Analysis of The Effects of Consumer Ethnocentrism

The more general concept of ethnocentrism stems from ethnocentrism of consumers. Ethnocentric individuals see their group as being superior to others. From their own perspective, they view other groups and decide to reject different groups and accept similar ones. Ethnocentrism of consumers refers specifically to the ethnocentric views of consumers in one country, the in-group, towards products from another country, the out-group. Consumers may think that buying products from other countries it is not appropriate, and possibly even shameful.

Consumer ethnocentrism gives consumers an understanding of what in-group purchases are acceptable, as well as feelings of identity and belonging. For consumers who are not ethnocentric products are evaluated solely from their country of origin on their merits, or possibly even viewed more positively because they are foreign. In 1998, Glen Brodowsky studied consumer ethnocentrism among car buyers in the U.S. He found a strong positive relationship in the evaluation of automobiles between high ethnocentrism and country-base bias. Consumers with low ethnocentrism appeared to evaluate cars rather than their country of origin based on the merits of the actual car. Brodowsky suggests that understanding consumer ethnocentrism is critical to understanding the effects of the country of origin.

In 1987, Terence A. Shimp and Subhash Sharma developed consumer ethnocentrism into a measurable structure by using the scale of ethno-centric consumer tendencies (CETSCALE). The CETSCALE’s initial development began with 225 different questions, which were narrowed down to 100 before being sent for the first purification study to a survey group. The number of questions was finally reduced to 17 through repeated purification studies. Shimp and Sharma repeated studies validated the U.S. CETSCALE. One was developed alongside the full version with 10 items. Both the version of 17 items and the 10 items version have been tested. Both versions of the CETSCALE were found to be reliable across the various cultures where they were tested. The results also helped validate the CETSCALE as an ethno-centricity measure for consumers. Since that time, in many different countries and cultures, the CETSCALE has been used in many studies.

Although much of the research on consumer ethnocentric tendencies is being conducted in developed countries, an attempt has been made to collect and analyze the vast literature review for further exploration of the subject. CET’s main background empirically tested by different researchers includes socio-psychological, demographic, political, and economic categories.

Cultural openness is widely referred to as customer openness toward foreign cultures. Shankarmahesh defined cultural openness as, “the opportunity and willingness of people in one culture to interact toward people, values, and artifacts from other cultures”. Shimp and Sharma stated that cultural openness is negatively correlated with CET. They most likely relied on the conventional wisdom that travel opportunities and cross-cultural interactions lead to more exposures and cultural tolerances, resulting in mitigating consumer ethnocentric tendencies. Such studies, however, have neglected the maxims of ‘familiarity breed contempt’ and ‘self-reference criteria’(SRC) whose meaning in cross cultural literature is the tendency to judge other cultures using one’s own culture as the reference point. Thus, further insights into the relationships between cultural openness and CET can be provided by considering both the effect of potential moderators such as SRC, attitudes towards foreign brands and possible interactions with other antecedents such as xenophobia, animosity and world mindedness.

Conservatism is the tendency to preserve and maintain the traditional order of the society that survived the tests of the time. It has been argued that conservatism could manifest itself in an extreme form as insistence on strict rules and punishments, religious outlook and an anti-hedonic outlook. With regard to developing countries, the results of the studies differ. Whatever the justifications for conservatism as a potential antecedent of CET have been provided, the criticisms it faces are consumers can hide their conservative belief while making a purchase decision and also conservatism has become obsolete with the advent of globalization. Thus, while studying the impact of conservatism on CET, moderating effects of world mindset, education, and globalization should be given due weightage.

World-minded people give less importance to nationality or ethnic groups and consider human beings as primary reference groups, thereby encouraging people to share common values and maintain empathy with other societies. Thus, a person without intercultural interaction can be “world minded” theoretically. World minded consumers are interested in knowledge of international affairs, regards for national harmony and consensus developments. One can certainly argue that in evaluating the relationship between Cultural Openness and the CET, world mindedness can be studied as a potential moderator.

Collectivism is defined by perceiving collectivist goals rather than individual goals as the social orientation in terms of human personal traits. Hofstede defined it as “collectivistic individuals from birth onwards are integrated into strong, cohesive in-groups, which throughout people’s lifetime continue to protect them in exchange for unquestioning loyalty”. Collectivism is a major element of individual cultural orientation and is therefore obliged to promote the economic improvement of domestic industries. Individuals with high collectivism scores also tend to reveal wider ethnocentric tendencies against individualistic goals. Studies in developed countries have consistently demonstrated the positive relationship between CET and collectivism.

Patriotism has been defined from different perspectives by various researchers, such as “sense of national loyalty”, “a love of national symbols”, devotion to one’s own country, and people’s commitment to their mother nations. Further liberalization of the federal governments’ trade policies on WTO lines can never lead to the conclusion that such governments are ‘unpatriotic’ or act against their nations. The above discussion therefore calls for the need to explore the moderating effects of global mentality and education on the governing relationship between Patriotism and CET.

Any correlation between ethnicity and CET demonstrated the ethnicity as a strong predictor of CET.

The conceptual difference between internationalism and world mindedness is perceived as positive feelings of people towards foreign countries highlighting international sharing and welfare and reflecting empathy for the peoples of other countries. Authors such as Lee and Back and Zhang et al. have empirically stated the negative correlation between internationalism and consumer ethnocentrism in developed countries. In the Crawford and Lamb and Rawwas studies, however, the positive correlation between buying preference between international brands and the global mindset emerges.

The moral dimension of ethnocentrism emphasizes the fact that it is solely because of nationals of a country buying products from countries otherwise available in domestic countries to lose workers’ jobs and put national economy behind well off nations. Salience means the perceived threat to domestic workers and positive relationship perception of threat to ethnocentrism. Some support the strong positive correlation between salience and the CET but, Shimp and Sharma et al. included it in their conceptual model as a moderator rather than a precedent. Both the viewpoints have merit as if salience is to be considered as moderating variable or a consumer ethnocentrism antecedent.

Dogmatism is defined as a trait of personality for black and white viewing of the world. The strong positive relationship between dogmatism and consumer ethnocentrism is also shown in different studies.

Xenophobia is defined as the negative attitude toward, or fear of, individuals or groups of individuals that are in some sense different (real or imagined) from oneself or the group(s) to which one belongs. While xenophobia is created primarily due to distrust and fear in the minds of consumers, it reinforces their ethnocentric tendencies. A strong positive empirical support between xenophobia and the consumer ethnocentrism has been found.

The lack of satisfying power of interpersonal relationships are is filled with materialistic possessions. The dimensions of materialism are possessiveness, non-generosity and envy. Consumer ethnocentrism is associated with envy, possessiveness; it is necessary to defend one’s ego and to identify with a larger group similar to materialism. Demonstrated a sufficient positive correlation between materialism and consumer ethnocentrism.

Socio-Psychological Antecedents of Consumer Ethnocentrism

In addition to the major socio-psychological constructs discussed in holistic review of consumer ethnocentrism literature, other researchers from different perspectives also introduce some other antecedents. Inheritance and individual social responsibility are a few to mention. It was argued that negative attitudes towards foreigners may be antecedents of the CET, although most researchers view it as consequences of a higher degree of CET. In addition, consumer affinity is a positive determinant of the consumer ethnocentrism. Consumer affinity and consumer ethnocentrism are interrelated concepts, and conceptual differences are evident in defining social identity theory-based in-groups and out-groups.

Economic Antecedents

Ethnocentrism is regarded as a sociological concept, but the holistic term of consumer ethnocentrism has a great deal to do with the economic aspects of nations as a whole. Different researchers have undertaken the studies to analyze a nation’s possible economic relationships not only with mediators or moderators, but also with the CET’s major background. While the results of developing and developed countries show considerable diversion, they show relatively consistency when considering the similar status of individuals from different nations.

It’s the way a country’s economic activities like capitalism, socialism, or mixed economy are governed. The feelings of a country’s ethnocentric and nationalist people are directly influenced by a country’s prevailing economic system. Capitalism that encourages people to own property is negatively associated with the CET, which is further empirically substantiated by citizens’ research in four post-communist countries: Czech Republic, Slovakia, Hungary and Poland, while as socialistic economies are more conservative and are expected to have more ethnocentric tendencies. From a study on 13 transitional economies in Europe, a unique CE model has been noted and authors believe consumers prefer to buy domestic products as there is a weak relationship between cosmopolitanism and CET in these transitional economies. However, there is practically a dearth of literature in developing economies that highlights the relationship between economic backgrounds and CET.

A country’s stage of development is a major factor influencing the ethnocentric tendencies of consumers. A comprehensive framework is sketched that links various stages of economic development with consumer’s preferences for domestic and foreign goods. As per the framework, die to high quality, status and curiosity motives, the early stages of the transition (from state control to market control) are marked by the preference for foreign products. However, the dominance of nationalist motives is observed in the intermediate mode of transition and further reversed upon attainment of the developed status. Klein and Ettenson believe that consumers are on the increase in their disposable income for expensive imported goods and thus confirm the negative relationship between economic development and the CET. This is also justified by the comparative studies carried out by the United States, Slovenia and Kazakhstan by confirming the stronger association of ethnocentric consumer trends in the contexts of less developed transitional economies.

The negative relationship between national economy improvement beliefs and consumer ethnocentrism has been observed in developed countries like the U.S. Authors also argued that the result of improved personal financial situation is reduced levels of CET. The positive correlation between individual consumer income levels and foreign brand preferences was explored primarily due to the consumer buying behavior associated with the status. It was further argued that less ethnocentrism is observed when people believe their national economies have improved over the past few years. In contrast, consumers in developed countries prefer domestic brands as they perceive them to be of high quality and people from developing countries are highly satisfied with preferential products from developed countries.

Political Antecedents

Political propaganda is informal government mentoring to their nationals to change their attitudes toward local brands. Some non-profit organizations in some countries are also promoting these campaigns. Rosenblatt’s political propaganda was posed back in 1964 as a precedent of the CET. The author argued that by raising the bogey of threat from out-groups, the leaders can increase the ethnocentrism of the group to a greater extent and whose magnitude is an empirical question to be answered. Studying the role of ‘political orientation’ as a moderator governing the relationship between political propaganda and the CET is worth mentioning, while arguing that the country’s political freedom can moderate the impact of political propaganda. The campaigns promoted by the most governments to ‘buy local’ show varying acceptability in the countries’ diasporas. It was furthered claimed that in less developed countries such as Indonesia, ‘buy local’ campaigns show sufficient ethnocentric influence. The impact of the campaign ‘made in India’ on consumer ethnocentrism in Indian consumers in the country’s political philosophy is a valuable question to be ascertained.

In addition to political propaganda, countries’ political histories determine the level of CET among their nationals considerably. It was argued that there is an increase in countries with a long history of oppression, a strong emotional feeling of rejecting out-group values in addition to enhancing cohesiveness within the group. It can be argued, however, that in comparison with the products of the conquered nation, the consumers of conquering nations will tend to see the ‘in-group’ products as higher and better. Since India has been under the Western rule for a long time, consumers are expected to demonstrate moderate behavior while making the purchasing intentions.

Furthermore, it was argued that leader has the power to manipulate a group’s ethnocentric beliefs. Therefore, when leaders conduct programs to foster homogeneity and in-group members’ mutual familiarity, it is a clear motivation for the nation’s customers to intensify ethnocentric feelings.

Jean Bodin introduced the concept of sovereignty in the 16th century, emphasizing that the nation’s freedom from external influences is the fundamental right of any country. Most political theories agree that sovereignty is a situation which the supremacy of authority is decided by the territorial legislature elected by that country’s general population. It was also argued that sovereignty is positively linked to both ethnocentrism and colonialism.

Demographic Co-variates and Ethnocentrism

In addition to import buying behavior, most researchers report the demographic antecedents of the CET comprehensively. The sole benefit of which is consumer demographic segmentation based on their favorable disposition to foreign products. Most previous researchers believe that understanding the relationship between demographic variables and consumer ethnocentrism is the most important thing for marketers when determining domestic buyers’ sensitivity to foreign brands.

More younger generation cosmopolitanism due to socio-cultural influences in the recent past is argued for their tendency to be less ethnocentric and is further justified by research findings showing a low score for young customer groups in the CET scale compared to conservative elders. While there is mixed empirical evidence to support the arguments that younger people are less ethnocentric, some studies have not found any significant relationship between the two, while researchers find a positive relationship between age and favorable evaluation of foreign product.

Gender is of prominent importance in analyzing the behavioral aspects of the customers and there is no consensus among various researchers regarding the relationship between gender and CET. Most studies show that women are more ethnocentric than the men who evaluate foreign products unfavorably, possibly because of more conservative and conformist nature or because they have higher tendencies to maintain social harmony. Some studies, however, found no sufficient gender difference with respect to CET, while women were found to be less ethnocentric than men.

Generally speaking, education is pretended to be a tool for making the mind of people broad and a very useful means of diminishing conservative tendencies. Most researchers have empirically demonstrated that customer educational levels are negatively related to the CET, mostly more educated individuals are less likely to have ethnic prejudices.

An important factor influencing customer decision-making is income. A majority of studies have concluded that income is a demographic precedent of consumer ethnocentrism, but there are fluctuations in the findings. The view showed that higher income levels offer the opportunity to travel and gain experience across borders, eventually inculcating them to hold cosmopolitan views.

Social classes are divisions in society that are relatively homogeneous and enduring, sharing a common pattern in consumer purchasing decisions. The magnitude of the income-CET correlation can be extended in proportion to the social class and CET, i.e. one can hypothesize that their ethnocentric tendencies tend to fall as consumers move up the social ladder. However, with regard to the negative correlation of social class and CET, no consistent pattern is observed, showing that upper class consumers are more ethnocentric than upper middle and lower classes. To conclude, therefore, that social class and CET are correlated remotely.

There is a diverse opinion on the preference for domestic/foreign countries from minority and non-minority communities. The research questions on the differences in consumer ethnocentrism between ethnic groups have yielded different results. Studies have concluded that minorities are more favorable than majority ethnic groups to foreign brands.

Consequences of Consumer Ethnocentrism

The primary consequence of interest is whether ethnocentrism really matters to a nation's consumers that have been extensively researched. Several operational definitions for possible CET consequences can be inferred from previous research. Researchers used various constructs such as ‘attitude towards purchasing foreign products;’ ‘purchase intention’ ‘support for foreign products’ ‘willingness to buy domestic products’ and ‘willingness to buy foreign products.’ They maintained, however, that sources of consumer ethnocentrism were not well recognized. An important research question to be determined is what leads consumers to score high on the scale of consumer ethnocentrism. In addition, it argued that international marketers significantly influence foreign customers’ ethnocentric tendencies along with preserving the well-being of other stakeholders popularly known as International Quality of Life Orientation (IQOL). From previous research, they categorized the effects of consumer ethnocentrism into three groups. It refers to ' consumer beliefs regarding the prestige of local and foreign brands, the characteristics and quality of local and foreign products and the purchase of imported products, ' second refers to ' general attitudes towards foreign products, advertising and brands, ' and third refers to ' consumer purchasing intentions. '

Conceptually there is by and large unanimous position on the argument that consumer ethnocentrism is positively correlated with favorable evaluation of domestic products and all of the previous studies, with few exceptions in a few cases, provide empirical evidence to justify the above argument. The positive relationship between CET and domestic products purchasing intention is empirically assumed.

Various researchers have proposed numerous mediators and the consequences of their effects on the ethnocentrism of consumers. Researchers conducted their study in the U.S. and offered empathy, perceived equity, costs and responsibility as potential mediators between CET and willingness to go for imported products. Ethnocentrism of the consumer is considered to have a positive influence on the empathy of other persons considered similar to the consumer. CET has been suggested to have a negative impact on perceived equity primarily because ethnocentric consumers feel that international competition is devastating for domestic industries, which will induce consumers to go for domestic commodities afterwards. To put it another way, ethnocentric consumers tend to ignore personal economic costs when buying domestic products, thus proving the CET's price inelastic nature. The authors also argued that consumers tend to be more responsible with a decrease in perceived equity, leading to go for domestically produced products rather than foreign products. The effect of ' Country of Origin (COO) ' is another mediating variable between consumer patriotism and buying intent. The authors concluded that patriotism affected country image in developed countries, but their relationship was moderated by the importance of the product. However, there is considerable inconsistency in the empirical results regarding the relationship between image of a country and purchase intention. As an affective and normative construct, CET can therefore lead to the country of origin effect, which is basically a cognitive construct. Finally, ' Product evaluation ' is also included among the empirically supported mediating variables for the evaluation of foreign products. However, no significant relationship between CET and evaluation of the quality of foreign products has been studied in the US and even positive relationships have been established for some Japanese products.

There were suggested two moderating variables, i.e. 'perceived product necessity' and ' perceived economic threat ' between consumer ethnocentrism and foreign product attitudes. The former is the extent to which consumers believe that because of its absolute necessity, an outsider product is indispensable. The authors concluded that CET had a more ' unnecessary ' perception of negative attitudes towards foreign products. Perceived economic threat is a concept similar to the previously discussed salience under the socio-psychological construct. The authors argued that CET influenced attitudes primarily for products perceived as a threat to the home economy as a whole. In a study on consumers in New Zealand, Watson and Wright introduced another moderating variable ' Cultural similarity ' and concluded that consumers with high CET use source country cultural similarity for product attitudes and product evaluations.

Results and Conclusion

The research project's goal is to provide a comprehensive review of consumer ethnocentrism's background and consequences. Each possible antecedent and consequence is discussed individually for the complete exploration of the subject. Information generated from such studies can provide a basis for a better understanding of countries and their consumer markets at different levels of economic development. This project will not only enrich the wide range of consumer behavior and marketing knowledge in transitional markets but will also provide broad opportunities for further marketing research.

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