May 2016 Q3 b.

Management orientation and organisation for engaging in international business are as follows:
1. Ethnocentrism orientation
2. Polycentrism orientation
3. Regiocentrism orientation
4. Geocentrism orientation
1. Ethnocentrism orientation: This is a home country orientation and it’s based on the philosophy that the culture of the home country is superior to that of other countries. The approach, thus, ignores any inter-country differences which exist. Essentially, ethnocentric companies will tend to exhibit the following features:

• Market the same products with the same marketing programmes in overseas countries as at home.
• Centralize the marketing function in the home country
• Standardize the marketing mix
• Carry out no local market research or adaptation of promotion.
  As a result of the above, market opportunities in the overseas markets may not be fully exploited and foreign customers may thus be alienated by the approach. Ethnocentric companies usually focus on its domestic market and sees exports as
  secondary to domestic marketing. One significant advantage in using this approach is the economies of scale that accrues to the company.
  2. Polycentrism orientation: The polycentrism orientation is based on a philosophy that is exactly in contrast with the ethnocentrism orientation. This orientation believes that each country’s culture is unique. Based on this philosophy, the following features of polycentric companies become evident:
• It adapts totally the product and the marketing programme to each local environment
• It establishes largely independent local subsidiaries who are free to formulate their own objectives and plans
• It decentralizes its marketing management function
• It invests massively in marketing research in order to be responsive to the local markets.
  The result of the above is major increases in turnover. However, loss of economies of scale can seriously damage profitability. Ethnocentric companies tend to think of themselves as having multiple identities, what is usually referred to as multinational corporations.
  3. Regiocentrism orientation: This is a synthesis of ethnocentrism and polycentrism orientations. It is based on the philosophy that there are both similarities and differences between countries that can be incorporated into regional objectives and strategies. Thus, with the approach market segmentation is fulfilled on the basis of similarities in terms of regions. A regiocentric company will find economic, cultural or political similarities among regions in order to cover the similar needs of potential consumers. For instance, nations like India, Pakistan and Bangladesh possess a strong regional identity that can be exploited using same products and strategies. The significant features of regiocentric companies are:
• It uses an integrated approach to marketing that is based on regional blocks.
  4. Geocentrism orientation: This orientation is similar to regiocentrism orientation. The only difference is that it fails to recognise similarities and differences among regional blocks. Thus, the target of geocentric companies, also known as global companies, is to target consumers who have similar tastes and preferences wherever they may be found on the globe. The main idea of this approach is to borrow from every country what is best. It treats the issues of standardization and adaptation on their merits so as to formulate objectives and strategies that exploit markets fully while minimizing company costs. The aim is to create a global strategy that is fully responsive to local market differences. The essential features of a global company are as follows:
• It uses an integrated approach to marketing management.
• It gives due consideration to each country’s condition without allowing any specific country’s culture or condition to dominate.