Principles of Marketing Philippine Marketing Environment

1. Presented by: Dr. John V. Padua
College of Business Administration
Lyceum of the Philippines University, Manila
The Philippine Marketing
Environment
1

2. At the end of the chapter, you should be able to:
 Learn and understand about the Philippine Market
and define the Market;
 Know and understand the Filipino Consumer and
its The Filipino Personality Traits;
 Describe the environmental forces that affect the
company’s ability to serve its customers.
CHAPTER OBJECTIVES
2

3. The Philippine market is an attractive and
dynamic one
 geographic,
 communications,
 transportation,
 education business,
 tourism,
 banking,
 marketing,
 exports,
 manufacturing,
 infrastructure, agriculture,
and
 in the tastes and lifestyles of
Filipino consumer.
It is fast growing and changing in all areas:
3

4. The Philippine market is an
attractive and dynamic one
In order to correctly identify
opportunities and monitor threats, the
company must begin with a thorough
understanding of the marketing
environment in which the firm operates.
4

5. Marketing Environment
Consists of actors and forces outside the organization that
affect management’s ability to build and maintain
relationships with target customers.
Includes:
 Microenvironment: actors close to the company that
affect its ability to serve its customers.
 Macroenvironment: larger societal forces that affect the
microenvironment.
5

6. Marketing Environment
Actors in the microenvironment include:
 The Company Itself
 Suppliers
 Marketing intermediaries
 Customers
 Competitors
 Publics
6

7. Microenvironment
Company’s Internal Environment:
 Areas inside a company.
 Affects the marketing department’s planning
strategies.
 All departments must “think consumer” and work
together to provide superior customer value and
satisfaction.
7

8. Microenvironment
Suppliers:
 Provide resources needed to produce
goods and services.
 Important link in the “value delivery
system.”
 Most marketers treat suppliers like
partners.
8

9. Microenvironment
Marketing intermediaries:
 Help the company to promote, sell, and
distribute its goods to final buyers

Resellers

Physical distribution firms

Marketing services agencies

Financial intermediaries
9

10. Customers:
 Five types of markets that purchase a
company’s goods and services.

Consumer

Business

Reseller

Government

International
Microenvironment
10

11. Microenvironment
Competitors:
 Those who serve a target market with
products and services that are viewed by
consumers as being reasonable
substitutes.
 Company must gain strategic advantage
against these organizations.
11

12. Publics:
 Any group that has an interest in or impact on an
organization's ability to achieve its objectives.

Financial public

Media public

Government public

Citizen-action public

Local public

General public

Internal public
Microenvironment
12

13. Macroenvironment
The company and all of the other actors
operate in a larger macroenvironment of
forces that shape opportunities and
pose threats to the company.
13

14. Macroenvironment
Forces in the macroevironment can be
categorized as:
 Demographic
 Economic
 Natural
 Technological
 Political
 Cultural
14

15. Demographic Environment
Demographics:
The study of human populations in terms of size,
density, location, age, gender, race, occupation, and
other statistics.
 Marketers track changing age and family structures,
geographic population shifts, educational characteristics,
and population diversity.
15

16. Demographic Environment
The changing age structure of the U.S.
population is the single most important
demographic trend.
 Baby boomers, Generation X, Generation
Y, and Generation Z are the key groups.
16

17. Demographic EnvironmentDemographic Environment
• Baby boomersBaby boomers – 77 Million post-World War
II babies born between 1946-1964
• Generation XGeneration X – 45 million born between
1965-1976, the “birth dearth”
• Generation YGeneration Y (echo boomers) – 72 million
born between 1977-1994
• GenerationGeneration ZZ (techno boomers) – born after
-1996
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens 17

18. Employed persons fall into any of these categories:
wage and salary workers, own account workers and
unpaid family workers.
 Wage and salary workers are those who work for
private households, private establishments,
government or government corporations and those
who work with pay in own-family operated farm or
business.
 Employed persons are classified as either full-time
workers or part-time workers
 Those working for the government or government
corporations accounted for 8.0 percent of the total
employed and 4.7 percent were workers in private
households.
Economic Environment
18

19. Natural Environment
 Involves natural resources that are needed as inputs
by marketers or that are affected by marketing
activities.
 Factors include:
 Shortages of raw materials.
 Increased pollution.
 Increased government intervention.
 Environmentally sustainable strategies.
19

20. Technological Environment
 Changes rapidly
 Creates new markets and
opportunities
 Challenge to make
practical, affordable
products
 Safety regulations result
in higher research costs
20

21. Increasing
Legislation
Increasing
Legislation
Changing
Government
Agency
Enforcement
Changing
Government
Agency
Enforcement
Includes Laws, Government Agencies, Etc. that Influence
& Limit Organizations/Individuals in a Given Society
Includes Laws, Government Agencies, Etc. that Influence
& Limit Organizations/Individuals in a Given Society
Increased
Emphasis on
Ethics &
Socially
Responsible
Actions
Increased
Emphasis on
Ethics &
Socially
Responsible
Actions
Political Environment
21

22. Cultural Environment
 The institutions and other forces that affect a
society’s basic values, perceptions,
preference, and behaviors.
 Core beliefs and values are passed on from
parents to children and are reinforced by schools,
churches, business, and government.
 Secondary beliefs and values are more open to
change.

Marketers may be able to change secondary beliefs, but
NOT core beliefs.
22

23. Cultural Environment
 Society’s major cultural views are expressed
in people’s views of:
 Themselves
 Others
 Organizations
 Society
 Nature
 The universe
23

24. Cultural Environment
The Filipino Personality Traits
 The Filipino has a unique personality trait that
distinguishes him from other people.
 Knowing the Filipino personality traits will help
marketers prepare and fit their marketing program to
its Filipino target market
24

25. Cultural Environment
 Hiya. Involves the ego, “it is a kind of anxiety, a fear of being left
exposed, unprotected and unaccepted” (Bulatao: Marketing
Horizon, 1965).
 It is hiya that makes the Filipino not to approach the store sales
clerk; not to enter a store or restaurant without any customer
inside; or not to verbally order over-the-counter some
pharmaceutical products.
 Amor propio. It is self-esteem, when he cannot afford the
merchandise. For the Filipino is an insult to his amor propio.
Because of this, he feels embarrassed (napahiya) and slighted.
25

26. Cultural Environment
 Utang na loob. The debt of gratitude or debt of honor. A Filipino
returns his gratitude to anyone who has given him the financial
or moral support.
 Pakikisama. The cooperation or camaraderie among peers or
colleagues.
 Bahala na. For a Filipino, he “allows destiny to take its course”
or “leave its fate to God” in situations installment buying or
purchasing a new brand.
 Filipino “Yes”. Jocano listed seven occasions in the Filipino
Social Structure and Value System when a Filipino says “yes”
26