Applying The STEEP Analysis Model To Marketing

Adam PiernoApril 29, 20192 min

A great way to gain perspective on the market is to conduct a STEEP analysis (also known as PEST and several other variations). It’s an acronym for; Social, Tech, Economical, Ecological, Political. Looking at the market from these five directions tells you what is happening and what is possible. This initial context will be very useful for brand briefs and for understanding how the market may change.

To help bring STEEP to life, let’s run through an analysis for electric car and engineering brand Tesla.


The initial product strategy attracted a wealthy user base and positioned the product as premium. Traditional eco-consumers favored the Prius, but upscale buyers came to Tesla for the prestige, a part of their stated strategy to move downmarket. Acceptance for electric vehicles has grown in the US and abroad, while Tesla has introduced lower priced products more accessible to the masses.


Tesla has innovated with battery, charging and self-driving features making their line desirable and ahead of trends. Major carmakers haven’t figured out how to make and market a comparable vehicle in the US yet. The Prius outperforms on efficiency but underperforms on power, a sacrifice many Americans are not yet ready to make. Tesla shared its patents publicly, a move that demonstrates the brand’s commitment to improving tech for electric cars and renewable energy. Tesla’s early self-driving technology positions the brand well with the trend of autonomous vehicles replacing traditional cars.


The growing market for electric cars and batteries means Tesla’s promise of lower cost cars is coming true. With many states still offering incentives for electric vehicles and for alternative power sources that return power to the grid, the time may be right for mainstream adoption in the next 18 to 24 months. On the commercial side, manufacturing facilities are in demand in the US, with individual states competing with subsidies and other tax incentives to take the sting out of the start-up costs.


Fossil fuels are widely accepted to be passé. Electric power has fewer damaging effects on the environment and is gaining consumer appeal on a mass market level. However, the ecological costs of manufacturing batteries may offset some of the fuel benefits. Long term, the eco-damage may be less severe, but regulators and consumers have a lot to learn about these benefits.


It is a challenging time for innovation in the automotive space because the big players are well entrenched with government lobbyists. Each of the big automakers and oil companies is invested in existing models and working on legislation to extend the service lives of current vehicles. Pressure is on for politicians and candidates to demonstrate commitment to voters on ecological issues and change.

As you can see, STEEP analysis can be a revealing marketing tool for evaluating different external factors which impact an organization.

Contributed to Branding Strategy Insider by: Adam Pierno. Excerpted and adapted from his book Under Think It.

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