HBM 212

Principles Of MRKETING
Course Description
• HBM 212 Provides principles , interpretations and analytical framework and
challenges employees and producers to make better marketing decisions
LEARNING OUTCOMES
• INTERPRET THE RELEVANCE OF MARKETING THEORY
• CLASIFY GOODS AND SERVICES
• DEMONSTRATE KNOLEDGE OF KEY ELEMENTS OF MODEREN MARKETING
CONCEPTS
• ANALYSE BUYER BEHAVOR AND APPLY THIS TO MARKETING STRATEGY

• DEVELOP APROPRIATE STRATEGY TOWARDS PROMOTION OF A PRODUCT

Content
1. The Marketing Environment
2. Marketing Ethics
3. Market Segmentation
4. Consumer Behavior
5. Decision Making and Managing Customer Satisfaction
6. Services Marketing
7. Branding
8. Marketing Mix
9. Integrated Promotion and Advertising
10. Marketing Research
11. Marketing Information System
12. International Marketing
 Assessment Plan
• Test 1 - 15 % - Week 3 of Lectures

• Test 2 – 25 % - Week 6 of lectures

• Group Project – 20 % - Due Week 5 of lectures

• Exams – 50% - Per the exam schedules

Lecture 0ne (1)
• The Marketing Environment
• PURPOSE OF MARKETING ENVIRONMENT ANALYSIS
• To observe and know where the environment is heading (such as relevant
events and their trends etc) , and to project where each factor of the
environment will be at a future point of time.
• To discern which events and trends are favorable from the standpoint of the
firm, and which are unfavorable; to
• figure out the opportunities ( and shortlist those that have favorable impact on
the business), and trace out the threats hidden in the environmental events
and trends.
• To help secure the right-fit between the environment and the business unit,
which is the crux of marketing; to help the business unit respond to
environment
• To facilitate formulation of a marketing strategy in the right way— in line with
the trends in the environment and the opportunities emerging therein.
MICRO ENVIRONMENT
• The micro environment refers to the small forces that are close to the
company and affect its ability to serve its customers. It includes the
company itself, its suppliers, marketing intermediaries, customer markets
and public. Microenvironment may be internal and external.
• Internal Micro Environment : Internal micro environment or company
aspect of micro-environment refers to the internal environment of the
company. This includes all departments, such as management, finance,
research and development, purchasing, operations and accounting,
personnel. Each of these departments has an impact on marketing
decisions. For example, research and development have input as to the
features a product can perform and accounting approves the financial
side of marketing plans.
• External Micro-environment/ Meso-Environment : External Micro-environment
or also called meso-environment refer to the industry in which a company
operates and the industry’s market(s). Meso-environment includes:
• Marketing Intermediaries
• Customers
• Suppliers
• Competitors
• Public
• Marketing Intermediaries: Marketing intermediaries refers to resellers, physical
distribution firms, marketing services agencies, and financial intermediaries. These are the
people that help the company promote, sell, and distribute its products to final buyers.

• Customers: There are different types of customer markets including consumer markets,
business markets, government markets, international markets, and reseller markets

• Suppliers: Suppliers are the people who provide necessary resources (raw materials,
intermediate goods and services) needed to produce goods & services. Policies of the
suppliers have a significant influence over the marketing manager’s decisions.
• Competitors :
• Competitors include rival companies with similar offerings for goods and
services and substitutes that a buyer might consider.
• A prudent marketing manager has to identify his competitor’s strategies, build
his plans to overtake them in the market to attract competitor’s consumers
towards his products. Any company faces these types of competition:
Market Structures (segmentation):
1.Perfect Market – infinite buyers & sellers
2. Monopoly – one seller many buyer eg: PNG power
3. Dupoly – two sellers and many buyers, Digicel & Telikom in
the past
4. Oligopoly – Few sellers and many buyers eg: Nike, Puma
5.Monopolistic Market –many sellers & buyers eg: super
markets
• Brand Competition i.e. competition between various companies producing
similar products. e.g. competition between Digicel and Woda Phone
companies
• Product Form Competition: i.e. competition between companies
manufacturing products, which are similar offerings and substitutes to each
other e.g. competition between coke and Pepsi (similar offerings) , cold rinks
and ice-cream ( substitutes)

• Desire Competition: i.e. Competition with other companies producing

diverse products . e.g: competition between the manufacturers of TV sets &
all other companies manufacturing various products like automobiles, washing
machines, etc. To understand the competitive situation, a company must
understand the nature of market.
The Macro Environment
• The macro environment refers to influences in wider society. These factors can
impact the micro environment and an organisation is unable to control them.
Businesses must choose areas to focus on that are most relevant to their
organisation and the way they operate.

• A PESTELE framework can be used to analyze the forces within the macro
environment. This is an extension of the PESTEL model and includes the extra
E (ethical) to take into consideration areas such as confidentiality and business
ethics
• A change in the macro environment could be a new law affecting businesses,
technological breakthroughs, a recession, austerity or a large spike in
unemployment.
MACRO-ENVIRONMENT
• \Macro-environment refers to the larger/ broad societal forces
that affect the microenvironment and shape the activities of
every business and non-profit marketer.
• These are the forces over which marketers have much less
control. These factors—and changes in them—present both
threats and opportunities that require shifts in marketing plans.
• To spot trends and other signals , marketers must continually
monitor the environment in which their companies operate.
• Physical Environment:
Natural resources and other aspect of the natural world influence marketing
activities. The analysis of the mega environment must cover aspects like
extent of endowment of natural resources in the country , ecology , climate,
etc. These constitute the natural environment:
Natural resources: The availability of natural resources may have a direct
and far-reaching impact on marketing activities of a firm in a geographic
region.
• Climate : Climate also greatly influences the timing of marketing activities.
Production as well as sale of output of firms greatly depends on climate.
Firms have to study the climate in-depth and decide their production
locations

• Ecology: In modern times, all societies are very much concerned about
ecology , especially about issues like environmental pollution, protection of
wild life and ocean wealth.
• Socio-cultural Forces: Most of us purchase because of the influence of
social & cultural factors. Each society has its own culture. Culture is a
combination of various factors such as Institutions, values, beliefs, the
lifestyle , behavior of a society which are transferred from older
generations & which are acquired. Consumer’s behaviour is guided by our
culture, family, educational institutions, languages, etc. Institutions, values
(reflecting abstract ideas about what is good and bad, right, and wrong,
desirable and undesirable), belief (a conviction concerning the existence or
the characteristics of physical and social phenomena) are determined
among other things by the society in which he lives. A marketing manager
must study the society in which he operates.
• Science and Technology: Although the two terms are sometimes used
interchangeably , science is the accumulation of knowledge about human
beings and the environment, and technology is the application of such
knowledge for practical purposes.
• From customer’s point of view, improvement in technology means
improvement in the standard of living. In this regard, it is said that
“Technologies shape a Person’s Life”. Every new invention builds a new market
& a new group of customers.
• A new technology improves our lifestyle & at the same time creates many
problems. Eg: Invention of various consumer comforts like washing machines,
mixers, etc have resulted in improving our lifestyle but it has created severe
problems like power shortage. Eg: Introduction to automobiles has improved
transportation but it has resulted in the problems like air & noise pollution,
increased accidents, etc.
• Demographics: Demography is the study of the size, composition, and
distribution of the human population in relation to social factors such as
geographic boundaries.
• This is one of the most influencing factors because it deals with the people
who form the market. A company should study the population, its
distribution, age composition, etc before deciding the marketing
strategies.
• Each group of population behaves differently depending upon various
factors such as age, status, etc. if these factors are considered, a company
can produce only those products which suits the requirement of the
consumers. In this regard, it is said that “to understand the market you
must understand its demography”.
• Economic Environment:national and international economic
growth/decline, exchange rates, interest rates, inflation, purchasing
power, employment rates, income, investment opportunities

Economic environment refers to the purchasing power of potential

customers and the ways in which people spend their money. Within this
area are two different economies, subsistence and industrialized.
Subsistence economies are based more in agriculture and consume their
own industrial output. Industrial economies have markets that are diverse
and carry many different types of goods. Each is important to the marketer
because each has a highly different spending pattern as well as different
distribution of wealth.
Political and Legal Factors:
• The political environment such as the practices and policies of governments
and the legal environment such as laws and regulations and their
interpretation etc. affect marketing activity in several ways.
• In general, the political environment includes all laws, practices and policies
of governments, government agencies, and groups that influence or limit
other organizations and individuals within a society. They can limit the
actions marketers are allowed to take and put restriction on their activities.
• It is important for marketers to be aware of these restrictions as they can be
complex. Some products are regulated by both state and union government
laws. There are even restrictions for some products as to who the target
market may be, for example, cigarettes should not be marketed to younger
children. There are also many restrictions on formation of monopolies.
• Social/Cultural: demographics, population growth/decline, age distribution, education, cultural differences,
lifestyle trends, health and welfare, career attitudes

• Technological: new innovation, big data, Internet of things, automation, research, tech awareness,
technological growth, skilled resources, smart phones, advanced AI, tracking, location data

• Economic: national and international economic growth/decline, exchange rates, interest rates, inflation,
purchasing power, employment rates, income, investment opportunities
• Ethical: bribery, intellectual property, reputation, business ethics/morals, confidentiality, privacy
• Political: government policy, taxation, political stability, foreign trade, trade restrictions
The budget for 2023 in Papua New Guinea (PNG) includes an increase in the
rate of corporate income tax from 30% to 45% for all banks. This maintains the
hard stance on non-competitive sectors taken by the administration headed by
the prime minister, James Marape, following the introduction of a one-off
dominant player levy in 2022
• Environmental: weather, climate change, emissions, environmental policies,
pressure from NGO's, natural disasters

• Legal: court system, employment law, discrimination law, anti-trust law, trade
unions, consumer protection, health & safety, copyright law,
• Public: A Company’s obligation is not only to meet the requirements of its
customers, but also to satisfy the various groups. A public is defined as “any
group that has an actual or potential ability to achieve its objectives”.
• The significance of the influence of the public on the company can be
understood by the fact that almost all companies maintain a public relation
department. A positive interaction with the public increase its goodwill
irrespective of the nature of the public. A company has to maintain cordial
relation with all groups. Public may or may not be interested in the company,
but the company must be interested in the views of the public. Public may be
various types and they are:
i.Press: This is one of the most important group, which may make or break a
company. It includes journalists, radio, television, etc. Press people are often
referred to as unwelcome public. A marketing manager must always strive to
get a positive coverage from the press people.
ii.Government: Politicians often interfere in the business for the welfare of
the society & for other reasons. A prudent manager has to maintain good
relation with all politicians irrespective of their party affiliations. If any law is
to be passed, which is against the interest of the company, he may get their
support to stop that law from being passed in the parliament or legislature.
iii. General Public: This includes organizations such as consumer councils,
environmentalists, etc. as the present day concept of marketing deals with
social welfare, a company must satisfy these groups to be successful.

End of Lecture
• Tutorial Exercise
Question 1
List some components of Micro and Macro environment
Question 2 – Explain any two micro environment at UOG that can affect
marketing
a. In a bad way
b. In a positive way
Question 3 – Identify any two PESTELES and explain how one can be a
threat or an opportunity situation for marketing in a business

Question 4 – Why is understanding market segmentation important in

Marketing. Explain in your opinion.
Question 5- Why study Macro factors carefully when dealing with
marketing?