Socio-cultural environment in INternational Business
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International business involves the exchange of goods, services, and resources across national borders, requiring an understanding of the socio-cultural environment to tailor strategies effectively. Cultural factors, such as customs and values, significantly influence market acceptance, necessitating adaptations like product modifications and branding changes for different regions. Additionally, businesses must also consider social responsibilities as societal expectations for accountability grow, impacting marketing strategies and societal engagement.
Socio-cultural environment in INternational Business
- 1. Presented to Dr. N. Sree Rajani madam
- 3. What is International Business? The exchange of Goods and Services, Resources, Knowledge, Skills, among individuals & businesses in two or more countries. Transaction that are carried out across national borders to satisfy the objectives of individuals and organizations.
- 4. What is Environment in Business? The process by which strategists monitor the economic, governmental/legal, market/competitive, supplier/technologic al, geographic and social settings to determine opportunities and threats to their firms.
- 5. What is Socio-Cultural Environment in International Business? A set of beliefs, customs, practices and behaviour that exists within a population. International companies often include an examination of the socio-cultural environment prior to entering their target markets.
- 6. Basically, socio-cultural factors are customs, lifestyles and values that characterize a society. Cultural aspects include aesthetics, education, language, law and politics, religion, social organizations, technology and material culture, values and attitudes. Social factors include reference groups, family, role and status in the society.
- 7. The cost of ignoring the customs, traditions, taboos, tastes and preferences etc. of people could be very high. The buying and consumptions habits of the people, their language, beliefs and values, customs and traditions, tastes and preferences, education are all factors that affect the business. For a business to be successful, its strategy should be the one that is appropriate in the socio-cultural environment.
- 8. Examples: In Thailand, Helene Curtis switched to black shampoo because Thai women felt that it made theor hair look glossier. Nestle, a Swiss multinational company, today brewa more than forty varieties of instant coffee to satisfy different national tastes
- 9. Even when people of different cultures use the same basic product, the mode of consumption, conditions of use, purpose of use or the perceptions of the product attributes may vary so much so that the product attributes method of presentation, positioning or method of promoting the product may have to be varied to suit the characteristics of different markets.
- 10. Examples: The two most important foreign markets for Indian shrimp are the U.S and Japan. The product attributes for the success of the product in these two markets differ. In the U.S market, correct weight and bacteriological factors are more important rather than eye appeal, colour, uniformity of size and arrangement of shrimp which are very important in Japan.
- 11. Similarly, the mode of consumption of Tuna, another seafood export from India, differs between the U.S and European countries. Tuna fish sandwiches, an American favourite which accounts for about 80% of American Tuna consumption, have little appeal in high tuna consumption, whereas Europeans eat it right from the can. A very interesting example is that of the Vicks Vaporub, the popular pain balm, which is used as a mosquito repellent in some of the tropical areas.
- 12. The differences in languages sometimes pose a serious problem, even necessitating a change in the brand name.
- 13. Examples: Preett was perhaps, a good brand name in India, but it did not suit in the overseas market, and hence it was appropriate to adopt ‘Prestige’ for the overseas markets. Chevrolet’s brand name ‘Nova’ in Spanish means “it doesn’t go”.
- 14. In Japanese, General Motors- :Body By Fisher” translates as corpse by Fisher”. Again in Japanese, 3M’s slogan : “sticks like crazy” translates as “sticks foolishly”. In some languages, Pepsi-Cola’s slogan “comes alive” translates as “comes out of grave”.
- 15. The values and beliefs associated with colour vary significantly between different cultures.
- 16. Examples: Blue, considered feminine and warm in Holland, is regarded as masculine and cold in Sweden. Green is a favourite colour in the Muslim world; but in Malaysia, it is associated with illness. White indicates death and mourning I China and Korea; but in some countries, it expresses happiness and is the colour of the wedding dress of the bride. Red is a popular colour in the communist countries; but many African countries have a national distaste for red colour
- 17. There are also a number of demographic factors, such as the age, and sex composition of population, family size, habitant, religion, etc., which influence the business. While dealing with the social environment, we must aslo consider the social environment of the business which encompasses its social responsibility and the alertness or vigilance of the consumers and of society at large.
- 18. Barker said that- Today, business is being asked to take responsibility for the quality of life in our society. The expectations that business- in addition to its traditional accountability for economic performance and results- will concern itself with the health of the society, that it will come up with the cures and ills that currently beset us and indeed will find ways of anticipating and preventing future problems in these areas.
- 19. Stem Points out that- “more educated the society becomes, the more interdependent it becomes, and the more discretionary the use of its resources, the more marketing will become enmeshed in social issues
- 20. Conclusion: Marketing personnel are at interface between company and society. In this position, they have the responsibility not merely for designing a competitive marketing strategy, but for sensitizing business to the social, as well as the product demand of the society’.