Ethnocentric tendencies of Indian consumers: impact on preference for domestic versus foreign products

Abstract

India is witnessing a plethora of foreign and domestic products competing against each other in its retail market. In order to understand how ethnocentrism among Indian consumers leads to attitudes toward foreign/domestic products, this study aims to understand the antecedents (socio-psychological and demographic) of consumer ethnocentric tendencies (CET) among Indian consumers, the impact of ethnocentrism on attitude toward domestic versus foreign product and service, and the impact of a moderator (perceived economic threat) on the relationship between ethnocentrism and attitudes. Using a sample of 800 Indian consumers, the relationships among variables were analyzed by means of structural equation modeling (SEM) using one product (soap) and one service (mobile phone service) category. The findings suggest that Indian consumers who are ethnocentric prefer domestic product/service to foreign product/service. Ethnocentrism of Indian consumers is influenced by education, income, cultural openness, and collectivism. The relationship between ethnocentrism and attitudes was moderated by perceived economic threat. Implications are provided for both Indian and foreign marketers to successfully promote their products to Indian consumers.