The effect of country‐of‐origin on foreign brand names in the Indian market

Abstract

PurposeTo investigate consumer attitudes in India towards local and foreign brand names, against a background of increasing prevalence of foreign brand names and stereotypes of countries of origin covering the range from positive to negative.Design/methodology/approachA structured questionnaire administered face‐to‐face to 112 consumers in the city of Lucknow. Attitudes to brands categorized as “foreign” or “Indian” were measured by seven‐point semantic differential scales, and consumer ethnocentrism by CETSCALE. Factor analysis with varimax rotation was used to identify factors contributing to the observed degree of ethnocentrism in brand choices.FindingsIt was found that the quality of foreign brands was perceived to be generally higher and superior to local brands. Most consumers also associated greater accessibility of foreign brands in the Indian market with better quality at lower prices. Despite high levels of nationalism and preference for indigenous manufacture, as evidenced in high factor ratings on an ethnocentrism scale, which might indicate a positive bias towards local brands, Indian consumers were not prejudiced against foreign brand names. In fact, they evaluated them higher on technology, quality, status and esteem than Indian brands, and attributed higher credibility to those countries‐of‐origin.Research limitations/implicationsThis study adds to the body of knowledge about country‐of‐origin effect, in a massive and fast developing market.Practical implicationsThe strategy of marketers of foreign brands in the Indian market should be to position their products on attributes of technology and quality, rather than economy and value for money.Originality/valueShows that ethnocentricity does not necessarily result in hostility to foreign brands.