Social and cultural factors affecting business include belief systems and

practices, customs, traditions and behaviours of all people in given country,

fashion trends and market activities influencing actions and decisions. Socio-
cultural perspective is one of the most important factor influencing
decision of marketingmanagers and strategic goals of companies entering
new foreign markets. It should be noted that legal factors affecting business is
also considered as one of the major socio-cultural factors that can influence
companies. Proper identification of this factor during strategic analysis (PEST
analysis, STEEP analysis, SWOT analysis, TOWS analysis) could lead to
better strategic alignment of company to society (during international
development).

Social factors affecting business

 social classes and their influence on the society,
 average disposable income level,
 wealth of people,
 economic inequalities,
 level of education,
 access to education (free, paid),
 level and access to health-care,
 health consciousness in society (smoking, drinking, drug use, safe driving,
etc.),
 buying habits and consumer preferences,
 average retirement age (for men and women),

 personality of average consumer,

 reputation of company in society,
 conflicts within society,
 susceptibility to influence,
 social organization (communities, social groups, gangs, ad-hoc gatherings,
etc.),
 uncertainty avoidance dominating in society (or other G. Hofstede socio-
cultural factors),

Cultural factors affecting business

 fashion trends,
 lifestyle,
 social media influence (blogging, etc.) vs traditional media (press, TV,
radio),
 dominant communication technology in social groups,
 participation in cultural events,
 willingness to pay for tickets,
 popular actors, music styles, design forms, etc.
 creativity of people,
 relative population of local (folk) artists vs. global imported culture,
 various other determinants of culture.

https://ceopedia.org/index.php/Social_and_cultural_factors_affecting_business

1. Social and cultural Environment • The socio-cultural fabric is an important environmental

factor that should be analysed while formulating business strategies. The cost of ignoring
the customs, traditions, taboos, tastes and preferences, etc., of people could be very
high.
2. 4. Elements of culture • Culture is the sum total of the societal behavior. It is simply the
totally life way of people.
3. 5. Culture Definition • Knowledge and beliefs - It refers to a people’s prevailing notions of
reality. • Ideals – It refer to the societal norms which define what is expected. •
Preferences – It refer to society’s definitions of those things in life which are attractive or
unattractive as objects of desire.
4. 6. Social and cultural Environment • The buying and consumption habits of the people,
their language, beliefs and values, customs and traditions, tastes and preferences,
education are all factors that affect business.
5. 7. Social and cultural Environment In Thailand, Helene Curtis switched to black shampoo
because Thai women felt that it made their hair look glossier. Nestle, a Swiss
multinational company, today brews more than forty varieties of instant coffee to satisfy
different national tastes.
6. 8. Social and cultural Environment Even when people of different cultures use the same
basic product, the mode of consumption, conditions of use, purpose of use or the
perceptions of the product attributes may vary so much so that the product attributes
method of presentation, positioning, or method of promoting the product may have to be
varied to suit the characteristics of different markets.
7. 9. Social and cultural Environment For example, the two most important foreign markets
for Indian shrimp are the U.S and Japan. The product attributes for the success of the
product in these two markets differ. In the U.S. market, correct weight and bacteriological
factors are more important rather than eye appeal, colour, uniformity of size and
arrangement of the shrimp which are very important in Japan. Similarly, the mode of
consumption of tuna, another seafood export from India, differs between the U.S. and
European countries.
8. 10. Social and cultural Environment The values and beliefs associated with colour vary
significantly between different cultures. Blue, considered feminine and warm in Holland is
regarded as masculine and cold in Sweden. Green is a favourite colour in the Muslim
world; but in Malaysia, it is associated with illness.
9. 11. Social and cultural Environment White indicates death and mourning in China and
Korea; but in some countries, it expresses happiness and is the colour of the wedding
dress of the bride. Red is a popular colour in the communist countries; but many African
countries have a national distaste for red colour.
10. 12. Hofstede’s Research on National Culture • Individualism versus collectivism • Power
distance • Uncertainty avoidance • Masculinity versus femininity • long-term versus short-
term orientation
11. 13. Hofstede’s Research on National Culture Individualism versus collectivism refers to
whether a person functions primarily as an individual or within a group. In individualistic
societies, ties among people are relatively loose, and each person tends to focus on his
or her own self-interest. These societies prefer individualism over group conformity.
12. 14. Hofstede’s Research on National Culture Power distance describes how a society
deals with the inequalities in power that exist among people. Societies characterized by
high power distance are relatively indifferent to inequalities and allow them to grow over
time. There are substantial gaps between the powerful and the weak.
13. 15. Hofstede’s Research on National Culture Uncertainty avoidance refers to the extent
to which people can tolerate risk and uncertainty in their lives. People in societies with
high uncertainty avoidance create institutions that minimize risk and ensure financial
security.
14. 16. Hofstede’s Research on National Culture Masculinity versus femininity refers to a
society’s orientation, based on traditional male and female values. Masculine cultures
tend to value competitiveness, assertiveness, ambition, and the accumulation of wealth.
They are characterized by men and women who are assertive, focused on career and
earning money, and may care little for others.
15. 17. Hofstede’s Research on National Culture long-term versus short-term orientation .
This dimension denotes the degree to which people and organizations defer gratification
to achieve long-term success. That is, firms and people in cultures with a long-term
orientation tend to take the long view to planning and living. They focus on years and
decades.
16. 18. High-Context Cultures • Infer information from message context, rather than from
content. • Prefer indirectness, politeness & ambiguity. • Convey little information explicitly.
• Rely heavily on nonverbal signs. • Asian • Latin American • Middle Eastern
17. 19. Low-Context Cultures • Rely more on content rather than on context. • Explicitly spell
out information. • Value directness. • See indirectness as manipulative. • Value written
word more than oral statements. • European • Scandinavian • North American
18. 20. Some Cultural Scenarios Japan China India Mexico
19. 21. JAPAN To help her American Company establish a presence in Japan, Mrs. Torres
wants to hire a local interpreter who can advise her on business customs. Ms. Tomari
has superb qualifications on paper, but when Mrs. Torres tries to probe about her
experience, Ms. Tomari just says, “I will do my best. I will try very hard.” She never gives
details about any of the previous positions she has held. Mrs. Torres begins to wonder if
Ms. Tamari's résumé is inflated.
20. 22. CHINA Stan Williams wants to negotiate a joint venture between his American firm
and a Beijing-based company. He asks Tung-Sen Lee if the Chinese people have
enough discretionary income to afford his product. Mr. Lee is silent for a time, and then
says, “Your product is good. People in the West must like it.” Stan smiles, pleased that
Mr. Lee recognizes the quality of his product, and he leaves a contract for Mr. Lee to
sign. Weeks later, Stan still hasn’t heard anything. If China is going to be so inefficient,
he wonders if his company should try to do business there.
21. 23. INDIA Gloria Johnson is proud of her participatory management style. Assigned in
Bombay on behalf of her U.S.-based company, she is careful not to give orders but to
ask for suggestions. But the employees rarely suggest anything. Even a formal
suggestion system she established does not work. Worse still, she doesn’t sense the
respect and camaraderie that she felt at the plant she managed in Texas. Perhaps the
people in India just are not ready for a woman boss.
22. 24. MEXICO Alan Caldwell is a U.S. sales representative in Mexico City. He makes
appointments with Senõr Lopez and is careful to be on time, but his host is frequently
late. To save time, Alan tries to get right to business, his host wants to talk about
sightseeing and about Alan’s family. Even worse, the meetings are interrupted constantly
with phone calls, long conversations with other people, and even customers’ children
who come into the office. Alan’s first report to his home office is very negative. He hasn’t
yet made a sale. Perhaps Mexico just isn’t the right place to do business.
23. 25. Religion • The cost of ignoring certain religious aspects could be very high,
sometimes fatal, in international business. • When Mac Donalds was planning to enter
India, one political party stated that it would oppose the marketing of beef products in the
country by MNC.
24. 26. Language • Differences in the language are a very important problem area in
business., • Non verbal communications create equally difficult problems.
25. 27. Etiquette • The ways of meeting and greeting people, expression of appreciation or
disapproval, methods of showing respect etc vary quite widely between cultures. •
Handshake.
 26. 28. In Japan, bowing is the norm in both business and personal settings. Here, Japanese
Foreign Minister Yoriko Kawaguchi and a U.S. Trade representative (left) bow to each
other before a 2004 meeting
27. 29. • There are even differences in one country and some may consider certain regions
more hospitable and polite; it is often just a matter of understanding their traditions.
28. 30. For example, friends can give three kisses in certain countries if they meet each
other; others will give one, two and there are even consider kissing between friends as
insulted. There is no difference between the hospitality and politeness between these
countries; they have just different etiquettes.
29. 31. • Most everyone knows the traditional Thai Greeting (the Wang). Thai people put both
hands in a prayer position and bow their head a little bit to their hands. They always smile
and only use this “Way greeting” to foreigners or elderly persons. This kind of greeting is
also used in some other countries in Asia, for example India, the Philippines, Myanmar,
China and many others.
30. 32. • Kissing and shaking hands are the most common greeting gestures between
different countries and cultures. Shaking hands is a traditional way of greeting when
American people meet someone for the first time.
31. 33. • American people are friendly people and say “hi” to everyone they meet, even if
they don’t know them. It is more a form of politeness and they expect you return the
same greeting. No return of greeting is considered to be a form of rudeness. It is unusual
to kiss foreigners and even friends. Cheek kissing is acceptable but unusual in Northern
America.
32. 34. Cheek kissing is more common in Europe and Latin America. There are either
differences between the countries in these continents. • For example in France, Spain,
Portugal, Switzerland, Belgium they usually give one on each cheek • there are either
parts of Belgium, France and Switzerland where they gave three or even four kisses. •
Cheek kissing is uncommon in Asia, they greet mostly with a bow or they shake hands.
Shaking hands is also the most common form of greeting in Africa.
33. 35. • People in Turkey are talkative and welcome almost all visitors of their country. They
invite you at home for a drink or to spend some time with the family. People of this
country are proud of their country and want to show all the beauties to every tourist.
34. 36. • Life in Asia is not easy and they treat every tourist with respect. It is a part of their
culture. You may find some countries impolite at first sight because you don’t know the
meaning of their traditions. • For example; Chinese people are noisy when they eat and
they even slurp when they eat noodles.
35. 37. • People of Europe, America and many other countries of the world may consider this
as impolite but according theChinese culture, it is a sign they enjoyed the meal. There is
no reason to consider their behavior as less polite than western culture; it is just different.
36. 38. • It is more a matter of accepting these differences and you will find hospitable and
polite people in every country and culture of the world. Discovering the differences in
traditions between countries and cultures is really a wonderful experience and may help
you to see the positive things in every culture.
https://www.slideshare.net/manumelwin/social-and-cultural-environment-international-business

Social and cultural factors are important to consider while creating and implementing a marketing
strategy of a company. These often-linked but somewhat different factors have diverse effects on
the decisions of consumers and buyers. Sociocultural factors are customs, lifestyles and values
that characterize a society. More specifically, cultural aspects include aesthetics, education,
language, law and politics, religion, social organizations, technology and material culture, values
and attitudes. Social factors include reference groups, family, role and status in the society.
Small-business owners should be aware of and understand these factors' connection with buying
habits.
Education and Language
The average level of education in a society affects the interests and sophistication of consumers.
For example, in a community in which a high percentage of potential customers have some form
of post-secondary education, small-business owners might use more details and explanations
while advertising and promoting products.

The spoken language of the community is a decisive factor on the labeling and advertising of the
products. Consider the foreign language skills in the society while advertising. For example, in
Washington, D.C., different transportation companies use English and Spanish on their
brochures.

Social Organization
As part of the culture, social organization is the way a society organizes itself, how it considers
kinship, status system, social institutions and interest groups. For example, the role of women in
a society, whether they are the decision-makers in shopping, for example, is a decisive factor in
marketing. A major interest group in the area -- such as oil companies in Texas -- can also
influence society. The marketing of a small business can be successful by building its advertising
strategy on women or moms, a specific interest group or a leader that has the biggest influence
in the community.

Reference Group and Family

Because people are social beings, each person has people around him who influence his
decisions in some way. Reference groups comprise people with whom individuals compare
themselves. Family members, relatives, neighbors, friends, co-workers and seniors at workplace
can form reference groups. Well-known and respected idols in society serve as examples in
lifestyle, values and buying habits.

Family is a specific reference group and can play the most important role in influencing the
buying decisions of the individuals. Spouses, children or grandparents have different needs and
necessities. Being aware of and finding the major reference groups, persons or family structures
in a community and building marketing on them can help small businesses achieve success.

Role and Status in Society

A person's role in society and social status affects her buying decisions. Each person plays a
dual role in society depending on the group to which she belongs. An individual working as
president at a reputed firm is also someone’s wife and mother at home. The social status is also
a relevant factor; an individual from an upper-middle class would spend on luxurious goods,
while an individual from a lower income group would buy items required for basic needs.
Knowing the income information of the potential customers gives the small-business owner an
edge, allowing her to have more information about customer habits and implement a successful
marketing strategy.

https://yourbusiness.azcentral.com/sociocultural-factors-affect-marketing-4471.html
https://businesszeal.com/how-does-socio-cultural-environment-impact-business

https://www.marketingtutor.net/how-social-factors-affect-business-environment/