Geocentric Marketing Strategy Example – Recommendation “It is not necessary to understand all the material on the slides. Apply your current work environment and experience to the situation. Errors and omissions are unfortunate. The message should be changed.
3 References -1 Future Globalization Imperative Vs Regional and National Responsiveness Pressure Dr. Ravindra Pratip Gupta
Geocentric Marketing Strategy Example
The EPRG model, sometimes called the EPG model, is used in international markets. It was proposed by Perlmutter (1969). The strategy of the organization is characterized by three elements: ethnocentrism, pluralism and geocentrism. Hence the original name EPG. A little later, Wind, Douglas and Perlmutter (1973) extended this model with another factor – regularity. The extended model is called the EPRG model. This pattern aims to identify the direction of the organization. The orientation of a company’s personnel affects the company’s ability to adapt to any foreign marketing environment. According to the EPRG, the characteristics of the company’s management behavior in exporting freely to global markets can be described
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The importance of the EPRG model lies primarily in the company’s recognition and understanding of its priorities. This is because strategies based primarily on one of the four factors mean different costs or benefits to the company. A company should analyze the direction its company is heading in order to make the right decisions. When conducting an EPG analysis, a company may find that they are moving in a direction that is not good for the company or does not fit with the company’s corporate culture and overall strategy. In this case, it is important to refocus the company’s focus to ensure that its focus is properly represented.
An important assumption underlying the EPRG framework is that the degree of internationalization that management undertakes or intends to undertake will influence a firm’s particular international strategy and decision rules. The first view is that the “globalization mandate” is a global way of doing business that is considered the key to efficiency and effectiveness. A second idea is that in response to national and regional pressures, an increasing number of companies are turning to regional or geocentric strategies.
Different product standards Different customer needs and tastes Different businesses or customers prefer local products Managing details in a global organization is complex and difficult. Subsidiaries know better local market needs and management methods than head offices. Employees of affiliated companies are looking for promotion opportunities.
Ethnocentrism: Mother country is superior. Sees similarities abroad Regiocentric: sees similarities and differences in regions of the world Ethnocentric or polycentric in its view of the rest of the world: worldview! Sees similarities and differences between home and host countries Polycentric: Each host country is unique. abroad
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Duty is to win. Top-down decision-making – Major decisions are made at headquarters. Global products (depending on home country needs) Home country managers hold important positions everywhere. Subsidiary profits are repatriated (returned) to corporate headquarters to make decisions about budgets, profit targets, and head office investments.
The belief that one’s culture is superior to others is called ethnocentric orientation. This means that the company or its managers are very fond of believing that a marketing strategy that works in the domestic market will work in the international market as well. Thus, ethnocentric firms ignore environmental differences between markets. These companies usually operate domestically. Several export-oriented companies see this as an extension of their domestic business. These companies believe that, like domestic operations, export operations require minimal effort to adapt the marketing mix to the needs of foreign markets. Generally, such companies try to sell their products in countries similar to the domestic market or where local products are acceptable to consumers in those markets. Ethnographic orientation can be the following categories: (a). The company is so accustomed to certain cause-and-effect relationships in import activities that some cultural factors of foreign markets are ignored.
Managers need to analyze cultural variables so that they consider all key factors before making decisions, for example, Indian handicraft exporters are mostly from the small and medium enterprises (SMEs) sector and do not appreciate market differences and needs. (b) to align the marketing strategy. Environmental differences are recognized by management, but marketing strategies focus on achieving domestic rather than international or global goals. Opposing their foreign marketing practices. The size of the Indian market gives companies little incentive to enter foreign markets, or even if they do sell abroad, companies try to find markets with similar products and consumers with similar tastes and preferences.
A range of Indian products sold abroad including clothing items such as salwar-kurtas, sarees and food products such as dosa mix, idli mix, vada mix, samhar mix, gulab jamun mix, papads and Indian sweets. Population of India. Trade statistics show that these products find customers in major global markets such as Dubai, Singapore, London and Canada, which have large populations in India or South Asia. Ethnocentrism sees foreign operations as a way to deal with overproduction, thus giving it secondary or subordinate treatment. Generally, ethnographically, goods are produced on a family basis and decisions are made at headquarters. In general, in the early stages of internationalization, most companies adopt an ethnocentric orientation, but once they gain a large market share, it becomes difficult to continue this approach.
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Additionally, this strategy can be used in South Asian markets where consumer tastes and preferences are more or less similar. Fifty years ago, most businesses, especially those located in large countries such as the United States, operated quite successfully with an ethnocentric orientation, but ethnocentrism is one of the greatest internal threats facing a company. Until the 1980s, Eli Lilly & Company operated as an ethnographic company, with operations outside the United States closely controlled by headquarters and focused on selling products originally developed for the American market. Electrolysis has been using the ethnomethodological method for many years. The globalization approach reflects an ethnocentric attitude with examples of global companies such as Alias Cycles, Age of Heroes and Metro Balloon.
Mission Public procurement (legal) subsidiaries define their strategic goals. Subsidiaries use national response strategies (based on local needs). Products are based on the needs of the host country. Most of the profits are retained by the subsidiary. Subsidiaries make budget and investment decisions. Local citizens are trained for important positions.
Polynomial Orientation In contrast to the ethnocentric approach, the polynomial approach is market-based. He believes that there are significant differences between different markets. Each market is considered unique in terms of its market environment, such as political, cultural, legal, economic, consumer behavior and market structure. Marketing mix decisions as well as product development strategies, pricing strategies, etc. Includes local expertise and the distribution of marketing activities in different countries is highest in the multipolar direction. Although the multipolar approach is market-based, it usually requires more corporate resources, interagency coordination, and duplication of some activities.
In addition, economies of scale are hardly realized in any company. This assumption provides a foundation for each affiliate to develop their own business and marketing strategies for success. Citicorp’s financial services operations are diversified worldwide. Walmart, Barclays Bank and Coca-Cola were appointed as hosts.
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The company tries to balance its own interests with regional departments.
The mission is profit and community acceptance. The strategy is focused on regional integration and national response. Strategic goals are being negotiated between regional headquarters and subsidiaries. Regional products, often with local adaptations, keep most of the profits in the region. Investment decisions are made regionally. Managers are trained for key positions anywhere in the region.
The company considers the region as a single market segment and adapts similar marketing strategies within the region, but not within the region. A similar marketing strategy is used based on a combination of marketing activities based on geographic regions. The region becomes a relevant geographical unit (rather than a state) and the direction of governance shifts to the development of an integrated regional strategy. For example, in the case of the European Union, NAFTA, McDonald’s strategy of not serving pork and not slaughtering animals in a halal process is implemented only in the Middle East or Muslim-dominated countries, which can be called regiocentric. For example, the North American Free Trade Agreement (NAFTA) – which has US corporate registries focused on countries such as the United States, Canada and Mexico. Similarly, the focus is on European companies
