PEST drivers

Topics: Alcoholic beverage, Vodka, Alcoholism Pages: 5 (1200 words) Published: December 14, 2013
Marketing Environment
What would you assume to be the key PEST drivers?
PEST/STEP is about the macro environment.

We should use the finer grained variant of Kotler which details Social into Cultural, Demographic and Natural (the first two probably being very “yielding”). Political Forces
Alcohol consume is a threat to public health and should be constrained • Market monopolization in Scandinavian and other countries • Alcohol taxes in most countries of the world
• Anti-alcohol campaigns in many countries of the world
• Alcohol prohibition (e.g. in specific countries, regions or (public) places; in certain facilities like Metros; in Islamic countries; during public events, etc.)
Laws regulating ads, product placement and sponsorship / sales promotion for alcoholic drinks • Restrictions for on-/off-premise sales of alcoholic beverages (time, specific events) • National legal minimum age for on-premise sales of alcoholic beverages (serving and selling)

“Don’t drink and drive”

Economic Forces
Economic decline in Europe, US, etc. reduces amount available to spend for luxury goods.
Alcoholic beverages are no basic food. However, they are very important for many cultures and come along with many social activities. Alcoholic drinks are sometimes differentiated by the social level of their typical consumers.
Change in price, availability and quality of production inputs.
Increasingly countries around the world have become more economically interdependent. Free-trade agreements have made the international trade in a more direct and easier fashion, such as European Union (EU), North American Free Trade Agreement (NAFTA), and World Trade Organization (WTO). Even China has to open its ―virgin alcohol market to the importers from all over the world.

Social Forces
Cultural Forces

Since 1979 when Absolut Vodka was introduced in the US-Market, company marketers has been fighting against a number of cultural aspects that makes that competitive market a unique one. From the former idea about “the cheaper vodka, the best”, to Who would buy a totally unknown vodka from Sweden?. US is the most competitive market for premium spirits, but facing a trend change in alcohol consumption that have decreased by 20 percent as result of the tendency towards a healthy live and changing lifestyle across the Country.

Absolut breached into the American market by creating a luxury image for a product that was viewed as a commodity. Absolut Vodka has currently seem by Americans as a product that compliments social functions, as a premium icon that provides a status and accomplish with current trend and thinking on drink “less but better”. Today, those specific US cultural aspects matches with the priorities that company promotes across the world (Promote Responsible Drinking – Respect our environment and share cultures).

Having a drink is (mostly) a group task; it involves going to a bar, attending an event or inviting people for a party, meeting other people, communicating, partying, etc. Such activities are mostly seen as leisure time activities which most people connect positive feelings to.

Image of Vodka seems to have improved from an original perception of a lower-class, undifferentiated and unprestigious drink.
“Drinking” (specifically alcohol) is not generally a highly rated activity among most cultures.
Being bound to traditions is highly rated by many people.

Basic things remain the same: city of origin, raw materials, creation process, bottle design, emphasize on creativity; others change: drinking tastes and flavours, collaborators Demographic Forces

Population decline in Europe, population growth elsewhere

Changing age structure of the population
• More younger people in emerging economies
• Aging population in developed countries (with exception US)
Changing family/household structure
• Increasing number of single households
• Increasing number of households with no children...
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