A firm having a presence in the global market has to decide the manner in which it will enter and operate there. Firms in the international market have a different orientation and operating strategy. The country in which a company has its headquarter is Home country and countries where it has subsidiaries are known as host countries. EPRG Framework helps the company to decide the way in which strategic decisions are being made and how the company manages operations between headquarter and its subsidiaries. The concept of EPRG was introduced by Howard V. Perlmutter within the journal article “The Tortuous Evolution of Multinational Enterprises” in 1969.
1. ETHNOCENTRIC ORIENTATION (Home country orientation)
In this approach, A firm employs home market strategies to the international market. Plans for overseas market are developed in the home office of the company. Personnel is hired from home country. Also, promotion and distribution strategies are similar to that employed in the home country.
2. POLYCENTRIC APPROACH (Host country orientation)
In this approach, marketing strategies are framed out as per the situation of the host country ( the country where subsidiary is situated). Decisions can be altered as per the economic, political and cultural disparities in the country. This provides a firm to manage its operations independently, without much interference from its headquartered.
3. REGIOCENTRIC ORIENTATION
In this approach, a firm treats a group of countries with similar characteristics as a single market and accordingly designs a marketing strategy. Countries like India, Pakistan and Bangladesh possess similar characteristic and can be served well with a single marketing strategy.
4. GEOCENTRIC APPROACH
This approach maintains a balance between home and host market. Marketing strategies are not influenced by the home or host country preferences. A firm tries to adopt globalized marketing, formulates an integrated marketing strategy for across the globe. this enables a firm to enjoy economies of scale.