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Pestle analysis

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  • 1. Session on PEST Analysis Presenter: Prof. K. T. Rengamani VIT Business School
  • 2. What is PEST Analysis?• This analysis is essential for an organization before beginning its marketing process• Consists of internal environment and external environment
  • 3. Break up of PEST• Political Factors• Economic Factors• Socio Cultural Factors• Technological Factors
  • 4. 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
  • 5. Political Factors - Contd. – Political System is responsible for Law Making. – Immediate laws which affect any business in general are Central Excise, Sales Tax/ VAT, Corporate Income Tax, Personal Income Tax & Service Tax – Environmental Protection Law – Controls if any on Marketing Strategies • Like Marketing / Advertising of Cigarettes, Tobacco, Alcohol etc.
  • 6. Political Factors - Contd..• Control on Pricing – like sugar, drugs etc.• Government Policies on the Economy – Role of Public Sector – Role of Private Sector – Role of Joint Sector
  • 7. Economic Factors• Government outlook towards – Bank Financing – Interest Rates – Exchange Rate Mechanism – Incentives for Exports – Restrictions for Imports – Inflation – Labour Policies
  • 8. Economic Factors - Contd.• 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
  • 9. Economic Factors - Contd.• Business Cycles• Monsoon• Energy Availability• Cost of Energy
  • 10. Socio-Cultural Factors• Demographics• Distribution of Income• Social Mobility• Life Style Changes• Consumerism• Educational Levels
  • 11. Socio-Cultural Factors - 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
  • 12. Social Cultural Factors - 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. • Joint living and nuclear families • Availability of various media tools • Reach of the media to the population
  • 13. Technological Factors• Advantage of Technology – In terms of Economies of Scale• New Discoveries & Innovations• Speed & Cost of Technology Transfer• Rate of Obsolescence
  • 14. Other Factors• Judicial System• Insurance System• Banking System• Regulatory System• Infra Structure – Communication – Transportation
  • 15. 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.