12 SENIOR HIGH SCHOOL

PRINCIPLES OF
MARKETING
Quarter 3 – Module 4
Macro & Micro-environment
and Their Influence to Marketing
Planning
Title
Principles of Marketing – Grade 12
Alternative Delivery Mode
Quarter 3 – Module 4: Macro and Micro-environment & Their Influence to
Marketing Planning
First Edition, 2020

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 12

Principles of
Marketing
Quarter 3 – Module 4
Macro and Micro-environment &
Their Influence to Marketing
Planning
Introductory Message
For the facilitator:
Welcome to the Grade 12 Principles of Marketing Alternative Delivery Mode
(ADM) Module on Macro- and Micro-environment & Their Influence to
Marketing Planning!
This module was collaboratively designed, developed and reviewed by
educators both from public and private institutions to assist you, the teacher
or facilitator in helping the learners meet the standards set by the K to 12
Curriculum while overcoming their personal, social, and economic
constraints in schooling.
This learning resource hopes to engage the learners into guided and
independent learning activities at their own pace and time. Furthermore, this
also aims to help learners acquire the needed 21st century skills while taking
into consideration their needs and circumstances.
In addition to the material in the main text, you will also see this box in the
body of the module:

Notes to the Teacher

This contains helpful tips or strategies that
will help you in guiding the learners.

As a facilitator, you are expected to orient the learners on how to use this
module. You also need to keep track of the learners' progress while allowing
them to manage their own learning. Furthermore, you are expected to
encourage and assist the learners as they do the tasks included in the module.

2
For the learner:
Welcome to the Grade 12 Principles of Marketing Alternative Delivery Mode
(ADM) Module on Macro- and Micro-environment & Their Influence to
Marketing Planning!
This module was designed to provide you with fun and meaningful
opportunities for guided and independent learning at your own pace and time.
You will be enabled to process the contents of the learning resource while
being an active learner.
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What I Need to Know competencies you are expected to learn in the
module.

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check what you already know about the
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lesson to take. If you get all the answers
correct (100%), you may decide to skip this
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understand new concepts and skills.

This comprises activities for independent

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skills of the topic. You may check the
answers to the exercises using the Answer
Key at the end of the module.

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What I Have Learned
sentence/paragraph to be filled in to process
what you learned from the lesson.

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 This is a task which aims to evaluate your
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Additional Activities to you to enrich your knowledge or skill of the
lesson learned.

Answer Key This contains answers to all activities in the

module.

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References This is a list of all sources used in

developing this module.

The following are some reminders in using this module:

1. Use the module with care. Do not put unnecessary mark/s on any part of the
module. Use a separate sheet of paper in answering the exercises.
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included in the module.
3. Read the instruction carefully before doing each task.
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5. Finish the task at hand before proceeding to the next.
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If you encounter any difficulty in answering the tasks in this module, do
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We hope that through this material, you will experience meaningful
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can do it!

4
 I

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 influences your marketing planning.

LEARNING COMPETENCY:
• Analyze the elements of macro- and micro- environment and their
influence to marketing planning (ABM _PM 11-Iei-10)

OBJECTIVES:
K: Identify the different elements of macro-and micro-
environment;
I
S: Perform environmental analysis;

A: Shows interest on of the importance of analyzing macro-and

micro-environment and its influence in marketing planning.

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 I

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
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
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 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
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

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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

___________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.

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 ’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.

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?

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 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 (Business
Environment) - Core Differences

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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.

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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.

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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.
o The natural environment involves natural resources needed as inputs by
marketers or that are affected by marketing activities.

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 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.
• 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.

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 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 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.”

16
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

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?

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 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: ______________________

Marketing
Strength Weaknesses Opportunities Threats
Environment
Microenvironment
a.

b.

Macroenvironment
a.

b.

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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
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

19
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
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

20
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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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.

Online Sources
6 Interesting Difference between Micro and Macro Environment (Business Environment) -
Core Differences. Retrieved from: https://coredifferences.com/difference-between-micro-and-
macro-environment/

The Marketing Environment: company’s micro environment | getmerit (wordpress.com).

Retrieved from: https://getmerit.wordpress.com/2015/10/17/the-marketing-environment-
companys-microenvironment/

Macro-Environmental Factors | Marketing Portfolio (wordpress.com). Retrieved from:

https://elokmagozian.wordpress.com/macro-environmental-factors/

Marketing environment (slideshare.net)

Published in: Economy and Finance
Published on Dec. 05, 2012

Sly Mot, Lecturer at Sabah foundation technical college | SlideShare

Published in: Business
Published on Aug 06, 2015

The Marketing Plan (slideshare.net)

Published in: Education
Published on November 13, 2012

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