MKTG1100 Marketing Management

Macro Environmental Analysis (PEST) Handout

A macro environmental analysis uses the PEST tool - Political, Economic, Socio-cultural,
Technological analysis. Some organisations also use a PESTE or a PESTEL. These are all
the same tools:
• PEST = Political, Economic, Social, Technological
• PESTE = Political, Economic, Social, Technological and Environmental
• PESTEL = Political, Economic, Social, Technological, Environmental and Legal
If you apply the PEST version, you incorporate environmental and legal into any of the P E S
T relevant areas (ie. environmental could fall under Political if there are changes in relation
to recycling, or social if recycling is a community trend).
The thing to remember is that a macro environmental analysis focuses on big issues and
trends in the market that will impact a business and the brand you are developing your
marketing plan for.
Not all the areas below will be applicable, and from the research, you may identify other
areas, this is just a list to get you going:

Political / Legal Economic Socio-cultural Technological

• Government • Business cycles • Population • Government

stability • GNP trends demographics spending on
• Taxation policies • Interest rates • Income distribution research
• Social welfare • Inflation • Social mobility • Industry and
policies • Unemployment • Lifestyle changes government focus on
• Monopolies • Disposable income • Attitudes (work and technological
legislation leisure) developments
• Employment laws • Consumerism • New discoveries and
• Health and safety (spending) developments
• Product safety • Levels of education • Speed of
• Environmental • Energy consumption technological
protection laws transfer
• Energy • Rates of
consumption obsolescence

In a working file, you should list out as much as you can. Then you rate it. After rating it,
rank the highest to lowest within each element. Keep it short and sharp! Be sure to include
the implication to the brand, product or company.
A recommended format to use in Microsoft Excel is on the following page.
Recommended format for your Analysis
Significance Likelihood Total
(1-5) (1-5) Rating
Element Factor Implication 1 = low 5 = high SxL
Political • Potential change in • Likely tax increases 2 4 8
federal government to small business
• … owners
• … • … 5 3 15
• … • … 4 2 8
• … • … 1 2 2
• … 1 4 4
Economic • … • …
Socio- • … • …
Cultural
Technologic • … • …
al • … • …

A well-researched and considered PEST(EL) would contain 5-8 strong factors per element.
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MKTG1100 Marketing Management
Macro Environmental Analysis (PEST) Handout

Remember, to sort them in order of highest to lowest, then place only the top 4 of each
element in the body of your report, explaining the importance to your organisation.
Recommended format for the body of the report:
Element Factor Implication
Political • Potential change in federal • Likely tax increases to small
government business owners
• … • …
• … • …
• … • …
Economic • … • …
Socio-Cultural • … • …
Technological • … • …
• … • …

Only the first three columns (Element, Factor, and Implication) are required in the body of
the document. The detailed analysis is found in your appendix.

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