Thursday, May 20, 2021

Ethnocentric and polycentric orientation

Ethnocentric and polycentric orientation

The term ethnocentric orientation means that a company does not differentiate between domestic and foreign markets and applies same techniques in foreign markets which are applied in domestic marketing. Polycentric orientation is opposite of ethnocentric orientation. Ethnocentric and polycentric orientation The term polycentric orientation means each overseas market is different from other and local techniques and personnel are best suited to deal with local conditions. 

According to ethnocentric orientation foreign operations are secondary to domestic operations while according to polycentric orientation foreign operations are equally significant.

Under ethnocentric orientation, international marketing activities are controlled from the home country while under polycentric orientation subsidiaries are established in all overseas markets. Ethnocentric and polycentric orientation Subsidiaries are given free hand in framing and implementing policies.

Ethnocentric orientation is appropriate when overseas sales volume is insignificant compared to total sales of the firm. Polycentric orientation is appropriate when firm is committed to international marketing.

The term ethnocentric orientation means that a company does not differentiate between domestic and foreign markets and applies same techniques in foreign markets which are applied in domestic marketing. Ethnocentric and polycentric orientation Polycentric orientation is opposite of ethnocentric orientation. The term polycentric orientation means each overseas market is different from other and local techniques and personnel are best suited to deal with local conditions. On the basis of above, following points of distinction emerge:

According to ethnocentric orientation foreign operations are secondary to domestic operations while according to polycentric orientation foreign operations are equally significant. Under ethnocentric orientation, international marketing activities are controlled from the home country while under polycentric orientation subsidiaries are established in all overseas markets. Subsidiaries are given free hand in framing and implementing policies. Ethnocentric and polycentric orientation Ethnocentric orientation is appropriate when overseas sales volume is insignificant compared to total sales of the firm. Polycentric orientation is appropriate when firm is committed to international marketing.

The practices and policies of headquarters and of the operating company in the home country become the default standard to which all subsidiaries need to comply. Ethnocentric and polycentric orientation Such companies do not adapt their products to the needs and wants of other countries where they have operations. There are no changes in product specification, price and promotion measures between native market and overseas markets. Ethnocentric and polycentric orientation The general attitude of a company's senior management team is that nationals from the company's native country are more capable to drive international activities forward as compared to non-native employees working at its subsidiaries. Ethnocentric and polycentric orientation The exercises, activities and policies of the functioning company in the native country becomes the default standard to which all subsidiaries need to abide by. The benefit of this mind set is that it overcomes the shortage of qualified managers in the anchoring nations by migrating them from home countries. This develops an affiliated corporate culture and aids transfer core competences more easily. The major drawback of this mind set is that it results in cultural short-sightedness and does not promote the best and brightest in a firm.

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