Consumer Behavior Towards Foreign Versus Local Products and Brands: Future Research Directions

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Consumer Behavior Towards Foreign Versus Local
Products and Brands: Future Research Directions
S Sulhaini
Department of Management
University of Mataram
Mataram, Indonesia
sulhaini@unram.ac.id
Abstract—This paper reviews five theories explicative of
consumer predispositions towards foreign or local products and
brands: social identity theory, personal identity theory, cultural
identity theory, system justification theory, and categorical
cognitive theory. This paper also identifies research questions
and adjoining disciplines to propose future directions of
research; these directions follow the research stream of
consumer culture theory. Moreover, the paper proposes further
studies of recent trends in the fourth industrial revolution and
the (post-) COVID-19 pandemic setting. These research avenues
are particularly noteworthy in the context of developing
countries. They may lead to studies of each theory that are
sharper, deeper, and more focused and allow the application of
adjoining disciplines into consumer behavior studies, especially
the consumer culture theory stream.
Keywords— consumer behavior, social identity, personal
identity, cultural identity, system justification, categorical
cognition
I. INTRODUCTION
Consumer behavior (CB) has been viewed as a sub-
discipline of marketing. CB exists as a coherent set of actors,
behaviors, and situations [1]. It is characterized by the study
of people in their capacities as consumers, including the
acquisition, consumption, and disposition – each of which
may be shaped by various interconnected market forces – of
products, services, and brands [2]. Macinnis & Folkes [2]
identified three streams of studies on CB: information
processing, behavioral decision theory, and consumer culture
theory (CCT). To a great extent, these streams are influenced
by various disciplines that adjoin (but remain outside of)
marketing, such as anthropology, sociology, psychology,
linguistics, neuroscience. Nonetheless, Belk [3] argued that
information processing and behavioral decision theory can be
integrated into a single-stream termed consumer psychology
(CP). Accepting such an integration, CB can then be
delineated into two main streams, which are CP and CCT. The
underlying and adjoining disciplines of the two streams vary
[2]; however, some constructs present in one stream can be
also recognized in, or regarded as constructs of, the other
stream. Examples of this include emotion, desire, and
imagination, which are claimed to be constructs of CP but
also, because they are mediated by the culture, of CCT [4]. In
CB, a given construct can be evaluated and measured in both
streams [5]. This may be a sign that the distinction between
the two streams has been softened – the lines between them
blurred – and pursuing one stream of research will likely
involve constructs that are also investigated in the other
stream. Therefore, it is fair to say that research on CB pieces
of evidence intersections between the two streams and, at the
same time, openness to the integration of various neighboring
disciplines.
CB has been a dominant research topic in reputable
international journals of marketing for 60 years, and it will
continue to flourish in the future as the topic presents a high
potential for innovation [6]-[7]. This continued flourishing
will inevitably extend to the disciplines adjoining CB,
ultimately enriching our understanding of the theories of CB.
The adjoining disciplines mentioned above provide
opportunities for researchers to be innovative and productive
in research and publication. Nonetheless, various authors [1]-
[2]-[3] have stated that even though CB theory developing
dynamically, it is not yet fully multidisciplinary and must
become more open to supporting its development by
importing and integrating knowledge from various
disciplines. CCT is a growing research stream, and articles on
CCT are the most cited in reputable journals of CB [7]. [8]
argued that CCT is much like a family of theoretical
perspectives that address the dynamic relationships between
consumer actions, the marketplace, and cultural meanings,
which can be influenced by globalization and market
capitalism. They further argued that CCT explains CB by
illuminating socio-cultural processes and structures in light of
consumer-identity projects, marketplace cultures, socio-
historic patterns of consumption, and the mass-mediated
marketplace. Finally, the pair also recommended that in the
era of globalization of consumer culture, one must examine
how consumer culture is evolving in non-developed countries.
Other CCT researchers [9]-[10]-[11] have also set out to
measure this phenomenon. In developing countries, local
consumer culture is increasingly shifted and altered by global
consumer culture [12].
CCT research topics in the context of consumer globalism
[3] and consumer nationalism [13] have attracted increasing
numbers of CCT researchers. International-marketing
researchers focus on consumer predispositions towards
foreign or local products and brands, which are the
manifestations of socio-psychological and socio-cultural
worlds. Products and brands are seen as agents of marketplace
phenomena, i.e. as carriers of identities and meanings that are
social, personal, and cultural. Consumer globalism and
nationalism predispose consumers to foreign or local products
and brands, respectively. Given the ongoing nature of the
globalization phenomenon, scholarly knowledge on such
predispositions is still expanding, and it merits further
investigation. To that end, this paper explores the issue of
consumers’ foreign vs local predispositions to identify new
research directions.
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Proceedings of the 2nd Annual Conference on Education and Social Science (ACCESS 2020)
Copyright © 2021 The Authors. Published by Atlantis Press SARL.
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II. METHODS
This essay reviews the literature on the concepts of teacher
competence and research findings on Indonesian teachers’
competence. The concept of teacher competence in the time
of pandemic is formulated by referring to the concept of
competence from the perspective of critical English pedagogy,
both from Indonesian and Western perspectives. The two
conflicting concepts on teachers’ competence evaluation
(standardized versus contextualized competencies) are also
discussed by referring to at least 35 research papers on the
subject matter. These works of literature are then linked to the
pandemic situations to suggest considerations for selecting
one of the three options.
III. RESULT AND DISCUSSION
Various theoretical explanations of predisposition towards
foreign or local products and brands have been set forth. [14]
argued that predisposition is primarily explained by five
relevant theories: social identity theory, personal identity
theory, cultural identity theory, system justification theory,
and categorical cognition theory. A discussion of these
individual theories is laid out below to facilitate the author’s
identification of the research questions of each. This also
enables the identification of interesting questions that are
related to more than one single theory.
A. Social identity theory
Social identity theory provides that in-group favoritism
emerges from the intrinsic need to maintain a positive social
identity and positively differentiate the in-group from out-
groups [14]. Consumer ethnocentrism (CET) is the
predominant construct of this theory. Describing individuals’
beliefs that their groups are superior and the ‘center of the
universe, it relates to consumers’ convictions regarding the
appropriateness, and indeed the morality, of purchasing
foreign products vs local ones [15]. Accordingly, highly
ethnocentric consumers, for the good of the national economy,
behave more favorably towards domestically made products.
They may ignore rational considerations and overestimate the
quality of locally made products [16] as a function of their
sense of national belonging. Such consumers identify strongly
with their own country and tend to reject the idea of
consuming imported products. Regarding consumer
predisposition towards local vs foreign brands, [17] propose a
construct rooted in CET: local brand consciousness. Local
brand consciousness refers to consumer attention dedicated to
supporting local brands rather than foreign ones; it is seen as
a realization of one’s pride, love, and sense of obligation
towards one’s own country. Consumers with strong local
brand consciousness behave positively towards local brands
and, because of their understanding of buying local as a civic
duty, exhibit strong preferences for those brands in
comparison with global ones. This reflects the desire of
domestic consumers to protect local brands and their national
identity [18], they involve actively in consuming, using,
buying, or wearing local brands.
Karoui and Khemakhem [11] argued that the effect of CET
on consumer willingness to buy local products/brands tends to
be stronger in developed countries than in developing ones.
Nonetheless, they also wrote that previous studies in
developing countries yielded inconsistent findings on the
issue. In Indonesia, for instance, [19] found that young
consumers in Jakarta are less ethnocentric and demonstrate no
impact of foreignness/localness on willingness to buy. In
contrast, [16], in a study in Mataram, found a significant effect
of CET on young consumers’ willingness to buy locally made
products. Furthermore, in a nationwide study, [20] arrived at
an intriguing yet contradictory finding: that while ethnocentric
consumers tend to have open minds towards global
citizenship, their acceptance of global cultural forces does not
include the abandonment of local culture. The researchers
argued that the political economy has transformed Indonesian
consumers. Accordingly, [13] suggested that CET is triggered
by political and economic nationalism, especially in
developing countries. Such countries’ governments
sometimes have unstable political and economic policies, and
differences in political and economic policies, wisdom, and
priorities may establish a foundation for stronger or weaker
CET. A country’s political and economic dynamics over time
are highly likely to determine the state of CET in that
countries, and therefore, it is important to explore socio-
historical, political, and economic influences on consumer
perceptions of their group (nation) and how they manifest in
consumption of foreign vs local brands and products.
B. Personal identity theory
Personal identity theory differs from social identity theory
concerning its focus. Personal identity theory centers on
consumer roles, which shape consumer identity and behavior.
Social identity theory, in contrast, centers on groups and inter-
group aspects of behavior. Personal identity theory explains
that consumers align their behavior with their role (identity)
to avoid incongruence between their identity and their
perceptions at the hands of others [14]. Each desires a
personal identity with which to build their status and establish
their roles in life, and possessing or consuming certain
products and brands is a means of developing such an identity.
Some popular constructs in this theory are consumers’
cosmopolitanism and the need for uniqueness.
Consumer cosmopolitanism is a consumer orientation
governing the extent to which consumers are open-minded
towards foreign countries and cultures [14]. Consumers with
a strong orientation towards cosmopolitanism exhibit a greater
willingness to buy foreign products and brands than domestic
ones. Consumers in developing countries often believe that
globalization is a modern civilization; they tend to support,
enjoy and follow global (foreign) products and brands,
evidencing their global orientation [21]. Globalization brings
global products and brands to developing countries where
consumers view global products and brands as more favorable
than local ones. Even so, according to [13], consumer
cosmopolitanism can coexist with – and even depends on –
consumer nationalism. Consumers may engage in
cosmopolitan behavior but also maintain favorable attitudes
towards local products and brands. This suggests an interplay
between consumer globalism and nationalism, and such an
interplay ought to be the subject of future research.
The consumer’s need for uniqueness manifests as a need
to express his or her identity through the choice of a brand that
they perceive as special, unique, rarely owned by others, and
usable to signal a unique self-image and support one’s lifestyle
[17]. Consumers seek out brands that have unique
characteristics [5], and foreign brands, which are usually more
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expensive and not owned by most consumers, are seen as
capable of demonstrating personal identity. Consumers with
pronounced needs for uniqueness enhance their self-image by
emphasizing and showcasing their ownership of products and
brands that are considered original, special, or unique.
Accordingly, such consumers tend to be strongly materialistic.
Conversely, local brands and products are mostly owned by
domestic consumers and thus are seen as not giving the
impression of being special, luxurious, or unique. Consumers
who perceive a strong need for uniqueness are not interested
in local brands. They are attracted to foreign/global brands
that tend to be subject to limited availability and are thus not
owned by most consumers, and they tend to express avoidance
or even hatred of local brands. Regarding brand hate, [22]
stated that local consumers are more likely to demonstrate
passive hatred, rather than active hatred, toward local brands.
Nevertheless, whether passive hate toward local brands exists
and is consistent across the spectrum of functional (utilitarian)
and hedonic (conspicuous) products continues to bear
investigating.
C. Cultural identity theory
Cultural identity theory is the primary conceptual basis of
local and global identities. It explains how individuals identify
themselves as local or global citizens. This theory can be
situated between the above theories of personal and social
identity as it involves both group and individual identities
[14]. Consumer attitudes toward foreign vs local products and
brands have received constant attention from international
marketing researchers seeking to explain global vs local
consumer cultures. Based on the work of [8], [12, p. 3]
proposed the following definition of global/local culture:
‘social arrangements in which the relations between lived
culture and social resources, and between meaningful ways of
life and the symbolic and material resources on which they
depend, are globally (locally) conceived and are mediated
through deterritorialized, global (geographically anchored),
local markets’. This suggests that consumption, in a given
socio-cultural context, is shaped by dynamic market forces –
i.e. globalism, localism, or both.
Since CCT covers the effects of both group identities and
individual identities on consumption acts, the consumption of
products and brands is an expression of both one’s social
(group) identity and self-identity in CCT. Products and brands
are symbols in consumers’ lives; they are viewed as the
sources of symbolic meaning. When consumers live out a
global consumer culture, they will behave more favorably
towards products and brands rich in global symbolic
meanings, and they will behave oppositely when they adhere
to local consumer culture. [23] proposed global symbolic-
value orientation to refer to the tendency or desire of
consumers to obtain symbols that strengthen the image of their
global citizenship. Consumers with strong orientations of this
type will act on strong desires to possess brands that
symbolize global consumer culture. They crave symbolic
values such as social status, wealthy appearance, success,
prestige, uniqueness, and luxury. Consumers believe that
these values are inherent in global/foreign brands, particularly
those that come from Western (developed) countries, and in
developing nations, consumers have a strong tendency to seek
out symbolic value in global brands. However, consumers
today live simultaneously in both global and local cultures
[12]. Therefore, it is critical to understand the dynamic
interplay between nationalism and globalism in developing
countries and the consequences of the interplay. Additionally,
further investigations shall be focused on the rise of glocal
brands in developing countries, as prior studies tend to
uncover the trend in developed nations [24].
D. System justification theory
This theory stands in contrast to social identity theory. It
explains that members of groups that are low in social and
material standing exhibit in-group derogation and out-group
favoritism [14]. System justification theory predicts that
consumers will tend to favor products and brands from other
countries – especially those from more developed nations – as
they view those countries are superior to their own. Consumer
xenocentrism (C-Xen) is the primary construct of this theory.
It refers to a consumer’s internalized belief of the inferiority
of domestic products and their corresponding propensity to
prefer foreign products for social the purpose of
aggrandizement [25]. CET seems to be the opposite of
consumer xenocentrism; however, it is important to recall that
the two hail from different theories. CET arises in social
identity theory, which predicts that consumers in developing
countries will exhibit negative behavior towards brands or
products from other countries, regardless of the level of
economic development in the country of origin. C-Xen
appears in system justification theory, which explains the
importance of relative differences in status between countries
– less developed, developing, and developed countries, for
example. Consumers from countries with comparatively low
status (i.e. developing ones) are more likely to exhibit
xenocentric tendencies than consumers from higher-status
(i.e. developed) countries [25]. Consumers in low-status
countries justify the purchase of products or brands from
higher-status countries simply by asserting that they are better
and more worthy of admiration. They readily conclude that
good products and brands must come from abroad. Such
consumers have positive general impressions of foreign
products and brands, which suggests a strong and favorable
halo effect on those products and brands [26].
High-quality local products and brands are available in
developing countries [18]-[27]. However, the favorable
identities attached to these local products and brands may lead
local consumers to misclassify them as foreign [28]. Local
consumers do not expect strong local brands to exist in the
domestic market, and they are prone to assuming that all
favored brands available on the domestic market come from
other (more developed) countries. This mistaken attribution
suggests that local consumers are unable to accurately identify
local brands. Such misclassification plays a significant role in
governing attitudes towards brands [26] as consumers’
attitudes are directly influenced by their knowledge – correct
or otherwise – of a brand’s country of origin. It is therefore
reasonable to assume that a consumer’s misidentification of
strong local brands as foreign is also indicative of a negative
attitude towards brands recognized by that consumer as local.
Consumers in developing countries are foreign-brand
admirers: they perceive foreign brands to offer high quality
and high emotional value [22]. Consumers may not be
intimately familiar with foreign brands, but they nevertheless
approach those brands with pre-existing favorable perceptions
of their quality [25]. Such consumers evaluate the brands as
able to fulfill their desires. This perception may not always
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stem from consumers’ own experiences; rather, they admire a
given brand because they perceive it as offering what the
consumer truly desires. Brand admiration can still be held by
consumers who do not necessarily experience satisfaction
from using or perceive any particular excellence of, the brand.
Conversely, these consumers lack pride in local brands, which
are perceived as inferior to foreign ones [18]. This inferiority
complex engenders negative emotion towards local brands,
whose perceived low quality and low prestige will reduce the
social respect afforded to their users. This attitude is widely
shared by consumers in developing countries, owing to a
pervasive colonial mentality felt by domestic consumers that
trigger feelings of inferiority [11]. The age of colonialism has
long since ended, but its effects have not; feelings of national
inferiority are unconsciously propagated from one generation
to the next, even in the era of globalization, and they influence
consumer predispositions toward foreign brands and products
over local ones. However, given that such feelings pass from
generation to generation, generational differences may exist in
the level of xenocentrism and degree of inability to identify
local brands. The possible existence of these differences
requires. It is similarly important to uncover differences in
these constructs’ impacts on behavior towards foreign and
local products and brands.
E. Categorical cognition theory.
The country of origin effect (COO) is the primary
construct of this theory, which explains that consumers rely
on categorical representations of the world to economize their
cognitive resources and streamline their cognitive process
[29]. This concept focuses on the fit between countries and
product categories, and it explains how consumer behavior
towards product categories depends on the image of the source
country. A country with a positive reputation concerning
certain product categories will enjoy favorable consumer
behavior in international markets; as expected, negative
reputations will result in just the opposite. However,
according to [9], studies on COO have been described as
stagnant, and the research stream must be renewed by
investigating the contexts of new market countries, e.g.,
developing countries, where consumers’ socio-psychological
characteristics (such as consumer affinity, consumer
animosity, etc.) may interact with socio-cultural (e.g.,
religious) beliefs and affect real consumer behavior.
Furthermore, previous studies on COO have primarily focused
on the image of the foreign countries from which the imported
products come and how that image may explain consumer
behavior. Studies about the image of the home country, and
how it influences the behavior of domestic consumers, remain
limited. More precisely, little is known about the role of
home-country image in consumers’ evaluation behavior and
purchase behavior in developing countries [16]. Furthermore,
another fundamental gap remains in the multi-dimensionality
of country image [9], particularly in assessing consumers’
home countries in an emerging market [16]. Therefore,
investigations of the country image may not focus solely on
how consumers perceive other countries and behave towards
imported products but also on how domestic consumers’
perceptions of their own country, across various
characteristics, affect how they behave towards domestic
products.
Research on COO has shifted from product origin to brand
origin, which is considered more relevant in today’s
international marketing practice and has greater influences on
CB. Nonetheless, consumers in developing countries are often
confused and misapprehend the nationalities of famous
brands. Indeed, they may be unable to distinguish between
local and foreign brands [30]-[26]. This misapprehension
occurs particularly often with famous local brands and is
caused by the halo effect of (favorable) foreign countries and
the perceived inferiority of local products and one’s home
country [28]. Domestic consumers lack knowledge of local
brand origins and exhibit favorable behavior towards brands
that they (missed)perceive as originating in favorable
countries. Why consumers in developing countries
underestimate their country’s capability to develop high-
quality products and brands is deserving of understanding and,
as such, demands study.
According to [14], the above theories vary in terms of the
influence of their central constructs on consumer attitudes and
loyalty. These variations depend on the product category, the
type of consumption (conspicuous vs inconspicuous), and the
nature of the product (hedonic vs functional). The phenomena
of conspicuous consumption and hedonic purchasing are
made strong in developing countries by wide economic
disparities. Constructs in each theory will have impacts on
consumers’ predispositions towards foreign or local products
and brands, depending on their images of the COO and their
own country. Consumers in developing countries tend to view
certain products and brands from favorably perceived
(developed) countries as prestigious or luxurious and thus
behave favorably towards those products and brands even if
they possess ethnocentric tendencies [11] – [20].
Xenocentrism is triggered by consumers’ images of the source
country and their own country [14], and because some brands
come from favorable countries, consumers may pursue certain
global symbolic values through those brands [22].
Nonetheless, global brands such as 7-Eleven have been
defeated by local retailers in Indonesia; a similar story
unfolded for McDonald’s and Burger King in the Philippines
and Vietnam. Thus, it remains to be asked whether consumers
who discover that they have strong local brands will perceive
their country more positively or feel less inferior.
Furthermore, that local brands are perceived as lacking
symbolic value and thus avoided or (passively) hated causes
another question to emerge: can passive brand hate be reduced
by domestic consumers’ improved images of their own
country or by their local brand knowledge?
Three studies share a similar view: that consumers in
developing countries can live simultaneously in local and
global consumer culture, depending on the situations those
consumers face [12], [13], [20]. However, it is far from clear
how the combination of cultures can stably develop in
consumer life, particularly in today’s hyperconnected world.
The recent and rapid growth of information technology has
facilitated consumer interactions that transcend geographical
boundaries, strengthening global citizenship. Consumers
now enjoy wider opportunities to interact, through social
media, with individuals anywhere and everywhere. They can
share thoughts, opinions, feelings, experiences, and even
hopes. This interaction social media-based can reinforce
certain trends – those that remove consumers from local
consumer culture and immerse them even more deeply in
global consumer culture, and those that do the opposite.
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The need to study consumption communities, and
especially brand communities, in greater depth [3]-[8]. The
internet is accelerating the formation of consumption
communities, which are likely to reach a global scale. Brand
communities are facilitated by social media, which, by
enabling consumers to socialize and form groups of likewise-
thinking individuals, allows the formation of this new sub-
culture. Symbolic values are produced by individual
consumers and their social groups, who also define their
meaning. Indeed, the symbols attached to products and brands
would be meaningless without consumers’ social interactions.
Social interactions may lead to homogeneity in consumers’
societies. Brands, then, are shared ownerships in which
consumers co-create brand experiences and brand meaning,
evidencing a blurring of brand boundaries [31]. Online brand
communities are communities in which every member can
engage in online conversation, through which brand meanings
are dynamically co-created, reshaped, or reinvented.
Consumers participate online in the co-creation of brand
meanings, making brand communities participatory
experiences. Members of such communities develop
traditions, rituals, and even a sense of shared culture [32].
They share a common interest in, and loyalty to, the brand,
which unifies them in dynamic and iterative actions (dialogues
and interactions) on the internet. However, the questions arise:
do consumers tend to desire involvement in global brand
communities across countries when they are also attached to
the local culture? and how is symbolic meaning created
through social media? Online brand communities seem to play
important roles in strengthening global consumer culture in
developing countries, making these two questions areas of
significant interest for further research. Moreover,
technological development also allows for the rapid
development of e-commerce in developing countries where
strong local brands emerge, but share ownership may not be
limited to one country of origin. Future research needs to
explore whether ownership influences CB in developing
countries.
Last but not least, the COVID-19 pandemic provides
another interesting research context. The pandemic is
currently projected to last quite some time, and no party can
confidently predict when it will end. What is certain, however,
is that this pandemic is affecting CB and that these effects will
persist after the pandemic is concluded. It is quite possible that
as the pandemic grows longer, its impact on CB grows even
more profound. Future research will need to focus on how this
pandemic has changed (and continues to change) consumers’
predispositions towards foreign vs local products and brands.
Since the pandemic, consumption of certain products has
increased. Examples of such products include bicycles, plants,
and gardening tools. Consumers seem to be making more
ethical and environmentally friendly purchases, but they also
demonstrate a high degree of materialism: this consumption is
quite conspicuous, and consumers buy such products even
though their prices are far above normal. Moreover, the
tendency of ethnocentrism drives group consciousness and
feelings of cooperative energy and empathy to support
consumers’ social groups [33]. This was evident when the
COVID-19 pandemic hit Indonesia: calls were made in the
media, including on social media, for consumers to buy at
small stalls in their communities to help those businesses
survive the economic recession. This local purchasing
behavior benefits the nation on economic, social
(community), and environmental levels. Though buying local
is sometimes considered to overlap with green consumerism,
[34] argued that consumers with low incomes and poor
educations – which are the typical characteristics of
consumers in developing countries – are motivated to buy
local for social and economic benefits but not necessarily out
of environment concern. [35] reported that consumers in
developing countries that have a strong global culture trend
strongly towards materialistic and environmental values. They
prefer environmentally friendly products with global brands,
which they see as more environmentally friendly. These
products are sold at high prices but, at the same time, reflect
the consumer’s materialistic tendency. Further research needs
to explore the issues. Furthermore, the current pandemic has
raised Indonesian consumers’ health consciousness and
encouraged a tradition of maintaining health by consuming
local herbal and organic medicine (jamu). This reflects a
return by consumers to the local culture, which raises the
question: can this pandemic strengthen local culture and
reduce the impact of global consumer culture? Or can this
increased purchasing of local medicinal herbs simply be
attributed to their affordability and relative ease of access in a
time of economic recession? A final area worthy of
investigation is how young consumers, who grew up in the era
of market globalization and live in a global culture, have
behaved towards traditional herbal medicine during the
pandemic.
IV. CONCLUSION
This paper’s explorations of various theories and
constructs of consumer behavior identify several prospective
research questions that may guide future research directions.
These questions and directions were identified by critical
examinations of each theory and consideration of novel
contexts in the study of consumer culture. The author hopes
that these research avenues will lead to studies of each theory
that are sharper, deeper, and more focused but also permit the
integration of knowledge from adjoining disciplines (politics,
economics, history, etc.) to the study of consumer culture.
This shall lead to a deeper, better understanding of consumer
predispositions between foreign and local products and
brands.
ACKNOWLEDGMENT
The author acknowledges Miss Kyle (Cambridge
Proofreading & Editing Services LLC) for kindly
proofreading the paper.
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