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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