Transcript
BUSINESS ENVIRONMENT
ACCORDING TO KEITH DAVIS:-Business environment is an aggregate of all
conditions, events and influences that surround and affect it. It is broad and ever-changing as it separate elements interact with one another.
It is broadly divided into internal environment and external environment
INTERNAL ENVT. It is related to those
factors which are internally related to business
It is controllable
EXTERNAL ENVT. It is related to those
factors which are external to the business
It is further divided into two parts:-
Micro envt.
Macro envt.
External envt.
MICRO ENVIRONMENT
Customers Suppliers Marketing intermediaries Competitors society
MACRO ENVIRONMENT
Political envt. Economic envt. Regulatory envt. Technological envt. SOCIO-CULTURAL
ENVT. Demographic envt. Natural envt. Global envt.
SOCIO CULTURE
Meaning: Culture includes several behavioral factors shared by the members of a society and passed through generations.
IMPACT OF CULTURE ON BUSINESS
Culture creates people:The concept of the culture is important to
the business, because it is the culture that determines the ethos of people
Organizational culture has functional and disfunctional consequences.
Culture and Globalization:
Understanding and appreciating the cultural differences is essential.
When the people from the different cultures converge in a work place, the problem of managing diversity comes in.
If the diversity is not managed it results in increasing turnover, reducing communication and interpersonal conflicts.
Any move from one country to the another will create a certain amount of confusion, disorientation and an emotional upheaval.
CULTURE DETERMINES GOODS AND SERVICE
Culture determines the type of goods and services a business should produce.
Business should realise the cultural differences and bring out the desired products accordingly.
Customs And manners
Family
ReligionAmbitious and complacent
Attitude
Language
Marriage
BUSINESSDECISION
Ambitious and complacent:
Ambitions to grow and remain complacent depend on the culture.
Majority of people are known to be complacent.
Religion:
Religion refers to the specific an institutionalized set of beliefs and practices generally agreed upon by a number of persons.
People go to any extent and practice abnormal activities in the name of religion.
Attitude:
Attitude is the positive or negative evaluation which makes an individual in a particular way.
Culture determines the attitude of the people towards the business.
Family:
Family plays an important role for the development of a personality.
The joint family system was extremely popular in ancient times, but has given way to the nuclear family in the modern times.
Marriage:
Traditionally marriage has 3 objectives: performances of household sacrifices, progeny and the sexual pleasure.
A single may spark off protest from women and approval from men.
Customs and manners:
Customs are established practices, manners and behaviors that are regarded as appropriate in the particular society.
The business man should understand manners and customs of his or her country citizen.
For examples:
Indian culture does not prefer drinking liquor. Many people do not touch it, because in our society’s definitions of liquor is unattractive and not preferred, like many people steal things this is not preferred but still since they like it they do it. Hence what is always considered (preferable/ideal or proper) may not always match with our views of enjoyable.
In italy, a US company that set-up a corn-processing plant found that it,s marketing efforts failed because italians thought of corn as “pig food”.
The nestle makes a variety of instant coffee to satisfy tastes of different countries because in every country people prefer a different tastes of coffee.
In many countries green colour is considered as a sign of prosperity in others it is not considered good and is related to illness.
Even small mistake in studying socio-culture environment can lead to big problems in the survival of the business. Procter and gamble had to face problems due to culture differences. They ran into big losses, learnt a lesson and came out of them.
CULTURAL BLUNDER
CASE STUDY
SOME YEARS BACK, JAPANESE TELEVISION AUDIENCES WATCHED AS A JAPANESE WOMAN’S HUSBAND WALKED
INTO THE BATHROOM AS SHE WAS BATHING. WHILE SHE TOLD HIM ABOUT
THE NEW BEAUTY SOAP SHE WAS USING, HE STROKED HER SHOULDER AND
HINTED THAT HE WAS INTERESTED IN MORE THAN HER SOAP . MANY JAPANESE VIEWERS ,
DID NOT LIKE IT , THEY FELT OFFENDED . THEY FELT THAT THE MAN WAS SHOWING
BAD MANNERS TO ENTER IN HIS WIFE’S BATH . PROCTOR AND GAMBLE’S EFFORT TO SELL IT’S CAMAY SOAP TO JAPANESE CONSUMERS WERE SET BACK BY THIS ADVERTISEMENT .
P&G’S STAFF FINALLY SOLVED THE BLUNDER AND ENTERED FOREIGN MARKETS
SO WELL THAT THE COMPANY EXPECTED OVER HALF OF IT’S
TOTAL INCOME FROM FOREIGN SALES IN THE 1990’S . THEY LEARNT A LESSON FROM THE ABOVE MISTAKES . THEY LEARNT A LESSON
THAT SUCCESFUL MARKETING NEEDS A PROPER KNOWLEDGE OF DIFFERENT
CULTURAL ATTITUDES AND DIFFERENT CULTURAL PRACTICES
(SOURCE : W.C.FREDRICK , ET.AL. , BUSINESS AND SOCIETY)
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