EPRG Approach

Aakash Kumar 001Gaurav Kataria 003Rahul Ujjainwal 005Rahul Anand 006

MANAGEMENT ORIENTATIONS

The form and substance of a company's response toglobal markets opportunities depend greatly onmanagement’s assumption and beliefs (bothconscious and unconscious) about the nature of theworld. The worldview of a company’s personnel canbe described as :

ETHNOCENTRIC

POLYCENTRIC

REGIOCENTRIC

GEOCENTRIC

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

Ethnocentric

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

Characteristics –Overseas operations viewed as secondary & primary means of disposing the surplus production Domestic techniques &personnel superior to foreign & most effective in overseas marketDomestic 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

Ethnocentric …cont.

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

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

Polycentric

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

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

Polycentric…… cont.

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)

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

Regiocentric

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)

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

Geocentric

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