The Marketing

Environment

Lesson 2
Toys R Us closed all of its stores in the US last
June 29, 2018, due to bankruptcy.
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Marketing Environment
Marketing Environment. The actors
and forces that affect a firm’s ability to
build and maintain successful
relationships with customers.

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 Key Environments

1. Microenvironment

2. Macroenvironment

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Are factors close to a business that have a direct impact
on its business operations and success. Before deciding
corporate strategy, businesses should carry out a full
analysis of their micro environment.
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 The Microenvironment
The factors consist of
the:
1. Company itself
2. Suppliers
3. Marketing
Intermediaries
4. Customer markets
5. Competitors
6. General Public

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 The Company
In designing marketing plans, marketing management
considers other company groups such as top
management, finance, research and development
(R&D), purchasing, operations, and accounting.

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 Suppliers
Suppliers are in the
company’s overall
customer value
delivery network.
They make available
the resources
required by the
company to
generate its goods
and services.

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Marketing
Intermediaries
 Help the company to
promote, sell, and
distribute its products to
final buyers.
 Include:
Resellers
Physical distribution firms
Marketing services
agencies
Financial intermediaries
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Marketing Intermediaries
Resellers are the distribution channel firms that help
the company find customers or make sales to them.
These include:
• Wholesalers
• Retailers

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Marketing Intermediaries
Physical distribution firms are the distribution
channel firms that help the company to stock and
move goods from their points of origin to their final
destination.

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Marketing
Intermediaries
• Marketing service
agencies help the
company target and
promote its
products to the right
markets (Ex.
marketing research
firms, advertising
agencies, media
firms, and marketing
consulting firms).

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Marketing Intermediaries
Financial intermediaries help finance
transactions or insure against the risks associated
with the buying and selling of goods (Ex. include
banks, credit companies, insurance companies).

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 Competitors
Refers to the immediate industry in which your
company is doing business.

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 Competitors
It should be noted that while competitors take the bulk of
our attention, history shows that it is often the substitutes
that end up doing the most damage in an industry.

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Publics
Are groups that may have a significant impact on
marketing activities formulated to contribute to
customers’ satisfaction with a product and an
organization.
1. Financial
2. Media
3. Government
4. Citizen-action
5. General
6. Internal

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Publics

1. Financial publics
influence the
company’s ability to
obtain funds—banks,
investment houses,
and stockholders.
2. Media publics carry
news, features, and
editorial opinion—
newspapers,
magazines, and radio
and television stations,
Internet media.

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Publics

3. Government publics –
Management must
consider government
developments.
Marketers should
regularly check with
the company’s
lawyers on product
safety, truth in
advertising, and other
matters.

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Publics
4. Citizen-action publics include consumer
organizations, environment groups, and
minority groups; they make queries about a
company’s marketing decisions.

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Publics
5. General publics – A company needs to be
apprehensive about the general public’s attitude on its
products and activities. The public’s image of the
company will influence its buying.
6. Internal publics include workers, managers,
volunteers, and directors.

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 Customers

Normally, customers are individuals, business

enterprises, institutions, and government.

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 The Macroenvironment
The major external and uncontrollable factors that
influence an organization's decision making, and affect
its performance and strategies.

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The Macroenvironment

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 Political
The political factors
refer to the stability of
the political
environment and the
attitude of political
parties or movements.
Examples: tax policies,
government
involvement in trading
agreements, etc.

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 Political
1. Tax policy – The
Philippines has one of the
highest tax structures in
Asia. For instance, the
corporate income tax in the
Philippines is at 30% and
value-added tax is at 12%,
compared to 12.5-25% and
10% respectively in
Indonesia, and 20% and
10% respectively in Viet
Nam.
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 Political
2. Political stability – A 2013 siege in Zamboanga by the MNLF
faction of Nur Misuari put the Zamboanga economy on a
standstill for three weeks. President Duterte declared Martial
Law in Mindanao on May 23, 2017 due to another siege, this
time in Marawi City.

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 Political
3. Health – Senior citizens 60 years old and above get
20% in drugstores (for prescribed drugs) and
restaurants. Patients cannot be refused reasonable
treatment or asked advance payment before being
admitted in a Philippine hospital.

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 Political
4. Education – President Benigno Aquino II signed
into law the K-12 education system, adding two
more years (Grades 11 and 12) in 2015 before
students can be allowed to enroll in the collegiate
level.

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 Economic
The economic factors represent the wider economy and
consist of external factors in a business market and the
broader economy that can influence a business.

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 Economic
Examples of these factors
are:
economic growth rates
salary levels
levels of employment
and unemployment
credit trends
exchange rates and
inflation rates
pricing patterns that
affect consumer
spending habits and
purchasing power
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 Economic
1. Economic growth
o A higher economic growth is an increase in
the capacity of an economy to produce goods
and services, compared from one period of
time to another.

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 Economic
2. Exchange rate – A higher foreign exchange rate has
two meanings: exporters get more peso when they
ship out goods while imported products become more
expensive to buy due to more peso for every dollar.

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 Economic

2. Inflation rate – Higher

prices mean higher
inflation rate, affecting
the purchasing power,
which will lead or warrant
to a wage increase.
The most ideal country
environment is to have high
economic growth, low
interest rate, stable
exchange rate, and low
inflation rate.

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 Sociocultural
The demand for a company’s products and how firms
should operate are affected by social demographics,
attitudes, and opinions on issues like career, culture,
education and ethics, health and safety, housing and
fashion, immigration and diversity among others.

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 Sociocultural
1. Careers – The
increasing number
of nightshift
workers from the
BPO industry has
given way to 24/7
convenience
stores and fast
food catering to
the millenial force.

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 Sociocultural
2. Culture – Attracted to earning in dollars and
providing a better future for the family,
Filipinos have a culture of migration among
the middle and lower income working class.

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 Sociocultural
3. Education – Most of the young, educated
career women prefer late marriages. In fact,
the number of marriages in the Philippines
dropped from 492,666 in 2006 to 414,325 in
2015.

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 Sociocultural
4. Health – The malling trend has given rise to health
clinics such as Healthway, located inside malls since
most visits to emergency rooms are for outpatient
services.

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 Sociocultural
5. Fashion and Lifestyle – Popular bloggers are
now the go-to source of information for fashion
and lifestyle.

Tricia Gosingtian is a 29-year-old life, style, and travel photographer-blogger living in

Manila, Philippines. Last March 2010, she graduated from Ateneo de Manila University,
where she took up a bachelor's degree in Fine Arts and majored in Information Design.

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 Sociocultural
6. Demographics.
 The study of people’s vital statistics such as age,
gender, race/ethnicity, location, occupation, income, etc.
 Significant because the basis for any market is people.

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 Sociocultural
Age Groups:
 Tweens
 Generation Z
 Generation Y
 Generation X
 Baby Boomers

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 Tweens
Today’s pre- and early adolescents, ages 9-12

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 Tweens: Interesting Facts
A population of more than 20
million in the U.S.
They watch cable channels
designed just for them.
They cruise the Net with ease.
They know what they want – and
often get it.
Tweens want their own look –
their styles don’t reflect those of
their parents.
If one adds in the amount
parents spend on tweens, the
total spending is estimated as
high as $300 billion.

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Abercrombie
& Fitch
Abercrombie stores,
the tween version of
Abercrombie & Fitch,
features loud,
thumping music;
blowup posters of
young girls and boys,
and clothing just for
pre-teens.

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 Generation Z
Generation Z is the demographic cohort after the
Millenials (Generation Y). There is no precise date for when
Generation Z begins, but demographers and researchers
typically use the mid-1990s to mid-2000s as starting birth
years.

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Generation Z: Interesting Facts
 Generation Z are often children
of Generation X, but they also
have parents who are
Millennials.
 According to Public Relations
Society of America, the Great
Recession has taught
Generation Z to be independent,
and has led to an
entrepreneurial desire, after
seeing their parents and older
siblings struggle in the
workforce.

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Generation Z: Interesting Facts
A 2014 study Generation Z Goes
to College found that Generation
Z students self-identify as being
loyal, compassionate, thoughtful,
open-minded, responsible, and
determined.
How they see their Generation Z
peers is quite different from their
own self-identity.
They view their peers as
competitive, spontaneous,
adventuresome, and curious; all
characteristics that they do not
see readily in themselves.

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Generation Z: Interesting Facts
Generation Z is the first cohort to have Internet
technology readily available at a young age.
As technology became more compact and
affordable, the popularity of smartphones in
the United States grew exponentially.

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Generation Z: Interesting Facts
Anthony Turner characterizes
Generation Z as having a
'digital bond to the Internet',
and argues that it may help
youth to escape from
emotional and mental
struggles they face offline.
According to U.S. consultants
Sparks and Honey in 2014,
41% of Generation Z spend
more than three hours per
day using computers for
purposes other than
schoolwork, compared with
22% in 2004.[

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Generation Z: Interesting Facts
Music. According to Girls
Gen Z Digital media company
Sweety High's 2018 Gen Z
Music Consumption &
Spending Report, Spotify
ranked first for music listening
among Gen Z, terrestrial
radio, ranked second,
while YouTube was reported
to be the preferred platform
for music discovery.
Additionally, Soundcloud
and Bandcamp allow Gen Z
access to music from artists
who are not yet signed to a
music label.

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Generation Z: Interesting Facts

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 Technological

 How technological
aspects affect
innovation, productivity,
investment, and cost.
 Example: Automation
– ATMs have been
added by banks to
respond to the
increasing mobility of
people.

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 Legal
The legal factors also affect the organization even though a
company cannot directly influence any laws. Include national
employment laws, international trade regulations and
restrictions, monopolies and mergers’ rules, and consumer
protection.

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 Legal
 Changes in the legal
environment can limit or
even stop certain
marketing activities. The
tobacco industry is a case
in point.
 In the Philippines, there are
already certain strict
regulations to follow when
it comes to smoking.

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Rotating text only health warning labels covering 30% of the front of the package are
now required on tobacco product packaging. A new law was passed on July 2014,
which will require graphic health warnings on 50% of each of the principal display
areas of tobacco product packaging.

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 Environmental
Refers to natural resource inputs and environmental
concerns.
Example: Use of fossil fuel in organizational activities
has heightened concern for the sustainability of the
natural environment.

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 Environmental
Other equally pressing
issues are pollution,
global warming, and the
rampant denudation of
the forest.
Acts of God – include
calamities like floods,
earthquakes, tornadoes,
landslides, tropical
cyclones, volcanic
eruptions, and storm
surges.

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