The macro environment refers to the factors that are constantly changing that we have relatively little control over outside of our business or organisation. These factors are known to marketers as the PEST elements. They are Political, Economic, Socio-demographic and Technological forces that influence a marketers’ decision making process. My observations are that overall; the macro environment’s influence over the marketers’ decision making pertains mainly to how the marketing mix will be manipulated to suit the circumstances. The marketing mix is made up of four main components: Product, Price, Place / Distribution and Promotion. There are however, three distinct ways in which these PEST elements affect the manipulation of the marketing mix. I will explain these below giving examples from the news media for each.

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Firstly, the PEST elements influence the customers’ lifestyle and standard of living. This means that the marketer might have to alter the product itself, the price of the product, the way the product is distributed or the products promotional strategies, in order to maintain its appeal or effectiveness. A prime example of this can be seen through the current economic recession. A recent article headline from Market Oracle online reads: “Economic Forecast 2009: Deflation, Deleveraging and Recession.” (Mauldin, 2009, marketoracle.co.uk) The economic recession is an example of how changes in the economy influence customers’ lifestyle and standard of living because we are currently living a lower quality of life due to the lack of credit and financial abundance. This means that companies will be most beneficial if they alter the price of their products in order to be more affordable, or promote strategically to appeal to the societies’ new way of understanding towards finance.

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Secondly, the PEST elements determine how and whether certain marketing strategies can be implemented by an organisation. This is because in today’s society, businesses rely on politics, the economy, people and technology as they have a direct influence over the business world. One example of this is the unfortunate disappearance of rugby league star Sonny Fai in early January. On the 5^th of January 2009, One News broadcast an article advising of Sonny’s disappearance while swimming with family at one of Auckland’s west coast beaches (One News, 2009) It was common knowledge among league fans that the Warriors were to start pre-season training the day his disappearance was announced, but the usual media coverage of the team in high spirits, was forfeited out of respect for the player, his family and the club. In this case, the decision of how the marketing strategy (the media coverage of their pre-season training) was to be implemented was affected by the socio-demographic PEST element of the players’ disappearance.

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Thirdly, the PEST elements influence the customers’ reactions to marketing initiatives. Political, Economic, Socio-demographic and Technological adjustments can change the attitudes a consumer currently has towards a particular product or service. President of the United States, Barak Obama is viewed by many as well spoken and an effective communicator. He is also widely known for his constant use of his BlackBerry (Hand-held device that includes the use of a phone, computer and wireless internet abilities). A recent article from the New York Times read: “President Barack Obama has repeatedly said how much his BlackBerry means to him and how he is dreading the prospect of being forced to give it up, because of legal and security concerns, once he takes office.” (Clifford, 2008, nytimes.com) President-elect Obama’s’ reputation in communication and his repeated endorsement of his BlackBerry has made him an unofficial spokesperson for the device, which is effective promotional marketing that is being lost with his movement into the Whitehouse. Because of the political PEST element of the Whitehouse legislation and its effect on Obama, customers’ attitudes towards the BlackBerry product are therefore influenced. More strategic manipulation of the marketing mix may be needed to ensure the current sales trend continues.

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So in conclusion, the examples given above, illustrate how the PEST elements influence:

· a customers’ lifestyle and living,

· a customers’ reactions to a product or service,

· how & whether a marketing strategy can be implemented.

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In particular, my analysis of these examples, confirm my observation that the PEST elements’ influence over a marketers’ decision making is focussed mainly around manipulating the marketing mix.

Yip, I own this blog.

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