In addition to understanding the company itself, their competition, and their corporate
partners, marketers must also understand the macroenvironmental factors that operate
in the external environment.
They are include: culture, demographics, social trends, technological advances,
economic situation, and political/legal environment, or CDSTEP
PEST Analysis include: Political/legal environment, Economic situation, Socio-cultural,
Social trends shape consumer values around the world.
Social trends tend to change over time in their popularity and importance, and savvy
marketers work hard to identify emerging trends to understand whether they present
an opportunity or pose a threat to their business.
• Greener consumers:
Customers who appreciate the effort of companies to supply them with environmentally
Green consumers purchase products based on issues beyond the tangible products
These issues can include a variety of social causes such as environmental awareness,
protection of animals, HIV/AIDs awareness and preventions
Consumers who purchase these products do so to support these causes.
• Marketing to children:
Obesity in children, negative body image, video games, healthy eating etc.
• Privacy concern:
Loss of privacy, identity theft, do not call, do not email
• Time-Poor society:
In the majority of families, most parent work
Consumers have many more choices regarding leisure time
Many consumers multitask
Technological Advances: Technological advances have accelerated greatly during the past few decades,
improving the value of both products and services.
On the retail side, firms are able to track an item from the moment it is manufactured,
through the distribution system, to the retail store, and into the hands of the final
consumer by using radio frequency identification device (RFID) chips that are affixed to
Because they are able to determine exactly how much of each product is at a point in
the supply chain, retailers also can communicate with their suppliers—instantaneously
over the Internet—and collaboratively plan to meet their inventory needs.
Other areas of technical advance include how we bring media into our homes. Popular
movies are now on Blu-ray disc or high-definition digital video disc (HD DVD), and the
latest sportscasts are available via high-definition television (HDTV).
Different technology adoption levels also matter to marketers when communicating a
new product or using a new media type
As noted so far and as described throughout this book in the Social Media Marketing
boxes, not only are marketers trying to make social media an integral part of their
marketing strategy, but also consumers are using social media to share information
and their experiences and frustrations with products, services, and marketers.
The key challenge for marketers is to spot emerging technology trends very early and
to assess their likely impact, positive or negative, on business. They must then develop
appropriate strategies for responding to the trends.
Marketers monitor the general economic situation, both in their home country and
abroad, because it affects the way consumers buy merchandise and spend money.
Some major factors that influence the state of an economy include the rate of inflation,
foreign currency exchange rates, interest rates, and recession.
Inflation refers to the persistent increase in the prices of goods and services.
Increasing prices cause the purchasing power of the dollar to decline; in other words, a
dollar buys less than it used to.
Foreign currency fluctuations can influence consumer spending.
The exchange rate changes also have serious implications for consumers as well. As
the value of the Canadian dollar increases compared with the U.S. dollar, merchandise
made in Canada and exported to the United States becomes more costly to
It is not always easy for marketers to respond quickly to such rapid increases; but,
marketers who monitor the economic environment have the advantage, as they will be
able to adjust th