Social factors represent the beliefs, customs, demographics, attitudes of peoples from a certain society. Each society has its distinct characteristics which are followed by people living in the community. And as a business is operated by and for people, it always gets affected by those social factors.
Social Factors of PESTLE Affecting Businesses
Education: The level and access to education within a society indicate which goods and services will be appropriate for the people. The literacy level controls the lifestyle of people. It’s also important to know the approximate percentage of people living below and above the education level. Because people with higher education lead to a different lifestyle and have a distinct preference for their necessities than uneducated ones, it’s rare to find a society with a complete literacy rate or illiteracy rate. That’s why businesses have to adopt a mixed strategy depending on the mixed education level of society.
Buying Habits: Society controls the buying habits of people. Buying habits generally grows on people towards a specific direction since childhood, and it doesn’t change unless there are any significant changes happen. Buying habits also depends on the geographical differences. In some societies, people like to have processed canned food, but they prefer fresh foods in others. Asian countries consume spicy foods more than in European countries. Japanese people want to have the fragrance of flowers on their toothpaste, but Indian people don’t. That’s why even the same company operating in a different society has to offer its products differently depending on each society’s buying habits.
Age: The age variation and percentage of society impact the consumption and usage of goods and services. Because people of different age has a different consumption pattern. The necessities of a baby are different from the essentials of a middle-aged person. Also, the necessities of a teenager are different from the necessities of an older person. These preferences also vary from society to society, even the sub-cultures within a society. That’s why businesses have to decide which business group they’re going to target and the specific preferences of that age group.
Income: Income level is one of the most impactful factors for the business of a society. Because it’s the income that decides how much people will spend on what. In a society where the income level is lower, people tend to spend less on luxury items. Also, the definition of luxury varies because of the income of people. Those with higher incomes may find AC as a luxury item. But, those with lower incomes may find a new table fan on their house as a luxury item even if you notice that brands known for their premium goods and services tend to set different prices for their products due to the income variation of a diverse society. Or you may not even find some luxury brands in some places because those people can’t afford that.
Family Structure: Family structures such as nuclear or extended can affect businesses as well. In a society where people live in extended families, they tend to buy things in bulk, especially the daily necessities. On the other hand, in nuclear families, people buy things in a small amount. That’s why businesses have to measure family structure trends and make their future business plans. For example, in some societies, people are breaking into nuclear families. As a result, there are now looking for small houses or apartments to live in. That’s why now real estate developers are building small units suitable for nuclear families more than building big homes.
Religion: Religion has a significant impact on society, and businesses have to operate on a society keeping that in mind. McDonald’s, Burger King, and brands like these sell pork on their food items, but pork is strictly prohibited in countries of the Middle East. Then again, they can’t sell beef in India, as beef is forbidden there. Also, in some societies, selling alcohol openly is legal, but in some places it’s not due to religious beliefs. That’s why businesses have to measure these spiritual beliefs before starting a business.
Gender Roles: Gender roles are essential. Businesses have to identify if males dominate a society, or there is equality among genders. When one gender is more dominating than another in a society that creates a difference in consumption, such as, in the past, females were not allowed to work outside, but now they can. And for that, the demands of products such as washing machine, dishwasher, microwave oven, rice cooker, etc. are increasing day by day, as females are getting little time to do household chores. But before a few decades ago, no one ever thought of having something like this on their home as females used to do all the tasks.
Access to Technology: The world is getting more technologically advanced daily, which affects the lifestyle of people and businesses as well. But still, there are some variations of technological access to various societies, which affects business. For example, people of rural areas of some countries still don’t have full access to the internet, and most of them even don’t know the use of it. So, if a renowned mobile phone company such as Samsung or Apple opens a showroom of their smartphones in those areas, it won’t be the right decision! That’s how access to technology regulates business operations.
Bottom Line
People have different needs depending on their societal rules and values, And each of those rules and values opens new opportunities for businesses. Now it’s up to businesses how much they can measure the opportunity and adapts to that.
Related:
References
- https://courses.lumenlearning.com/boundless-sociology/chapter/family/
- https://smallbusiness.chron.com/social-factors-affecting-retail-business-71662.html
- https://www.bbc.co.uk/bitesize/guides/zgfrpbk/revision/4
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