A Mobile-based company is considering going global.

As the Marketing Director of the company, it wants

you to enlighten the Board of Directors about the
three philosophies of international business.

List, explain, and provide examples along with

international business implications for each.
The following are the three philosophies in global
marketing:
1. Domestic Marketing Extension/Expansion Philosophy

This philosophy reveals an ethnocentric tendency on the

part of company that deems foreign markets as a mere
extension of and secondary to its domestic market. Given
this orientation, the company’s marketing strategy in
global markets is similar to the one in the domestic
market. Standardization of the 4P’s is the result of
following this strategy. What sells well in Mobile should
sell well Mozambique. The basic idea is that customers
are alike everywhere. If they truly are, then this is a very
profitable strategy. In some cases, there is also a tinge of
ethnocentricity underlying this belief.
Example: Communication satellites and other
industrial hi-tech devices and super luxury
products generally tend to have similar customers
around the world making this philosophy profitable
for the marketers.

This strategy results in reduced costs and thereby

reduced prices. Generally, lower prices should
result in higher sales, market share and profits if
the customers’ needs are the same in the targeted
markets. For most consumer products, this may
not be the case and the company might fail in the
long run.
2. Multi-domestic Market Philosophy
In this instance, the company’s position
indicates a level of polycentrism in that they
consider the global markets completely
different from the domestic market. Given this
orientation, the company tries to develop
different strategies for different markets all of
which are significantly dissimilar to the
domestic strategy. Thus, the 4P’s are adapted
for each country meaning that they are different
in each country served. There is little
commonality or uniformity since customers in
each market are assumed to be vastly different.
Example: GM was known for its decentralization of
decisions around the world that resulted in each
country developing products for their market with no
consideration for worldwide consistency or
uniformity. This cost GM millions of dollars in
development cost.

This strategy, when applied to consumer products,

results in increased costs thereby increased prices
and lower sales and profits. There might be B2B
situations in which this strategy might succeed if the
prices are high and the customers are not price
sensitive.
3. Global Marketing Philosophy

According to this philosophy, a geocentric orientation is

the best of the three. Here, the company takes a
worldview of the marketing strategies and thus the
4P’s. The goal is to satisfy demands worldwide with
4P’s that are standardized whenever possible and
adapted when necessary. In this situation, the company
takes into account the economies of scale as a result of
standardization of 4P’s but also considers local tastes,
preferences, cultures, and influences that might require
a certain level of adaptation. This type of company
adheres to a “think globally-act locally” motto.
Example: Most consumer products including food
fall into this category of thinking. McDonalds, for
instance, sells hamburgers around the world
(standardization) but the meat might be beef,
pork, or lamb depending on the local preferences
(adaptation).

This is the best overall strategy in which the costs

are not too high or too low. Prices might have to
be higher than under the first strategy (because of
some adaptation) but lower than that under the
second strategy (because of some level of
standardization). But, an adapted product with a
moderate price might result in higher sales and
profits.