^{Having journeyed through the first three of the famous 5C’s of Marketing namely, Consumer, Company and Competitiveness, let us explore the CONTEXT that's the 4th C, the marketing strategy should take note of. Studying the context or the ecosystem that the company is set in or proposing to set it, requires a holistic view. The PESTLE system sort of simplifies the study. PESTLE stands for}

POLITICAL ENVIRONMENT

Any business needs a set of basic things to enable business e.g. a consuming population, stability of the area, and an established system of transaction. However, to run any business successfully there is a need to study the political policies deeply. Tax policy, tariffs, Trade Restrictions and Bureaucracy are the most obvious of the factors that needs to be studied. The tax policy of most of the countries, however  varies in the case of each product and is often illusive to grasp at. 

For example, the selling price of cigarettes, alcohol and even sugary drinks are higher in India due to the “sin taxes” levied on them.  Though the soft drink companies are working hard to get the 30% tax reduced to about half the amount, the political policies are not giving in. IF however, the policies change then the soft drinks will become a lot cheaper and open up a huge market segment that will be able to afford the drink at lower prices!

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ECONOMIC ENVIRONMENT

Each business or organization is an ecosystem that can survive only with constant interaction with other ecosystems. The economic environment of the area where the business is set up or going to be set up plays a major role not only in deciding if the product is a viable solution but also in the Go-To-Market strategy to be applied and the pricing of the product. 

E.g. Jio comprehended the vast addressable market of the lower middle class and rural area. They designed, priced and marketed the Jio phones to reach out to them. To make sure that it reaches them, they first sold it to urban population to ensure that a “cheap” tag portrayed into an “economically sensible” image!  This is a market the other service providers overlooked. They did not think of the economic environment of India is majorly dictated by this segment. While the higher middle class and the rich are quite a huge population in numbers, they form a minuscule portion in percentage.

Having said that I also need to mention that  Chotukool by Godrej,  the cheaper fridge for the same segment did not have a strong GTM strategy or budget and relied on word to mouth and failed in the same ECONOMIC ENVIRONMENT. So as every factor discussed, nothing can work in a silo but only in a combination!

SOCIAL AND CULTURAL

The social and cultural environment of any place dictates consumer behaviour profoundly. The consumer behaviour is largely based on the emotional leaning of the person, later validated by reasoning perhaps. The deciding fact in a buyer’s and consumer’s purchase habits is the psyche and the mindset which in turn is moulded by the social and cultural factors

Taking the example of Chotukool further, the Positioning of the product was done for the rural and the economically backwards without taking into consideration their newly found Aspirational mindset. Every rural youngster was looking at migrating to urban to make it big! The influence of the youngsters on the decision making was getting increasingly higher in the close-knit Indian families! Age and cultural perceptions that had shifted were overlooked by Godrej.

TECHNOLOGICAL INFLUENCES

The ever-evolving product is desirable only in the context of other solutions available in the market for a similar pain point. Technological evolution, R&D, Automation and most importantly Innovation is all related to the same.  With the market buzzing with technology, innovation and disruption, it only takes us to look around us how the context of setting up a business is affected by the technological changes.

After the advent of eCommerce, setting up a grocery shop without online payment and doorstep delivery would be suicidal. In a world flooded with innovations on almost an hourly basis, the product or service RELEVANCE is to be ascertained periodically. The onslaught of TV channels like Star and Zee along with  OTT players, each of them struggling- put together they effectively killed the cable TV.

ENVIRONMENTAL

With the environmental consciousness growing and taking precedence over consumerism, it is important to analyze the organization and the product through the green lens too. Today right from women’s make up wear to children’s toys, we have the green option or the environmentally friendly option.

Ola Electric Bikes were presold at a record time and without much advertising. The reason is not just the economic pricing but the fact that it was electric and easy on the environment. The fact that it cost lesser to maintain and is free from fuel inflation didn’t hurt either.

LEGAL

Any organization to survive sustainably and thrive need to abide by the legal norms of the land. There are no two ways about it. Many times developing nations, infested with corruption might give an impression of “sab kuch chalta hai” but in long run, any deviation will come back to bite!

Similarly, Ignorance of the law is no excuse either. It is imperative that the organization gathers all know-how and weaves them into the company policies. 

The PESTLE format covers the context setting of the organization that needs to be studied forming the 4th C of the Marketing