SOCIAL AND CULTURAL FACTORS

AFFECTING BUSINESS IN INDIA

 CONTENTS OF THE PRESENTATION

1. Socio-cultural environment

2. Critical elements of socio-cultural environment in

business
 “All of us are like
millions of
Bubbles, and our culture
is our binding force..”
 NOW, WHAT EXACTLY IS SOCIO-
CULTURAL ENVIRONMENT
Sociocultural Environment
That part of the firm's external marketing environment in
which social or cultural changes (that is, changes to the value
system of a society) act to affect the firm's marketing effort.
The changing sociocultural environment may pose threats or
present opportunities for the business.

Socio
-Cultural

Society Culture
 SOCIETY
o Society or human society is the set of relations among people,
including their social status and roles.
o A society is a body of individuals outlined by the bounds of
functional interdependence, possibly comprising characteristics
such as national or cultural identity, social
solidarity, language or hierarchical organization.
 CULTURE

 “ Culture is the software of the mind- the social programming that

runs the way we think, act and perceive ourselves and others.”
Culture is defined as a complex whole which consists of
customs, attitudes, beliefs and values of a society. The set of
shared attitudes, values, goals, and practices that characterizes
an institution, organization or group.
 Culture is the total way of life of people
 SOME CONCEPTS RELATED TO CULTURE
ELEMENTS
Knowledge and beliefs (Science, myth, metaphysics)
Ideals (Right / Wrong)
Preferences (Attractive/ Unattractive)
CULTURAL HERITAGE
Cultural heritage is the legacy of physical artifacts and intangible
attributes of a group or society that are inherited from past
generations, maintained in the present and bestowed for the benefit of
future generations
CULTURAL ADAPTATION
Culture is learned by each person in the course of his development in
the society.
• CULTURAL CONFORMITY:
It means following the culture blindly, doing what are predessors
have been doing without even knowing the reason for it
For example:
 CRITICAL ELEMENTS OF SOCIO-
CULTURAL ENVIRONMENT OF BUSINESS

Social Institutions & • Caste System, Joint Family System, Patriarchal

Systems Family, Marriage, Religion

Social Values & • Customs & Superstitions, Traditions, Conventions,

Movers Manners, Attitudes

• Attitude towards Education, Business Morality &

Education & Culture Organisational Culture

• Business Ethics, Social Welfare

Social Responsibility

• Urbanisation, Education, Cross Cultural Issues,

Others Language, Cultural Shock
 SOCIAL INSTITUTIONS AND SYSTEMS

CASTES AND COMMUNITIES

As we all know, Indian society, particularly the Hindu society, was
divided into four categories on the basis of caste.
Economic pressures, spread of education, and other developments
have been breaking down slowly class distinctions and social
barriers.Industrialization has created new social and political
functions and new occupations.
Vaishyas, Brahmins, and other ‘castes’ are no longer confined to
their original roles.
 FAMILY SYSTEM
Earlier, Joint Family System was prevalent.
Now, Nuclear family is being preferred.
The joint family is being split into smaller units of nuclear
family.
Now, the impacts for Marketers:
Increasing demand for Flats, Vehicles, Consumer Goods.
Increasing demand for catering services (packed lunches), baby sitters,
creches.
 RELIGION AND RELIGIOUS GROUPS
Religious beliefs, convictions, customs, rituals and festivals differ
from one group to another.
Business firms can suffer heavy losses by ignoring religious
sentiments of customers, employees and others.
Religious groups exert considerable influence on activities of
business groups.
Thus, business must recognize and respect religious sentiments.
Example, negative demand for beef products in India.
MARRIAGE
Marriage is one of the basic elements of culture and people’s
attitude towards marriage influences culture a lot.
Marriage is a social event that concerns the whole society.
In India, marriages are a family affair. The marriage season is a
big opportunity for business.
For e.g. Jewellery, Kitchen ware, Honeymoon Package,
Household Furniture, Vehicles etc have huge demand during
the marriage season.
 SOAIL VALUES AND MOVERS
CUSTOMS & SUPERSTITIONS
Many important business decisions in India are taken on the advise
of astrologers. (Location of business, time of launch, name of
enterprise, brand name etc.)
Example, Business firms do brisk business on festivals such as
Deepavali, Christmas, Id, Guru Purab etc.
No purchase of Iron & Steel goods by people on Saturday as it is
considered inauspicious.
 SUPERSTITIONS
Barber Shops & Chicken Shops don’t open on Tuesday due to
religious reasons. (Lord Hanuman’s Day)
In most countries Sunday is a weekly holiday, but in Islamic
countries Friday is treated as a weekly holiday.
Even acceptable colors depend on the culture sometimes.
SINGH IS KINNG
The extra “N” in the word King in the title of movie
“Singh is Kinng” was due to astrological &
numerological reasons.

BALAJI TELEFILMS
Balaji Telefilms names all its serials starting with the letter ‘K’.
For e.g. Kyunki Saas Bhi Kabhi Bahu Thi, Kasauti Zindagi Kay etc both
which were superhit serials and a common topic of discussion among
the households.
 ATTITUDES
Attitudes include things such as individual freedom, democracy, truth
and honesty, justice love and marriage to name a few.
Attitude towards work is important as it determines motivation,
morale, job satisfaction, productivity etc.
All sorts of attitudes exist, but the positive aspect of Indian attitude is
that generally, no worker or employee touches his/her tools of work,
without closing his/her eyes for a few minutes and thanking the
almighty for having bestowed his blessings in the form of work.
Sincerity, hard work, loyalty and honesty are other aspects of the
Indian work culture.
 ETHICS
o Ethics in business deals with the ethical path business firms ought to
adopt.
o Jacques Cory, a noted business ethicist observes, “companies should
behave ethically and be profitable in parallel, and even if ethics
diminishes the profitability of the company, they should still behave
ethically”.
o Google Halts Censorship on Chinese Search
o Google announces a “new approach to China,” indicating that China’s
behavior toward human rights activists and other efforts “to further limit
free speech on the web in China” had led Google to stop censoring its
search services on the Google.cn site and instead redirect traffic to its
Hong Kong-based servers.
 EDUCATION AND
ORGANISATIONAL CULTURE
EDUCATION
A person is said to be literate if he/ she is 15 years and above and
can read and write

Approximately 35% of illiterate world population is of India

In 2007, adult literacy rate is 66% from 12% in 1947

In 2009 Literacy rate for men was 76.9% for men and 54.5% for
women
Kerala is the most literate state in India, with 90.86% literacy and
Bihar is the least literate state with 47% literacy.
To promote Education Govt. launched Sarva Shiksha Abhiyan to
provide free and compulsory education for age group 6–14 years,
Mid Day Meal scheme etc.
EDUCATION
Countries rich in educational facilities vastly attract high wage
industries.
By investing in education, a country can attract “Brain-Power”
Industries.
Market Potential of a country depends on education.
The level of literacy determines the nature of advertising,
packaging, quality of marketing research and distribution system.
Barack Obama has said in a recent address to the US Senate that,
“India is playing for the number one position. If they keep
producing more engineers, doctors and scientists than us, we will
not be number one for long.”
 WORK FORCE DIVERSITY
When people from different cultures converge in a workplace,
Management will be required to manage diversity.
Workforce diversity has important implications for Management
practices.
Managers will be required to shift their philosophy from treating
everyone alike to recognising differences and responding to those
differences in manners that will ensure employee retention and
productivity.
SOCIAL RESPONSIBILITY
INTRODUCTION

CSR is about how

companies manage the
business processes to
produce an overall
positive impact on society..

The continuing commitment by

business to behave ethically and
contribute to economic development
while improving the quality of life
of the workforce and their families
as well as that of the local
community and society at large.
DEFINITION

World Business Council

for Sustainable
Development:

“Corporate Social Responsibility is the

continuing commitment by business to
behave ethically and contribute to
economic development while improving
the quality of life of the workforce and
their families as well as of the local
community and society at large”.
WHICH AREAS ARE COVERED BY CSR?

Responsibility towards Shareholders.

Responsibility Towards Employee

Responsibility Towards Consumer.

Responsibility Towards Community

Human Rights
CSR IN INDIA
Nearly all leading corporates in India are involved in corporate social
responsibility (CSR) programmes .

The leading areas that corporations are working on are education, health,
environment, livelihood promotion and women's empowerment. .

Microfinance, slum improvement and agricultural development issues are also

gaining prominence as CSR activities.

Over 90% of all major organizations surveyed were involved in CSR initiatives.

The private sector is more involved in CSR activities than the public/
government sector.
Indian Companies implementing CSR
FACTS ON SOCIAL SECTOR DEVELOPMENT
Fiscal 2009-10 saw the strengthening of several public initiatives and programmes with
a view to cushioning the impact of the global slowdown on the more vulnerable
segments of the population in the country.

While some of these programmes were a part of the ongoing interventions to give
effect to a more inclusive development strategy.

Thus emphasis in favour of higher allocation to social-sector development given in

recent years continued to be reflected in the allocations under the Union Budget
2009-10.

 The share of Central Government expenditure on social services including rural

development in total expenditure (Plan and non-Plan) increased to 19.46 per cent in
2009-10 from about 10.46 per cent in 2003-04
 OTHERS

LANGUAGE
 India is multi linguistic. (18 officially recognized languages and the census of India
identifies 1652 more.)
 Marketing plans become costlier and more complex due to this huge diversity. The
advertising campaigns have to been launched in National as well as local languages.
 Pepsi’s ‘come alive’ slogan was considered offensive in some places as to the locals
it meant ‘come out of the grave’.
 Parker Pen Company faced similar problems as in some countries ‘Ball Pen’ meant
‘lie’, ‘Obscenity’, ‘fabrication’, ‘revolution’ etc.
 Reebok had to discontinue its ‘INCUBUS’ brand as in medieval folklore, Incubus
was a devil who terrorized women.
 Ford Motor’s truck named Fiera meant “Ugly old women” in Spanish.
 Segmentation can be done on the basis of linguistic groups.
CULTURAL SHOCK
• A move from one country to another may create certain amount of
confusion, disorientation and emotional upheaval.
• This is called Cultural Shock.
• Organizations, particularly MNCs must be prepared to cope with
the cultural shock.
 
Kirana Ki Dukan to Swanky Malls
Earlier people used to go to Neighborhood Kirana Shops,
but now due to changing culture of working people, these
shops have given way to Swanky Malls like Big Bazaar,
Pantaloons etc.
The people have become more brand conscious. Nowadays,
people prefer more branded products over the local
products even if they are more expensive.
KFC’S FAILURE IN INDIA

Reasons for Failure:

• KFC was banned in India in 1997 due to launching of Beef’s
products in India.
• Beef products in India are totally unacceptable by the people of
India as Cow is a Holy Animal in Hindu Culture and it is
worshipped.
• So, it hurt the religious sentiments of all the Hindu people in India
and was subsequently banned by the Government.
KELLOGG’S FAILURE IN INDIA
Reasons for Failure:
• The fact that the taste of its products did not suit Indian breakfast habits.
• The second mistake it made in the Indian market was its positioning front. Its
advertisements and promotions focused initially on the health aspects of the
product which was a fundamental departure from the successful ‘fun and taste’
positioning adopted in the United States.
• High prices: At an average cost of Rs.21 per 100gm,Kellogg products were clearly
priced way above the product of its main competitor , Mohun Cornflakes (Rs16.50
for 100gm).Another small-time brand, Champion was selling at prices almost half
that of Kellogg’s. This gave Kellogg a premium image and unattainable for the
average Indian consumer.
 CONCLUSION
o Socio- Cultural factors influence business and managerial decision
making to a large extent.

o An organization which ignores these factors is moving towards its

own doom.

o One cannot expect loyal customers until one conforms to their

social and cultural norms.
THANK U