Imapct factor(SJIF): 5.889
Implications of Ethnocentric Tendencies among Indian Car Buyers: Scale Refinement and Analysis of Dimensionality
Department of Business Administration
Aligarh Muslim University
Dr. Mohammed Naved Khan
India is witnessing a plethora of foreign and domestic products competing against each other in its retail market. In order to understand how ethnocentrism among Indian consumers toward foreign/domestic products, this study aims to understand the consumer ethnocentric tendencies (CET) among Indian consumers. Though, results have shown that consumer ethnocentrism does impact behavior of the consumer regarding foreign-made products, yet researchers have observed that the results are not consistent across nations and cultures. Thus, there exists a pressing need for replicative as well as extension studies in the area.In the light of the above, the purpose of the present paper is to explore the underlying meaning and significance of the concept of consumer ethnocentrism with special reference to India. As a first step, the researchers have tried to explore the ethnocentric tendencies prevalent among the Indians. The original 17-item versiondeveloped by Shimp and Sharma in 1987, is one of the most commonly used scales in the marketing literature. There are many empirical applications using other adapted versions of CETSCALE.Some of these papers question the uni-dimensionality of such a scale. We intend to analyse the dimensionality of the CETSCALE. In addition, we analyse the dimensionality of an adapted version of the CETSCALE including the product category (automobiles) under study. Keeping that objective in mind,CETSCALE was administered on a representative sample of students. It is expected that the findings will provide vital inputs to marketers in dovetailing their marketing strategies as also prevent them from committing the mistake of imposing perspectives applicable to other cultures and nations.Implications are provided for both Indian and foreign marketers to successfully promote their products to Indian consumers.
Keywords: consumer ethnocentrism, cetscale, automobiles, consumer behaviour, India.
Automobile industry is the key driver of any growing economy. Due to its deep forward and backward connections with almost every segment of the economy, the industry has a strong and positive multiplier effect and thus propels progress of a nation (Ponnuswamy, 2012).The Indian auto industry is one of the largest in the world. The industry accounts for 7.1 per cent of the country's Gross Domestic Product (GDP) (India in Business, 2016). India is currently the seventh largest vehicle producer in the world with an average annual production of 23.36 Million vehicles of which 3.57 Million are exported (The Dollar Business, 2016). The automotive industry accounts for 45% of the country's manufacturing gross domestic product (GDP), 7.1% of the country's GDP and employs about 19 Million people both directly and indirectly and is estimated to become the third largest in the world by 2016 accounting for more than 5% of global vehicle sales (PTI, 2016). The industry produced a total of 23,366,246 vehicles including passenger vehicles, commercial vehicles, three wheelers and two wheelers in April-March 2015 as against 21,500,165 in April-March 2014, registering a growth of 8.68 percent over the same period last year (SIAM, 2015).In the early 1990s, auto production was freed for investment by any domestic and foreign investor. Indian planners as well as foreign investors regarded India as a low-skilled, low-productivity country producing third-rate cars like the Ambassador and Premier (Press Reader, 2009). Foreign investors came only because car imports were virtually banned (Elite Trader, 2009). Since then, it has witnessed the entry of several new manufacturers with the state‐of‐art technology, thus replacing the monopoly of a few manufacturers (Business Portal of India, 2015).
Consumer biases toward products have been recognised in the international marketing literature for over three decades (Nagashima, 1970;Papadopoulos et al., 1987;Samiee, 1994; Manrai and Manrai, 1995;Watson and Wright, 2000; Kaynak and Kara, 2002). Wishing to lead a life similar to Western cultures, consumers in developing countries often seek to emulate Western practices by purchasing foreign brands (Batra et al., 2000; Kinra, 2006). There is evidence to suggest that products that are manufactured in advanced western countries are perceived as being better than those from developing or less developed countries (Bilkey and Nes, 1982; Kaynak and Kara, 2002).The development of the manufacturing sector in developing economies is hampered by the fact that consumers in those economies view domestic products less favourably than products from more advanced countries (Ettenson, 1993; Jaffe and Martinez, 1995). Many studies have shown that consumers in those countries tend to prefer products from developed countries to those from less developed countries (Wang and Lamb, 1983; Cordell, 1992;Heslop and Papadopoulos, 1993; Jaffe and Martinez, 1995).
Ethnocentrism, represented by an intense preference for domestic products or a moral obligation to buy domestic products (Shimp and Sharma, 1987), is a source of bias that may influence consumers’ preferences for products, which are made in different countries. It is the tendency of consumers to show a favourable predisposition toward locally made products vis a vis overseas made products. Ethnocentric consumers believe it is inappropriate, indeed immoral, un-nationalistic and unpatriotic to buy foreign-made products in place of domestic-made products (Shimp and Sharma, 1987; Caruana and Magri, 1996). Ethnocentrism may thus lead to overstating the quality of locally made products while underestimating the quality of foreign-made products. Ethnocentric consumers exhibit a greater preference for domestic products in decision situations in which a domestic alternative is available (Watson and Wright, 2000). According to Kasper (1999), highly ethnocentric consumers are probably most prone to biased judgment by being more inclined to adopt the positive aspects of domestic products and to discount the virtues of foreign made products.Over the years, Indian consumers have been exhorted by various Indian governments to buy locally made products. The current Prime Minister Mr. Narendra Modi has also started a similar initiative in the form of “Make in India” Such exhortations have arisen from economic reforms and the increase in foreign investments in India. And also India being in the eyes of most of the major industries of the world.
The study focuses on assessing the impact of ethnocentrism on locally manufactured cars among the Indian consumers. More specifically, we measure the standard 17 item CETSCALE (Shimp and Sharma ,1987). Its validity and reliability in the Indian context. Testing the uni-dimensionality of the CETSCALE and if necessary, refinement of scale.The results of this research will also help to refine and further develop the CETSCALE. Scale construction is an important but oft-neglected step in the task of theory building.
Over the years, a number of studies have been carried out to understand the behavior of the ethnocentric consumer better (Shimp and Sharma, 1987;Han, 1988; Chasin et al., 1988; McLain and Sternquist, 1991; Netemeyer et al., 1991; Sharma et al., 1992;Durvasula and Netemeyer, 1992;Kaynak and Kara, 1996). We conducted the study in India because it is a suitable environment for our research. First of all, like consumers in other developing countries, Indian people tend to perceive imported products as superior to domestic (Bawa, 2004).Ethnocentrism, on the other hand, encompasses issues such as one’s fear of economically harming one’s own country by buying foreign products, the morality of buying foreign products, and a personal prejudice against imports (Sharma et al., 1995). Across cultures, researchers have demonstrated that ethnocentrism is a global phenomenon, but there are differences in the degree of ethnocentrism expressed by consumers, depending on the country under study (Gross et al., 2005).Furthermore, consumer ethnocentrism’s predictive ability of buying intentions varies from country to country (Balabanis et al., 2001).Previous studies have suggested a positive correlation between the evaluations of domestic products and a country’s level of economic development (Gaedeke, 1973;Wang and Lamb, 1983; Toyne and Walters, 1989). There has been a predominance of studies on ethnocentrism in developed (United States, Canada, and Europe) countries and in transitional (such as China and Russia) countries, which has neglected the perceptions of the consumers in developing countries because it was believed that foreign- made goods are seen as symbols of status, whereas for developed countries the issue is more relevant to patriotic behaviour (Chowdhary and Rahman, 2014).Due to large differences in market structure and consumer behavior, research on these topics conducted in developed countries may not be generalizable to less-developed countries (Papadopoulos et al., 1990; Ralston et al., 1993).This research intends to close this gap.Research on ethnocentrism has been extensive and concentrated in several areas. CETSCALE (Consumer Ethnocentric Tendencies Scale) was developed to measure this construct (Shimp& Sharma, 1987; Netemeyer&Durvasula, 1991). Therefore, it is necessary to probe deeper into the ethnocentric tendencies of the Indian consumers. In the light of the above, the primary purpose of the study was to develop a refined CETSCALE and asses it’s dimensionality based on the 17 item scale suggested by Shimp and Sharma(1987).
2. Literature Review
Research on ethnocentrism has been extensive and concentrated in several areas (Shimp& Sharma, 1987; Netemeyer&Durvasula, 1991).Kucukemiroglu (1999) utilised interview data collected in Istanbul mentioned consumers who were classified as non-ethnocentric showed more favourable beliefs, attitudes and intentions towards imported products than ethnocentric consumers. Ethnocentric consumers would believe that their personal or national well-being could be under threat from imported products (Shimp and Sharma, 1987; Sharma et al., 1994). Watson andWright (2000) concluded consumers with relatively high levels of ethnocentrism preferred imported products from countrieswith similar culture. In evaluating imported products for ethnocentric consumers, cultural similarity could be critical.Klein et al. (1998) stated ethnocentric consumers tended to purchase domestic products due to the belief that products made in their own country were considered superior. Wang and Chen (2004) argued that in a developing country, influences of consumer ethnocentrism on willingness to purchase domestic products were weakened by judgement of inferior product quality. Moss and Vinten (2001) mentioned that even for geographical neighbours, cultural performance could be different. Laroche et al. (2003) emphasised importance of analysing sub-cultural differences within culturally affiliated countries. Pereira et al. (2002) utilised student samples to examine consumer ethnocentrism in different cultures and concluded that consumers of Chinese culture were more ethnocentric than those of Indian culture, and mainland. Several studies found that males, better educated consumers, and those with a higher income tend to be less ethnocentric (Shimp, 1984; Good and Huddleston, 1995; Sharma et al., 1995; Balabanis et al. 2004; Shankarmahesh, 2006) while several other studies found women to be more ethnocentric (Han, 1988; Howard, 1989;Sharma et al. 1995; Kucukemiroglu, 1997;Brunning, 1997;Balabanis et al. 2004).There is only one study available on a South Asian country: India (Bawa, 2004). In addition, there are only two studies available on developing countries, namely, Ghana (Saffu& Walker, 2006) and Nigeria (Okechuku &Onyemah, 2000). Suh and Kwon (2002) examined effects of global openness on consumer ethnocentrism and reluctance to purchase foreign-made products. They concluded consumer ethnocentrism was an important factor in determining the magnitude of reluctance in the purchases of imported products.
Strengthening and supporting the automotive industry has become an inevitable necessity for developing countries (Khaju, 2009).There is a dearth of studies when it comes to automobiles and consumer ethnocentrism. The more favorably a match between country and product category is perceived, the better the overall consumer evaluation, e.g. French perfume or German cars (Roth & Romeo 1992, Usunier& Lee 2009). German cars may be perceived as being better than cars assembled in Nigeria (Festervand and Sokoya, 1994). Herche (1992) found that CE is related negatively with actual ownership of foreign cars and computers.Particularly strong drivers of the German economy (e.g. cars or electronic items) are rated favorably, contrary to a negative evaluation of products that represent a threat to the economy (e.g. Italian fashion wear or French food etc.) (Evanschitzky et al. 2008).Nazlida and Razli (2004) found Malaysians showed higher preference toward local foods but tend to show no preferences towards domestic cars and personal computers.
Researchers have investigated the ethnocentric behavior of the people of different parts of the world through CETSCALE. However, there has always been a predominance of CETSCALE studies in the advanced countries and studies on developing countries and South Asia have largely been ignored in the literature. There are studies on CETSCALE on few Asian countries such as India (Bawa, 2004; Khan and Rizvi, 2008), China (Wong et al., 2008), Japan (Hult et al., 1999), Indonesia (Hamin& Elliot, 2006), Malaysia (Nazlida&Razli, 2004; Teo et al., 2011; Mohamad, Omar, &Ramayah, 2007), and South Korea (Park et al., 2008). Numerous studies have been conducted in assessing the validity of CETSCALE around the globe. Shankarmahesh (2006) made an extensive analysis exploring the consequences of consumer ethnocentrism based on 37 previous studies conducted on advanced nations such as Australia, Austria, Britain, Canada, China, Czech Republic, France, Hong Kong, Japan, Mexico, New Zealand, Russia, Poland, Turkey, and the United States. However, his results on the applicability of CETSCALE were mixed for different countries. Teo et al. (2011) in their study provided literature on the findings of CETSCALE validation in countries like the United States (Shimp& Sharma, 1987; Durvasula, et al.,1997), Poland and Russia (Good & Huddleston, 1995); Malta (Caruana, 1996); United States and Sweden (Hult et al., 1999); Belgium, Great Britain, and Greece (Steenkamp & Baumgartner, 1998); Turkey (Balabanis et al., 2001); and Germany (Evanschitzky, 2008, Wangenheim et al., 2008). Some studies have found mixed results on the validity and uni-dimensionality of the CETSCALE (Netemeyer et al., 1991; Durvasula et al., 1997;Witkowski, 1998;Saffu& Walker, 2005). Empirical studies have shown the nature of the products influencing the consumer ethnocentrism, such as level of product involvement, perceived product necessity, and the extent to which the foreign-made product is a threat to personal or national welfare (Herche, 1992; Kaynak&Cavusgil, as cited in Lindquist et al., 2001). On the other hand, studies by Lindquist, Vida, Plank, and Fairhurst (2001) and Saffu and Walker (2005) have found the fit results acceptable even though in later studies uni-dimensionality was found to be validated for Canada but not for Russia. Studies by Bawa (2004) on India, Teo et al. (2011) on Malaysia, and Douglas and Nijsen (2002) on Netherlands found the CETSCALE to be multidimensional. A study by Saffu and Walker (2006) on Ghana found the 17-items reliable but not unidimensional. Netemeyer et al. (1991) found strong support for the CETSCALE factor structure and reliability across the four countries in his study. Past research (Shimp and Sharma, 1987; Netemeyer et. al., 1991) established uni-dimensionality, factor structure invariance, discriminant, and nomological validity of the CETSCALE and reliability across nations (Sharma et al. 1995; Good and Huddleston, 1995; Nielsen and Spence, 1997;Suh et al, 2002;Javalgi et al, 2004;Reardon et al, 2005;Hamin and Elliott, 2006; Chryssochoidis et al, 2007; Liu et al, 2007).
Although consumer ethnocentrism has been well studied in the literature, consumer ethnocentrism in Indian cultures has been lacking. The objective of this study is to examine consumer ethnocentrism in Indian societies and further to reveal whether more ethnocentric consumers would have higher preferences of domestic manufactured cars. Since consumer ethnocentrism is a more powerful influence on consumer preferences for domestic and foreign products than demographic or marketing-mix variables (Herche, 1994), its understanding is vital for international marketers.
3. Research Gap
There is a dearth of literature on CET (consumer ethnocentrism) in the Indian context (Bawa, 2004), and also the automobile scenario has remained untouched by the country’s researchers with regard to this scale. Today, when the Indian consumer has great access to foreign goods and the Indian manufacturer is facing increasing competition from foreign products, the neglect of this topic in India is hard to explain. The Indian consumer has greater and easier access to imported goods than ever before. Consequently, the Indian manufacturer has to face increasing competition from foreign goods that too on home turf. In such a scenario, it would be worthwhile to examine the attitude of Indian consumers towards the purchase of foreign-made goods (Bawa, 2004).Researchers all over the world are usingconsumer ethnocentrism in order to understand the effect of consumer ethnocentrism on the attitudes of consumers towards local vs. foreign made products. Researchers from developed country (Klein, 2002; Balabanis and Diamantopoulos, 2004) to developing countries (Kaynak and Kara, 2002) to the less develop countries (Agbonifoh and Elimimian, 1999; and Hamin and Elliott, 2006) have adopted the study to measure the ethnocentric tendency of consumers in a particular country and whether it will influence the attitudes of consumers on foreign made products. Some of the previous studies and researchers had revealed that people from developed, more modern nations, tend to be less ethnocentric than their counterparts in developing and emerging nations (Lindquist et al., 2001). Research from the US and other developed countries generally support the notion that highly ethnocentric consumers overestimate domestic products, underestimate imports, have a preference for, and feel a moral obligation to buy, domestic merchandise (Shimp and Sharma, 1987).
Indians are generally perceived as clamouring for foreign brands (Varma, 1998). Indian consumers evaluated foreign brands higher on technology, quality, status, credibility and esteem than Indian brands (Kinra, 2006). Moreover, there is some evidence that developing countries have contained a higher percentage of counterfeits, replicas and unbranded products with the implication that global brands are the main source of knowledge about global products (Strizhakova et al., 2008). In this sense, developing countries have a more ambivalent relationship with CET. (Vida et al., 2008; Vida & Reardon, 2008).However, in the broader context of the threat to the quality of life and economic livelihood derived from foreign products (Shimp& Sharma, 1987), consumers in developing countries with their lower levels of wealth and reliance on lower-value natural resource endowment (Maddison, 2013) may feel particularly threatened by foreign imports, particularly as they achieve greater economic growth (Shankarmahesh, 2006). For example, Indian agricultural workers and shopkeepers have blocked foreign companies from taking over their land for manufacturing and large retail stores (Corbridge& Shah, 2013). Similarly, Batra, Ramaswamy, Alden, Steenkamp, and Ramachander (2000) showed that Indians preferred foreign products to domestic ones, and similar.Hungarian consumers rated Western products more positively than their local products (Papadopoulos et al., 1990). Similar findings were reported for Polish and Russian consumers (Ettenson 1993), Turkish consumers (Erdogan and Uzkurt 2010), and Indian consumers (Batra et al. 2000). Kinra (2006) linked Indian consumers’ preference for foreign brands to superior quality, value, and technicality. The reason for such results is that ethnocentrism takes a back-seat when a product is from a developed country. In this scenario, consumers judge products based on the positive image associated with the country of origin (Yagci, 2001). That is, even ethnocentric consumers in developing countries may positively evaluate foreign products to some extent if they perceive these products as being associated with a country with a better image (Wang and Chen 2004).
These studies demonstrate that ethnocentric consumers in developing countries perceive foreign goods to be superior to domestic products in certain aspects, and may thus prefer foreign goods. If the findings from the above studies are true for Indian consumers, then it will severely impact the Indian manufacturer and the Indian economy, as both ethnocentric and non-ethnocentric Indian consumers will tend to prefer foreign goods over domestic goods. Until now, there have been few studies that aim to understand the factors influencing ethnocentrism among Indian consumers and its impact on attitude toward both domestic and foreign products/services.To understand Indian consumers’ attitudes toward domestic and foreign products, it is essential to critique the ethnocentric tendencies of Indian consumers. This study aims to understand the implications of ethnocentrism on attitudes of Indian consumers towards locally manufactured cars. The results can assist both Indian and foreign retailers in developing successful strategies in order to thrive in the Indian economy.
4. Research Methodology
5.1 Research Instrument: The present study employs the 17-item CETSCALEdeveloped by Shimp and Sharma (1987) and also used by earlier researchers (Netemeyer et al., 1991;Herche, 1994;Shimp and Sharma, 1995; Good and Huddleston, 1995; Durvasula et al., 1997;Luque-Martinez et al., 2000). The CETSCALE measures consumer ethnocentrism using a Likert-type scale (1 = Strongly Disagree to 7 = Strongly Agree). However, based on inputs obtained during pilot study present research uses CETSCALE with ashorter 5-point scale (1 = Strongly Disagree to 5 = Strongly Agree) as suggested by Cameron and Elliot (1998) instead of a 7-point format employed by Shimp and Sharma (1987). Thus the term goods and foreign in the CETSCALE questionnaire were replaced by cars and India respectively to provide a perspective to the study. The 17 item CETSCALE was tested on a researcher controlled sample. Subsequently, items that seemed problematic were reworded and refined (Malhotra,1991).
5.2 The Sample: The researcher controlled sample comprised students from a government-funded central university offering Undergraduate to Post-Doctoral courses and located near the national capital of India i.e. New Delhi. These institutions are a hub of students from middle-class strata of the society (Heslop, 2014).Consequently, the population in this university is cosmopolitan and culturally diverse as well as being socio-economically diverse, a sizable percentage of the population own cars or have been involved in the process of purchase of car at some level or another. It is expected that such diversity will generate varied perspectives, and will, thereby, enrich the findings of the study. The data was collected by 100 management graduates from the Aligarh Muslim University. Moreover, students belonging to the faculties of Economics/Business Management/Commerce are the most oft-researched group of respondents (Bawa, 2004).The questionnaire was administered in the presence of the authors so that doubts, if any, could be addressed. A total of 73 usable questionnaire responses were used for carrying out the analyses.
5.3 Analysis and Results
5.3.1 Cetscore: CETSCALE scores were determined for each respondent, with the mean, the standard deviation of the CETSCALE were 43.22 and 11.15 respectively. The CETSCALE questions along with the mean and standard deviation for each question are presented in Table 1. The mean ethnocentrism value indicates the intensity of ethnocentrism (Shimp et al., 1987). A higher mean value indicates higher consumer ethnocentrism, while lower mean value implies lower ethnocentrism. In other words, the higher the CETSCALE mean value the more ethnocentric the group under investigation, and the lower the mean value, the less ethnocentric the group that is being investigated. CETSCALE mean value of 43.22 shows that the Indian consumers in the study are not highly ethnocentric. They can best be described as moderately ethnocentric since the mean score is in the middle of the range of the CETSCALE Score (17 to 85).
5.3.2 Reliability: Following prior research (Shimp and Sharma, 1987; Netemeyer et al., 1991; Sharma et al. 1995; Muyle et al., 1997; Hult et al., 1999), the CETSCALE’s reliability was measured using Cronbach’s alpha (Fornell and Larcker, 1981). The Cronbach alpha was 0.913, which indicates that the CETSCALE score is reliable for the Indian data since it exceeds the rule-of-thumb value of 0.70 (Nunnally, 1978; Hatcher, 1994). We can therefore conclude that the CETSCALE is reliable across the Indian sample (Fornell and Larcker, 1981).
5.3.4 Dimensionality: As recommended by Gerbing and Hamilton (1996), we used exploratory factor analysis (EFA) to identify poorly fitted items.In order to achieve our goals and after a previous analysis of reliability to measure the internal consistency of the scale, we developed an exploratory factor analysis (EFA) aimed to establish whether items included in the scale measure the same dimension (uni-dimensionality) or whether there are more dimensions.Principal component analysis was used to explore the dimensionality of the CETSCALE. Prior to conducting the principal component analysis, the factorability of the data set was examined. As the results of the exploratory factor analysis given in Table 1 show, the KMO values are meritorious (>0.8). However, at 59.53, the percentage of variance extracted is a tad below the thumb rule of 0.6 (Malhotra, 2001).Bartlett’s Test of Sphericity had a Chi-Square value of 602.032 (p-value < 0.000 with degrees of freedom = 136), and the Kaiser- Meyer-Olkin (KMO) measure of sampling adequacy was 0.852.These scores suggest that collinearity exits among the data variables, and the degree of common variance is exceptional.For a scale to be uni-dimensional, all items should load highly (>0.3 or hopefully 0.5) on one factor. Stringent items loading retention rules are item loadings 0.5, the difference between an item’s two highest loadings to be > 0.20, at least three items to load on each factor (Tansey, Carroll and Lin Jun, 2001). On the basis of these rules, the CETSCALE cannot be declared to be uni-dimensional.After EFA on the standard 17 items CETSCALE and pruning out the cross loadings 8 items emerged. Out of which 5 items loaded on one construct and 3 loaded on the other as seen in Table 2. The uni-dimensionality of the CETSCALE was compromised, as two factors were brought to light, indicating the patriotism and the self-reliance. The factors were named Patriotics and the Self-Reliants respectively.
Table 2: Result of Exploratory Factor Analysis
The items of the CETSCALE have a discriminating power, the two constructs that were devised aptly stand true to their name. We observe the following attitudes loading on Factor I, which we label as Patriotics, in increasingorder of significance, magnitude of the factor loadings. (Table 2) We infer the following statements after the analysis:
1. Buying Indian made cars doesn’t make one patriotic.
2. Buying foreign made cars is not the reason that Indians lose their jobs.
3. Buying Indian cars is not the only option.
4. Buying foreign made cars does not lead to unemployment in the Indian market.
5. Any Indian purchasing foreign made cars is not unpatriotic.
The second construct tries to gauge the self-reliance characteristics of the Indian consumer. We observe the following items loading and what they signify, on Factor II. We have labelled them as Self Reliants, in increasing order of significance, magnitude of the factor loadings (Table 2).
1. Disagreement with the view that Indian made products are of poorer quality than imports.
2. Choosing Foreign made cars even if there isan Indian made option.
3. Indian made cars should not be bought if it’s priced higher than the foreign made cars.
Summarizing the results of the factor analysis, consumer behaviour can be characterized as un-patriotic towardsbuying Indian made products and at the same time recognizing through the self-reliance behaviour which also results in a negative behaviour towards Indian- made products. In other words, the consumerdoesn’t feel very ethnocentrictowards Indian made goods with regard to actual purchasing patterns. Such is the case when Indian-made products are widely available in numerous areas of the country.Concluding the results of the factor analysis, consumer behaviour to “buy locally” can be characterized by a laidback approach toward buying Indian made products and in some items even negative behaviour towards the Indian-made products.
In this study, our objective was to understand what leads Indian consumers toethnocentrism and the effects of their ethnocentrism on their attitudes towards imports, and subsequently on purchase intentions.Sociological phenomena have received insufficient attention from marketing and consumer behavior scholars (Nicosia and Mayer 1976; Sheth 1977). The concept of consumer ethnocentrism and its measurement via the CETSCALE helps to close this gap and respond to the plea for domain-specific concepts in marketing and consumer behavior (Jacoby, 1978).The focus in this study was on locally manufactured cars. The findings confirm results from previous consumer ethnocentrism research (Sharma et al., 1995; Ruyter et al., 1998). The study illustrates that CETSCALE behaves just as a scale should behave in terms of reliability. But, the consumer ethnocentrism concept is not conceptually equivalent to the concept of consumer ethnocentrism prevailing in the US where it was found to be unidimensional in the original study. However, studies replicated in other nations have also not found the scale to be unidimensional. A significant finding of this study and contribution to the literature, is the multi-dimensionality of the CETSCALE. Earlier research (Shimp and Sharma, 1991; Netemeyer et al., 1991; Herche, 1992; Sharma et al., 1995; Durvasula et al., 1997) found the CETSCALE to be uni-dimensional. Our finding is therefore inconsistent with prior research, but is consistent with recent studies that indicate the CETSCALE may be multidimensional (Marcoux et al., 1997; Mulye et al., 1999; Yu and Albaum, 2002; Bawa, 2004; Khan and Rizvi 2008; Hsu and Nien, 2008; and Wei et al., 2009;Chowdhary and Rahman, 2014).
We set out to evaluate the properties of the CETSCALE within the context of locally manufactured cars in India, a developing country. A student sample was used and provided information on the CETSCALE as a measure of consumer ethnocentrism. International marketers planning to promote and sell imported products should consider demographics, socio-psychological variables, and consumers’ opinions of other nations’ religious orientation while developing their strategies. This confirms the importance of thorough market research studies when entering foreign markets (Moon & Jain, 2001). In India, the original CETSCALE behaves as a scale to assess the opinion of consumers on buying foreign-made goods. This argument is justified as 8 out of 17 items of the CETSCALE were found to be applicable for India with high reliability and validity values (even though not unidimensional).Our study shows that with a mean ethnocentric scale value of 43.22(17-85), Indian consumers were moderately ethnocentric. For instance, they don’t feel at all that buying Indian made cars is patriotic and they don’t believe that the purchase of foreign cars leads to unemployment in India. The Indian consumers will also buy cars that offer the best value for money regardless of country of manufacturing. This finding appears to be consistent with prior studies that suggest that products that are manufactured in advanced western countries are perceived to be better than those from developing or less developed countries (Bilkey and Nes, 1982;Wildt and Jones, 1987;Samiee, 1994;Watson and Wright, 2000; Kaynak and Kara, 2002).On the basis of findings, the car manufacturers can use a platform that incorporates moderate ethnocentrism and the consumers’ self-interest, encapsulated by realism in the price-quality relationship and value-for-money, as an effective way of ensuring people to be more inclined towards locally manufactured cars.
A recognition of the degree of ethnocentrism is useful for developing marketing strategies. As the study shows that the consumers in the study are not highly ethnocentric, it would be pointless to stress the product’s country of origin (Han, 1989) in marketing to the consumers in the study. For instance, it may not be advantageous for domestic marketing managers to undertake a promotional campaign that stresses a nationalistic theme, such as buy ‘Made in India’ products. Foreign retailers could emphasize how their presence in India improves the local economy. This would make Indian consumers feel secure about purchasing a particular foreign product/service in an environment where they may feel that foreign companies in general threaten the Indian economy. The scale offers marketing managers a useful tool for better understanding how present and prospective customers feel about purchasing foreign- versus Indian-made products. The CETSCALE provides managers with an instrument to create a database for marketing strategy development. Understanding the role consumer ethnocentrism plays in influencing consumers may provide useful decision framework for segmentation and target market selection within different markets for firms operating globally.More specifically, companies that wish to market to the Indian consumers in the study, must ensure that their products are of a high quality although we haven’t assessed this anywhere in the study but it’s the only logical thing to do especially when the consumers are low to moderately ethnocentric.
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