The purpose of this study is to enquire the influence of ethnocentrism on customers purchase intention towards foreign products that moderated by social media. Much attention is given for foreign customers because there are many issues that multinational corporations have to consider to get the benefits from foreign customers. The paper looks at recent research dealing with need for uniqueness and trust of the product because both of them are important factors from the customers’ point of view. Besides, ethnocentrism relates to the customers believes that the products that made by their home country are the best and refuse to use imported products. Moreover, the study gives a detailed analysis of the impact on customers’ need for uniqueness on buy intention towards foreign products: firstly it will define about the description of each construct, secondly disclose the hypotheses, and lastly goes to the methodology that will be used to test the hypotheses.
Nowadays, with the growth of globalization, international expansion become a common strategy to be implemented by a multinational corporations (MNC). Customers can easily access and exposed a great variety of products and services from other countries because MNCs can provide both domestic and international customers’ need. However, MNCs may face the difficulties to fulfill customers’ need because MNCs have to distinguish different of those needs in virtually every product category (Fakharmanesh & Miyandehi, 2013). Therefore, MNCs need to know the motivations of local and different foreign customers that buy its products so that MNCs can improve their ability to fulfill the needs. This study will focus only for foreign customers because there are many issues that MNCs have to consider to get the benefits from foreign customers. Besides, studies stated that customers in developing countries prefer foreign products to domestic products because they believe that foreign products have better quality than domestic products and it can impress customers’ status in the society (Frimpong, 2011).
Most of the earlier study stated that customers purchase products from other countries relates to their understanding about the country-of-origin reputation of the consequence (Torres & Gutierrez 2007; Rezvani, 2012; Renkon, 2012; Akdogan, 2012; Wong, 2007). However, there is not only country-of-origin that impact the client buy intention towards imported products. Fakharmanesh and Miyandehi (2013) explained that consumer usually compares the domestic and foreign products based on its mark and company names, product labels, or linguistic, visual and aural symbols. Another motivation can be ethnocentrism, materialism, conformity, need for uniqueness, vanity (Ahmad, et al, 2013), belief and fashionability (Afzal, et al., 2013). This study will meet on the need for uniqueness and trust because both of them are important factors from the customers point of view. Besides, ethnocentrism relates to the client believes that the products that made by their home country are the best and reject to use imported products (Shimp & Sharma, 1987).
Therefore, MNCs should refer about ethnocentrism customers because it may conduct to low customer intention to purchase their products. Furthermore, social media may be able to used by customers to get information about overseas products because it is an simple and low-cost way to collect data. Through social media, customers can get knowledge for their uniqueness and build them more reliance with the product. Besides, since social media shares wide information about foreign products, it may provide the customer with strong ethnocentrism a new insight about it. It then may impact their thoughts about an imported product and raise their aim towards it. However, even though social media is significant in terms of foreign consequence purchasing, there is no study that explains about it. Therefore, the target of this study is to consider the influence of social media on the impact of customers’ need for uniqueness, faith, and ethnocentrism on their buy intention toward foreign products.
Customers’ need for uniqueness and purchase intention
Every customer has her/her own preference for the products he/she is bought. The product can be similar to others in the same group or in contrary some of the customers do not want to be the same. When customers want to assure their need for uniqueness, they will obtain a foreign product because it is different from others who purchase domestic products. In this case, customers who have a high level of need for uniqueness will have more wish for buying a foreign product. Based on that, the following hypothesis is developed:
Customers’ trust and purchase intention
Trust is a ‘psychological conditions comprising the aim to allow vulnerability based upon positive expectations of the intentions or behavior of another’ (Rousseau, et al., 1998). Trust can reduce the uncertainty created by others (Blau, 1964). Because of that, reliance is significant in terms of purchasing overseas products because in this activity usually firms and customers do not meet each other or so-called online shopping. Besides, the complexity and variety of cross-country interactions make the chance of unpredictable behavior (Gefen & Straub, 2003). Therefore, customers need to get trustable firms so that they can obtain a foreign product without any doubts. Customers will be more clear to obtain a foreign product because there is nothing they be concerned about. In other words, they will more often purchase foreign products. Therefore, the strong the belief of the customer to the product/brand, the higher will be their buy intention (Bhattacharya, 1998; Lacoeuilhe, 1999). Based on that, the following hypothesis is developed:
Ethnocentrism and purchase intention
Ethnocentrism refers to the tendency of people that aspect their own group as the best among others and explain other groups from the point of view of their group. It makes them refuse other people who have a different culture and take the same one (Booth, 1979). According to Crawford and Lamb (1981), buying the foreign product will produce strong emotional involvement especially about nationwide safety and loss of jobs. Furthermore, in the marketing sphere, ethnocentrism becomes one of the dynamic factors in customer purchasing choices. Ethnocentrism is significant to be considered by the firms that have foreign customers because firms need to enquire whether most of the foreign customers have strong ethnocentrism or not. If the foreign customers have a high level of ethnocentrism, the firms have to find the way to handle with that because customer ethnocentrism has a negative and strict impact on buy intention towards foreign products (Renko, et al., 2012).
In contrary, it has an important positive influence on buy intention of products that manufactured domestically (Shoham & Brenečić, 2003, Nguyen, et al., 2008; Evanschitzky, et al., 2008; Ranjbaim, et al., 2011). Based on that, the following hypothesis is developed:
In consumers’ point of view, social media can help them to get knowledge about the product or service they want/need. It will impact the way they think and lastly their decision to buy the product or use the service. Knowledge and sharing experiences through social media can reshape the customer’s beliefs and thoughts about other culture or foreign products because it provides a broad and wide acquaintance to them. Therefore, the costumers may be less ethnocentrism to purchase foreign products after they get data through social media.
However, it will also depend on the attribute of customers and countries because some former studies stated that customer ethnocentrism tendencies depend on the level of the development of a country (Renko, et al., 2012). Customers in developing countries more likely to purchase foreign products than in developed countries because customers in developed countries have thoughts that their domestic products are better than others since they have high technology or manufacture equipment. This study will not distinguish between developing and developed country because the purpose of this study is to enquire the impact of ethnocentrism on customers buy intention towards foreign products that moderated by social media. Based on that, the following hypothesis is developed:
In this study, the following conceptual framework is developed based on the research objectives of this study.
- Need for uniqueness
- Purchase intention towards foreign products
- Social media
This study adopted survey approach to gather appropriate research information, the accomplished sample was selected randomly from customers who purchase foreign products in Taiwan because there are many customers who purchase foreign products from Taiwan and usually through online shopping or social media. Online surveys will be conducted. Overall 500 surveys will be sent to the participants. This study will propose three lucky draws to appreciate the time and efforts from respondents.
For the object of the testing these hypotheses, the following five main constructs and one moderating variable will be operated in this study: (1) customers’ need for uniqueness, (2) customers’ reliance, (3) customers’ ethnocentrism, (4) buy intention towards foreign products, and (5) social media. All of those variables will be considered on a seven-point Likert scale. Respondents will be asked to indicate their degree of agreement toward each statement, from 1 = strongly disagree to 7 = strongly agree.
- Customers’ need for uniqueness
- Customers’ trust
- Customers’ ethnocentrism
- Purchase intention towards foreign products
- Social media
Descriptive statistic analysis
To better understand the characteristics of each variable, descriptive statistical analysis was used to illustrate the means and standard deviation of each research variable and to provide information about the characteristics of respondents.
To purify the measurement scales and to identify the dimensionality of each research constructs used in this study, principal components factor analysis with varimax rotation was applied to condense the collected data into factors. Based on the results of factor analysis, item-to-total correlation and internal consistency analysis (Cronbach’s alpha) were applied to confirm the reliability of each research factor.
Structural Equation Model (SEM)
In order to determine the overall fitness of the research model, SEM was used in this study. The Amos 5.0 package software was used to analyze the relationships within the entire research model to explore the relationships among variables in this model. According to Jöreskog and Sorbom (1993), the following criteria were adopted to justify the goodness of fit of the research model: Chi-square/d.f. < 2, Goodness of Fit Index (GFI) > 0.9, Adjusted Good of Fit Index > 0.9, and Root Mean square Residual (RMR) < 0.05. This study adopted SEM to analyze the interrelationships among elements of the entire research model.
ANOVA was used to discuss the interaction effects of the clusters of customers’ need for uniqueness, trust, and ethnocentrism, with social media as the moderating variable on purchase intention towards foreign products.
The contribution of this study is it integrates the customers’ need for uniqueness, reliance, and ethnocentrism to their buy intention toward overseas products that moderated by social media. Besides, for managerial implications, it gives a concept that social media can be used for business to make more benefits, especially in this globalization stage. Furthermore, in order to put together this study simply to be understood, firstly it will define about the description of each construct, secondly disclose the hypotheses, and lastly goes to the methodology that will be used to test the hypotheses.
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