The Purchase of Foreign Products: The Role of Brand Image, Ethnocentrism and Animosity: Iran Market Evidence

Abstract

Consumer purchasing decisions relating to foreign products are influenced by economic, psychological and sociological factors. This study attempts to relate such rarely studied variables as animosity and ethnocentrism to concepts taken from consumer behavior which are brand image and purchase intention. Consequently, this study attempts to provide insights into how brand image, consumer ethnocentrism and animosity shape consumers' purchase intention. Empirical data were collected by a questionnaire distributed to a British apparel retailer. The results show that while consumer's brand image was found to be positively related to consumer's purchase intention, consumer ethnocentrism and animosity were negatively related to consumer's purchase intention. Additionally, consumer ethnocentrism was negatively related to brand image, whereas, consumer animosity has no significant relation with brand image. These findings have direct and important implications for international marketers. [PUBLICATION ABSTRACT]

Headnote

Abstract

Consumer purchasing decisions relating to foreign products are influenced by economic, psychological and sociological factors. This study attempts to relate such rarely studied variables as animosity and ethnocentrism to concepts taken from consumer behavior which are brand image and purchase intention. Consequently, this study attempts to provide insights into how brand image, consumer ethnocentrism and animosity shape consumers' purchase intention. Empirical data were collected by a questionnaire distributed to a British apparel retailer. The results show that while consumer's brand image was found to be positively related to consumer's purchase intention, consumer ethnocentrism and animosity were negatively related to consumer's purchase intention. Additionally, consumer ethnocentrism was negatively related to brand image, whereas, consumer animosity has no significant relation with brand image. These findings have direct and important implications for international marketers.

Keywords:

Brand image, Ethnocentrism, Animosity, Purchase intention.

(ProQuest: ... denotes non-US-ASCII text omitted.)

Introduction

With acceleration of globalization, international expansion is now a common strategy for offsetting a maturing domestic retail environment. As a result, the potential customer base has been extended from purely domestic to both domestic and international customers. Since the decline of communism, many countries have adopted themselves with globalization spreading trend and free international trade, thus reducing tariffs and other trade barriers to facilitate the import of foreign goods. Within this global marketplace, international firms are faced with increasing competition that is highly focused on customer needs with substitutable goods in virtually every product category (Netemeyer, Durvasula, and Lichtenstein, 1991).

After Iran has almost completely opened its markets to the globe, due to political changes after presidential election in 2005, Iranian customers have been rapidly becoming global costumers, developing tastes similar to those in the developed Western countries. According to Iranian official economic news (econews.ir), Iran's apparel imports volume has been increased more than fifteen percent and reached nineteen million dollars in 2011. Fairly easy import rules together with increase in purchasing power have boosted demands for foreign products in Iran. In addition, over sixty percent of Iran's 75 million people are under thirty-year-olds which makes Iran an appealing market for western apparel brands.

Despite the given rapid growth and optimistic outlook for global western brands in Iran, little is known about Iran's foreign product consumption and particularly, managing consumer expectations with regard to this specific consumption context. This is the vacuum in the contemporary literature on foreign consumption that this study is designed to fill. Therefore, the objective of this study is to investigate rarely studied variables namely animosity and ethnocentrism with concepts taken from consumer behavior which are brand image and foreign purchase intention. Consequently, this study attempts to provide insights into how, brand image, consumer ethnocentrism and animosity shape Iranian consumers' foreign purchase intention.

The paper starts with a section presenting the literature review. From this review hypotheses are formed followed by the methodology and results. And concluding section with a discussion of the findings, managerial relevance, and future research directions is followed.

Theoretical Background and Hypotheses Development

Consumer Purchase of Foreign Product

One of the fundamental components of consumer behavior is product evaluation in which consumers assess the attributes of various offered products and make purchase decisions (Dickson et al., 2004). Consumers typically separate foreign products from domestic ones through their cognitive processing of country specific information (Papadopoulos & Heslop, 1993). This information can be inferred from brand and company names, from product labels, and from linguistic, visual and aural symbols (Klein & Ettenson, 1999). In this study consumers' purchase of British apparel is investigated.

Brand Image

In the case of foreign products, brand name and associated image are critical extrinsic cues related to consumers' purchase intention (Wang & Chen, 2004; Chevalier & Mazzalovo, 2008; Kapferer & Bastien, 2009). For publicly visible products, such as apparel, consumers in developing countries typically prefer imports due to their brand image which is associated with country of origin (Wang & Chen, 2004). Brand image for foreign brands specially fashion brands is often the key competitive advantage that could have potential of value creation for organizations (keller, 2009). Erdem et al. (2006) argues that consumers in collectivist, developing markets (e.g. Iran) are highly concerned with extrinsic cues such as brand image in their purchase decisions in comparison to consumers in individualist, developed markets. In other words, brands which are associated with higher social acceptability are more appealing among consumers in collectivist markets (Yoo & Donthu, 2001). The results of those studies suggest the idea that Iranian consumers' brand image may have significant impact on their purchase of foreign apparel due to collectivist nature of Iranian consumers. Therefore, it is proposed that:

Hi. Iranian consumers' brand image (BI) is positively related to their purchase intention of foreign apparel (PI).

Consumer Ethnocentrism

Although governments have continually reduced trade barriers such as tariffs to encourage international trade, consumer ethnocentrism is one form of non-tariff barrier which is among citizens (Shankarmahesh, 2006). Ethnocentrism originates from tendency of people to view their own groups as the center of the universe and interpret other social units from the perspective of their own group, and consequently reject people who have different culture and accept those with the same culture as themselves (Booth, 1979). Consumer ethnocentrism is defined as the beliefs held by consumers about the appropriateness, indeed morality, of purchasing foreign-made products instead of locally made products (Shimp & Sharma, 1987).

In the case of foreign products, several studies have investigated the relation of consumer ethnocentrism and purchase intention of foreign products (Balabanis & Deamantopoulos, 2008; Herch, 1992; Lantz & Loeb, 1996; Netemeyer et al., 1991; Sharma et al., 1995). Klein, Ettenson and Morris (1998) investigated Chinese consumers and their propensity to purchase Japanese durable goods. Their results support that consumer ethnocentrism is influential on the purchase of foreign products. Several studies have found support for negative impact of consumer ethnocentrism on their evaluation of foreign products (Shimp & Sharma, 1987; Klein, 2002; Klein, Ettenson & Morris, 1998). On the other side, several studies have provided evidence which support a positive impact of consumer ethnocentrism on their purchase intention of domestic products (Han 1988; Herche, 1992; Suh & Kwon, 2002).

Several studies have suggested consumer ethnocentrism could be an antecedent of country-of-origin image (Brodowsky, 1998; Samiee, 1994; Gürhan-Canli & Maheswaran, 2000). Brodowsky (1998) argues that consumers who have low levels of consumer ethnocentrism will use country-of-origin cues for objective product evaluation. Highly ethnocentric consumers were shown to systematically view the foreign country-of-origin in a negative light, thus producing negative foreign product evaluations (Dissertation). In the study of O'Cass and Lim (2002) the impact of consumers' ethnocentrism on consumers' brand preference has been investigated and results show that highly ethnocentric consumers are highly influenced by brand preferences in purchase of foreign products. After a review of the relevant literature the following hypotheses are developed:

H2. Iranian consumers' ethnocentrism (CET) is negatively related to their purchase intention (PI) of foreign apparel.

H3. Iranian consumers' ethnocentrism (CET) is negatively related to brand image (BI) of foreign apparel.

Animosity

Over the past decade, the concept of consumer animosity has gained considerable attention in international marketing literature as an antecedent of foreign product purchase intention. Klein et al. (1998) have identified three categories of tension between countries that result in consumer animosity. War-related tensions are those kinds of tensions which are arising from military conflicts (e.g. ongoing Middle East conflicts, such as presence of Britain's warships in Persian Gulf). Economic and business-related tensions which are between their domestic nation and foreign countries (e.g. economic sanctions made by British government against Iran) and the last category is political tensions (e.g. many Iranian have political animosity towards Britain due to negative background they have, which is a result of Britain's past political interference in Iran affairs).

Previous studies have found that consumer animosity has negative impact on consumers' willingness to buy foreign products (Ettensen & Klein, 2005; Klein et al., 1998; Nijssen & Douglas, 2004). Although Shoham et al. (2006) has found that animosity has negative impact on consumers' product judgment of domestic product, it is argued that their findings may have been resulted due to the use of domestically produced goods (e.g. foods), which is difficult to separate from the people who produce them (Rose et al., 2009). Rose et al. (2009) have found that consumers' animosity towards a foreign country will lead to consumers' decreased willingness to purchase the nation's products.

There are few studies in international marketing literature which have investigated the impact of animosity on branding cues (e.g. Russell & Russell, 2009). In the study of Russell and Russell (2009) the relation of consumers' animosity towards a country with which they have strong stereotypic association with brand prejudice have been investigated and results have shown that brands with strong stereotypic association with a county suffer from direct prejudice, in the form of more negative attitudes, related to animosity. O'Cass & Lim (2002) have investigated consumers' ethnocentrism on consumers' brand preference but there are no researches investigating the impact of animosity on brand image. Therefore, it is proposed that:

H4. Iranian consumers' animosity (ANI) towards Britain is negatively related to their purchase intention (PI) of British apparel.

H5. Iranian consumers' animosity (ANI) towards Britain is negatively related to their brand image (BI) of British apparel.

Methodology

Measures

The questionnaires were mainly adopted from relevant previous studies and carefully modified to reflect the characteristics of Iranian consumers. The first set of items for brand image was derived from Batra et al. (2000). Eight items measuring ethnocentrism were adopted from Shimp and Sharma (1987). Items measuring consumers' animosity were adopted from Klein et al. (1998). Items related to purchase intention were derived from Dodds et al. (1991). To assess the content and face validity, the questionnaire was submitted to three marketing professionals who assessed each item for representativeness, specificity, and clarity. The final questionnaire was divided into two parts. The first part contained questions regarding respondents' demographics, and the second part focused on measurement scales. All variables in the second part of the questionnaire were closed-ended five-point scales, with 1 indicating "strongly disagree" and 5 indicating "strongly agree".

Sample

A total of four hundred sixty three consumers completed questionnaires. From the respondent profile, (59.33%) of the respondents were male. More than (46%) of the respondents were between the ages of 31 to 40. Nearly (10%) of respondents were married. The education profile indicates that more than (50%) of respondents were among academic graduates. Table 1 shows the profile of respondents in detail.

Analysis and Results

Table 2 shows the common fit indices, recommended values and analytical results for total measurement model. All the model-fit indices were qualified with the recommended values (Hair et al., 1998), indicating that the overall model fit was acceptable.

CFA has been used to measure the reliability, convergent validity, and discrimination validity of measurement model. As shown in Tables 3 and 4, most of the squared multiple correlations (SMC) of the measured variables were larger than (0.50) and the composite reliability (CR) of the latent variables was higher than (0.6) indicating that all measures had good reliability (Bagozzi & Yi, 1988; Hair et al., 1998). Moreover, the completely standardized factor loadings all reached the level of significance. All the latent variables had a CR larger than (0.60) and AVE larger than (0.50), meaning that good convergent validity could be obtained (Forneil & Larcker, 1981). Each latent variable's AVE was larger than the squared correlation between each pair of latent variables. Therefore, the discriminant validity was good (Forneil & Larcker, 1981).

Means, standard deviations and correlation among variables is reported in Table 4. The brand image has the highest mean (3.24) and animosity has the lowest mean (2.74). The means score showed this important reality that animosity of the sample was under the mean and indicated the weak animosity. As it was anticipated, ethnocentrism has negative correlation with purchase intention (r = -0.62, /K0.001 ) and also negative correlation with brand image (r = -0.41, ¿><0.001). Correlation results show that there is negative relationship between animosity and purchase intention (r = -0.4, ¿><0.001). AVEs of the variables are also shown on the table which all of them exceeds the threshold of (0.5) indicating that discriminant validity is good.

Given the satisfactory fit of the model, the estimated path coefficients of the structural model were then examined to evaluate the hypotheses. Figure 1 shows the standardized path coefficients, t-values, and coefficients of determination of the latent variables. Most of the hypotheses were strongly supported, expect for hypothesis H4 (c = 0.066; t = -1.33). Discussions will be presented in the next section.

Discussions

(1) Brand image had direct positive effect on foreign purchase intention (c=0.633, 1=9.83); therefore, Hi was supported. This result is in line with previous studies such as Shukla (2010) and indicates that consumers who have more favorable image towards a foreign brand have more willingness to buy that brand.

(2) The effect of consumers' ethnocentrism on foreign purchase intention was significant and negative (c= -0.53; 1= -7.52). Thus, H2 was supported. This result is consistent with those of previous studies on purchase intention (Hamin & Elliott, 2006; Wang & Chen, 2004). In other words, when consumers have more feeling of ethnocentrism towards their home country they have less intention to buy foreign products.

(3) The effect of consumers' ethnocentrism on brand image as expected was significant and negative (c=~.29, ¿=-4.35), so H3 was supported. In the other words, when consumers have high sense of ethnocentrism toward their domestic products, their brand image will be more negative toward the foreign products. This result is in line with the study of O'Cass and Lim (2002) where the consumers' ethnocentrism is shown to have impact on their brand preferences.

(4) Consumers' animosity had direct negative impact on their purchase intention (c = -0.377; t = -5.672), so H4 was supported. This means that consumers who have more sense of animosity towards Britain, has less willingness to purchase British apparel. This finding is in line with the finding of Rose et al. (2009).

(5) Consumers' animosity had no impact on their brand image (c=-0.066 ¿=-1.33) this means that the effect of consumers' animosity on brand image is not significant.

Using the standardized path coefficients between constructs, the direct effect and the indirect effect of each construct on the purchase of foreign products can be calculated (Table 5). The total effects of the constructs on foreign purchase intention (direct effect plus indirect effect) can be ranked as follows: ethnocentrism (-0.713), brand image (0.633), and animosity (-0.418). Other direct and indirect effects of variables are also shown in Table 5.

Table 6 shows the common model-fit indices, recommended values and results of the test of structural model fitness. Comparison of all fit indices with their corresponding recommended values (Hair et al., 1998), the evidence of a good model fit was revealed.

Conclusions and Managerial Implications

The effects of brand image, consumer ethnocentrism and animosity on foreign purchase intention were investigated in this research. The study also highlights how the presence of consumers' ethnocentrism and animosity alters the relationship between consumers' brand image and foreign purchase intention. The results demonstrate that the model is effective in explaining Iranian consumers' foreign consumption tendencies related to brand image, consumer ethnocentrism and animosity.

Previous research has already showed that brand image has influences on foreign purchase intention like Shukla (2010), which is confirmed in this research for Iranian foreign products consumers; therefore, it suggest that Iranian consumers are highly rely on brand image cues. This finding highlights the importance of brand building for global firms considering Iranian consumers as target consumers.

The effect of ethnocentrism and animosity as an antecedent of foreign purchase intention is supported by the findings, which is in line with previous researches in this field (e.g. Hamin & Elliott, 2006; Wang & Chen, 2004). This indicates Iranian consumers have tendency to buy foreign apparel if they either do not have feeling of ethnocentrism or do not have sense of animosity toward the origin country of the brand.

Consumer ethnocentrism was also found to be an influential variable on consumers brand image which shows that Iranian consumers demonstrate their feeling toward foreign countries' products by the image they have in their minds.

This research is considered as the first attempt to investigate the impact of brand image and consumer ethnocentrism and animosity on Iranian foreign purchase intention. Therefore, further researches are needed for further confirmation of the results. Besides, the sample size and the possibility of sampling bias occurrence are important constraints on the generalizability of the empirical results. Analysis of the hypotheses was based on a data set of 463 samples. Therefore, more researches could be conducted in with larger set of samples. Due to the point-in- time nature of this study which could not assess variations in results, further research is needed to be performed in longitudinal investigations.

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References

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