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Ethnocentrism and Country of Origin Effects: Introduction by Doreen Soutar

Ethnocentrism and Country of Origin Effects: Introduction and Literature Review by Doreen Soutar

Overview

Being able to predict the future purchasing intentions of consumers is a very important capability to any business, and attempts to understand the processes involved in purchasing decisions in consumers has developed and diversified over the last forty years. With the increase of globalisation, the country-of-origin (COO) effect is a line of enquiry which is highly relevant to businesses wishing to expand their range of operations.

enthnocentricism

The country-of-origin effect is the level of influence the image of the country producing products has over its likely value in the minds of customers. So, for example, a country with a high level of esteem internationally may have an inbuilt advantage when selling products abroad. However, as research into the COO effect has evolved, this simplistic correlation between countries of high esteem and high quality products has come under question.

Firstly, the countries considered to be of high esteem are also those which have the most advanced market systems, and this includes a more sophisticated capacity to promote their goods successfully. Secondly, the esteem in which countries are held is not static, and public opinion towards the countries of dominant producers can go down as well as up. In this case, the COO effect can be a negative one, where consumers in countries flooded with imports can express their rejection of the country of origin through their rejection of their products, regardless of their quality.

In addition to the COO effects on at a national level, individuals are likely to vary in their attention to the country of origin when buying products. Consumer ethnocentrism research looks at the likelihood that the country of origin will play an important role in purchasing intentions, and research suggests that both the socio-demographic position of the individual and the nature of the product being purchased have an effect on the purchasing decision process. Specifically, ethnocentrism appears to be correlated with low levels of education and wealth, and also to age and gender.

The COO effect and associated levels of consumer ethnocentrism have large literatures separately, but the two concepts together have received very little attention by researchers in the marketing literature. The purpose of the current study is to address this gap. It is hoped that the results will be helpful to businesses in Sri Lanka who are interested in promoting domestic products, as well as defining the challenges faced by companies attempting to gain access to the Sri Lanka as part of their export market.

 

Country of Origin

Research Rationale

The literature on COO effects suggests that highly developed countries tend to have the highest reputations for high quality produce. This means that a consumer purchasing items on rational issues of value for money and the capacity of the product to meet their needs and desires would tend to prefer the products of highly developed countries. However, research into ethnocentrism suggests that consumers in some countries prefer to purchase domestic products over imports. Whilst it is accepted that the perception of value of any given country is likely to be dynamic in terms of quality of production, it is unlikely that the domestic products of countries exhibiting high levels of ethnocentrism are producing the highest quality products. Why, then, would consumers prefer lower quality domestic products over higher quality imported products?

Researchers into purchasing behaviour would suggest that not all of the purchasing habits of individuals are based in rational issues. In developing previously simple models of planned action (e.g. Azjen, 1991), researchers such as Kotler (2000) and Hawkins et al (2001) suggested that there were several non-rational elements to purchasing which had not previously been considered, such as brand loyalty, or the cultural pressure to conform to local purchasing norms. Therefore, models of purchasing behaviour have come to the conclusion that purchasing behaviour is still about finding value for money, but it is also subject to emotional and cultural pressures, as well as marketing pressures from companies, and the personal identity of the individual and their preferred lifestyle.

These non-rational and cultural influences are likely to influence the consumer in terms of COO: the individual may prefer to project an identity associated with a particular country, or they may believe that products which come from a specific region are likely to be of higher quality and status value, and are therefore more highly desirable. Consumers who prefer to purchase domestic products, on the other hand, tend to be viewed in the literature as lacking in the educational attainments or income capacity to appreciate this argument. A majority of the findings into ethnocentric purchasing behaviours tend to describe those preferring domestic products as relatively unsophisticated.

However, the preference for domestic items is also an issue for individuals in highly developed markets, who see buying locally (localism) as a way of containing the power of globalised companies to homogenise products and services, retaining diversity in the marketplace, and increasing the connection between local spending and revenue. This means that the behaviour of localists and ethnocentrists is very similar. So in conducting this research project, it was decided that in addition to the standard, validated survey instrument applied to ethnocentric research (CETSCALE), the author would add a further group of questions which addressed the issues of globalism and the environment to ascertain whether behaviour described as ethnocentric overlapped with localist behaviour.

It was anticipated that the results would continue to show that there were socio-demographic differences between sections of the community, as there was a large literature which supported this view. Some recent studies had suggested that this result could not be replicated, but these papers were in the minority. In short, the expectation of the author was that the majority view in the literature would prevail: less sophisticated individuals would indeed make ethnocentric choices based on their loyalty to their in-group, rather than on any rational or value-based decision process. The addition of localist agendas such as diversity of supply or the welfare of the local community was viewed as an interesting addition to the breadth of reach of the CETSCALE, and it was considered likely that these results would only serve to confirm the non-rational basis for ethnocentric purchasing decisions.

 

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