The final stage of market analysis process is of the broader market factors, including political, economic, social and technological (PEST) considerations.
PEST analysis is a strategic tool to help businesses understand and evaluate the external macro-environmental factors that can impact operations and decision-making. It helps identify and analyse the key political, economic, social, and technological factors that may influence your company’s performance and prospects.
Whilst it is your business, audience and competitor analysis that may shape your short term prospects, it’s the broader market factors that are likely to shape the long term. These include:
What is the political climate and how could this affect your business in three years from now? Brexit is a classic example of this, but there will likely be a variety of political factors that could impact your particular business/industry in the long term.
What are the main economic trends and how will they affect your business in the future? In times of recession some brands will benefit and others will suffer.
What are the social considerations we should be aware of, whether it’s changes in fashion, health and fitness, music or the environment? How are they likely to impact demand for your products and services?
Like it or not, every market is being disrupted by technology. We need to be aware of developments on the horizon and ensure we are well placed to turn them into an advantage.
Frequently Asked Questions about PEST Analysis
It’s recommended to perform a PEST analysis periodically, at least once a year, or whenever significant changes occur in the business landscape or digital marketing ecosystem.
Yes, a PEST analysis helps you identify potential threats arising from political instability, economic downturns, or shifts in consumer behaviour, enabling you to devise risk mitigation strategies.
PEST analysis complements your market research and competitor analysis by providing a broader perspective on the external factors that may impact your digital marketing performance, helping you understand the bigger picture.
By understanding the political, economic, social, and technological factors, you can align your digital marketing strategies with the external environment, enabling you to make more informed decisions and optimise your ROI.
Absolutely! Social factors analysed in PEST shed light on evolving consumer preferences and behaviours, allowing you to tailor your digital marketing content and campaigns for better engagement with your target audience.
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