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The PEST report

by User Not Found | Mar 25, 2013

In business undertaking a PEST report regularly is a great way to make sure that your business is aware of external factors that can have an impact on the organisation.

What makes up the PEST analysis?

The factors that need to be investigated are:

  • Political and legal factors
  • Economic factors
  • Social and cultural factors
  • Technological factors

Political and legal factors focus on government and legal issues that can have a major influence on markets because of the impact of policy implementation, legislation and regulation.

Businesses should look at this from federal, state and local level.

 There are five categories affecting political–legal influences on marketing, and these are:

  1. Monetary and fiscal policies including interest rates, government spending levels,money supply and taxation.
  2. Social legislation and regulations including heritage building protection or antipollution laws.
  3. Government relationships with individual industries e.g. large employers may receive government benefits to set up or to remain in a particular state. Australia, for example, has also negotiated free trade agreements with various countries around the world.
  4. Legislation specifically related to marketing, for example, food labelling laws.
  5. The provision of information and the purchase of products.


Economic factors look at how the economic conditions influence business cycles, including: prosperity, recession and recovery in the economy. This has an impact on what people buy, when they buy and how they buy, and how often. Items that help indicate economic conditions include:

 Employment levels

  • Inflation rates
  • Interest rates
  • Economic growth
  • Exchange rates
  • Business cycles


Social and cultural factors identifies the population’ changing socio-cultural patterns, lifestyles, social

values and beliefs. Sometimes these changes can move very quickly particularly with the advent of smart technology – people have access to the internet all the time. It is important to be aware of what people are doing, how they are doing things and what trends are being embraced. It is also good to see if any of this information can be transferred back to the organisation. Eg use of social media


Technological factors looks at all aspects of technology and the implications to business. Technology is viewed as a mixed blessing: it can improve our lives in one area while creating environmental and social problems in another, for example safe disposal of technological waste e.g. old laptops and mobile phones, is a difficult issue.  

 Examples of technology include: internet, software and hardware development, mobile phones, automated machinery.


By regularly reviewing what is happening in the external environment businesses can identify if changes need to be made in their marketing plans and programs. By looking at each of the PEST factors decisions can be made with more confidence.

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