International Marketing Environment - PEST Analysis
There are a number of steps that need to be taken before you decide to enter international markets.
The first step involves an analysis of the international marketing environment (Macro Environment) through a PEST/STEP analysis. Lets briefly look at some factors that make up a PEST analysis and how to adapt them for a foreign country.
International Marketing Environment - Social Factors
- Language. Will language be a barrier to communication for you? Does the country you would like to trade in (host country)speak your national language? What is the meaning of your brand name in your host country’s language?
- Customs: what customs do you have to be aware of within the country? This is important. You need to make sure you do not offend while communicating your message.
- Social factors: What are the role of women and family within society?
- Religion: How does religion affect behaviour?
- Values: what are the values and attitudes of individuals within the market?
International Marketing Environment - Technological Factors
- The technological infrastructure of the country you would like to trade in - Internet, telephone and other types of media
- How efficient is the internet infrastructure and information exchange services? What technology will you use to communicate between your firm's offices around the world?
- Do all homes have access to energy (electricity) so that they can access technology?
- How easy is it to access technology hardware such as laptops, servers and mobiles?
- How well will your Information Technology systems integrate with your host country's?
When operating in foreign markets its very important to analyse the Macro environment through things like a PEST analysis as events are not happening around you. There will be customs and cultures that you are not accustomed to and values you may not agree with.
Ongoing PEST analysis will help you integrate your business into foreign markets and forecast change so that you mitigate threats and capitalise on opportunities (SWOT).