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Descriptionhow to do a pestle analysis
PEST analysis is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning. The organization's marketing environment is made up from: PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macroenvironmental factors used in environmental scanning. It is also referred to as the STEP, STEEP or PESTLE analysis (Political, Economic, Socio-cultural, Technological, Legal, Ethical).
It is a part of the external analysis when doing market research and gives a certain overview of the different macroenvironmental factors that the company has to take into consideration. Political factors include areas such as tax policy, employment laws, environmental regulations, trade restrictions and tariffs and political stability. The economic factors are the economic growth, interest rates, exchange rates and inflation rate. Social factors often look at the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. The technological factors also include ecological and environmental aspects and can determine the barriers to entry, minimum efficient production level and influence outsourcing decisions. It looks at elements such as R&D activity, automation, technology incentives and the rate of technological change.
The internal environment e.g. staff (or internal customers), office technology, wages and finance, etc.
The microenvironment e.g. our external customers, agents and distributors, suppliers, our competitors,
The macro-environment e.g. Political (and legal) forces, Economic forces, Socio cultural forces, and
Technological forces. These are known as PEST factors.
The political arena has a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses. You must consider issues such as:
l.How stable is the political environment?
Z.Will government policy influence laws that regulate or tax your business?
S.What is the government's position on marketing ethics?
What is the government's policy on the economy?
Does the government have a view on culture and religion?
Is the government involved in trading agreements such as EU, NAFTA, ASEAN, or others?
Marketers need to consider the state of a trading economy in the short and long-terms. This is especially true when planning for international marketing. You need to look at:
The level of inflation Employment level per capita
Long-term prospects for the economy Gross Domestic Product (GDP) per capita, and so on
The social and cultural influences on business vary from country to country. It is very important that such factors are considered. Factors include:
l.What is the dominant religion?
2.What are attitudes to foreign products and services?
3.Does language impact upon the diffusion of products onto markets?
4.How much time do consumers have for leisure?
S.What are the roles of men and women within society?
6.How long are the population living? Are the older generations wealthy?
7.Do the population have a strong/weak opinion on ...
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