2. The EPRG framework throws light on four broad types of
orientation of a firm towards foreign marketing as follows:
1. ETHNOCENTRIC ORIENTATION
2. POLYCENTRIC ORIENTATION
3. REGIOCENTRIC ORIENTATION
4. GEOCENTRIC ORIENTATION
3. 1. ETHNOCENTRIC ORIENTATION
• In such a firm, all foreign marketing operations are planned and carried out
from home base, with little or no difference in product formulation and
specifications, pricing strategy, distribution and promotion measures
between home and overseas markets. The firm generally depends on its
foreign agents and export-import merchants for its export sales.
• Results in the staffing of key positions in the MNC by Parent Country
Nationals.
4. ADVANTAGES:
• Organizational control and coordination is maintained and facilitated.
• Promising managers are given international experience.
• Assure that subsidiary will comply with company objectives.
5. DISADVANTAGES:
• It limits the promotion opportunities of HCNs
• The adaptation of expatriate managers to new environment takes time
during which these expatriates make poor decisions.
6. 2. POLYCENTRIC ORIENTATION
• When a firm adopts polycentric approach, it attempts to organize its
international marketing activities on a country to country basis. Each
country is treated as a separate entity and individual strategies are worked
out accordingly. Local assembly or production facilities and marketing
organizations are created for serving market needs in each country.
• Polycentric orientation could be most suitable for firms seriously
committed to international marketing and have its resources for investing
abroad for fuller and long-term penetration into chosen markets.
Polycentric approach works better among countries which have significant
economic, political and cultural differences and performance of these tasks
are free from the problems created primarily by the environmental factors.
• The MNC with this approach staff its foreign subsidiaries with HCNs and
its home office with PCNs.
7. ADVANTAGES:
• It eliminates language barriers.
• Avoids adjustment problems of expatriates and their families and removes
the need for cultural awareness training.
• Gives continuity to the management of foreign subsidiaries, thus reduces
turnover.
8. DISADVANTAGES:
• It provides federalism at regional basis rather than country basis. This
serves as a barrier in taking a global stance.
• Limits career progression opportunities to the regional level.
9. 3. REGIOCENTRIC ORIENTATION
In regiocentric approach, the operational strategies are
formulated on the basis of the entire region rather than individual
countries. The production and distribution facilities are created to
serve the whole region with effective economy on operation, close
control and co-ordination.
In this approach, MNC divide its operations into geographical
regions and transfer staff within those regions.
10. ADVANTAGES
• Allows interaction between executives transferred to regional HQs.
• A step for MNC to move from purely poly or ethnocentric or geocentric
approach.
11. DISADVANTAGES
• It provides federalism at regional basis rather than country basis. This
serves as a barrier in taking a global stance.
• Limits career progression opportunities to the regional level.
12. 4. GEOCENTRIC ORIENTATION
• The firms accept a world wide approach to marketing and its operations
become global.
• In global enterprise, the management establishes manufacturing and
processing facilities around the world in order to serve the various regional
and national markets through a complicated but well co-ordinated system
of distribution network.
• There are similarities between geocentric and regiocentric approaches in
the international market except that the geocentric approach calls for a
much greater scale of operation.
13. ADVANTAGES
• Enables an MNC to develop an international executive team.
• Overcome the federation drawback of polycentric approach.
14. DISADVANTAGES
• Host govt. pressurizes MNC to employ high number of HCNs.
• Expensive to implement because of training and relocation expense.
• Time consuming.
• Requires more centralized control of staffing.
15. CONCLUSION
• The firm’s involvement decision is conditioned by a variety of internal and
external factors such as firms' export policy, resources and product range,
volume of export business, regulatory and procedural conditions to be
fulfilled both from exporting and importing angle.
• In practice, planning the ethnocentric approach is found to be most
common when overseas volume is insignificant, compared to the total sales
turnover, or if the firm does not want to go for higher volume of overseas
sales for some reason. Since little or no investment is needed, ethnocentric
oriented firms have the least risk.
