PEST Factors

Source:  PEST Factors    Tag:  pest

PEST stands for Political, Environmental, Sociocultural and Technological. These factors are used to carry out logical analysis for the company, identifying opportunities and threats that impact the company. It is usually used to promote well thought-out decisions and prepares the company for unanticipated events. The following posts analyze the impact external events have on Dunkin' Donuts. This activity will help me understand the company better and aid me during the summative task.

Post #1: "Morning Comforts"
PEST Factor - Sociocultural

Baked breakfast items are all time favourites of consumers', as they are purchased anytime of the day and a trend that is rapidly growing. In addition to selling coffee, many coffee and bakery chains are increasing their range of products and offering more breakfast items. Companies such as Starbucks and Caribou Coffee are trying to increase sales, encouraging consumers to attach food along with their coffee orders. This is a challenge for such companies as they are trying to expand on their products, offering new food combinations. However, this is an opportunity for Dunkin' Donuts as the company is already offering baked breakfast items. Seeing as it is a new and on-going trend, the company will be able to increase sales by increasing promotion and development of new products. Dunkin' Donuts will be able to take advantage of this factor and may want to consider any further expansion and invest in product development within the company.

Post #2: "Fast food can be waist-friendly"
PEST Factor - Sociocultural

An Iowa science teacher, John Cisna, recently lost 37 pounds within 3 months by eating at McDonalds 3 meals a day, along with 45 minutes of walking daily. Dietitians are surprised by the results, however understands the success to his weight loss. Cisna consumed fewer calories than he burnt daily, by picking healthier choices at the fast food chain. This is an opportunity for Dunkin' Donuts, seeing as the dieting and health trend is still going on, consumers would likely turn to fast food chains for cheap, healthy alternatives. The company can take advantage of this recent study and increase promotion on healthy products, as well as providing more nutrition information for the consumers in order to create an economic growth through sales. This may create opportunities under both sociocultural and economic factors of PEST.

Post #3: "India food: Fast growth for cheap eats"
PEST Factor - Economical

As India is a fast-developing country and a key market for fast-food chains, it creates an opportunity for Dunkin’ Donuts to expand the business, adding new chains. Youths are rapidly increasing with increasing spending capital, and this market enjoys both international and domestic fast-food. According to the article, over 60% of the population is younger than 30 year olds, and take interest in international brands. With other countries offering slow economic growth, India would be the opportunity for international fast-food chains like Dunkin’ Donuts to expand the area, increase market share and overall generate more profit. This may possibly create a sociocultural threat as many fast-food chains are focused on seizing the same opportunity, maybe leading Indian youths to a change in taste and preferences.

Post #4: "Fast-Food Diners Prove Reluctant to Try Limited-Time Items"
PEST Factor - Sociocultural

Businesses are constantly promoting new products as limited time offers, however only 10% of consumers are willing to try them out. Dunkin’ Donuts is constantly making these offers available, but this may pose a sociocultural threat to the business as consumers tend to be less adventurous and enjoy keeping with familiar products. Dunkin’ Donuts may want to conduct further market research and offer seasonal specialities, along with trend forecasting making sure competitors are not offering a similar product, to ensure increasing sales. An example of a successful promotion was by a competitor, Wendy’s, when they promoted pretzels last year. The level of success in promoting products with the consideration of trends directly impacts the economic growth in the business (which is another PEST factor).

Post #5: "How IHOP's New Menu Design Gets Customers to Spend More"
PEST Factor - Sociocultural

The fast-food chain IHOP recently introduced a new menu, carefully designed in order to boast customer spendings (there was a 3.6% increase in sales after it was introduced). Based on the article, it appears that visual elements within the menu drives food appeal. Redesigning creates a sociocultural opportunity for Dunkin’ Donuts, as the creative development of menus is not only trendy, improves customer’s mood, but will create a positive economic growth to business sales. Dunkin’ Donuts could do the same, encouraging customers to purchase and draw attention to less popular items through the redesign.

Post #6: "Meat Consumption And The Environment: Study Calls for Eating Less Meat"
PEST Factor - Political

Environmental organizations are encouraging people to consume less meat, as not only is it bad for your health, but it contributes greatly to deforestation. This poses a threat to Dunkin’ Donuts as these organizations are encouraging government officials to act on this issue. If any action is taken on creating restrictions to the selling of meat products, the business would have to invest in research and development in order to introduce new alternatives. The issue is significant based on the statistics gathered by the organizations, for example, cows only produce less than 5% of protein while taking up 3/5 of the world’s land space. This could easily lead to a sociocultural threat as well, as the trend of reducing meat consumption could rise.

Post #7: "Restaurant Can Be Sued For Serving Meat To Vegetarians"
PEST Factor - Political

Moghul Express was recently sued by Hindus for emotional and monetary damages, as restaurant staff did not provide accurate information on whether their products contained meat.   In previous cases, fast-food chains ended up in multi-million-dollar settlements. If similar situations occur more frequently, government officials or religious groups may require businesses to make product ingredient information available to all within the restaurants. This would pose a threat to Dunkin’ Donuts, as restaurant staff not only have to be more well informed, but the business would need to invest funds in developing new menus and possibly products that do not contain meat to avoid any political situations.

Post #8: "Fake Meat: Scientists Closer To Vegetarian Chicken"
PEST Factor - Technological

Scientists from the University of Missouri found the recipe to creating vegetarian chicken, by using soy-protein powder, wheat flour and water. This latest invention not only looks like chicken, but has the same taste and texture as the actual meat. This creates an opportunity for Dunkin’ Donuts, as many of the current products include the use of chicken meat. Not only will this technological advancement satisfy the trend of healthy lifestyles, but may attract a new target market of vegetarian consumers. To create this product requires a series of heavy-duty laboratory procedures, which may not sound very appealing to a consumer. Nonetheless, the new plant-based invention is good for the body and the environment.

Post #9: "Save the Planet: Eat Peanut Butter and Jelly"
PEST Factor - Political

A governor in Michigan dedicated March 20th as “meatless day” and received large amounts of negative feedback. From the example, we learn that a direct approach in advocating - telling people what they cannot do, simply did not work. Director of the PB&J Campaign had a different approach - telling people what they can do. The campaign encouraged consumers to eat peanut butter and jelly sandwiches, while advocating for the same cause, indirectly promoting less meat consumption. The feedback received from the campaign was more positive. This creates an opportunity for Dunkin’ Donuts to improve it’s CSR profile - by creating campaigns under indirect approaches to satisfy customers, environmental groups, and political figures. By improving the brand reputation, economic growth would also be evident.

Post #10: "Calorie Count Disclosure And The Health Care Bill: Will This Lead To A Food Revolution?"
PEST Factor - Political

A health care bill regarding chain restaurants having to prominently display calorie counts/nutrition information was passed recently. This is used to ensure that customers understand the amount of calories they are consuming and make good choices for themselves. This poses as a threat for Dunkin’ Donuts, as the business’s product range consists of donuts, breakfast sandwiches, cool drinks, which are mainly high-calorie products. The bill forces chain restaurants to invest in new menu designs, and possibly investing to improve products (reduce calories) in order to attract a wider range of consumers; who may be more attracted to healthier alternatives.

Post #11: " V-Tex will chill your wine to 5 degrees in less than 45 seconds”
PEST Factor - Technological

V-Tex, a new refrigeration technology recently developed, is capable of cooling drinks in 45 seconds. This innovation is an opportunity for Dunkin’ Donuts, as businesses no longer need to have chillers to store drinks. Chillers are not only energy inefficient, but takes up lots of space within stores. V-Tex would minimize storage space, cut down electrical expenses, and effectively cool drinks to a high level to satisfy consumers. On the long run, Dunkin’ Donuts would benefit from this technology through the multiple methods of saving, although it seems to be a big investment at the beginning.

Post #12: "Minimizing Compromise in Healthy Bakery Information"
PEST Factor - Economical

The article talks about how healthy bakery reformulation may lead to a difference from original product - taste, texture, shelf life, etc. In order to cut down on costs, many businesses search for “ingredient replacers”, especially for condiments. However, a portion of consumers are always likely to notice the change, and in many cases, the product no longer satisfy their taste and preferences. This poses a threat for Dunkin’ Donuts, if the business ever considers to take on the trend of healthy lifestyles and plan to invest in developing more health-friendly products. If considering alterations of existing products, there is a risk of losing loyal, long-term consumers, directly infecting sales of the business.

Post #13: "Uneasy bedfellows: Salt and health in US snacking"
PEST Factor - Sociocultural

American consumers love eating salty snacks prior to sleeping, but many find difficulty in finding salty snacks that are good for their body. There is an increasing trend in delicious, yet healthy snacks and could be an opportunity for Dunkin’ Donuts. The business offers a large range of donuts, which involves high levels of sodium. There could possibly be a gap within this market of healthy and delicious food, therefore many food manufacturers try to keep up with the trend by investing more in product development (creating new flavors). Dunkin’ Donuts could launch new products in order to satisfy this trend while creating an economic advantage in sales for the business.

Post #14: "Subsidies on healthy foods work to increase consumption"
PEST Factor - Economical

With the government providing subsidies to consumers who purchase fruit or vegetables, it has motivated many and increase consumption level of these promoted products. This creates an opportunity for Dunkin’ Donuts as consumers are highly aware and respond quickly to financial incentives presented. Therefore, the business may want to consider providing more cash discounts to promote food and beverage choices.  Even a short term subsidy period may attract new consumers to the business, overall increasing consumption levels for Dunkin’ Donuts and generating more publicity at the same time.

Post #15: "How this Design Firm Transforms Our Favorite Food Brans is Absolutely Breathtaking”
PEST Factor - Technological

A design firm recently repackaged many known brands into minimalist versions of the original product. With the amount of advertising an average person is exposed to daily, designers utilize editing software to create “streamlined conceptual pieces” by toning down recognizable logos and designs. This is an opportunity for Dunkin’ Donuts to repackage their products, as this clearly distinct, simplistic design will definitely capture the attention of consumers. As products by popular brands become well known, consumers no longer pay attention to the packaging of the product; which is why a new development to the product will give a new feeling and change of perspective to consumers.

Post #16: "McDonald’s Sued For $1.5M By Customer Who Wanted More Than 1 Napkin”
PEST Factor - Economical

McDonald’s was recently sued by a customer who received only one napkin at purchase, and was racially discriminated when asked for more. Customer then mentioned he suffered “undue mental anguish” after the incident. This event could pose an economical threat to Dunkin’ Donuts, as sufficient amount of capital should be spent on training staff members to prevent similar situations. The business may also want to invest in setting up more self-serving areas where consumers can pick up their own essentials, in order to make items more accessible for them. With unfair treatment from staff to consumer, it creates great damage to the overall brand image and costs the business a lot financially to rebuild reputation.