Global Brands and Consumer Ethnocentrism of Indonesian Youth Consumers

Abstract

Indonesia is a large market for consumer product targeting youth consumers, with populations of more than 70 million young inhabitants and market size of 155 billion US Dollar. The size of this potential market attracts foreign products with globally-recognized brands to enter the Indonesian market. The objective of this study is to explain how consumer ethnocentrism may impacts the perceptions of Indonesian youth consumers toward a particular brand of soft drink with world wide market penetration and their consequent purchase intentions. This study employed self-assessment questionnaire to 156 Indonesian youth which has recognized the product as a global brand, with nearly 75% of the total respondent was students. The resulting data was analyzed using structural equation modeling with LISREL software package. There are several interesting findings, first of which, consumer ethnocentrism directly reduces purchase intention of the product with global brand. Consumer ethnocentrism also decreased brand image of global brand, which has positive influence toward purchase intention. Therefore, consumer ethnocentrism decreases purchase intention, both directly and indirectly through brand image. Second is that contrary to the hypothesis, consumer ethnocentrism does not influence corporate image of the global firm, which significantly influences brand image but only slightly impacts purchase intentions directly.