SHS

Principles of Marketing
Module 5

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ABM/GAS • Applied Economics
Grade 11/12: Module 5
First Edition, 2021

Copyright © 2021
La Union Schools Division
Region I

All rights reserved. No part of this module may be reproduced in any form without
written permission from the copyright owners.

Development Team of the Module

Author: Joselito O. Dumocmat, MT II

Editor: SDO La Union, Learning Resource Quality Assurance Team

Illustrator: Ernesto F. Ramos Jr., P II

Management Team:

Atty. Donato D. Balderas, Jr.

Schools Division Superintendent

Vivian Luz S. Pagatpatan, Ph.D

Assistant Schools Division Superintendent
German E. Flora, Ph.D, CID Chief

Virgilio C. Boado, Ph.D, EPS in Charge of LRMS

Lorna O. Gaspar, EPS in Charge of ABM
Michael Jason D. Morales, PDO II
Claire P. Toluyen, Librarian II

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 Target

PhilipKotler, a well-known marketing books author and acknowledged father

of marketing stated that “a company’s marketing environment consists of the actors
and forces outside of marketing that affect marketing management ability to build
and maintain successful relationships with target customers”.

The above statement was interpreted by another author Aashish Pawha in an

article written in his website. The author specified that “the marketing activities of
the business are affected by several internal and external factors. While some of the
factors are in the control of the business, most of these are not and the business has
to adapt itself to avoid being affected by changes in these factors. These external and
internal factors group together to form a marketing environment in which the
business operates.”

Further analysis of the above statements in relation to the MELCs issued by

the Department of Education shows that understanding marketing environment
leads to, a good planning, better understanding of the customers’ needs and wants
(ABM_PM11-Icd-5 and ABM_PM11-Icd-6), better understanding of the competitors
and identifying the threats and opportunities of the business.

This learning materials will provide you a general idea of the business
environment as a whole and how this business environment affects the successful
operation of the company. Specifically, it will help you aanalyze the elements of
macro and micro-environment and their influence to marketing planning
(ABM_PM11-Iei-10).

Before you proceed, check how much knowledge you have in this topic.

Answer the pretest questions presented below in a separate sheet of paper.

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 Jumpstart

For you to understand the lesson well, do the

following activities. Have fun and good luck!

Directions: Answer the pre-test questions below by writing the letter of the
best answer on a separate sheet of paper. Use CAPITAL LETTERS only.
1. What is the combination of internal and external forces that could affect the ability
of the company to establish and sustain a good customer relationship to its
client?
A. Internal environment B. Macro-external environment
C. Marketing environment D. Micro- external environment
2. What environment do man, machine and money belong?
A. Internal environment B. Macro-external environment
C. Marketing environment D. Micro- external environment
3. What factor listed below belong to micro-internal environment?
A. Man B. Money
C. Suppliers D. Technological factors
4. What environment forces and factors that affect the industry as a whole but do
not have a direct effect on the business?
A. Internal environment B. Macro-external environment
C. Marketing environment D. Micro- external environment
5. What are examples of internal, micro-environment and macro-environment
respectively?
A. Consumers – Economic factors – Man
B. Economic factors – Man - Consumers
C. Man – Consumers – Economic factors
D. Man – Economic factors – Consumers
6. What is the main component of a business that contributes significantly to its
success?
A. Competitors B. Customers
C. Employees D. Suppliers
7. What factors of the macro-external environment do taxes and duties, codes and
practices, and market regulations belongs?
A. Economic factors B. Social factors
C. Political and Legal factors D. Technological factors
8. What marketing environment comprises the factors and forces that are directly
related to the business?
A. Internal environment B. Macro-external environment
C. Marketing environment D. Micro- external environment

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9. What are the forces and factors inside the organization that affects its marketing
operation?
A. Internal environment B. Macro-external environment
C. Marketing environment D. Micro- external environment
10. Micro-internal Environment composed of factors in the immediate environment.
Which factor is considered as part of the micro-environment?
A. Demographic B. Economic
C. Household D. Natural Resources
11. Marketing Intermediaries facilitate the movement of goods from manufacturer
to consumers. Which one of the items listed below is considered as marketing
intermediaries?
A. Manufacturer B. Middlemen
C. Retailer D. Wholesaler
12. What kind of environment are the forces that directly and indirectly influence
the organizations capability to undertake its business?
A. External Environment B. Internal Environment
B. Market Environment D. Micro Environment
13. Which is NOT included in the macro-external environment?
A. Demographic environment B. Economic environment
C. Market intermediaries D. Technological environment
14. What are examples of factors and forces in the internal environment of the firm?
A. Market, man, machine, suppliers
B. Market, man, partners, customers
C. Money, machineries, materials, man
D. Market, suppliers, partners, customers
15. What statement distinguishes a macro-external environment from the micro-
external environment?
A. Macro-external environment forces can be controlled by the business while
the micro- external environment cannot be.
B. Macro-external environment forces cannot be controlled by the business
while micro- external environment forces can be.
C. Suppliers is an example of macro-external environment forces while men
are an example of micro- external environment forces.
D. Company policy belongs to macro-external environment while demographic
environment is for micro- external environment.

Discover

Directions: Read the concepts of marketing environment below. Understand what

you are reading.

Marketing Environment
Marketing Environment is the combination of external and internal factors
and forces which influences the organizations’ capability to undertake its business.

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Components of Marketing Environment
The marketing environment is broadly classified into two (2) – Internal and
External Environments. External environments are of two (2) types, these are Micro-
External Environment and the Macro-External Environment.
Internal environment are factors and forces inside the firm that affects the
overall marketing operation. These factors and forces can be grouped together and
known as five (5) Ms of Marketing
External environment consists of factors and forces that are outside the
business and which the marketer has no control.

Ms of Marketing
The internal environment of the firms consists of five (5) Ms. These are, Men,
Money, Machine, Materials and Market.
Men are the human resources of the firm. They are the main proponents of
the business who contributes significantly to its success. The quality of the human
resources of the firm depends on the type of trainings and motivations they received
from management.
Money is most liquid asset of the company. These are amounts received in
lieu of the goods and services the employees are providing to the customers. Also,
these are the amount invested by the owners of the firm.
Machines are the product of technological advancements. They are produced
to make production more effective and efficient.
Materials are the in the form of inventories. It is an asset of the company and
used to produce finish goods.
Market is the environment of the company where the products / service is
sold. It could be everywhere as long as there is a legal object of sales and there is a
capable and willing buyer.

Forces and Factors of Micro-External Environment

The micro-external environment includes all those factors that are closely
associated with the operation of the firm and influences its decision. There are:
The Company are all the separate entities like advertising agencies, market
research organizations, banking and insurance companies, transportation
companies, brokers, etc. which conduct business with the organization.
Suppliers are entities or individual that provides the resources needed by the
company. The terms of payment maybe in the form credit or in cash basis.
Market Intermediaries are the parties involved in the distribution of the
product / services of the firm.
Customers are the target market of the firm. It could be determined by age
bracket, economic standing, educational attainment, etc.
Competitors are the players of the same industry as the firm and target the
same customer as the company.
Public are groups of people that has an actual or potential interest to the
company. Examples: media, government.

Factors Affecting the Macro-External Environment

The Macro-external Environment of the firm includes all those factors that
exist outside the company that cannot be controlled. Specifically, these are:
Demographic. Demographics is the study of a population based on factors
such as age, race, and sex. Demographic data refers to socio-economic information
expressed statistically, also including employment, education, income, marriage
rates, birth and death rates and more factors.
Political & legal Factors. Political & Legal Factors are laws and government’s
policies prevailing in the country. It also includes other pressure groups and agencies

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which influence or limit the working of the industry and/or the business in the
society.
Economic Factors. Economic Factors are factors that can influence the
people’s purchasing ability and spending patterns. Examples of which are GDP,
GNP, interest rates, inflation, income distribution and government funding and
subsidies.
Natural Resources. Natural Resources are the physical environment where
the firm operates. This includes the climatic conditions, environmental change,
accessibility to water and raw materials, natural disasters and pollution.
Technological Factors. Technological Factors are innovation, research and
development in technology, technological alternatives, innovation inducements also
technological barriers to smoothen operation. Technology is one of the biggest
sources of threats and opportunities for the organization and it is very dynamic.
Political & Legal Factors. These are the 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 Factors. These are lifestyle, values, culture, prejudice and
beliefs of the people. Culture differs from region to region.

Explore
Enrichment Activity
Directions: Analyze each problem independently then answer the questions that
follow. Write your answer on a separate sheet of paper.

A. “Keep your friends close but keep your enemies closer.” Relate this with the
concept of marketing environment in not more than 5 simple sentences. Use
another sheet of paper for your answer.
Rubric:
5 – the idea is clear and follow the maximum sentences required.
4 – the idea is clear but with 1 extra sentence.
3 – the idea is clear but with 2 extra sentences.
2 – the idea is clear but with 3 extra sentences.
1 – no clear idea and above the required number of sentences.

B. Barangay “A” is located in a mountainous area and thickly populated. The

residents are very conservative. Their customs are inherited from their great great
ancestors. Person “y” is planning to open a “MASSAGE CLINIC’. Can the business
prosper? Why or Why not? Answer in not more than 3 sentences. Write your
answer in a separate sheet of paper.
Rubric:
5 – answer is clear and concise.
4 – answer is clear but with 1 extra sentence.
3 – answer is clear but with 2 extra sentences.
2 – answer is clear but with 3 extra sentences.
1 – not clear answer and with extra sentence.

Great job! You have understood the lesson. Are you now ready to summarize?

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 Deepen
Directions: In a separate sheet of paper, answer what is required.

A. Based from your reading on the previous pages (Discovery). Illustrate the
interaction between and among the Marketing Environment, Internal
Environment, Micro External Environment and Macro-External Environment.
The rubric below will be used to rate your output.

Rubric:
5 – the environments are correctly place in the illustration.
4 – contains all the environment but one environment is misplaced
3 – contains all the environment but 2 environments are misplaced.
2 – contains all the environment but 3 environments are misplaced.
1 – do not contain all the environment and are misplaced.

B. How does your knowledge in Marketing Environment can aid assessing the
strength, weakness, opportunities and threat? Write your answer in a separate
sheet of papers. The rubric below will be used to rate your answer.

Rubric:
5 points= the answer is complete
4 points = the answer is missing slight details
3 points = the answer is missing multiple details;
2 points = content suggests a lack of preparation or comprehension
1 point = content only marginally related to the question

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 Gauge

Congratulations! You have reached this far. To measure how much you have
learned from the topic, answer the posttest prepared for you. After which
compare your answers with your answers on the pretest.

Directions: Answer the post-test questions below by writing the letter of the best
answer on a separate sheet of paper. Use CAPITAL LETTERS only.

1. What is the combination of internal and external forces that could affect the ability
of the company to establish and sustain a good customer relationship to its
client?
A. Internal environment B. Macro-external environment
C. Marketing environment D. Micro- external environment
2. What environment do man, machine and money belong?
A. Internal environment B. Macro-external environment
C. Marketing environment D. Micro- external environment
3. What factor listed below belong to micro-internal environment?
A. Man B. Money
C. Suppliers D. Technological factors
4. What environment forces and factors that affect the industry as a whole but do
not have a direct effect on the business?
A. Internal environment B. Macro-external environment
C. Marketing environment D. Micro- external environment
5. What are examples of internal, micro-environment and macro-environment
respectively?
A. Consumers – Economic factors – Man
B. Economic factors – Man - Consumers
C. Man – Consumers – Economic factors
D. Man – Economic factors – Consumers
6. What is the main component of a business that contributes significantly to its
success?
A. Competitors B. Customers
C. Employees D. Suppliers
7. What factors of the macro-external environment do taxes and duties, codes and
practices, and market regulations belongs?
A. Economic factors C. Social factors
B. Political and Legal factors D. Technological factors
8. What marketing environment comprises the factors and forces that are directly
related to the business?
A. Internal environment B. Macro-external environment
C. Marketing environment D. Micro- external environment

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9. What are the forces and factors inside the organization that affects its marketing
operation?
A. Internal environment B. Macro-external environment
C. Marketing environment D. Micro- external environment
10. Micro-internal Environment composed of factors in the immediate environment.
Which factor is considered as part of the micro-environment?
A. Demographic B. Economic
C. Household D. Natural Resources
11. Marketing Intermediaries facilitate the movement of goods from manufacturer
to consumers. Which one of the items listed below is considered as marketing
intermediaries?
A. Manufacturer B. Middlemen
C. Retailer D. Wholesaler
12. What kind of environment are the forces that directly and indirectly influence
the organizations capability to undertake its business?
A. External Environment B. Internal Environment
C. Market Environment D. Micro Environment
13. Which is NOT included in the macro-external environment?
A. Demographic environment B. Economic environment
C. Market intermediaries D. Technological environment
14. What are examples of factors and forces in the internal environment of the firm?
A. Market, man, machine, suppliers
B. Market, man, partners, customers
C. Money, machineries, materials, man
D. Market, suppliers, partners, customers
15. What statement distinguishes a macro-external environment from the micro-
external environment?
A. Macro-external environment forces can be controlled by the business while
the micro- external environment cannot be.
B. Macro-external environment forces cannot be controlled by the business
while micro- external environment forces can be.
C. Suppliers is an example of macro-external environment forces while men
are an example of micro- external environment forces.
D. Company policy belongs to macro-external environment while demographic
environment is for micro- external environment.

References:
Website:

https://www.feedough.com/marketing-environment/accessed September 24, 2020.

https://businessjargons.com/marketing-environment.html accessed September 25, 2020.

https://www.investopedia.com/terms/d/demographics.asp accessed September 26, 2020.

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 Page 11 of 11
KEY ANSWERS
PRETEST POSTTEST
1. C 1. C
2. A 2. A
3. C 3. C
4. B 4. B
5. C 5. C
6. C 6. C
7. C 7. C
8. D 8. D
9. A 9. A
10.C 10.C
11.B 11.B
12.A 12.A
13.C 13.C
14.C 14.C
15.B 15.B
Answer Key