Environmental analysis is extremely beneficial when a company is considering to do business in an international market economy. It is important to analyse the "environments" of international business marketing before entering a new economy. The central areas of consideration include a country‘s political, legal, economic, technological, and cultural aspects. These five environments form the common acronym, "PEST-C." The term, PEST-C, is widely used in today's business world. Each environment within the acronym must be considered individually to help develop an understanding of the country. The most important PEST-C variable, culture, should be looked at in the most detail. Also, it must be kept in mind that these ecosystem attributes (PEST-C) are not to be viewed as independent "silos," but rather as multidimensional and nonlinear inputs.
By observing the PEST-C variables, international businesses are able to make smarter choices in their global marketing decisions. These attributes that must be thoroughly understood and analysed in order to succeed in the international marketplace. All of the variables relate to global marketing. Global marketing can be defined as marketing on a worldwide scale. All variables must consider the understanding of the advantages of global operational differences, similarities, threats, and opportunities that can be used to meet international objectives.
Marketing managers are also tasked with the responsibility of “wringing the pennies out of the activities.” Basically, they are responsible for and add value to their activities that will contribute to a higher value in the mind of their consumers. Managers must understand the role of their supply chain to accommodate international customer prefer...
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...their respect to tradition, compared to their perseverance to change. A low Long-Term Orientation, for example, may mean that people prefer to value actions that are affected by the short-term outlook, and have a concern for stability.
All in all, we must keep in mind that these ecosystem attributes (PEST-C) are not to be viewed as independent "silos," but rather as multidimensional and nonlinear inputs. For example, the significantly different ecosystem attributes (PEST-C) have resulted in two very different nations in Korea. The very different political ideologies of North and South Korea have produced dramatically different business environments. Any change in a PEST-C variable, especially a change in culture, may dramatically affect a company’s plan to expand. These variables must be considered and understood before conducting international business.
Marketing is the process of searching for options for accumulating profits by identifying the demands of the people and satisfying their needs with appropriate products. In today’s globalized business world, marketing can play a vital role in establishing trade blocks all over the globe with competitive and cutting edge market, research, policies, strategies and activities.
This paper will discuss the five environmental factors that influence global and domestic marketing decisions that organizations must make. These five environmental factors are technology, demographics, government, culture and economics. Companies are affected differently by these factors depending on the industry they are in and the size of the organization. I will be using the Washington Plaza Hotel to illustrate how these environmental factors affect the hotel industry's marketing decisions. The Washington Plaza Hotel is a hospitality business located in Washington, DC. They offer services such as lodging, restaurant, bar, catering and meeting space rental. The Washington Plaza Hotel's major customer base is government, tourist, non-profit organizations, local businesses and some corporate clientele. Let's now take a look at how these environmental factors affect the marketing of the hotel.
Assuming a country had a favorable political, legal and economic environment; its cultural environment was evaluated. Culture impacts demand and the marketing mix; therefore, if a country's culture was deemed unfavorable, it was not included in the top ten ranking. Similarly, if a country's culture seemed especially favorable, that aspect is denoted later in the analysis. Cultural factors considered in this analysis:
In internationalization, the most challenging decision faced by the company to choose between standardization and adaptation in its operations, products or services. It has been one of the important and most popular research topics since 1960s to understand whether standardization is better or adaptation for marketing mix in international marketing. The increasing role of international expansion of business across the borders has also increased the focus of companies towards the international marketing strategies. It is also a biggest challenge for companies to better understand the different needs and choice of customers due to the huge differences among the cultures from various nationalities. This leads to the dilemma in the mind of marketers to understand which strategy is effective and good - standardization or adaptation. There is a significant impact of standardization or adaptation on all avenues of business such as research & development, structure, marketing mix, production, finance and marketing mix. The attitude of a company towards the culture of a particular country in which it is going to enter or start its operations decides to choose between standardization and adaptation. Consider the different views and arguments for each standardization and adaptation, this essay critically analyze which strategy is better to choose for international marketing.
India is world’s second most populated country with over 1.2 billion people. Since its independence from British rule in 1947, the country has been more or less been a stable democracy. Until 1991 Indian governments imposed economic austerity and its markets were comparatively closed to the world. Economic reforms in 1991 brought about a change which made India an attractive and huge market for multinational corporations from all over the world (Joshi 8). Retail industry within a globalized world is one of the thriving and profitable sectors. In the case of India retail industry is witnessing unprecedented growth and transformation (Malini 161). Organized retailing is becoming a norm as opposed to unorganized retailing which was dominant in the past. For a direct investor from United States of America, who is interested in investing in consumer goods retailing and e-retailing in India, it is important to understand the macro environmental factors which can have serious impact on the success or failure of a venture. According to Musgrave (38) India is the fourth largest economy in the world and it is expected that by 2050 it will become the most populous country in the world. Since the initial relaxation of barriers and encouragement of foreign direct investment in 1991 retailers have started making inroads into the Indian markets. Using the PEST analysis this paper will explore the macro environmental factors comprising political, economic, social and technological environments for investing in retailing and e-retailing of consumer goods.
International business can be quite challenging and unsuccessful, if multinational companies do not look at the environment where they want to explore and invest. There are different aspects and market dimensions that can tell decisions makers if it’s convenient to invest in different markets. According to Global Edge (2014), “Global marketing has become more and more important over the years with the increasing trend of internationalization. Faced with too many choices, marketers have the challenge of determining which international markets to enter” (para. 1). The market potential indicator (MPI) is an index that can help marketers understand statistically how consumers behave and use these numbers to analyze potential countries and its risks. Based on the MPI
A major challenge of doing business internationally is to adapt effectively to different culture. Such adaptation requires an understanding of cultural diversity, perceptions, stereotypes, and values (Hodgett &Luthans, 2005). Doing business overseas has its challenges as well as it rewards.
Kotler (1998) claims that PEST analysis is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. The headings of PEST are a framework for reviewing a situation, and can in addition to SWOT and Porter's Five Forces models, be applied by companies to review a strategic directions, including marketing proposition. The use of PEST analysis can be seen effective for business and strategic planning, marketing planning, business and product development and research reports. PEST also ensures that company's performance is aligned positively with the powerful forces of change that are affecting business environment (Porter, 1985). PEST is useful when a company decides to enter its business operations into new markets and new countries. The use of PEST, in this case, helps to break free of unconscious assumptions, and help to effectively adapt to the realities of the new environment.
Because in case of global marketing analyze the factors that need to be taken into account are significantly more, including the economics, environment, cultural differences that is going to affect the analysis of situation. The issues of marketing strategy were covered in detail during classes and this knowledge was cemented with the report I had to write as a part of project assessment that marketing analysis .It was very challenging and interesting at the same
Strategic analyses can be either internal or external. Internal analyses take a look at firms on an individual basis to determine their abilities, while external analyses look at the industry or overall business environment. The PEST analysis evaluates the environment surrounding an industry. It looks at political, economic, social, and technological factors that are current or potential future drivers that shape the landscape. The tool is useful for both strategy and market research and will provide a broad framework for Casa San Ysidro to consider in their future decisions. In the context of this project, we decided to to focus on a few specific factors that can affect museums within the U.S.
“Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.” (AMA, 2007)
The PEST Analysis for PC market in UK. Changes in interest rates, exchange rates, technology and the law are all external factors, which can affect a firm. These factors can affect the firms’ costs, or the market as a whole. Changes that take place in the external environment can be evaluated and analysed using a PEST analysis. To analyse the firms’ external environment, the following headings are used.
Jeannet, J. and Hennesey, H. (1998), Global Marketing Strategies, 3rd ed., Houghton Mifflin Company, Boston, MA.
As a result of the above they were giving less importance to customer satisfaction and customer relationship building. This form of strategy conformed to short term business motives. In a globalised and highly competitive world, modern marketing is about concentrating ...
A PEST analysis is an analysis of the external macro-environment that affects all firms. P.E.S.T. is an acronym for the Political, Economic, Social, and Technological factors of the external macro-environment. Such external factors usually are beyond the firm's control and sometimes present themselves as threats. For this reason, some say that "pest" is an appropriate term for these factors. Let us look at the PEST analysis of the Indian aviation sector: