Strategic Orientation

STRATEGIC ORIENTATION:

The stages of international marketing involvement described above do not necessarily coincide with managers’ thinking and strategic orientations. Often companies are led into international and even global markets by burgeoning consumer or customer demands, and strategic thinking is secondary to “filling the next order”. But putting strategic thinking on the back burner has resulted in marketing failures for even the largest companies.

The consensus of the researchers and authors in the area reveals three relatively distinctive approaches that seem to dominate strategic thinking in firms involved in international markets:

         Domestic market extension concept

         Multi-domestic market concept

         Global marketing concept

Differences in the complexity and sophisticated of a company’s marketing activity depend on which orientation guides its operations. The ideas expressed in each strategic orientation reflect the philosophical orientation that also should be associated with successive stages in the evolution of the international operations in a company.

The domestic company seeking sales extension of its domestic products into foreign markets illustrates this orientation to international marketing.

It views its international operations as secondary to and an extension of its domestic operations; the primary motive is to market excess domestic production. Domestic business is its priority, and foreign sales are seen as a profitable extension of domestic operations. Even though foreign markets may be vigorously pursued, the firm’s orientation remains basically domestic. Its attitude toward international sales is typified by the belief that if it sells in St. Louis, it will sell anywhere else in the world.

If any efforts are made to adapt the marketing mix to foreign markets the firm’s orientation is to market to foreign customers in the same manner in which the company markets to domestic customers. It seeks markets where demand is similar to the home market and its domestic product will be acceptable. This domestic market extension strategy can be very profitable; large and small exporting companies approach international, marketing from this perspective. Firms with this marketing approach are classified as ethnocentric. Meter Man discussed earlier could be said to follow this orientation.

Multi domestic Market Orientation:

One a company recognizes the importance of differences in overseas markets and the importance of offshore business to the organization, its orientation toward international business may shift to a multi-domestic market strategy. A company guided by this concept has a strong sense that country markets are vastly different (and they may be, depending on the product) and that market success requires an almost independent program for each country. Firms with this orientation market on a country by country basis, with separate marketing strategies for each country.

Subsidiaries operate independent of one another in establishing marketing objectives and plans, and the domestic market and each of the country markets have separate marketing mixes with little interaction among them. Products are adapted for each market with little coordination with other country markets; advertising campaigns are localized as are the pricing and distribution decisions. A company with this concept does not look for similarity among elements of the marketing mix that might respond to standardized; rather it aims for adaptation to local country markets. Control is typically decentralized to reflect the belief that the uniqueness of each market requires local marketing input and control. Forms with this orientation would, be classified as polycentric.

Global Market orientation:

A company guided by the global marketing orientation or philosophy is generally referred to as a global company; its marketing activity is global, and its market coverage is the world. A company employing a global marketing strategy strives for efficiencies developing a standardized marketing mix applicable across boundaries. Markets are still segmented, but country or region is considered side by side with a variety of other segmentation variables, such as consumer characteristics (age, income, and language group), usage patterns and legal constraints. The world as a whole is viewed as the market, and the firm develops a global marketing strategy. The global marketing company would fit the region-centric or geocentric classifications. Coca-Cola Company, Ford Motor Company, and Intel are among the companies that can be described as global companies.