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The evolution of global marketing: the EPRG model
This video introduces learners to the EPRG framework.
The EPRG framework is a useful tool for understanding an organisation’s attitude towards international marketing. The framework looks at how an organisations orientation towards internationalisation can influence strategy. It is useful in helping provide managers clarity on how to best orientate their organisation in order to fit their international marketing strategy, as well as provide an insight into potential limitations of each approach. Ethnocentric orientation is the approach whereby an organisation believes that the practices of the organisation within their domestic market should drive their international strategy. This in practice would mean that an organisation would replicate the way they operate their organisation domestically across international markets.
This can manifest itself with the organisation choosing to send managers from the domestic market to manage in other markets, therefore replicating their domestic marketing strategy. A good example of a company using this approach to their advantage is Harley Davidson. They proudly market themselves an all American brand, however, still manage to hold a huge multinational appeal. Polycentric orientation is when an organisation understands that every international market requires its own unique approach. This manifests itself in every country the organisation operates in, having the freedom to pursue the strategy best suited to that market. McDonalds, for example, will research each market and gain insight into the differences in culture and adapt their menus accordingly.
For example, McDonalds in India offer a menu based on the tastes of the market. This includes the McAloo Tikki and the Chicken Maharaja. Regiocentric orientation is when an organisation groups countries into regions and adopts a management approach specific to these regions. This can be seen when organisations create regional offices. For example, European or Asian offices. The rationale for this approach is that countries in these areas share similar values that enables them to be grouped. For example, countries such as Pakistan, India and Bangladesh can share similar regional characteristics. Global organisations such as Loriel and Adidas, therefore, divide their business into regional areas in order to address these similarities and avoid the pitfalls of ignoring regional variations.
Geocentric orientation is when an organisation does not organise based on country or regions. Geocentric firms adopt an approach whereby they have a global mindset. They view the whole world as their market and seek to identify global needs and wants and create products and services. The organisation will attempt to adopt a global approach to its operations, rather than drawing on practices from a particular country. Intel, for example, standardise their products worldwide as computer processes are required globally and on the whole do not need to be adapted for different markets. This creates a massive positive impact on the relevant market and enables the company to achieve global competitive advantage.
This video gives an overview of Perlmutter’s (1969) EPRG framework.
The EPRG framework explores four different orientations to internationalisation:
- Ethnocentrism: where the company’s approach is determined by its domestic practices.
- Polycentrism: where the company pursues the strategy that is best suited to the host market.
- Regiocentrism: where countries that share economic, cultural or political similarities are grouped in regions, and the company adopts an approach specific to those regions.
- Geocentrism: an approach driven by the company’s global mindset, and which serves global needs and wants.
In the next steps, you will explore examples of these individual management approaches in turn.
Reference
Perlmutter, H. V. (1969). The Tortuous Evolution of the Multinational Corporation. Columbia Journal of World Business, 9 (January-February), 9-18
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International Marketing: Definition and Strategy
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International Marketing: Definition and Strategy
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