WHAT I NEED TO KNOW

Good day, dear learner!

This module is solely prepared for you to access and acquire lessons
befitted to your grade level. The exercises, drills and assessments are
carefully made to suit your level of understanding. Indeed, this learning
resource is for you to fully comprehend entrepreneurship and its relevance
to your chosen strand. Independently, you are going to go through this
module following its proper sequence. Although you are going to do it alone,
this is a guided lesson and instructions/directions on how to do every activity
is plotted for your convenience.
Using this learning resource, you will be able to discuss the
relevance of entrepreneurship to your chosen strand as indicated in the K-
12 Most Essential Learning Competencies.
At the end of this module, you are expected to achieve the following
objectives:

identify and discuss the aspects of the marketing environment

describe the microenvironment and its internal factors

describe the macroenvironment and external factors

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 WHAT I KNOW

Choose three local businesses which existed during the COVID pandemic in your
area (for example, a bakery, laundry shop, sari-sari store) that you will examine.
Fill out the table with the required information.

Business Name Nature of Business

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 WHAT’S NEW

Give an example of a trend which started during the onset of COVID pandemic.
How can an entrepreneur take advantage of this trend? Discuss idea.

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 WHAT IS IT

The Marketing Environment

The marketing environment is the sum of all the internal and external forces that
affect the way a firm operates, particularly its ability to build and maintain relationships
with its target customers. The internal forces are referred to as the microenvironment,
while the external forces are called macroenvironment. To be effective, an organization
must proactively monitor these forces and their changing trends so that it can adapt to
changes, keep up with the competition and develop strategies to fulfill the present and
future needs of consumers.
Microenvironment
The microenvironment consists of all internal factors which may have direct
contact with and a direct influence on the company. The microenvironment has five
components: the organization itself, the suppliers, the customers, marketing
intermediaries and competitors. Companies can exert some control or influence over
these components.
1. The organization itself consists of the owners, investors and employees who are
all considered members of the organization. the company’s top management
has the duty to develop the company’s mission, vision, goals and policies which
set the stage for the company’s’ marketing plans. Top management provides the
direction and lays out the strategies and plans.

An organization is composed of different departments with specialized functions

and these should all work together to achieve the company’s objectives.
Marketing managers work hand in hand with these departments to ensure
superior value to customers.

2. Suppliers provide the resources the organization needs to produce goods and
services. A good relationship with suppliers enables the organization to ensure
the availability of supplies for prompt operations.

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3. Customers are the people who are willing and able to buy the organization’s
products and services. They are considered the lifeblood of the business, for
without them the organization will cease to exist. Customers determine the
demand for products and services. Their needs and wants vary and may change
over time, therefore, marketers should exert effort to monitor these needs and
wants in order to continually satisfy them.
4. Marketing intermediaries are entities that assist in the distribution and selling of
goods to customers. They help in the free flow of goods from organizations to
the different markets. They create marketing utilities of place, time and
possession for organizations by ensuring that goods are accessible and will
reach the final customers promptly. There are four types of marketing
intermediaries: wholesalers, retailers, distributors and agents and brokers.

Wholesalers are entities that buy goods from manufacturers or producers and
resell them to retailers and other organizations. Full-service wholesalers take
charge of storage, order processing and delivery of goods, while limited-service
wholesalers do not usually carry all the functions of full-service wholesalers but
package and ship the goods after receiving the customer’s order details from the
retailers.

Distributors are entities selected by manufacturers to buy goods for resale to

retailers. They usually hold a narrower range of goods than wholesalers and
cover a specific geographic area.

Retailers carry a wide range of goods which are bought from wholesalers or
distributors and then sold directly to consumers. They have different brands of
goods manufactured or produced by competing organizations.

Agents and brokers sell products for a certain commission or percentage of

sales. Agents are authorized by their respective companies to act and decide on
their behalf. Examples are real estate agents and insurance agents.

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 5. Competitors are rival firms that offer similar goods or services as the
organization. Competitors can be either direct or indirect. Direct competitors are
brands competing in the same industry, offering essentially the same goods or
services. For example, the direct competitor of Coca-cola is Pepsi Cola; while
that of Colgate is Close Up. Indirect competitors offer products or services that
differ slightly, but with the same benefits. For example, Coca-cola and Pepsi
belong to the soft drink industry. All other brands of soft drink are their direct
competitors. Their indirect competitors are fruit juices, bottled water, iced tea,
sports drinks and energy drinks.

Macroenvironment

The macroenvironment of a firm consists of the various factors which affect not
only the firm itself, but also the entire industry of the region or country. These factors are
broader in nature than tose of the microenviroment and are out of the firm’s control. The
six factors of the microenviroment are demographics, economics, sociocultural factors,
technological factors, political factors and ecological factors.
1. Demographics refer to characteristics of a population such as age, gender,
religion, educational attainment, civil status, geographic location, lifestyle, race
and others. Organizations can understand their target customers better by
studying their demographics.

For example, in a 2016 survey made by Pulse Asia, there is a marked change in
the lifestyle of Filipinos, with 62 percent of the respondents identified as being
health-conscious. A survey made by Kantar in 2013 also revealed that many
Filipinos have chosen to live a healthy lifestyle through their food choices. There
was a marked increase in the purchase of cereals (17%), yoghurt (9%), canned
vegetables (6%), biscuits (6%), soy milk (20%), bottled water (12%), fruit and
vegetable juices (7%) and powdered milk (6%). Because of this, marketers have
included low-calorie choices in their product offerings. They also implemented

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 other strategies, such as launching ad campaigns emphasizing the health
benefits of their existing products, or creating new product lines with less sugar,
less sodium, less trans fats and so on.
2. Economics refers to the influence of the purchasing power of the peso on
spending patterns, in the context of inflation and other economic forces that may
affect the economy. A high inflation rate affects both producers and consumers.
An increase in the prices of raw materials will mean that either the producer’s
profit margins will decrease, or they must raise selling prices to compensate. As
prices increase, purchasing power decreases, meaning that if income remains
the same, consumers can purchase fewer goods and services than they were
able to prior to inflation. Organizations and marketers therefore must examine
their goods and services. Are these goods and services needs or wants? Are
they meant for a specific income classes or the general public? On average, how
much disposable income does the target market have? What are the best ways
these goods and services to the target market, given their economic class?
3. The sociocultural aspect refers to the beliefs, practices, norms, customs and
traditions that may affect business operations.

Culture has a big impact on how goods and services may be marketed. Brands
which found success in the Philippines are known to use traditional Filipino
values such as hospitality, generosity and religion in their promotional
campaigns. For example, Jollibee, PLDT and Vicks Vaporub have used family
values in their advertisements to considerable success.

Upon the historic approval of marriage equality in the United States, may
companies such as Coca-cola, Pepsi, Starbucks, Procter and Gamble and
Google came out in support of the LGBT (lesbian, gay, bisexual and
transgender) community. This was met with mixed reactions. While progressive
sectors of American society lauded such as statements of support, conservatives
decried them some even expressing intent to boycott the said companies. Such
reactions should be taken into consideration by marketers.

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4. The technological factor refers to developments in technology which may affect
consumers, businesses and the society at large. For example, banks have made
it more convenient to withdraw, pay bills and check current balances through
ATMs, (automated teller machines) and online banking and these made
telegraphic transfers obsolete. The Internet has made communication and
access to information faster and more efficient, and expanded the ways in which
brands can reach out to consumers. And although the speed at which
technology evolves can sometimes be overwhelming, organizations should
always strive to keep pace with technological developments.
5. Political forces refer to groups of people or parties which may influence the
stability of a country and affect the production, distribution, promotion and selling
of goods and services.

There are certain regulations which are enforced upon companies in the conduct
of their business. Copyright and patent laws enable individuals and entities to
protect their ideas and inventions and prevent others from making, using, or
selling goods or services based on these ideas and inventions without their
consent. The government sees to it that products and services undergo quality
control to ensure that they meet certain standards. It also requires organizations
to acquire operational permits, and abide by certain rules and regulations in the
treatment of their workers. Taxes may place restrictions on certain goods and
services and discourage certain behavior. For example, sin taxes, or tariffs on
items such as alcohol and tobacco, discourage heavy use of such substances.
Conversely, tax laws may encourage other behaviors. For example, tax
exemptions for married couples with children may result in some individuals to
consider married life as cheaper than being single, thus encouraging them to
marry and raise a family.
6. The ecological factors refer to all the processes or activities necessary to protect
the natural environment while maintaining efficiency of business operations.

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Organizations should ensure that the scale and methods of sourcing their raw
materials are conducted properly, safely and in an environmentally-friendly
manner – while minimizing damage done to the environment. Governments may
encourage such practices by implementing laws and guidelines to protect the
natural environment – providing implementing laws and guidelines to protect the
natural environment – providing incentives to those who abide by them, and
imposing heavy sanctions on violators. Among environmentally conscious
consumers, adherence to environmental laws can be used as a selling point and
has even spawned its own movement.: eco-capitalism. Making products from
recycled materials and using reusable shopping bags instead of plastic ones, for
example, have become popular trends and some consumers make conscious
efforts to support businesses that publicly emphasize their environmentally-
friendly practices.

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 WHAT’S MORE

Answer the following questions.

1. Which among the forces in the macroenvironment has the most impact on a
company? Why?

2. Why do you think a firm should monitor the activities of competitors?

3. What is the importance of examining internal and external forces in the

achievement of the company’s goals and objectives?

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 WHAT I HAVE LEARNED

Answer the question to the best of your ability.

Below are macroenvironmental forces. For each one, identify one (1) issue that may
present an opportunity for the identified local business and another issue that can pose
a threat or have an adverse effect on the business.

Macroenvironmental Opportunity Threat

Forces

Demographics

Economics

Sociocultural factors

Technological factors

Political factors

Ecological factors

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 WHAT I CAN DO

Select one product and one service and determine the internal and external forces that
affect it. Make a table outlining the various factors that affect the product.

Forces
Product Service
Internal Factors

External Factors

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 ASSESSMENT

In the first column, write MA if the provided term is part of macroenvironment, and MI if
it is part of microenvironment. In the second column, indicate the specific factor or
component under which term falls. The first item has been done for you.

1. inflation MA economic

2. convenience stores and groceries ____________ ________________

3. age, gender, lifestyle ____________ ________________
4. culture ____________ ________________
5. proper waste disposal ____________ ________________
6. patent laws ____________ ________________
7. ATMs ____________ ________________
8. purchasing power ____________ ________________
9. a company’s vision, mission and goals ____________ ________________
10. customers ____________ ________________

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 ADDITIONAL ACTIVITIES

Determine your own personal microenvironment and macroenvironment. What

internal and external factors influence your plans and decisions in life?

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 ANSWER KEY

What's more
Answers vary

What I have learned

Answers vary

What I Can Do
Answers vary

Assessment
Module 3 Answer Key
1. MA - economic
2. MI - Competition
3. MA - Demographics
4. MA - sociocultural
5. MA - Ecological factors
6. MA - Political forces
7. MA - TEchnological factor
8. MA - Economics
9. MI - Organization
10.MI - Customers

Additional Activities
Answers vary

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REFERENCES

Te, Baltazar-Marte, Abrina (2018).Principles of Marketing for Senior High School. 839
EDSA, South Triangle, Quezon City: C & E Publishing, Inc

Ilano, A.B., (2016).Principles of Marketing.Manila, Philippines:REX Book Store

Zarate, Cynthia A.(2017).Principles of Marketing for Senior High School.839 EDSA,

South Triangle, Quezon City:C & E Publishing, Inc.

https://www.cyberclick.net/numericalblogen/10-marketing-strategy-examples

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