EVOLUTIONARY PROCESS OF GLOBAL MARKETING
Global marketing ’a gradual process occurring in stages’. The evolution of marketing across
national boundaries has identifiable stages, which are discussed in the following:
DOMESTIC MARKETING
In the initial stages, most companies focus solely on their domestic markets. The marketing
mix decisions are invariably based on the needs and wants of the domestic customers. These
decisions are taken so as to respond competitively and effectively to the domestic
environmental factors.
Market Focus Domestic
Orientation Ethnocentric
Marketing Mix Decisions Focussed on domestic customers
EXPORT MARKETING
The stage models suggest that generally a firm focussed on domestic markets begin to export
unintentionally by receiving unsolicited orders from overseas markets. The firm tries to fulfil
such orders reluctantly with little strategic orientation. Thus, the initial entry of a firm in
international markets may be characterized as a consequence of responding to unsolicited
export enquiries. However, the positive experience in fulfilling such overseas market
requirements serves as a stimulus to look for repeat orders.
Marketing Focus Overseas(Targeting and entering foreign
markets)
Orientation Ethnocentric
Marketing Mix Decisions Focussed mainly on domestic
customers.
Overseas marketing-generally an
extension of domestic marketing.
Decisions made at headquarters.
The major marketing decision areas at this stage include market identification and
selection, timing and sequencing of entry and selection of an appropriate entry mode.
The marketing mix decisions are primarily made at the headquarters.
INTERNATIONAL MARKETING
International marketing is defined as the marketing activities carried out across
national boundaries.
International marketing involves:
1) Identifying needs and wants of customers in international markets
2) Taking marketing mix decisions related to product, pricing, distribution and
communication keeping in view the diverse consumer and market behaviour across different
countries on one hand and firm’s goals towards globalization on the other hand
3)penetrating into international markets using various mode of entry and taking decisions in
view of dynamic international marketing environment.
Marketing Focus Differentiation in country markets by way of
developing or acquiring new brands
Orientation Polycentric
Marketing Mix Decisions Developing local products depending upon country
needs. Decision by individual subsidiaries.
The extreme form of international marketing is multi-domestic marketing, where
a company establishes an independent foreign subsidiary in each and every
foreign market. The foreign subsidiaries operate independently without any
measureable control from the headquarters.
MULTINATIONAL MARKETING
Once a company establishes its manufacturing and marketing operations in multiple markets,
it begins to consolidate its operations on regional basis so as to take advantage of economies
of scale in manufacturing and marketing mix decisions. Various markets are divided into
regional sub-segments on the basis of their similarity to respond to marketing mix decisions.
It is known as multinational marketing.
Marketing Focus Consolidation of operations on regional
basis. Gains from economies of scale.
Orientation Regiocentric
Marketing Mix Decisions Product standardization within regions but
not across them on regional basis
GLOBAL MARKETING
The extreme view of global marketing refers to the use of a single marketing method across
the international markets with little adaptation.
Marketing Focus Consolidating firm’s operations on global basis
Orientation Geocentric
Marketing Mix Decisions Globalization of marketing mix decisions with local
variations. Joint decision making across firm’s global
operations.
The globalization of markets leads to:
Reduction of cost in efficiencies and duplication of efforts among national and
regional subsidiaries,
Opportunities for the transfer of products, brands and other ideas across
subsidiaries
Emergence of global customers
Improved linkage among national marketing infrastructures leading to the
development of a global marketing infrastructure.
In practice, global marketing hardly means complete standardization of the marketing mix
decisions, but it increasingly means a strategic approach to have a global perspective to have
economies of scale.
EPRG FRAMEWORK
E: - Ethnocentric orientation
P: - Polycentric orientation
R: - Egocentric orientation
G: - Geocentric orientation
The key assumption of EPRG is the degree of internationalization to which the management
is committed or willing to move affects the specific international strategies and decision rule
of the firm
Ethnocentric Orientation
• Domestic strategies, techniques, and personnel are perceived as superior
• International customers are considered as secondary
• Guided by domestic market extension concept:
• International markets are regarded primarily as outlets for surplus domestic
production
• International marketing plans are developed in-house by the international division
• try to market those product in other countries which have demand equal to domestic
market
Polycentric Orientation
• Guided by the multidomestic market concept:
• Focuses on the importance and uniqueness of each international market
• Likely to establish businesses in each target country
• Fully decentralized, minimal coordination with headquarters
• Marketing strategies are specific to each country
• in the effort to satisfy local customer needs and wants, full product modification is
implemented or separate product lines are developed
• Result: No economies of scale, duplicated functions, higher final product costs
Regiocentric Orientation
• Guided by the global marketing concept:
• World regions that share economic, political, and/or cultural traits are perceived as
distinct markets
• Divisions are organized based on location
• Regional offices coordinate marketing activities
Geocentric Orientation
• Guided by the global marketing concept:
• The world is perceived as a total market with identifiable, homogenous segments
• Targeted marketing strategies aimed at market segments, rather than geographic
locations
• Achieve position as low-cost manufacturer and marketer of product line
• Provides standardized product or service throughout the world
• analyze and manage the marketing strategies with integrated global marketing
program
• The objective of a geocentric company is to achieve a position as a low-cost
manufacturer and marketer of its product line. Such firms achieve competitive
advantage by developing manufacturing processes that add more value per unit cost to
the final product than do their rivals
