Pre-Submission Final Oral Presentation by Christopher Seyrl
Date and time: 9:30am-11:30am (Canberra time), Thursday 24th August
Location: RSM Seminar Room 1106, Level 1, Copland Building 24
Chair of the Session: Professor Israr Qureshi
An Organic Approach to Conjoint Analysis for the Delineation of Foreign Product Avoidance
Introduction
Internationalisation represents a key means for multinational firms to attain growth, whether it be recognition, market share, or profitability (Agndal and Elbe, 2007). Yet, a key barrier is foreign product avoidance (otherwise known as consumer ethnocentrism). Notwithstanding the augmentation of globalisation in recent decades, political and economic fragmentation have come to the forefront, presenting foreign product avoidance as a contemporary and pertinent 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 no more fully reflect the 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 form purchase behaviour, is timely and of utmost importance. The purpose of the thesis is to investigate changes in consumer behaviour as globalisation and neoliberalism show signs of diminishing significance with the simultaneous rise of nationalism. As such, the main objectives are to identify the antecedents of consumer ethnocentrism, and propose a methodology to delineate the phenomenon as it is experienced in relation to different products within a particular cultural context.
Literature Review
A multi-disciplinary review of academic literature identified extant and potential moderators which transform foreign product aversion tendency into purchase behaviour. The review also revealed theories of significance that relate to intergroup dynamics, selective cosmopolitanism, consumer behaviour, and insights from case studies.
Stemming from social psychology, and when applied to consumer behaviour, intergroup dynamics indicates that target market consumers could be described as an ingroup (“we”), with the foreign company as an outgroup (“they”). Ingroup favouritism may be present, in which the target market associates positive attributes with their home nation (Dunkel and Dutton, 2016), manifested as purposeful purchases of local products and avoidance of foreign options.
Individuals define themselves in terms of their social group membership, and seek to attain positive social identity (Hewstone and Greenland, 2000). As such, they strive to maintain or enhance their selfesteem and self-concept, and as a result, social groups can be associated with positive or negative connotations, regardless of the individual’s ingroup membership. In the realm of consumer behaviour, foreign products could be preferred (referred to as cosmopolitanism), to enhance one’s self concept. The behaviour may be selective, in which particular foreign products are sought, and others are derided.
A consumer’s planned intent may not be inextricably linked to purchase behaviour. The link can be influenced by perceived behavioural control, or an individual’s perception of the ease or difficulty in performing a task (Ajzen, 1991). Furthermore, heuristic processing or information selectivity in the decision-making process can influence behaviour, independently of intent (Norberg, et. al., 2007). In the context of purchase behaviour, consumers form foreign product judgements on the basis of characteristic cues (e.g. luxury foreign product purchases to demonstrate prosperity). Positive judgements based on product characteristic cues (e.g. luxuriousness) may reduce perceived behavioural control, and metamorphosise otherwise ethnocentric intent into a foreign product purchase.
Inherent product characteristics which moderate ethnocentric intent include country of origin, product category, luxuriousness, and linkage with the target market’s culture (Packman and Casmir, 1999; Ericsson, 2007). Theoretically, these four moderators may impact perceived behavioural control in both directions, resulting in a foreign product purchase (or rejection). Interestingly, these characteristics are not reflected in the industry standard measure of ethnocentric tendency, the CETSCALE (Consumer Ethnocentric Tendency Scale; Shimp and Sharma, 1987).
The Problem and Research Question
Foreign product aversion as a social phenomenon that links the identity of the individual consumer to that of products through feelings, acts and relationships of strong dislike, represents an empirical, theoretical, and methodological problem. Empirically, the phenomenon has been demonstrated across a range of case studies, with consequences related to failed market presence or a decline in revenue. Notable examples explored in academic literature include the initial challenges of Disneyland Paris (anti-American sentiment) (Newell, 2013), and the Judgement of Paris, in which ardent support for a culturally significant product resulted in fervent rejection of a foreign alternative (Ericsson, 2007). The thesis does not contend that the empirical problem can be eliminated, but that an improved circumscription of its antecedents and the way it is measured are possible. In other words, the theoretical and methodological problems may be addressed, in which findings across disciplines are synthesised, and a methodology to delineate the phenomenon is presented.
Theoretically, the multi-disciplinary nature of consumer ethnocentrism indicates a fragmented approach to, and a lack of consensus on its moderators. Those with instruments to delineate (define and describe) the phenomenon have concentrated on measuring ethnocentric tendency in a highly repeatable fashion, with an emphasis on studying demographic predictors of such tendency (e.g. age, gender, and education). In this regard, research findings across disciplines have not been synthesised within consumer behaviour to circumscribe the moderators of foreign product aversion and realise more actionable insights with respect to purchase decisions.
The methodological problem pertains to the means by which researchers can robustly identify, measure, and delineate the moderators of consumer ethnocentrism. Since its creation in 1987, the CETSCALE has been utilised extensively as something of an industry standard (Jimenez-Guerrero et. al., 2013). However, it is unidimensional, in that it does not consider the idiosyncratic characteristics of the product in question. Rather, it is assumed that all foreign products fall under a single outgroup designation, without a country of origin that can be problematic to domestic consumers. Such an absence in the instruments could misinform foreign market entry strategies.
In view of these problems, the following main research question (and related sub-questions) guided the scope, structure, methodology, and overall direction of the thesis:
“What are the impacts of diminishing globalisation and its concomitant rise in nationalism on consumer behaviour in relation to foreign products?”
a. What are the moderators of consumer ethnocentrism?
b. How can the moderators of consumer ethnocentrism be integrated to improve the
multidimensionality of the CETSCALE?
Methodology
The methodology adhered to a pragmatic realist research philosophy. Epistemologically, it placed significant emphasis on actionable insights and practical consequences. Further lending to a pragmatist approach to inquiry, underlying theory was identified across disciplines, synthesised, and applied back to practice (i.e. the study of foreign product aversion). The thesis contends that foreign product aversion is a phenomenon which occurs irrespective of an observer’s perception, thus adhering to a realist ontology (Phillips, 1987). The unit of analysis in the thesis was Russian consumers at the group level, and their associated product preferences.
To that effect, the thesis adopted a mixed methods approach, in which theory was developed inductively to be then tested deductively across four studies. More granularly speaking, an exploratory instrument development methodology, consisting of a single qualitative study was followed by three correlational and descriptive quantitative studies. Study one sought to identify potential products which exemplify each moderator 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 and purified the CETSCALE, and study four applied the purified CETSCALE in combination with product profiles generated at the conclusion of the second study. All studies (except study one) were conducted in the Russian Federation. The following figure illustrates the research design, including key insights from each study.
Findings and Contributions
Synthesised findings across the four studies indicate that Russian respondents indeed utilise heuristic processing when judging foreign products. In this regard, each moderator carries a different level of importance. Based on the conjoint analysis, country of origin (Germany versus Vietnam) carried the highest importance, followed by luxuriousness (luxury versus basic), cultural linkage (with or without), and product category. Part-worth utilities indicate clear differentiation. Positive values were expressed when a product originated from Germany, was luxurious (not basic), and/or without a linkage to Russian culture. Negative utilities were observed if a product originated from Vietnam, was basic, and/or with a linkage to Russian culture.
Of note, high-CETSCALE score respondents (i.e. those with high ethnocentric tendency) nevertheless hold positive judgements in the form of the part-worth values. This supports the contention that a product’s characteristics can diminish one’s perceived behavioural control, resulting in a foreign product purchase from an otherwise ethnocentrically intended consumer. Furthermore, the CETSCALE was found to be a statistically robust measure of ethnocentric tendency, based on high Cronbach’s Alpha calculations.
The thesis contributes to theory by integrating fragmented consensus of ethnocentrism’s moderators into the Theory of Planned Behaviour, while considering diminishing globalisation and the concomitant rise in nationalism. This thesis represents the fourth application of the CETSCALE in combination with conjoint analysis (most recently by Bernabéu, et. al. (2020)), but the first to utilise an organic approach to conjoint analysis, and the first to be conducted in a developing (part of so-called BRIC) nation. The new methodology can be described as organic, because actual products are rated by respondents, rather than lists of product attributes. The organic approach can reduce the artificiality of the model’s design, ameliorate cognitive burden, and more closely emulate a realistic purchase decision in an empirical setting. Hence, the combined utilisation of conjoint analysis can reflect the moderators of ethnocentric tendency in a more informative manner than the CETSCALE in isolation.
Limitations, Challenges, and Future Research
The proposed research design can be complex and resource intensive. As observed during the thesis, four separate studies over 15 months were necessary to construct (via interviews), test (statistically validate), and apply (via surveys) the product profiles for conjoint analysis. This may be problematic for multinational companies which require rapid insights (e.g. for short go-to-market strategies), or lack the resources necessary for such an undertaking. On a separate note, the thesis was disrupted by the COVID-19 pandemic and conflict in Ukraine, which resulted in a delay for the fourth study. .
It would be prudent to apply the research design in a developed nation to further gauge the validity of moderators identified in the review of academic literature. Furthermore, due to the complexity of the design, it may be an area of future research to identify an abridged version (e.g. to eliminate one or more of the four studies in the methodology).
References
- Agndal, H. & Elbe, J. 2007, "The Internationalization Processes of Small and Medium-sized Swedish Tourism Firms", Scandinavian journal of hospitality and tourism, vol. 7, no. 4, pp. 301-327.
- Ajzen, I. 1991, "The theory of planned behavior". Organizational Behavior and Human Decision Processes, vol. 50, no. pp. 179–211.
- Bernabeu, R., Oliveira, F., Rabadán, A., and Díaz, M. 2020, “Influence of ethnocentrism on consumer preference patterns: the case of olive oil in Portugal”. New Medit, vol. 19 no. 1, pp. 55-68.
- Dunkel, C.S. & Dutton, E. 2016, "Religiosity as a predictor of in-group favoritism within and between religious groups", Personality and individual differences, vol. 98, pp. 311-314.
- Ericsson, K.A., Prietula, M.J., & Cokely, E.T., 2007, “The Making of an Expert.” Harvard Business Review, July-August.
- Hewstone, M. & Greenland, K. 2000, "Intergroup Conflict", International journal of psychology, vol. 35, no. 2, pp. 136-144.
- Jiménez-Guerrero, J. F., Gázquez-Abad, J.C. & Linares-Agüera, EDC. 2014, “Using Standard CETSCALE and Other Adapted Versions of the Scale for Measuring Consumers’ Ethnocentric Tendencies: An Analysis of Dimensionality.” BRQ Business Research Quarterly, vol. 17, no. 3, pp. 174–190.
- Newell, L.A., 2013, "Mickey Goes to France: A Case Study of the Euro Disneyland Negotiations", Cardozo Journal of Conflict Resolution, vol. 15.
- Norberg, P. A.; Horne, D. R.; Horne, D. A. 2007, "The pr paradox: Personal information disclosure intentions versus behaviors". Journal of Consumer Affairs, vol. 41, no. 1, pp. 100–126.
- Packman, H.M. & Casmir, F.L. 1999, "Learning from the Euro Disney Experience: A Case Study in International/Intercultural Communication", Gazette (Leiden, Netherlands), vol. 61, no. 6, pp. 473-489.
- Phillips, D. C. 1987, “Philosophy, science, and social inquiry: Contemporary methodological controversies in social science and related applied fields of research”. Oxford: Pergamon Press.
- Shimp, T.A. & Sharma, S. 1987, "Consumer Ethnocentrism: Construction and Validation of the CETSCALE", Journal of marketing research, vol. 24, no. 3, pp. 280-289.
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