An Organic Approach for the Delineation of Foreign Product Avoidance

Abstract

Introduction

Internationalisation represents a key means for firms to attain growth, whether it be recognition, market share, or profitability (Agndal & Elbe, 2007). However, a key barrier is foreign product avoidance (consumer ethnocentrism) (Keane & Morschett, 2016, pg. 228). Notwithstanding the augmentation of globalisation in recent decades, political and economic fragmentation have come to the forefront, presenting foreign product avoidance as a contemporary phenomenon.

The intersection of globalisation and rising nationalism in reaction to neoliberalism indicates a potential resurgence in empirical observations of foreign product avoidance. Epistemologically, extant assumptions and explanations in the realm of consumer ethnocentrism are no more aligned with, and do not fully reflect the dynamic and multidisciplinary nature of ethnocentrism, advances across other disciplines, and changes in geo-economics and politics. Hence, a revisit and reconceptualisation of foreign product avoidance, namely, the factors which metamorphosise ethnocentric tendency to shape purchase behaviour, is timely and of utmost importance theoretically, methodologically and for international companies and firms.

The purpose of the thesis is to investigate changes in consumer behaviour as globalisation shows signs of diminishing significance in the face of the fall of neoliberalism with the simultaneous rise of nationalism. As such, the main objectives were to identify the factors that shape consumer ethnocentric purchase behaviour, propose a methodology to delineate the phenomenon as it is experienced in relation to different products within a particular cultural context, and extrapolate insights which shape internationalisation strategies.

Research Question(s)

The following primary research question (and related sub-questions) guided the scope, structure, methodology, and overall direction of the thesis:

"How can internationalising firms overcome the challenge of consumer ethnocentrism and generate appeal within a foreign target market, in light of rising nationalism and its concomitant resistance to globalisation?"

a. What are the factors which influence consumer ethnocentric tendency to form purchase behaviour? b. How can the factors of consumer ethnocentrism be integrated to improve the informativeness of the CETSCALE?

Methodology

The thesis adopted a mixed methods approach. An exploratory instrument development methodology, consisting of a single qualitative study was followed by three correlational and descriptive quantitative studies. Thus, study one sought to identify potential products which exemplify each factor which was theoretically derived from the review of academic literature (country of origin, product category, luxuriousness, and linkage with the target market's culture). Study two reduced the list of examples. Study three tested the reliability of the CETSCALE, and study four applied the CETSCALE in combination with conjoint analysis (utilising the product profiles generated at the conclusion of the second study). All studies (except study one) were conducted in the Russian Federation.

Findings

Synthesised results and findings across the four studies indicate that Russian respondents indeed utilise heuristic processing when judging foreign products. Each factor carries a different level of importance. Based on the conjoint analysis, Russians prefer products to be German rather than Vietnamese (origin factor), luxurious rather than basic (luxuriousness factor), without a linkage to Russian culture, and to be non-ingestible (product category factor). Based on such insights, internationalising firms can generate appeal through a more well-informed marketing mix. For example, to relocate manufacturing to a sought-after country, or utilise advertising campaigns that emphasise luxuriousness. Subsequent benefits related to growth in market presence and profitability would abound in turn. Show more