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Session on PEST Analysis

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. P olitical Factors

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Session on PEST 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.

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