The economic environment comprises the nature and structure of the economy, the stage of economic development, economic resources, the level of income, economic policies, distribution of income, etc. Social environment refers to the characteristics of the society in which a business firm exists. Social and Social and cultural environment consists of the following :
(i) Demographic forces – size. Composition, mobility and geographical dispersal of population.
(ii) Social institutions and groups.
(iii) Caste structure and family organization.
(iv) Educational system and literacy rates.
(v) Customs, attitudes, beliefs, values and life styles.
(vi) Tastes, preferences of people, and their buying behaviour.