What Are the 4 Ps of Marketing?
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- Regiocentric
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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. However, companies that use this approach learn by doing. For this reason, a learning effect occurs, and new knowledge is an intellectual asset of the company. If a company is the first to enter a market or offer an unfamiliar product, the local company has first-mover advantages. It could have the best location in a host country to operate the business, and this could additionally substantially increase profit margins. 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. It is still challenging to determine countries in one region that share the same characteristics. Consider, for example; some companies use this approach for NAFTA countries, which include the United States, Canada, and Mexico. All countries are in the same region but still have some different characteristics. The same implies for the Benelux, which include Belgium, Netherlands, and Luxembourg. The countries are in the same region, but Belgium has different market characteristic than the Netherlands and Luxembourg. The reason why companies use this approach to group countries into for example NAFTA and Benelux. is depending on the type of industry and product or service. Every organization has its way of internationalization. Download 74.89 Kb. Share with your friends:
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