BUSINESS ENVIRONMENT

Business Environment means a collection of all

individuals, entities and other factors, which
may or may not be under the control of the
organization, but can affect its performance,
profitability, growth and even survival. Every
business organization operates in a distinctive
environment, as it cannot exist in isolation.
Such an environment influence business and
also gets affected by its activities.
 MACRO ENVIRONMENT

The major external and uncontrollable

factors that influence an
organization's decision making, and
affect its performance and strategies.
These factors include the Political
factors, Economic factors, Socio -
Cultural factors, Technological factors
and Legal factors.
 PESTLE
POLITICAL ECONOMIC SOCIAL TECHNOLOGICAL LEGAL

GOVERNMENT GROSS CULTURAL RESEARCH AND CONSUMER

POLICIES DOMESTIC DEVELOPMENT PROTECTION
PRODUCT

TRADE EXCHANGE RATE DEMOGRAP LICENSING EMPLOYMEN

POLICIES POLICIES HICS T LAW

LOBBYING INFLATION RATE EDUCATION PATENTS COMPETITIV

E
REGULATION

GOVERNMENT TAXATION RATE RELIGIOUS ENVIRONME

LEADERSHIP FACTORS NTAL
REGULATION

FOREIGN EXPORT IMPORT ADVERTISIN INDUSTRY

PRESSURE POLICIES G SPECIFIC
SCENARIOS REGULATION
SOCIAL FACTORS
Socio-Cultural Environment and
Its Impact on International
Marketing

Presented by:
Aakanksha Sharan
Swati Tiwari
Shivani Singh
 Topics to be Discussed
What is Culture?
The elements of Culture
Social and culture environment of USA
Brands launched in India by USA company
Social and culture environment of India
Brands launched in USA by Indian company
Difference between Indian and US culture
What is Culture?
Terpstran (1987) has defined culture
as follows:
"The integrated sum total of learned
behavioral traits that are manifest
and shared by members of society."
Culture, therefore, according to this
definition, is not transmitted
genealogically. It is not, also innate,
but learned.
The Elements of Culture
Intangible
Language
Education
Religion
Attitudes and Values
Social Organization
Tangible
Technology and Material Culture
The Elements of Culture
Hofstedes Contribution
Power Distance
Individualism
Masculinity
Uncertainty avoidance
Integration
Moral Discipline
Human Heartedness
 Language

Language reflects the nature and values of

society. There may be many sub-cultural
languages like dialects which may have to be
accounted for. Some countries have two or
three languages.
In Zimbabwe there are three languages -
English, Shona and Ndebele with numerous
dialects.
In Nigeria, some linguistic groups have
engaged in hostile activities. Language can
cause communication problems - especially in
the use of media or written material. It is best
to learn the language or engage someone who
understands it well.
Language
In a low context culture spoken language carries
the emphasis of the communication i.e. what is
said is what is meant. Examples include Australia
and the Netherlands.
In a high context culture verbal communications
tend not to carry a direct message i.e. what is
said may not be what is meant. So with a high
context culture hidden cultural meaning needs to
be considered, as does body language. Examples
of a high context cultures include Japan and some
Arabic nations.
Education
Education refers to the transmission
of skills, ideas and attitudes as well
as training in particular disciplines.
Education can transmit cultural
ideas or be used for change, for
example the local university can
build up an economy's performance.
Education
In the People's Republic of China a nationwide system
of public education is in place, which includes primary
schools, middle schools (lower and upper), and
universities. Nine years of education is compulsory for
all Chinese students.
In Finland school attendance is compulsory between
the ages of 7 and 16, the first nine years of education
(primary and secondary school) are compulsory, and
the pupils go to their local school. The education after
primary school is divided to the vocational and
academic systems, according to the old German model.
In Uganda schooling includes 7 years of primary
education, 6 years of secondary education (divided into
4 years of lower secondary and 2 years of upper
secondary school), and 3 to 5 years of post-secondary
education.
Education
Education levels, or lack of it, affect marketers
in a number of ways:
advertising programmes and labelling
girls and women excluded from formal
education (literacy rates)
conducting market research
complex products with instructions
relations with distributors and,
support sources - finance, advancing agencies
etc.
Material Culture
Material culture refers to tools,
artifacts and technology. Before
marketing in a foreign culture it is
important to assess the material
culture like transportation, power,
communications and so on. Input-
output tables may be useful in
assessing this.
Material Culture
Trevor Baylis launched the clockwork radio upon
the African market. Since batteries were
expensive in Africa and power supplies in rural
areas are non-existent. The clockwork radio
innovation was a huge success.
China's car market grew 25% in 2006 and it has
overtaken Japan to be the second-largest car
market in the world with sales of 8 million
vehicles. With just six car owners per 100 people
(6%), compared with 90% car ownership in the
US and 80% in the UK, the potential for growth in
the Chinese market is immense
 Aesthetics
Aesthetics refer to the ideas in a culture
concerning beauty and good taste as expressed in
the arts -music, art, drama and dancing and the
particular appreciation of colour and form.
African music is different in form to Western music.
Aesthetic differences affect design, colours,
packaging, brand names and media messages.
For example, unless explained, the brand name
FAVCO would mean nothing to Western importers,
in Zimbabwe most people would instantly
recognise FAVCO as the brand of horticultural
produce.
Religion
Religion provides the best insight into a society's
behavior and helps answer the question why people
behave rather than how they behave.
Religion can affect marketing in a number of ways:
religious holidays - Ramadan cannot get access to
consumers as shops are closed.
consumption patterns - fish for Catholics on Friday
economic role of women - Islam
caste systems - difficulty in getting to different costs
for segmentation/niche marketing
joint and extended families - Hinduism and
organizational structures;
institution of the church - Iran and its effect on
advertising, "Western" images
market segments - Maylasia - Malay, Chinese and
Indian cultures making market segmentation
Religion
In China in 2007 (which was the year of the pig)
all advertising which included pictures of pigs was
banned. This was to maintain harmony with the
country's Muslim population of around 2%. The
ban included pictures of sausages that contained
pork, and even advertising that included an
animated (cartoon) pig.
In 2005 France's Catholic Church won a court
injunction to ban a clothing advertisement (by
clothing designers Marithe and Francois Girbaud)
based upon Leonardo da Vinci's Christ's Last
Supper.
Values and Attitudes
Values and attitudes vary between nations, and
even vary within nations. So if you are planning
to take a product or service overseas make sure
that you have a good grasp the locality before
you enter the market.
This could mean altering promotional material or
subtle branding messages. There may also be an
issue when managing local employees.
For example, in France workers tend to take
vacations for the whole of August, whilst in the
United States employees may only take a couple
of week's vacation in an entire year.
Values and Attitudes
In 2004, China banned a Nike television commercial showing
U.S. basketball star LeBron James in a battle with animated
cartoon kung fu masters and two dragons, because it was
argued that the ad insults Chinese national dignity.
In 2006, Tourism Australian launched its ad campaign
entitled "So where the bloody hell are you?" in Britain. The
$130 million (US) campaign was banned by the British
Advertising Standards Authority from the United Kingdom.
The campaign featured all the standard icons of Australia
such as beaches, deserts, and coral reefs, as well as
traditional symbols like the Opera House and the Sydney
Harbour Bridge. The commentary ran:
"We've poured you a beer and we've had the camels
shampooed, we've saved you a spot on the beach. We've
even got the sharks out of the pool,".
Then, from a bikini-clad blonde, come the tag line:
"So where the bloody hell are you?"
Social Organization
What is the role of women in a society?
How is the country governed - centralized
or devolved? The level influence of class
or casts upon a society needs to be
considered. For example, India has an
established caste system - and many
Western countries still have an embedded
class system. So social mobility could be
restricted where caste and class systems
are in place. Whether or not there are
strong trade unions will impact upon
management decisions if you employ local
workers.
Hofstedes Contribution
Power Distance
Individualism
Masculinity
Uncertainty avoidance
Integration
Moral Discipline
Human Heartedness
Social and culture environment of India

India is so diverse, with so many

different ethnic, religious and
linguistic communities, that it is
hardly possible to speak of its
culture and society, better to speak
of its multiplicity of cultures and
societies.
Language and Education
India is a mosaic of linguistic communities
with hundreds of spoken languages and
dialects belonging to four linguistics
families.
Indo-European language, with its
Sanskrit roots, which has shaped Hindi
-the official language mostly spoken in
Northern India, Dravidian languages, such
as Tamil, which predominate in the
southern States, as well as pockets of
Austro-Asiatic and Tibeto-Burman
languages.
Attitudes and Value
There is a hierarchical social
structure, the caste system which,
as a composite social structure, is
unique to India.
It is at the root of the social life that
is in the family, traditionally joint
and patriarchal, a third unique
model of adaptability of India.
Demography of Population
The population of India is so diverse that
it has challenged the capacity of the
Modern State to handle the cohabitation
of the numerous different ethnic, religious
and linguistic communities
India is the second most
populous country in the world, with over
1.18 billion people (estimate for April,
2010), more than a sixth of the world's
population
Contd.
Already containing 17.31% of the world's
population, India is projected to be the world's
most populous country by 2025,
surpassing China, its population exceeding 1.6
billion people by 2050.
India has more than 50% of its population below
the age of 25 and more than 65% hovers below
the age of 35. It is expected that, in 2020, the
average age of an Indian will be 29 years,
compared to 37 for China and 48 for Japan; and,
by 2030, India's dependency ratio should be just
over 0.4
Religion
India is also a religious mosaic, with
Muslims, Christian, Sikhs, and a myriad of
others minorities (Buddhist, Jain, Parse,
Jew, etc.) coexisting with the Hindu
majority (82% of the population).
The Muslim minority which makes up 12.5
% of the national population, therefore
over a 150 millions people, makes India
the third Muslim country in the world
The Christian community is far less
important demographically (2,3%) but
politically significant .
Mc Donalds
Much higher degree of adaptability.
40% vegetarians- Vegetarian selection to
suit Indian tastes.
Maharaja Mac replaced Big Mac, Chicken
Patty.
Respect for local culture- Special Indian
Menu, No beef or pork items in the menu.
McAloo burger, Veg Salad Sandwich,
McMasala
& McImli sauces
Contd.
Common Menu- Chicken Nuggets, Fillet-O-
Fish,fries, sodas, shakes.
Garlic free sauces to get in hard
corevegetarian customers.
Re-formulated own products using spices
favoured by Indians.
Eggless sandwich sauces, Soft serves &
McShakes.
Freshest chicken, fish and vegetable
products Only vegetable oil used as a
cooking medium
Failures of brands
Failure of Kelloggs due to high prices
and not matching the Indian pallet.
KFC was banned in India in 1997, due
to the launching of unacceptable beef
products in India.
Pepsis come alive slogan was
considered offensive in some places
as to the locals it meant come out of
the grave.
Brands to Launched
Stores for Diesel and Paul & Shark
brought to India by Reliance Brands
Departmental store chain Shoppers
Stop plans to launch the Playboy
brand and around six other
international labels in Indian market
Wal mart is coming to India in a
joint venture with Bharti.
Contd
Tesco planning to set up a reatil
outlet in India.
Hugo Boss watches, the MGI Luxury
Asia Pacific Ltd and it has recently
signed a special contract with the
Titan Industries in order to do the
marketing and distribution of the
Hugo Boss watches in India in a
better way.
Contd
International brands such as Arredo Classic, Art
Design Group, B.T.C. International, Bastex,
Bizzarri, Cantori, Desire, Effebiquattro, Elledue
Arredamenti, Flou, Friulintagli Industries,
Gardesa, Girasole, Gold Line, Gori Cucine,
Laboratorio del Marmo, Lumina, Matteograssi,
Mepsystem, Mida, Mobilificio Tre Ci, Nord Light,
Paola Lenti, Pordenone Export, Presotto, Reflex,
Riva Mobili d'Arte, Scavolini, Segis, Sicis, Stellare
Mobili 2, Stival, Tonin Casa , Tonon & C., Uffix,
Vitemper are looking to enter the Indian market
 Social and culture environment of USA

Ethnic Diversity-
America is home to people of every background,
every color, and every origin.
76% are White (also called Caucasian in English),
14% are Hispanic, 12% are Black or African
American, 4% are Asian, 0.8% are Native American
or Alaska Native, and 0.1% are Pacific Islander
Self Reliance
Many Americans are taught to be self-reliant at an
early age.
To understand real world things, many parents
encourage their children to work part-time jobs after
school to learn the value of work and money.
approximately 74 % of Americans 18 years of age
and over live independently of their parents.
 Gender Equality
A large number of women in America hold full time
jobs outside the home.
parenting is seen as the responsibility of both the
mother and father,
In a recent poll, 65% of married men in America say
they split household chores equally with their
spouses, but only 47% of married women polled
agreed!
Religion
Some of the most common religions in America are
Protestant (52%), Catholic (24%), Judaic (1%),
Muslim (1%), and Mormon (2%)
approximately 44% of Americans attend a place of
worship at least once a week.
According to a recent Gallup poll, almost 9 out of 10
Americans said that they believe in God or a higher
power, but only 54% of those surveyed would label
themselves as religious
 The Melting Pot
America is often referred to as the melting pot due
to its unique blend of different cultures, nationalities,
and backgrounds.
American population comprises approximately 53.3%
are from Latin America, 25% from Asia, 13.7% from
Europe, and 8% from the rest of the world (US
Census 2002)
18% of the population speaks a language other than
English at home
After English, the most commonly spoken language is
Spanish, with 14.3% of the population claiming it as
their primary language
No official language exists at Federal Level in US.
 The Mobile Society
Of residents born in the United States, 68% currently
reside in the same state where they were born.
Reasons for moving include going away to college, starting
a new job, lower cost of living, better weather, desire for a
different lifestyle, etc.
Education
The literacy rate in America is 97%
85% of Americans have a high school education or higher
and 27% have a bachelors degree or higher
It has been reported that 79% of all undergraduates in
America work while taking classes.
Family
Median age for getting married for women is 25.3 years
whereas for men is 26.9 years.
Approximately 50% of marriages in the U.S. end in divorce.
American couples have an average of 2 children
Many families in the suburbs live in private homes, but
apartment living is common in larger cities.
 Individualism
Leaving people by themselves and not asking many
personal questions is often a sign of respect in America
culture.
Also, for a person to act competitively is considered normal
and even desirable. Individual success is highly valued.
Charity/Volunteerism
Charity and volunteer work are American traditions.
63% of Americans donated to charity.
Brands
Himalya International: India's first frozen food
company which exports its products to North
America, has launched real fruit blended yogurts
in Metro cities under brand name Himalya Fresh.

Hamam: one of the oldest Indian beauty soap brands,

has created itself as a trustworthy brand in the market.
It is a natural soap category with low pricing.
It was owned by Tata Oil Mills Company (TOMCO).
It was taken over by Hindustan Unilever Limited when it
acquired TOMCO in the year 1993.
Brands
Kissan:The preserved food division of United Breweries
Group (UB Group) was not doing well as compared to
its liquor division.
UB Group sold its food section along with Kissan brand to
Hindustan Unilever Limited.
Kwality: This brand of ice cream found in every
nooks and corner was a pioneer in the field of ice
cream manufacturing in India.
Kwality later ventured out from ice cream sector to
restaurants.
In 1995, Kwality tied up with Hindustan Unilever Limited,
move that took this Indian brand to international market .
Brands
Lakme: It started as a subsidiary of Tata Group in
1952. This Indian cosmetic brand was not making
any profit.
Tata Group took the second option and Lakme Limited
formed a joint venture of 50-50 with Hindustan Unilever
Limited in 1996
In year 1998 sold this brand to Hindustan Unilever Limited,
a conglomerate in consumer goods sector.
Viva and Maltova: This favorite Indian heath drink
was brought by GlaxoSmithKline Beecham Consumer
Healthcare Linited from Jagatjit Industries in the year
2000
it has become a market leader in Indian health drink
market.
Difference between Indian and US
culture
Indians are very much
family oriented.
Indians respect family
values
Indians are more
competitive
Indians are a lazy lot
working places and
stores are located near
the Indian home
Education costs more in
India
Food is cheaper in India
The Americans are
individual oriented.
the individual values
gets prominence than
the family values.
Americans have great
regard to time and its
value
Americans are less
competitive.
Education cost is less
compared to india
Food is expensive
Conclusion
Thus, from all the examples
discussed above we can conclude
that socio-cultural environment has
a lot of impact on the international
marketing and also on the 4Ps of
marketing.
Thank You!