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Introduction to Marketing Assignment comparing the two analytical techniques, SWOT and PEST

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Introduction

´╗┐Unit 3: Introduction to Marketing Assignment 1 M2 Introduction In this essay I will be comparing the two analytical techniques, SWOT and PEST, in terms of their usefulness in making particular marketing decisions including the most useful for specific decisions. What were the reasons for the popularity of these two analytical planning tools and techniques? 1. An ever changing and more competitive marketing environment. 2. Higher levels of investment required to develop new products and markets 3. Better trained marketing managers using more sophisticated and powerful marketing tools 4. Recognition of the need for improved coordination and integration of marketing with other company functions. SWOT What is SWOT? SWOT analyses are done by businesses at the very start of planning; this is to spot the organisation?s strengths, weaknesses, opportunities and threats. The SWOT analysis should never be done as a separate process and it is important that decisions are taken based on the findings. SWOT falls into the situation analysis stage in the marketing planning. A SWOT starts with an external analysis of the business environment, known as a PEST analysis, and then looks at the businesses? internal strengths and weaknesses in relation to the external analysis. This is done so that the company can combine analysis internally with external analysis giving a broader outlook on how they can go about marketing decisions. ...read more.

Middle

The taxation system needs to be analysed with great care to see how much they get taxed, on what items tax is valid on and how to avoid breaking taxation laws. Economic The economic is the second of the PEST and analyses the state of the economy of the country or area that the business is looking to invest in. They need to look at the GDP (gross domestic product) which determines how wealthy or poor a country is on average looking at everyone?s individual earnings. Also looking at the unemployment rate will link into the figure given from the GDP, having a lot of unemployment could be a bad investment as there will be less money with customers to spend in store. On the other hand it will mean a lot of choice for employing people into your business and expanding from there. Social The third of the PEST is looking at the social lives of the people living in the area. A questionnaire needs to be conducted asking what they do when they go out, do they like going out, what is the normal thing to do in this area, what kind of music, food, games are available, is there a dominant religion that affects the lifestyle of local people, is fashion a big thing in this area, what major events does this place hold, what different cultures are there and what is the share of ethnicity? ...read more.

Conclusion

Looking at the two in comparison you can clearly state that there is no ?better? analysis as without each other they will leave them selves at risk of losing profits. Both require an extensive upkeep, PEST more than SWOT, and constant evaluation of what to do and how to look at the results. There is no doubt that the results for the market research will have to be done monthly or maybe even less than that. When used correctly in coordination they can make up for promising marketing decisions in the future. Conclusion In conclusion, PEST must be done first as it is an external analysis of the business and SWOT must be done second as it is an internal analysis of the business. You can link the SWOT analysis into the PEST analysis to gain a broader look over the overall organisation to see what marketing decisions would be beneficial. Both methods are vitally important in any marketing operation as forecasting financial figures is always challenging but having a method can help structure your plans. In the fast developing world of business these sophisticated techniques are a big asset to management however it is not enough to just undertake the analysis, you have to act accordingly and implement the plan. This said, it is not always possible to act on every element identified in the SWOT and PEST. All in all, SWOT and PEST have two very effective, but different approaches to developing marketing objectives. When used conjunctively, these are very useful tool for audit and analysis. ...read more.

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