PEST analysis shows factors that affect or will have major impact on the way Somerset house conducts its business. These factors cause change in the market and the way business is done. They are political, economical, social, and technological factors, if a company does not respond to these factors as they change it will be less competitive.
Political changes from one party to another for example from the conservative government to the labour government, this means law will be changed and the government will consecrate on increase spending in one field than the other which might not favour Somerset house. The labour government has been in power since 1996, duing there haven’t been many changes but we have seen some changes that will affect me. For example recently the labour government passed legislation that all museums must be free entry for the public by in the forth coming years, this means that the museum will not generate any income from tourists visiting them. Most of the museum like the natural history museum have respond to the government’s legislation and abolished the entry fee, this might attract more customers to these museums than Somerset house there for causing a decrease in the sales and profits at Somerset house.
Since September the 11 public spending has gone done and the British economy has decreased, people are not spending as much as they were and instead they are turning to saving most of their money and only buying basic products. This has a major effect on Somerset house because there not many people visiting it its not meeting its objectives. Also if the rate of interest rises it depresses business and causes redundancies and lower public spending levels which is bad new for business like Somerset house, however if the interest rate goes down this increases public spending.
This involves changing lifestyles and attitudes, as people earn more money they tend to spend more on leisure activities like visiting places, this comes as an advantages to Somerset house as if spend more on leisure, this increases Somerset’s sales and profits. Also factors like the increasing number of women going to out to work led to the need for time-saving products for the home. Social factors will also affect the way Somerset house does its promotion/advertising for example they can not advertise using any thing that will cause grave in the community like putting a pig on there adverts.
Changes in the technology in the past 20 years have created opportunities for new products and product improvement, for example products can now be developed and test on the computer, which saves money and time. This was not possible 20 years ago and these are the changes that Somerset house should take into consideration before developing any products. Changes in technology have brought about new way of doing business and actually marketing the products, at the turn of the last century the internet was born it enables customers to find out about the company and its products, buy the product, or in the cause of Somerset house customers can buy the tickets on lines from the house by a click of a button. This increases the like hood of people visiting Somerset house. Business in Countries, continents dividend by time can get sales on the Internet even if there is no person in the office.
My marketing strategy involves making and using different strategies to make Somerset house look different from its competitors, this way I can be assured that I will attract more people than my competitors and there fore increasing the sales and profits of Somerset house. This will give me a competitive advantage over my competitors. Even though most of the services and products Somerset house is providing are similar to its competitors I will make them look a bit different by adding value to them to attract more customers. I will use the following techniques: –
PEST and SLEPT analysis
I will have to carry out considerable research into the external issues that affect the development of Somerset house’s strategy which they are using at the time/moment this will help me develop a strategy that will be effective and beneficial to Somerset house. External issues are aspects of Somerset house which are outside the business Somerset does not have control over them and they affect the success of Somerset house’s products and the number of visitors. For example from questionnaire and survey I found out that most people who visit London’s museums travel by train, 90% of tourists use the tube everyday. At the moment London pays some of the highest fares in the world yet trains are grossly over crowed, with frequent delays. Since the abolition of GLC, tube and bus fares have increased by 46% in real terms it now costs more to travel a mile on the tube than on a Concorde but this has not great affected the number of tourists using the tube however if London transport raised the train fares again this could lead to less people coming in London to visit Somerset house and its attractions.
SWOT involves finding out Somerset’s strengths, weaknesses, opportunities, and threats. I will have to examine Somerset’s business current activities which can be recognised and then make changes were necessary to maintain the strength of Somerset house and improve on the weaknesses. I will use external research data to recognise opportunities and threats and act upon them and make necessary decisions in order to improve the general performance of Somerset house.
The main task I have is to attract more people from different generations to Somerset house. These will be of different cultures, backgrounds and nationalities because Somerset house is also competing internally I would like to attract tourists too. The ice rink will raise public awareness and tourists and it will attract them.
Somerset house is located in an attractive area on the banks of the River Thames, it is easily accessible, I will use this to my advantage and ability to make Somerset house one of the major tourists attractions in London.
The fact that Somerset house is the only place that sells high quality silvers in London is a strength that I can use. Other strength include a team of staff to help visitors on site and though it’s an historic building it has facilities for all kind like rumps for wheel chairs users for easy access all around the museum.
As having strength Somerset house has many weaknesses and its major weakness that is affecting its performance is the public image of being a place for births, deaths, and marriages. However, I have an opportunity to change the public’s perception about Somerset house through the use of promotion like getting the press and celibates to visit Somerset house and hopeful screening this on television.
Influence pest and slept and other legal laws will have on the marketing strategy.
Changes in the value of VAT put Somerset house and its competitors at a disadvantage, as they have to charge the VAT value and pay it to the HM customs and excise with out failure or they could face lager fines or even prosecution. So they will have to charge this on every product or service they provide expect food. Also because Somerset house competes on an international level and most the other nations VAT value is lower that the UK’s, this causes problems with the tourists. The changes in the law also added to the uncertainties about Somerset house’s prospects of change. The budget reading will be taking place soon and as part of this new legislation will be placed on these may have an influence on the sales and the way I going to conduct my promotion and pricing. Because of the recent problems on the economy of the UK the government might try and increase public spending, which means that more money to spend by the public, people tend to spend more money on leisure and jewellery which works in my favour as Somerset house provides both these services.
It requires a great deal of experience to determine which strategy will be more effective for Somerset house. Low levels of public spending will affect summerset house because as a result the public start to spend less than they would usually spend. Somerset may have to cut down on its staffing figures, if interest rates are increased. This will have an impact on the performance of Somerset house as there will be less staff to carter for the customers this could also lead to poor customer service. From the statistics provided by the government we can see the number of people in the UK who are not being employed increasing this means there is less people to visit Somerset house as less people are working.
The introduction of the Euro will affect my pricing and promotion also because the prices of goods and services in the UK must be in line with other EURO nations by the time the UK joins the EURO, will affect Somerset house they will have to re price there product which means the products and services may be cheaper that Somerset house does not make enough profit or that the prices are to expensive the public that the sales drop.
Inflation changes will also affect me as it may cause the prices of the goods to increase or drop however because of the September the 11 events the government is aiming control the inflation, which in turn means that I don’t have to change my prices time to time.
Changing lifestyles affect the overall performance and success of Somerset house as young people are not very interested in the galleries. The increase in disposable income means that people will spend more on leisure activates and in restaurants at Somerset house which in turn will increase Somerset’s sales and profits. There has a lot of change in the behaviour of the younger generations since as we approached the 21st century; this is going to affect my promotion as I will have to change the advertisement to suit the change in behaviour.
The internet is a form of technology that Somerset house uses; it creates opportunities and improvements in the organisation. The technology used by Somerset house enables its customers to buy/booked tickets over the internet at any time, this saves Somerset house money and time as there is no need for a member of staff to attend to the ticket office on site and also there wont be no need for the box office which saves space, and creates opportunity for further develop as this space can be used for other developments. It enables people to know background information about Somerset house and its facilities before they actually visit the place. I will have to keep on researching on the technological adverse other museums have made so that I can alter Somerset’s technologies in ordered not to lose out on the sales.
Somerset house has a restaurant and cafes on site which sale foods and drinks, because most food companies now days package there food and drink products in recyclable packaging for example cocoa cola, am considering to buy all food and drinks products that are in recyclable packaging. Also the tickets that will be sold for the ice rink will be made out of recyclable paper, which is environmental friendly.
The fact that Somerset house is a listed historic building the trust can not make changes to the building without the Westminster council stopping them, unless the law changes. This is a constraint and will affect the development of Somerset as no changes can be made to the brick work in or out side the building.
Regulatory bodies like the advertising standards Authority will have an effect on the way Somerset house’s adverts are structured, Somerset house will have to follow what the ASA sys which might not favour Somerset house. And if Somerset house does not follow what the ASA says they will be liable to large fines. Because the ASA does not cover radio or TV adverts, there other bodies like the radio authority and the ITC control the radio and TV adverts. These three bodies will affect my marketing strategy and promotion because I will have to make sure that the adverts are legal, descent, honest, truthful and must not cause wide spread grave.
Legal constraints will affect the products that Somerset house will be marketing laws such as the sale of Goods Act 1979 and Sales and supply of goods Act 1994, state that I must have the legal right to sell the goods and services. I have to make sure that the goods and services are sold as described. The goods must be of satisfactory quality and fit for the purpose. If Somerset house breaks any of the conditions, the buyers/ customers will be entitled to a refund of the purchase price from Somerset house, this will affect the level of profits and also because we are having unsatisfied customers it may lead to them not coming back to Somerset house.
The trade description Act states that it is a criminal act to apply a false trade description to any goods, or supply or offer to supply, any goods to which a false trade description is applied, to make a false statement knowingly or recklessly as to the provision of a service and to give misleading information about prices and apply false description on facilities and services at summerset house. I will have to take great care in my advertisements not to mislead customers as if I don’t follow these laws Somerset house will be prosecuted and may end up paying large fines.
If I use any act against the publics interest and use predatory pricing to run my competitors out of business so that I can have a dominate position in the market. The competition act 1998 operates through the competition commission. The commission will investigate me and if it is found that Somerset house is acting against the public’s interest I might be prosecuted.