eprg
TRANSCRIPT
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Copyright Atomic Dog Publishing, 2002
EPRG Framework…
Scope, Concepts, and Drivers of International Marketing
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Copyright Atomic Dog Publishing, 2002
Chapter Objectives
Define international marketinglevels of international involvement.company orientations and philosophies
toward international marketing.
environmental and firm-specific drivers that direct firms toward international markets.
obstacles to successful international ventures.
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Copyright Atomic Dog Publishing, 2002
Importance of International Marketing
International expansion helps firm: Keep pace with competition Reach a larger marketReap higher profitsProlong the lifecycle of their
products
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Copyright Atomic Dog Publishing, 2002
Levels of International Marketing
Domestic Marketing
Export Marketing
International Marketing
Global Marketing
• Least international commitment
• Domestic focus
• Limited international commitment
• Involves direct or indirect export
• Ethnocentric
• Substantial internationalcommitment
• Focus on individual countries or regions
• Polycentric or Regiocentric
• Extensive internationalcommitment
• Focus on segments, rather than countries or regions
• Geocentric
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International Philosophy
Corporation & Business Lines
Human Resources
Marketing &
Sales
Manufacturing& Distribution
Finance
Management internationalization philosophy
affects all functional areas of the corporation.
Based on EPRG framework
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EPRG FRAMEWORKETHNOCENTRIC orientationPOLYCENTRIC orientationREGIOCENTRIC orientationGEOCENTRIC orientation
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Ethnocentric Orientation
domestic market extension concept:Domestic strategies, techniques, and
personnel are perceived as superiorInternational customers, considered
secondaryInternational markets regarded as
outlets for surplus domestic productionInternational marketing plans
developed in-house by international division
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Polycentric Orientationmultidomestic market concept:Focuses on importance and uniqueness
of each international marketMay establish businesses in each target
countryFully decentralized, minimal coordination
with headquartersMarketing strategies = specific to each
countryResult:
No economies of scale, duplicated functions, higher final product costs
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Regiocentric Orientationglobal marketing concept:World regions that share
economic, political, and/or cultural traits are perceived as distinct markets
Divisions are organized based on location
Regional offices coordinate marketing activities
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Geocentric Orientation
global marketing concept:world is perceived as a total market
with identifiable, homogenous segmentsTargeted marketing strategies
aimed at market segments, rather than geographic locations
Achieve position as low-cost manufacturer & marketer of
product lineProvides standardized product or service
throughout the world
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Drivers of International Expansion
CompetitionRegional Economic & Political IntegrationTechnologyImproved Transportation &
TelecommunicationEconomic GrowthTransition to Market EconomyConverging Consumer Needs
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Drivers of International expansion,
continued
COMPETITIONMcCann Erickson, the
advertising agency, follows longtime
client, Coke, to all countries where
company is present
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Drivers of International Expansion, continued
•Regional agreements • such as NAFTA, MERCOSUR, and the European
Union • lower and eliminate barriers and promote trade
within common markets.•Subsidiaries established in specific
markets • to take advantage of free trade within the region.
REGIONAL, ECONOMIC and POLITICAL INTEGRATION
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Drivers of International Expansion, continued
TECHNOLOGY• Consumers worldwide are exposed to similar products, services, and entertainment.
• The Web & the Internet have revolutionized the way companies conduct business.
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• Lower cost and higher quality communication • due to satellite technology,
teleconferencing, and e-mail• Efficient transportation
• due to containerization and • just-in-time technology
Drivers of International Expansion, continued
TRANSPORTATION and TELECOMMUNICATIONS
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Drivers of International Expansion, continued
• Emerging middle class in big emerging markets • with increasing buying power• Brazil and India
• Opening of new markets previously closed, • such as China and Vietnam
• Emerging economies • are becoming viable trade partners
ECONOMIC GROWTH
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Drivers of International Expansion,
• Transition of Eastern Bloc to a market economy • created important new markets
• Created opportunities to transform • inefficient government-owned local companies • into successful enterprises
TRANSITION to a MARKET ECONOMY
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Drivers of International Expansion,
• Uniform consumer segments • emerging worldwide:
• global teenagers, global elite
CONVERGING CONSUMER NEEDS
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Firm-Specific Drivers
Product Life Cycle Considerations: opportunity to prolong product lifecycle by entering growth markets.
Sales
Intro Growth Maturity Decline
Profits
Sales
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Firm-Specific Drivers, High New Product Development Costs:
Firm must look beyond home-country market to recover investment costs
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Price competition during maturity drives firm to new international markets
Firm-Specific Drivers,
Standardization, Scale Economies, Cheap Labor
Intro Growth Maturity Decline
Sales
Profits
Sales
Time
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Firm-Specific Drivers, Experience Transfers
Experience in one country serves as
basis for strategies in new international markets.
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Obstacles to Internationalization
Self-reference CriterionConscious and unconscious reference to own national culture while operating in the
host country
To counter the impact of the self-reference criterion,
select appropriate personnel forinternational assignments
engage in sensitivity training*Lessons in culture differences
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Obstacles to Internationalization
Government BarriersRestrictions on foreign corporations
tariffs, import quotas, and other limitations,
such as restrictive import license awards
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Obstacles to Internationalization,
Barriers from International CompetitionBlocked channels of distributionExclusive retailer agreementsPrice reductions
at the time of market entryAdvertising blitzes
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Copyright Atomic Dog Publishing, 2002
Chapter Summary
International involvement: Domestic marketing, export marketing,
international marketing and global marketingInternationalization philosophies:
Ethnocentric, polycentric, regiocentric, and geocentric
Drivers of international expansion: Competition, regional integration, removal of
trade barriers, improvements in transportation, telecommunications and technology, converging consumer needs
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Copyright Atomic Dog Publishing, 2002
Chapter Summary
Firm-specific drivers: Prolonging product lifecycle, recovering new product development costs, price competition, standardization, economies of scale and cheap labor, experience transfers
Obstacles to entry: Self-reference criterion, government barriers, competitive barriers