Effect of Ethnocentrism and Attitude Towards Foreign Brands in Purchase Decision

Ethnocentrism refers to the intense preference for domestic products or a moral obligation to buy domestic products. With an extraordinary amount and variety of foreign goods and services now being made available to the Indian market, the level of competition faced by domestic companies has tremendously increased. This forms the need for domestic marketers to understand how the ethnocentrism and attitude of consumers towards foreign brands influence their purchase decision. In order to appeal to the Indian market better, many companies have started using patriotic advertising to evoke patriotic and nationalistic emotions among consumers. One such industry that utilizes such patriotic strategies is the automobile industry. The main objective of the study is to understand the effect that ethnocentrism and attitude towards foreign brands have on consumer’s purchase of automobiles. To measure the same, a survey consisting of a self-administered questionnaire with a sample size of 108 was conducted. For data analysis purpose, exploratory factor analysis, CART technique and regression analysis have been used in the study. CART technique has been used to develop a model keeping ethnocentrism and attitude as the base. The results of the study show that attitude has turned out to be dominant over ethnocentrism and has a significant role to play in persuading consumers to buy cars of an Indian or a foreign brand. The findings also show that ethnocentrism influences attitude which in turn influences purchase decision. The implications of the study suggest that domestic marketers should imply patriotic advertising in their marketing initiatives and also recommend them to highlight the ‘Made in India’ tag. The study also suggests foreign marketers operating in the Indian market to focus less on the country-of-origin and focus more on the technicalities of the product because attitude towards foreign brands is a major contributor towards the purchase decision.