Does Consumer Ethnocentrism Affect Purchase Intentions Of Chinese Consumers? Mediating Effect Of Brand Sensitivity And Moderating Effect Of Product Cues
| Date | 01 September 2008 |
| Pages | 54-66 |
| DOI | https://doi.org/10.1108/15587890880000491 |
| Published date | 01 September 2008 |
| Author | Yujie Wei |
| Subject Matter | Strategy |
Journal of Asia Business Studies FALL 2008
54
INTRODUCTION
The American Chamber of Commerce-China issues a White Paper
each year that reports the performance of American businesses in
China based on surveys of its members. The latest report (2005) indi-
cates that 83% of responding companies look at China not as a plat-
form to export cheap goods to the US, but as a growing marketplace
for US goods and services. The results of this 2005 sur vey indicate
that only 26% of American businesses that have been in China for less
than two years make money while about 52% of respondents break
even or experience a small loss (American Corporate experience in a
Changing China --- Insights from AmCham Business Climate Survey,
1999-2005, p.16). Many factors influence the performance of foreign
companies operating in China. On a macro level, the legal and politi-
cal environment, social and economic development, and cultural dif-
ferences all impact the performance of foreign marketers. On a micro
level, consumer characteristics including ethnocentrism, as well as
the marketing mix variables of foreign products have a tremendous
influence on the global marketers’ success (Balabanis and Diamanto-
poulos 2004; Bruning 1997; Klein, Ettenson, and Morris1998; Wall,
Liefeld, and Heslop 1991).
Based on the theory of ethnocentrisms (Shimp and Sharma 1987),
this study attempts to find which country’s products are preferred by
Chinese consumers and the reasons why Chinese consumers prefer
those products. This study also investigates what foreign products Chi-
nese consumers intend to purchase in the next five years and the major
concerns when they choose foreign products. Finally, insight is provid-
ed to foreign marketers on what Chinese consumers intended to spend
their disposable income in the next several years (2003 to 2007).
This paper specifically focuses on the impact of consumer ethno-
centrism on Chinese consumers’ intention to purchase foreign goods.
The purpose of this study is threefold. First, the primary goal is to
understand Chinese consumers’ ethnocentric tendencies in the post-
WTO era and their impact on the purchase intentions of Chinese
consumers to foreign products. Second, this paper investigates the
role of consumers’ brand sensitivity in Chinese consumers’ decision
to buy foreign products. Third, the study examines the relationship
between selected product cues and the consumers’ decision to pur-
chase imports. Finally, this study also investigates the influence of
other demographic variables such as age, gender, occupation, and
income on ethnocentrism.
Several contributions to global marketing are made. First, this
study employs the 17-item CETSCALE with Chinese consumers.
While CETSCALE has been used and tested in other countries and
cultures, it has not been widely used with Chinese consumers (Klein
et al used only 6 items of the scale). Second, most previous research
has focused on a product’s country of origin, an extrinsic cue only;
this study also includes intrinsic product cues such as perceived
quality, performance, price, variety, after-sale service, and packaging.
Further, the data for this study were collected after China’s entry into
WTO, which has been considered a watershed event in the develop-
ment of the Chinese economy. Consumer preferences for different
Does Consumer Ethnocentrism Affect Purchase Intentions Of Chinese
Consumers? Mediating Effect Of Brand Sensitivity And Moderating
Effect Of Product Cues
Yujie Wei
The University of West Georgia
absTRaCT
This paper studies how Chinese consumers respond to foreign goods in the post-WTO era. Specifically, it examines brand sen-
sitivity as a mediator and product cues as moderator of purchase intention. Additionally, it examines consumer preferences
for different products and consumption plans for the subsequent five years. The survey sample is drawn from a population of
foreign product users from 34 cities in 18 provinces in China. Results provide evidence that brand sensitivity mediates the relationship
between consumer ethnocentrism and purchase intention; product cues moderate the effect of ethnocentrism on purchase intention.
As the first study to link consumer ethnocentrism directly to brand sensitivity and purchase intention, this research provides some
managerial implications. Global marketers can offset the negative effect of ethnocentrism by emphasizing brand image of its products,
taking advantage of specific product cues, or by providing more comprehensive after-sale service to reduce the perceived risk of
purchasing imports. Also, price is still a hurdle that prevents Chinese consumers from mass consumption of foreign products. Global
firms should not overestimate the purchasing power of Chinese consumers. This study represents a “snapshot” of Chinese consum-
ers’ decision making at a time when their economic system is undergoing rapid change.
Keywords: Consumer Ethnocentrism, Brand Sensitivity, Product Cues and Purchase Intention
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