FOREIGN MARKETING ORIENTATIONS THE EPGR MODEL Companies Differ in their Foreign Marketing Orientations

1. It Influences Company CONTROL over SUBSIDIARIES operating in different foreign country markets. 2. It affects Corporate DECISION MAKING in different subsidiaries 3. MARKETING STRATEGY/MARKETING MIX Formulation for different country markets is standardized or adapted based on degree of corporate control. PRODUCT STRATEGY PRICING STRATEGY DISTRIBUTION STRATEGY PROMOTION STRATEGY IMPLICATIONS OF THE EPGR MODEL The Company Orientation (EPGR) Influences the Extent of Parent Company Control over Foreign Market Operations.

THE INTERNATIONALIZATION PROCESS INTERNATIONAL MARKETING ORIENTATIONS BY LEVEL OF INVOLVEMENT INFREQUENT EXPORT MARKETING REGULAR FOREIGN MARKETING MULTINATIONAL MARKETING GLOBAL TRANSNATIONAL MARKETING INTERNATIONAL MARKETING POLYCENTRIC ORIENTATION ETHNOCENTRIC ORIENTATION REGIOCENTRIC/ GEOCENTRIC ORIENTATION GEOCENTRIC/ REGIOCENTRIC ORIENTATION Ex. British Airways Ex. British Paints Ex. Pepsico, Ex. IBM Ex. Mac Donald’s A Particular Orientation may be more suitable at a particular point in time.

READINGs Keegan Chapter 1 Background reading. Group 1 Presentation: GLOBAL GRID Assignment 1 Friday Global Grid: All Group Write- ups (ungraded assignmentss) are to be handed in (Handwritten and not copied work. Any late submissions or non submissions will have a penalty of half mark from total. Assignment 2 Saturday Which company is Transnational. (Graded Group Write-up 5 marks).

THE EPGR MODEL Refers to the attitude or orientation of a company towards the different foreign country markets How much importance is to be given to the Domestic Market versus Foreign Market. Home Country orientation: Orientation is toward the Home country market. The firm has primarily a Domestic Market Focus. 1. Foreign Marketing Strategy is an extension of the domestic marketing strategy It Is Common in the 1st and 2nd Stages of Internationalization 3. There is a PROJECTION OF COUNTRY OF ORIGIN IMAGE in the Foreign Country Market ETHNOCENTRIC ORIENTATION Assumption & Characteristics 1. Products that succeed in the domestic market will be a success in the foreign country market. 2. The firm considers superiority the DOMESTIC MARKET to be applied to to EXPORT COUNTRY MARKETS.

Results in PROJECTION OF FAVORABLE COUNTRY OF ORIGIN IMAGE Starbucks Coffee: American Image Walmart Stores: American Image Heinekin Beer: German Image. Chrysler Corporation: Ethnocentrism of the Big American Car in the 1970’s. (Had a Negative Effect on Sales in European markets) `Wrangler’ American Jeans, American Image (Ethnocentric Positive Effect). Harley Davidson’ (Ethnocentric Positive Effect) Chrysler Corporation: Ethnocentrism of the Big American Car in the 1970’s. (Had a Negative Effect on Sales in European markets) `Johnny Walker’ Scotch (Great Britain `Made in Great Britain Image Positive Effect). `Bosch’ German Exports. (Ethnocentric) Instructions are in the German Language. (Negative Ethnocentric Effect) Airline Companies: British Airways; Singapore Airlines Gillette: Global Image (Existence of a Global Market Segment). If FAVORABLE Image: It can increase sales If UNFAVORABLE Image: It can lead to low sales IMPLICATIONS OF ETHNOCENTRIC ORIENTATION

Every Foreign Country Market is assumed to be Unique. The way to succeed in each country market is to adapt to country differences Note: A multinational that responds to unique market differences is also called MULTI DOMESTIC. 1.There is Decentralized Decision-making operations among SUBSIDIARIES 2.The Company Develops a Unique marketing strategy for each Foreign Market. 3.Marketing Strategy and Mix is organized on a country to country basis. 4.Adaptation will lead to greater market acceptance and Higher Sales. POLYCENTRIC ORIENTATION CHARACTERISTICS

1.Xerox Corporation The company encouraged Decentralized Operations. 2.Philips versus Japanese Competitors in Foreign Markets Philips had a Polycentric Orientation. Resulted in Greater variety in technical design. Eventually it led to a long Product line and lower profits. In Contrast The Japanese Competing Companies were Geocentric in approach and Formulation of a Global Strategy: Ex: Sony: Global world market for home entertainment. E XAMPLES OF POLYCENTRIC ORIENTATION

CHARACTERISTICS 1.Emphasis on a Global Market Segment for products. 2.Global Brand Image. Ex. IBM, Coca Cola Inc, Ford. GLOBAL MARKET SEGMENT GEOCENTRIC ORIENTATION It Capitalizes on Similarities among Foreign markets for a global approach. Similarities are more important than the differences. ASSUMPTION: Foreign Market No country is superior. Home market and foreign country market are equal.

REGIOCENTRIC ORIENTATION It is a Geocentric orientation limited to Regions of the World. Attempt at Regional Market Segmentation. CHARACTERISTICS 1.Regional differences are more important than global similarities 2.Corporate Control on a Regional Basis. 3.Decision-Making on Marketing Mix Strategy are by Region. Product Standardization versus Adaptation by Region.

A GLOBAL COMPANY with a GEOCENTRIC ORIENTATION `Washing Technology is Washing Technology’ Ex. Refrigeration: Standardized Technology Having Operations in Several Different Countries is not enough. Having a Global Brand is not enough. `HAVE THE BEST TECHNOLOGY AT LOWEST POSSIBLE COST’ is required for a global market segment. EXAMPLE OF WHIRLPOOL CORPORATION Whirlpool began to USE THE BEST CAPABILITIES in whichever country THEY ARE LOCATED. Also Attempted to Reduce Costs. The company also shifted to ADAPTED FEATURES, DIMENSIONS, CONFIGURATIONS. THESE VARY FROM MARKET TO MARKET

Global Marketing Strategy it will focus on world markets and source from its home market or from a single country to supply these markets. Ex: Harley Davidson All assets are located in its US home country market. Global Sourcing Strategy It will source from the world market to supply its domestic market. Ex: Gap: A retailer who sources world wide to get best quality at least cost to supply the US retail network. CHARACTERISTICS OF A GLOBAL COMPANY A Global Company will generally have either a Global marketing strategy or a global sourcing strategy but not necessarily both.

INTERNATIONALMULTINATIONALGLOBALTRANSNATIONAL EXTENSION OF HOME MARKET DIFFERENT NATIONAL MARKETS ONE GLOBAL MARKET GLOBAL MARKET WITH REGIONAL BIAS ASSETS LOCATED IN HOME COUNTRY ASSETS are DISPERSED CENTRALIZED HUB FOR SOURCING ASSETS DISPERSED BY REGION Factors of Production STANDARDIZED MARKETING PROGRAM STANDARDIZED MARKETING PROCESS AD APPEALS CENTRALIZED AD APPEALS ADAPTED TOP JOBS BY HOME COUNTRY NATIONALS TOP POSITIONS are FOR HOST COUNTRY NATIONALS TOP JOBS REGARDLESS OF NATIONALITY R& D IN PARENT COMPANY R&D done with in OPERATING UNITS COST ADVANTAGE THROUGH CENTRALIZED R&D INTEGRATED NETWORK OF INFORMATION ETHNOCENTRIC Ex Harley Davidson GEOCENTRIC Ex. Whirlpool THE DIFFERENCE BETWEEN GLOBAL COMPANIES AND TRANSNATIONAL COMPANIES