The Scottish Referendum - Let's deal with that PEST......

Well, today’s the day that everyone is talking about – the Referendum on whether Scotland remains in the UK or goes independent ending a union that is the United Kingdom. 

Everyone is talking about it and, before the ink is dry on the ballot papers, the press is rife with dramatic headlines about what will happen when we all get up tomorrow morning.  If it’s “aye” then we’re all facing change – north and south of the border.  Things we’ve had as part of our lives for generations may change or even be consigned to history.  What will happen to the NHS? Will the Queen still be head of state?  What would happen to the BBC?  What about the Armed Forces?  Would there even be a new border control?

Factors in the external Macro environment, that form the acronym PEST or PESTEL, are usually theoretically explained to marketing students as almost remote to an organisation but they could now be very important particularly if your business involves customer segments and markets in Scotland.  Whilst on this day, the Scottish people have control in their hands with their individual vote, once the deed is done then these factors are uncontrollable but perhaps not as remote to your business as you would like.

Let’s just review some of these in the context of a “yes” vote:

Political / Legal – clearly the most prominent factor here in terms of headlines.  The Scot’s as part of an independent nation would have total control (that’s the point after all) but what about the English parliament?  Lots of implications regarding the Conservatives and the PM himself and even if it’s “nay” then there’s political strife ahead as more powers will be devolved anyway.  Will Scottish MPs have to leave parliament and what affect would that have?

Economic – Would Scotland’s economy fare better inside or outside the UK?  The “yes” camp say it will.  How would the economic turmoil we’ve seen the past few years affect a smaller independent country?   However, doubters question the possible loss from not having direct access to the rest of the UK for its goods.  Some multinationals have said they’ll relocate their headquarters from Scotland to England.  There would be big changes ahead with a new currency and the amount of debt that parliament have said will transfer to Scotland’s hands.  All this change could affect jobs, taxes, disposable income and pensions.  

When a business markets internationally exchange rates are of course important and Scotland as a republic will be errr international as far as a marketer is concerned.

Inevitably, all this uncertainty will have a dampening effect on consumer sentiment, business confidence and investment intentions which could be as gloomy for us all as a wet weekend in the Outer Hebrides.

Sociological – our culture and heritage is what makes us British.  We’re famed for it and a little teased by it at times, let’s face it.  There will be a need for new Union Jack, perhaps new National Anthem (and the Scot’s would have to agree on what theirs would be) and what about the Queen?  The latter question may not have a direct effect on marketing per-se, unless you make mugs and tea-towels with Royal Family branding, but a lot of companies market “Britishness” and an erosion to that, however slight, could cause us to choke on our Earl Grey tea.

Environmental – As I am contemplating whether there are any issues here that we could discuss, my eye glances at a snippet in the Daily Mail about Shetland, that oil-rich island very very far north.  There was some discussion in the media about Scotland being able to capitalise on being oil rich as an independent nation but, before we start contemplating a Scottish Dallas, the Shetland Islanders, in the event of a “yes” vote, may make the decision to break away from Scotland and remain as part of the UK. 

The Scottish government says Scottish renewable energy is the most cost-effective source of low-carbon electricity, and enables the rest of the UK to meet its climate change targets.  In return, financial support for renewable energy schemes and the transmission network would be met by consumers across Britain.

The UK government says any decision to import energy from an independent Scotland would be taken on a "commercial basis" i.e. if the numbers don't stack up it won't happen.  That could leave consumers in Scotland to foot the bill for renewable energy schemes and investment in the transmission network.

Technological – no discussion on external environmental factors would be complete without switching to technology.  Nothing particularly springs up here (and analysis sometimes results in “analysis paralysis” after all, so my students tell me) but if we have border controls resulting in passport checks, it reminds me of the chaos that engulfed the UK passport agency this summer.  Could the Scot’s have a better techy process for issuing their passports in a timely fashion?  Aye, it’s possible and if they do, can they sell it to the English please?

This referendum is unchartered territory and we’ll have to wait and see tomorrow what the future of the UK will be.  One thing’s for certain, marketers everywhere will be affected and will need to adapt and change, just as they should.