Saturday, 20 September 2014

PESTLE Grinding out real world PESTS in your #marketing model

PESTLE  Real world factors in Marketing – Big Mike and Cavendish

Not for the first time in the history of the Banana,  the cultivated fruit is under attack from a disease. The fruits in Jordan and Mozambique have been found to have a virulent fungus. The disease strain is called Tropical Race 4.

Cavendish is now the world’s single most successful – and valuable – banana, accounting for 47 % of all cultivated bananas and nearly the entire export trade, worth £5.3 billion.

The Cavendish banana was developed as a clone and is today the most important variety in international trade.

 It was introduced to fulfil modern needs for transportation over long distances, ready for ripening with a consistent flavour. 

Today Cavendish is threatened by pests -new strains of fungal diseases

The previous cultivar to today’s Cavendish banana was the Gros Michel or  Big Mike which suffered the pest  in 1903 known as Race 1. The pest ravaged the plantations of South America and the Caribbean.

 The reality behind ‘bananageddon’
Posted by Martine Parry,
Media and Public Relations Manager
 at the Fairtrade Foundation
The Banana is not just a vital form of sustenance but also an important living for thousands.  

Well in this post in Marketing Week on  fruits of Success blog we should look at the equivalent real world pests that can blight the marketer’s marketing plan or crop.

We use the acronym PESTLE to illustrate the real world factors we have to take up the daily grind with in modern marketing . 
(There are other similar models such as STEEPLED, SLEPT and STEER the acronym does not matters as much as what it covers)

Some of these you can predict, some you can prepare for, some you made need a plan b ( contingency plan)  for:-

Political factors are include to what degree the government intervenes in the economy. Specifically, political factors include areas such as tax policy, employment law, environmental law, trade restrictions, tariffs, and political stability.

 Political factors may also include goods and services which the government wants to provide or be provided (merit goods) and those that the government does not want to be provided (demerit goods or merit bads). 

Furthermore, governments have great influence on the health, education, and infrastructure of a nation. 

For marketers they might  have wished to factor in the  Scottish Yes/No vote the effects of decisions on currency ( e.g. £ , Scottish £ or € ), possible ramifications of defence policy ,change in supermarket distribution costs if for an independent country.

The possible ramifications of of Devo Max and the months leading to the  General election on the 7th  May 2015 in the UK will focus  marketer's radar when considering the real world pest factor of politics

Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. 

For example, 
interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy – all questions marketers should consider in their marketing plans .

Social factors include the cultural aspects and include health and well-being consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates.

For example 

In response to the  rise in Obesity and health consciousness in UK Coke have introduced  Coca-Cola Life using natural sweeteners including Stevia into the UK August 2014 see previous post .

Technological factors include technological aspects such as R and D activity, automation, technology incentives and the rate of technological change. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation. 

Partners with Visa contactless
For example 

the recent  introduction of contact-less payment from Visa contact-less for London Travel,  purchases at partners Starbucks, Tesco, WHSmith and EAT  for purchase sup to £20.

Will this be the death of the wallet or bill fold?

Legal factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law.  Most companies operating in Scotland will know about Scottish Law but if a Yes vote wins the day further legislation is on the horizon. These factors can affect how a company operates, its costs, and the demand for its products.

Implications of legals rulings can have an important effect on marketers .

For example:-
A recent ruling by the European Court of Justice on a case of Spanish budget carrier Vueling Airlines, challenged Spanish law prohibiting carriers from making people pay to put their suitcases in the aircraft's hold. As hold luggage cannot be considered to be 'compulsory or necessary'  when travelling on a plane  ALL carriers should be allowed to charge extra fees - judges said.

Many Budget airlines in Britain such as easyjet and Ryanair already charge up to £75  to check in baggage but the ruling could also be potentially see extra fees on other airlines across Europe.

British Airways which introduced  cheaper ' hand baggage only" fares on some routes last year said it had no plans to alter its policies as a result of Thursday's ( 18th September 2014) ruling.

Environmental factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. 

Buying Fairtrade bananas in the UK means that producers are guaranteed a minimum price, get an extra premium to invest in their community and have improved workplace conditions and protection
© Fairtrade Foundation 2014. Registered charity number 1043886

Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones.

Demographic factors ( can be included as a subset of Social above) include gender, age, ethnicity, knowledge of languages, disabilities, mobility, home ownership, employment status, religious belief or practice, culture and tradition, living standards and income level.

Regulatory factors ( can be a subset of Legal above) could include acts of a future Scottish parliament and associated regulations, international and national standards, local government by-laws, and mechanisms to monitor and ensure compliance with these.

For example
 EU recent regulation impact on Marketing of Vacuum Cleaners

A ban was bought in on September 1, preventing the import or manufacture of vacuum cleaners rated above 1,600 watts, which the EU says will save householders money.

UK shoppers have been rushing to buy high strength vacuum cleaners before the EU ban came into force. UK Sales lifted 3.9% last month. Tesco reported a 44 % increase in sales, Currys said that it had sold out of its 2,000 to 2,300 watt Hoover Breeze and Pet models, and sold out of 2,000 watt models.

The ban starting this month covers cleaners with motors  above 1,600 watts.

The maximum wattage will be lowered even further to 900 watts by the EU in 2017
 if the 2017 cap to 900 watts comes into effect, every one of these best sellers would be prohibited.

Related Links
Related Links on Marketing

The price of a banana bought in a UK supermarket has dropped from around 18p a decade ago to just 11p now. The result is that for farmers and workers in countries like Colombia and the Dominican Republic, growing bananas for a living is becoming unsustainable.
But buying Fairtrade bananas in the UK means that producers are guaranteed a minimum price, get an extra premium to invest in their community and have improved workplace conditions and protection

© Fairtrade Foundation 2014. Registered charity number 1043886

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