This literature review is divided into three main sections: This section looks at The Country of Origin (COO) Effect…

Shankarmahesh (2006) suggested that ethnocentrism can be the result of a combination of four issues: socio-psychological, economic, political and socio-demographic.

Socio-demographic issues

Erdogan & Uzkurt (2010) found that ethnocentrism varies with socio-demographic and biological variations, such as gender, age, education, and income. They also discovered that individuals who tend to be less ethnocentric in general tend to have more favourable attitudes, beliefs and intentions towards foreign products. Watson & Wright (2000) suggest that older, female, less wealthy and less educated individuals are more likely to be ethnocentric, and the opposite is also the case.
Attitudes towards foreign goods can be influenced by ethnocentrism (Kucukemiroglu, 2009; Craig & Dougals, 2006; Kraft & Chung, 2002), where individuals evaluate the products they buy in terms of whether they originate domestically, and there are a range of papers in the literature which suggest that consumers judge the value of the products on this basis (Poon et al, 2010; Hu et al, 2008; Zhang, 2007; Pecotich & Ward, 2007; Niss, 2006; Phau & Leng, 2008).

Evanschitzky et al (2008) assert that consumer purchasing behaviour can be explained in terms of socio-demographics, suggesting that older consumers are likely to be more ethnocentric than younger consumers, those who are less well educated are more ethnocentric than those who are better educated, and those with higher incomes are likely to be less ethnocentric than those with lower incomes.

In terms of gender, Schooler (2001) and Good & Huddleston (2005) suggest that females tend to have a more positive attitude to foreign products than males. Indeed, there is evidence from psychological studies which suggests that males find ways to value their in-group higher than those of an out-group (Sherif, 1966). However, the rationale for the differences reported in acceptance of foreign products by wealthier, more educated, or female socio-demographic groups remain unclear. It may be the case that as the primary everyday purchasers for the family, females appreciate the wider range of products available through imports. Interestingly, research conducted by Bondy & Talwar (2012) suggests that the main socio-demographic group associated with high levels of Fairtrade products was also female. However, they noted that this group tended to be highly educated with a high income. Therefore, it may be the case that levels of education and income in the female population is likely to have a substantial impact on the ratio of domestic to foreign goods and attitudes towards them.
 

Socio-Psychological Issues

In general, it is asserted that there is a positive correlation between ethnocentrism as a general trait and a preference for domestically produced goods. Watson & Wright (2000) suggest that this is based on the consumer’s strong cultural affiliation with their country of origin (Watson & Wright, 2000). This is supported by Elchardus & Siongers (2007), who suggest that ethnocentrism can be seen as a way of creating a personal identity by erecting symbolic boundaries between the individual and others. These symbolic boundaries can include attitudes and tastes, as individuals make lifestyle choices based on the norms of the group they wish to be associated with (Elchardus & Siongers, 2007). These attitudes and tastes can become a fundamental way of defining the group, whereby the expression of particular traits becomes a necessary part of belonging to the group (Durkheim, 1968 in Elchardus & Siongers, 2007).

Gabannesch (1972) asserted that social position and cultural opportunities can influence these choices, with lower educational and cognitive development correlated to higher levels of ethnocentrism, so that individuals with a less sophisticated upbringing tend to place a greater level of importance of their in-group culture. Douglas (1978) and Oakley (1983) support this hypothesis, noting that there are specific associations between attitudes and tastes and social class, with individuals expected to select tastes which are appropriate to their standing in the community.

This theme is developed by Bryson (1996) who suggests that the development of tastes beyond the group boundaries represents an attitude of willingness to be more tolerant of those with different attitudes and norms. However, Elchardus & Siongers’ (2007) results shows no evidence to suggest that either deprivation or school success have any significant relationship to levels of ethnocentrism. This suggests that assertions that ethnocentrism is positively correlated to cognitive or intellectual weakness are still under debate. As will be discussed below, defining consumer ethnocentrism as being a behaviour associated with low cognitive capacity or lacking in cultural sophistication may say much about those defining ethnocentrism.
Ethnocentrism has also been attributed to a sense of meaninglessness which leads to discontent (Giddens, 1990) when people become indifferent to traditional aspects of life such as religion. Elchardus & Sioners (2007) suggest that in modern societies, the influence of religion has been replaced by a humanist model, where the individual is the sole source of meaning. This may mean that individuals place more meaning on their purchasing decisions, as the establishments which determined the boundaries of the group are diminishing in favour of the individual’s preferences. For some individuals, this move towards a humanist model of the person may threaten their status in the community (Grant & Brown, 1995).
This hypothesis would suggest that individuals who have more to lose by the changes in socio-cultural norms would also be those who would be likely to hold ethnocentric views. In the case of purchasing decisions, one of the major changes in the way products are supplied is in the globalisation of production. As discussed above, although it may have been the case that countries with highly developed markets were thought to produce higher quality goods, the country of origin of products is now a more complex issue. If imported products are viewed as being associated with a change to the traditions of the culture, then it may be that consumer ethnocentrism arises out of the impact of globalised markets.
 

Cultural Diversity In The Local Population

The immigrant population in a given area may also influence the level of demand for imported foods. Camarena et al (2011) looked at the rise in availability of ethic foods as a result of a rise in the immigrant population. Sharma et al (1995) and Heslop et al (1998) suggested that higher levels of cultural integration predict lower ethnocentric tendencies, and the results of Camarena et al (2011) support this prediction.

In terms of socio-demographics, Camarena et al (2011) found that younger members of the community are more likely to be accepting of new products and types of cuisine than their older counterparts. However, as Camarena et al (2011) note, there is a difference between the levels of ethnic food consumed where it has been cooked outwith the home (restaurants and take-aways) than ethnic foods cooked inside the home.

Therefore, it is possible that levels of ethnocentricity in food consumption may be at least partly a lack of confidence in being able to cook it. This is important, because some studies show a gender difference in levels of ethnocentric purchasing, where older females are more ethnocentric than their male or younger counterparts. However, if the eldest female in the household is providing cooking services, then her confidence in creating ethnic dishes is likely to influence her choice of meal plan. In addition, if a family is on a restricted income, experimenting with unfamiliar ingredients may not be a luxury the household can afford. Therefore, care needs to be taken to ensure the validity of the measures used, and exactly what is being measured.

Political and Economic Issues

In 1979, Yoram Ziera wrote on the relationship between multinational corporations (MNCs) and the attitudes of host-country organisations (HCOs) towards them. He concluded that, at the time, many of these relationships were dysfunctional in terms of the ethnic makeup of management. Subsidiaries, Ziera (1979) notes, prefer host-country mangers who are familiar with local customs and tend to adhere to patterns of management which are prevalent in the host country. Expatriate managers also tended to stay in positions for a shorter period of time than host-country managers.
Since then, the literature surrounding the ethnic issues of MNCs, their subsidiaries and their markets has grown considerably (Morschett et al, 2010). From the point of view of an MNC, homogenisation of needs and desires of customers globally is a positive attribute, as it allows for standardisation and therefore economies of scale in production (Yip, 1995). In the belief that consumer tastes were becoming more homogenous globally, many companies have attempted to play down the country of origin of production, focusing instead on the universal nature of the brand (Alden et al, 1999).
However, from the point of view of a growing number of consumers (Dimofte et al, 2008), this tendency towards globalisation and homogenisation has become a threat to local and domestic production (Ritzer, 2004). Reifler (2012) suggests that consumers’ globalisation attitude (GA) has an important part to play in the way consumers view homogenous global brands. Globalisation attitude refers to the general viewpoint of the consumer concerning free movement of capital, labour, and products. Riefler (2012) suggests that the GA of consumers informs their attitude towards global and domestic products, whereby consumers who have a positive attitude towards globalisation in general are likely to have a positive attitude to globally branded, homogenous products and services.

This suggests that purchasing ethnocentrism may vary depending on the experiences individuals have with global products and the companies which produce them. Therefore, it could be argued that increased levels of ethnocentric purchasing in particular geographic areas may be associated with outsourced production employment, the experience of fluctuations in local employment prospects in manufacturing domestic products, or even corporate social projects in the area.

Interestingly, Riefler (2012) notes that globalised products tend to be particularly popular to their own domestic market. This suggests that the in-group effect discussed above may also apply to globalised products, where even globally homogenous products are preferred in a somewhat ethnocentric manner. In this case, the consumers tend to be more pro-globalisation (Balabanis & Diamantopoulos, 2004 in Riefler) but the process of discrimination between imported and domestically produced products as a behaviour still exists: the geographical location of the producing company influences sales in that location.
This may suggest that one of the salient differences in the concepts of ethnocentrism and a positive globalisation attitude may be the geographical proximity of a globally recognised company. If this is indeed the case, then it may be expected that less developed countries would tend to exhibit higher levels of pro-domestic purchasing decisions than countries with highly developed markets (Manrai et al, 1998). However, as discussed earlier in the section on the determinants of ethical purchasing, Cherrier (2009) notes that there is an increasing anti-consumerist movement in highly developed countries, and part of this movement involves consumers deciding to opt for locally produced products rather than favouring globally homogenous ones.
 

Localism

Localism is a purchasing preference which has emerged with ethical purchasing, and localist consumption tends to be based on the preference for locally produced goods rather than those generically produced by large, multinational companies (Hess, 2009). Whereas ethnocentrism tends to view the purchasing process from the point of view of the producer, localism has emerged from the point of view of the consumer. In their review of food localism, McIntyre & Rondeau (2011) define local as a food produced close to the consumer. They cite a large number of research papers which suggest that the rise of localism has developed through an increasing dissatisfaction with globalised production. The reasons they suggest for the rise in localism are economic, environmental, health-related benefits and levels of social inequality in global production practices.
Martinez et al (2008) who suggest that localist consumers tend to prefer to have a direct link between themselves and the producers of the products they buy, and suggest that buying locally has become a ‘mantra’ of individuals who consider local produce to be superior both in terms of quality and of ethical values (Johnston & Bauman, 2010). In McIntyre & Rondeau’s (2011) study of farmwomen in Canada and their food provisioning strategies, they found that these women favoured locally produced goods, or indeed ideally grew some of their food themselves.

McIntyre & Rondeau (2011) found that the desire for local food purchasing strategies were hampered by the women’s capacity to source local food producers, as it tended to be less convenient than supermarket shopping (see Appendix   However, the farmwomen who took part in McIntyre & Rondeau’s (2011) study took a positive attitude to localism in general as a principal. A similar attitude is described in McDonald’s (2013) investigation into defensive localism and eco-gastronomy.

McDonald describes a growing movement which seeks to promote local produce in cultural, economic, moral, and political terms. This movement views global, fast, and homogenous food as “uncivilised” (p.96), and suggests that traditional methods of production in products such as cheese need to be preserved and appreciated. A significant element in this argument is a reduction in the supply chain, and a return to the development of a connection between the producer and the consumer, with tends to be lost in the creation of mass produced homogenous products (Blythman, 2004; McDonald, 2013).
This movement is interesting for the purposes of the current study, as the behaviour and attitudes of consumers towards localism in highly developed countries appears to be similar to the concept of ethnocentrism in less developed countries. The difference between ethnocentrism and localism, however, is that ethnocentrism is viewed as being a negative aspect of consumerism, predominantly practiced by those deemed to be relatively poorly civilised. Localism, on the other hand, is defined as a civilising influence which rises above the dehumanisation of homogenous globalised products.
 

Case Study: Sri Lanka

Sri Lanka is an island off the south east of India with a population of around 21 million. Sri Lanka spent around 450 years as a European colony, but gained its independence from Great Britain in 1948, and changed its name in 1972. English is one of the three main languages spoken in Ceylon, along with Sinhala and Tamil.

Around 92% of the population is literate, and the life expectancy is 72 years. Its main exports are rubber processing, tea, agricultural commodities, clothing and cement. The agricultural crops grown are mainly rice, sugarcane, grains and pulses.

Exports include textiles and clothing, tea, diamonds, coconut products and petroleum products. 25 years of civil war came to an end in 2009, and the country is rebuilding after a devastating tsunami in 2004. Although there remain religious tensions between factions, the country is looking to create an attractive sustainable-tourism destination based on wildlife, beaches and ancient temples (Walljasper, 2010). However, the country still faces political challenges, with some commentators suggesting that a dictatorship may be in place in the future. Ethnocentrism in the country is considered to be high (Bandara Winninayake & Chovancova, 2012).
Internet usage in Sri Lanka has increased from 0.5% in 2000 to 8.3% in 2010. This translates to a current internet user total of around 1.8m Sri Lankans out of a total population of around 21m. Internet access is more frequent through mobile communication devices than fixed line broadband. Poverty headcount ratio at the national poverty line has gone from 26.1% in 1991 to 8.9% in 2010 (World Bank, 2013). Sri Lanka had boasted a rich biodiversity, but much of this has been destroyed, with two thirds of the forest cover and associated biodiversity disappearing over the last century. According to the World Bank, extreme weather events are likely to be a major ongoing threat to the Sri Lankan economy and the health of its citizens.
 

Elephant House Soft Drinks

The Elephant House soft drinks brand is part of the Ceylon Cold Stores company which began in 1866 in Sri Lanka. The production of soft drinks began in earnest in 1998, when the company invested in a state of the art bottling plant for its carbonated drinks. Since then the brand has become part of the John Keells Group which is a publicly owned company floated on the Sri Lankan stock exchange (John Keells Annual Report, 2012). Their products retain market leadership in Sri Lanka against stiff competition from global branded substitute products. The annual report from the John Keells group suggests that this is based on a cost-competitive strategy.
However, in terms of COO and ethnocentrism effects, the literature suggests several reasons in addition to price why this may be the case: the company is local, and locals tend to support successful local businesses regardless of their size, ethnocentrism may be higher for this low-value product as it does not impose a large substitute cost; individuals who are particularly patriotic are able to express this at little cost, and individuals with issues over the power of globalised companies are able to express their localist preferences to homogenous, global production by purchasing a local brand.
Finally, the country of origin of Elephant House soft drinks and the global brand leaders such as Coca Cola are relatively clear-cut. Although Coca Cola may be manufactured outwith the United States, the brand image is strongly north American. As was discussed in the literature review, defining a country of origin for many products can be difficult, given the practice of outsourcing manufacturing processes. Therefore, examining country of origin effects in participants may be eliciting opinions on the country of origin expressed in the brand rather than the manufacturing location. However, it is assumed for the purposes of the current study that participants can be relatively sure of the country of revenue: that is, which country the profits return to.
 

Summary

This literature review has presented an overview of the development of purchasing behaviour and intention models, from their inception as simple models of rational behaviour to complex models combining psychological, social, and value-driven elements. Country of origin effects and consumer ethnocentrism represent two strands of purchasing behaviour research in general, and they deal with the way in which consumers react to domestic and imported products.

The main thrust of COO research is that the country of origin can influence the perception of value for the individual consumer, and that ethnocentrism is a consumption attitude which favours the domestic over the imported product regardless of quality or value. The addition of localism is justified in terms of its behavioural similarity to ethnocentrism, suggesting that these two research areas have more in common than previously thought.
 

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