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INTERNATIONAL MARKETING
EPRG MODEL
Globalization
• Advances in technology:
– Improved shipping capabilities
– Improved communication technologies
– Globally available Internet stores.
Cont…
• The difference in countries governing laws:
can also create reasons for companies to
globalize.
– Lower environmental standards
– Absence of minimum wage laws and
– Lower working age regulations create advantages
for companies that do business in other nations.
Cont…
• 3.Another important driver of globalization is
the need for depleting natural resources.
Countries without a sufficient oil supply must
trade to sustain a high quality of life. Precious
stones and metals are also examples of natural
resources that may be hard to attain without
global trade opportunities.
Globalization- forces
• Political forces
– Reduction of barriers to trade and foreign investment by
governments
– Privatization of former communist nations
• Technological forces
– Advances in computers and communications technology
– Internet and network computing
Globalization- forces
• Market forces
– Globalizing companies become global customers
• Cost forces
– Goal for economies of scale to reduce unit costs
• Competitive forces
– Increase in intensity due to explosive growth in
international business
Explosive growth
• Foreign Direct Investment and Exporting
– FDI - Direct investment in equipment, structures,
and organizations in a foreign country
• level sufficient to obtain significant management control
(Table 1.2)
– Exporting – transportation of any domestic
good/service to a destination outside a country or
region
Factors: increased cross national
cooperation
• Increased cooperation between governments
through treaties, agreements and consultations:
– To gain reciprocal advantages
– To attach problems jointly that one country acting
alone cannot solve
– To deal with areas of concern that lie outside the
territory of any nation
Factors: increased cross
national cooperation
• Number of International Companies
– UNCTAD - United Nations agency in charge of all
matters relating to FDI and international
corporations.
• 1995 – 45,000 parent companies with 280,000 foreign
affiliates ($7 trillion in sales)
• 2004 – 70,000 parent companies with 690,000 foreign
affiliates ($19 trillion in sales)
Factors: Technology
• Larger proportion of population involved in
R&D
• Escalating pace of new product development
Factors: communication, transportation
• Efficiency-driven stage
• Competitiveness becomes increasingly driven by pillars 5-10
• Countries must begin to develop more efficient production
Stage 2 processes and increase product quality
Singapore 1 3 12 29
Switzerland 9 1 7 23
USA 58 40 1 41
Ireland 4 2 14 7
Denmark 8 8 5 6
India 59 51 57 60
Iran 57 62 48 61
The 2016 A.T. Kearney FDI Confidence Index –
GAINS & DECLINES
• Singapore is the largest gainer in this year’s index. Investors from the Asia Pacific
region and in the IT industry are the most interested in investing in Singapore.
• Switzerland’s sustained moderate economic growth, high consumer spending, and
extremely competitive business environment helps the country rise three positions
above.
• The United States is the top-ranked FDI destination for the fourth year in a row.
• China holds second place for the fourth consecutive year and attracts broad-based
investor interest.
• Canada rises one spot to rank third in this year’s Index
• Germany, the top-ranked European country, holds its highest position in 14 years.
• India - India’s rise demonstrates the country’s increasing attractiveness to foreign
investors. Reforms such as the “Make in India” initiative underline the government’s
commitment to attract FDI.
The 2016 A.T. Kearney FDI Confidence Index –
GAINS & DECLINES
• An economic recession, ongoing corruption scandals, and record-low
consumer confidence are among the factors that likely knocked Brazil
out of the top 10 in the Index—for the first time in more than five
years.
• Japan rises one spot this year to sixth place—its highest ranking ever.
The government is committed to raising its FDI stock from 17.8 trillion
yen in 2015 to 35 trillion yen by 2020.
• France maintains its eighth position in the FDI Confidence Index. The
“Creative France” campaign targets investors from 10 key countries,
including the UK, Germany, Japan, Singapore, and the UAE.
Global Cities Index - A.T. Kearney’s Index
Domestic Market
Profit Motive
constraint
Bindumadhavi P 80
Factors affecting International
Marketing
Trade
Facilities Distance
practices
Multidomestic
Polycentric
Marketing
Global Marketing
Regio/Geocentric
EPRG Model - Characteristics
Ethnocentric Polycentric Geocentric
Approach International Each country is The world is one
operations are relatively common market
secondary independent
Vision Centered on the Each market is Global vision of
domestic market unique the world
Performance Domestic market share Local market share World market share
measures
Progression to Global Marketing
EPRG FRAMEWORK
Ethnocentric
Polycentrism Regiocentrism Geocentrism
- Home
- Host country - A regional - A world
country
orientation orientation orientation
orientation
EPRG FRAMEWORK
Ethnocentric Domestic techniques and
Personnel are considered
- Self superior
Reference
Criterion
Ethnocentric
• Overseas operations are viewed as secondary to
domestic operations
• Considered as a means to dispose off surplus
domestic production
• Plans for overseas market are developed in the
home office, utilizing policies and procedures
identical to those employed in the domestic
market
• Overseas marketing is looked after by home
country nationals
Ethnocentric continued
• No systematic research is conducted overseas
• No major modifications are made to products sold
in overseas markets
• Prices are calculated on the same basis as in the
home market with the addition of overseas
distribution costs
• Promotion and distribution strategies are similar
to that employed in the home country
• Strong reliance on export agents
Surf – Super washout in Japan
Unilever enters Japan Detergent Market
GLOBAL
DECIDE – TO
MARKETING IN
GO OR NOT
ORIENTATION
GLOBAL WHICH
MARKETING MARKETS TO
PROGRAM? ENTER FIRST
Conclusion
The globalisation of Markets has necessitated
all managers to pay attention to International
marketing.
Other than Environmental factors, self
reference criterion are considered obstacles to
International Marketing.
Global awareness and sensitivity are the best
solutions challenges faced in International
marketing
THANKYOU