Socio Cultural Environment impact on business

Socio Cultural Environment

The socio cultural environment includes the social and cultural factors that influence people and societies. It has mixed aspects, such as beliefs,  traditions, values, customs, and social norms in a specific community or group.

The cultural and social influences of international marketing are immense. Differences in religion, social conditions, and material culture all affect consumers’ patterns of buying behaviour and their perceptions. This area determines the degree of similarity or dissimilarity among consumers worldwide.  Consequently, it also determines the potential for standardization and global branding. This category encompasses a broad range of factors which if misunderstood or unanticipated – significantly undermine a business’s marketing efforts.

These include:

    1. Literacy rates,
    2. General education levels,
    3. Language,
    4. Religion,
    5. Ethics
    6. Social values, and
    7. Social organisation.

Understanding Socio Cultural Environment

A failure to understand the social/cultural dimensions of a market is complex to manage, as McDonald’s found in India. It has to deal with a 40 per cent vegetarian market, an aversion to either beef or pork among meat-eaters, and hostility to frozen fish and meat, but with the general Indian fondness for spice with everything. To satisfy such tastes and preferences of its customers, McDonald’s realized it had to go beyond simply offering the perfect burger. Customers who opt for vegetarian burgers desire confirmation that the preparation occurs in a dedicated kitchen space with distinct utensils and sauces. Therefore, the purpose of developing McMasala and Mcimli was to provide a spicier option for Indian customers. However, the interesting thing is that what they introduced in other markets are now innovations.

When a company operates in an international business environment, as an individual is bound by the society in which people live, it needs to understand the importance of community. Social class is an integral part of the society. In most Western societies,  social classes are generally categorized as upper, middle, and lower. Each class’s perception level and frequency of buying goods differ from country to country.

In countries like India, consumer perception and trends have been changing due to liberalisation and lifestyle changes. Another important aspect of every society is the group. The performance of groups differs in individualistic and collectivist cultures. The family is an integral part of the social environment.

Socio cultural environment examples are Language and Communication, Social Norms and Values, Religion and Belief Systems, Education and Literacy Levels, Cultural Celebrations and Festivals, Social Institutions, Cultural Diversity and Multiculturalism, and Media and Technology.

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Importance of socio cultural environment

The socio cultural environment is an important component of the international business environment and one of the most challenging aspects to understand. This is because the social and cultural environment is essentially unseen; it has been described as a shared, commonly held body of general beliefs and values that determine what is right for one group. National culture is described as the body of general values and beliefs that are shared by a country. Factors like history, religion, language, government, geographic location, and education shape values and beliefs, and firms initiate a cultural analysis by comprehending these elements.

Before entering a foreign market, marketers should study all aspects of that nation’s culture, including language, education, religious attitudes, and social values. The French love to debate and are comfortable maintaining consistent eye contact. In China, humility is a prized virtue, colours have special significance, and it is insulting to be late. Swedish culture places a high value on consensus and generally avoids the use of humour in negotiations. The “etiquette tips for marketing professionals” feature offers some examples that will help you deal with cultural differences that emerge during business interactions with foreign guests.

Aspects of Society and Culture

The basic aspects of society and culture can be understood in the following points:

1) Prescriptive

It prescribes the types of behaviour considered acceptable within society. The prescriptive nature of culture simplifies the decision making process of consumers by narrowing down the available product choices that match their social values and norms.

2) Socially Shared

Culture, by necessity, must be based on social interaction and creation. It cannot exist by itself. Members of society must share it, thereby reinforcing the prescriptive nature of culture.

3) Facilitates Communication

One helpful function provided by culture is facilitating communication. Culture usually imposes everyday habits of thought and feeling among people. Thus, a given group culture makes it easier for people to communicate with one another. However, it is important to note that a lack of shared cultural values can also become an effective barrier to communication between groups.

Read More: Types of Merger

4) Learned Phenomenon

Culture is not a result of genetic inheritance; rather, it demands learning and acquisition. Socialisation or enculturation occurs when a person absorbs or learns the culture in which he or she is raised. In contrast, if a person learns the culture of a society other than the one in which he was raised, the process of acculturation occurs.

5) Subjective

People in different cultures often have other ideas about the same object. It is important to recognize that acceptability varies across cultures. What is acceptable in one culture may not necessarily be so in another cultural norms and values as they vary across different societies. In this regard, culture is both arbitrary and unique. As a result, the interpretation of the same phenomenon seen in different cultures can be very different.

6) Enduring

Culture endures through generations due to its sharing and passage from one generation to another. This continuity ensures that culture remains relatively stable and somewhat permanent. Old habits are hard to break, and people tend to maintain their heritage despite a continuously changing world. This explains why China and India, despite severe overpopulation have a great deal of difficulty with birth control.

7) Cumulative

Culture is based on hundreds or, in some cases, even thousands of years of accumulated circumstances. Each generation adds something to the culture before passing the heritage on to the next generation. Therefore, culture expands its scope over time by incorporating new ideas and integrating them into its fabric.

8) Dynamic

Culture is transmitted from generation to generation; however, one should not assume that culture is static and immune to change. Contrary to popular belief culture is not a static entity. Rather, it is a dynamic force constantly evolving – it is adapting itself to new conditions and new sources of knowledge.


1. What is the role of socio cultural environment in business?

Socio cultural environment in business plays an important role in shaping societal norms, values, attitudes, behaviours, and consumer preferences. 

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