CHAPTER 05

POLITICAL, CULTURAL
AND
DEMOGRAPHIC ENVIRONMENT

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LEARNING OBJECTIVES
 To explain the nature of social and cultural
environments, and their importance for
business growth
 To describe what is meant by ‘culture’ and the
numerous approaches devised for its study
 To analyse demographic trends and the
implications of demographic factors for
business
 To develop an understanding of the Indian
cultural and demographic environment

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Political Environment and
Business
 The political environment in which the firm operates
(or plans to operate) will have a significant impact
on a company’s business activities, including its
marketing activities there.
 A foreign company operates in a host country at the
discretion.
 Government’s attitudes and policies towards
business are reflected in its ideas about how best to
promote national interest in the light of the country’s
economic and political resources and objectives

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Different Types of Political
Systems

 Capitalism system
 Statist system
 welfare state

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Cultural and Social
Environment of Business
 Social environment refers to how people behave,
their relationships, education and occupation, and
the conditions in which they live.
 The cultural environment includes institutions and
other forces that affect the basic values, behaviour,
and preferences of the society—all of which have an
effect on consumer marketing decision.
 The demographic environment includes the study of
human populations
 in terms of size, density, location, age, sex, race,
occupation, and other statistical information.

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What is Culture?
 E.B. Taylor defined culture as “that complex whole which
includes knowledge, belief, art, morale, laws, custom and any
other capabilities and habits as acquired by man as a member of
society.”
 B. Malinowski defined it as “the handwork of man and the
medium through which he achieves his ends.”
 R. Redfield defined culture as “an organised body of
conventional understandings manifest in art which persisting
through tradition, characterises a human group.”
 V. de Robert opined “culture is the body of thought and
knowledge, both theoretical and practical, which only man can
possess.”

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Approaches to the Study of
Culture
 Anthropological approach
 Maslow approach
 The self reference criterion (SRC)
 Diffusion theory

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The Elements of Culture
 Material culture
 Language
 Aesthetics
 Education
 Religion
 Attitudes and values
 Social organisation

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Characteristics of Culture

1. Culture is learned
2. Culture is shared
3. Culture is cumulative
4. Cultures change
5. Culture is adaptive and dynamic

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Characteristics of Culture
6. Culture is transmissive
7. Culture is ideational
8. Culture is diverse
9. Culture defines permissible behaviour patterns
10. Culture is gratifying

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Functions of Culture
1. Performs a boundary defining role
2. Affirms identity and supplements rational
management
3. Facilities induction and socialisation
4. Sets rules and standards

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Cultural Change
 Social and cultural change
 Process of cultural change

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Cause of Cultural Change

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Demographic Environmental
Factors
 Population
 Education level
 Income Level
 Gender
 Age
 Occupation

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