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Published by: Ancy Shajahan on Jan 09, 2013
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Session on PEST Analysis

Presenter: Prof. K. T. Rengamani VIT Business School

What is PEST Analysis? • This analysis is essential for an organization before beginning its marketing process • Consists of internal environment and external environment .

Break up of PEST • Political Factors • Economic Factors • Socio Cultural Factors • Technological Factors .

Political Factors • This is the most important influence on the regulation of any business. – How stable is the political environment? – Influence the Government Policy / Law on your business – Government’s position on Marketing Ethics – Government’s policy on the economy – Government’s view on culture under religion .

Sales Tax/ VAT. Tobacco. – Immediate laws which affect any business in general are Central Excise. – Political System is responsible for Law Making.Contd. Alcohol etc.Political Factors . Corporate Income Tax. . Personal Income Tax & Service Tax – Environmental Protection Law – Controls if any on Marketing Strategies • Like Marketing / Advertising of Cigarettes.

drugs etc.Political Factors . • Government Policies on the Economy – Role of Public Sector – Role of Private Sector – Role of Joint Sector .Contd. • Control on Pricing – like sugar..

Economic Factors • Government outlook towards – – – – – – – Bank Financing Interest Rates Exchange Rate Mechanism Incentives for Exports Restrictions for Imports Inflation Labour Policies .

• Level of Government Spending • Avenues for Capital Creation – – – – Size of the Capital Market Role of the Regulator Type of the Instruments Nature of the Investors .Contd.Economic Factors .

Economic Factors .Contd. • • • • Business Cycles Monsoon Energy Availability Cost of Energy .

Socio-Cultural Factors • • • • • • Demographics Distribution of Income Social Mobility Life Style Changes Consumerism Educational Levels .

Contd. • Demographics & Distribution of Income – Division of population .Male / Female – Age Group of the Population – Disposable Family Income • Disposable Income in the hands of the different Age Groups • Education Level of the Age Groups .Socio-Cultural Factors .

• Joint living and nuclear families • Availability of various media tools • Reach of the media to the population .Contd. • Life Style Changes & Consumerism – Attitude to living • Different Age Groups • In tune with available disposable income • Thrust on taking care of present needs by spending than saving for the future.Social Cultural Factors .

Technological Factors • Advantage of Technology – In terms of Economies of Scale • New Discoveries & Innovations • Speed & Cost of Technology Transfer • Rate of Obsolescence .

Other Factors • • • • • Judicial System Insurance System Banking System Regulatory System Infra Structure – Communication – Transportation .

.Role of PEST • Helps Assess the market including Competitors from the stand point of a Particular Business. • PEST is relevant for any type of Business large. small & medium.

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