Social and Cultural Environment

The social factors that affect a firm include the values, attitudes beliefs, opinions and
lifestyles of person’s in the firm’s external environment as developed from
demographic cultural, religious, educational and ethnic conditioning. Like other
forces in the external environment social factors change continually . As social
attitudes, beliefs and values change, so does the demand for various types of
dresses, books, leisure activities etc. Let’s examine these factors in greater detail.

Demographic Factors:

Demographic characteristics such as population, age, distribution, religious

composition, literacy levels, inter state migration, rural urban mobility, income
distribution, etc. influence a firm’s strategic plans significantly . The entry of women
into the labor market has, in recent times affected the hiring and compensation
policies of their employers. This has also expanded the market for a wide range of
products and services necessitated by their absence from their homes (such as
convenience foods, microwave ovens, day care centers etc). The shifts in age
distribution caused by improved birth control methods have literally compelled
producers to go after youth oriented goods (beauty products , hair, and skin care
preparations fitness equipment etc). The growing number of senior citizens has
made many a government to pay more attention to tax exemptions, social security
benefits etc. Another important concern is the desire for a better quality of work life.
Employees expect more from organizations than simply a pay cheque. They want
cleaner air and water as well as more leisure time to enjoy life more fully.

Labor mobility across different occupations and regions in recent times has cut down
wage differentials greatly. If labor is heterogeneous as is the case in India, managing
people becomes a tough and demanding task. The Explosive population growth
during the last decade has serious implications for the Indian government which is
wanting to go after sophisticated technologies and discarding the traditional.

Cultural factors:

Social attitudes values, customs, beliefs, rituals and practices also influence
business practices in a major way. Christmas offers great financial
opportunities for card companies, toy retailers, tree growers, mail order
catalogue firms and other related businesses. Social values refer to abstract
thinking about what is good, right and desirable. Beliefs on the other hand
reflect the characteristics of physical and social phenomena. We may believe
for example that a high fat diet causes cancer or that chocolate causes acne.
Beliefs are important (whether right or wrong) in that they affect how we may
behave and what we buy. For example, McDonald’s does not serve the beef
burgers in India because Indians consider the cow as a sacred animal (Hindu
traditions prohibit the consumption of beef in any form). Values and beliefs
vary from culture to culture and before going ahead in a big way, companies
must study the socio-cultural environment of a country thoroughly to avoid
costly mistakes. To market soup in Japan the manager / marketer must realize
that soup is regarded as a breakfast drink in Japan rather than as a dish
served with lunch or dinner. The loyalty shown by Japanese workers towards
their employees to take another example is far greater than that shown by
Indian workers for their employers The distinction obviously can be traced
back to their respective socio-cultural.

Most Indians still believe in work, in getting married, in offering prayers to God
daily, in giving to charity and in being honest .These core values are passed
on from parents to children and are reinforced by major social institutions such
as schools, temples, churches, government etc. Increasing pressure from
social activists has forced the government to ban cow slaughter in India. Rural
women likewise joined hands in getting certain evil habits (drinking, gutka,
drugs) rooted out of villages and educational institutions. Marketers should
respect the core values of a society and respond in an appropriate manner.

Social Institutions
A social institution is a complex, integrated set of social norms organized around the
preservation of a basic societal value. Obviously, the sociologist does not define
institutions in the same way as does the person on the street. Lay persons are likely
to use the term "institution" very loosely, for churches, hospitals, jails, and many
other things as institutions.
Primary Instituitions
Sociologists often reserve the term "institution" to describe normative systems that
operate in five basic areas of life, which may be designated as the primary
institutions. 

(1) In determining Kinship; 

(2) in providing for the legitimate use of power; 

(3) in regulating the distribution of goods and services; 

(4) in transmitting knowledge from one generation to the next; and 

(5) in regulating our relation to the supernatural.

 In shorthand form, or as concepts, these five basic institutions are called the family,
government, economy, education and religion.