International Marketing Management - Part 3
A geocentric strategy is characterised by a way to combine some level of internal consistency and a measure of responsiveness to local conditions - International Marketing Management introduction. A particular type of organisational structure and leadership style is reflected by a certain attitude. When the top-management of an organization or company has an ethnocentric or home-country attitude it implicitly regards the parent company and the criteria that the parent company employs as superior. This stance entails the imposing of the parent company’s methods and conditions for doing things through the use of home-country nationals to manage foreign subsidiaries. The organisation is highly centralised and communication of issues such as Human Resource Management is one-way and top-down: from company headquarters to the local operations. The time and room to manoeuvre for local management is minimal.
About two decades ago, Wind, Douglas and Perlmutter (1973) described firms’ international marketing strategies as polycentric, ethnocentric, or geocentric. Companies taking an ethnocentric approach merely replicate home-market strategies in foreign markets. A polycentric approach involves in adapting marketing strategies to each international market served. A geocentric approach joins both of the former into a global strategy, consciously weighing the costs and benefits of both (Rossiter RJ 1988, pp 10).
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Cross-cultural studies have been carried out to compare advertising and marketing strategies and companies’ tactics in their home markets. However, some empirical studies have reported some companies’ advertising strategies in international markets. (Suzuki’s in the 1980 study of Japanese firms’ advertising in the United States is an interesting exception.) In the current studies, German and Japanese print advertisements used in three foreign markets (Indonesia, Spain, and the United States) are compared using a content analysis approach (Walters P 1986, pp. 63).
Aside from the descriptive findings which have been analysed, two related issues are considered in the study. First examined is the question: Does culture in the home-country influence advertising approaches in international markets? Through extensive literature in comparative management (e.g., Negandhi 1983; Adler 1987; ), we understand that culture has significant impacts on employees’ and managers’ behaviors and thinking. Multi cultural differences across cultural groups often cause serious problems in multicultural organizations. There has been also pervasive effects on consumer behavior which are caused by culture. Although some recent attention has been given to the influence of culture on marketing tactics and strategies in home markets, almost no studies have considered how home culture influences marketing and advertising strategies and tactics in foreign markets. Generally, there is need to consider the issues as to whether home-country advertising styles and values are projected or present in international market campaigns (Mueller B 1991, pp. 14).
Geocentrism is related with an integrated world structure of continued physical growth and tied to centralized/decentralized management strategies. They are highly complex and worldwide interdependent. Firms and multinational organizations utilizes a Geocentric or global advertising and marketing infrastructure and likely to have enhanced global new product development capabilities. These Geo-mechanisms gives multinational corporations (MNCs) rroom to transfer knowledge across borders at the organization level, with a primary and basic focus on broad strategic decision-making premises and the structuring of headquarter-subsidiary relationships (Simmonds K 1985, pp. 15).
Compared to geocentrism, cybercentrism encompasses the management of the highly interactive digital economic universe, capturing a ‘real time’ vision of market realities without physical size limitations to corporate operations or growth. The Cybercentristic businesses may be fully virtual or a traditionally structured virtually-extended business engaged in the B2C (Business-to-Consumer) features of Internet e-commerce, the B2B (Business-to-Business) elements of cyber-alliances including e-procurement in supply chain management, and the F2B (Factory-to-Business) aspects of e-Manufacturing including virtual product design, remote diagnostics/maintenance, and manufacture-on-demand (Hornik J 1980, pp. 39).
When businesses start marketing across countries and cultures, they frequently encounter linguistic problems. Translating the name of the product and that of the company can be difficult; translating advertising slogans can be downright not possible. Over the years, some of the largest and most marketing-savvy companies have made some of the biggest translation blunders thus making their customers unable to understand the usage of the products. For example Coca-Cola company had trouble in global markets. A few decades ago, the advertisement “Have a Coke and a Smile” was translated into French. Although the translation was technically correct, the words weren’t heard clearly when they’re sung, and the song in the advert sounded like “Have a Coke and a Mouse.” (Papavassiliou N 1989, pp. 145)
Multinational firms are which are defined in terms of both geographic scope and mind-set may compete globally through either a multi-domestic or transnationally integrated strategy. There is no way to believe that a geocentric mind-set characterizes all firms where scale requires transnational tactic integration, or even that there is a necessary relationship between the two; there are integrated businesses that are global in geographic scope that (Busch R 2006, pp. 213).
Companies and Geocentric mindsets would see regional differences in consumer purchase behaviour, local languages and currencies as obstacles to doing business. Your e-commerce, virtual storefront on the Web sees these differences as opportunities, with the utilization of translation and currency software engines providing conveniences for your cyber customers (Porter ME 1986, pp.101).
The other major problems facing the international marketing firms adopting a geocentric strategy for their advertising campaign are as follows;
There are major differences in consumer needs, wants, and usage patterns for products. There are differences in the utilization of products in by different people because of their religion, race, culture among other reasons (Simon JL 1971, pp. 31).
l There are differences in consumer response to marketing mix elements
l There are differences in brand and product development and the competitive environment. The production of similar products in a foreign country makes it impossible for an organization to advertise in the highly competitive region.
l There are in the legal environment, some of which may conflict with those of the home market. Some countries set up rules and regulations that must be followed while advertising exported goods. Taxes and other duties are charged making it difficult for many foreign corporations to be unable to advertise their products (Samover L 1981, pp. 75).
l There are differences in the institutions available, some of which may call for the creation of entirely new ones (e.g. Infrastructure).
l There are differences in administrative procedures
l There are differences in product placement.
Busch R, Seidenspinner M and Unger F 2006. Marketing Communication Skills. Spring Berlin Heidelberg. Berlin pp.199-239
Hornik J 1980 “Comparative evaluation of international vs national advertising strategies”, Columbia Journal of World Business, Vol. 15 pp.36-45.
Porter ME 1986 Competition in Global Industry, Harvard Business School Press, Boston, MA.
Rossiter RJ Percy L 1988. Advertising and Promotion Management, McGraw-Hill Book Company, New York.
Samover L, Porter R, Jain N 1981. Understanding International Communications, Wadsworth, Belmont, CA.
Simmonds K 1985 “Global strategy: achieving the geocentric ideal”, International Marketing Review, Vol. 2 pp.8-17.
Simon JL 1971. The Management of Advertising, Prentice-Hall, Englewood Cliffs, NJ.
Papavassiliou N 1989 “The involvement model in advertising consumer products abroad”, European Journal of Marketing, Vol. 23 No.1, pp.17-30.
Mueller B 1991 “Multinational advertising: factors influencing the standardized vs specialized approach”, International Marketing Review, Vol. 8 No.1, pp.7-18.
Walters P 1986 International Marketing Policy: A discussion of the Standardization Construct and its Relevance for Corporate Policy. A Journal of International Business Studies. . 17. No. 2. pp. 55-69.