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Eprg Framework

By | December 2010
Page 1 of 4
EPRG Framework

A firm needs to an appropriate orientation for the world market. While looking for orientation, it is important to understand the EPRG framework. Ethnocentric (E) orientation refers to home country organization. Here the firm's reference point is the home market. Generally, when the firm is ethnocentric, it looks for foreign markets to sell its currents products and surpluses. There is hardly any or minimal product adaptation for the foreign markets. Maybe some minor changes are made to suit hot or importing country's legal requirements, like in packaging; the firm may have to comply with statutory declarations.

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As one can make out, this orientation leads to exporting the product. Hence the most common market entry strategy is export. The firm's objective is to seek overseas customers for its existing product line. The firm may do so either by bidding or sell to an export house or to an overseas buyer or its representative. At times, the overseas buyer may give his requirements, as in the case of ready-made garments, to the firm, which then makes it and delivers it to the customer. Here, for gaining competitive advantage, the firm will have to ensure that its meets the buyer's specifications in terms of features, quality and delivery. The issue of pricing and payment terms is also important. Normally, a firm may have to work on a marginal cost method to price its products and get paid through a confirmed irrevocable letter of credit. Should there be a problem in product clearance or selling in the importing country, the firm may have at times no alternative other than either to get it back or destroy it there or accept other cuts in its price. An ethnocentric firm always looks for help from the home country government. A polycentric firm (P) is one that exports to not just one market but to several markets. It looks for customers in different markets. But still it is interested in selling its existing product line in the existing form....

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