usually broken down into the macro, micro and internal environments as summarised in the diagram below. The macro-environment A commonly used method of quantifying the macro external environment is with a PEST analysis. PEST is an acronym which divides the macro-environment into four areas -- Political, Economic, Social, and Technological, examples of which are shown below. Political environmental factors Trading agreements Tax rules Employment regulation Environmental legislation Legal issues Economic environmental factors Recession Interest rates Exchange rates Rate of inflation Population wealth Growth of the housing market Social environmental factors 'Green' behaviour Eating habits Shifts in attitude Population demographics Attitudes to career Technological environmental factors Emergence of new communications channels Improved production processes Advances in computing and the internet New technologies such as electric vehicles Automation Reduced cost of materials Micro-environment The micro-environment includes factors which are still not directly under the control of the company, but more directly relevant to strategy such as consumer trends, stakeholders, suppliers and competitors. Some example items are listed below. Summary of your market segment Market growth, trends and competition Potential new markets Direction from shareholders Supplier costs and service quality Changes is consumer behaviour Understanding your customers and market Ensuring a thorough knowledge of the consumer is vital for successful marketing planning. Use the primary and secondary (first and second hand) market research information at your disposal to describe your customer. The more accurate your picture of your consumer, the better you'll be able to design products which cater for their needs and