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Effects of Brand Local and Nonlocal Origin on Consumer Attitudes in Developing Countries
Author(s): Rajeev Batra, Venkatram Ramaswamy, Dana L. Alden, Jan-Benedict E. M.
Steenkamp, S. Ramachander
Source: Journal of Consumer Psychology, Vol. 9, No. 2, Cultural Psychology (2000), pp. 83-95
Published by: Society for Consumer Psychology
Stable URL: http://www.jstor.org/stable/1480401 .
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VenkatramRamaswamy
School of BusinessAdministration
Universityof Michigan
Dana L. Alden
College of BusinessAdministration
Universityof Hawaii at Manoa
Jan-BenedictE. M. Steenkamp
Departmentof Marketing
TilburgUniversity,TheNetherlands
S. Ramachander
Academyfor ManagementExcellence
Madras,India
This studytested whether,amongconsumersin developingcountries,brandsperceivedas having a nonlocalcountryof origin,especially from the West, are attitudinallypreferredto brands
seen as local, for reasonsnot only of perceivedqualitybut also of social status.We found that
this perceivedbrandnonlocalnesseffect was greaterfor consumerswho have a greateradmiration for lifestyles in economically developedcountries,which is consistentwith findings from
the culturalanthropologyliterature.The effect was also foundto be strongerfor consumerswho
were high in susceptibilityto normativeinfluenceandfor productcategorieshigh in social signaling value. This effect was also moderatedby productcategoryfamiliarity,but not by consumerethnocentrism.The results,thus, suggest thatin developingcountries,a brand'scountry
of originnot only serves as a "qualityhalo"or summaryof productquality(cf. Han, 1989), but
also possesses a dimensionof nonlocalnessthat,amongsome consumersandfor some product
categories,contributesto attitudinalliking for status-enhancingreasons.
countryof origin (CO) as a cue in inferringits qualityandacceptability (Baughn & Yaprak, 1993; Bilkey & Nes, 1982),
and this researchought to help us understandhow consumers in developing countries make this choice between local
and nonlocal brands.However, most analyses of CO effects
have only used data from U.S. or U.K. consumers (see review in Heslop & Papadopoulos, 1993). As a result, we are
left with little theory to predict how and why consumers in
developing marketschoose between older, local brandsand
newer, foreign or nonlocal brands. To enhance our under-
84
BRAND
LOCAL
ANDNONLOCAL
ORIGIN 85
ger in developing than developed countries, where most of
the CO researchhas originated.
86
any discussionof "nationalcharacter"is necessarilyan oversimplification,some generalizationsmay nonethelessbe offered. India has always had a very hierarchy- and status-conscious society (Kakar, 1981, p. 124), which began
with the caste system and has now evolved into more of a
class-basedsystem(Venkatesh& Swamy, 1994, p. 54). Thus,
therehas alwaysbeen a searchfor signs andmarkersof status
and class, and successful Indiansfrequentlylike to display
their affluence through ostentatiousdisplays of the goods
theyown (Singh, 1982,p. 27). India'sclosed economy,which
only recently opened to the outside world, severely limited
importsof Westernconsumergoods and made them scarce
andexpensive. Thus,it was naturalfor such goods to acquire
such a symbolic status-givingrole.
Ger et al. (1993, p. 106) pointedout thatdemandfor foreign goods also goes up whena nationorculturegoes through
a periodof lowered confidence or esteem, such as happened
recentlyin Easternand CentralEurope,with the "defeat"of
communismandstatism.Indiahas long hada historyof being
colonized by foreign rulers, most recently the British, and
many social commentatorshave claimed that Indians still
have an "inferioritycomplex" and a desire to imitate foreign-originproductsand people. Tully (1991) wrote, "Colonialism teaches the native elite it creates to admire-all too
often to ape-the ways of their foreign rulers.That habit of
mind has survived in independentIndia" (p. 3). Naipaul
(1964) said of India:
Itsmimicryis bothlessandmorethanacolonialmimicry.Itis
thespecialmimicryof anoldcountrywhichhasbeenwithout
fora thousandyearsandhaslearnedto
a nativearistocracy
butonlyatthetop... no peopleare
makeroomforoutsiders,
as capableof mimicryas theIndians.(p.60)
This meaning transferof status and yearning to scarce
Westernbrandshas been magnified by (a) the large number
of Indians with connections to the West (such as relatives
living or workingthere, or travelingthere);(b) exposure to
Westerntourists;(c) the widespreadknowledge of English
and thus greatercomprehensionof English-languagemedia
inflows; and more recently, (d) the very influential role
played by TV (including satellite and cable channels) as a
culturalandentertainmentmedium,disseminatingexposure
to Westernlifestyles.
In addition,with the recentopeningup of its marketsand
the changesin women's roles, Indiais now undergoingvery
significantchanges, includingrising incomes and changing
expectationsandtastes (Venkatesh& Swamy, 1994, p. 207).
As pointed out by Luckmannand Berger (1964), times of
transitionand social mobility magnify the tendencyto claim
differentialstatusthroughthe brandsone consumes.As a result, morethanever before,todayIndianconsumersyearnto
be equal participantsin the global consumereconomy, with
the power to acquirebrandsmade from all over the world,
giving foreign-madeproductsa cachet often not known in
In India, the site of this research-as in most other developing countries-local-origin brandsare almost withoutexception sold only domestically, so thatthe fact thata brandis sold not only locally butalso in manyforeign marketsclearly implies nonlocal origin.
brand'slocal versus nonlocal origin. A brandis conceptualized as being more nonlocal thanlocal if it is perceivedto be
marketedandconsumedin othercountriesas well, notjust in
thatlocal market.We thusfirst test our maineffects hypothesis concerningperceived nonlocalness:
H1: A brand'sperceiveddegreeof nonlocaloriginwill
be significant in shaping consumer attitudestoward it, in a positive direction.
More important,it follows from the aforementionedtheoretical development that any such main effect of a brand's
nonlocalorigin(Hypothesis 1) shouldvaryin strengthacross
consumersin developing countriesdependingon theiradmirationof lifestyles in EDCs. Attitudestowardnonlocalbrands
ought to be higherfor those who admireEDC lifestyles than
for those who do not. Past researchhas found a strongertendency to favor foreign CO productsamong consumerswho
hadmorefavorablesocial contactwith foreignersandamong
those who have a greaterperceivedsimilarityof interestsand
beliefs with the foreign CO in question (Heslop &
Papadopoulos,1993, p. 63). By extension, EDC admiration
ought to lead to more positive attitudestowardbrandswith
higherperceived nonlocal CO.
H2: A consumer'sEDC admirationmoderatesthe effect of perceivednonlocalnessof a brand'sorigin
on brandattitudes.As EDC admirationincreases,
the effect of perceived nonlocalness of the brand
on brandattitudewill become more positive.
Other IndividualDifference Characteristics
Moderating the Effect of a Brand's Origin
Ethnocentrism. Several CO researchers have found
that many respondents in their studies preferreddomestic
products to foreign ones, although this bias varied across
consumersegments andcountries(Heslop & Papadopoulos,
1993, pp. 44, 46). In the sociological literature,the construct
of ethnocentrismdescribes the tendency of people to reject
people who areculturallydissimilar,and at the same time to
favor those who are more like themselves. Drawing on this
literature, Shimp and Sharma (1987) developed the construct of consumer ethnocentrism and argued that highly
ethnocentricconsumerscan be expected to avoid buying importedproductsbecause doing so would be unpatriotic,hurt
domestic jobs, and so on. In contrast,nonethnocentricconsumersshouldevaluateforeign productson the product'sintrinsicmerits,withoutdowngradingthem simply because of
their foreign origin. In a variety of studies, Shimp and
Sharma showed that U.S. consumers who scored high on
ethnocentrism (measured on their CETSCALE) were indeed more favorably biased toward buying local products
andmore opposed to buying productsmanufacturedin other
87
88
89
respondentthenansweredquestionscoveringbrandattitudes,
brandimage,brandquality,andthe brand'sperceivedlocal or
nonlocal origin about three brands. Questions were also
askedon priorbrandusage, brandfamiliarityandavailability,
andproductcategoryrisk,for use as covariates.Details on the
measuresused in our analysis are presentedlater.
Across all respondents,datawere collected on eight product categories,four brandsper productcategory.Because of
space or time limitations,the productcategorieswere rotated
across questionnaires,in sets of two categories for any one
questionnaire.For each productcategory, the brandswere
also rotatedacross questionnaires.As a result, each respondent for a particularproductcategoryansweredquestionson
two fixed brandsand on a third brandthat was alternated
across respondents.2Thus, whereas each respondent only
provideddata on three brands,data on four brandsper category were collected across all respondents.This balancing
androtationwere neededto keep each respondent'stime demandswithinreasonablelevels.
The totalset of productcategorieswas createdpurposively
to provide variance across constructsof interest:consumer
familiaritywith the productcategory;productcategorysocial
signalingvalue;level of technologyused in the categoryand,
thus,perceivedrisk;andthe level to which local tastepreferences mightbe expectedto vary fromthose of othercultures.
Using these criteria, we selected eight product categories:
laundry detergents, wristwatches, soft drinks, light bulbs,
toothpaste,washing machines,tea, and TV sets. Analysis of
the mean levels and variancesof these variablesacrossthese
eight productcategories(omittedfor brevity)showed thaton
most characteristics(especially perceivedrisk andsocial signalingvalue), thereappearedto be significantvariationof individualcategoryratingsrelative to the mean.
As already mentioned, each individual respondentonly
answeredquestionson two productcategories.Fourbrandsin
each product category were selected and a total set of 32
brandswas createdto providevariancein the perceivedlocal
or nonlocal origin constructof interest. Thus, some brands
were clearly nonlocal (e.g., Ariel detergent, Coca-Cola,
Timex watches,Philips TV sets, Taster'sChoice tea), others
were clearly local (e.g., Nirma detergent,Taaza tea, Limca
soft drinks,HMT watches), whereasothers were of blended
or hybrid origin (e.g., TVS-Whirlpool washing machines,
BPL-Sanyo TV sets, Lehar-Pepsi soft drinks),and so on.
Measures
The items used in our scales (see Table 1 for full details)
were drawn to the maximum extent possible from scales
Combiningdata from multiplerespondents,when each respondentprovides dataon only a subsetof stimuli, is standardresearchpracticewhen the
numberof stimuli for any one respondentwould otherwisebecome huge, as
in blocked designs in conjointanalysis (Louviere, 1994).
90
Measures
Scale
Consumerethnocentrism(a = 0.63; M = 4.81, SD = 1.27)
Item
Purchasingforeign-madeproductsis un-Indian.
Indiansshouldnotbuyforeignproducts,becausethishurtsIndianbusinessandcausesunemployment.
A real Indianshould always buy Indian-madeproducts.
It is not rightto purchaseforeign-madeproducts.
If I want to be like someone, I often try to buy the same brandsthey buy.
Whenbuyingproducts,I generallypurchasethose brandsthatI thinkotherswill approveof.
To be sureI buy the rightproductor brand,I often observewhatothersarebuyingand using.
To what extent do you yourself admirethe lifestyle of people who live in more economically
developedcountries,such as the United States, WesternEurope,and Japan?
Dislike/Like.
I have a negative (positive) opinion of it.
I considerthis brandto be an Indian(foreign)brand.
I don't (do) thinkconsumersoverseas buy this brand.
This brandis sold only in India(all over the world).
This is a very poorly made (well-made)brand.
This brandhas a very cheap/poor(good/high) image.
This brandreally makes me look good (not too good) in frontof my friends.
Not at all (very) familiarwith it.
Never even heardof it (Know a lot of it).
This brandis easily (just not) availablefor me to buy.
I have seen (never seen) ads for it in Indianmagazines,radio,or TV.
Never triedit even once (Use it all the time).
I have no (extensive) personalusage experiencewith it.
I am not at all familiarwith this productcategory(Agree/Disagree).
It is (is not) a big deal if I make a mistakein choosing a (category).
A poor choice of (category)would (not) be upsetting.
Which (category)you select tells (doesn't tell) anythingabouta person.
Note. Almost all the scales have standardizedalphasabove 0.60, the level suggestedby Nunnally(1967) for scales still underdevelopment.
that have previously been validated in the literature, including consumer ethnocentrism(Shimp & Sharma, 1987)
and susceptibility to normative influence (Bearden et al.,
1989), as well as the levels of category perceived risk and
social signaling value (Laurent& Kapferer,1985). Unless
otherwise indicated, these used strongly agree and
strongly disagree endpoints. Admiration of the lifestyles
in economically developed countries was measured
througha single-item scale, "To what extent do you yourself admire the lifestyle of people who live in more economically developed countries, such as the United States,
Western Europe, and Japan?"(not at all or very much).
Viewing these countries or regions as part of one larger
group of economically developed countrieshas lots of precedent: "FirstWorld"characterizationcontinues in classifications by institutions, such as the World Bank.
For a brand'sperceivedlocal or nonlocalorigin,consumers ratedthe degree to which, "I considerthis brandto be an
Indian(foreign) brand,""I don't (do) thinkconsumersoverseas buy this brand,"and "Thisbrandis sold only in India(is
sold all over the world)." Because almost all India-made
brandsare only marketedwithin the country,the perception
thatIndiais only one of many marketsfor the brandclearly
suggests a non-Indianorigin for the brand.Brand attitudes
91
3Thesecategorydummies
themean-level
differences
acrossthese
capture
Westillretainthevariables
fortheindividual-level
productcategories.
perbecausetheymodeledthe
ceptionsof thatcategory'sriskandfamiliarity
variation
aroundthatcategory'smeanlevel(captured
bytheaddedcategory
92
TABLE2
MultipleRegression Analysis of BrandAttitudes
Variablea
Maineffects of perceivedbrandcharacteristics:
Perceivedbrandlocal/nonlocalorigin
Origin-freebrandquality
Origin-freebrandimage
Brandavailability(covariate)
Brandfamiliarity(covariate)
Priorexperiencewith brand(covariate)
Interactionsof perceivedbrandlocallnonlocalorigin
Individualdifferencevariables:
EDC admiration(H2: +)
Ethnocentrism(H3: -)
EDC Admirationx Ethnocentrism(H4: +)
EDC Admirationx SNI (H5b: +)
CategorySignaling x SNI (H5a: +)
SNI
Perceivedcategorycharacteristics:
Categoryfamiliarity(H6: -)
Categoryrisk
Categorysignaling
Othercontroleffects:
Ethnocentrism
SNI
EDC admiration
EDC Admirationx Ethnocentrism
EDC Admirationx SNI
Categoryfamiliarity
Categoryrisk
Categorysignaling
CategorySignaling x SNI
Intercept
ParameterEstimate
StandardizedEstimate
0.276**
0.085**
0.364**
0.133**
0.207**
0.149**
0.296
0.076
0.267
0.123
0.214
0.220
0.021**
-0.012
0.004
0.019**
0.016**
-0.006
0.031
-0.016
0.008
0.036
0.036
-0.008
-0.020**
0.015**
0.003
-0.034
0.026
0.004
0.032**
-0.034**
-0.036**
0.036**
-0.002
-0.001
0.044**
-0.021*
-0.012
5.129**
0.029
-0.031
-0.037
0.046
-0.002
-0.001
0.049
-0.024
-0.018
0.000
= .016, p < .01), with each main effect and two-way interaction already in the model, this hypothesis was supported.
Similarly,supportwas foundfor Hypothesis5b, which stated
thatbrandswith a nonlocal origin lead to more positive attitudesamonghigh SNI consumerswho also havehigh admiration of EDC lifestyles: The three-way interaction of
perceivedbrandlocal or nonlocal origin with SNI and admirationof EDC lifestyles was significant(b = .019, p < .01).
Whataboutthemoderatingroleof productcategoryfamiliarity?As hypothesizedearlier(Hypothesis6), a brand'sperceived
local or nonlocaloriginmightserve morestronglyas a quality
cue for productcategorieswithlow familiarity.Supportingthis
hypothesis,the variablecategoryfamiliaritydid have a significant negativeinteraction(b = -0.020, p < .01) with perceived
brandlocalornonlocalorigin.Notethatthecategoryriskcontrol
variablewas also significantatp < .05, consistentwithpriorresultsin the literature(e.g., Lumpkinet al., 1985).
Additional Analysis of Mediation
Recall thatwe arguedin ourtheoreticaldevelopmentthatthe
focus of this article-the status preferenceby consumersin
developing countriesfor nonlocal over local brandsbecause
of admirationof EDC lifestyles and cultures-was in addition to the quality-relatedpreferencepreviouslystudiedin the
CO literature.To furthersupportthis argument,it is necessaryto show thatthe effect of EDC admirationon brandattitudes is not occurringlargely through(i.e., is not mediated
by) judgmentsof the brand'squality, but instead occurs directly, at least in part.
A formalanalysis of mediationwas, therefore,conducted
by using the procedureof BaronandKenny(1986). ForEDC
admirationof perceived brandnonlocalness to affect brand
attitudesthroughbrandquality,(a) the interactionof EDC admiration with perceived brand nonlocalness must significantly affect brand attitudes; (b) this EDC admirationby
perceived brand nonlocalness interactionterm must affect
brandquality;(c) brandquality must affect brandattitudes;
and(d) the effect of the EDC admirationinteractionwith perceived brandnonlocalness, on brandattitudes,must disappear or substantially diminish when the mediator (brand
quality)is introducedinto the equation.These estimateswere
obtained through a series of regression equations, each of
which also containedall the control and covariatevariables
discussed earlier,in additionto the necessarysubset of these
three variables(EDC admirationinteractingwith perceived
brandnonlocalness;brandquality;brandattitudes).Results
showed that although (a) EDC admiration by brand
nonlocalness did significantly affect brandattitudesat p <
.04, (b) it did not affect brandquality.Thus,equations(c) and
(d) become irrelevant.These results held both for the origin-freebrandqualityvariableandthe rawbrandqualityvariable. Results were similarif (a) was EDC admirationitself,
insteadof the interactionterm of EDC admirationwith perceived brandnonlocalness. We concluded that the data are
93
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Accepted by DurairajMaheswaran.