Distinguish between Ethnocentric Orientation and Polycentric Orientation.
The term ethnocentric orientation means that a company does not differentiate between domestic and foreign markets and applies same techniques in foreign markets which are applied in domestic marketing. Polycentric orientation is opposite of ethnocentric orientation. The term polycentric orientation means each overseas market is different from other and local techniques and personnel are best suited to deal with local conditions. On the basis of above, following points of distinction emerge:
According to ethnocentric orientation foreign operations are secondary to domestic operations while according to polycentric orientation foreign operations are equally significant.
Under ethnocentric orientation, international marketing activities are controlled from the home country while under polycentric orientation subsidiaries are established in all overseas markets. Subsidiaries are given free hand in framing and implementing policies.
Ethnocentric orientation is appropriate when overseas sales volume is insignificant compared to total sales of the firm. Polycentric orientation is appropriate when firm is committed to international marketing.