How Does Socio-Cultural Environment Impact a Small Business?

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According to the Houston Chronicle, the socio-cultural environment has an effect on a business' advertising and internal decision-making process. Businesses need to pay constant attention to changes in the socio-cultural environment in order to stay relevant in the minds of their consumers and gain competitive advantage.

Businesses typically use a PEST analysis to identify changes in the socio-cultural environment. PEST is an acronym that stands for political factors, economic influences, sociological trends and technological innovations. The socio-cultural trends observed with a PEST analysis include demographic changes and trends in the way people live, work and think. These changes help businesses tailor their advertising messages and business processes in order to benefit from the socio-cultural environment.

When designing a new advertising strategy, companies must consider the customs, lifestyles and values that characterize a community. Social factors, such as role and status in society, have an effect on the extent to which companies can use different adverting strategies to promote their products or services to customers. The average level of education in society is also considered before the development of an advertising campaign. According to azcentral, "a community in which a high percentage of potential customers have some form of post-secondary education, small-business owners might use more details and explanations while advertising and promoting products."