EPRG ORIENTATION

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Master of Commerce – M.Com First Year Solved Assignments for July 2019 and January 2020 Admission Cycles

M.COM First Year Tutor Marked Solved Assignment

Course Code : IBO – 02
Course Title : International Marketing Management
Assignment Code : IBO-02/TMA/2019-20
Coverage : All Blocks

IBO – 02 International Marketing Management Solved Assignment for 2019-20

Q1.)(b)Write short notes on the following:

  ii) EPRG Orientation :

EPRG stand for Ethnocentric, Polycentric, Regiocentric, and Geocentric. It is a framework created by Howard V Perlmuter and Wind and Douglas in 1969. It is designed to be used in an internationalization process of businesses and mainly addresses how companies view international management orientations. According to the EPRG Framework (or the EPRG Model), there are four management approaches that an organization can take to get more involved in international business substantially.

The EPRG Framework suggests that companies must decide which approach is most suitable for achieving successful results in countries abroad. For this reason, the EPRG Framework can be a useful tool to utilize if a company does not know yet how to manage business activities between companies in the local country and a host country. The EPRG Framework is additionally useful for making strategic decisions.

Ethnocentric : 

In this approach of the EPRG Framework, the company in a local country that wants to do business overseas does not put in much effort to do research abroad about the host country’s market. Instead, most of the market research is executed in the headquarters in the local country. With this approach, the company seeks for markets abroad that share the same characteristics as the local market so that the marketing strategy does not have to be adapted. More specifically, the ethnocentric approach uses the same marketing strategies that are created by local personnel and further utilized multiple countries.

The ethnocentric approach of the EPRG Framework has benefits but also downsides. At first, the company saves a lot of operational costs that can be invested elsewhere. But the downside is that the company does not build up new knowledge about the market abroad, which could substantially increase sales volume if products and strategies would be adopted to the needs of the host country.

Polycentric : 

In the polycentric approach of the EPRG Framework is the opposite of the ethnocentric approach. A company that utilizes this approach carefully consider different markets abroad to identify host countries that could potentially offer the most benefits. It means that if a company has a local headquarter and a separate office overseas in a host country that manages the operations in that or more countries, the marketing strategies are locally created and implemented based on the local needs. Businesses that utilize the polycentric approach of the EPRG Framework strongly believe that every market has its differences. For this reason, these types of companies implement different marketing strategies for each market.

In the polycentric approach, it is therefore easier to make strategic decisions based on current cultural differences and political differences. Companies that use this approach can also more easily adapt to changes in the market because of their decentralized decision-making authorities.

The downside is that the local headquarter has less control over its operations abroad. As long as the business operations in the host country demonstrate to be successful, this might not be a problem. But if the business operations overseas show to be not too profitable and result in losses, it is more difficult for the local company to minimize those losses.

Regiocentric : 

In a regiocentric approach of the EPRG Framework, businesses create and implement internationalization strategies for specific regions. Companies that utilize this type of approach use this for the area in which the local business is operated. It can also be that an organization utilizes two kinds of approaches. An organization can use a regiocentric approach for the business in the region in which it operates. And the same organization can use a polycentric or ethnocentric approach to do business in countries outside the region.

Businesses that use a regiocentric approach of the EPRG Framework many times believe that the markets in the region share the same characteristics of the market in the home country.

Geocentric : 

A geocentric approach of the EPRG Framework means that a business strongly believes that it is possible to utilize one type of strategy for all countries, regardless of the cultural differences. However, companies that use this approach attempt to create products or offer services in a way that best suit national and international customers. This means that instead of believing that their product or service is excellent and that it will sell in other markets, like in the ethnocentric approach, these organization proactively adapt their products and services that best meet the global needs.

Companies sometimes prefer this type of strategy of the EPRG Framework because it does not involve many adoptions, which minimizes operational costs. These companies use one strategy to sell a product or service, and could for this reason, achieve economies of scale. Organizations that have a geocentric approach are many times considered as key international businesses because these companies utilize a combination of the polycentric and ethnocentric approaches. It means that organizations with a geocentric approach of the EPRG Framework can identify similar cultural characteristic, and they can convert the different cultural characteristics into mutual characteristics.