Mark40033 Environmental-Marketing PDF

Republic of the Philippines
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

Office of the Vice President for Academic Affairs
College of Business Administration
INSTRUCTIONAL MATERIAL FOR:

ENVIRONMENTAL MARKETING
COMPILED BY:
PROF. JOEL T. AGACITA

PROF. PERLA B. PATRIARCA

PUP A. Mabini Campus, Anonas Street, Sta. Mesa, Manila 1016
Direct Line: 335-1752|Trunk Line: 335-1787 or 335-1777 local 236 or 302
Website: www.pup.edu.ph| Email: [email protected]
THE COUNTRY’S 1 POLYTECHNICU st
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TABLE OF CONTENTS
Page
Topic 1: Introduction to Environmental Marketing 6
Overview 6
Learning Outcomes 6
Course Materials 6
Marketing Environment 6
Microenvironment 7
Macroenvironment 10
Assessment 11
Topic 2: The Immediate Environment: Company Objectives & Capacity 12
Overview 12
Learning Outcomes 12
Course Materials 12
Objectives should Set Firms course 12

Hierarchy of Objectives 14
Assessments 16
Topic 3: The Immediate Environment: Competitors 17
Overview 17
Course Materials 17
Competitive Environment 17
Kinds of Competitive Environment 18

Competitors Analysis Tools 19
Assessment 21
Topic 4: The Macro environmental Factors: Overview 22
Overview 22
Course Materials 22
Market Environment 22
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Demographic Environment 23
Economic Environment 24
Natural and Social-Cultural Environment 25
Technological and Political-Legal Environment 26
Assessment 27
Topic 5: Cultural Factors 28
Overview 28
Course Materials 28
Culture 28
Characteristics Culture 28
Dimensions of Culture 29
Assessments 30
Topic 6: Demographic and Social Trends 31
Overview 31
Course Materials 31
Philippine Population 31
Demographic generations 38
Assessment 38
MIDTERM 38
Topic 7: Economic Environment 39
Overview 39
Course Materials 39
Economic Environment 39
Economic Indicators 40
Assessment 43
Topic 8: Technological and Political Environments 44
Overview 44
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Course Materials 44
Technological Environment 44
Political Environment 46
Assessment 46
Topic 9: Public Health Issues(Covid 19) 47
Overview 47
Course Materials 47
Public Health 47
Job Loss 48
Economic Recession 50
Assessments 51
Topic 10: Overview in Scenario Planning 52
Overview 52
Course Materials 52
What is Scenario Planning 52

Building a scenario plan 52
Types of scenario 53
Assessment 55
Topic 11: Identify Different Scenarios 56
Overview 56
Course Materials 56
Steps in scenario planning 56

Guideline for Developing Scenario 58
Assessments 60
Topic 12: Retailing and Wholesaling 61
Overview 61
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Course Materials 61
Marketing Mix 61
Situations 62
4C’s of Marketing 63
Assessments 64
Topic 13: Assessing the Profitability of each scenario Synthesis 95
Overview 65
Course Materials 65
Transparency 65
Benefits of Profitability Analytic Solutions 68
Assessments 69
FINAL EXAM 70
REFERENCES 70
GRADING SYSTEM
Class Standing 70%
• Project
• Assignments
• Special Reports
• Case Study
Midterm / Final Examinations 30%
100%
Midterm Grade + Final Term Grade = FINAL GRADE

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Topic 1: Introduction to Environmental Marketing
Overview
This chapter introduces you to the basic concepts of environmental marketing. We start
with the question: What is environmental marketing? How market environment affects your
business.
Learning Outcomes
• Understand the marketing environment.

• Define the microenvironment
• Define the macroenvironment
Course Materials
Market environment
A company’s marketing environment consists of the actors and forces outside marketing that
affect marketing management’s ability to build and maintain successful relationships with target
customers. Like Microsoft, companies constantly watch and adapt to the changing
environment—or, in many cases, lead those changes. More than any other group in the
company, marketers must be environmental trend trackers and opportunity seekers. Although
every manager in an organization should watch the outside environment, marketers have two
special aptitudes. They have disciplined methods—marketing research and marketing
intelligence—for collecting information about the marketing environment. They also spend more
time in customer and competitor environments. By carefully studying the environment,
marketers can adapt their strategies to meet new marketplace challenges and opportunities.
The marketing environment consists of a microenvironment and a macroenvironment. The

microenvironment consists of the actors close to the company that affect its ability to engage
and serve its customers—the company, suppliers, marketing intermediaries, customer markets,
competitors, and publics. The macroenvironment consists of the larger societal forces that affect
the microenvironment—demographic, economic, natural, technological, political, and cultural
forces. We look first at the company’s microenvironment.
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Microenvironment - Includes the actors close to the company. The micro-component of the
external environment is also known as the task environment. It comprises of external forces and
factors that are directly related to the business. These include suppliers, market intermediaries,
customers, partners, competitors and the public
Actors
1. T h e c o m p a n y
2. S u p p l i e r s
3. M a r k e t i n g i n t e r m e d i a r i e s
4. C u s t o m e r s
5. C o m p e t i t o r s
6. P u b l i c s
The Company
In designing marketing plans, marketing management takes other company groups into
account—groups such as top management, finance, research and development (R&D),
purchasing, operations, human resources, and accounting. All of these interrelated groups form
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the internal environment. Top management sets the company’s mission, objectives, broad
strategies, and policies. Marketing managers make decisions within these broader strategies
and plans. Then, as we discussed in Chapter 2, marketing managers must work closely with
other company departments. With marketing taking the lead, all departments— from
manufacturing and finance to legal and human resources—share the responsibility for
understanding customer needs and creating customer value.
Suppliers
Suppliers form an important link in the company’s overall customer value delivery network. They
provide the resources needed by the company to produce its goods and services. Supplier
problems can seriously affect marketing. Marketing managers must watch supply availability
and costs. Supply shortages or delays, natural disasters, and other events can cost sales in the
short run and damage customer satisfaction in the long run. Rising supply costs may force price
increases that can harm the company’s sales volume. Most marketers today treat their suppliers
as partners in creating and delivering customer value.
Marketing Intermediaries
Marketing intermediaries help the company promote, sell, and distribute its products to final
buyers. They include resellers, physical distribution firms, marketing services agencies, and
financial intermediaries. Resellers are distribution channel firms that help the company find
customers or make sales to them. These include wholesalers and retailers that buy and resell
merchandise. Selecting and partnering with resellers is not easy. No longer do manufacturers
have many small, independent resellers from which to choose. They now face large and
growing reseller organizations, such as Walmart, Target, Home Depot, Costco, and Best Buy.
These organizations frequently have enough power to dictate terms or even shut smaller
manufacturers out of large markets. Physical distribution firms help the company stock and
move goods from their points of origin to their destinations. Marketing services agencies are the
marketing research firms, advertising agencies, media firms, and marketing consulting firms that
help the company target and promote its products to the right markets. Financial intermediaries
include banks, credit companies, insurance companies, and other businesses that help finance
transactions or insure against the risks associated with the buying and selling of goods.
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Competitors
The marketing concept states that, to be successful, a company must provide greater customer
value and satisfaction than its competitors do. Thus, marketers must do more than simply adapt
to the needs of target consumers. They also must gain strategic advantage by positioning their
offerings strongly against competitors’ offerings in the minds of consumers. No single
competitive marketing strategy is best for all companies. Each firm should consider its own size
and industry position compared to those of its competitors. Large firms with dominant positions
in an industry can use certain strategies that smaller firms cannot afford. But being large is not
enough. There are winning strategies for large firms, but there are also losing ones. And small
firms can develop strategies that give them better rates of return than large firms enjoy.
Publics
The company’s marketing environment also includes various publics. A public is any group that
has an actual or potential interest in or impact on an organization’s ability to achieve its
objectives. We can identify seven types of publics:
• Financial publics. This group influences the company’s ability to obtain funds. Banks,
investment analysts, and stockholders are the major financial publics.
• Media publics. This group carries news, features, editorial opinions, and other content. It
includes television stations, newspapers, magazines, and blogs and other social media.
• Government publics. Management must take government developments into account.
Marketers must often consult the company’s lawyers on issues of product safety, truth in
advertising, and other matters. • Citizen-action publics. A company’s marketing decisions may
be questioned by consumer organizations, environmental groups, minority groups, and others.
Its public relations department can help it stay in touch with consumer and citizen groups.
• Local publics. This group includes neighborhood residents and community organizations.
Large companies usually work to become responsible members of the local.
Customers
Customers are the most important actors in the company’s microenvironment. The aim of the
entire value delivery network is to engage target customers and create strong relationships with
them. The company might target any or all of five types of customer markets. Consumer
markets consist of individuals and households that buy goods and services for personal
consumption. Business markets buy goods and services for further processing or use in their
production processes, whereas reseller markets buy goods and services to resell at a profit.
Government markets consist of government agencies that buy goods and services to produce
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public services or transfer the goods and services to others who need them. Finally,
international markets consist of these buyers in other countries, including consumers,
producers, resellers, and governments. Each market type has special characteristics that call for
careful study by the seller.
Source: (Principles of Marketing by Kotler,2016)
Macro environment- Involves larger societal forces. The macro component of the marketing
environment is also known as the broad environment. It constitutes the external factors and
forces which affect the industry as a whole but don’t have a direct effect on the business.
Macroenvironmental Forces
1. Demographic
2. Economic
3. Natural
4. Technological
5. Political
6. Cultural
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Source: (Principles of Marketing by Kotler,2016)
• Economic Environment
The economic environment constitutes factors which influence customers’ purchasing
power and spending patterns. These factors include the GDP, GNP, interest rates,
inflation, income distribution, government funding and subsidies, and other major
economic variables.
• Technological Environment
The technological environment constitutes innovation, research and development in
technology, technological alternatives, innovation inducements also technological
barriers to smooth operation. Technology is one of the biggest sources of threats and
opportunities for the organization and it is very dynamic.
• Political-Legal Environment
The political & Legal environment includes laws and government’s policies prevailing in
the country. It also includes other pressure groups and agencies which influence or limit
the working of the industry and/or the business in the society.
• Social-Cultural Environment
The social-cultural aspect of the macro-environment is made up of the lifestyle, values,
culture, prejudice and beliefs of the people. This differs in different regions.
Assessment
• Explain your thoughts about marketing environment.

• Define the microenvironment
• Define the macroenvironment
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Topic 2: The immediate Environment: Company Objectives & Capacity
Overview
This chapter will elaborate about the marketing internal objectives and capacity of the company.
Learning Outcomes
• Explain the marketing strength.
• Discuss the company’s objectives.
• Discuss the company’s capacity.
Course Materials
Objectives Should Set Firm’s Course
A company must decide where it’s going, or it may fall into the trap expressed so well by the
quotation: “Having lost sight of our objective, we redoubled our efforts.” Company objectives
should shape the direction and operation of the whole business. It is difficult to set objectives
that really guide the present and future development of a company. The marketing manager
should be heard when the company is setting objectives. But setting whole company
objectives—within resource limits— is ultimately the responsibility of top management. Top
management must look at the whole business, relate its present objectives and resources to the
external environment, and then decide what the firm wants to accomplish in the future. Each
firm needs to develop its own objectives based on its own situation. This is important, but top
executives often don’t state their objectives clearly.
A mission statement helps set the course
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Many firms try to avoid this problem by developing a mission statement, which sets out the
organization’s basic purpose for being. For example, the mission statement for the American
Red Cross states that it “will provide relief to victims of disaster and help people prevent,
prepare for, and respond to emergencies.” A good mission statement should focus on a few key
goals rather than embracing everything. It should also supply guidelines that help managers
determine which opportunities to pursue.
The whole firm must work toward the same objectives
A mission statement is important, but it is not a substitute for more specific objectives that
provide guidance in screening possible opportunities. For example, top management might set
objectives such as “earn 25 percent annual return on investment” and “introduce at least three
innovative and successful products in the next two years.” Of course, when there are a number
of specific objectives stated by top management, it is critical that they be compatible. For
example, the objective of introducing new products is reasonable. However, if the costs of
developing and introducing the new products cannot be recouped within one year, the return on
investment objective is impossible.
Company objectives should lead to marketing objectives

To avoid such problems, the marketing manager should at least be involved in setting company
objectives. Company objectives guide managers as they search for and evaluate
opportunities—and later plan marketing strategies. Particular marketing objectives should be set
within the framework of larger company objectives. As shown in Exhibit 3-2, firms need a
hierarchy of objectives—moving from company objectives to marketing department objectives.
For each marketing strategy, firms also need objectives for each of the four Ps—as well as
more detailed objectives.
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Company Resources May Limit Search for Opportunities
Every firm has some resources—hopefully some unique ones—that set it apart. Breakthrough
opportunities—or at least some competitive advantage—come from making use of these
strengths while avoiding direct competition with firms having similar strengths. To find its
strengths or recognize weaknesses, a firm must evaluate its functional areas (production,
research and engineering, marketing, general management, and finance) as well as its present
products and markets. The knowledge of people at the firm can also be a unique resource. By
analyzing successes or failures in relation to the firm’s resources, management can discover
why the firm was successful—or why it failed—in the past.
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Financial strength
Some opportunities require large amounts of capital just to get started. Money may be required
for R&D, production facilities, marketing research, or advertising before a firm makes its first
sale. And even a really good opportunity may not be profitable for years. So lack of financial
strength is often a barrier to entry into an otherwise attractive market.
Producing capability and flexibility

In many businesses, the cost of producing and selling each unit decreases as the quantity
increases. Therefore, smaller firms can be at a great cost disadvantage if they try to win
business from larger competitors. On the other hand, new—or smaller—firms sometimes have
the advantage of flexibility. They are not handicapped with large, special-purpose facilities that
are obsolete or poorly located. Many firms increase flexibility by not having any “in-house”
manufacturing for their brands. Hanes is a good example. At one point, Hanes had U.S.
factories for its underwear and T-shirts. But the factories were sold when most textile-related
manufacturing moved to other countries with lower labor costs. Top managers for the brand said
that they didn’t have a competitive advantage in manufacturing anyway. Now, as Hanes’ needs
change, it has the flexibility to work with whatever suppliers around the world are best able to
meet its specifications.
Marketing strengths
Marketing resources can create opportunities for a firm. In the product area, for example, a
familiar brand can be a big strength. Starbucks is famous for its coffee beverages. When
Starbucks introduced its Coffee Ice Cream, many people quickly tried it because they knew
what Starbucks flavor meant. 4 A new idea or process may be protected by a patent. A patent
owner has a 20-year monopoly to develop and use its new product, process, or material. If one
firm has a strong patent, competitors may be limited to second-rate offerings—and their efforts
may be doomed to failure. 5 Good relations with wholesalers and retailers can also be an
important resource—especially when introducing new products. Marketing managers at Clorox
relied on this when they introduced the Green Works line of household cleaners. After years of
working with the company on well-established products like Clorox Bleach, retailers trusted
Clorox to create an effective marketing strategy for Green Works. Promotion and price
resources must be considered too. Fidelity Investments already has a skilled sales force.
Marketing managers know these sales reps can handle new products and customers. And
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expertise to create an Internet website for online orders may enable a firm to expand into a new
target market.
Assessment
1. Discuss the company’s objectives.
2. Discuss the company’s capacity.
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Topic 3: The Immediate Environment: Competitors
Overview
In this chapter the discussion will focus on the competitive environment and its competitors.
Learning Outcomes
• Describe the competitive environment.

• Explain the disadvantage and advantage of competitive environment
• Identify the kinds of competitive environment.
Course Materials
The competitive environment affects the number and types of competitors the
marketing manager faces and how they may behave. choose strategies that avoid head-on
competition. Marketing managers choose strategies to avoid head on competitors and where
competition is inevitable, they can plan for it. It stated in the article in study.com by Joseph
Shinn (2016) , A competitive environment is the dynamic external system in which a business
competes and functions. The more sellers of a similar product or service, the more competitive
the environment in which you compete. Many markets are flooded with firms, making them
extremely competitive.
Direct competitors are businesses that are selling the same type of product or service as
you. Indirect competitors are businesses that still compete even though they sell a different
service or product. The products or services offered by indirect competitors tend to be those that
can be substituted for one another
The Competitive Environment advantages:
● Price - Higher competition levels mean businesses have less influence on making prices
higher. Lower for Consumers.
● Quality - High competition means businesses need to compete on quality of the goods
and services so they do not lose customers to competitors.
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● Choice - More businesses providing products mean consumers have a wider range to
choose from.
● Efficiency - High competition forces businesses to be efficient and remain competitive.
The Competitive Environment disadvantages:
Companies may partake in bad practices and can lead to disadvantages of high competition
levels such as :
● Increased pollution
● Unfair trade
● Social and ethical issues - child labour and bad work conditions.
● High risk of unemployment
There are four basic kinds of competitive environment:
1. Perfect Competition - exists when there are many consumers buying a standardized
product from numerous small businesses.
2. Monopolistic Competition- they sell differentiated products that differ somewhat, or are
perceived to differ, even though they serve a similar purpose.
3. Oligopoly- means few sellers. In an oligopolistic market, each seller supplies a large
portion of all the products sold in the marketplace. Companies in oligopolistic industries
include such large-scale enterprises as automobile companies and airlines.
4. Monopoly- this lies at the opposite end of the spectrum from perfect competition. Also
there’s only one seller in the market. There are few monopolies in the United States
because the government limits them. Most fall into one of two categories: natural and
legal. Natural monopolies include public utilities, such as electricity and gas suppliers. A
legal monopoly arises when a company receives a patent giving it exclusive use of an
invented product or process.
Understanding the differences among these market situations is helpful in analyzing the
competitive environment, and our discussion assumes some familiarity with these concepts.
According to the book Essentials of Marketing by W D. Perreault (2015), the best way for a
marketing manager to avoid head-on competition is to find new or better ways to satisfy
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customers’ needs and provide value. The search for a breakthrough opportunity or some sort of
competitive advantage that requires an understanding not only of customers but also of
competitors.
Competitor Analysis Tool
As technology occupies the business world, competitor analysis also became more
advanced and more useful than usual. In a blog published by Christian Schultorp, he split into
six different categories, namely:
1. Ad Intelligence;
2. SEO Competitor Analysis Tools;
3. Pay-per-click Tools;
4. Content and Traffic Analysis Tools
5. Mention and Monitoring Tools; and
6. Social Media Tools
Moat by Oracle Corporation, a Brand Intelligence and Analytics instrument serves big
companies, like Unilever, Nestle, Kellogg’s, and divided into two core products, Moat Analytics,
and Moat Pro. Moat Analytics is SaaS (Software as a Service) aimed to trace content reviews
and ad impressions to brands and clients to have better internet recognition and marketing
strategy. As to Moat Pro, “enterprise marketing and ad intelligence platform for mobile, direct,
and programmatic advertising.” It also has a fee which you will get if you request a demo on
their website.
SEO (or Search Engine Optimization) Competitor Analysis tool helps brands and clients
to know what their competitor’s keyword rank and how difficult they are to target. The instrument
will also show a SERPs (Search Engine Result Pages) of your close competitor. The Trust and
Citation Flow tools are also helpful because it will give clients a deciding factor if your brand is
worthy of trust and cited by other clients. After analyzing your competitors, given to you is a
report with insights on how better you should do to surpass your customers. However, after a
14-day free trial, you will have to pay $49 per month.
Alexa or Alexa.com is a Content and Traffic Analysis tool known for its "Alexa ranking”
which explains how popular a site or brand compared to others all over the world. According to
the blog, “the lower the ranking, the more popular the site.” A popular site will have a low rank
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that gets a fair amount of traffic on the internet. The website will also explain how web traffic
works and will measure your site against your competitors. It also has a competitive intelligence
tool that will measure traffic statistics, showing views, bounce rates, and other instruments that
will help you build insight and a significant marketing strategy. It also has a fee that costs $20
per month after a week of a free trial.
A free Mention and Monitoring tool, Google Alerts lets you set up either daily or weekly
reports that include blogs, news, forums, discussions, and other materials that will show some
keyword mentions from your competitors’ brand.
Kantar Media is a famous Pay-per-click tool that is widely used by different big
companies, brands, and other sites. It will require you a contract after signing up on the website,
that has a multifunctional tool that will help you see where your competitor’s pay-per-click
budget spent, how their ads are performing, the exact ad copy, and where it posted. SEM
(Search Engine Marketing) Insight is also a tool used by Kantar Media to know if your
competitor changed their bidding strategy, thus, a valuable tool to recognize what your
competitors’ strengths and weaknesses.
Lastly, Sprout Social, a Social Media tool, combines data from all of your social media
sites into a comprehensive report for you to analyze your content. It also has tools for analytics,
engagement, publishing, and other helpful tools. After a month of a free trial, you will be paying
a minimum of $99 per month that will help you identify trends, tactics, and challenges in making
a marketing plan.
Effects of Different Competitive Situation to the Planning of Marketing Strategy
The competitive environment affects the number and types of competitors the marketing
manager faces and how they may behave. Although marketing managers usually can't control
these factors, they can choose strategies that avoid head-on competition. And where
competition is inevitable, they can plan for it.
Competitor-free environments are rare
Monopoly situations, in which one firm completely controls a broad-product market, are
rare in market-directed economies. Further, governments commonly regulate monopolies. For
example, in many parts of the world prices set by utility companies (electricity and water) must
be approved by a government agency. Monopolies can be tempted to ignore customer needs.
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Yet monopolies often face competition sooner or later. Consider cable TV, which for a long time
had a monopoly in delivering a wide range of television programming into homes. Cable TV
operators were notorious for providing poor customer service. Then competition came from
satellite television and now from online providers like Hulu, Netflix and more. Many customers
are happy to "cut the cord" if only because of memories of frustration eith their cable television
operator.
Monopolistic Competition is typical and a challenge
In monopolistic competition, a number of different firms offer marketing mixes that at

least some customers see as different. Each competitor tries to get control ( a monopoly) in its
"own" target market. But competition still exists because some customers see the various
alternatives as substitutes. Most marketing managers in developed economies face
monopolistic competition.
In monopolistic competition, marketing managers sometimes try to differentiate very

similar products by relying on other elements of the marketing mix. For example, many
consumers believe that most brands of gasoline are very similar. This makes it difficult for a
Texaco station to attract customers by claiming it offers better gas. So a Texaco station might
serve Seattle's best coffee, offer discounted car washes, maintain longer hours of operation, or
keep a well-lit, safe storefront. Yet such approaches may not work long if they are easily copied
by competitors. So marketing managers should actively seek sustainable competitive
advantage, a marketing mix that customers see as better than a competitor's mix and cannot be
quickly or easily copied.
Assessment
1. Describe the competitive environment.
2. Explain the disadvantage and advantage of competitive environment
3. Identify the kinds of competitive environment and give each an additional example.
4. What toothpaste are you using and identify its competitors.
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Topic 4: Macro environmental Factors: Overview
Overview
In this chapter, we continue our exploration of how marketers gain insights into an overview of
what is macro environment and how it helps the marketing plan to be successful.
Learning Outcomes
• Explain the importance of macroenvironment

• Explain the macroenvironmental factors overview
Course Materials
The Market Environment that consists of micro and macro environment shapes the
environment of marketing strategy planning. The Micro Environment serves as the immediate
environment because it is the factor that directly affects the process and the transactions of the
business. These factors include the suppliers, competitors, customers, intermediaries, company
and the general public. The Macro Environment is an external factor that may or may not be
predictable but shapes the marketing strategy planning. These include the cultural factors,
demographic and social trends, the economic environment, the technological and political
environment, and the natural environment. Strictly speaking, the macro environment
encompasses all of the relevant factors making up the broad environmental context in which a
company operates.
These macro environmental factors are specified by Keller, et al., but there are different
acronyms across the globe. There is the PEST, which stands for political, economic, social and
technical. It is proposed by Francis Aguilar, an American professor at Harvard Business School.
The PEST Analysis didn’t start like that, but as ESTP. And, because it doesn’t roll off the
tongue, other authors attached different letters and to further the acronym. Thus, the creation of
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PESTEL (Political, Environmental, Social, Technological, Economic, and Legal) and DESTEP
(Demographic, Environmental, Social, Technological, Economic, and Political)
The macro environmental analysis is a strategic tool. It helps businesses succeed by

understanding political, economic, social and technological impacts. Without the information it
brings to light, a business will find themselves conflicted. They’d be forced to fight against
threats without a plan of action. They may not acknowledge advanced technologies. And they
may become susceptible to laws and regulations without notice. This analysis tool is intended to
help with smarter decision making. And, it matters.
The macro environment consists of six factors: demographic environment, economic

environment, social-cultural environment, natural environment, technological environment, and
political-legal environment (Keller, et al). Marketers must give close consideration to the trends
and improvements in these and alter their marketing techniques if needed. New opportunities
are continually developing that anticipate the correct marketing knowledge and resourcefulness.
The Demographic Environment.
Demography is the study of human populations in terms of size, density, location, age,
gender, race, occupation, and other statistics. Demography is very important because it involves
people, and people make up markets. The world population is growing at an explosive rate.
Size. The size of the country is estimated by counting the number of the people in that
country. The size of the population and its growth rate has both demand and supply side
effects. An expansion in the size increases the consumption needs and the amount of labor.
Composition. The composition of population can be assessed by classifying it by using

different criteria described as follows: Age compositions/generations: The population is divided
into three categories: Child 0-14; Working 15-64; Aged 65 and above
Race/Ethnicity. Classification of population on the basis of race or ethnicity is subjective

as individuals usually identify their own race or ethnicity in the population census conducted by
their countries. For example, in the USA census there are six race/ethnic categories: American
Indian, Asian, Black, White, Hispanic And Others. Business organization also use such a data
for a variety of business strategies. They often use such a data to design advertisement that can
attract the dominant category. Similarly, investment decisions are often based on such
information.
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Religion. Religion categories in demographic classification also vary across countries. In
India major religions are Hindu, Christian, and Muslim. Business organization take care of the
religious sentiments while designing their products, like the McDonalds India.
Language. Depending on the major language spoken in a particular country, the

classification of population according to language also varies across countries. For example,
Regional radio stations.
Education. Education profile is assessed by enumerating the number of people of 18

years and above attaining a specified level of education. Education level also often influences
income, product choices and standard of living. Businesses, hence, often use such information
for market research and product targeting. For example, IT companies.
Occupation. Different countries have been using different occupation classification.

Occupational data is used by businesses for targeting and pricing for their products. For
example, Insurance Companies.
Income. Income, being a primary measure of well-being of a person, influences his/her

purchasing power and choices. Income can be aggregate income of a person or per capita
income. Brands are specifically developed and positioned within particular income segments to
maximize turnover and profit.
Gender composition. One of the basic characteristics of demography, the gender

composition largely reflects the underlying social, economic, and cultural patterns of a society. §
Gender classification of population is often analyzed by businesses as men and women have
different psychological and physiological needs and they shop differently. Such a segmentation
is widely used within cosmetics, clothing and magazine industry.
Family life cycle. The stages of life through which families go through is known as family
life cycle. It is expressed as, Families with no children Families with children.
The Economic Environment
The term economic environment refers to all the external economic factors that influence
buying habits of consumers and businesses and therefore affect the performance of a company.
These factors are often beyond a company’s control, and may be either large-scale (macro) or
small-scale (micro).
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Macro factors include: Employment/unemployment, Income, Inflation, Interest rates, Tax
rates, Currency exchange rate, Saving rates, Consumer confidence levels, and Recessions.
Micro factors include: The size of the available market, Demand for the company’s
products or services, Competition, Availability and quality of suppliers, and The reliability of the
company’s distribution chain (i.e., how it gets products to customers).
The Natural Environment
Climate, weather, and natural resources that affect human survival and economic activity
Nature influences demand for many products. Of course, natural disasters such as
tornados and floods can influence demand for building products and the like. But unseasonable
weather can damage or enhance sales, depending on the type of product. For example, due to
pandemic or Corona Virus, some areas are held lockdown that affect the shipment of goods and
some raw materials that the firms needed in producing their products. Another one is due to
climate change, major disasters happened like typhoon and volcanic eruption which affect the
production of natural resources, because of distraction from the certain phenomenon that can
lead to shortage and directly affect the businesses’ economy.
Since natural resources are limited, business firms use the method of 3R’s or REUSE,
REDUCE, RECYCLE in response to this. For example, the uses of plastics in Uniqlo's
wearables, the uses of electricity for modern jeepneys which usually uses fuel before it
upgraded which cannot reproduce.
The Social-Cultural Environment
The institutions and other forces that affect a society's basic values, perceptions,
preference, and behaviors.
Values of a society affect marketing and sales programs in a variety of ways.
Firms develop new products in response to trends in consumer tastes and preference.
There are two factors that businesses followed in response to consumers social and
cultural diversity:
Ø Norms, the certain standards that one society abide (for example, be honest
or be an environmentalist or love the nature).
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Ø Ethics, the rational thinking of which determining the right and wrong (for
example, being honest is right, but lying is wrong).
These factors are important in marketing since consumers are diverse and has different
perspective base on the product they patronize. Most of the consumers are preferred those
product lines that is honest to their consumers and also producing their products without
creating hazards for the environment or should I say eco-friendly businesses since consumers
are being observant and conservative on the product they purchase.
The Technological Environment
Technology plays an important part of our daily lives, and it rapidly grows and evolves making a
change even in the business world. Social media, web and other gadgets than can be use gives
a huge impact in modern marketing. It strengthens and builds customer relationship, helps the
organization grow and it allows the company to gather more information about it’s possible
customers. Technology can be another way to give an opportunity to a certain company, but
they also have to look out for this because it constantly changes, it improves and the company
must have the ability to keep up with these changes. Otherwise, they might miss market
opportunities. but also, technology isn’t always about social medias and other technological
devices it also talks about innovating your products, developing the manufacturing processes
and techniques.
The pull of technological change refers to the development of the manufacturing process and
the production of products, goods or services. There is always a good side and bad side of it,
the use of technology can bring the company both opportunities and threats. It can make your
product even better, it can also increase the awareness, etc. But if the company fails to adopt
these technological changes it may also affect the business. Being outdated can be a risk for
the business that it can be forced out of the competition and it’s another opportunity for the
potential competitors.
The Politico-legal Environment
There are 3 elements of Politico-legal and is a factor that can still give an impact to a
business:
1. Government
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It gives and decides all the fiscal policies, monetary policies and taxation
modules as well. And it is very important to follow all of this in order to have a
stable business function.
2. Legal
In order to equally protect the consumer and the manufacturers, the country must
have an effective legal system with laws. It includes some various matters like
company law, patent law and intellectual property rights.
3. Political
The lack of political stability in a country affects business operations, and

whenever it became unstable, it adversely affects the flow of foreign capital and
enterprise. This commonly happens with the companies that operates
internationally.
Assessment
• Explain the importance of Technological Environment and explain what happen to Nokia.
• Your takeaways on Legal-Political Environment and its importance to marketers
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Topic 5: Cultural Factors
Overview
In this chapter, we look at the cultural factors that should be considered in analyzing your target
market and your existing customers.
Learning Outcomes
• Define the characteristic of culture.

• Describe the dimension of culture
• Promotional strategies for marketing across cultures
Course Materials
According to Perreault, Cannon, and McCarthy, the cultural and social environment affects how
and why people live and behave as they do—which affects customer buying behavior and
eventually the economic, political, and legal environments. Many variables make up the cultural
and social environment. Some examples are the languages people speak; the type of education
they have; their religious beliefs; what type of food they eat; the style of clothing and housing
they have; and how they view work, marriage, and family.
Culture is described as the total way of life of a group of people. It is also a set of traditional
beliefs and values that are transmitted and shared in a given society.
BASIC CHARACTERISTICS OF CULTURE
CULTURE IS LEARNED Culture is not inherited genetically, but must be learned and acquired.
CULTURE IS SOCIALLY SHARED It cannot exist by itself but must be based on social
interaction, and creation.
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CULTURE IS SUBJECTIVE People in different cultures often have different ideas about the
same object.
CULTURE IS ENDURING Because culture is shared and passed down from generation to
generation, it is relatively stable and somewhat permanent.
CULTURE IS CUMULATIVE It is based on several years of accumulated circumstances, as a

result, each generation adds something of its own to the culture before passing the heritage on
to the next generation.
CULTURE IS DYNAMIC It passes from generation to generation, therefore, is subject to

change as it adapts itself to new situations and new sources of knowledge.
SEVERAL DIMENSIONS OF CULTURE
LANGUAGE Language differences can be a challenge for marketers
RELIGION provides the best insight into a society’s behavior and helps answer the question
why people behave rather than how they behave.
AESTHETICS Aesthetics refer to the ideas in a culture concerning beauty and good taste as
expressed in the arts such as music, art, drama, dance and the particular appreciation of colour
and form.
VALUES The role of values in society is to dictate what is acceptable or unacceptable.
CUSTOMS AND TABOOS All cultures have their own unique sets of customs and taboos. It is
important for marketers to learn about these customs and taboos so that they will know what is
acceptable and unacceptable for their marketing programs.
EDUCATION refers to the transmission of skills, ideas and attitudes as well as training in
particular disciplines.
SOCIAL ORGANIZATION Social organizations refer to the way people relate to each other, for
example, extended families, units, kinship.
DEMOGRAPHIC DATA Understanding the demographic dimensions is also important to

marketing strategy planning, so it’s useful to look at some demographic patterns and trends.
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MATERIAL CULTURE (TECHNOLOGY) Before marketing in foreign culture, it is important to
assess the material culture like transportation, power, communications and so on.
PROMOTIONAL STRATEGIES FOR MARKETING ACROSS CULTURES
Communications adaptation This involves changing marketing communications for each local
market.
Dual adaptation This involves adapting both the product and the communications features to
suit local preferences.
Assessment
1. Define the characteristic of culture.
2. Describe the dimension of culture
3. Promotional strategies for marketing across cultures
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Topic 6: Demographics and Social Trends
Overview
In this chapter, well explain the demographics and social trends.
Learning Outcomes
• Define the cultural and social environment
• Explain the Demographic Trends
• Explain the Demographics of the Philippines
Course Materials
The Cultural and Social Environment
The cultural and social environment affects how and why people live and behave as they
do which affects customer buying behavior and eventually the economic, political, and legal
environments. Many variables make up the cultural and social environment. Some examples
are the languages people speak; the type of education they have; their religious beliefs; what
type of food they eat; the style of clothing and housing they have; and how they view work,
marriage, and family. Because the cultural and social environment has such broad effects, most
people don’t stop to think about it, how it may be changing, or how it may differ for other people.
Based on the definition of cultural and social environment. An individual has his own
choice and mindset. Consumer buying behavior eventually refers to the buying behavior of an
individual. An individual can get affected by the environment in which he lives, his culture, his
social class, his psychology and his personality. Now, marketers need to understand this
psychology and the mindset of these consumers, also, understand what all factors influence
their behavior to develop effective marketing strategies.
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A shift from rural to urban areas
Just 50 years ago, about two-thirds of the world’s population lived in rural areas. Today
about half live in urban areas, as more people move to cities for better job opportunities. The
extent of urbanization varies widely across countries. While about 82 percent of U.S. residents
live in urban areas, more than 90 percent do in Japan, Singapore, Israel, and Argentina (see
Exhibit 3-4). By contrast, in Ethiopia and Kenya, 25 percent or less of the population lives in
urban areas. The concentration of people in major cities often simplifies Place and Promotion
decisions
There’s no market when there’s no income

Profitable markets require income—as well as people. The amount of money people can spend
affects the products they are likely to buy. When considering international markets, income is
often one of the most important demographic dimensions. There are a variety of different
measures of national income. One widely used measure is gross domestic product (GDP) —the
total market value of all goods and services provided in a country’s economy in a year by both
residents and nonresidents of that country. Gross national income (GNI) is a measure that is
similar to GDP, but GNI does not include income earned by foreigners who own resources in
that nation. By contrast, GDP does include foreign income.
When you compare countries with different patterns of international investment, the
income measure you use can make a difference. For example, Ford has a factory in Thailand.
The GDP measure for Thailand would include the profits from that factory because they were
earned in that country. However, Ford is not a Thai firm, and most of its profit will ultimately flow
out of Thailand. The Thai GNI would not include those profits. You should see that using GDP
income measures can give the impression that people in less developed countries have more
income than they really do. In addition, in a country with a large population, the income of the
whole nation must be spread over more people. So GNI per capita (per person) is a useful
figure because it gives some idea of the income level of people in the country.
Reading, writing, and marketing problems

The ability of a country’s people to read and write has a direct influence on the
development of its economy—and on marketing strategy planning. The degree of literacy affects
the way information is delivered, which in marketing means promotion. The United Nations
estimates that 16 percent of adults (age 15 or older) in the world cannot read and write. Two-
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thirds of them are women. You may be surprised by the low literacy rates for some of the
countries. Illiteracy creates challenges for product labels, instructions, and print advertising.
Technology adoption races across continents
Cell phone and Internet usage has increased rapidly around the world. These
technologies may have their greatest impact in developing countries where, for example,
they’ve completely skipped the adoption of landline phones and instead moved directly to a
reliance on mobile phones.
Let’s look at this phenomenon more closely. With the introduction of cell phones to the
developing world came an ability to instantly communicate supply and demand to buyers and
sellers. This has dramatically increased efficiency in some markets. For example, after
fishermen in India began using cell phones, they called ashore to find out which ports had the
most demand for their catch. This helped match supply and demand, lowering waste and
stabilizing prices.
Adoption of these technologies varies across the globe (see Exhibit 3-4). Take cell
phones, for example. Some people in Europe and Russia have separate phones for work and
personal use, so the number of cell phones exceeds the population. While penetration is lower
in many of the poorest nations, those countries are experiencing very fast adoption rates.
In Bangladesh, for instance, the 2011 ownership rate of 56 phones per 100 people
represents a more than 300 percent increase from just five years earlier. Similar differences can
be observed in Internet access. Marketing managers need to recognize how target markets
utilize this technology to determine its role in marketing strategy. For example, setting up a
website in another language may be more useful in some countries than others.
Demographics trends in the U.S. consumer market
While the U.S. population is not growing as quickly as in some other countries, Exhibit
3-5 shows that current population and population growth vary a lot in different regions of the
country. The states shaded blue and green are growing at the fastest rate. The greatest growth
is in the west and southeastern United States. These different rates of growth are important to
marketers. Sudden growth in one area may create a demand for new shopping centers—while
retailers in declining areas face tougher competition for a smaller number of customers.
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Philippine Population
Urban
Density Pop % Urban World Global
Year Population (P/Km²) Population Population Rank
2020 109,581,078 368 47.50% 52,008,603 7,794,798,739 13
2019 108,116,615 363 47.10% 50,971,408 7,713,468,100 13
2018 106,651,394 358 46.80% 49,961,978 7,631,091,040 13
2017 105,172,925 353 46.60% 48,978,289 7,547,858,925 13
2016 103,663,816 348 46.30% 48,017,889 7,464,022,049 12
2015 102,113,212 342 46.10% 47,078,199 7,379,797,139 12
2010 93,966,780 315 45.20% 42,487,934 6,956,823,603 12
Source: https://www.worldometers.info/world-population/philippines-population/
§ The current population of the Philippines is 109,762,573 as of Monday, August 17, 2020,
based on Worldometer elaboration of the latest United Nations data.
§ The Philippines 2020 population is estimated at 109,581,078 people at mid year according to
UN data.
§ The Philippines population is equivalent to 1.41% of the total world population.
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§ The Philippines ranks number 13 in the list of countries (and dependencies) by
population.
2 2
§ The population density in the Philippines is 368 per Km (952 people per mi ).
§ The total land area is 298,170 Km2 (115,124 sq. miles)
§ 47.5 % of the population is urban (52,008,603 people in 2020)
Boomers drive the graying of America
Another important dimension of U.S. society is its age distribution. In 1980, the median
age of the U.S. population was 30—but by 2010 the median age rose to 37. The median age is
growing because the percentage of the population in older age groups has increased. Exhibit 3-
6 shows population trends by age groups. The graphic shows the number of people in the
United States at various age groups in 2005, 2015, and 2025.
In Exhibit 3-6, these changes can be seen most dramatically when looking at the
population of those over age 60. The three age bands (60–69, 70–79, and 80+) each show a
large increase by 2025. This will significantly increase the number of senior citizens (people
over 65). This increase is partly due to better health care and Americans living longer lives. It is
also because of baby boomers, those born between 1946 and 1964, began to reach age 65 in
2011. Baby boomers are a powerful demographic force, as there are large numbers of people in
this group. Looking ahead, these shifts create new opportunities in industries such as tourism,
health care and financial services—all of which are more important to the middle-aged and
retired.
Generation X (Fewer in Number )
According to Perrault the Gen X, refers to the generation born immediately following the
baby boom from 1965 to 1977. This group is much smaller in number than the baby boomers it
follows notice the decline in 40–49 year olds from 2005 to 2015 and the decline in 50–59 year
olds from 2015 to 2025.
The initial name of this generation was “Gen Bust”, as the birth rates were substantially
lower than the ones during the Baby Boom. Whenever the birthdate is between 1965 and 1979,
the person is considered to be part of the generation X. Even though this generation only makes
out one fourth of the U.S. population, their purchasing power already represents 31% of the total
U.S. income.
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When the digital world came around, generation X have already been shopping in-store
for years. Now, they are a hybrid in terms of shopping, as they still enjoy shopping in-store.
However, they also enjoy the benefits of purchasing things conveniently online. Gen Xers are
believed to be very dedicated to lists while shopping, however, they also admit to impulse
purchasing while shopping.
This generation is known as savvy, meaning, that they make well informed choices and
purchases therefore, they actively engage in research about companies and their products and
services. Members of the generation X are known to be more resistant towards current trends,
however, they support altruistic values of companies. Therefore, they are more likely to support
a company that offers products and services that somehow benefit the society, communities or
the environment.
Generation Y ( Techno Savvy )
Other term for generation y is called Millennials, refers to those born from 1978 to 1994.
This group emerged from the echo boom when baby boomers started having kids. This should
make Gen Y an increasingly attractive market for industries like housing, appliances, furniture,
and electronics though the recent recession delayed that opportunity. More or less all grown up
now. They're graduating college, entering the full-time work force, renting and purchasing
homes, and, perhaps most important, spending their disposable income.
Even though Millennials appreciate good advertising, and are more willing to actively
seek it out before making purchase decisions as opposed to generation X, who perceive
advertising as disruptive and actively tune it out either with the help of ad-blockers, skipping the
pre-rolls online or changing channels while watching TV. Because of the widespread use of
social media to learn about products, Gen Y-ers are more likely to buy from a brand that was
referred to them by a friend, rather than one they saw in an advertisement
Moreover, Millennials are trusting big brands more than other generations, as long as
these companies are displaying honesty and integrity. Additionally, they show a great interest in
the climate change and they are more likely to buy from companies who engage in fair-trade
sourcing, organic growing and other measures that help combat the threat of global warming.
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Assessment
1. Define the cultural and social environment
2. Explain the Demographic Trends
3. Explain the Demographics of the Philippines
MIDTERM EXAM(Essay at least 3,000 words)
Please analyze the Macro and Microenvironment of Jollibee Corporation.
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Topic 7: Economic Environment
Overview
This chapter looks further into the economic environment and its importance.
Learning Outcomes
• Define the economic environment

• Explain the Economic Indicators
Course Materials
Markets require buying power as well as people. The economic environment consists of
economic factors that affect consumer purchasing power and spending patterns. Marketers
must pay close attention to major trends and consumer spending patterns both across and
within their world markets.
Changes in Consumer Spending

Economic factors can have a dramatic effect on consumer spending and buying behavior. For
example, until fairly recently, American consumers spent freely, fueled by income growth, a
boom in the stock market, rapid increases in housing values, and other economic good fortunes.
They bought and bought, seemingly without caution, amassing record levels of debt. However,
the free spending and high expectations of those days were dashed by the Great Recession of
2008/2009.
Income Distribution Marketers should pay attention to income distribution as well as income
levels. Over the past several decades, the rich have grown richer, the middle class has shrunk,
and the poor have remained poor.
Changes in major economic variables, such as income, cost of living, interest rates, and savings
and borrowing patterns, have a large impact on the marketplace. Companies watch these
variables by using economic forecasting. Businesses do not have to be wiped out by an
economic downturn or caught short in a boom. With adequate warning, they can take advantage
of changes in the economic environment.
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Economic Indicators
An economic indicator is a piece of economic data, usually of macroeconomic scale, that is
used by analysts to interpret current or future investment possibilities. These indicators also
help to judge the overall health of an economy.
Basic economic indicators.
1. GDP
2. GNP
3. Exchange Rate
4. Employment Rate
5. Interest Rate
6. Inflation Rate
What Is Gross Domestic Product (GDP)?

Gross domestic product (GDP) is the total monetary or market value of all the finished goods
and services produced within a country's borders in a specific time period. As a broad measure
of overall domestic production, it functions as a comprehensive scorecard of a given country’s
economic health.
Though GDP is typically calculated on an annual basis, it is sometimes calculated on

a quarterly basis as well.
What is Gross National Product (GNP)?

Gross national product (GNP) is an estimate of total value of all the final products and services
turned out in a given period by the means of production owned by a country's residents. GNP is
commonly calculated by taking the sum of personal consumption expenditures, private domestic
investment, government expenditure, net exports and any income earned by residents from
overseas investments, minus income earned within the domestic economy by foreign residents.
Net exports represent the difference between what a country exports minus any imports of
goods and services.
GNP is related to another important economic measure called gross domestic product (GDP),
which takes into account all output produced within a country's borders regardless of who owns
the means of production. GNP starts with GDP, adds residents' investment income from
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overseas investments, and subtracts foreign residents' investment income earned within a
country.
What is an Exchange Rate?
An exchange rate is the value of one nation's currency versus the currency of another nation or
economic zone.
Types of Exchange Rates
Free Floating
A free-floating exchange rate rises and falls due to changes in the foreign exchange market.
Restricted Currencies
Some countries have restricted currencies, limiting their exchange to within the countries'
borders. Also, a restricted currency can have its value set by the government.
Currency Peg
Sometimes a country will peg its currency to that of another nation. For instance, the Hong Kong
dollar is pegged to the U.S. dollar in a range of 7.75 to 7.85.2 This means the value of the Hong
Kong dollar to the U.S. dollar will remain within this range.
Onshore Vs. Offshore

Exchange rates can also be different for the same country. In some cases, there is an onshore
rate and an offshore rate. Generally, a more favorable exchange rate can often be found within
a country’s border versus outside its borders. China is one major example of a country that has
this rate structure. Additionally, China's yuan is a currency that is controlled by the government.
Every day, the Chinese government sets a midpoint value for the currency, allowing the yuan to
trade in a band of 2% from the midpoint.3
Spot vs. Forward
Exchange rates can have what is called a spot rate, or cash value, which is the current market
value. Alternatively, an exchange rate may have a forward value, which is based on
expectations for the currency to rise or fall versus its spot price. Forward rate values
may fluctuate due to changes in expectations for future interest rates in one country versus
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another. For example, let's say that traders have the view that the eurozone will ease monetary
policy versus the U.S. In this case, traders could buy the dollar versus the euro, resulting in the
value of the euro falling.
Quotation

Typically, an exchange rate is quoted using an acronym for the national currency it represents.
For example, the acronym USD represents the U.S. dollar, while EUR represents the euro. To
quote the currency pair for the dollar and the euro, it would be EUR/USD. In this case, the
quotation is euro to dollar, and translates to 1 euro trading for the equivalent of $1.13 if the
exchange rate is 1.13. In the case of the Japanese yen, it's USD/JPY, or dollar to yen. An
exchange rate of 100 would mean that 1 dollar equals 100 yen.
Employment Rate
Employment rates are defined as a measure of the extent to which available labour resources
(people available to work) are being used. They are calculated as the ratio of the employed to
the working age population. Employment rates are sensitive to the economic cycle, but in the
longer term they are significantly affected by governments' higher education and income
support policies and by policies that facilitate employment of women and disadvantaged groups.
Employed people are those aged 15 or over who report that they have worked in gainful
employment for at least one hour in the previous week or who had a job but were absent from
work during the reference week. The working age population refers to people aged 15 to 64.
This indicator is seasonally adjusted and it is measured in terms of thousand persons aged 15
and over; and in numbers of employed persons aged 15 to 64 as a percentage of working age
population.
What Is an Interest Rate?

The interest rate is the amount a lender charges for the use of assets expressed as a
percentage of the principal. The interest rate is typically noted on an annual basis known as
the annual percentage rate (APR). The assets borrowed could include cash, consumer goods,
or large assets such as a vehicle or building.
Takeaways:
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• The interest rate is the amount charged on top of the principal by a lender to a borrower
for the use of assets.
• Most mortgages use simple interest. However, some loans use compound interest,
which is applied to the principal but also to the accumulated interest of previous periods.
• A loan that is considered low risk by the lender will have a lower interest rate. A loan that
is considered high risk will have a higher interest rate.
• Consumer loans typically use an APR, which does not use compound interest.
• The APY is the interest rate that is earned at a bank or credit union from a savings
account or certificate of deposit (CD). Savings accounts and CDs use compounded
interest.
What Is Inflation?
Inflation is a quantitative measure of the rate at which the average price level of a basket of
selected goods and services in an economy increases over some period of time. It is the rise in
the general level of prices where a unit of currency effectively buys less than it did in prior
periods. Often expressed as a percentage, inflation thus indicates a decrease in the purchasing
power of a nation’s currency.
Inflation can be contrasted with deflation, which occurs when prices instead decline.
KEY TAKEAWAYS
• Inflation is the rate at which the general level of prices for goods and services is rising
and, consequently, the purchasing power of currency is falling.
• Inflation is classified into three types: Demand-Pull inflation, Cost-Push inflation, and
Built-In inflation.
• Most commonly used inflation indexes are the Consumer Price Index (CPI) and the
Wholesale Price Index (WPI).
• Inflation can be viewed positively or negatively depending on the individual viewpoint
and rate of change.
• Those with tangible assets, like property or stocked commodities, may like to see some
inflation as that raises the value of their assets.
• People holding cash may not like inflation, as it erodes the value of their cash holdings.
• Ideally, an optimum level of inflation is required to promote spending to a certain extent
instead of saving, thereby nurturing economic growth.
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Assessment
1. What happen to the GDP of the Philippines during this Pandemic
2. Explain the current interest rate of the Philippines
3. Discuss the current exchange rate of the Philippines
Topic 8: Technological and Political Environments
Overview
We start with a seemingly simple question: What is technological and political environments?
Learning Outcomes
• Describe the technological environment
• Discuss the political environment
Course Materials
Technological Environment
Technology is the application of science to convert an economy’s resources to output.
Technology affects marketing in two basic ways; it creates opportunities for new products and
for new processes (ways of doing things). Let’s look at how that happens.
Technological environment Forces that create new technologies, creating new product and
market opportunities.
Technology affects opportunities
Rapid advances in technology can shake up markets. Digital photography replaced film, which
presaged the bankruptcy of Eastman Kodak, once the world’s largest film photography
company. On the upside, the same digital technology created opportunities for new cameras
from Nikon and Canon, as well as software from Apple (iPhoto) and Adobe (Photoshop).
Technology foreshadows breakthrough opportunities
And the biggie—the Internet—opened up opportunities for breakthroughs that include

Facebook, Twitter, and Instagram; new ways to deliver video entertainment, including YouTube
and Hulu; and low-cost or free phone service from Skype or Vonage.
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Anticipate technologies and plan for the future
Most technological developments don’t come out of nowhere—Kodak knew for decades that
digital imaging was coming. On the other hand, it is not always clear how a technology just on
the horizon might change a business. For example, camera makers might not have seen how
quickly smartphones would cut into their business. Marketing managers should monitor all
technologies that might impact their industry. Consider the possible impact of Google’s
driverless car project. Many expect that by the 2020s, most of us will be transported in robot-
driven cars. There will be obvious effects in the automobile and insurance markets. Beyond that,
did you know that in the United States, auto accidents account for 2 million emergency room
visits each year? So driverless cars may reduce hospital demand for emergency services. Also,
the nation’s elderly might be able to live on their own longer if they can get around without
having to drive, slowing demand for nurs- ing homes. Bars and restaurants may see more
business, and sell more alcohol, when patrons don’t need to worry about driving home under
the influence. Marketing managers who anticipate the impact of new technology can plan and
adapt marketing strategies for the future.
Technological changes marketing processes
Technology changes how customer and marketers do things. Now many organization have
Facebook pages or run highly targeted ads on social network. The Internet has changed the
nature of retailing as many consumers shop from their keyboard—or tablet device—and have
purchases delivered to their home. Computer databases allow sellers to more closely watch
supply and demand—and adjust prices accordingly.
Technology comes with challenges

Technological change opens up many new opportunities, but it also poses challenges for
marketers. For some marketing managers, change can be difficult and they avoid technologies
they do not understand. Finding the best applications of technology still requires that marketing
managers begin with customer needs.
Technology can pose ethical dilemmas
New technologies give marketers new ways to track consumers and perhaps deliver a more
tailored experience—but does that invade consumers’ privacy? Website visitors may not be
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aware that small computer files (called cookies) are often placed on their computers. Cookies
allow the company to track what the customer does on the web. This information can be used to
give a Companies need to recognize and take advantage of changes in the technological
environment.
Information of the customer can be track using the technologies at it will be advantages of
some company because they recognize what customer want and doing. Information of the
customer will lead them knowledgeable.
Political environment
Laws, government agencies, and pressure groups that influence and limit various organizations
and individuals in a given society.
Legislation Regulating Business
Even the strongest advocates of free-market economies agree that the system works best with
at least some regulation. Well-conceived regulation can encourage competition and ensure fair
markets for goods and services. Thus, governments develop public policy to guide commerce—
sets of laws and regulations that limit business for the good of society as a whole. Almost every
marketing activity is subject to a wide range of laws and regulations.
The first is to protect companies from each other. Although business executives may praise
competition, they sometimes try to neutralize it when it threatens them. Therefore, laws are
passed to define and prevent unfair competition.
The second purpose of government regulation is to protect consumers from unfair business
practices. Some firms, if left alone, would make shoddy products, invade consumer privacy,
mislead consumers in their advertising, and deceive consumers through their packaging and
pricing. Rules defining and regulating unfair business practices are enforced by various
agencies.
The third purpose of government regulation is to protect the interests of society against
unrestrained business behavior. Profitable business activity does not always create a better
quality of life. Regulation arises to ensure that firms take responsibility for the social costs of
their production or products
Assessment
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1. Describe the technological environment
2. Discuss the political environment
Topic 9: Public Health Issues (e.g. COVID 19 Pandemic)
Overview
In this chapter, We examine the effect of COVID 19 Pandemic to the Philippines and all over the
world.
Learning Outcomes
• Explain how COVID affects the Public Health
• Describe the what happen to GDP.
• Discuss the effect of COVID to businesses locally and globally.
Course Materials
How COVID-19 Disrupt Personal Lives, Social Interactions, and Economic Activities of
Families, Society, Nations, and the World
Public Health
Public health is the science of protecting and improving the health of people and
their communities. This work is achieved by promoting healthy lifestyles,
researching disease and injury prevention, and detecting, preventing and
responding to infectious diseases.
Overall, public health is concerned with protecting the health of entire populations.
These populations can be as small as a local neighborhood, or as big as an entire
country or region of the world.
COVID-19
COVID-19 is a disease caused by a new strain of coronavirus. ‘CO’ stands for corona, ‘VI’ for
virus, and ‘D’ for disease. Formerly, this disease was referred to as ‘2019 novel coronavirus’ or
‘2019-nCoV.’ The COVID-19 virus is a new virus linked to the same family of viruses as Severe
Acute Respiratory Syndrome (SARS) and some types of common cold.
Lockdowns and Quarantines
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In order to prevent the spreading of the Coronavirus, governments imposed lockdowns and
quarantines. Also, this will help to slowdown the spread of the virus. The ability of individuals
who are asymptomatic or have mild symptoms, but can still spread the disease, explains why
social distancing – limiting contact with others – in addition to other actions such as washing
your hands and not touching your face, is so critical. The World Health Organization is starting
to refer to it as physical distancing instead to emphasize the importance of being far away
enough to avoid infection from the respiratory droplets that carry the virus. It is important that
every single person adheres to this, whether or not they think they are sick.
For people who are symptomatic, or have been in contact with someone who is showing
symptoms, most countries are advising total self-isolation, for a week or two in order to limit
further transmission of the virus.
QC places two areas in special concern lockdown after COVID-19 surge:
The Quezon City government on Sunday said it has placed two of the areas in a
barangay under the special concern lockdown (SCL) after the surge of the novel coronavirus
disease 2019 (COVID-19) cases.
Assistant City Administrator Alberto Kimpo identified these areas are 138 Ermin Garcia
St. and 52 Imperial St., both in Barangay E. Rodriguez.
“From two active cases, the number of COVID-19 cases in these two areas went up to
15, this came after Metro Manila eased into general community quarantine,” Kimpo explained.
Kimpo added that the move to place the two areas under SCL was made upon the
request of Barangay Chairman Marciano Buena-Agua Jr. and verification from the Quezon City
Epidemiology and Surveillance Unit (QCESU).
Job Loss
A total of 2,068 establishments had closed down during the COVID-19 health crisis,
displacing 69,022 workers, Labor Secretary Silvestre Bello III said at the Laging Handa briefing
on Wednesday.
The Philippine Statistics Authority’s figure of 7.3 million workers who have lost their jobs
due to the pandemic was based on a survey and was not the actual figure, he added.
To help displaced informal workers, the Department of Labor and Employment (DOLE)
was planning to expand its emergency employment program from 10 days to up to six months’
work, Bello said.
Mental Health Issues and Death
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The coronavirus disease 2019 (COVID-19) pandemic may be stressful for people. Fear
and anxiety about a new disease and what could happen can be overwhelming and cause
strong emotions in adults and children. Public health actions, such as social distancing, can
make people feel isolated and lonely and can increase stress and anxiety. However, these
actions are necessary to reduce the spread of COVID-19. Coping with stress in a healthy
way will make you, the people you care about, and your community stronger.
Stress during an infectious disease outbreak can sometimes cause the following:
• Fear and worry about your own health and the health of your loved ones, your financial
situation or job, or loss of support services you rely on.
• Changes in sleep or eating patterns.
• Difficulty sleeping or concentrating.
• Worsening of chronic health problems.
• Worsening of mental health conditions.
• Increased use of tobacco, and/or alcohol and other substances.
As of August 19, 2020 here is the summary of the COVID-19 cases Worldwide:
CONFIRMED RECOVERED DEATHS

22M 14M 777K
Social Distancing, No Mass Gatherings Allowed and Travel Restrictions
Social distancing must be accepted as the “new normal” until a vaccine to prevent the
coronavirus disease 2019 (Covid-19) becomes available.
It will likely take a while before the country’s top sports leagues and other athletic
competitions get the go-signal to return to action, according to a health official. Mass gatherings
are not allowed before the Palace announced on June 20 that mass gatherings in colleges and
universities are now permitted in areas under modified general community quarantine.
The strict implementation of checkpoints in borders of provinces will remain despite the
easing of community restrictions. People who will travel to provinces for non-work purposes
would still be required to obtain a travel pass. Help desks have been set up in local government
units (LGUs) and police stations to disseminate information regarding the travel pass policy.
LGUs would also provide the medical certificate that is required to get a travel pass.
Curfews
The National Union of Peoples’ Lawyers said in a legal opinion that curfews may be
imposed under “certain situations and conditions like the current pandemic, and it is legitimately
and really necessary for public interest, public welfare and public health.”
Government bodies with police power, such as the Sangguniang Barangay, Municipal or City
Council, Provincial Board, Congress, and the president, may enact curfews.
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But the NUPL stressed that the imposition of curfews “cannot be arbitrary, excessive or
disproportionate.”
Business closing, Job loss and Poverty
Social Distancing is a privilege, it means you live in a house good enough to practice it.
Hand washing is a privilege too. It means you have access to clean running water. Hand
sanitizers are a privilege. It means you have money to buy them. Lockdowns are a privilege. It
means you can afford to be at home. All of us who are practicing social distancing and have
imposed a lockdown on ourselves are very lucky to have the means because many people
won’t be able to do this.
In the U.S. workforce, 44% of people are employed in low-income, unstable jobs—the
segment of the working population that is becoming the first to lose their jobs due to the
pandemic. Left to face increased financial burdens, they are becoming more fearful in not
knowing where their next income will come from. They are even on the verge of thinking if their
families will be able to survive this epic crisis.
With the loss of their livelihoods, they are unable to pay for basic necessities including
rent, utilities, and food. Also, schools were often providers of meals for children, now leaving
these children at risk of facing hunger with schools closed.
Economic recession and GDP rate drop
Most of the nations are going through recession and collapse of their economic structure
that points out the staggering conditions for them in this regard almost 80 countries have
already requested International Monetary Fund (IMF) for financial help.
On 15 April, the IMF warned economies in Asia would see no growth this year, for the
first time in 60 years, with the service sector particularly under pressure. National lockdowns
across the region have meant airlines, factories, shops and restaurants have suffered the
greatest economic shocks. Just a day after the IMF warning, official data showed the Chinese
economy had contracted in the first quarter - the first time since quarterly records began in
1992.
Gross domestic product (GDP) in the world's second largest economy fell 6.8% in
January-March year-on-year - more than the 6.5% forecast by analysts and the opposite of the
6% expansion in the fourth quarter of 2019. The Chinese economy is likely to be hit further by
reduced global demand for its products due to the effect of the outbreak on economies around
the world. Data released on 16 March showed China's factory production plunged at the
sharpest pace in three decades in the first two months of the year. For 2020, the
country's economic growth is expected to fall to 2.5%, according to a Reuters poll - its slowest in
almost 50 years.
In addition, GDP dropped by 4.8% in the first quarter of 2020 - the sharpest contraction since
the global financial crisis of 2007-2009 - bringing to an end the longest economic expansion in
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US history. While when it comes to the stock market, it is severely damaged by Covid-19 such
as the stock market of the United States is down about thirty percent. So, the impact of Covid-
19 is severe on the economic structure of the world because people are not spending money
resultantly businesses are not getting revenue therefore most of the businesses are shutting up
shops.
Substantial increase in unemployment
A substantial increase in global unemployment seems almost certain. The ILO expects
the pandemic to disproportionally affect not only those workers with underlying health
conditions, but also young people who are more vulnerable to decreased labour demand,
women, who are over-represented in those sectors that are likely to be affected most (such as
services or in occupations on the front lines of the pandemic, e.g. nurses), as well as
unprotected workers in the so-called ‘gig economy’ and migrants.
That’s why when it comes to the human cost of the Coronavirus pandemic it is
immeasurable therefore all countries need to work together with cooperation and coordination to
protect the human beings as well as limit the economic damages.
Assessment
1. Explain how COVID affects the Public Health
2. Describe what happen to GDP during the Pandemic.
3. Discuss the effect of COVID to businesses locally and globally.
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Topic 10: Overview on Scenario Planning Process
Overview
In this chapter, will touch on scenario planning processes and its importance to the
organization.
Learning Outcomes
• Define what is scenario planning.
• Discuss how to build a scenario plan
• Identify and define the types of scenario
Course Materials
What is scenario planning?
Scenario planning provide structured method for organization to evaluate alternative views if
what may happen in the future as an aid to strategic planning, operation and financial planning.
Scenario planning is also called scenario thinking or scenario analysis is a method used in
strategic planning process to help businesses make flexible long term plans.
A scenario is cohesive set of assumptions that describes a view of the future that is then to
develop a forecast or test strategy, plan or decision. Scenario planning is a means for managers
to visualize the future and assess how they will respond in different situations. As agility,
flexibility and responsiveness have become more prized capabilities, scenario planning has
become an integral part of the overall planning and risk management process for many
organizations. Scenario-planning techniques are being used to help organizations better
understand the implications on a broad range of decisions affecting business strategy,
investment prioritization and operations. Of particular note to management accountants is that
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many organizations are looking to integrate aspects of scenario planning into near-term
management processes such as risk management, business case development, budgeting,
forecasting and competitive analysis.
Building a Scenario Plan
Shell Oil was one of the pioneers in the use of scenario planning — the company
publishes its scenarios on its website. Shell’s view on the value of scenario planning as:
“Good scenarios are ones that explore the possible, not just the probable — providing a
relevant challenge to the conventional wisdom of their users and helping them prepare
for the major changes ahead. They will provide a useful context for debate, leading to
better policy and strategy, and a shared understanding of, and commitment to, actions.”
Shell have been developing possible visions of the future since 1970s, it helps the
generations of Shell leaders explore ways forward and make better decisions. Shell Scenarios
always ask “what if?” questions encouraging leaders to consider events that may only be
remote possibilities, and stretch their thinking. Shell scenarios also help governments, schools
and business in understanding possibilities and uncertainties ahead.
Scenarios are a way of understanding the forces at work today for example
demographics, globalization, technological change, environmental sustainability, and
biotechnology that will or maybe shape the future.
There are four broad types of scenario:
Social
Social attitudes, behaviors, and trends that impact on your organization and target market.
Examples include: Attitudes and shared beliefs about a range of factors including money,
customer service, imports, religion, cultural taboos, health, work, leisure, the environment;
population growth and demographics, immigration/emigration, family size/structure, lifestyle
trends, and the likes.
Economic
Overall economic forces that could impact on your success.

Examples include: Economic trends, growth rates, industry growth, seasonal factors,
international exchange rates, International trade, labor costs, consumer disposable income,
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unemployment rates, taxation, inflation, interest rates, availability of credit, monetary policies,
raw material costs, etc.
Political
Political or politically motivated factors that could impact the organization.

Examples include: Government policy, political stability or instability, bureaucracy, corruption,
competition regulation, foreign trade policy, tax policy, trade restrictions,
labor/environmental/copyright/consumer protection laws, funding grants & initiatives, etc.
Technological
Technology that can affect the way you make, distribute, and market your products and
services.
Examples include: Technology and communications infrastructure, legislation around
technology, consumer access to technology, competitor technology and development, emerging
technologies, automation, research and innovation, intellectual property regulation, technology
incentives, etc.
RAISE and How does it apply
In the current global economy, the business is always changing. Some changes are so
dramatic that everybody notices them but others may slowly creep up over the years before
they can no longer be ignored.
Fortunately this scenario planning process is one tactic that an organization may employ to
address how it will respond to these ever-evolving business challenges. Scenario planning can
also ensure an organization focuses in what matters most – its customers or core stakeholders
– in an effort to respond to external market forces and focus an organization’s effort.
On the other hand, raise is a philosophy which can help in guiding an organization or enterprise
towards a unique strategy that provides an ongoing sustainable edge.
Key drivers that’s must be embrace by organization on applying raise to scenario planning;
RESILIENCE
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Organizations today must demonstrate their resilience. They need to respond very quickly to
these constant and unexpected external changes while at the same time sustaining regular
business operations. Scenario planning process refocuses an organizations effort back to what
is important as these crises arise and enables organizations to isolate such problems
proactively, so that the strategic focus and awareness are maintained.
ADAPTIVE
Organizations more than ever need to be adaptive in their ability to adjust to these ongoing
market shifts in the competitive landscape. Given this changed environment, they need to be
nimble and flexible enough to proactively respond to any all competitive and market changes.
Scenario planning employs the method to adapt.
INNOVATIVE
Organizations should know how innovate opportunities that are typically a primary contributor to
organizational success and longevity. However, it is area that many fail to adequately explore or
execute upon. Scenario planning is one such vehicle that can be leverage to communicate the
importance of innovation in achieves its strategic and operational objectives.
SUSTAINABLE
Embracing such drivers as key components of an organization’s strategic and operational plans
and decisions, ensure an organization’s sustainable competitive edge. Combining the resilient,
adaptive, and innovative drivers of success results in a unique and robust strategy for adopting
and implementing scenario planning as explored throughout the course of this guideline.
Two prerequisites for embarking on a successful program
1. Securing the senior management commitment early in the process.

Senior management support is best achieved when the following conditions are met:
• The program should sponsored by a member of the executive team.
• The objectives and scope of the program are agreed by the executive team.
• The project team keeps senior management informed and engaged throughout the
process.
2. Selecting the right participants in the process.
The team should be;
• Be comfortable dealing with ambiguity.
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• Aware of the external environment.
• Understand the current operating model.
• Be cross-functional
• Combine analytic and creative minds.
• Have excellent communication and facilitation skills.
• Be able to access subject matter expertise as needed.
• Be respected by the senior leadership team.
Assessment
1. Define what is scenario planning.
2. Discuss how to build a scenario plan
3. Identify and define the types of scenario
Topic 11: Identify Different Scenario Planning
Overview
This chapter will elaborate on how to identify different scenario planning.
Learning Outcomes
• Explain steps in scenario planning.
• Discuss the guidelines in scenario planning
Course Materials
STEPS IN SCENARIO PLANNING
Step 1: Define scope, issues and time horizon
Before embarking upon a scenario-planning exercise, it is essential to be clear about the issue
that you are seeking to address and then define the appropriate scope and time horizon for the
scenarios to be constructed. Answering the following questions can assist:
What issues or decisions are being evaluated?
• Is there a high degree of uncertainty about the future environment?
• What is the time horizon for making decisions and then executing against them?
For example, an oil company may have a 15-year time horizon from initial exploration to full
production of a new oil field; a pharmaceutical company may focus on a 20-year time horizon
that matches the patent protection period for newly approved drugs; a fashion retailer may only
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focus on a six- to nine-month window, which equates to the next two (spring and fall) selling
seasons.
Step 2: Define key drivers
The heart of an effective scenario plan is to identify the right drivers around which to construct
the scenarios. In the context of scenario planning, drivers are internal and external factors that
could influence the future environment. This definition is very broad so it is important to develop
reasonable criteria for identifying those that are material to the organization or issues being
addressed.
EXTERNAL DRIVERS
KEY BUSINESS VARIABLES
• GDP growth
• Access to capital
• Demographic change
• Market share/acceptance
• Market size and growth
• Customer satisfaction/loyalty
• Commodity prices
• Productivity
• Consumer spending patterns
• Quality
• Rate of technological innovation
• Cost structure
• Inflation
• Business model
• Exchange rates
• Talent attraction/retention
• Time to market
Step 3: Collect and Analyze Data
In traditional planning processes, much of data collected are of a historic nature. When
embarking upon the development of scenario plans, the data collection net should be cast wide.
Numerous types of data can be collected, including traditional historic trends, future projections
and forecasts, insights as to potential sources of disruption, alternative hypotheses of the future
and analyses of the relationships between key drivers.
Not all the data need to quantitative, some of the most interesting inputs to scenario
planning can be the diverse opinions of experts and futurists who specialize in conceptualizing
alternative futures. The key is to collect a broad range of data with a view to developing credible
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scenarios of what the future may look like based upon what is known or believed today. Having
collected the base data, the next step is to identify the relative materiality and predictability of
the drivers.
Scenarios are not directly concerned with probabilities. They are more concerned with
plausibility. In a world characterized by increased volatility and uncertainty, the number of
plausible but low probability events that can affect an organization or a market is increasing —
hence the increased interest in scenario planning.
Step 4: Developing Scenario
Crafting scenarios that lay out plausible alternative views of the future based upon a
change in the behavior of drivers or the relationship between them is at the heart of effective
scenario development. Having constructed a set of plausible and interesting scenarios, many
organizations mistakenly think they are done — they’re not! While creating plausible scenarios
that resonate with management is satisfying, the real value comes by using the scenarios in a
structured manner to test and adjust strategies, plans and decisions.
GUIDELINES FOR DEVELOPING SCENARIOS
1. Develop between two and four scenarios. Developing more than four scenarios can
be confusing and counterproductive. Each scenario should be sufficiently distinct to
materially affect future plans or decisions.
2. The intent is not to develop the perfect scenario but to provide a mechanism for
testing strategy, plans, decisions and behaviors under a range of credible future
scenarios.
3. Scenarios should be organized around the key questions or issues defined in step 1.
4. Each scenario must present a credible and logical alternative view of the future
5. Scenarios must be internally consistent.
6. Each scenario should clearly describe the assumptions or pre-conditions upon which
it is based.
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7. The differences between each scenario should be clearly documented and
understood.
8. The completed scenario should include:
a. A narrative description that sets out the major elements that describes each scenario.
b. A listing of the key drivers that will determine whether the scenario prevails.
c. The definition of the leading indicators that will provide early warning that a particular
scenario is unfolding.
d. Quantifiable metrics that allow the organization to test strategies, plans, or decisions
for efficacy under each scenario.
The three most common approaches for defining scenarios are the spectrum, the matrix and the
binary. The spectrum approach isolates one major variable that has a spectrum of credible
future states. A simple example would be the approach many organizations used for developing
their plans for 2010. During the latter half of 2009, when most plans were being developed,
there was considerable uncertainty as to the medium-term economic outlook. While stock
markets were signaling signs of recovery, many other indicators such as unemployment, gold
prices, housing and credit quality were less positive.
Step 5: Apply Scenario
One of the criticisms of scenario planning is that it can become largely conceptual
exercise with a little practical application. It is valid criticism not on the technique it self but on
how the result is used or not used. too often organization put a lot of effort in developing rich
scenario but fail to apply them in planning and decision-making process. The next step is how
plans, decisions and priorities will change under different circumstances.
The first step after completing the scenario planning development is to test the sensitivity of
strategies, plans and budget under different scenarios by asking “what will be the impact”
Step 6: Maintain and Update
Some organization treat scenario planning as one of the off exercise or projects. There
is certainly merit in using scenario planning in this way as the effort required can be significant.
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However in to days volatile world the future is rarely predictable so many organizations are
adding scenario planning as a core in their management.
Scenario planning does not have to be an annual activity; many organizations tie the
development and update of their scenario plans to major event rather than simply turning the
calendar.
Updating scenario serve two purpose in external and internal environment.
1. It forces the manager to revisit the original scenarios and develop an understanding of
what work and what didn’t which provides valuable input to future interactions.
2. It will help flush out new opportunities and threats that have been created since the
original were developed.
Assessment
1. Explain steps in scenario planning.

2. Discuss the guidelines in scenario planning
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Topic 12: Apply Marketing mix to different situations
Overview
We now look more deeply on the application of marketing mix in different situations.
Learning Outcomes
• Explain the marketing mix

• Describe the 4C’s of marketing
Course Materials
Marketing Mix
Place is concerned with all the decisions involved in getting the “right” product to the target
market’s Place.
Promotion is concerned with telling the target market or others in the channel of distribution
about the “right” product. Sometimes promotion is focused on acquiring new customers, and
sometimes it’s focused on retaining current customers. Promotion includes personal selling,
mass selling and sales promotion. It is the marketing manager’s job to blend these methods
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of communication.
Price refers to the value that is put for a product. It depends on costs of production, segment
targeted, ability of the market to pay, supply - demand and a host of other direct and indirect
factors. There can be several types of pricing strategies, each tied in with an overall business
plan. Pricing can also be used a demarcation, to differentiate and enhance the image of a
product.
Product refers to the item actually being sold. The product must deliver a minimum level of
performance; otherwise even the best work on the other elements of the marketing mix won't do
any good.
Let’s sum up our discussion of marketing mix planning thus far. We develop a Product to satisfy
the target customers. We find a way to reach our target customers’ Place. We use Promotion to
tell the target customers (and others in the channel) about the product that has been designed
for them. And we set a Price after estimating expected customer reaction to the total offering
and the costs of getting it to them.
Situation
Take yourself, as a “target customer.” Think about your cell phone. What would make you want
to buy a new one? How might the following issues affect your purchasing decision?
• Features: A company has just released a new phone with amazing features that
appeal to you.
• Price: You’re concerned about the price—is this phone a good deal? Too
expensive? So cheap that you suspect there’s a “catch”?
• Information: How did you find out about this phone? Did you see an ad? Hear
about it from a friend? See pictures and comments about it online?
• Customer service: Is your cell service provider making it easier for you to buy this
phone with a new plan or an upgrade?
• Convenience: Could you easily buy it online or in a perfect place.
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The marketing mix represents the way an organization’s broad marketing strategies are
translated into marketing programs for action.
Over time, new categories of the marketing mix have been proposed. Most are more consumer
oriented and attempt to better fit the movement toward a marketing orientation and a greater
emphasis on customer value. One example is the four Cs, proposed by Robert F Lauterborn in
1990:
1. Customer solution: what the customer wants and needs

2. Communication: a two-way dialogue with the customer
3. Convenience: an easy process to act or buy
4. Cost: the customer’s cost to satisfy that want or need
The four Cs include a greater focus on the customer but align nicely with the older four Ps. They
also enable one to think about the marketing mix for services, not just products. While it is
difficult to think about hotel accommodations as a distinct product, it is much easier to think
about a hotel creating a customer solution. You can see how the four Ps compare with the four
Cs in the chart below:
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Four Ps Four Cs Definition
Product Consumer A company will only sell what the consumer specifically
solution wants to buy. So, marketers should study consumer wants
and needs in order to attract them one by one with
something he/she wants to purchase.
Price Cost Price is only a part of the total cost to satisfy a want or a
need. For example, the total cost might be the cost of time
in acquiring a good or a service, along with the cost of
conscience in consuming it. It reflects the total cost of
ownership. Many factors affect cost, including but not
limited to the customer’s cost to change or implement the
new product or service and the customer’s cost for not
selecting a competitor’s product or service.
Promotion Communication Communications can include advertising, public relations,

personal selling, viral advertising, and any form of
communication between the organization and the
consumer.
Place Convenience In the era of the Internet, catalogs, credit cards, and
smartphones, often people don’t have to go to a particular
place to satisfy a want or a need, nor are they limited to a
few places to satisfy them. Marketers should know how the
target market prefers to buy, how to be there and be
ubiquitous, in order to provide convenience of buying. With
the rise of Internet and hybrid models of purchasing, “place”
is becoming less relevant. Convenience takes into account
the ease of buying the product, finding the product, finding
information about the product, and several other factors.
Assessment
1. Explain the role of retailers in the distribution channel and describe the major types of
retailers.
2. Describe the major retailer marketing decisions.
3. Explain the major types of wholesalers and their marketing decisions.
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Topic 13: Assessing the Profitability of Each Scenario Synthesis
Overview
This chapter will discuss the profitability analysis of different scenarios.
Learning Outcomes
• Discuss the importance of transparency of the company’s initiatives.
• Describe and explained the five cornerstones enabling better decisions
• Explain the benefits of profitability analytic solution.
Course Materials
Transparency comes actionable insight
Most companies today struggle with identifying which of their offerings and which of their
customers are the most profitable. They can measure revenue but not the profit associated with
the product or client group — which means they make decisions about what to sell, in which
markets, to which customers, and at what price based on partial or inaccurate information. They
operate without a single version of the truth. Methods used to allocate large buckets of costs
such as sales, advertising and customer service can be arbitrary and potentially inaccurate.
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A crux of the problem is that current reporting structures are primarily designed for
purposes other than measuring profitability such as meeting regulatory requirements; optimizing
tax treatments; and supporting cost budgets for cost centers, R&D and other business units.
Cost allocation models tend to be overly complicated as a result, and they do not reflect the true
resource consumption in the value chain. Companies have most of the information they need to
measure and manage profitability, but it is scattered across multiple source systems and often,
the business rules have yet to be established. They typically lack the methodology, the
structures, and the analytics to consolidate the data and then calculate the true cost of the value
chain. That means they may not answer basic questions such as “What is the cost of the
processes we are performing?” or “What is the cost of the products we are delivering?”
A bottoms-up approach reflects a disciplined and systematic approach to this challenge.

Data can be detangled, cleaned, and aggregated. Costs are allocated to cost elements and cost
elements are assigned positions along the value chain. Business rules are established to roll up
costs across the steps of the value chain and allocate them to products and customers in a
transparent way.
Setting up this new structure is hard work; but once it is in place, companies may have a
wellspring of data to support agile decision making. For strategic choices a company may be
considering — such as a price, cost, volume, or product mix change — profitability analytics can
help model:
• Required resources in the value chain
• Functional impact per cost center and staff, including the impact on any outsourced step in the
value chain
• Impact of changes in input costs, product specifications, resource levels and productivity Data
crunching occurs at speeds that would have been unimaginable in recent past. With the
analysis results in hand, as a result, the distribution of costs throughout the organization
(regardless of profit center or cost center structure) has become highly transparent. A portal of
multidimensional reports can give executives the basis for discussions at both strategic and
tactical levels
Actionable Decision Making
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Once executives have a detailed understanding of what drives costs in a company, they can
figure out if their offerings are profitable, their resources are allocated to best advantage, and
their products are priced and promoted to drive profitable growth. A differentiator now, such
information will soon become table stakes, with business leaders drawing insights from
multidimensional reports
Using information to out-think the competition
Whether a company is primarily focused on a cost-cutting agenda or looking at a growth

agenda, profitability analytics can provide insights for driving that agenda forward. The “ah-ha”
moment for business leaders occurs when they realize what they can do differently based on
the data they now have. Three examples of better decisions — in product pricing and
messaging, improving process efficiency, and targeting offerings to customer segments —
illustrate that point.
Product profitability
A European electronics company is in the process of revamping its product pricing and
promotion strategy. With a profitability analytics solution in place, the product manager was able
to identify that two product categories produced the highest net profit for the company; further,
three categories consumed rather than produced net profit. Next, the product manager studied
the portal report that decomposed costs down to the product code and showed the cost
distribution pattern. For the first time, he could see where the costs associated with each
product arose and could identify the lowest acceptable price for each product the company
sells. Further, he could model the effect on product profitability of changing the cost of
processes associated with manufacturing, sourcing, and selling those products. Based on
product insights such as these, the electronics company:
• Changed the pricing structure and configuration of its product portfolio
• Identified which products to promote to which customers, with the goal of ensuring that “cash
cow” products (with high net profitability) were promoted to.
FIVE CORNERSTONES ENABLING BETTER DECISIONS
67

1. Cost transparency is an important result of the solution. It is possible to identify why a cost is
traced to a process, customer or product using transaction statistics.
2. The organizational structure and general ledger hold the basic information for the
methodology — what cost is consumed where and by whom.
3. Process efficiency can be analyzed and improved, thereby leading to improved cost
efficiency. Company executives
know how resources are used and what is produced.
4. The costs — and the components of those costs — associated with producing a product are
known. This data can be rolled up to the product group and product area level.
5. What customers buy and the revenue they generate is known. This data can
be rolled up to the customer segment level. Changes in buying behavior can
be identified and simulated.
Cost Transparency
It is the term used to describe the tracking within the organization of the total cost required to
provision and maintain products and services for the benefit of the enterprise. It is about
establishing what different products and services exist, what they cost and how they relate to
each other and to the business.
What to expect and benefits of improved profitability measurement
When companies are considering adopting a profitability analytics methodology, they need to
start that journey with the right expectations: (1) Staged Approach- This type of project is often
undertaken in stages. The first step is to study how the business is managed, what information
is actually used to make important business decisions, and the impact of those decisions. Ask,
“If better information were available, how would that affect the quality and speed of decision
making?” The next step is to run a proof-of-concept project in a well-understood area of the
business, with the intent of demonstrating the impact of the decision support solution; (2)
Addressing poor data quality and cost transparency- this is often the largest hurdle, and it
should be dealt with during the design stage. Companies must determine the information they
want from the solution and then ensure they have the necessary data. For example, if a
68

company wants to know which of its regions are profitable, it must capture not only which
products customers buy but also the zip or post code in which the customers live. Fixing data
quality issues is critical to cost transparency. If people cannot believe the numbers presented to
them, they will not support decisions based on those numbers. However, once a company can
clearly show how costs are traced to a process, customer or product, that cultural hurdle can be
overcome; (3) Heavy lifting at the beginning- the hard work in implementing the system occurs
at the beginning, during design. If the solution is well structured, it mostly runs by itself. At that
point, companies can focus on analyzing results instead of simply gathering data.
Benefits of Profitability Analytic Solution- profitability analytic allows the companies to:
• Understand their true costs and profitability structure, thereby enhancing their decision
making and proactive business management.
• Gain greater transparency around the enterprise’s cost agenda, discouraging
counterproductive and solid thinking and reducing silo management.
• Improve some measurement of costs and profits — and therefore better manage their
cost and profit agendas.
• Respond with greater agility to environmental and business paradigm shifts
• Target resources across the enterprise to drive value creation.
• Reevaluate their value chain and business model, gaining strategic insights for
succeeding in an uncertain and volatile business climate
• Figure out what to do with non-profitable products, including reworking the product mix
configuration.
• Focus on how to “package” the product offering to get the most out of the value chain.
• Fine tune their customer offering, setting or resetting their customer strategies based on
buying behavior and resource consumption.
• Use the different dimensions of their business model to execute effective
multidimensional customer segmentation
Assessment
• Discuss the importance of transparency of the company’s initiatives.

• Describe and explained the five cornerstones enabling better decisions
• Explain the benefits of profitability analytic solution.
69

Final Examination Requirement
Prepare a marketing plan for Jollibee Corporation in this time of Pandemic.
References:
• Kotler, P., & Armstrong, G. (2016). Principles of Marketing (16th Global Edition).
• W. Perreault, Jr., J. Cannon, and E.J McCarthy, Essentials of Marketing (A Marketing
Strategy Planning Approach)15th edition McGraw Hill/Irwin International Edition 2017
• https://www.investopedia.com/terms/e/exchangerate.asp
70

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Republic of the Philippines

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

INSTRUCTIONAL MATERIAL FOR:

PROF. JOEL T. AGACITA

Topic 2: The Immediate Environment: Company Objectives & Capacity 12

Objectives should Set Firms course 12

Topic 3: The Immediate Environment: Competitors 17

Kinds of Competitive Environment 18

Topic 4: The Macro environmental Factors: Overview 22

Topic 6: Demographic and Social Trends 31

Topic 7: Economic Environment 39

Topic 8: Technological and Political Environments 44

Topic 9: Public Health Issues(Covid 19) 47

Topic 10: Overview in Scenario Planning 52

What is Scenario Planning 52

Topic 11: Identify Different Scenarios 56

Steps in scenario planning 56

Topic 12: Retailing and Wholesaling 61

Topic 13: Assessing the Profitability of each scenario Synthesis 95

Class Standing 70%

Midterm Grade + Final Term Grade = FINAL GRADE

• Understand the marketing environment.

The marketing environment consists of a microenvironment and a macroenvironment. The

Source: (Principles of Marketing by Kotler,2016)

• Explain your thoughts about marketing environment.

A mission statement helps set the course

Company objectives should lead to marketing objectives

Producing capability and flexibility

• Describe the competitive environment.

The Competitive Environment advantages:

product from numerous small businesses.

perceived to differ, even though they serve a similar purpose.

include such large-scale enterprises as automobile companies and airlines.

invented product or process.

Competitor Analysis Tool

Effects of Different Competitive Situation to the Planning of Marketing Strategy

Competitor-free environments are rare

Monopolistic Competition is typical and a challenge

In monopolistic competition, a number of different firms offer marketing mixes that at

In monopolistic competition, marketing managers sometimes try to differentiate very

• Explain the importance of macroenvironment

The macro environmental analysis is a strategic tool. It helps businesses succeed by

The macro environment consists of six factors: demographic environment, economic

The Demographic Environment.

Composition. The composition of population can be assessed by classifying it by using

Race/Ethnicity. Classification of population on the basis of race or ethnicity is subjective

Language. Depending on the major language spoken in a particular country, the

Education. Education profile is assessed by enumerating the number of people of 18

Occupation. Different countries have been using different occupation classification.

Income. Income, being a primary measure of well-being of a person, influences his/her

Gender composition. One of the basic characteristics of demography, the gender

The Economic Environment

The Natural Environment

The Social-Cultural Environment

Values of a society affect marketing and sales programs in a variety of ways.

The Technological Environment

The Politico-legal Environment

The lack of political stability in a country affects business operations, and

• Define the characteristic of culture.