EPRG
Approach
MANAGEMENT ORIENTATIONS
The form and substance of a company's response to
global markets opportunities depend greatly on
management’s assumption and beliefs (both
conscious and unconscious) about the nature of the
world. The worldview of a company’s personnel can
be described as :
ETHNOCENTRIC
POLYCENTRIC
REGIOCENTRIC
GEOCENTRIC
Ethnocentric
Management orientation – Home country orientation
Perception about market –
Domestic market is superior
Focuses on similarities between home and foreign
market
Considers foreign market secondary to an extension
of domestic market
Marketing strategy – Extension of domestic strategy to
foreign market
Companies basic objective – Profitability
Type of governance – Top-down
Culture - Home country
Technology - Mass production
HRM practices – Overseas operations are managed by
people from home country
Managerial predisposition - Manager/MNC rely n
values &interests of parent company in formulating and
implementing strategic plan
Ethnocentric …cont.
Characteristics –
Overseas operations viewed as secondary & primary
means of disposing the surplus production
Domestic techniques &personnel superior to foreign
& most effective in overseas market
Domestic marketing mix is employed without major
modifications in overseas market
All foreign marketing operations are planned &
carried out from home base & overseas marketing
administered by export department
Merits –
No cost & efforts needed for adaptation/localization
It easy route to internationalization when foreign
market exists with similar domestic characteristics
Demerits –
No full exploitation of IB opportunities worldwide
Main focus on domestic market
Examples Nissan in 1st years exported cars in US
markets, sold cars without change then sold car in
Japan
Polycentric
Management orientation – Host country
orientation
Perception about market –
Each national market is distinctive
Focuses on differences between home country
& foreign country
Marketing strategy – Localization / adaptation
Companies basic objective – Public acceptance
Type of governance – Each local unit sets objectives
(bottom up)
Culture-Host country
Technology - Batch production
HRM practices – Local nationals are used in key
management positions
Managerial predisposition - MNC tailor strategic plan to
meet the need of local culture
Polycentric…… cont.
Characteristics –
Recognize importance of inherent differences in
overseas markets
Subsidiaries are established in overseas market &
each is independent with own marketing objectives
& plans
Local techniques & personnel best suited to deal
with local market conditions
International marketing organized on country to
country basis with separate marketing strategy for all
Merits –
Adaptation to market characteristics help in better
understanding of local needs which will lead to better
exploitation of market potentials
Demerits –
High cost of national responsive marketing mix for
each country
Delay in localization
Examples McD (no beef burgers in India)
Regiocentric
Management orientation – Regional orientation
Perception about market – Markets can be
differentiated on the basis of common regional
characteristics
Marketing strategy – Trade- off between
standardization & localization
Companies basic objective – Both profitability & public
acceptance
Type of governance – Mutually negotiated between
region & its subsidiaries
Culture-Regional
Technology - Flexible manufacturing
HRM practices – Regional people are developed for
key managerial positions anywhere in region
Managerial predisposition - MNC use a strategy that
addresses both local & regional needs
Characteristics –
Treat different regions as different market
Regions with similarity of marketing characteristics
treated as separate market
Merits - Advantages of both localization
&standardization
Demerits – Lack of attention to inter regional
differences
Examples Punjab (paneer products more)
Gujarat (sugar more)
Geocentric
Management orientation – Global orientation
Perception about market – Entire world is a single
market that can be effectively tapped by standardized
marketing strategy
Marketing strategy – Global standardization
Companies basic objective – Both profitability &
public acceptance
Type of governance – Mutually negotiated at all level
of organization
Culture- Global
Technology - Flexible manufacturing
HRM practices – Best people anywhere in the world are
developed for key managerial positions everywhere in
the world
Managerial predisposition - MNC constructs its
strategic plan with a global view of operations
Characteristics –
Entire world is treated as single market
Standardized marketing mix, to give uniform image
of product &company for global market
Worldwide approach to marketing & its operations
Merits –
Economies of large scale production
Lower costs advantage of pace
Demerits –
Not successful in many cases
Uniform /standard marketing mix not guarantees for
sure success in every situation
Examples Microsoft & Nokia standardized products
world wide
