Intention–Behavior Discrepancy of Foreign versus Domestic Brands in Emerging Markets: The Relevance of Consumer Prior Knowledge

Abstract

Most research on the performance of foreign versus domestic brands in emerging markets has examined dependent measures of product evaluation or purchase intention. However, consumers who intend to buy a product may switch to competing brands, thus displaying an intention–behavior discrepancy (IBD). Drawing on literature on country associations and dual process theory, the authors examine the performance of foreign versus domestic brands on IBD in emerging markets and the moderating role of consumer prior knowledge. They conduct an intention survey followed by a postpurchase survey in the Chinese automobile and smartphone industries and find that foreign brands have an advantage on IBD relative to domestic brands, indicating that they have the dual advantage of higher evaluations and lower IBDs. Furthermore, foreign brands’ advantage on IBD is smaller for consumers with inaccurate prior knowledge because they are more likely to systematically reprocess information and discount foreign brands’ favorable country associations. For these consumers, overestimating the product reduces foreign brands’ advantage to a lesser degree than underestimating it as a result of confirmation bias. These findings provide implications for brands in emerging markets.