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EXPOSÉ MASTER THESIS MARIJANA OLDEN
EUROPEAN MASTER IN BUSINESS STUDIES
COUNTRY OF ORIGIN ON FOOD LABELING: HOW DOES THE
INFORMATION OF THE ORIGIN OF INGREDIENTS AND PRODUCTION SITE
IMPACT THE BUYING INTENTION OF CONSUMERS OF DOMESTIC-BRAND
PRODUCTS?
Exposé Master Thesis – Marijana Olden 2
ABSTRACT
Background
Despite having less influence than other factors, as price or brand, previous research has
shown, that the country of origin of nutrition does have an important impact on consumer
buying decisions (Loureiro & Umberger, 2003). This influence is especially crucial when
purchasing low-involvement products (Ahmed, Johnson, Yang, Fatt, Teng & Boon, 2004).
Consequently, there is a high attention put on the origin of food, since consumers may even
be willing to pay more for products carrying this information (Skuras & Vakrou, 2008;
Verbeke & Ward, 2006).
At this moment, especially in Europe there is an increasing discussion about the origin of
food. Currently only for non-processed food, producers are obliged to indicate where the
different ingredients come from, for example for beef (European Union, 2011, para. 31), but
this might change in the future. A strong lobby does try to prevent harder rules on country of
origin labeling, mainly because it might hurt companies with a global supply chain
(Oltermann & Topham, 2014).
Purpose
The objective of this thesis is to find out how much the knowledge of country of origin of
ingredients and production site would change the buying intention of consumers when
considering domestic-brand products. A second objective is to understand how much
importance is given to country-of-origin of ingredients and production site respectively. It
can be assumed that the difference in buying intention between various countries is highly
impacted by the cultural differences and ethnocentrism that these countries present.
In order to assess, whether there are differences between countries regarding the country of
origin effect for food ingredients and production site, two European countries will be chosen
and compared. These are Germany and Spain.
Method
In a first step, the existing literature will be reviewed in order to understand the importance
of country of origin information for the consumers in general and how this information
might influence the buying intention. Furthermore, the construct of ethnocentrism will be
taken into account to devise hypothesis regarding if and how the country of origin effect will
differ in the selected countries. After the literature review and formulation of hypotheses, a
quantitative study will be conducted. The method is an online questionnaire in order to reach
a maximum number of respondents in different countries. The results of the questionnaire
will be analyzed and conclusions and recommendations derived.
Exposé Master Thesis – Marijana Olden 3
TABLE OF CONTENTS
1. INTRODUCTION ...................................................................................................................... 5
2. PROBLEM STATEMENT AND RESEARCH QUESTION .................................................. 6 1.1 PROBLEM STATEMENT ........................................................................................................................ 6 1.2 RESEARCH QUESTION .......................................................................................................................... 6
3. THEORETICAL BACKGROUND AND HYPOTHESIS ....................................................... 6 1.3 CONSUMER ETHNOCENTRISM ............................................................................................................ 7 1.4 COUNTRY-‐OF-‐ORIGIN OF INGREDIENTS VS. COUNTRY-‐OF-‐ORIGIN OF PRODUCTION SITE .... 9
4. REVIEW OF LITERATURE ................................................................................................. 11
5. METHODOLOGY .................................................................................................................. 28 1.5 SETTING ............................................................................................................................................... 28 1.6 PARTICIPANTS .................................................................................................................................... 29 1.7 CONSTRUCTION AND DISTRIBUTION .............................................................................................. 29 1.8 MEASUREMENT AND ANALYSIS ....................................................................................................... 30 1.9 BENEFITS AND POSSIBLE PROBLEMS ............................................................................................. 30
6. OVERVIEW OF CHAPTERS ................................................................................................ 32
7. TIMELINE ............................................................................................................................... 33
8. REFERENCES ......................................................................................................................... 34
Exposé Master Thesis – Marijana Olden 4
LIST OF ABBREVIATIONS
COO Country of Origin
CETSCALE Consumer Ethnocentrism Tendencies Scale
LIST OF TABLES
Table 1: Literature on COO and factors influencing it ........................................................... 11 Table 2: Literature on ethnocentrism and it's impact on the COO ......................................... 13 Table 3: Literature on ethnocentrism, it's measurements and factors influencing it .............. 17 Table 4: Literature on models that influence the country of origin effect .............................. 25
LIST OF FIGURES
Figure 1: First Research Question .......................................... Error! Bookmark not defined. Figure 2: First Research Question and Influence of EthnocentrismError! Bookmark not
defined. Figure 3: Antecedents of Consumer Ethnocentrism ................................................................. 8 Figure 4: First Research Question, Ethnocentrism and it's Antecedents and Moderating
Factors ............................................................................ Error! Bookmark not defined. Figure 5: Second Research Question ...................................... Error! Bookmark not defined. Figure 6: Attributes and Levels for Conjoint .......................................................................... 30
Exposé Master Thesis – Marijana Olden 5
1. INTRODUCTION When consumers take consumption decisions about products, they evaluate the products
based on certain so-called cues, which can be intrinsic (inherent in the product) or extrinsic
(independent of the product itself). Companies are therefore concerned with optimizing these
cues and marketers have to be able to make the product attractive for the market. Country-of-
origin (COO) is an extrinsic cue that has been widely researched in the past. It is not only
influencing purchases for high-end and luxury products that use COO extensively to market
their goods, but also has an impact on low-involvement products (Ahmed, Johnson, Yang,
Fatt, Teng & Boon, 2004). In the past, domestic brands were preferred by customers,
because they assumed that the COO of the brand is the country in which production and
sourcing takes place (FutureBrands, 2014, p. 4). Nowadays, there is an increasing difference
in brand origin, production and sourcing due to the internationalization of the supply chain.
Since recently, especially in Europe there is an increasing discussion about the origin of food
and the need for companies to indicate this information on the label, the topic becomes more
and more important. Currently only for some non-processed products, producers are obliged
to indicate where the different ingredients come from, but this might change in the future.
Apart from this obligation, marketing often uses COO cues willingly to promote their
products (Aichner, 2014), even if these products are not made or sourced in the country they
indicate.
This thesis has the objective to analyze if and how the knowledge of COO of ingredients and
production site would change the buying intention of consumers for products produced by
domestic brands. Furthermore it is especially interesting to find out how high the acceptance
of foreign ingredients or place of production is in different countries. It can be assumed that
the difference in buying intention between various countries is highly impacted by cultural
differences and by ethnocentrism that these countries present. In order to assess, whether
there are differences between countries regarding the COO effect for food ingredients,
Germany and Spain have been chosen as countries to be analyzed.
The results of this work could lead to information that can be used by companies to decide
about ingredient sourcing and production locations. In case of alteration of the European
law, resulting in an obligation to disclose COO information to the consumers, this
information could be important. The results could also be used for marketing purposes. For
example which COO information to use on the label in different countries.
Exposé Master Thesis – Marijana Olden 6
2. PROBLEM STATEMENT AND RESEARCH QUESTION
1.1 Problem Statement As above-mentioned, the COO effect is an important driver for consumer decisions and is
getting more and more important in the globalized world. Traditional domestic brands that
formerly were produced and sourced only in the home-country now employ global supply
chains (FutureBrands, 2014). However, there is no research yet on how a disclosure of the
information of COO of production and ingredients would impact these brands. Another
question regards the importance given to the COO of ingredients and production site
respectively. Are they both equally important, or is one factor more decisive? This could be
a crucial information for companies that try to make their products as attractive to the market
as possible and that are impacted by EU’s as well as their own country’s rules concerning
COO disclosure.
1.2 Research Question The three main research questions formulated are the following:
“Does the information about country-of-origin (COO) of ingredients and production
site impact the purchase intention of consumers regarding domestic brands?”
“How does consumer ethnocentrism impact the acceptance of foreign country-of-origin
(COO) of ingredients and production site in food from domestic brands?”
“Do the consumers have a preference for a country-of-origin (COO) product cue? If
yes, what is the trade-off between: Country-of-origin (COO) of ingredients or country-
of-origin (COO) of production?”
3. THEORETICAL BACKGROUND AND HYPOTHESIS The first research question could be graphically represented in the following way:
Figure 1: First Research Question
Source 1: Own creation
Exposé Master Thesis – Marijana Olden 7
1.3 Consumer Ethnocentrism The main factor influencing how much importance consumers give to COO information is
the so-called consumer ethnocentrism. When dealing with COO information this is important
because from the perspective of ethnocentric consumers imported products should not be
purchased “because, in their minds, it hurts the domestic economy, causes loss of jobs, and is
plainly unpatriotic” (Balabanis & Diamantopoulos, 2004; Sanjay K Jain & Jain, 2013;
Shimp & Sharma, 1987, p. 280; John J Watson & Wright, 2006).
Therefore, when considering buying a product originally labeled as domestic, the hypotheses
to be tested regarding the first two research questions are the following:
H1a: The information about country-of-origin does impact the buying decision only if
the country of origin is (partly) foreign.
H1b: More ethnocentric consumers do accept a lower percentage of foreign ingredients
in food from domestic companies, than less ethnocentric consumers.
H1c: More ethnocentric consumers do accept a lower percentage of production in
foreign countries in food from domestic companies, than less ethnocentric consumers.
This may be graphically shown as follows:
Figure 2: First Research Question and Influence of Ethnocentrism
Source 2: Own creation
The answer to these hypotheses will fill a gap in COO research because they consider
products with two different COO, which is a characteristic of the supply-chain-management
of today’s companies.
Exposé Master Thesis – Marijana Olden 8
Antecedents of Consumer Ethnocentrism
However, when analyzing ethnocentrism there are some other factors that influence
ethnocentrism positively or negatively. The demographic antecedents of consumer
ethnocentrism, which have been researched in many studies are the following:
Figure 3: Antecedents of Consumer Ethnocentrism
Source 3: Adapted from (Shankarmahesh, 2006)
These factors do not have a direct influence on the acceptance of foreign COO of ingredients
or production. However they will be analyzed regarding their influence on the ethnocentrism
in the study.
Additionally to the demographic factors there are socio-psychological factors working as
antecedents, which have also been studied by many researchers. The ones mentioned are:
Salience, animosity, patriotism, openness to foreign culture and conservatism as well as
collectivism/individualism. (e.g., Han, 1988; Howard, 1989; Olsen & Jacoby, 1993; Sharma
et al., 1995; Klein and Ettenson, 1999; Nijssen and Douglas, 2004).
Nevertheless, they will not be taken into account in this study. First of all, because the
studies present differing results. Secondly, they have been measured with various scales that
have not been standardized and thirdly, because measuring all of these factors would exceed
the scope of a master thesis and they are not crucial to the research question itself.
Moderating Factors of Consumer Ethnocentrism
Once the ethnocentrism is already established, there are also moderating factors, which have
been found to enhance or diminish the influence of ethnocentrism on the purchase intention.
Exposé Master Thesis – Marijana Olden 9
The factors postulated are: 1) The perceived need for the product 3) the economic threat
(Shimp, Sharma, & Shin, 1995), 3) the product category (Balabanis & Diamantopoulos,
2004; Shimp et al., 1995) and 4) cultural similarity of the countries of origin (J. J. Watson &
Wright, 2000).
Since I will be using only one product category, the product category as a moderating factor
does not have to be taken into account. For all other factors, however, there are also no
standard measurement scales and only very few researchers have researched them.
This is the reason why I will not take them into consideration; therefore this will be one of
the limitations of this study.
Figure 4: First Research Question, Ethnocentrism and it's Antecedents and Moderating Factors
Source 4: Own creation
1.4 Country-of-Origin of Ingredients vs. Country-of-Origin of Production Site
This part concerns the third research question:
“Do the consumers have a preference for a country-of-origin (COO) product cue? If
yes, what is the trade-off between: Country-of-origin (COO) of ingredients or country-
of-origin (COO) of production?”
Exposé Master Thesis – Marijana Olden 10
It could be graphically represented as follows:
Figure 5: Second Research Question
Source 5: Own creation
When talking about COO information, it mainly concerns the COO of ingredients,
production or brand. On the label we can mostly find information about where the
production took place and where the ingredients come from. Consumer polls have shown
that the broad majority supports COO labeling, especially on food products (Trans Atlantic
Consumer Dialogue, 2008). A recent study from Austria, France, Poland and Sweden, has
found that at least two-thirds of respondents in these countries want to know the COO of the
products they consume (Bureau Européen des Unions de Consommateurs, 2013). Despite
this, the information is by far not present on all products. Especially the “made-in” labels are
applied on a voluntary basis for most products in Europe (Oltermann & Topham, 2014).
Although COO labeling has been studied, until now there seems to be very limited research
on the distinction between the importance of COO of production and COO of ingredients. At
this moment consumers are not always sure what the COO information on the products
actually refers to, whether it refers to the origin of the raw materials or the processing
(Bureau Européen des Unions de Consommateurs, 2013).
There are only some studies that give hints about which COO information is more important
to consumers.
For example a survey from 2012 in Australia showed that 80% of consumers responded that
it is crucial or very important to them to be able to identify where the food is manufactured.
Therefore this information is almost as important as the possibility to know where the
ingredients come from. This was very important or crucial for 84% of the respondents
(Australian Consumers’ Association, 2012). The study by the Bureau Européen des Unions
de Consommateurs (BEUC) (2013) did investigate two product types (jam and other sauces,
and meat products). They found that for both product types between 53% and 69% of the
respondents in all countries found ingredients and sourcing COO information equally
important. Between 20% and 27% did care more about the raw-material sourcing and
Exposé Master Thesis – Marijana Olden 11
between 5% and 15,3% were more interested in where the processing took place (Bureau
Européen des Unions de Consommateurs, 2013, pp. 8–10). Notwithstanding, this was just a
theoretical question posed to the consumers; they did not have to decide between products
with differing COO information on the label. Nevertheless, based on this information, the
next hypotheses are:
H2a: Consumers will prefer products with a bigger percentage of ingredients sourced
in their home country than production conducted in their home country.
H2b: The home country of the consumers does not have an influence on their
preference for country-of-origin of production or country-of-origin of ingredients.
Finding an answer to these hypotheses will give companies an indication about which COO
information is more important for the customer. They could use it for marketing purposes
and organization of the supply chain.
4. REVIEW OF LITERATURE Regarding the concept of ethnocentrism, which is, as mentioned, according to the literature
the main factor influencing the country of origin effect, there are several basic works. For
example the introduction of the consumer ethnocentrism tendencies scale (CETSCALE), a
tool to measure ethnocentrism by Shimp & Sharma (1987) as well as many articles and
studies in which ethnocentrism has been applied to - and tested in different countries. An
overview over the research in the field of COO and ethnocentrism is given in the following
tables.
COO and the factors influencing it has been researched in the following publications: Table 1: Literature on COO and factors influencing it
Topic Title Author Content
Country of origin
and influencing
variables
Impact of country-
of-origin on
product purchase
decision.
Javed, A.;
Hasnu, S. A. F.
(2013)
Researches impact of different
variables concerning COO on
consumer decisions for three
categories of products. Result:
product involvement and
product knowledge impact
consumer choices
Country of origin Do consumers Kuchler, F. Concerns the labeling of
Exposé Master Thesis – Marijana Olden 12
labeling and
consumer
responses: Case
Seafood in the
USA
respond to country-
of-origin labelling?
Krissoff, B.
Harvey, D.
(2010)
seafood: when the information
of COO is on the label, does
that change the consumer
behavior? Result: The number
of people buying the seafood
products did not change
before and after the
implementation of COO
labeling
Country of origin
labeling and
consumer
responses: Case
Fresh Food in
New Zealand
Country of origin
labelling of fresh
produce: consumer
preferences and
policy implications.
Holdershaw, J.
Gendall, P.
Case, P.
(2013)
Fresh food: do consumers
prefer food from own country
or abroad? Consumers prefer
New Zealand labeled food to
non-labeled and overseas
labeled
Country of origin
labeling and
consumer
responses: Case
Beef in USA
Assessing
consumer
preferences for
country-of-origin
labeling
Loureiro, M. L.
Umberger, W. J.
(2005)
Assessment of consumer
willingness to pay for country
of origin labeling in the US.
Result: Willingsness is
relatively small, although
consumers are concerned for
food safety.
Country of origin
labeling and
consumer
responses: Case
Beef in USA
Hierarchical Bayes
approach for
analyzing the
impact of labeling
on the country of
origin effect
Zulauf, K.
Wagner, R.
Oswald, A. W.
(2013)
Study focused on COO,
price, fair trade and organic
labeling.
Result: strong relation of
the country image and
evaluation of individual
products. Negative effects
with regard to the country
image can be reduced by
positively associated
attributes such as fair trade
or organic labeling.
Country of origin
effect: Case
Selection criteria of
Lebanese
Zbib, I. J.
Wooldridge, B.
Studies correlation involved
between country of
Exposé Master Thesis – Marijana Olden 13
Potatoe Chips in
Lebanon
consumers in the
global snack food
industry: country of
origin perceptions.
R.
Ahmed, Z. U.
Benlian, S.
(2010)
manufacture and consumer
behavior; purchase intent; and
product quality for potatoe
chips. Results: Potatoe chips
seem to be low-involvement
products, therefore there is no
change in purchasing behavior
COO and
consumer
preferences
Measuring the
relative importance
of preferences for
country of origin in
China, France,
Niger, and the
United States.
Ehmke, M. D.
Lusk, J. L.
Tyner, W.
(2008)
Measures consumer
preferences for country of
origin and compares the
relative importance of
consumer preferences for
origin to their preferences for
genetically modified food and
pesticide-free production.
Result: Consumers tend to
prefer food from their own
country, indicating
ethnocentrism, but country of
origin is less important than
genetically modified content
or pesticide use
Works that research the concept of ethnocentrism and it’s impact on the country of origin
effect in different countries are compiled in the following table:
Table 2: Literature on ethnocentrism and it's impact on the COO
Topic Title Author Content
Ethnocentrism/
Country of Origin
Effect generally
in retail service
The impact of
country of origin in
the retail service
context
Pecotich, A.,
Pressley, M.,
Roth, D.
(1996)
This study investigates the
impact of the country-of-
origin cue associated with a
change of ownership and
brand on service quality
perceptions, price and
purchase intentions, with
ethnocentrism and product
class knowledge as
Exposé Master Thesis – Marijana Olden 14
covariates. Support was found
of the country-of origin effect
and ethnocentrism as a
covariate.
Ethnocentrism/
Country of Origin
Effect in China,
USA, South
Korea
For love of
country? Consumer
ethnocentrism in
China, South
Korea, and the
United States.
Tsai, W. S.
(2013)
Study on influence of
ethnocentrism of COO effect
on food products in China,
South Korea and USA and of
the changes with country of
origin or product category
Ethnocentrism/
Country of Origin
Effect in
Germany
Consumer
ethnocentrism in
the German market.
Evanschitzky,
H.
(2008)
In Germany consumer
preference rankings can best
be explained by a combination
of demographic variables and
country-of-origin effects.
Results indicate that domestic
firms in Germany can well
rely on a safeguarding effect
when marketing their
products. At the same time,
managers from foreign
countries cannot rely on
consumer ethnocentrism as a
reliable indicator of the
inclination of consumers to
downgrade their products.
Ethnocentrism/
Country of Origin
Effect in UK
Domestic country
bias, country-of-
origin effects, and
consumer
ethnocentrism: A
multidimensional
unfolding
approach.
Balabanis, G. ;
Adamantios, D.
(2004)
Analysis for eight different
products in the UK Result:
Preferences are linked to
consumer ethnocentrism, the
preferences are also dependent
both on the specific country of
origin and the particular
product category
Ethnocentrism/ The effects of Cumberland, F.; Assesses the level and impact
Exposé Master Thesis – Marijana Olden 15
Country of Origin
Effect in Poland
consumer
ethnocentrism and
country of origin on
Polish consumers’
evaluation of
foreign
manufactured
products.
Solgaard, H. S.;
Nikodemska-
Wolowik, A.M.
(2010)
of consumer ethnocentrism
and the effect of country of
origin on polish consumers’
evaluation of the buying
intentions toward foreign
manufactured products.
Results show consumer
ethnocentrism is present and
that more than one-fifth of
consumers are highly
ethnocentric but also that
ethnocentrism has no direct
effect on the evaluation of
product quality or on buying
intention for either of the
products.
Ethnocentrism/
Country of Origin
Effect in
Morocco
Consumer
ethnocentrism and
country-of-origin
effects in the
Moroccan market.
Hamelin, N.;
Ellouzi, M.;
Canterbury, A.
(2011)
To which extent does
consumer ethnocentrism
influence consumer choice in
Morocco
Ethnocentrism/
Country of Origin
Effect in India
Consumer
ethnocentrism:
Relevance and
implications for
marketers.
Khan, M. N.
(2008)
Explores the underlying
meaning and significance of
the concept of consumer
ethnocentrism with special
reference to India. Result:
CETSCALE is not
unidimensional but useful for
marketing
Ethnocentrism/
Country of Origin
Effect and
influencing
factors in
Vietnam
Consumer
ethnocentrism,
cultural sensitivity,
and intention to
purchase local
products—evidence
from Vietnam.
Nguyen, T. D.
(2008)
Analyzes ethnocentrism and
influencing factors in
Vietnam. Results show that
the impacts of consumer
ethnocentrism on imported
product judgment and on
intention to purchase local
Exposé Master Thesis – Marijana Olden 16
products are not different in
terms of product categories,
gender, income, and education
levels. However, differences
exist between younger and
older consumers.
Ethnocentrism/
Country of Origin
Effect and
lifestyles in
Turkey
Consumer
perceptions of
foreign products:
An analysis of
product ‐ country
images and
ethnocentrism
Kaynak, E.;
Kara, A.
(2002)
Investigates product‐country
images, lifestyles and
ethnocentric behaviors of
Turkish consumers. Turkish
consumers had significantly
different perceptions of
product attributes of the
products coming from
countries of different levels of
socio ‐ economic and
technological development.
Results lend support to earlier
studies conducted in western
countries and also indicate the
robustness of the CETSCALE.
Ethnocentrism/
Country of Origin
Effect in China
Who are
ethnocentric?
Examining
consumer
ethnocentrism in
Chinese societies.
Hsu, J. L.
(2008)
This study examined
consumer ethnocentrism in
Chinese societies and further
to reveal whether more
ethnocentric consumers would
have higher preferences of
domestic products. Multi-item
CETSCALE was applied in
the study. Result:
ethnocentrism has a strong
influence on preferences of
domestic brands.
Ethnocentrism/
Country of Origin
Effect in Japan,
USA, France,
A cross-national
assessment of the
reliability and
validity of the
Netemeyer,
Richard G.
(1991)
CETSCALE was only
developed for US. Is it valid
for other countries? > The
results suggest that the
Exposé Master Thesis – Marijana Olden 17
West-Germany CETSCALE. CETSCALE is a reliable
measure across the countries
and afford some evidence of
validity as well
Ethnocentrism/
Country of Origin
Effect in Spain
Consumer
ethnocentrism
measurement An
assessment of the
reliability and
validity of the
CETSCALE in
Spain
Luque-Martinez,
T.; Ibanez-
Zapata, J. A.,
del Barrio-
García, S.
(2000)
Validates CETSCALE as a
measure of Spanish
consumers’ ethnocentric
tendencies. Results: prove that
the scale measures a
unidimensional construct and
that the measurement error is
quite acceptable
General research concerning ethnocentrism, ways of measurement (mainly the CETSCALE)
and other influencing factors, always concerning COO is listed in the following table:
Table 3: Literature on ethnocentrism, it's measurements and factors influencing it
Topic Title Author Content
Ethnocentrism
concept
Consumer
ethnocentrism: The
concept and a
preliminary empirical
test.
Shimp, T. A.
(1984)
Introduces the concept of
„consumer ethnocentrism“
and presents empirical
evidence from a
preliminary test of the
concept.
Ethnocentrism
and it’s impact
on purchase
decision
Exploring the impact of
consumer ethnocentrism
on decision making
process across the
product categories
Cutura, M.;
Kauffmann, R.
H.; Butigan, R.
(2012)
Explores the impact of
consumer ethnocentrism on
decision making process
across the product
categories. Result:
consumer ethnocentrism
provides stronger impact on
purchase intention than on
product beliefs and attitude.
Purchase behavior is
influenced by consumer
ethnocentrism in two of the
three product categories
Exposé Master Thesis – Marijana Olden 18
studied.
Ethnocentrism
vs. Global
orientation
Living in a global
world: Influence of
consumer global
orientation on attitudes
toward global brands
from developed versus
emerging countries.
Guo, X.
(2013)
Consumers’ global
orientation positively
influences their attitudes
toward global brands of
developed-country origin.
In addition, ethnocentrism
negatively influences their
attitudes toward these
brands, but this effect
diminishes for consumers
with high global identity
Ethnocentrism
in bicultural
consumers
Country of origin,
ethnocentrism and
bicultural consumers:
the case of Mexican
Americans.
Zolfagharian,
M.A.; Sun, Q.
(2010)
Bicultural Mexican
Americans are less
ethnocentric than either
American or Mexican
monoculturals; exhibit
more favorable quality
evaluation and purchase
intention toward American
brands than Mexican
monoculturals; and exhibit
more favorable quality
evaluation and purchase
intention toward Mexican
brands than American
monoculturals
Ethnocentrism
in immigrants
Ethnocentrism and
country of origin effects
among immigrant
consumers.
Zolfagharian,
M.
(2014)
Examines how country of
origin and consumer
ethnocentrism pertain to
first-generation immigrants,
who often identify with two
or more countries. Non-
ethnocentric immigrants
favor the products of
economically advanced
Exposé Master Thesis – Marijana Olden 19
countries. Ethnocentric
immigrants favor the
products of their home and
host countries relative to
foreign products, regardless
of the economic standing of
foreign countries. When
home and host countries
represent significantly
different degrees of
economic advancement,
both ethnocentric and non-
ethnocentric immigrants
favor the products of the
more advanced country.
Ethnocentrism
and local
integration of
brand
‘They don’t want us to
become them’: Brand
local integration and
consumer ethnocentrism
.
Kipnis, E.;
Kubacki, K.;
Broderick, A.
J.; Siemieniako,
D.; Pisarenko,
N. L.
(2012)
The results indicate that
foreign brand identities that
integrate ‘localised’ appeals
communicating respect of
local traditions (through the
use of local images,
symbols, and recipes) and
contribution to the local
society’s well-being
(through local manufacture,
employment, use of local
ingredients) lead to more
favourable
consumer perceptions. In
distinguishing between
‘purely foreign’ and
‘locally integrated foreign
brands’, consumers perceiv
e the latter to be more
acceptable for consumption
Ethnocentrism
and regional
Regional ethnocentrism:
antecedents,
Fernández-
Ferrína, P.;
Presents the construct of
consumer regional
Exposé Master Thesis – Marijana Olden 20
preferences consequences, and
moderating effects
Bande-Vilela,
B.
(2013)
ethnocentrism, which
relates to consumer
opinions over whether or
not it is acceptable and
ethical to purchase products
from other regions. Results:
consumer ethnocentrism is
an important factor
regarding the intention to
purchase not only foreign
products but also non-
regional products.
Ethnocentrism
and product
knowledge
Effects of consumer
ethnocentrism and
product knowledge on
consumers ‚ utilisation
of country-of-origin
information
Moon, B.
(2004)
Concerned with the effects
of consumer ethnocentrism
and product knowledge on
consumers’ utilization of
country-of-origin
information for their
product evaluation. Result:
low-knowledge consumers
pay more attention to
country of origin.
Consumer ethnocentrism
strengthens the country of
origin effect for domestic
products perceived as
higher in quality.
Ethnocentrism
and it’s
antecedents and
moderators
Consumer
ethnocentrism: A test of
antecedents and
,odmrators
Sharma, S.;
Shimp, T. A.;
Shin, J.
(1995)
This article identifies
theoretical antecedents of
consumer ethnocentricity
and the effect
ethnocentricity has on
evaluations toward
importing products.
Ethnocentrism
and it’s
antecedents and
Consumer
ethnocentrism: A
literature review
Abdulrahman
A.
(2013)
Literature review of
consumer ethnocentrism
with a focus on antecedents
Exposé Master Thesis – Marijana Olden 21
moderators and consequences.
Ethnocentrism
and it’s
antecedents and
moderators
Consumer
ethnocentrism: an
integrative review of it’s
antecedents and
consequences.
Shankarmahesh
, M.
(2006)
Provides an integrative
review of the antecedents
and consequences of
consumer ethnocentrism
Ethnocentrism
and it’s
antecedents and
moderators:
Case China and
USA
A cross-cultural study
of consumer
ethnocentrism between
China and the U.S.
Tsai, W. H.
(2013)
Consumers’ ethnocentric
tendencies heighten in
intensity when a country is
threatened This study aims
to understand how the
recent global financial
crisis may have influenced
the phenomenon of
consumer ethnocentrism
(CE). Comparison of levels
of CE in the U.S. and
China. Analyzed
antecedents: patriotism,
nationalism,
internationalism, and
demographic factors.
Results indicate that
American consumers are
more ethnocentric than
Chinese consumers, while
nationalism has the
strongest impact on CE in
both countries.
Ethnocentrism
and it’s
antecedents and
relationship
with
cosmopolitanis
m and
Cosmopolitanism,
consumer
ethnocentrism, and
materialism: An eight-
country study of
antecedents and
outcomes.
Cleveland, M.
(2009)
Examines similarities and
differences with respect to
the nature of three
consumer attitudinal
dispositions:
cosmopolitanism, consumer
ethnocentrism, and
Exposé Master Thesis – Marijana Olden 22
materialism materialism. Empirical
findings broadly support
the cross-cultural
applicability to the
constructs, though the links
between various
demographic antecedents
vary considerably from
sample to sample.
Ethnocentrism
and social
desirability bias:
analyzed in
USA and
Sweden
The impact of a social
desirability bias on
consumer ethnocentrism
research: A cross-
national perspective.
Hult, G. T. M.;
Keillor, B. D.
(1994)
Different factors may
intervene to prevent
accurate assessment of
consumer ethnocentrism.
Here the social desirability
bias is analyzed. Utilizing
cross-national samples, this
study explores the
relationship between the
measurement of consumer
ethnocentrism and social
desirability bias. Result:
there might be some
influence of the social
desirability bias, and it is
stronger for males.
Ethnocentrism
and personal
cultural
orientation:
Case
USA/Japan
The effect of personal
cultural orientation on
consumer
ethnocentrism:
evaluations and
behaviors of U.S.
consumers toward
Japanese products.
Yoo, B.
Donthu, N.
(2005)
The article focuses on a
research study. which
examines the relationship
between cultural orientation
and consumer
ethnocentrism. The findings
of the study reveal that
consumers' attitudes and
behaviors toward foreign
products are explained by
consumer ethnocentrism.
Ethnocentrism Consumer Watson, John Investigates the relationship
Exposé Master Thesis – Marijana Olden 23
and cultural
similarity
ethnocentrism and
attitudes toward
domestic and foreign
products.
J.; Wright, K.
(2006)
between consumer
ethnocentrism and
consumer attitudes toward
foreign manufactured
products in product
categories in which
domestic alternatives are
not available. Results
suggest that cultural
similarity is an important
consideration for highly
ethnocentric consumers in
the evaluation of foreign
products.
Measurement of
consumer
ethnocentrism:
CETSCALE
Consumer
ethnocentrism:
Construction and
validation of the
CETSCALE.
Shimp, T. A.;
Sharma, S.
(1987)
The concept of consumer
ethnocentrism is introduced
and a corresponding
measure, the CETSCALE,
is formulated and
validated.
CETSCALE
revision
Consumer
ethnocentrism:
Reconceptualization and
cross-cultural validation
Sharma, P.
(2014)
This note addresses gaps
about construct validity,
dimensionality and cross-
cultural measurement
invariance by
reconceptualizing CE as an
attitude construct consisting
of three dimensions: (1)
affective reaction, (2)
cognitive bias and (3)
behavioral preference.
CETSCALE
validity in
developing
countries: South
Africa
Measuring consumer
ethnocentrism in a
developing context: An
assessment of the
reliability, validity and
dimensionality of the
Pentz, C.
(2013)
This study was conducted
in response to calls by
several researchers to
investigate the validity,
reliability, and
dimensionality of the
Exposé Master Thesis – Marijana Olden 24
CETSCALE. CETSCALE, in developing
markets. Result:
CETSCALE can be used
CETSCALE
validity in
developing
countries: India
Understanding
consumer ethnocentrism
in developing countries:
Case Bangladesh.
Chowdhury, T.
A.
(2013)
This article argues that the
traditional belief that
„consumer ethnocentrism is
a phenomenon of
developed countries only“
is no longer true.
Statistically significant
results show that for three
chosen sociodemographic
groups, namely, students,
job holders, and
businesspersons, the
original CETSCALE is to
large extent applicable.
Only some restrictions.
CETSCALE in
transitional
economies
Extending the construct
of consumer
ethnocentrism: When
foreign products are
preferred
Klein, J.G.;
Ettenson, R.;
Krishnan,
Balaji C.
(2006)
The study evaluates the
psychometric properties of
the consumer
ethnocentrism scale
(CETSCALE) in the
transition economies of
China and Russia. Findings
show that the scale can be
used effectively in these
transitional economies.
Influence of
language in
evaluation of
ethnocentrism
through
CETSCALE
Conducting
international consumer
ethnocentrism surveys.
Luthy, Michael
R.
(2007)
Does the presentation
language of the
CETSCALE influence the
level of ethnocentrism?
Result: Statistical analysis
showed that native
language presentation did
not have an impact on the
Exposé Master Thesis – Marijana Olden 25
respondent's level of
consumer ethnocentrism.
Other models that influence the country of origin effect are the consumer disidentification
model, the consumer affinity model and the animosity model. Scientific papers that treat
these topics are the following:
Table 4: Literature on models that influence the country of origin effect
Topic Title Author Content
Disidentification
model
Consumer
Disidentification
and its effects on
domestic product
purchases: An
empirical
investigation in the
Netherlands.
Josiassen, A.
(2011)
Analysis of consumer
disidentification model =
repulsion against domestic
country > negative influence
on domestic product
purchases. Structural
equation modeling supports
the model and shows that
consumer disidentification
model has a significant
impact on buying decisions
beyond the effect of
consumer ethnocentrism.
Affinity model Consumers'
emotional bonds
with foreign
countries: Does
consumer affinity
affect behavioral
intentions?
Oberecker, E. M.
Diamantopoulos,
A.
(2011)
Advances the construct of
consumer affinity, which
captures country-specific
favorable feelings toward
particular foreign countries.
The findings indicate that
consumer affinity is more
powerful than consumers'
ethnocentric tendencies in
explaining both perceived
risk and willingness to buy.
Animosity model Consumer
animosity: A
literature review
Riefler,
P.;Diamantopoulos,
A.
Conducts a review of
consumer animosity
research raises specific
Exposé Master Thesis – Marijana Olden 26
and a
reconsideration of
its measurement
(2007) issues for future research on
consumer animosity.
Potential problems
associated with the
measurement of consumer
animosity are highlighted
and an alternative
perspective for
operationalizing the
construct is proposed.
Animosity
model: example
China / Japan
Implicit consumer
animosity: A
primary validation
Cai, H.
Fang, X.
Yang, Z.
Song, H.
(2012)
Validates implicit animosity
as a unique determinant of
consumer behavior in the
context of Chinese
animosity toward Japan. The
Implicit Association Test
(IAT) was employed to
measure implicit Chinese
animosity toward Japan.
Results: (a) implicit
animosity was distinct from
consumer ethnocentrism; (b)
implicit animosity was
significantly correlated with
war animosity, but not with
economic animosity; and (c)
implicit animosity exerted
negative impacts on
purchase intention,
independent of explicit
animosity, consumer
ethnocentrism, and product
judgment.
Animosity
model: Case
China
The animosity
model of foreign
product purchase:
An empirical test
Klein, J. G.;
Ettenson, R;
Morris, M.D.
(1998)
The authors provide an
initial test of the animosity
model of foreign product
purchase in the People's
Exposé Master Thesis – Marijana Olden 27
in the People's
Republic of China
Republic of China
Ethnocentrism
and animosity
model
Consumer
animosity and
consumer
ethnocentrism: An
analysis of unique
antecedents
Klein, J. G.;
Ettenson, R.
(1999)
The study provides
empirical evidence for
discriminant validity
between this construct and
consumer
ethnocentrism. Results show
that the profile of the
ethnocentric consumer is
different from the consumer
holding animosity towards a
specific exporting nation.
Ethnocentrism
and animosity
model
New perspectives
on the animosity
model of foreign
product purchase:
Are animosity and
ethnocentrism
distinct constructs?
Richardson, Jr., C.
W.
(2012)
Investigates linkage of
ethnocentrism and animosity
by having significant impact
on consumer's judgments of
product quality. Results
indicate that animosity does
indeed impact product
judgments, implying that the
constructs of ethnocentrism
and animosity represent
greater consistency of
consumer attitudes than
previously described.
Ethnocentrism
and animosity
model
Us versus them, or
us versus
everyone?
Delineating
consumer aversion
to foreign goods.
Klein, Jill Gabrielle
(2002)
This paper presents evidence
that international animosity
and consumer ethnocentrism
are distinct constructs that
play different roles
depending on the set of
products available to
consumers. Result:
animosity toward a foreign
Exposé Master Thesis – Marijana Olden 28
nation is related to choices
between foreign goods,
while consumer
ethnocentrism is related to
choices between domestic
and foreign goods. Further,
the study finds animosity
effects even though anger
levels are generally low,
thus extending the
boundaries of the animosity
model of foreign purchase.
5. METHODOLOGY
1.5 Setting The first part of the thesis will be a literature research in the field, to have an overview over
the results of previous research and articles.
In the second part, an empirical quantitative study will be conducted. The study will consist
of a questionnaire that will be distributed to participants in the two targeted countries.
A conjoint analysis with a rating of profiles will be conducted to analyze how much impact
COO (domestic or foreign) of ingredients and production has on the purchasing intention of
consumers. Additionally a self-explicated conjoint analysis will be done, in order to answer
hypothesis H1b and H1c.
The product that will be used to carry out the study is beer. It has been chosen for several
reasons. They are the following:
• It has one main ingredient and is produced in one process. Therefore a conjoint
analysis can easily be carried out, because there are two factors with a variety of
characteristics that have to be considered.
• Food generally could be considered as rather low involvement product, but it is one
of the instruments to convey cultural expressions (Cleveland et al., 2009) and beer
often seems to have an emotional attachment to it. Especially the “choice of
beverage may also be a statement of affiliation, a declaration of membership in a
particular group, generation, class, ‘tribe’, sub-culture or nation and its associated
values, attitudes and beliefs” (Social Issues Research Center, 1998, p. 23).
Exposé Master Thesis – Marijana Olden 29
• It is a product that is produced locally and consumed in all countries that are being
compared, with Germany and Spain being on the first and second place respectively
in Europe (Statista, 2013).
The survey will consist of the following sections:
1) Ethnocentrism: Measuring consumer ethnocentrism with the new version of the
CETSCALE, developed by Sharma (2014). It measures three dimensions of
ethnocentrism. This has been adapted in consequence of the differing results that the
application of the former CETSCALE has shown.
2) Self-explicated conjoint: Consumers have to evaluate levels and attributes.
3) Conjoint rating: The participants have rated the possible product profiles. A full-profile
analysis is conducted.
4) Socio-demographics: The socio-demographic background of participants is determined.
Since the newly developed CETSCALE is unfortunately not available in other languages
than English, the survey will be only conducted in English. Changes in language might
impact the evaluation of the consumer ethnocentrism if they are not applied correctly.
1.6 Participants The participants for the survey will be coming from the analyzed regions: Germany and
Spain. Personal and educational/community networks will be used to contact and invite
participants to the study. The target group segmentation in a first instance will only be done
by country. Concerning an estimate of how many participants are needed, according to
Raosoft (2004) with a margin of error of 5%, a confidence level of 95% and a population
size of over 20000 per country, a sample size of 377 respondents per country is needed.
1.7 Construction and Distribution For the construction of the questions for the two conjoint analysis, product attributes and
their levels that will be evaluated. The relevant attributes and levels are the following:
Exposé Master Thesis – Marijana Olden 30
Figure 6: Attributes and Levels for Conjoint
Source 6: Own creation
The number of possible profiles is 16. A full profile analysis will be conducted, because with
only two attributes, there can be no reduction done. The online questionnaire will be either
designed with help of the software Sphinx. The finished questionnaire will then be
distributed to the participants via email and social media channels.
1.8 Measurement and Analysis The software SPSS will be used to do the statistical analysis of the data, which will consist in
different statistical analysis, since the survey will most probably consist of different kind of
questions (e.g.: open questions, closed questions). The data obtained with the conjoint
analysis will probably be analyzed using a linear model. Whereas the data from the self-
explicated conjoint attribute importance scores can be weighted to produce so-called “self-
explicated utility values” for each attribute level, which indicate the utility for each
respondent and can also be averaged for all. It also has to be considered, that there is not
always a scale equivalency between different countries. Especially when using formative
measurement models, a “basic premise for establishing scale equivalence for formative
constructs is the availability of generic effects or consequences” (Wagner, Wetzels, &
Winklhofer, 2005, p. 5). A different sequential testing procedure has to be applied, than for
reflective constructs (ibid). In order to obtain valid results, the cross-cultural scale
equivalence has to be measured after obtaining the final data.
1.9 Benefits and Possible Problems The benefits of the online survey are that it is a quick and easy way to contact people in the
different countries. The fact that it is done with software enables the use of an interactive
design, without which a self-explicatory conjoint analysis would not be possible. Since
participants from two countries will be answering the questions, this will allow a more
general conclusion arising from the results. However, there will be limitations to the study
Exposé Master Thesis – Marijana Olden 31
because the moderating factors between ethnocentrism and purchase intention will not be
taken into account. These might be different between the countries and therefore are an
unknown factor.
Possible problems could be presented by a low number of participants or the fact that only
people with internet access and considerable English skills will be able to answer to the
survey. That may result in a focus on a certain age group or a certain level of economic
wealth, which is not intended and would influence the result.
Generally, since only two countries are analyzed, the results are not globally representative
but can only show a trend in these European countries.
Exposé Master Thesis – Marijana Olden 32
6. OVERVIEW OF CHAPTERS 1. Introduction
1.1. Relevance of the Subject
1.2. Research Question and Objective of the Thesis
1.3. Basics and Preliminary Definitions
1.4. Overview over Structure and Contents in Following Chapters
2. Theoretical Part
2.1. Consumer Perception of COO of Domestic Brands over Time
2.2. Concept of Country-of-Origin
2.3. Concept of Consumer Ethnocentrism
2.3.1. CETSCALE
2.3.2. Antecedents of Ethnocentrism
2.3.3. Moderating Factors of Ethnocentrism
2.3.4. Other Models Influencing Country-of-Origin Effect
2.4. Product Cue Importance
3. Empirical Study
3.1. Methodology
3.1.1. Research Design
3.1.2. Research Question & Hypothesis
3.1.3. Attributes and Levels
3.1.4. Construction of Tasks
3.1.5. Target Group
3.1.6. Instrument Design
3.1.7. Data collection
3.1.8. Statistical Analysis
3.1.9. Results
4. Conclusion
4.1. Managerial Implications
4.2. Limitations and Future Research
5. Bibliography
6. Appendix
7. Personal affirmation in lieu of oath
Exposé Master Thesis – Marijana Olden 33
7. TIMELINE Weeks Phase Subject
01.09.14 – 13.10.14 Research Create Exposé
14.09.14 – 09.11.14 Theory I Work on theory part
10.11.14 – 30.11.14 Survey I Create the survey, pre-test,
send to participants
01.12.14 – 14.12.14 Theory II / Intermediate
report draft
Finish theory and prepare
intermediate report draft
15.12.14 – 01.01.15 Buffer / Survey II Buffer – Send reminder, find
new participants
02.01.15 – 11.01.15 Survey III Start analyzing survey
12.01.15 – 30.01.15 Intermediate report Improve intermediate report
after feedback
01.02.15 – 09.02.15 Buffer Buffer
10.02.15 – 30.04.15 Survey VI Draw conclusions on survey
and finalize thesis
01.05.15 – 30.05.14 Final Report Create final report
Exposé Master Thesis – Marijana Olden 34
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