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International Marketing Orientations

The document discusses different orientations that companies can take when conducting international marketing: ethnocentric, polycentric, regiocentric, and geocentric. An ethnocentric orientation assumes the home country approach will work everywhere, while a polycentric orientation tailors strategies to each local market. A regiocentric orientation groups similar markets together, and a geocentric orientation views the entire world as a single market.

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339 views13 pages

International Marketing Orientations

The document discusses different orientations that companies can take when conducting international marketing: ethnocentric, polycentric, regiocentric, and geocentric. An ethnocentric orientation assumes the home country approach will work everywhere, while a polycentric orientation tailors strategies to each local market. A regiocentric orientation groups similar markets together, and a geocentric orientation views the entire world as a single market.

Uploaded by

Scorpio Girl
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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International Marketing

Orientations
Ethnocentric Orientation (home-
country/ domestic market)
• A person who assumes that his home country is
superior compared to the rest of the world is said to
have an ethnocentric orientation. The ethnocentric
firm assumes that the products and practices that
succeed in the home country will because of their
demonstrated superiority be successful anywhere.
• Major features: 
• Views foreign market as a place to dispose of excess
output.
• Perceives foreign environment and its opportunities
as not different from domestic market.
•
Ethnocentric cont…
Even if the needs and wants of the international markets
differ from those of the home country, such needs are
ignored at by headquarters
• Perceives foreign operations as secondary or subordinate
to domestic ones.
• The firm sees no need for systematic marketing research
outside the home market.
• No major modifications are made to the product before
exporting them abroad.
• The ethnocentric firm has a centralized marketing
management
Ethnocentric…
• Marketing strategies similar to domestic markets. Hence
the ethnocentric firm doing business at homes only are
referred to as domestic companies. Ethnocentric firms that
do business outside the home country are described as
international companies.
•  The main advantage of this approach is that it is relatively
simple, rapid and economical to implement in overseas
market.

• The main limitation to this approach is that it limits the


long term success of a firm because it does not involve any
sort of comparative analysis.
Ethnocentric

• It adopts a Domestic Market Extension Concept: this is when a


company seeks sales extension of its domestic products into
foreign markets. This is Characterized by:
• Domestic business is the priority
• Primary motive is to dispose of excess production
• Seeks market where demand is similar to the home market
• Minimal efforts are made to adapt the marketing mix to foreign
markets i.e. the firms sells to foreign customers the same way
it sells to domestic customers.
Polycentric Orientation (host-
country orientation)
•
 
The polycentric orientation is the opposite of
ethnocentrism. The term polycentric describes
management beliefs or assumption that each country in
which a company does business is unique.
• A polycentric firm identifies the differences in each
market. This assumption lays the ground work for each
subsidiary to develop its own unique business and
marketing strategies in order to succeed.
• The term multinational company is often used to
describe such a structure.
Polycentric cont…
• Major features: 
• Each market where it operates is treated as if it were
unique.
• Each market has its own marketing strategy and
objectives based on firms’ knowledge of local needs.
• Product modified to meet local market.
• Price and promotion established by each subsidiary.
• Local nationals make up the sales force.
• The polycentric firm has a decentralized marketing
management
Polycentric …

• The main disadvantage of this approach is that it is


unprofitable in the long run due to duplication of
effort and strategies.
• A remedy is to adopt a cluster of markets approach
where a group of market (countries) exhibit similar
market characteristics. An approach called
regiocentrism.
Polycentric…
• Adopts a Multidomestic Market Concept: a company with
this concept recognizes that country markets are vastly
different and that strategies may be required for each
country .Characterized by:
• Marketing on a country by country basis, with separate
strategies for each country.
• Subsidiaries operate independently in establishing
objectives, plans and marketing mixes.
• Products are adapted for each market, advertising
campaigns, pricing and distribution decisions are
localized.
Regiocentric and Geocentric
Orientation (World Orientation)
 
• In a company with a Regiocentric orientation,
management views regions as unique and seeks to develop
an integrated regional strategy.
 
• A company with a geocentric orientation views the world
as a single market and tends to use both similarities and
differences in various markets to develop a world market
strategy.
• A firm whose management has a regiocentric or geocentric
orientation is also known as an international or
transnational company.
Major features of Regiocentric
and Geocentric orientations 
• Firm attempts to develop uniform international
marketing strategies that is fully responsive to local
needs and wants.
• Identifies homogenous international demand
segments that can be targeted by a standard product.
• The geocentric firm has an integrated marketing
management approach on a regional and
international scale.
 
• It adopts a Global Marketing Concept: Its marketing activity
is global and its market coverage is the world.
• Characterized by:
• Employs a global marketing strategy and the world as a
whole is viewed as the market.
• Creates market segments with similar demands for the same
basic product the world over.
• Some decisions are viewed as applicable worldwide like the
strategies
• But marketing mix decisions may differ in different market
Cont…

• This approach is capable of achieving rapid


worldwide distribution of a product as well as
attaining low production cost partly due to
economies of scale.

• The main challenge with this approach is that its


success depends on careful and continuous
international market research which is expensive
and time consuming.

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