MACRO AND MICRO-

ENVIRONMENT &
THEIR INFLUENCE TO
MARKETING
PLANNING
Define the following terms:

 Economy
 Politics
 Socio-cultural
 Demographic
 Technology
 Natural Environment
THE MARKETING
ENVIRONMENT
 Marketing Environment
Micro
Demographic Economic

Company Economic
Cultural
Publics Suppliers
Company
Competitors Customers
Political Intermediaries Natural

Macro Technological
Economic
 THE MARKETING ENVIRONMENT
Micro (Internal) Environment Macro (External) Environment
These are the internal forces that are These are the external factors that can
relevant to company operations influence or affect the operations of the
company.
The company itself Economic Macro-environment
Suppliers Politico-Legal
Market Intermediaries Socio-Cultural
Customers Demographic
Competitors Technological
Public Natural
The two types of marketing environment:

Micro – environment
Macro – environment
Micro – environment

➢ Consists of factors close to

the company that affect its
ability to serve its customers.
Macro – environment
➢ Consists of the larger societal forces
that affect the entire
microenvironment.
➢ Broad forces which shape the
character of opportunities and threats.
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.
Company’s Microenvironment
o Marketing management’s job is to build
relationships by creating customer value and
satisfaction.
o The success of marketing plans requires
working closely with the company’s
microenvironment.
 Marketing

The Marketing Environment: Company’s Micro Environment.

❑ Company
o Marketing managers must work closely with
top management and the various company
departments.
o The finance department is concerned with
finding and using funds required to carry out the
marketing plan.
❑ Company
o Top management sets the company mission,
broad strategies, objectives, and policies.
o Under the marketing concept, all managers,
supervisors, and employees should work in
harmony to provide superior customer value
and satisfaction.
 ❑ Suppliers
o These are firms/business houses and individuals who provides
resources needed by the company to produce goods and
services.
o The developments in the supply’s environment have a
substantial impact on the marketing operations of the
company.
o Companies can lower their supply costs and increase product
quality to gain competitive advantage in the market.
 ❑ Suppliers
o 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
o It helps promote, sell, and distribute its
goods to the final buyers/customers.
o They act as middlemen, distributing agencies,
market service agencies and financial
institution.
❑ Marketing Intermediaries
o The Internet as a booking engine has created
many opportunities, but it has also made
interactions with intermediaries more complex.
o Marketing services agencies are suppliers that
help formulate and implement marketing
strategy and tactics.
❑ Customers
o 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)
❑ Customers
▪ 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
❑ Competitors
o The marketing concept holds a successful company
must satisfy the needs and wants of consumers better
than its competitors.
o No company stands alone in serving and satisfying the
needs of a customer. It will always face competition.
o The company to come out successfully must adopt
means which may help it to outmaneuver.
❑ Competitors
oThe competitive environment consists of
certain basic things which every marketing
manager has to take note of.
oBoth large and small firm must find marketing
strategies that give them specific advantages
over competitors operating in their markets.
❑ Public
o 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
o It comprises general forces that affect all business
activities in market.
o 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.
o It refers to those factors which are external to
company’s activities and do not concern the
immediate environment.
 Company
Customer Value Proposition

Macro-Environmental Factors | Marketing Portfolio

❑ Demographic forces
o Demography is the study of human populations in terms of size,
location, age, gender, race, occupation, and other statistics.
o The demographic environment is of major interest to marketers
because it involves people, and people make up markets
o Demographic data helps in preparing geographical marketing
plans, household marketing plans, age, and sex wise plans.
❑ Demographic forces
oIt influences behavior of consumers which in
turn will have direct impact on marketplace.
oA marketer must communicate with
consumers anticipate problems, respond to
complaints and make sure that the firm
operates properly
❑ Economic forces
o Factors influencing consumer buying power and strategies
(stage of the business cycle, inflation, unemployment,
resources, income etc.)
o Affecting consumer purchasing power and spending
patterns.
o 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.
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
❑ Natural Forces
o 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.
o 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.
❑ Technological Forces
o It is the application of science, inventions, and innovations
to solve problems
o 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.
❑ Technological Forces
o Technology changes rapidly.
o It creates new markets and opportunities the boom
of online selling.
o The challenge is how to convince buyers for the
quality of your product and how to make practical,
affordable products.
❑ Technological Forces
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.
❑ Political / Legal Forces
o 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.

❑ Cultural / Social Forces
o Core beliefs and values are passed on from generation
to generation and are reinforced by schools, churches,
business, and government.
o The cultural environment includes institution and other
forces that affect society’s basic values, perceptions,
preferences, and behaviors.
❑ Cultural / Social Forces
o Social responsibility has crept into the marketing
literature as an alternative to the market concept.
o Socially responsible marketing is that business firms
should take the lead in eliminating socially harmful
products.
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
PEST Analysis
▪ Political
▪ Economic
▪ Social
▪ Technological
▪ 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?”
▪ 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?”
TRENDS
➢ according to A.B. Ilano of Principles of
Marketing, “Trends are all about
momentum: it is where the market is
going toward for the long haul. That is
what is worth investing in.”
SAMPLE TRENDS
According to A. B. Ilano of principles of marketing

▪ The continuing growth of smartphone penetration

▪ The continuing growth in credit card usage.
▪ The movement toward a higher value information-
oriented jobs.
▪ The growing presence of multinational franchises
even in non-food industries.
SWOT ANALYSIS
▪ It is a strategic framework use to audit
an organization and its environment. The
acronym SWOT stands for Strengths,
Weaknesses, Opportunities, and Threats.
 INTERNAL FACTORS
Strength Weaknesses
Things your company does well Resources limitations
Company’s tangible assets Things your competitors do better than you
Internal resources Weak brand name
Qualities that separate you from competitors Poor reputation
EXTERNAL FACTORS
Opportunities Threats
Emerging needs and wants New competitors and/or substitute products
Unstable politico-legal, environmental
Underserved markets for specific products
regulations
The arrival of new technology Trend changes
ASSESSMENT
Directions: Fill out the Venn diagram below to differentiate micro from macro-environment.

Macro Micro