Marketing organization and implementation for developing international markets - Marketing Management

The final element in the strategic management of international marketing is the important area of organization and implementation of international marketing programmes. A highly centralized structure is likely to develop a more standardized approach. A more decentralized structure is likely to lead to less standardization. Majaro8 has identified three alternative types of organizational structure for international marketing:

  1. The ‘Macropyramid’ structure – This type of structure is characterized by a strong central ‘nerve centre’. All strategic planning is centralized and subsidiaries operate primarily at the management and operational levels. Marketing effort is directed towards a maximum standardization of its mix with strong control procedures from the centre and centralized determination of policy. This approach obviously encourages standardization, but may be characterized by a degree of inflexibility and a lack of empathy and sensitivity for dealing effectively with local and national business. Local managers may feel hindered by having to operate within rigid standards of performance.
  2. The ‘Umbrella’ structure – Here, the nerve centre lays down a broad set of objectives in terms of profits, growth and return on investment, but local management has freedom to interpret these objectives and adapt them to local needs and conditions. This organizational structure is based on the recognition that markets and countries differ and that a degree of local independence and freedom of action is more effective than totally centralized control and standardization.
  3. Although the Umbrella organization is responsive to local needs, it may give rise to increased costs through the need for more adaptations to the elements of the marketing mix and can lead to over-fragmentation.

  4. The ‘Interconglomerate’ structure – In this type of organization central control and planning is exercised almost exclusively with regard to financial matters. Funds are manipulated on a transnational basis with a view to maximizing returns from factors such as exchange disparities. There is strong communication between the centre and subsidiaries, but only as regards financial planning and control and marketing tends to be non-standardized. Many factors will affect choice of appropriate structures for implementing international marketing programmes such as: company size, number of markets and their geographical spread, management attitudes and culture. However, one of the most important determinants of organization, and indeed the overall approach to developing and implementing strategic international marketing plans, is the level of involvement and commitment to international markets. You will recall that Wind suggested that the company that is totally committed to and involved in international marketing, i.e. the global marketer, will tend to have what they term a ‘geocentric’ approach to its marketing. This is in fact part of these authors’ EPRG schema.

The authors contend that firms can be classified as having an ethnocentric, polycentric, regio-centric or geocentric orientation (EPRG) according to the level of involvement and commitment to international markets by the organization. The ethnocentric orientation is one that is essentially characterized by a company concentrating primarily on its home markets i.e. with little or no commitment to international markets. The polycentric orientation company organizes its international marketing around each host country and has little central control and standardization. The regio-centric orientation company, as the term implies, organizes its marketing strategies and systems around specific regions, often geographical, but often political or economic, such as the European Union. As we have seen, the geocentric company looks at the world and its markets in a global context. Such a geocentric orientation global marketing strategy will extend to have more standardized global marketing programmes. Even the global marketer needs to be sensitive to different environments.

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