The most challenging task a company may face while entering the international market is the degree of standardization or customization in its operations. The question of standardization or adaptation or customization will be affecting all business operations and marketing mix decisions. However, in the era of globalization, where consumers have access to all the products and services and have their own taste and preferences, scope of customization has increased. Whether a company chooses standardization or customization of its operations depends upon its attitude towards different cultures and environments.
The attitude towards standardization or customization can be explained with the EPRG Framework of international marketing. EPRG framework is based upon four approaches of a company towards international marketing.
E stands for Ethnocentric
P stands for Polycentric
R stands for Regiocentric
G stands for Geocentric
Ethnocentric Approach: Ethnocentric approach or home country orientation is the approach where a company simply markets its product or services internationally in the same manner as they do domestically. Companies believe that consumer’s needs and market conditions are more or less homogeneous in international markets. Companies prefer an ethnocentric approach in order to avoid the expense of developing new marketing techniques to serve foreign consumers. All functions are planned and carried out from home base only with little or almost no difference in product formulation or specifications.
Polycentric Approach: In Polycentric approach, companies go for customization for each foreign market. They will customize the products according to each country depending upon the consumers taste or preferences or cultural or any legal or political factors i.e. depending upon their local marketing conditions and then enter into that market. Companies customize the marketing mix to meet the specific needs of each foreign market.
Regiocentric Approach: In a regiocentric approach, company’s target a group of countries having similar market characteristics, and then enter into the market. Once the company is established in various markets, attempts are made to form market clusters based on geographical and psychic proximity. The production and distribution of products are made to serve the whole region with an effective economy of operation, close control and coordination.
Geocentric Approach: In geocentric approach, the company identifies the needs of consumers worldwide and then enters into the market with standard products with standardized marketing mix for all the markets it serves. Companies have to identify the similarities in consumption patterns that can be targeted. The companies coordinate their distribution network to distribute their products in various regional and national markets by establishing manufacturing and processing facilities around the world.
Author: Prof. Nupur Rawal, Assistant Professor – Unitedworld School of Business (UWSB)
