Approaches to International Marketing/ International Business

The differences in international orientation and approach can be used to categorize the international marketing into different forms. A domestic company may initially start with ethnically close markets and extend its operations across the world in its final stage.

• Domestic marketing extension (Ethno-centric) concept
• Multi domestic market (Poly-centric) concept
• Global marketing (Regio-centric) concept

Domestic Marketing Extension (Ethnocentric) concept :

The companies guided by this are casual players in overseas markets. For them the overseas markets serve as conduits for directing surplus production. They use overseas markets as a buffer for checking the demand fluctuations in the domestic market. The main focus of the company remains domestic markets. This concept is usually preferred by small companies, or even by large companies operating in a competitive industry. The overseas operations of such companies are usually restricted to exports in certain niches such as approach is also known as ethnocentric in the EPRG schema.

Multi domestic marketing (polycentric) concept : 

 As the overseas operations of the companies grow, they recognize the need for a different approach to international marketing. The operations (10) of companies can acquire forms of overseas joint ventures, licensing agreements, overseas manufacturing and marketing. The subsidiaries operating in overseas markets are recognized as independent business units with autonomy to operate in their markets. Within their respective markets, the subsidiaries behave as domestic companies, deriving only strategic guidelines from their head offices. The companies usually become multinational corporations at this stage. The controls are decentralized to facilitate local operations under the EPRG schema, such firms are classified as polycentric.

Global Marketing (Regiocentric) Concept :

As the companies direct their approach to become a global company, they acquire a global perspective in their operations. Such companies look for lucrative business and investment opportunities on global basis. They derive synergy by sourcing the resources from across the globe by selecting those markets which can provide the inputs to business in most cost-effective manner. Such companies do not treat the SBUs operating in different markets as totally independent entities, but as the SBUs which are contributing towards the growth of the company as a whole. Certain degree of the controls and policy matters may extend to all the SBUs, although allowances may be made to accommodate regional diversities. Under the EPRG schema, global companies are often classified as regiocentric or geocentric companies.