Eprg1
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The document discusses international marketing and the EPRG model. It begins by defining international marketing as applying marketing principles across national boundaries. It then explains the EPRG model, which describes four orientations companies can take in international markets: ethnocentric, polycentric, regiocentric, and geocentric. The ethnocentric orientation views foreign markets as secondary and uses the same strategies as the domestic market. The polycentric orientation treats each foreign market separately. The regiocentric and geocentric orientations develop regional or global strategies, respectively. The document provides examples of companies using different orientations in international markets.
Eprg1
- 2. • Objectives of this presentation are to make students aware of following: What is International Marketing? Why it has acquired importance? What is EPRG model of International Marketing?
- 5. DEFINATION OF INTERNATIONAL MARKETING • It refers to marketing carried out by companies overseas or across national borderlines. • The performance of the business activities that direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit.
- 6. AMERICAN MARKETING ASSOCIATION (AMA) According to the American Marketing Association (AMA) "international marketing is the multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.”
- 7. INTERNATIONAL MARKETING • In simple words International Marketing is the application of marketing principles to across national boundaries. • However, there is a crossover between what is commonly expressed as international marketing and global marketing, which is a similar term.
- 8. GLOBAL MARKETING • Global marketing strategy a single strategy for a product, service or company for the entire global market • Opportunities for economies of scale and enhanced competitiveness will be greater if marketing strategies are integrated into a global scale
- 9. GLOBAL MARKETING • Rather than tailor a strategy perfectly to an individual market, the company settles on one general strategy that can be applied throughout the world, while at the same time maintaining flexibility to adapt to local market if necessary. • Major challenge: design marketing strategies that can work well across multiple markets
- 10. WHY INTERNATIONAL • Due to certain geo political changes in last part of 20th century, World is no longer divided in two blocks of Western and Soviet Union. • Cold war has ended. • National boundaries for business have shrunk. • The business has to compete internationally.
- 11. IMPORTANT GEO POLITICAL EVENTS • Demolition of Berlin Wall making East and West Germany one Nation. (1990)
- 12. IMPORTANT GEO POLITICAL EVENTS • Collapse of Soviet Union (1991).
- 13. IMPORTANT GEO POLITICAL EVENTS • India adopted a new liberalized economic policy. (1991)
- 14. IMPORTANT GEO POLITICAL EVENTS • Britain handed over Hong Kong to China with a promise that its Democratic structure would be maintained (1997). • China opened up to World.
- 15. INTERNATIONAL/GLOBAL MARKETING • Suddenly companies found access to new markets. • There was increase in competition. Cost of production was much less in China and India. • To remain in business and to grow, companies had to cater to diverse conditions. • New strategies had to be devised. • Activities in the international arena became important to companies in achieving maximum growth potential.
- 16. • For US-based companies, 75% of sales potential is outside the US. • For Japanese companies, 85% of potential is outside Japan. • For German and EU companies, 94% of potential is outside Germany. • About 90% of Coca-Cola’s and McDonalds operating income is generated outside the US. • Trend: A large number of industries will be dominated by a handful of global companies INTERNATIONAL/GLOBAL MARKETING
- 17. GLOBALIZATION • Globalization meant that the production and distribution of products and services of a homogenous/standardized type and quality on a worldwide basis, based on the assumption that the world is converging and becoming similar.
- 18. GLOBALIZATION Times have changed… • No company can safely assume there will be viable foreign markets for an existing product. • Any company seeking to expand globally needs to ask if its offerings are culturally and socially appropriate for its targeted market.
- 19. TODAY’S CHALLENGES • Companies find it difficult to succeed in new markets that are culturally unfamiliar. • They often underestimate differences in the patterns of daily life in the new markets. • This makes it difficult to develop products and services that fit peoples’ lives. • It becomes difficult to extend their brand and manage culturally diverse teams.
- 20. HYBRID STRATEGY • It’s often a mistake to set out to create a worldwide strategy. Better results come from strong regional/local strategies, brought together into a global whole.
- 21. ‘GLOCALIZATION’ • Think Global. Act Local.
- 22. EPG FRAMEWORK • EPRG model sometimes called as EPG model, is used in international marketing. • It was introduced by Perlmutter in 1969 , later Wind Doughlas extended this model by another factor that is Regiocentric and hence it came to known as EPRG FRAMEWORK
- 25. Domestic techniques and Personnel are considered superior
- 26. ETHNOCENTRIC • Overseas operations are viewed as secondary to domestic operations. • Considered as a means to dispose of surplus domestic production. • Plans for overseas market are developed in the home office, utilizing policies and procedures identical to those employed in the domestic market. • Overseas marketing is looked after by home country nationals.
- 27. • No systematic research is conducted overseas. • No major modifications are made to products sold in overseas markets. • Prices are calculated on the same basis as in the home market with the addition of overseas distribution costs. • Promotion and distribution strategies are similar to that employed in the home country. • Strong reliance on export agents ETHNOCENTRIC
- 28. SURF – SUPER WASHOUT IN JAPAN Unilever enters Japan Detergent Market • It releases Surf Super concentrate washing powder in Japan • Measured sachets for Convenience • Fresh Smell WHAT WENT WRONG??
- 29. UN EXPLORED MARKET • Washing powder did not dissolve completely due to weather conditions. • Low agitation washing machines were more popular in Japan, in which the super concentrate surf washing powder did not wash completely. • Fresh smell was not very significant.
- 30. Local Personnel and Techniques are best suited to deal with local market conditions
- 31. POLYCENTRIC ORIENTATION • Subsidiaries are established in overseas market. • Each subsidiary operates independently with its own marketing objectives and plans. • Marketing activities are organized on country by country basis. • Marketing research is conducted independently in each country. • Separate product lines are developed in each country.
- 32. • Each subsidiary will have its own pricing and promotion policy. • Sales personnel from those countries. • Traditional channels of distribution of those countries. Eg. McDonalds – Veg burgers in India POLYCENTRIC ORIENTATION
- 33. Recognizes regional commonalities and leads to the design of regional strategies
- 34. Best man for the job irrespective of national origin
- 35. REGIOCENTRIC AND GEOCENTRIC • Region or entire world as potential market. • Firm develops policies and organizes activities on a regional or worldwide basis. • Marketing personnel from the region or from any country. • Standardized product lines for regional or worldwide markets. • Regional or Global channels of distribution are also developed.
- 38. CONCLUSION The globalization of Markets has necessitated all managers to pay attention to International marketing. Other than Environmental factors, self reference criterion are considered obstacles to International Marketing. Global awareness and sensitivity are the best solutions to challenges faced in International marketing
- 39. Why Companies pursue International Marketing