SOCIAL ENVIRONMENT Flashcards
1.1 – The role of social factors for the businesses?
1▪ Businesses operate in and for society so values and culture of a business should be a** direct
reflection of society in which it operates.
2▪ Business manager should be well versed with that external social environment.
3▪ Business need to respond to changes in society, including demographic changes. If they do not, **
they will continue to offer products and services that are less relevant to customer needs.
4▪ Examples of some social, cultural and demographic factors are:
1- Outing and dining out habits of a particular area or particular region.
2- Social media addiction.
3- Domestic and international travelling, especially in vacations.
4- People interested and concerned with their looks when attending social gatherings.
5- People concerned about health and weigh
1.2 – how many social factors affecting businesses?
1.2 – Six social factors affecting businesses
1 Attitudes and
lifestyles
2 Social values
3 Demography
a Age groups
b Gender
c Ethinicity
4 Wealth distribution
5 Education level
6 Law and order situation
1.2.1 – Attitudes and lifestyles?
1.2.1 – Attitudes and lifestyles
▪ Consumer lifestyles and attitudes are continually changing due to:
1- education,
2- globalization,
3- urbanization,
4- social media,
5- advancements in technology and
6- advertisements.
▪ These factors rapidly impact the
1- dressing,
2- house décor and
3- food preferences.
▪ Businesses must understand the dynamics of different cultures.
▪ For example
- More focus on family values and joint family units in Pakistan than in the Europe
- A tea manufacturer would do better in Pakistan rather than US (who are coffee lovers)
1.2.2 – Social values?
1.2.2 – Social values
▪ Social values include the common behaviors of a society that expressly or implicitly determine the
boundaries of what is:
1- permissible
2- prohibited,
3- acceptable and
4- undesirable.
▪ For a business, it is important to be aligned with social values of the society.
▪ Therefore, the
1- policies,
2- products,
3- marketing pitch,
4- stakeholder relationship of a business must be in line with the norms of the society.
▪ **For example, insurance companies may offer a higher education and marriage plans to parents in
a society where they are the decision makers and financial supporter of their children.
1.2.3 – Demography?
1.2.3 – Demography
1▪ It is study of key statistics about the segments of a society, such as:
1- age,
2- gender,
3- race, ethnicity and location.
2▪ It helps the businesses define the markets for their products and services.
3▪ It also determines the size and composition of the workforce.
1.2.3 – Demography
(i) Age groups?
(i) Age groups
1▪** People born after 1980** are over 60% of world population and are much important element in marketing strategy of business.
2▪ They** have seen tremendous changes in the world** as compared to the earlier generation.
3▪** Because of such exposure** they challenge conventional working styles and prefer innovation.
4▪ **They are used to smart phone and internet **and they acquire instant online information for personal decision making.
5▪ **Another thing to consider is the varying nature **of needs and preferences of different age groups
1.2.3 – Demography
(ii) Gender?
(ii) Gender
1▪ Company’s decisions are significantly impacted by the gender it plans to attract.
**2▪ Such gender-based decisions are related to:**
1- product development,
2- marketing strategies,
3- hiring policies and
4- selection of business locations
- For example:
➢ marketing of baby products and households should be directed to women exclusively.
3▪ Companies should also have proper evidence-based social analysis of their market about:
1- the **influence on domestic **decision making
2-** gender-wise loyalty pattern **that can be very different
3- gender-wise spending patterns
1.2.3 – Demography
(iii) Ethnicity?
(iii) Ethnicity
**1▪ **Ethnicity is the segmentation or identification of people based on their cultural distinctiveness.
**2▪ **This is generally expressed in:
1- language,
2- values,
3- religion,
4- ritual,
5- origin and ancestry.
**3▪ **Companies should recognize the way different ethnic groups behave or react.
4▪ Companies should also be mindful of the ethnic sensitivity.
- For example, in Pakistan, an advertisement of hotel room showing a wine bottle is not
acceptable
5▪ Companies should use attributes of different ethnic groups to introduce new products.
- For example, neckless with hanging cross would have good marketability in Christian
community where the neckless with name of Allah (SWT) has good sale in the Muslim
community.
1.2.4 – Wealth distribution?
1.2.4 – Wealth distribution
1▪ Businesses have to define their target markets around different income groups.
- For example,
➢ luxury watch company would not advertise in classified ad sections of the newspaper.
➢ Supermarket targets middle to lower income segments by claiming lower prices
2▪** Production plans of companies** are made on basis of affordability of the relevant market.
1.2.5 – Education level?
**1.2.5 – Education level
1▪** Quality & quantity of educated population** in a society directly impacts the strategy of organisation
2▪ Good supply of educated and skilled work force helps companies to acquire good talent.
3▪ Companies also adapt their advertising and communication **according to the literacy level.
4▪** It is study of key statistics** about the segments of a society, such as:
1.2.6 – Law and order situation?
1.2.6 – Law and order situation
1▪ Law and order situation in either a** specific vicinity, city or entire country affects the business. **
2▪ Following are s**ome negative effects **of an unfavorable law and order situation;
1- Loss of staff and customers.
2- Insurance/security costs become expensive.
3- Loss of profits due to stolen goods from businesses.
4- Businesses spend money on installing effective security measures e.g. alarms.
3- Foreign investment is discouraged and tourism is reduced.
