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CMA Foundation · Fundamentals of Business Economics and Management · Economic and Business Environment

A company that sells packaged snacks finds that in a region where a major festival involves fasting, sales of its regular products fall sharply for nine days, while sales of its fasting-compliant range rise. Which statement best describes the lesson for management?

Cultural practices affect demand patterns, so the firm should adapt its product mix and marketing to them. Fasting customs shift what customers buy during the festival, which is why compliant products sell more. This is a cultural influence on domestic demand, not a monetary or purely regulatory matter.

  1. ACultural practices affect demand patterns, so product mix and marketing should be adapted to themCorrect
  2. BCulture affects only exports, not domestic sales
  3. CFestivals are an economic factor which changes the money supply
  4. DOnly government regulation can change consumer behaviour

Explanation

Fasting customs are part of the cultural environment and alter what consumers buy. Management should adapt products and promotion accordingly. Culture affects domestic as well as foreign markets, a festival is not a monetary variable, and consumer behaviour is shaped by many non-governmental factors.

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