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PEST Analysis.docx

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Ryerson University
MKT 100

PEST Analysis Macroenvironment Factors:  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, and Technological Social Trends:  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 friendly merchandise.  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 the merchandise.  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. Economic Situation:  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
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