What is PEST Analysis?
It 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:
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?
3.What is the government's position on marketing ethics?
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
