How PESTLE Analysis Affects Marketing

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Are you a marketer? If you are, then you need to know how the six most important macro-environmental factors influence the state of marketing. These factors are politics, economics, society, technology, legal, and the environment.

Each one plays a vital role in the current and future of marketing. Not only have these factors changed how we market, but it’s also allowed for the creation of specialized genres of marketing. You’ll see what I mean below as I explain how PESTLE analysis affects marketing.

How politics has impacted marketing

American politics have changed marketing. Thanks to Facebook allegedly impacting the presidential election in 2016, social media transformed. Politicians use social media as a tool to push marketing campaigns to appeal to the “younger crowds”.

It’s not just politicians using marketing to gain publicity — companies do too. Americans are more likely to support companies who choose a political stance. Big name companies like Amazon and Starbucks have taken political sides to “emotionally connect” with readers.

These companies have made their political stances public through social media. Others have made a stand using the Super Bowl to showcase political messages, garner more buzz and online discussions. Although choosing political sides hasn’t led to higher reviews of products or build an emotional bond with viewers, it leads to conversations. That’s enough to influence the perception and performance of brands — whether that’s good isn’t confirmed.

But what happens when the CEOs, who have chosen a stance, retire? Will the new CEO stay on the same side or switch? And how will this impact marketing efforts?

By using politics for personal gain, corporations, former politicians, and up-and-coming politicians use marketing to raise awareness of who they are and what they stand for. Although political marketing isn’t new — you’ve seen advertisements when elections are gearing up — it’s much easier to connect with the public through social media and digital advertising.

Does economics shape marketing?

Marketing shapes the economy, but the economy is shaped by marketing too.

For example, if you sell a product and sales take a nosedive, the marketing costs may exceed the profits. Then, ask yourself why this is happening? Could it be a new competitor entering the scene? Or are customers now longer interested in your offering? Or maybe your products are now too expensive for the average consumer.

For the last reasoning, the state of the economy can be to blame. During a recession, people are more likely to keep a tight hold on their wallets. They may only buy what they have to, rather than what they want to. Companies selling luxury products may suffer most during this time.

When marketing efforts don’t bring as many profits as expected, it’s called the law of diminishing returns; your marketing efforts aren’t bringing in as many profits as expected. This affects all products. Companies who experience this have some assessing to do. It may be time to change product costs, respond to customer desires, and keep an eye on your competition to remain competitive.

With few exceptions, all industries have at least one competitor that’s gunning for your customers. You can thank the internet for allowing new businesses to appear literally overnight. The only way to remain competitive is for companies to know who you’re dealing with. 

Social factors influencing marketing

Marketing is impossible if you don’t know who you’re talking to. In business, the ideal customer is called a “target market”. The more you can know about your target market, the better your marketing results can be.

Think of it this way — if companies targeted random people, the sales would be just as random. However, if the company targets specific people — people who have a pain point the company solves — the chances of selling your product rises significantly.

No one should ever market without knowing who their target market is, where they reside, and what their pain points are. Marketers then have to find where these people hangout to offer the products. Once upon a time, this didn’t matter too much. Marketers sold through direct mail, radio, and the television. But now, with so much of us connected to the internet, this has led to a whole new level of marketing.

Direct mail can still work — but you’ll likely have a better response through digital marketing. People change — what they want and when they want it. Marketers must learn everything they can about the target market, keep up it this social change, and technological developments. Otherwise, the marketing will be in vain.

Technology and marketing

Technological advancements are the foundation behind the evolution of marketing. Before the internet, marketers used fliers, radio, and direct mail to reach consumers. It worked — because it was the only option (besides face-to-face communication) to connect with people.

And then… the internet happened.

Suddenly, you could create banner ads, pop-ups, and web pages to showcase products. On top of these new mediums, marketers now had free access to market to anyone in the world.

Direct mail still exists. You’ll still hear ads on the radio or drive past billboards on the highway. But the internet has given power for marketers to reach whomever, whenever, and however they want.

Over the last few years, artificial intelligence has intercepted marketing. It gives marketers the ability to learn more about people. AI can search through databases, collect data about keywords, and help business owners learn about buying behaviors without having to talk with customers directly. This technology is in its infancy, but it’s already a promising tool in marketing.

Legal factors and the implications in marketing

Now that we’ve countless means to market products and services, it also means businesses have to be more cautious about laws and regulations. For example, the General Data Protection Regulation (GDPR) rocked businesses last year.

It forced companies — everyone from Google to startups — to be upfront about the data they collect and use from users. For digital marketers, this meant adjusting the wording for opt-in forms, using cookies, and updating subscribers that they’re now GDPR compliant.

Environmental factors impacting marketing

Eco-friendly consumers led some companies to adopt a genre of marketing. It’s called “green marketing”. This type of marketing showcases how companies, products, and services, positively impact the environment.

In doing so, consumers will recognize the brand as being “eco-friendly”, “organic”, or “sustainable”. People who care about the environment are likely to stand by brands who are green-friendly.

Many companies now mention how they’re helping to better the planet. Target has “Made to Matter” eco-friendly products. Walmart has webpages expressing their goal to improve the environment. And this is fine, but it’s another marketing technique. Popular websites like Fortune write articles about these eco-friendly initiatives, which is good publicity for any company.

PESTLE Analysis in Marketing: Final thoughts

The political, economic, social, technological, legal, and environmental influences work together to change the world of marketing. Not only do the PESTLE analysis factors influence marketing, but marketing can affect the factors too. This means if you want to have a better understanding of the future of marketing, then you need to pay attention to PESTLE too.

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