PEST stands for Political factors, Economic factors, Social factors, and Technology factors. These are all elements that may have an effect on your future business. Make a list of all factors that may be either beneficial or detrimental to the success of your marketing efforts or business.
Political factors include regulatory issues that affect your product line (e.g. ergonomics issues and the current regulatory rulings), legal aspects such as patents and copyrights, or just the current political climate.
Social factors include changes in social trends, fads, or demographic groups as they affect your target market and its current opinions. This could include changes in shopping habits, such as the increase in online shopping or the super-mall trend. It could also include the aging of your current target market, or the population increase in the over-50 group.
Technology factors include everything that affects your product, its market, or information-gathering efforts of your market that come as a result of changes in technology. This would include the Internet, wireless communications, handheld electronic devices, and anything else technology-driven that is affecting your product or service.
All of the PEST factors will tie into and possibly have an effect on the strengths, weaknesses, opportunities, and threats you identify for your product and market.