Consumer ethnocentrism (Shimp and Sharma, 1987) refers to the tendency on how customers or individuals perceive foreign-made products and domestically produced products, whereby some are highly ethnocentric and others are non-ethnocentric . Ethnocentric individuals believe that buying products from abroad results into adeverse economic effects such as decline in economic activities, decline in domestic employment rates and some view it as being unpatriotic.
Non-ethnocentric consumers tend to prefer foreign-made products to domestic products due to their external features believing that foreign-made products are of high quality compared to domestically produced products, products are evaluated on their merits irrespective of their country of origin, or possibly even viewed more positively simply because they are foreign.
The ethnocentric view the domestic market to be of much significance than foreign markets thus contribute their felings of identity and belonging. Determinants of consumer ethnocentrism may vary from country to country and culture to culture. Previous reseachers identified Tanzanian individuals as non-ethnocentric thus being more interested with foreign-made products than domestic products.
Statement Of The Problem.
Despite the efforts of Tanzania to improve the industrial sector and produce higher quality products in order to reduce importation of goods and services from abroad, most of individuals continue to purchase more goods from outside the country. Therefore, the question comes, what factors influence individuals to prefer foreign-made products than domestic products. The study intends to find why individuals are most interested with the products from abroad.
Research Objectives Of The Study.
· General objective
The main objective of the study is to identify the reasons that causes an individual to buy product from outside the country even if that product is available in domestic market.
· Specific objectives
- To obtain necessary information that will help to increase demand of individuals for domestically produced products.
- To find out on how the government can make improvements on industrial sectors so as to produce domestic products that match the quality of foreign products.
- To examine the the effect of excessive importation (resulting from being highly non-ethnocentric) to the economy.
- To impart a positive perception of individuals towards domestic products.
- To obtain information that influences policy formulation to support domestic product production.
Justification For The Study.
- To create favourable balance of payments by reducing importation of products, this can be possible through producing domestic products of high quality.
- To increase employment opportunities to the society. More jobs will be created if more individuals purchase domestic products as more labour will be hired in facilitating the production process.
- To reduce excessive dependence on developed countries. If more individuals purchase local products importation of foreign products will decline thus reduce dependency.
Scope And Delimitation Of The Study.
Scope Of The Study.
The coverage of this study is the University of Dar es Salaam. It will focus on the University of Dar es Salaam students, because it comprises of individuals from various regions of Tanzania thus will provide a diverse and wide range of information obtained.
Delimination Of The Study.
The study will focus on the University of Dar es Salaam students. The selection of the coverage is due to time and financial constraints that prevent the research from covering a wider range.
Theoretical Literature Review.
· Relative deprivation theory.
According to Crosby (1976), individuals feel deprived when they are treated or compensated unjustly compared to some standard of reference. Hence, deprivation is associated with dissatisfaction due to lack of justice and fairness.
An individual in a group, which is deprived of socio-economic benefits available to another group, will imitate the lifestyle and strive to acquire objects, goods and services of the other group.
· Reference group theory.
It follows from Merton and Rossi (1962) that individuals aspire to emulate members of reference groups because they want to reduce the socio-economic difference with them. This explains why poorer individuals in a society imitate the lifestyle of their wealthier fellow citizens. This also explains why individuals in poorer economies copy the way of life in wealthier societies for example by acquiring their imports.
· Psychological reactance theory.
The theory of psychological reactance forms the basis for consumer ethnocentric tendencies (Shimp 1984, Shimp and Sharma 1987). The reactance results from perceived threats to socio-economic circumstances of consumers. Individuals are forced to choose between national and foreign products, a consumer may experience reactance and may opt for national items if he feels that foreign alternatives represent a threat to personal prosperity or the welfare of her in-group (Shimp and Sharma 1987). In the terminology of psychological reactance theory, imports reduce or eliminate freedom to have socio-economic stability.
· Dual Processing Theory.
Dual processing theory also proposes a negative impact of consumer ethnocentric tendencies on purchasing intentions towards foreign products. According to this theory, consumer ethnocentrism is a general tendency indicating reluctance to purchase imports. It may result in unwillingness to buy specific foreign items. It was shown that consumer ethnocentric tendencies lead to favourable attitudes towards specific domestic products and brands. It was also found that consumer ethnocentric tendencies determine negative attitudes towards specific imported items. For instance, consumer ethnocentrism determined negative attitudes towards imported products and brands in Shimp and Sharma (1987), Netemeyer, Durvasula and Lichtenstein (1991), Bawa (2004), Klein, Ettenson and Krishnan (2006) and Kwak, Jaju and Larsen (2006).
Empirical Literature Review.
- Country of origin. Studies on the effects of country of origin in Africa aiming at studying the differential perceptions of consumers on imported products versus local products. Studies done in Nigeria by Agbonifoh and Elimimian (1999) and Okechuku and Onyemah (1999) indicated that goods from the economically more developed nations were perceived more positively by citizens of transitional economies, than those from the economically less developed countries. Ferguson et al. (2008) analysed the country of origin effects in service evaluation in five West African nations. They discovered that situational individual attributes, such as enthusiasm and capability to process information, may possibly influence use of country-of-origin factor in evaluating a service.
- In addition, personal attributes, like ethnocentrism and cultural background, may as well influence consumer perception of foreign against locally provided services. Mitgwe and Chikweche (2008) and Saffu and Walker (2006) noted that consumer nationalistic stance did shape the consumer preference towards locally made products. Generally, the available empirical evidence, although not comprehensive does suggest that consumers in economically developing countries will perceive the products from economically developed nations to be superior than those from their own respective nations.
- Social status, certain consumers might prefer to buy foreign brands as this might be believed to enhance their self-image as being cosmopolitan, sophisticated, and modern. Therefore, perceived prestige associated with foreign brands provides intangible value to consumers, and consumers tend to reciprocate this value by enhancing their brand loyalty as well as transferring its good image to others through positive word-of-mouth. Foreign brands are likely to have higher prestige because of their relative scarcity and higher price compared with local brands (Batra et al., 2000). This might lead to consumers associating the foreign brands with prestige (Kapferer, 1997).
- Perceived quality and value are important factors influencing consumer perception and purchase behaviour of foreign products. The perceived quality is conceptualised as a purchaser’s evaluation of a brand’s general fineness based on built-in characteristics of a product such as performance and durability as well as extrinsic features such as brand name and service (Kirmani & Baumgartner, 2000). These appraisals of quality or perceptions are based on attitudinal conclusions, and buyers usually depend on the way that specific brand effectively satisfies internal quality standards in their assessment of a brand’s overall distinction with regard to their purchasing knowledge. According to Parasuraman and Grewal (2000), perceived value is a function of a ‘get’ component (the benefits a buyer derives from a seller’s offering) and a ‘give’ component (the buyer’s monetary and non-monetary costs of acquiring the offering.)
Philosophical Position Of This Study.
This study will use the interpretivism philosophy because it focuses on the interpretation of people’s actions specifically their preference of foreign products and the reasons behind such preference.
The study will also look into the influence of environmental, socio-cultural and economic factors that drive the consumer’s perception on foreign and domestic products.
This study will use an inductive research approach. This is because the study looks into the perception, personal views and opinions of consumers as to why and how they view and ultimately choose to purchase a foreign or local product.
Data Collection Methods.
The study will collect data through the following methods:
- Open-ended questionnaires. These will allow the respondents to describe their perception towards foreign and local products and it will enable the collection of specific information on consumer purchase attitudes and beliefs.
- Standardized open-ended interviews.
Identical questions will be asked to all respondents in an open-ended form thus allowing them to contribute as much details as they please and it would also allow for the researcher to ask follow up questions to assess the purchasing behavior of consumers.
The sampling technique for this study is non-probability sampling due to the qualitative research approach of the study. The study will employ convenience sampling approach because the individuals of interest are students who have busy and varying schedules. Other factors include time and financial constraints of the research .
Our study will be conducted in Tanzania and focus on University students in Tanzania.
The sample for this study are students at the University of Dar es Salaam Business School (UDBS), who will be representative of university students in Tanzania as it is the largest university in Tanzania with the most diverse individuals from all regions in the country that will provide a sample that is highly representative of the population under study.
The sample frame will be obtained at the University of Dar es Salaam Business School, from the dean of UDBS. This will be the listing of all population members of interest from which the sample will be drawn.
The study will take a sample size of a hundred university students from UDBS. The data will be collected from both female and male UDBS students.
Data Analysis And Interpretation.
Type Of Data.
The nature of data that will be used in this study is primary data. The primary data will be collected through open-ended questionnaires and standardized open-ended interviews.
Data Processing And Data Analysis
The data that will be obtained will be processed by using qualitative data processing software that fits such data.
The data processed will be effectively analyzed to indicate and prove the relationship that exists between the groups of data.
Conceptual Model Of The Study.
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