LESSON 7 MACRO AND MICRO-ENVIRONMENT.pptx

Principles of Marketing

1. MACRO AND MICRO-ENVIRONMENT

2. Pre-assessment: Directions: Identify what is asked in each item. Write the letter of the correct answer in your PAPER. 1. It consists of factors close to the company that affect its ability to serve its customers. a. Macro-environment b. Company c. Micro-environment d. Competitors 2. It consists of the larger societal forces that affect the entire microenvironment. a. Macro-environment b. Company c. Micro-environment d. Competitors

3. 3 . They provide resources needed by the company to produce goods and services. a. Suppliers b. Company c. Competitors d. Marketing intermediaries 4. These may include hotels, banks, parlors, construction, lending, supermarkets and many more . a. Suppliers b. Companies c. Competitors d. Marketing intermediaries

4. 5 . Companies engaged in commercial competition with others. a. Suppliers b. Companies c. Competitors d. Marketing intermediaries 6 . They help the company promote, sell and distribute its goods to the final buyers. a. Suppliers b. Companies c. Competitors d. Marketing intermediaries

5. 7. It is a booking engine where you can find lots of opportunities and has also made interactions with intermediaries more complex even, they are of different part of the world . a. Internet b. Magazine c. Ticketing office d. Brochure 8. It is the study of human populations in terms of size, location, age, gender, race, occupation , and other statistics . a. Topography b. Sociology c. Demography d. Anthropology

6. 9. Below are the factors influencing consumer buying power and strategies except for: a. Business cycle b. Inflation c. Unemployment d. None of the above 10. This includes the laws, government agencies, and pressure groups that influence and limit the activities of various organizations and individuals in society. a. Economic Forces b. Demographic Forces c. Political Forces d. Cultural Forces

7. 11. The core beliefs and values are passed on from parents to children and are reinforced by schools , churches, business , and government. a. Cultural Forces b. Political Forces c. Technological Forces d. Natural Forces 12. These consists of many amenities that attract tourists, such as Conserve natural habitats, resources , endangered species, minimize environmental impact, recycling, energy efficient products and clean air. a. Cultural Forces b. Demographic Forces c. Economic Forces d. Natural Forces

8. 13. These includes the application of knowledge in science, inventions, and innovations to solve problems. a. Natural Forces b. Technological Forces c. Economic Forces d. Political Forces 14. Below are the elements of Culture except for: a. Language b. Manners and Customs c. Unemployment d. Education

9. 15. Reducing consumer demand for a good or service to a level that the firm can supply. a. Demarketing b. Remarketing c. Post-marketing d. Pre-marketing

10. Task 1 Direction: Identify what is being asked in the following statements and choose your answers in the items inside the box. Choose the letters only. A. Marketing Goals and Objectives F. Marketing Strategies and Programs B. Financial Plans G. Appendices C. Executive Summary H. Desired Target Market D. Situation Analysis I. Evaluation and Control Section E. Performance and Implementation

11. ___________1. It includes any charts, graphs, or miscellaneous materials related to the marketing plan . ___________2. It provides detailed information about the organization’s planned marketing mix. ___________3. It serves as an introduction to the marketing plan and helps the reader to understand the purpose of the marketing plan. It contains a brief overview of the marketing plan and focuses only on the most important points of the plan . ___________4. In this section of the plan, marketers explain their expected results and indicate how the marketing plan’s progress will be measured . ___________5. It is an assessment of where the organization currently stands both internally and externally.

12. ___________6. This section should include a full demographic description of the target market. ___________7. This section of the marketing plan provides details of the expected expenses and profits of the plan’s programs . ___________8. It defines what the business hopes to accomplish . ___________9. It contains performance standards against which to measure the marketing plan and company performance.

13. The Marketing Environment You cannot just launch a product without knowing the world at large. Moreover, even in rolling out, you need to know quite a bit of information such as information about competitors ’ products and strategies, the market and its behaviors, government regulations regarding your proposed product, alternative options, economic trends, distributors and their behaviors , and a lot more. The problem is the world is very large and complex. It takes time for us to analyze each and every element in it. What element should you scan and monitor first? Is this element worthy of your attention? We first begin with a breakdown of the primary elements that make up your business environment .

14. The two types of marketing environment: • Micro – environment Consists of factors close to the company that affect its ability to serve its customers . The company itself, marketing channel firms, customers markets and a broad range of publics. • Macro – environment Consists of the larger societal forces that affect the entire microenvironment. Broad forces which shape the character of opportunities and threats. Demographic, economic, natural, technological, political, and cultural forces

15. Importance of Macro- and Microenvironment 1. An understanding of macro and micro marketing environment forces is essential for planning . 2. Helps a business to compete more effectively against its rivals. 3. Assists in the identification of opportunities and threats. 4. Enables an organization to take advantage of emerging strategic opportunities.

16. Company’s Microenvironment Marketing management’s job is to build relationships by creating customer value and satisfaction. The success of marketing plans requires working closely with the company’s microenvironment .

17. Company Marketing managers must work closely with top management and the various company departments. 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.

18. Suppliers These are firms/business houses and individuals who provides resources needed by the company to produce goods and services. 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 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.

19. Marketing Intermediaries It helps promote, sell, and distribute its goods to the final buyers/customers. They act as middlemen, distributing agencies, market service agencies and financial institution . The Internet as a booking engine has created many opportunities, but it has also made interactions with intermediaries more complex. Marketing services agencies are suppliers that help formulate and implement marketing strategy and tactics.

20. Customers The target market of the company is usually of the five types: Consumer market like individual and householders . Individual market like organizations buying or producing other and services. Reseller market like organizations buying goods and services with a view to sell them to other (retail stores ) Government and other non-profit markets like those buying goods and services to produce public services . International market like individuals and organizations of nations other than homeland who buy for either consumption or industrialization.

21. Competitors The marketing concept holds a successful company must satisfy the needs and wants of consumers better than its competitors. No company stands alone in serving and satisfying the needs of a customer. It will always face competition. The company to come out successfully must adopt means which may help it to outmaneuver. The competitive environment consists of certain basic things which every marketing manager has to take note of. Both large and small firm must find marketing strategies that give them specific advantages over competitors operating in their markets.

22. 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. 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 .

23. 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. It refers to those factors which are external to company’s activities and do not concern the immediate environment.

24. Demographic forces Demography is the study of human populations in terms of size, location, age, gender , race, occupation, and other statistics. The demographic environment is of major interest to marketers because it involves people, and people make up markets Demographic data helps in preparing geographical marketing plans, household marketing plans, age, and sex wise plans . It influences behavior of consumers which in turn will have direct impact on marketplace. A marketer must communicate with consumers anticipate problems, respond to complaints and make sure that the firm operates properly.

25. Economic forces Factors influencing consumer buying power and strategies (stage of the business cycle, inflation, unemployment, resources, income etc . Affecting consumer purchasing power and spending patterns . Marketers must pay close attention to major trends and consumer spending patterns both across and within their world markets . Under economic environment manager generally studies 1. Trends of gross national product. 2. Patterns of real growth in income. 3. Variations in geographical income distribution. 4. Borrowing pattern, trends and governmental and legal restrictions. 5. Major economic variables.

26. Inflation and Deflation ➢ Inflation: The devaluation of money by reducing what it can buy through continued price increases. ➢ Deflation: Falling prices Unemployment The proportion of people in the economy who do not have jobs and are actively looking for work. Income -Discretionary Income: the amount of money people have spend after paying bills and necessities. Resource Availability - Demarketing : reducing consumer demand for a good or service to a level that the firm can supply

27. Natural Forces The natural environment consists of many amenities that attract tourists, such as conserve natural habitats, resources, endangered species, minimize environmental impact, recycling, energy efficient products and clean air . The natural environment involves natural resources needed as inputs by marketers or that are affected by marketing activities . Natural Environment Trends ➢ Shortage of raw materials -Limited quantities of non-renewable resources. ➢ Increased pollution. -Waste disposal, air/water pollutants. ➢ Increased government intervention. -When Boracay Island were ordered to stop accepting tourists. ➢ Environmentally sustainable strategies. - G. R. E. E. N. movement.

28. Technological Forces It is the application of science, inventions, and innovations to solve problems Technology has shaped our destiny which has given us wireless internet, can let us communicate people all over the globe, can send documents anywhere and anytime and inexpensive worldwide transportation. Technology changes rapidly . It creates new markets and opportunities the boom of online selling . The challenge is how to convince buyers for the quality of your product and how to make practical, affordable products . Safety regulations result in higher research costs and longer time between conceptualization and introduction of product. New technology has a long – term competitive advantage because it creates more and better products, but it can make existing product obsolete.

29. Political / Legal Forces Marketing decisions are strongly affected by developments in the political environment. The laws, government agencies, and pressure groups that influence, and restricted the activities of various organizations and individuals in the society. Legislation and regulation affecting business have been enacted for three reasons . ▪ Protects companies from each other ▪ Customer from unfair business practices ▪ Society’s interest against unrestrained business behavior.

30. Cultural / Social Forces Core beliefs and values are passed on from generation to generation and are reinforced by schools, churches, business, and government. The cultural environment includes institution and other forces that affect society’s basic values, perceptions, preferences, and behaviors. Social responsibility has crept into the marketing literature as an alternative to the market concept . Socially responsible marketing is that business firms should take the lead in eliminating socially harmful products.

31. Elements of Culture a. Language b. Manners and Customs c. Technology and Material Culture d. Social Institutions – business, family e. Education – transmitting values, skills, attitudes etc. f. Aesthetics – attitude toward beauty, art, music etc. g. Religion

32. There are lots of elements in the macro environment but to help break down this complexity into more digestible parts, mnemonics is created. One of the most popular mnemonics is PEST, which stands for : • Political. According to A.B. Ilano of Principles of Marketing, “What are the different pieces of legislation, including tax rates, that affect the business? How likely is it for the government to intervene in the industry? How stable is the working environment in terms of political stability and overall predictability?” • Economic. According to A.B. Ilano of Principles of Marketing, “Is the market growing or shrinking? What is the savings rate of the population, and how is the employment situation? Is the consumer spending increasing or decreasing? Do people feel that their quality of life is improving? How volatile is the exchange rate, the interest rate, and other essential indicators?”

33. • Social. According to A. B. Ilano of Principles of Marketing, “Is the population growing or shrinking? Is it aging or the broad demographic is getting younger? What are their interests ? What are the lifestyles that they lead? How do the markets behave, especially in terms of assessing and consuming your industry products ?” • Technological. According to A. B. Ilano of Principles of Marketing, “What are the new technologies that are changing the business landscape? What new ideas are gaining momentum? What new products and practices could threaten to make your current business obsolete?”