social environment & its effect on business

8/8/2019 Social Environment & Its Effect on Business

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SOCIAL ENVIRONMENT&

ITS EFFECT ON BUSINESS

Presented By:

Amit Kumar Sharma 8003Abhishek Sinha 8002

Prashant Bayeti 8035

Economic, Environment & Policy



SOCIETY

´ D erived from the latin word ´Societasµ meaning ´friendly association with othersµ

´ An extended social group with a distinctiveculture and economic organization

´ The entirety of a community, the whole web of living relationships among people, their culture,and their environment



SOCIAL CLASS

´ A group of people that have similar social and economicstatus

´ Classification of People:

« Status Situation: On the basis of social Status andadvantages that accrued from particular social grouping

« Power situation: On basis of a person·s or group·sdifferential access to any legitimate use of force

« Class situation: A person·s material or economic advantagein any market situation whether as a consumer, employee or

landlord



CONTD«

´ D ifferent classes in Western countries:

« Upper class consisting of very wealthy/powerful people

« Middle class consisting of extremely well paid professionals

« Lower class consisting of people paid normal wages

´ Problems arises sometimes because of hostile feelingsof lower class people towards upper class e.g. Italy,Australia, Spain



EXAMPLES

´ Companies should target their consumer veryspecifically e.g. Mc D onalds in Britain

´ Companies should capture the opportunitiesarising because of increasing affluence e.g.

TGIF in Britain

´ Middle class behaves differently in different

countries e.g. US & India in switching vehicles



CHARACTERISTICS OF SOCIAL CLASS

´ H ierarchical: consumers purchase productbased on class.

´ Shared Values i.e. consumption pattern e.g. FastFood restaurants are associated with young and

fashionable consumers.



G ROUP

´ A group id formed when two or more people interact toaccomplish either individual or mutual goals

´

Classification:« Primary & Secondary Groups: on basis of interaction

and perceived importance

«

Formal & Informal Groups: based on extent to whichthe roles and levels are clearly defined

« Membership & Symbolic Groups: based onmembership status



FAMILY

´ Two or more persons related by blood, marriageor adoption who reside together.

´ Types of family:« Nuclear family: A family group consisting of most

commonly, a father and mother and their children

« Extended family:² It is used synonymously with joint family.² It provides greater security and belongingness



FUNCTIONS OF FAMILY

´ Economic well being: Nowadays as bothhusband and wife works, thus business havefound opportunities like fast food, dry cleaning,and day care centers for children

´ Providing Emotional Support: Nowadaysbecause of emergence of nuclear families,support from different family members is rare.This has given rise to psychological centers,greeting cards and e-cards these days.



CONTD«

´ Socialization of family members: With changing lifestyles it is not possible for people to spendmuch time with their family members. Thusalternative sources such as internet has got theopportunity to come into big picture.



CONTD«

´ Parenthood: When children are their in family,they influence the buying decision of family

´ Post parenthood: H ere the need for recreationalclubs and other forms of entertainmentincreases

´ D issolution: The individual now looks forsomeone to take care and look after him/herwell



W HAT COMPANIES SHOULD DO?

´ D esigning jobs as per changing society: It is done toensure less attrition rate, motivated employees, increaseworkers interest by putting him into varying jobs

´ Improving health and society: A physically unfit employeeremain absent and is less productive. Thus manyorganizations run wellness ad fitness programs, provideincentive to quit smoking and drinking

´ Family friendship practices: Employers provide flexiblescheduling, allowing workers to telecommute and providedaycare facility for young children of employees



DEMO G RAPHIC ISSUES

´ It helps a marketer locate target markets ininternational market

´ It helps a marketer in formulating marketing strategies in other countries

´ D emographic factors:« Age

« Sex« Marital status« Income« Education level



EXAMPLES

« In US the population of aged is growing because of baby bust period from 1945-1965

« Immigration is leading to increase the number of Asians in US

« In India population of young is growing



G LOBAL ENVIRONMENT POLICY

´ Issues Concerning Environment

« Companies at times ignores the effect of theirproduct on environment

« Greater pressure on natural resources



MANA G IN G THE ENVIRONMENT

´ Preserving the natural environment

´ Proper disposal of industrial waste

´ Use of recycled material

´ A balance between energy conservative goals andpollution controlling goal e.g. EPA was created in 1974in US

´ Environmental laws are different in different countriese.g. Intel Corporation , NEC Corp



CONTD«

´ Environmentalists and socially minded groupsformed the Coalition of EnvironmentallyResponsible Economies ( CERES)

´ CERES developed 10 principles

´ Firms can voluntarily choose to follow theseprinciples.



SUMMARY

´ Firms need to understand the importance of society

´ Level of perception of each class and their frequency of

buying differs

´ Family is important part of social environment,influences consumption and buying behavior

´ The diversity of the workforce needs to be managed

´ Firm should take responsibility towards environment

social environment & its effect on business

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