What You Will Learn…
� PEST Analysis � Political, economic, socio-cultural, and
technological factors that affect international business (PEST)
Review
� What are the 3 types of market segmentation? 1. Demographic (age, gender, income,
occupation, etc.) 2. Geographic (local, state, regional, national,
global) 3. Psychographic (attitudes, interests, opinions,
& lifestyles)
Identifying & Analyzing Markets
� Surest way for businesses to connect with customers?
� Know the people well! ◦ Where they live ◦ Income Level ◦ Age ◦ Ethnic Background ◦ Values ◦ Interests
Build a Global Perspective � Geographic segmentation is important for
multi-national and global businesses and brands
� Regional and national marketing programs to alter: ◦ Products ◦ Advertising ◦ Promotion
� Meet the individual needs of geographic segments
Global Environmental Scan-PEST � Political Factors ◦ Government Stability ◦ Trade regulations and agreements ◦ Laws that impact company operations � Domestic laws must be followed by foreigners ◦ Ex. Toys cannot be advertised in Greece;
important for retailers
Political – Questions to Ask � What are their views on business policy, and on
other policies that affect your organization? � How widespread are corruption and organized
crime? � Could any pending legislation or taxation
changes affect your business, either positively or negatively?
� How will business regulation, along with any planned changes to it, affect your business?
Global Environmental Scan-PEST � Economic Factors ◦ Infrastructure (buildings, roads, power supply) ◦ Quality and cost of labor ◦ Taxes ◦ Standard of living (income, poverty rate,
healthcare, etc.) ◦ Employee Benefits � Ex. France restricts work week to 35 hours;
requires companies to consult with employees before downsizing or restructuring
Economic – Questions to Ask � How stable is the current economy? Is it
growing, stagnating, or declining? � Are customers' levels of disposable income
rising or falling? How is this likely to change in the next few years?
� What is the unemployment rate? � Will it be easy to build a skilled workforce? Or
will it be expensive to hire skilled labor?
Global Environmental Scan-PEST
� Socio-Cultural Factors ◦ Language and Symbols � Ex. US considers 13 unlucky-some hotels do not
have a 13th floor � Ex. China associates #4 with death; sell in groups of
6 or 8
◦ Holidays and Religious Observances � Ex. Cow is sacred in India; little beef sold
◦ Social and Business Etiquette � Ex. Gift giving can be expected in the Far East;
considered a bribe in US and Canada
Socio-Cultural – Questions to Ask
� What is the population's growth rate and age profile? How is this likely to change?
� What are your society's levels of health, education, and social mobility?
� What employment patterns, job market trends, and attitudes toward work can you observe
� How do religious beliefs and lifestyle choices affect the population?
Global Environmental Scan-PEST � Technological Factors ◦ Measurement systems ◦ Electricity voltage standards ◦ Use of computers, faxes, voice mail, cell
phones and Internet
Technological– Questions to Ask � Are there any new technologies that you could
be using? � Are there any new technologies on the horizon
that could radically affect your work or your industry?
� Is there anything you can do to take advantage of this?
PEST In-Class Activity � You have been asked to perform a global
environmental scan (PEST) whether or not it would be profitable to open a top-of-the-line bicycle store in given country.
� Choose a foreign country and present your findings informally to the class today (2-3 minutes)
� Use the World Fact Book as a resource (search on Google)