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The STEEP Analysis – What to analyse in the marketing environment

Updated on January 25, 2016

The STEEP Analysis is used in marketing, it is a method to analyse the macro-economy of the firm to determine which factors can influence its success. This model is the updated, ‘modern’ version of the ‘PEST ’ model and plays a very important role in the companies’ marketing strategy.

STEEP analysis in progress
STEEP analysis in progress | Source

What about the micro-economy?

  • The analysis which can analyse the micro-economy of the company is the SWOT.

The word itself, STEEP is an acronym for the following words:

  • Social
  • Technological
  • Economic
  • Ecological
  • Political (and legislative)

Basically anything can fit into these ‘categories’, so once this analysis is done, the firm can have a detailed overview on what factors determine the present trends and what can be predicted for the future.

In the following points you can find most of the important factors that can determine the above mentioned macro-economy. Companies usually have no influence on these factors, so they have to accept them and somehow try to adapt them and also try to take great advantage of them.

The economics machine
The economics machine | Source
Consumers are always very important!
Consumers are always very important! | Source

Social factors

  • population of the consumers
  • age of the consumers
  • sex of the consumers
  • marital status of the consumers
  • educational level of the consumers
  • profession, residence of the consumers
  • ethnicity of the consumers
  • habits of consumers
  • the extent of local migration/mobility
  • social values
  • religions
  • traditions
  • approach of consumers
  • number of births

Technological factors

  • expenditures
  • innovation
  • expansion
  • changes in technology
  • patent regulations
  • life-cycle of products

The Circular flow of income
The Circular flow of income | Source

Economical factors

  • extent of economical growth
  • inflation
  • income of the consumers
  • taxes
  • subsidies
  • exchange rates
  • savings
  • loans and the conditions to get a loan
  • rate of unemployment
  • rate of investments
  • price of energy

Environment has to be important for everyone
Environment has to be important for everyone | Source

Ecological factors

  • natural resources
  • the price to exploit these resources
  • pollution
  • protecting the environment
  • environmental regulations

Political and legislative factors

  • political stability
  • the political system
  • competition laws
  • regulation of monopolies
  • tax policies
  • price regulations
  • financial regulations
  • regulation of export
  • regulation of import
  • consumer protection
  • protection of markets
  • other special regulations of products
  • jurisdiction
  • trade unions

What can the firm use and do to determine the impact of these factors?

  • using predictions (for example for technology or economy /like weather forecasts/)
  • group analysis (of the consumers)
  • press analysis (to strain off some important social trends)
  • analysing trends (like how will the number of consumers change)
  • analysing the lifestyle of consumers (like what they prefer or how they react to something)
  • analysing the resources of the company itself (what will and can the company do)
  • determining the capabilities of the firm (how can the company achieve further success)
  • using the results of the SWOT analysis (micro-economical impacts)
  • analysing the competitors (what will they do)
  • create scenarios to predict the possible impact of these factors (how can the company react to something)
  • analysing the economical regulations (of the country where the firm is located)
  • creating surveys and analyse the answers given to them (asking the consumers themselves)

Share your ideas!

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© Copyright 2012-2014, Zsofia Koszegi-Nagy (zsobig)

© 2012 Sophie

Comments on the topic

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    • profile image

      Farhan ahmadf 3 years ago

      Its nic i learn a lot of things here

    • profile image

      Afzaal Hussain 3 years ago

      good sir i absolutely like it

    • FSlovenec profile image

      Frank Slovenec 4 years ago from San Francisco, CA

      Well done this is a Bookmark article for reference. When I consult in the sales organizations of my customers this will come in very handy as a reminder of the market forces and internal forces that may impact the success of the company. thanks

    • profile image

      Vasudevan 4 years ago

      Really good material - easy to capture the essence of it. Please do add some comments on the advantage and disadvantage of doing STEEP.

    • Mama Kim 8 profile image

      Sasha Kim 5 years ago

      This sort of thing is usually way over my head but you've done a wonderful job making it easy to understand! Thank you! Voted up and interesting!!

    • zsobig profile image

      Sophie 5 years ago from United Kingdom

      Thank you for your nice comment Karine!

      thanks for the tip, you were right, it is much better already this way! :)

      Best wishes and thanks again a lot!

    • Karine Gordineer profile image

      Karine Gordineer 5 years ago from Upstate New York

      Hi Zsofi...Great Hub! I'm glad you included the Ecological Factors as more and more companies ARE factoring this in. One thing to note is companies are also beginning to ask themselves, "If we had to pay to replace this resource what would the cost be?". I loved seeing that in your model. I thought the Hub was a great overview and the drawing was great. One thing, if you can make the STEEP Analysis Flowchart larger I think that would help readability but other than that it was great!