, recycling, energy efficient getting younger? What are their interests? What are the lifestyles that
products and clean air. they lead? How do the markets behave, especially in terms of assessing
o The natural environment involves natural resources needed as inputs and consuming your industry products?”
by marketers or that are affected by marketing activities. • Technological. According to A. B. Ilano of Principles of Marketing,
Natural Environment Trends “What are the new technologies that are changing the business
➢ Shortage of raw materials landscape? What new ideas are gaining momentum? What new
-Limited quantities of non-renewable resources. products and practices could threaten to make your current business
➢ Increased pollution. obsolete?”
-Waste disposal, air/water pollutants. Going through the different elements above is what is called PEST
➢ Increased government intervention. analysis. The acronym PEST can sometimes be rearranged as “STEP”.
-When Boracay Island were ordered to stop accepting tourists. But in the end, it is all about identifying important trends in the
➢ Environmentally sustainable strategies. environment. But why trends? It is because trends become the reality of
- G. R. E. E. N. movement. the near future. Since it also takes time to mobilize a new product
• Technological Forces concept, you would want your product concept to be viable in the near
o It is the application of science, inventions, and innovations to solve future where it belongs. Trends according to A.B. Ilano of Principles of
problems Marketing, “Trends are all about momentum: it is where the market is
o Technology has shaped our destiny which has given us wireless going toward for the long haul. That is what is worth investing in.”
internet, can let us communicate people all over the globe, can send Sample trends according to A. B. Ilano of Principles of Marketing:
documents anywhere and anytime and inexpensive worldwide • The continuing growth of smartphone penetration
transportation. • The continuing growth in credit card usage.
o Technology changes rapidly. • The movement toward a higher value information-oriented jobs.
o It creates new markets and opportunities the boom of online selling. • The growing presence of multinational franchises even in non-food
o The challenge is how to convince buyers for the quality of your industries
product and how to make practical, affordable products.
o Safety regulations result in higher research costs and longer time
between conceptualization and introduction of product.
o New technology has a long – term competitive advantage because it
creates more and better products, but it can make existing product
obsolete.
• Political / Legal Forces
o Marketing decisions are strongly affected by developments in the
political environment.
o The laws, government agencies, and pressure groups that influence,
and restricted the activities of various organizations and individuals in
the society.