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12 SENIOR HIGH SCHOOL

PRINCIPLES OF
MARKETING
Quarter 3 – Module 4
Macro & Micro-environment
and Their Influence to Marketing
Planning
Title

NegOr_Q3_Principles of Marketing12_Module4_v2

NegOr_Q3_Principles of Marketing12_Module4_v2
Principles of Marketing – Grade 12
Alternative Delivery Mode
Quarter 3 – Module 4: Macro and Micro-environment & Their Influence to
Marketing Planning
Second Edition, 2021

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NegOr_Q3_Principles of Marketing12_Module4_v2
Introductory Message

This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions,
directions, exercises, and discussions are carefully stated for you to
understand each lesson.
Each SLM is composed of different parts. Each part shall guide you step-
by-step as you discover and understand the lesson prepared for you.
Pre-tests are provided to measure your prior knowledge on lessons in each
SLM. This will tell you if you need to proceed on completing this module or if
you need to ask your facilitator or your teacher’s assistance for better
understanding of the lesson. At the end of each module, you need to answer
the post-test to self-check your learning. Answer keys are provided for each
activity and test. We trust that you will be honest in using these.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how
they can best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any
part of this SLM. Use a separate sheet of paper in answering the exercises
and tests. And read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering
the tasks in this module, do not hesitate to consult your teacher or
facilitator.
Thank you.

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NegOr_Q3_Principles of Marketing12_Module4_v2
I

This module was designed to provide with fun and meaningful opportunities for
guided and independent learning at our own pace and time. You will be enabled to process
the contents of the learning resource while being an active learner.

Planning involves different processes. You cannot just sell your products without
planning thoroughly. The income that you will generate from selling your products will be a
result of your marketing plan. Hence, this module will help you to know the different
elements of macro-and micro-environment and how these influence your marketing planning.

Pre-assessment:
Directions: Identify what is asked in each item. Write the letter of the correct answer in your
notebook.
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. They provide resources needed by the company to produce goods and services.
a. Suppliers
b. Company
c. Competitors
d. Marketing intermediaries

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4. These may include hotels, banks, parlors, construction, lending, supermarkets and many
more.
a. Suppliers
b. Companies
c. Competitors
d. Marketing intermediaries
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
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
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
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
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NegOr_Q3_Principles of Marketing12_Module4_v2
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
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

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

’s In

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
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NegOr_Q3_Principles of Marketing12_Module4_v2
___________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.
___________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.

’s New

Task 2
Direction: In your notebook, accomplish the table below by identifying promising products
that could have worked in your locality if only the environment was different. Explain.

Product Previous Environment Ideal Environment for the


product. Explain.
a.

b.

c.

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Explore!
1. How did you find the activity?
2. Why did you choose these products?
3. How can the environment affect the success of the product the business is selling?
4. What are the things to be considered in your environment that could affect the product?

is It

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.

Figure 1. Six Interesting Difference between Micro and Macro Environment


(https://tinyurl.com/4ftju9cm)

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The two types of marketing environment:

• Micro – environment
o 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
o Consists of the larger societal forces that affect the entire microenvironment.
o Broad forces which shape the character of opportunities and threats.
o Demographic, economic, natural, technological, political, and cultural forces

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

• 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.

Figure 2. The Marketing Environment: Company’s Micro Environment


(https://tinyurl.com/2p995exn).

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• 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.
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.
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.
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)
▪ 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.
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• 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.
o The competitive environment consists of certain basic things which 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
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

• 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.

Figure 3. Macro-Environmental Factors | Marketing


Portfolio(https://tinyurl.com/2he2vwwx).
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• 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.
o It influences behavior of consumers which in turn will have direct impact on
marketplace.
o A 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.

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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.
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.
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.
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.

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• 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.
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

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?”
• 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?”

Going through the different elements above is what is called PEST analysis. The
acronym PEST can sometimes be rearranged as “STEP”.
But in the end, it is all about identifying important trends in the environment. But
why trends? It is because trends become the reality of the near future. Since it also takes time
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to mobilize a new product concept, you would want your product concept to be viable in the
near future where it belongs. 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.

Knowledge of relevant trends can lead to insights into possible opportunities and threats
to a firm’s operations. What are the trends that your business can take advantage of? What
are the trends that can eventually threaten its operations?

’s More

Task 3
Direction: Write at least 3 environmental variables that an internet café should be most
interested in.
Environmental
Why
Variables

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I Have Learned

Task 4
Answer briefly the following questions:

1. Which among the forces in the macro-environment has the most impact on a company?
Why?

2. What is the importance of examining, internal and external forces in the achievements of
the company’s goal and objective?

I Can Do

Task 5
Direction: Assuming that you are creating a product in your locality. Identify the micro and
macroenvironment. After identifying the marketing environment, make a SWOT analysis of
each marketing environment. Write at least 2 elements from micro- and macroenvironment.

Scoring

Product = 10pts
Element = 2 pts each x 4 8 pts
Strengths = 2 pts each x 4 8 pts
Weaknesses = 2 pts each x 4 8 pts
Opportunities = 2pts each x 4 8 pts
Threats = 2 pts each x 4 8 pts
Total Points 50 pts

Product: ______________________

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Marketing
Strength Weaknesses Opportunities Threats
Environment
Microenvironment
a.

b.

Macroenvironment
a.

b.

Directions: Identify what is asked in each item. Write the letter of the correct answer in your
notebook.
1. 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
2. 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

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NegOr_Q3_Principles of Marketing12_Module4_v2
3. 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
4. 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
5. They provide resources needed by the company to produce goods and services.
A. Suppliers
B. Company
C. Competitors
D. Marketing intermediaries
6. Companies engaged in commercial competition with others.
A. Suppliers
B. Companies
C. Competitors
D. Marketing intermediaries
7. They help the company promote, sell and distribute its goods to the final buyers.
A. Suppliers
B. Companies
C. Competitors
D. Marketing intermediaries
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
9. 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
10. 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
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11. 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
12. It consists of the larger societal forces that affect the entire microenvironment.
A. Macro-environment
B. Company
C. Micro-environment
D. Competitors
13. These may include hotels, banks, parlors, construction, lending, supermarkets and others.
A. Suppliers
B. Companies
C. Competitors
D. Marketing intermediaries
14. Below are the factors influencing consumer buying power and strategies except for:
A. Business cycle
B. Inflation
C. Unemployment
D. None of the above
15. Below are the elements of Culture except for:
A. Language
B. Manners and Customs
C. Unemployment
D. Education

Reflection

Complete the following statements. Write your statements in your activity notebook.

1. As an ABM student, I have learned…_______________________.

2. As an ABM student, it is very important for us to learn…_______________________.

3. Using the knowledge I have learned in this lesson, I will be able to...
_______________________.

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NegOr_Q3_Principles of Marketing12_Module4_v2
17
Answer Key
Preassessment:
1. C 6. D 11. A
2. A 7. A 12. D
3. A 8. C 13. B
4. B 9. D 14. C
5. C 10. C 15. A
TASK 1 MATCHING TYPE
1. G
2. F
3. C
4. E
5. D
6. H
7. B
8. A
9. I
TASK 2
(Answer may vary. It will depend on the kind of product they see in their locality.)
TASK 3
Environmental Why
Variables
Technological Because there are new innovations, programs, gadgets, or games that you need to have to
Forces eradicate threats coming from different competitors acquiring these may be an opportunity
for the business owner.
Demographic Because not all people/ages went to an internet café, therefore we need to have the internet
Forces café near a school where most of the customers are students.
Economic Forces Because we need to know the quality of life of the people where the business is situated if
they can afford to pay or are they potential customers.
NegOr_Q3_Principles of Marketing12_Module4_v2
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WHAT HAVE I LEARNED
TASK 4
Answers may vary
WHAT I CAN DO
TASK 5 (Example Output)
Product : Cake
Marketing Strengths Weaknesses Opportunity Threats
Environment
Microenvironment The company is The problem is The company is The presence of
a. Company owned by a sole shouldered by one partnered with other established
proprietor hence there person only. food panda companies that
is no misunderstanding therefore it can has loyal
also cater online customers.
customers.
b. Suppliers The availability of The prices of each The company is Due to pandemic,
supplies is abundant in raw materials are partnered with the other suppliers
the locality. getting higher distributors of the cannot supply the
since other raw materials raw materials.
suppliers are not hence we can ask
from the locality. for discounts.
Macroenvironment Almost all ages Old age Youngsters Due to pandemic,
a. Demographic wished to have cakes individuals with nowadays are so youngsters cannot
during birthdays and heart problems, fun of ordering easily go out to
other special occasions diabetic and cakes specially if celebrate special
hypertension may they are occasions.
not patronize celebrating
cakes. anniversaries,
birthdays, and
achievements.
b. Economic The target Due to pandemic, The consumers Due to
market/consumers of many people lost are increasing as unemployment
cake are increasing. their livelihood well as their many individuals
and jobs. spending ability. engage in selling
cakes online.
ASSESSMENT
Multiple Choice:
1. A
2. D
3. A
4. C
5. A
6. C
7. D
8. C
9. C
10. A
11. B
12. A
13. B
14. A
References
Book

Ilano, A. B. Principles of Marketing First Edition. 856 Nicanor Reyes, Sr. St., Sampaloc,
Manila: Rex Book Store, Inc. (RBSI), February 2017: Pp 41-48.

Website

Inc, slideplayer.com. n.d. https://slideplayer.com/slide/4928906/ (accessed December 15,


2021).
Lockmagozian, Elisa. n.d. https://elokmagozian.wordpress.com/about/ (accessed December
15, 2021)
mot, sly. n.d. https://www.slideshare.net/slymot?nomobile=true (accessed December 15,
2021). Nam. n.d. https://getmerit.wordpress.com/about/ (accessed December 15, 2021).

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