Presented by: Dr. John V. PaduaCollege of Business Administration

Lyceum of the Philippines University, Manila

The Philippine Marketing Environment

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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

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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:

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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.

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Marketing EnvironmentConsists 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.

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Marketing EnvironmentActors in the microenvironment include:

The Company Itself Suppliers Marketing intermediaries Customers Competitors Publics

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MicroenvironmentCompany’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.

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MicroenvironmentSuppliers:

Provide resources needed to produce goods and services.

Important link in the “value delivery system.”

Most marketers treat suppliers like partners.

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MicroenvironmentMarketing intermediaries:

Help the company to promote, sell, and distribute its goods to final buyers

Resellers Physical distribution firms Marketing services agencies Financial intermediaries

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Customers: Five types of markets that purchase a

company’s goods and services. Consumer Business Reseller Government International

Microenvironment

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MicroenvironmentCompetitors:

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.

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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

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MacroenvironmentThe company and all of the other

actors operate in a larger macroenvironment of forces that shape opportunities and pose threats to the company.

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MacroenvironmentForces in the macroevironment can be

categorized as: Demographic Economic Natural Technological Political Cultural

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Demographic EnvironmentDemographics:

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.

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Demographic EnvironmentThe 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.

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Demographic EnvironmentDemographic Environment

• Baby boomers Baby boomers – 77 Million post-World War II babies born between 1946-1964

• Generation X Generation X – 45 million born between 1965-1976, the “birth dearth”

• Generation YGeneration Y (echo boomers) – 72 million born between 1977-1994

• Generation Generation ZZ (techno boomers) – born after -1996

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th editionUpper Saddle River, NJ 07458 Kotler, Bowen, and Makens 17

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

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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.

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Technological Environment

Changes rapidly Creates new markets

and opportunities Challenge to make

practical, affordable products

Safety regulations result in higher research costs

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Increasing Legislation

Changing Government

AgencyEnforcement

Includes Laws, Government Agencies, Etc. that Influence & Limit Organizations/Individuals in a Given Society

IncreasedEmphasis on

Ethics &Socially

ResponsibleActions

Political Environment

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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.

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Cultural Environment Society’s major cultural views are

expressed in people’s views of: Themselves Others Organizations Society Nature The universe

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Cultural EnvironmentThe 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

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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.

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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”

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