Global Marketing - Marketing Approaches 4.3.1

Ethnocentric - The domestic markets values is the superior market, and so ignores the values of other countries/markets in which their product exists. General marketing reproduced overseas for their product and no adaptation of product to meet local needs. 

Therefore, products are marketed in foreign countres based on the perceived superiority of the home nation's values. To some extent, this approach ignores local customs, culture and religion. In order for this to be a successful approach, the markets need to be similar. For example, Nissan startd out using an ethnocentric approach to car sales where all cars overseas were exactly the same as those in the local Japanese domestic market.

Among the benefits of an ethnocentric approach is the fact that standardisation provides significant economies of scale and much lower marketing costs as there is little or no research required for new markets.

A drawback is the risk of losing sales as the business is not market orientated. 

Polycentric - The business adapts their marketing strategy to the local market, providing products tailored for that market. The values of that country are the most important in order to successfully market the product there. This approach is the direct opposite of ethnocentrism. 

Typically with this approach, the business believes the overseas marker is distinct from the domestic market. For example Pizza Hut in Japan has pizza toppings of squid and seaweed and in South Korea it offers crusts stuffed with sweet potato to satisfy local customer tastes. The business fully takes into account the nation's values including their customs, cultrue and religion. 

A benefit of this approach includes a likely increase in sales and local brand loyalty due to the market orientation of the product. 

A drawback is that average product costs will increase due to new product development, market research and a reduction in economies of scale. Additionally, a loss of sales as the product is no longer differentiated from other local competition. 

Geocentric - This is a fusion of both ethnocentric and polycentric approaches whereby the promotion of the product is undertaken on a global POV. Therefore, it is not based on the perspective of either the home or host nation. 

This approach takes the benefits of polycentric and ethnocentric to gain the best of both and hence is the best approach for businesses to take. For example, Coca-cola can operate an ethnocentric approach in markets such as the UK and the US and benefit from economies of scale, but a polycentric approach in places like India, where customers have less money to spend; hence similar cans are sold at cheaper prices. 

The benefits are the same as the polycentric and ethnocentric approaches. 

The biggest drawback is that it will not always be clear which is the correct strategy to choose for different markets, which could lead to the wrong approach, invoking the drawbacks of either ethnocentric or the polycentric discussed above.