PEST ANALISYS

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Taken from www.marketingteacher.com, accesed 17-11-2006, adapted to the Spanish environment. I'd included only the Alexandria translator and some exanmples from the Spanish environment

 

PEST ANALYSIS:

It's 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:

1. The internal environment e.g. staff (or internal customers), office technology, wages and finance, etc.

2. The micro-environment e.g. our external customers, agents and distributors, suppliers, our competitors, etc.

3. The macro-environment e.g. Political (and legal) forces, Economic forces, Sociocultural forces, and Technological forces. These are known as PEST factors.

 

 

Political 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:

1.How stable is the political environment?

2.Will government policy influence laws that regulate or tax your business? E.g. : Some laws, like the new Ley de Dependencia, gives us new oportunities for elderly cares.

3.What is the government's position on marketing ethics? E.g.: The XXL Burger King case.

4. What is the government's policy on the economy?

5. Does the government have a view on culture and religion?

6. Is the government involved in trading agreements such as EU, NAFTA, ASEAN, or others?

Economic Factors.

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:

1. Interest rates. E.g.: Low interest rate alows to the largest Spanish builders makes takes over banks, electric companies, etc.

2. The level of inflation and employment level. E.g.: In the last ten years we had created more than 5 million of new emploies

3. Long-term prospects for the economy Gross Domestic Product (GDP) per capita, and so on. E.g. : We are expecting to reach the GDP per cápita levels of the Italy, French or Germany in one or three years.

Sociocultural Factors.

The social and cultural influences on business vary from country to country. It is very important that such factors are considered. Factors include:

1.What is the dominant religion?

2.What are attitudes to foreign products and services? In many sectors, the Spanish consumer prefers foreing products; but in bank, insurance, tourism, food or health services, prefers national products.

3.Does language impact upon the diffusion of products onto markets? E.g.: Our biggest transnational companies, like Repsol, Santander, Endesa, Telefónica, had expanded in Latin-América before in Europe

4.How much time do consumers have for leisure? E.g.: The long and split working days in Spain gives us so few leisure time.

5.What are the roles of men and women within society? E.g.: Who take finally the last decission about buy a new car? The promotion tools can't ignore this fact.

6.How long are the population living? Are the older generations wealthy? E.g.: Nowdays, in Sapin we have few elderlyies and they have small pensions. The reason are two: Civil War ended 68 years ago and the wellfare state have few years, so they have only assistential pensions. In the next five years they'll increase and theirs pensions will be linked with their last wages.

7.Do the population have a strong/weak opinion on green issues?

Technological Factors.

Technology is vital for competitive advantage, and is a major driver of globalization. Consider the following points:

1. Does technology allow for products and services to be made more cheaply and to a better standard of quality?

2.Do the technologies offer consumers and businesses more innovative products and services such as Internet banking, new generation mobile telephones, etc?

3.How is distribution changed by new technologies e.g. books via the Internet, flight tickets, auctions, etc?

4.Does technology offer companies a new way to communicate with consumers e.g. banners, Customer Relationship Management (CRM), etc?