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Society for Consumer Psychology

Effects of Brand Local and Nonlocal Origin on Consumer Attitudes in Developing Countries
Author(s): Rajeev Batra, Venkatram Ramaswamy, Dana L. Alden, Jan-Benedict E. M.
Steenkamp, S. Ramachander
Source: Journal of Consumer Psychology, Vol. 9, No. 2, Cultural Psychology (2000), pp. 83-95
Published by: Society for Consumer Psychology
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JOURNALOF CONSUMERPSYCHOLOGY,9(2), 83-95


Copyright? 2000, LawrenceErlbaumAssociates, Inc.

Effects of BrandLocal and Nonlocal Originon


ConsumerAttitudesin Developing Countries
Rajeev Batra
School of BusinessAdministration
Universityof Michigan

VenkatramRamaswamy
School of BusinessAdministration
Universityof Michigan

Dana L. Alden
College of BusinessAdministration
Universityof Hawaii at Manoa

Jan-BenedictE. M. Steenkamp
Departmentof Marketing
TilburgUniversity,TheNetherlands

S. Ramachander
Academyfor ManagementExcellence
Madras,India

This studytested whether,amongconsumersin developingcountries,brandsperceivedas having a nonlocalcountryof origin,especially from the West, are attitudinallypreferredto brands
seen as local, for reasonsnot only of perceivedqualitybut also of social status.We found that
this perceivedbrandnonlocalnesseffect was greaterfor consumerswho have a greateradmiration for lifestyles in economically developedcountries,which is consistentwith findings from
the culturalanthropologyliterature.The effect was also foundto be strongerfor consumerswho
were high in susceptibilityto normativeinfluenceandfor productcategorieshigh in social signaling value. This effect was also moderatedby productcategoryfamiliarity,but not by consumerethnocentrism.The results,thus, suggest thatin developingcountries,a brand'scountry
of originnot only serves as a "qualityhalo"or summaryof productquality(cf. Han, 1989), but
also possesses a dimensionof nonlocalnessthat,amongsome consumersandfor some product
categories,contributesto attitudinalliking for status-enhancingreasons.

Consumers in developing markets are increasingly faced


with a choice between older local brands and newer
nonlocal or foreign brands. How they make this choice is
obviously worthresearching.Scores of studies have already
documented the ways in which consumers use a brand's

Requestsfor reprintsshouldbe sent to RajeevBatra,4209F Business AdministrationBuilding, School of Business Administration,University of


Michigan,Ann Arbor,MI 48109-1234. E-mail:rajeevba@umich.edu

countryof origin (CO) as a cue in inferringits qualityandacceptability (Baughn & Yaprak, 1993; Bilkey & Nes, 1982),
and this researchought to help us understandhow consumers in developing countries make this choice between local
and nonlocal brands.However, most analyses of CO effects
have only used data from U.S. or U.K. consumers (see review in Heslop & Papadopoulos, 1993). As a result, we are
left with little theory to predict how and why consumers in
developing marketschoose between older, local brandsand
newer, foreign or nonlocal brands. To enhance our under-

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BATRA, RAMASWAMY,ALDEN, STEENKAMP,RAMACHANDER

standingof such processes in developing versus developed


countrysettings, the following studytested severalhypotheses regardingthe psychological mechanisms that underlie
how a brand's origin, whether local or nonlocal, affects
brandpreferenceandchoice in India,one of the world's fastest growing consumermarkets.
Academic research on CO effects is now over 30 years
old. Much of the initial researchin this areasoughtto understand risk-reducing biases used by Western consumers
when evaluating products from, among others,
less-developed and, therefore,"risky"countriesor regions.
Schooler and Sunoo (1969), for example, studied biases
among U.S. consumers against countries in Asia or Africa.
Given this orientation,the CO literaturehas typically examined the role of the CO as a "halo"constructthat influences
productattributequality beliefs, or as a constructthat summarizes beliefs about productquality, and only then influences attitudesor purchaseintentions(Han, 1989; Heslop &
Papadopoulos,1993). Only recentlyhas the literaturebegun
to examine nonquality-related,direct effects of a brand's
CO on brandattitudesor purchaseintentions.For example,
Klein, Ettenson, and Morris (1998) found among Chinese
consumersan effect for country-specific animosity that reduces brand purchases from Japan, independent of judgments about the quality of those brands.
In this study,we hypothesizedthatCO effects in developing countriesoperatedifferentlythansuggestedin the literature, which is largely based on developed country data.
Specifically, we argue that, in developing countries, a
brand's CO affects perceptions of nonlocalness. Such
nonlocalnesscan be very favorable,especially if the CO has
a Westernor developed CO (e.g., the United States,Europe,
or Japan).We believe thatthe nonlocaleffect operatesin addition to consumer assessments of the brand's quality ratings and is motivated primarily for the purpose of status
enhancement.We also examinedthe extent to which the impact of a nonlocal CO is moderatedby a consumer'sadmiration of the lifestyles in economically developed countries
(EDCs). In addition, we studied other moderatingfactors,
such as consumer ethnocentrism and familiarity with the
productcategory.Ourstudycovered a wide rangeof product
categories, brands,and models and used consumerperceptions of a brand'slocalness and productquality, ratherthan
relying only on researcherimpressions.
LITERATUREREVIEWAND
HYPOTHESES
Reviews of the scores of articles that have appearedon the
topic of CO effects can be found in Bilkey and Nes (1982),
BaughnandYaprak(1993), andothers.In brief,a brand'sCO
serves as an extrinsiccue (along with price and brandname)
thatsupplementsthe use of intrinsiccues (perceptionsof design, performance,etc.). Economic, cultural, and political

perceptions of the CO in question determine its effect on


brand evaluation (Han, 1989). Research on the CO (e.g.,
Parameswaran& Pisharodi,1994) has shown thatCO image
has multipledimensionsor facets (such as the strengthof its
economy, natureof its politicalsystem,technologicalcompetence, etc.). Nonetheless, previously studiedCO effects primarily concernedits effect on a brand'spresumedlevels of
intrinsicqualityandperformanceand,therefore,its desirability (Bilkey & Nes, 1982; Han, 1989). These effects of the CO
have been foundto varyacrossproductclasses andconsumer
types andtend to be smallerwhen othercues are availableto
the consumer(Papadopoulos,1993).

Evidence of Generalized Preferences for


Nonlocal Brands in Developing Countries
Anotherstreamof the literaturethatis more anthropological
in nature,however, suggests that consumers in developing
countriesalso see the CO as determininga brand'sdesirability for symbolic, status-enhancingreasons (status preference), in additionto suggestingoverallquality.Suchgeneralized statuspreferencefor nonlocal (foreign)brandshas been
reportedin developing countries,such as The People's Republicof China(Sklair,1994),Vietnam(Schultz,Pecotich,&
Le, 1994),Nigeria(Arnould,1989), the DemocraticRepublic
of Congo (Friedman,1990), Zimbabwe(Burke, 1996), Romania and Turkey (Bar-Haim, 1987; Ger, Belk, & Lascu,
1993), and Ethiopiaand Peru (Belk, 1988, p. 117).
In discussing Romania,Ger et al. (1993) noted that
Statusgoodsarenearlyinevitablyforeign.Thiswastruebeforetherevolution,butthenscarcitymadesuchgoodsvery
hardto acquire.Nowit is morea matterof theirgreatercost,
plustheircontinuedassociationwithforeignlifestyles,that
impartsstatusto theirowners.(p. 104)
ConcerningTurkey,they continued,"Consumptionof foreign
productsis highly desirable ... The synonymityof progress
with ever-presentWesternizationwhets the appetitefor the
now-availableforeign products... status brandsare mostly
foreign"(p. 105). Sklair(1994) wrote of Chinese consumers
that"everythingforeignhadan automaticcachet"(p. 269). Of
Vietnam,Schultzet al. (1994) reported"westernbrandfavoritism ... supplantslocal products"(p. 248). Finally, Burke
(1996) wroteof Zimbabwethat"foreignitems(had)an association ... with elite power and privilege"(p. 181).
Despite the strengthof this research finding in the cultural anthropologyliterature,this status preferencefor foreign (especially Western) goods among consumers in
developing countries appearsto have been largely ignored
in the standardCO literature.Hence, additionalresearchon
its existence, as well as its antecedentsandconsequences, is
clearly needed. Neglect of this effect in the CO literature
could be because this effect seems likely to be much stron-

BRAND
LOCAL
ANDNONLOCAL
ORIGIN 85
ger in developing than developed countries, where most of
the CO researchhas originated.

Why This Effect Is Stronger in


Developing Countries
All societies have processes of social comparison,ways of
negotiating status and prestige, and markersof class. Researchersagree thatthe productsand brandschosen by consumersoften serve nonutilitarianfunctions,such as symbolic
acquisitionand communicationof social distinctions,particularly status (Douglas & Isherwood, 1979). Such concern
with status display is even more importantin developing
countries,where interpersonalrelationshipsare of primeimportance(Geret al., 1993, p. 105) andwhere,becauseof economic transition,income disparitiesand status mobility are
high (Belk, 1988, p. 112; Kottak, 1990, pp. 49, 58). Indeed,
times of transitionand social mobility magnify the tendency
to claim differentialstatusthroughthe brandsone consumes
(Luckmann& Berger, 1964). Developmenteconomists,such
as James (1993), arguedthat periods of economic development increase the importanceof positional values, oriented
towardconspicuousconsumptionand statusdisplay.
Given this greatersalienceof statusmarkersin developing
societies, several explanationsfor nonlocal productsacquiring higher statusthan local productscome to mind. First, in
developing countries, imports are usually more expensive
and more scarce thanlocal products,makingthem more desirablefrom a referencegroupstandpoint(Bearden& Etzel,
1982). Writingof the Congo, Friedman(1990) said,
FortheCongolese,identityis verymuchoutsideof... thesoandthelatciety.Torealizeoneselfis tobecome"ungrand,"
initshighestforminthebestof theWest,the
teris manifested
mostmodemandlatestdesignandtheleastaccessible[italics
of
added]... Thepracticeof identityhereis theaccumulation
otherness.(p. 324)
Second, consumersin developing countriesare relatively
less affluentthanthose in developed countries,and this can,
quite naturally,create a sense of insecurity and inferiority
(e.g., on the inferioritycomplex of Brazilians, see Kottak,
1990, p. 38; and for comments about Indians, see Singh,
1982, p. 23). Consumersin developing countries,thus, often
seek to emulatethe apparentlyglamorousWesternconsumption practicesand lifestyles andpurchasethe brandsthey are
exposed to throughmovies and TV channels,Westerntourists, their own workersgone overseas, and their own travel
abroad.Because the productionand control of popularcultureresides in the affluentcore countriesof the West (especially the United States), the flow of media images is mostly
fromthe economic center(the West) to the periphery(the developing world), making brands that symbolize affluent
Westernlifestyles seem highly desirable.Appadurai(1990,

p. 299) identifieddifferentdimensionsof this global cultural


flow, including "mediascapes"("large and complex repertoires of images, narrativesand 'ethnoscapes' to viewers
throughoutthe world,in which the worldof commoditiesand
the worldof 'news' andpolitics areprofoundlymixed");Ger
andBelk (1996) added"consumptionscapes"
to his list. Belk
(1988) wrote, "Besidesthe brandsthemselves, the consumer
desire for these brandsis one of the developed worlds' chief
exports"(p. 117). This processhas been labeledby some as a
noncoerciveform of "culturalimperialism";see Tomlinson
(1991) for a sophisticatedcritique.
Third,Hannerz(1990) pointed out that the desire to display competencewith regardto alien culturesis an important
motive behind the growth of "cosmopolitan"elites in many
developing countries. Owning foreign brandsis arguablya
way of displaying such competency. Belk (1988) made the
case that,althoughonly such elites may actuallyconsume in
the Westernmanner,the desire to do so is widespread,both
because of these outside influences and in imitation of the
Westernized domestic elites in these counties. Arnould
(1989) observedof Nigeria:
theimagined
of theWestern
the
consumer,
Adopting
trappings
of the supranational
Nigerianseeksto enterthe community
oronlyin his orherimagination
...
elite,if onlytemporarily
emulationof imaginedWesternconsumerbehaviorthrough
andaspirations
goodsencodingnewexperiences
prevailsas
of newroles.(pp.259-260)
partof theirsearchforlegitimacy
Finally,Venkateshand Swamy (1994, p. 207) arguedthat
consumersin developingeconomies today wantto be able to
participatein the global consumercommunity,living in this
"imaginedworld"(cf. Appadurai,1990), in part,throughaccess to productsfrom all over the world. However, not all
consumershave the powerto do so, leadingto an aspirational
yearningfor many foreign-madebrands.In Romania,for instance, only the nomenclatura,individualswho could travel
to the West, could acquiresuch goods. Hence, possession of
these goods (as well as knowledge of Westernpopularculture)was a source of greatstatus.The fact thatgovernments
andtraditionalinstitutionsoften criticizesuchcorrupting,hedonistic,alien values serves only to makethemeven moreattractive to younger consumers, who see these goods as
symbols of status,affluence,modernity,individuality,rebellion against traditionalinstitutions,and freedom of choice
(Bar-Haim,1987). Very importantfor our presentpurposes,
one consequenceof attitudeis a loss of confidence andpride
in local goods andmaterialculture,and (at least for awhile) a
disregardfor local products(Ger & Belk, 1996, p. 283).

The Indian Situation


These factorsare even more pronouncedin India,the developing countryin which this study was conducted.Although

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BATRA, RAMASWAMY,ALDEN, STEENKAMP,RAMACHANDER

any discussionof "nationalcharacter"is necessarilyan oversimplification,some generalizationsmay nonethelessbe offered. India has always had a very hierarchy- and status-conscious society (Kakar, 1981, p. 124), which began
with the caste system and has now evolved into more of a
class-basedsystem(Venkatesh& Swamy, 1994, p. 54). Thus,
therehas alwaysbeen a searchfor signs andmarkersof status
and class, and successful Indiansfrequentlylike to display
their affluence through ostentatiousdisplays of the goods
theyown (Singh, 1982,p. 27). India'sclosed economy,which
only recently opened to the outside world, severely limited
importsof Westernconsumergoods and made them scarce
andexpensive. Thus,it was naturalfor such goods to acquire
such a symbolic status-givingrole.
Ger et al. (1993, p. 106) pointedout thatdemandfor foreign goods also goes up whena nationorculturegoes through
a periodof lowered confidence or esteem, such as happened
recentlyin Easternand CentralEurope,with the "defeat"of
communismandstatism.Indiahas long hada historyof being
colonized by foreign rulers, most recently the British, and
many social commentatorshave claimed that Indians still
have an "inferioritycomplex" and a desire to imitate foreign-originproductsand people. Tully (1991) wrote, "Colonialism teaches the native elite it creates to admire-all too
often to ape-the ways of their foreign rulers.That habit of
mind has survived in independentIndia" (p. 3). Naipaul
(1964) said of India:
Itsmimicryis bothlessandmorethanacolonialmimicry.Itis
thespecialmimicryof anoldcountrywhichhasbeenwithout
fora thousandyearsandhaslearnedto
a nativearistocracy
butonlyatthetop... no peopleare
makeroomforoutsiders,
as capableof mimicryas theIndians.(p.60)
This meaning transferof status and yearning to scarce
Westernbrandshas been magnified by (a) the large number
of Indians with connections to the West (such as relatives
living or workingthere, or travelingthere);(b) exposure to
Westerntourists;(c) the widespreadknowledge of English
and thus greatercomprehensionof English-languagemedia
inflows; and more recently, (d) the very influential role
played by TV (including satellite and cable channels) as a
culturalandentertainmentmedium,disseminatingexposure
to Westernlifestyles.
In addition,with the recentopeningup of its marketsand
the changesin women's roles, Indiais now undergoingvery
significantchanges, includingrising incomes and changing
expectationsandtastes (Venkatesh& Swamy, 1994, p. 207).
As pointed out by Luckmannand Berger (1964), times of
transitionand social mobility magnify the tendencyto claim
differentialstatusthroughthe brandsone consumes.As a result, morethanever before,todayIndianconsumersyearnto
be equal participantsin the global consumereconomy, with
the power to acquirebrandsmade from all over the world,
giving foreign-madeproductsa cachet often not known in

their home countries. Venkatesh and Swamy (1994) also


claim that,becauseIndianconsumersarelong used to andsophisticatedaboutsymbolic religiousiconography,Indiaprovides "a fertile soil" for the iconic images of brands.
For all these reasons,Indiaseems to be a highly appropriate locale for testingthe intrinsicappealof a brand'snonlocal
origin.Resultsobtainedin Indiaareunlikelyto generalizeexactly to all developingcountriesbecausetherewill obviously
alwaysbe differencesin how consumersin differentdeveloping countriesrespondto the local versus nonlocal natureof
brands.However, one can reasonablyargue that the same
general phenomena are likely to recur across developing
countriesas they go througha process of economic change
and modernization(Westernization).Both sets of processes
usually lead to greaterindividualsocial mobility; (initially)
greaterincomeinequality;a declinein traditionalinstitutions,
such as religion and extended families; and the adoptionof
newer (more rationalisticand scientific) technologies, practices, and viewpoints (for discussions of modernizationand
Westernization,which are not identical but do share many
similarities,see Inkeles & Smith, 1974; Srinivas, 1966). As
previouslydiscussed at length,modernandsophisticatedoften come to be seen as connotedby the adoptionof Western
goods (Belk, 1988, p. 117). However,suchtrendsarenotirreversible or permanent.Some of this preferencefor foreign
productsis due to theirnovelty and to the desire of inexperienced consumersto buy betterknown and more trustworthy
brands. As consumers become more knowledgeable, they
may often returnto local goods, and thereis usually a "mixing-together"of local mores and foreignconsumptionhabits
(Arnould,1989; Friedman,1990; Ger& Belk, 1996, p. 285).
As Appadurai(1990) put it, the globalizationof cultureis not
always the same as its homogenization.

Interactions With Admiration of Lifestyle in


Economically Developed Countries
If consumers in developing countries tend to evaluate
nonlocal brands more favorably for the reasons just discussed, this effect ought to be strongerthe greaterthe degree
to which the brandis seen as being nonlocalinsteadof local.
Inthis study,we measurednonlocalnessas theperceptionthat
the brandis marketedlocally andin foreigncountries,instead
of only locally.1Althoughsome brandsareclearlylocal (e.g.,
Taaza tea, in India), and others clearly nonlocal (e.g.,
Coca-Cola),many have a "hybrid"origin (e.g., BPL-Sanyo
TV sets, in India).Forthis reason,we measurednonlocalness
on an intervalscale, althoughfor brevitywe refersimply to a

In India, the site of this research-as in most other developing countries-local-origin brandsare almost withoutexception sold only domestically, so thatthe fact thata brandis sold not only locally butalso in manyforeign marketsclearly implies nonlocal origin.

BRAND LOCALAND NONLOCAL,ORIGIN

brand'slocal versus nonlocal origin. A brandis conceptualized as being more nonlocal thanlocal if it is perceivedto be
marketedandconsumedin othercountriesas well, notjust in
thatlocal market.We thusfirst test our maineffects hypothesis concerningperceived nonlocalness:
H1: A brand'sperceiveddegreeof nonlocaloriginwill
be significant in shaping consumer attitudestoward it, in a positive direction.
More important,it follows from the aforementionedtheoretical development that any such main effect of a brand's
nonlocalorigin(Hypothesis 1) shouldvaryin strengthacross
consumersin developing countriesdependingon theiradmirationof lifestyles in EDCs. Attitudestowardnonlocalbrands
ought to be higherfor those who admireEDC lifestyles than
for those who do not. Past researchhas found a strongertendency to favor foreign CO productsamong consumerswho
hadmorefavorablesocial contactwith foreignersandamong
those who have a greaterperceivedsimilarityof interestsand
beliefs with the foreign CO in question (Heslop &
Papadopoulos,1993, p. 63). By extension, EDC admiration
ought to lead to more positive attitudestowardbrandswith
higherperceived nonlocal CO.
H2: A consumer'sEDC admirationmoderatesthe effect of perceivednonlocalnessof a brand'sorigin
on brandattitudes.As EDC admirationincreases,
the effect of perceived nonlocalness of the brand
on brandattitudewill become more positive.
Other IndividualDifference Characteristics
Moderating the Effect of a Brand's Origin
Ethnocentrism. Several CO researchers have found
that many respondents in their studies preferreddomestic
products to foreign ones, although this bias varied across
consumersegments andcountries(Heslop & Papadopoulos,
1993, pp. 44, 46). In the sociological literature,the construct
of ethnocentrismdescribes the tendency of people to reject
people who areculturallydissimilar,and at the same time to
favor those who are more like themselves. Drawing on this
literature, Shimp and Sharma (1987) developed the construct of consumer ethnocentrism and argued that highly
ethnocentricconsumerscan be expected to avoid buying importedproductsbecause doing so would be unpatriotic,hurt
domestic jobs, and so on. In contrast,nonethnocentricconsumersshouldevaluateforeign productson the product'sintrinsicmerits,withoutdowngradingthem simply because of
their foreign origin. In a variety of studies, Shimp and
Sharma showed that U.S. consumers who scored high on
ethnocentrism (measured on their CETSCALE) were indeed more favorably biased toward buying local products
andmore opposed to buying productsmanufacturedin other

87

countries. Similar effects were shown by Netemeyer,


Durvasula,and Lichtenstein(1991).
Despite such research, it is not clear that, among more
ethnocentricconsumers,the "homeproductbias"for a brand
identified with a particularCO will also exist for a brand's
generalized degree of nonlocal origin. An issue recently
raised in the literatureconcerns the possible diminutionof
CO effects as multinationalcompanies (e.g., Coca-Cola,
IBM, Philips, Sony) develop and leverage global brand
names, marketingthe same (or very similar)productsunder
the same brandname in various markets,with these brands
manufacturedlocally or regionally. This raises the question
of whetherCO-like effects persist even if consumers see a
brandas havingsuch a nonspecificor generalizedforeignorigin, insteadof identifyingit uniquelywith one particularCO
(Papadopoulos,1993, p. 17). Samiee (1994) wrote,
Totheextentthatmarketsareglobal,theCOmaybe lessimportantin thechoiceprocess... in aneraof globalsourcing,
andmarketing,
manufacturing
coupledwithabetterinformed
audienceinfluencedwithincreasedlevelsof globalcommunications,it is increasinglydifficultto preciselydefinethe
COof products.(p. 594)
It could thus be arguedthat the reduced identificationof a
brandwith a particularCO might reduce ethnocentricsentiments againstit.
Onthe otherhand,it could be arguedthateven brandshaving thisdiffuse nonlocalimage areevaluatedby consumersin
termsof theirassociationwith some primaryCO-for example, Coca-Cola with the United States, or Sony with Japan
(Papadopoulos,1993). Papadopoulospointed out that even
thoughmany of these productsare manufacturedin multiple
locationsacrossthe world,they arestill often positionedwith
respectto theirnationalorigins(e.g., Volkswagencars).Some
of these nationalorigins are even fictitious (e.g., Reebok, a
U.S. shoe company, uses the British flag). Tse and Gorn
(1993) found, in a limited experimentalstudy, that CO remaineda salientandenduringfactorin consumerevaluations
even in the presenceof a global brandname. Thus, given the
weight of previousresearchon this issue, we hypothesized,
H3: A consumer'sethnocentrismmoderatesthe effect
of perceived nonlocalness of a brand'sorigin on
brandattitudes.As ethnocentrismincreases, the
effect of perceived nonlocalness of the brandon
brandattitudewill become less positive.
In addition, this moderating effect of ethnocentrism
should be less strong among consumers who admire EDC
lifestyles than among those who do not. Among the former
category of consumers,their desire to buy nonlocal brands
(given their high EDC admiration),and their desire to buy
only local brands(given their high ethnocentrism),should
offset each other. For consumers who do not admire EDC

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BATRA, RAMASWAMY,ALDEN, STEENKAMP,RAMACHANDER

lifestyles, however, these two forces work in concert, each


working against the purchase of brands perceived to be
nonlocal. Therefore, we hypothesized the following
three-way interaction between ethnocentrism, perceived
brandlocal ornonlocalorigin,andadmirationof the lifestyles
in EDCs:
H4: The effects of consumerethnocentrism,in making
attitudesmore positive for brandsperceivedas local, will be less strongamong consumerswho admire lifestyles in EDCs than among consumers
who do not.

Susceptibility to normative influence. As discussed,


it has been arguedthatnonlocalbrandsare preferredover local-onlybrandsamongconsumersin developingcountriesfor
statusreasonsbecausethe goods' origingives theman "origin
cachet"among the consumer'sreferencegroups (Friedman,
1990; Hannerz, 1990). In the CO literature,Heslop and
Papadopoulos(1993, p. 71) pointedout thatCO effects have
beenfoundto be greaterwhenconsumersarelookingfor high
statusproducts.If this is true,it would seem thatthe kinds of
consumerswho place a premiumon a brand'snonlocalness
largelybecauseof the status(self-imageand referencegroup
approval)benefitsshouldbe those who are more sensitiveto
what theirreferencegroupsthink of them. This variablehas
neverbeen testedin the CO researchcontext.
Reference groups are groups used as standards for
self-appraisalor as sources of personalnormsand attitudes.
Because we were concernedwiththe addedvalueof a brand's
origin that may arise from its ability to enhance the user's
self-image and help the user gain social acceptanceand approbation,we were concernedonly with normativereference
group effects. Susceptibility to such normative reference
groupinfluencehas been conceptualizedandmeasuredmost
clearly by Bearden,Netemeyer, and Teel (1989) throughan
individual difference construct called the susceptibility to
normativeinfluence (SNI). It would seem logical that consumers who prefer nonlocal brandsbecause of their "reference group appeal"should also be more susceptibleto such
normativeinfluence.
However,the moderatingeffects of SNI shouldonly apply
whenthe ownershiporuse of thatproductcategoryis socially
visible, and it thus has high social and declarative value
(sometimesreferredto as "badge"products).Earlierresearch
on moderatorsof reference group influence has found that
such influenceis strongerwhen the productcategoryis more
conspicuousandits ownershipor consumption'aremorepublicly visible (Bearden & Etzel, 1982). Thus, CO effects
should be strongerin productcategoriesthat serve a greater
social signaling function,among high SNI consumersmore
sensitiveto this social signalingfunction(i.e., a three-wayinteractionon brandattitudesshould occur betweenperceived

brandorigin, SNI, and category social signaling value). We


thereforehypothesized,
H5a: A consumer's susceptibility to normativeinfluence moderates the effect of perceived
nonlocalness of a brand's origin on brandattitudes,for productcategoriesserving a social signaling function. For such productcategories, as
the consumer susceptibility to normativeinfluence increases, the effect of perceived
nonlocalness of the brandon brandattitudewill
become more positive.
In addition,these moderatingeffects of SNI shouldalso be
strongeramongconsumerswho display a greateradmiration
of the lifestyles in EDCs becausethereferencegroupsof consumerswith such high admirationfor EDCs should place a
higher value on nonlocal brandsthan on local brands.Thus,
we also hypothesizeda three-way interactionbetween perceived brandorigin, SNI, and EDC lifestyle admiration:
H5b: Among consumershaving a high admirationof
the lifestyles in economically developed countries,a consumer'ssusceptibilityto normativeinfluence moderates the effect of the perceived
nonlocalness of a brand's origin on brandattitudes. For such consumerswith high admiration
for EDC lifestyles, as their susceptibilityto normative influence increases, the effect of perceived nonlocalness of the brandon brandattitude will become more positive.

The moderating role of product category familiarity.


As arguedpreviously,a key reasonwhy many consumers
in developing countriesprefernonlocal over local brandsis
thatthe formerconveys higherstatus.It seems reasonablethat
thecontributionof a brand'soriginto brandattitudesfor these
reasonsshouldbe moderatedby some of the samefactorsthat
affect the contributionof otherextrinsiccues (attributessuch
as priceor brandnamethatarenotpartof the physicalproduct
itself; cf. Rao & Monroe, 1988).
Generallyspeaking,intrinsiccues (suchas designor performance)havea morepowerfuleffect on qualityjudgmentsthan
do extrinsiccues,andextrinsiccuesareusedmoreoftenin product evaluations when intrinsic cues are not available
(Steenkamp,1989).The literaturealso suggests,however,that
extrinsiccues are of greatersignificancewhen the consumer
feels less abletojudgetheproduct'sorigin-freequalityandthus
feels moreuncertainabouthow to choose brandsin thatcategory.Thiscouldarisebecauseeithertheconsumerlacksthenecessaryfamiliarityand expertise(Rao & Monroe,1988) or the
productcategoryis suchthatit is hardtojudgeobjectivequality.
Because nonlocal origin is clearly an extrinsic cue, it,
therefore,shouldbe usedmoreoften whenconsumersareless

BRAND LOCAL AND NONLOCALORIGIN

familiarwiththe productcategoryand,thus,less likely to rely


on quality alone in makingjudgments. This expectation is
supportedby previous researchon single-countryCO cues
(Han, 1989). Similar results were found by Maheswaran
(1994): Novices used CO informationmorethandid experts,
using them even when the attributeinformationwas unambiguous,a patternsimilarto the usage of otherkindsof stereotypical information.Thus:
H6: Consumerusage of a brand'sdegree of perceived
local or nonlocal origin as an attitude-determining
cue will be greaterwhen the consumeris less familiar with the productcategory.
Note thatanotherproductcategorycharacteristic,
its social
signalingvalue, was hypothesizedearlier(Hypothesis5a) to
have a three-wayinteractionwith the brand'sperceivedorigin
andwitha consumer'sSNI in shapingbrandattitudes.Note also
thata productcategory'slevel of perceivedriskwill be usedlater
as a controlvariablein our analyses,althoughhypothesesregardingit will not be offeredbecausethis variablehas already
been studiedextensivelyin the CO literature(e.g., Heslop &
Papadopoulos,1993,p. 71;Lumpkin,Crawford,& Kim,1985).
METHOD
Data Collection
Although the use of probabilisticallyselected nationalsamples is clearly preferable, practical problems make using
large, quota-basedurban samples that overweight respondents with higher socioeconomic backgrounds common
practice in internationalresearch. For similar reasons, the
data for this study were collected in the two largestcities in
India(BombayandDelhi) by a marketresearchcompanythat
used personal,at-homeinterviewsamong 508 urban,mostly
middle-classwomen. The respondentswere selected with the
use of quota sampling (to meet age and income categoryrequirements) from multiple geographical locations within
each city and were divided evenly between the two cities. A
Hindiversionof the questionnaire(verifiedto matchthe English version via back translation)was used when the respondent was not comfortablewith the English version, and 25%
of the interviews were back checked by supervisors.Seventy-threepercent of the women were between 25 and 54
yearsof age, 100%hadcompletedhigh school (53%hadeducation beyond high school), and 85% were married.
Each respondentanswereda questionnairethat included
questions(amongothers)on backgrounddemographics,attitudes and psychographics,and "individualdifference variable" scales (including consumer ethnocentrism,SNI, and
admirationof lifestyles in EDCs). Then,for each of two product categoriesperrespondent,questionswere askedon product category familiarity. For each product category, each

89

respondentthenansweredquestionscoveringbrandattitudes,
brandimage,brandquality,andthe brand'sperceivedlocal or
nonlocal origin about three brands. Questions were also
askedon priorbrandusage, brandfamiliarityandavailability,
andproductcategoryrisk,for use as covariates.Details on the
measuresused in our analysis are presentedlater.
Across all respondents,datawere collected on eight product categories,four brandsper productcategory.Because of
space or time limitations,the productcategorieswere rotated
across questionnaires,in sets of two categories for any one
questionnaire.For each productcategory, the brandswere
also rotatedacross questionnaires.As a result, each respondent for a particularproductcategoryansweredquestionson
two fixed brandsand on a third brandthat was alternated
across respondents.2Thus, whereas each respondent only
provideddata on three brands,data on four brandsper category were collected across all respondents.This balancing
androtationwere neededto keep each respondent'stime demandswithinreasonablelevels.
The totalset of productcategorieswas createdpurposively
to provide variance across constructsof interest:consumer
familiaritywith the productcategory;productcategorysocial
signalingvalue;level of technologyused in the categoryand,
thus,perceivedrisk;andthe level to which local tastepreferences mightbe expectedto vary fromthose of othercultures.
Using these criteria, we selected eight product categories:
laundry detergents, wristwatches, soft drinks, light bulbs,
toothpaste,washing machines,tea, and TV sets. Analysis of
the mean levels and variancesof these variablesacrossthese
eight productcategories(omittedfor brevity)showed thaton
most characteristics(especially perceivedrisk andsocial signalingvalue), thereappearedto be significantvariationof individualcategoryratingsrelative to the mean.
As already mentioned, each individual respondentonly
answeredquestionson two productcategories.Fourbrandsin
each product category were selected and a total set of 32
brandswas createdto providevariancein the perceivedlocal
or nonlocal origin constructof interest. Thus, some brands
were clearly nonlocal (e.g., Ariel detergent, Coca-Cola,
Timex watches,Philips TV sets, Taster'sChoice tea), others
were clearly local (e.g., Nirma detergent,Taaza tea, Limca
soft drinks,HMT watches), whereasothers were of blended
or hybrid origin (e.g., TVS-Whirlpool washing machines,
BPL-Sanyo TV sets, Lehar-Pepsi soft drinks),and so on.
Measures
The items used in our scales (see Table 1 for full details)
were drawn to the maximum extent possible from scales

Combiningdata from multiplerespondents,when each respondentprovides dataon only a subsetof stimuli, is standardresearchpracticewhen the
numberof stimuli for any one respondentwould otherwisebecome huge, as
in blocked designs in conjointanalysis (Louviere, 1994).

90

BATRA, RAMASWAMY,ALDEN, STEENKAMP,RAMACHANDER


TABLE 1

Measures
Scale
Consumerethnocentrism(a = 0.63; M = 4.81, SD = 1.27)

Susceptibilityto normativeinfluence (a = 0.59; M = 3.70,


SD = 1.26)

Admirationof economically developedcountrieslifestyles


(M = 5.24, SD = 1.42)
Brandattitudes(a = 0.67; M = 5.23, SD = 1.39)
Perceivedbrandlocal/nonlocalorigin (a = 0.63; M = 4.19,
SD = 1.49)

Brandquality(M = 5.15, SD = 1.44)


Brandimage (a = 0.69; M = 4.90, SD = 1.37)
Brandfamiliarity(a = 0.73; M = 5.48, SD = 1.44)
Brandavailability(a = 0.64; M = 5.83, SD = 1.29)
Priorexperiencewith brand(a = 0.79; M = 3.48, SD = 2.05)
Categoryfamiliarity(M = 5.11, SD = 1.60)
Categoryperceivedrisk (a = 0.64; M = 4.79, SD = 1.54)
Categorysocial signaling value (M = 4.69, SD = 1.56)

Item
Purchasingforeign-madeproductsis un-Indian.
Indiansshouldnotbuyforeignproducts,becausethishurtsIndianbusinessandcausesunemployment.
A real Indianshould always buy Indian-madeproducts.
It is not rightto purchaseforeign-madeproducts.
If I want to be like someone, I often try to buy the same brandsthey buy.
Whenbuyingproducts,I generallypurchasethose brandsthatI thinkotherswill approveof.
To be sureI buy the rightproductor brand,I often observewhatothersarebuyingand using.
To what extent do you yourself admirethe lifestyle of people who live in more economically
developedcountries,such as the United States, WesternEurope,and Japan?
Dislike/Like.
I have a negative (positive) opinion of it.
I considerthis brandto be an Indian(foreign)brand.
I don't (do) thinkconsumersoverseas buy this brand.
This brandis sold only in India(all over the world).
This is a very poorly made (well-made)brand.
This brandhas a very cheap/poor(good/high) image.
This brandreally makes me look good (not too good) in frontof my friends.
Not at all (very) familiarwith it.
Never even heardof it (Know a lot of it).
This brandis easily (just not) availablefor me to buy.
I have seen (never seen) ads for it in Indianmagazines,radio,or TV.
Never triedit even once (Use it all the time).
I have no (extensive) personalusage experiencewith it.
I am not at all familiarwith this productcategory(Agree/Disagree).
It is (is not) a big deal if I make a mistakein choosing a (category).
A poor choice of (category)would (not) be upsetting.
Which (category)you select tells (doesn't tell) anythingabouta person.

Note. Almost all the scales have standardizedalphasabove 0.60, the level suggestedby Nunnally(1967) for scales still underdevelopment.

that have previously been validated in the literature, including consumer ethnocentrism(Shimp & Sharma, 1987)
and susceptibility to normative influence (Bearden et al.,
1989), as well as the levels of category perceived risk and
social signaling value (Laurent& Kapferer,1985). Unless
otherwise indicated, these used strongly agree and
strongly disagree endpoints. Admiration of the lifestyles
in economically developed countries was measured
througha single-item scale, "To what extent do you yourself admire the lifestyle of people who live in more economically developed countries, such as the United States,
Western Europe, and Japan?"(not at all or very much).
Viewing these countries or regions as part of one larger
group of economically developed countrieshas lots of precedent: "FirstWorld"characterizationcontinues in classifications by institutions, such as the World Bank.
For a brand'sperceivedlocal or nonlocalorigin,consumers ratedthe degree to which, "I considerthis brandto be an
Indian(foreign) brand,""I don't (do) thinkconsumersoverseas buy this brand,"and "Thisbrandis sold only in India(is
sold all over the world)." Because almost all India-made
brandsare only marketedwithin the country,the perception
thatIndiais only one of many marketsfor the brandclearly
suggests a non-Indianorigin for the brand.Brand attitudes

were measuredby using dislike or like andI have a negative


(positive) opinion of it.
Becauseof potentialquestionnairelength,it was notpossible for us to use the completescales for some of theconstructs
of interest,which we wouldhave preferredto do. The authors
of some of the originalscales have themselves used smaller
subscaleswhenconfrontedwith suchquestionnairelengthrestrictions(e.g., Shimp & Sharma,1987), and such subscales
have received supportfor their psychometricpropertiesand
validity(Netemeyeret al., 1991). In addition,such subscales
have been used by otherresearchers(e.g., Klein et al., 1998,
used only six of the original CETSCALEitems). Principal
components analyses were thus performedon data from a
pretestto identifya subsetof highly loadingitems fromthese
scales thatcould be used withoutloss of validity.Afterexamining these factor loadings, four items from CETSCALE
(Shimp& Sharma,1987) were selected thathada coefficient
alphaof 0.88 in the pretest,and threeitems thathad a pretest
alphaof 0.80 were selected from the originalSNI scale.
The items finally used in each scale, along with the internal consistency coefficients (standardizedalphas) as they
emerged in the final Indiandata, are in Table 1. Most items
used 7-pointratings,andscores for relevantitems were averaged in the case of multiple-itemscales. The meansandstan-

BRAND LOCAL AND NONLOCALORIGIN

darddeviations for the independentvariablesof theoretical


interestare also shown in Table 1. All pairwisecorrelations
betweenthem were below 0.20 (except for brandfamiliarity,
availability,and experience, which had higher correlations,
in the 0.24-0.48 range.)
Creation of Key Analysis Variables
Becausepriorresearchhas shownthatindividualsrarelyhave
full self-awareness about the source of their attitudes,it is
hard to conceive of consumers answeringvalidly and with
full self-awarenessany survey questionthat asks them what
effect CO cues have in shapingtheirbrandattitudes.This suggests the needto empiricallyestimatethese effects by looking
at the brandattitudedifferencefor a nonlocalbrandversusan
otherwise equivalent local brand, keeping everything else
constant.Because such an otherwiseexactly equivalentlocal
brand is going to be impossible to find a priori for every
nonlocal brandstudied,it becomes necessaryto statistically
control for other major, attitude-causingdifferences among
them, particularlyquality and image.
Using consumer ratings of their perceived quality and
image for such statistical control purposes, however, is
likely confoundedby the fact thatquality and image ratings
of these brandsmight themselves be subconsciously influenced by theirnonlocal versuslocal origin. This expectation
was confirmed in the Indiandata in which, across all 2,857
observations,the brand's image ratingcorrelated0.49 with
its perceived local or nonlocal origin, and its quality rating
correlated0.31 with its perceived local or nonlocal origin.
(Brand image and brandquality also correlated0.45 with
each other.) Because our key construct of interest is perceived brandlocal or nonlocal origin, these high correlation
coefficients threatenthe conceptualclarity of this vital construct (e.g., its discriminant validity from brand image).
They also introduce the potential for multicollinearitybecause perceived brand local or nonlocal origin correlates
much more with brandimage at 0.49 than with brandattitudes, the dependentvariable, at 0.34. The following steps
were taken to circumventthese problems:
1. Obtainthe ratingof each brand'sperceivedbrandlocal
ornonlocaloriginfromeach consumer(throughthe measures
describedpreviously).
2. Obtainfrom each consumerthe ratingof that brand's
quality,image, andattitudestowardthatbrandfor each brand
(these measureswere also describedearlier).
3. Use OLS brand-specificregressionsto statisticallyestimatethatportionof a brand'sraw(initial)qualityandimage
ratings that are explained by its perceived brand local or
nonlocalorigin andcalculatethe remainder(residual)not attributableto this perceivedbrandlocal or nonlocal origin.
4. Save these residuals as new variables named origin-free brandqualityor origin-freebrandimage.

91

Throughthis partialling-outprocedure,the correlationcoefficients between perceived brandlocal or nonlocal origin


and both the new origin-free brandquality and origin-free
brandimage variableswere reducedto zero. This maximized
the discriminantvalidityfor these two new origin-freequality
and image variablesfrom perceived brandlocal or nonlocal
origin. In addition,the correlationcoefficient of origin-free
quality with origin-free image was now lowered to 0.28,
which is much less likely to createmulticollinearitydifficulties. However, as desired, the origin-freebrandquality data
still correlate0.87 with the raw qualityratings,and the origin-freebrandimage datastill correlate0.74 with the rawimage ratings. Thus, these new origin-free brandquality and
origin-freebrandimage variables,instead of the raw brand
quality and brand image variables, were used in the attitude-predictinganalysis.
RESULTS
Ourhypothesesconcernedthe moderatingeffects of several
individual-differenceand product-categoryvariableson the
main effect of a brand'sperceivedlocal or nonlocaloriginon
attitudestowardthe brand.To test these hypotheses,we conducteda linearregressionanalysis of consumers'brandattituderatingsas a functionof (a) the brand'sperceivedlocal or
nonlocal origin;(b) the brand's(origin-free)quality and image, as refinedpreviously, and the consumer'sbrandfamiliarity,priorbrandusage, and perceptionof the brand'slocal
availability,to controlfor any confoundingattitude-causing
differencesin the brandsrated;(c) the maineffects of the key
individualdifference(ethnocentrism,SNI, and admirationof
EDC lifestyles) and category-relatedvariables(categoryfamiliarity, category signaling, and category risk); (d) the
two-way interactionsof perceivedbrandlocal or nonlocalorigin with each of the variablesin item c; (e) the three-wayinteractionsin Hypotheses4, 5a, and5b; and (f) a dummyvariable for the productcategorybecausethe dataset pooled data
from differentproductcategories.3
All directionalhypotheses can be tested by seeing if the
sign of the estimatedcoefficient is in the hypothesizeddirection and is significant.Hypothesesaboutmoderatingeffects
can be testedvia the statisticalsignificanceof the appropriate
interactionterm (cf. Baron & Kenny, 1986). All variables
were centeredaroundtheirmeanpriorto analysisto facilitate

3Thesecategorydummies
themean-level
differences
acrossthese
capture
Westillretainthevariables
fortheindividual-level
productcategories.
perbecausetheymodeledthe
ceptionsof thatcategory'sriskandfamiliarity
variation
aroundthatcategory'smeanlevel(captured
bytheaddedcategory

dummy variable). The remaining variation in consumer attitudes across


brandsof varyinglocal or nonlocalorigin, and of varyingrisk or familiarity
levels, was whatwe wantedto study.Note thataddingdummiesfor the individualbrandsthemselveswould leave us only with variancewithinbrandby
individual, whereas our objective was to study variance across brandsof
varyingorigin by individual.

92

BATRA, RAMASWAMY,ALDEN, STEENKAMP,RAMACHANDER

the interpretationof interactioneffects (Jaccard,Turrisi,&


Wan, 1990). All hypotheses were directionalin nature,requiringtheuse of one-tailedtests of significance.Thehypothesized signs of the coefficients of primaryinterestare thus
indicatedin parenthesesin Table 2 (unstandardizedbs and
standardizedbetasarebothreported).The scales of the independent variables were reversed where necessary, prior to
analysis,to lead to these expected signs.
Theresultsof theregressionanalysisareshownin Table2.
Overall, 47.8% of the variance in brandattitudeswas explained by this regressionmodel, F(31, 2813) = 83.03, p <
.01. SupportingHypothesis1, it can be seen thatthe degreeof
perceived brandlocal or nonlocal origin has a significant,
positive effect on brandattitudes(b = 0.276, p < 0.01), indicatingthatthe morea brandis seen as nonlocal,the morepositive are the attitudes toward that brand. As stated in
Hypothesis 2, the attitudinaleffect of the perceived brand
nonlocalorigin was significantlymore positive among consumerswho aremoreadmiringof EDC lifestyles (interaction
termb = .021, p < .02) than among those who do not. Also
note that,consistentwith the literatureon the determinantsof

brandequity, the brand-specificmain effects of origin-free


brandqualityand origin-freeimage were also significant,as
were the three covariates of brandavailability,familiarity,
and priorusage (all atp < .0001).
Turningto Hypothesis3, we find thatethnocentrismdoes
nothavea significant,negative,moderatingimpacton theeffect
of perceivedbrandlocalornonlocaloriginon brandattitudes(b
= -.012, ns) Thisresultis contraryto ourhypothesisandis discussed later.ConcerningHypothesis4, we had hypothesized
thatconsumershigherin ethnocentrismwould not have a reducedattitudinalpreferencefornonlocalbrandsif theyadmired
EDC lifestyles. However,this three-wayinteractionbetween
ethnocentrism,perceivedbrandlocal or nonlocal origin, and
EDClifestyleadmirationwas notsignificant.Thus,Hypothesis
4 was also not supported. Perhaps consumers who are
ethnocentricarenotlikelyto alsobeadmiringof EDClifestyles.
Hypothesis5a arguedthatperceivednonlocaloriginleads
to morepositive brandattitudesfor high SNI consumerswho
buy productswith high social signaling value. Because the
three-wayinteractionof perceivedbrandlocal ornonlocalorigin with SNI andcategorysignalingvalue was significant(b

TABLE2
MultipleRegression Analysis of BrandAttitudes
Variablea
Maineffects of perceivedbrandcharacteristics:
Perceivedbrandlocal/nonlocalorigin
Origin-freebrandquality
Origin-freebrandimage
Brandavailability(covariate)
Brandfamiliarity(covariate)
Priorexperiencewith brand(covariate)
Interactionsof perceivedbrandlocallnonlocalorigin
Individualdifferencevariables:
EDC admiration(H2: +)
Ethnocentrism(H3: -)
EDC Admirationx Ethnocentrism(H4: +)
EDC Admirationx SNI (H5b: +)
CategorySignaling x SNI (H5a: +)
SNI
Perceivedcategorycharacteristics:
Categoryfamiliarity(H6: -)
Categoryrisk
Categorysignaling
Othercontroleffects:
Ethnocentrism
SNI
EDC admiration
EDC Admirationx Ethnocentrism
EDC Admirationx SNI
Categoryfamiliarity
Categoryrisk
Categorysignaling
CategorySignaling x SNI
Intercept

ParameterEstimate

StandardizedEstimate

0.276**
0.085**
0.364**
0.133**
0.207**
0.149**

0.296
0.076
0.267
0.123
0.214
0.220

0.021**
-0.012
0.004
0.019**
0.016**
-0.006

0.031
-0.016
0.008
0.036
0.036
-0.008

-0.020**
0.015**
0.003

-0.034
0.026
0.004

0.032**
-0.034**
-0.036**
0.036**
-0.002
-0.001
0.044**
-0.021*
-0.012
5.129**

0.029
-0.031
-0.037
0.046
-0.002
-0.001
0.049
-0.024
-0.018
0.000

Note. Coefficientsfor categorydummyvariablesnot shown for brevity.H = hypothesis;EDC = economicallydeveloped country;


SNI = susceptibilityto normativeinfluence.
aHypothesizeddirectionof effect in parentheses.

*p<0.0. **p< 0.05.

BRAND LOCAL AND NONLOCALORIGIN

= .016, p < .01), with each main effect and two-way interaction already in the model, this hypothesis was supported.
Similarly,supportwas foundfor Hypothesis5b, which stated
thatbrandswith a nonlocal origin lead to more positive attitudesamonghigh SNI consumerswho also havehigh admiration of EDC lifestyles: The three-way interaction of
perceivedbrandlocal or nonlocal origin with SNI and admirationof EDC lifestyles was significant(b = .019, p < .01).
Whataboutthemoderatingroleof productcategoryfamiliarity?As hypothesizedearlier(Hypothesis6), a brand'sperceived
local or nonlocaloriginmightserve morestronglyas a quality
cue for productcategorieswithlow familiarity.Supportingthis
hypothesis,the variablecategoryfamiliaritydid have a significant negativeinteraction(b = -0.020, p < .01) with perceived
brandlocalornonlocalorigin.Notethatthecategoryriskcontrol
variablewas also significantatp < .05, consistentwithpriorresultsin the literature(e.g., Lumpkinet al., 1985).
Additional Analysis of Mediation
Recall thatwe arguedin ourtheoreticaldevelopmentthatthe
focus of this article-the status preferenceby consumersin
developing countriesfor nonlocal over local brandsbecause
of admirationof EDC lifestyles and cultures-was in addition to the quality-relatedpreferencepreviouslystudiedin the
CO literature.To furthersupportthis argument,it is necessaryto show thatthe effect of EDC admirationon brandattitudes is not occurringlargely through(i.e., is not mediated
by) judgmentsof the brand'squality, but instead occurs directly, at least in part.
A formalanalysis of mediationwas, therefore,conducted
by using the procedureof BaronandKenny(1986). ForEDC
admirationof perceived brandnonlocalness to affect brand
attitudesthroughbrandquality,(a) the interactionof EDC admiration with perceived brand nonlocalness must significantly affect brand attitudes; (b) this EDC admirationby
perceived brand nonlocalness interactionterm must affect
brandquality;(c) brandquality must affect brandattitudes;
and(d) the effect of the EDC admirationinteractionwith perceived brandnonlocalness, on brandattitudes,must disappear or substantially diminish when the mediator (brand
quality)is introducedinto the equation.These estimateswere
obtained through a series of regression equations, each of
which also containedall the control and covariatevariables
discussed earlier,in additionto the necessarysubset of these
three variables(EDC admirationinteractingwith perceived
brandnonlocalness;brandquality;brandattitudes).Results
showed that although (a) EDC admiration by brand
nonlocalness did significantly affect brandattitudesat p <
.04, (b) it did not affect brandquality.Thus,equations(c) and
(d) become irrelevant.These results held both for the origin-freebrandqualityvariableandthe rawbrandqualityvariable. Results were similarif (a) was EDC admirationitself,
insteadof the interactionterm of EDC admirationwith perceived brandnonlocalness. We concluded that the data are

93

consistent with our theoretical argumentthat the effect of


EDC admirationon brandattitudeswas not occurringsimply
because of a higherqualityinference.
DISCUSSION
In this study we found that among consumersin developing
countries,for reasons that go beyond brandquality assessments, brands perceived as having a nonlocal CO are
attitudinallypreferredto brandsseen as local. Furthermore,
the results indicate that such attitudinalenhancement increases with the degree of perceivednonlocalness.This suggests that a brand'sCO not only serves as a quality halo or
summaryof productquality(cf. Han, 1989), butcan also possess an additionaldimension-that of the degree of foreignness or nonlocalness.Among some consumersand for some
productcategories,this dimensioncan contributeto attitudinal liking for the brand.We found this attitudinaleffect was
strongerfor consumers high in SNI for productcategories
high in social signaling value, which is consistent with our
status-enhancementexplanation.
Amongthe consumersin developingcountriesthatwe studied, theeffectwas especiallystrongamonghighSNIconsumers
who also hadhigh EDC admiration.Drawingfromthe cultural
anthropologyliterature,we developeda theoreticalframework
showing why, among consumers in developing countries,
brandsseen as being sourced overseas (especially from the
Westerncenter)areseen as endowingprestigeandcosmopolitanismand,thus,as enhancingthebuyer'ssocialidentity(Friedman,1990;Hannerz,1990).As shownin ouradditionalanalysis
of mediation,these attitude-enhancing
effects arein additionto
those caused by the perceived origin-freequality of these
brands,whichwe usedas a separateandunconfoundedvariable
in ourmodelthroughpartiallingoutandestimationprocedures.
We also studieda few otherimportantmoderatingeffects.
Here,we foundthatthe local or nonlocalorigineffect was not
weaker among more ethnocentricconsumers,a finding that
differs from most priorresearch.This has an interestingand
potentiallyimportantimplication:A brandseen as generally
nonlocal(ouroperationalization),insteadof coming fromone
specific country (as in prior CO research),may simply not
evoke as much hostility from ethnocentricconsumersas has
been found in priorCO research.Supportwas also found for
the theoreticalexpectationthatthis local or nonlocalperception effect is greaterwhen the consumerfelt a greaterneed to
use qualitycues becauseof lowerfamiliaritywiththecategory
(aftercontrollingfor levels of perceivedriskin the category).
These resultsaddto the literatureon the use by consumersof
extrinsiccues aboutquality(cf. Steenkamp,1989).
As mentionedin the introductoryparagraphs,most previous research has approachedCO effects from the perspective of consumers in developed countries, where a brand's
CO is used primarily as a risk-reducing cue (Heslop &
Papadopoulos, 1993). In contrast, this study examined CO
effects from the perspective of consumersfrom developing

94

BATRA, RAMASWAMY,ALDEN, STEENKAMP,RAMACHANDER

countries, where a brand'snonlocal origin has been argued


to symbolize cosmopolitanismand prestige, at least among
certain consumer segments (those with high EDC admiration and high SNI levels), for productcategories that have
high signalingvalue. It is importantto note thatourstudyexamined a brand's diffuse nonlocal image, instead of single-countryCO cues, because of the predominanceof global
brandsin developing countrymarkets.Together,these findings add to ourknowledge of consumer-levelmoderatorsof
CO-like effects, expand our theoretical understandingof
some consequences of ethnocentrismand SNI, and add to
the nomological networkfor these constructs(cf. Beardenet
al., 1989; Shimp & Sharma, 1987).
Lendingvalueto thesefindingsarethe natureof these data
andthe analytictechniquesused in this study.The datacome
fromcarefullyconductedpersonalinterviews,froma reasonably large sample of adultIndianconsumers(homemakers).
They cover 32 brands(varying across the nonlocal-local
continuum)fromeight verydifferentproductcategories,covering a range of perceivedrisk, category familiarity,and so
on. The key constructs(brandattitudes,perceivedbrandlocal
or nonlocal origin, consumercharacteristics,categorycharacteristics,etc.) areall basedon respondentratings,insteadof
being assumedby the researcher(e.g., how nonlocala brand
is, how risky a categoryis, etc.). Samiee (1994, pp. 588, 593)
highlightsthe importanceof measuringsuch consumerperceptions,given thata brand'sCO andcountryof manufacture
often differ, and because many brandshave been considered
local in more than one country (e.g., Singer in the United
Kingdom,the United States, Germany,etc.). Care has also
beentakenin the analysisto partialout the effects of a brand's
perceivedlocal or nonlocaloriginfromits qualityandimage
ratings.Theseorigin-freequalityandimageratingswere then
used in the model, along with the brand'sperceivedlocal or
nonlocalorigin,to estimatethe effect of the latteron brandattitudes. Other covariates (such as brand familiarity,brand
priorusage, andcategoryperceivedrisk) were used to reduce
errorvarianceand the chances of a misspecified model.
Future Research
Perhapsthe key findingof this studywas that,amongtheconsumers in developing countries examined here, consumers
with high EDC admirationtendedto have more positive attitudes towardbrandsmarketednonlocally (Hypothesis2). A
brand'sperceivednonlocalnessmay thusbe a significantreason why certain nonlocal brandsface strong consumerdemand in such developing countries,over and above the advantagesof intrinsicquality and lower costs highlightedby
Levitt (1983). If replicated,this finding has the implication
for marketingpracticethat emphasizingforeign acceptance
and origin may help ratherthanhurtthe brandin developing
countrieswhereWesternbrandsareheld in high esteem. This
findingalso suggests the need for futureresearchon the phenomenon of global brands, including work to clarify the

meaning and measurementof that construct.Researchalso


needs to examine how such perceptionsof globalness are
formedthroughmarketingcommunications.
Dataarealso neededfrommultiplecountriesto see if ourresultsgeneralize.It is possible,for instance,thatthe level of socioeconomic modernityof the developing countryinvolved
of ourresults.It is possiblethat
mightaffectthe generalizability
the moderatingrole of EDC admiration,for instance,mightbe
reducedin countrieswith a higherlevel of socioeconomicmoit may be thatourresultsconcerningthe
dernity.Furthermore,
effects
ethnocentrismand SNI might vary deof
moderating
on
the
of
pending
degree collectivismin thecountryconcerned.
Both ethnocentrismandSNI deal with the ideas of groupsand
adherenceto groupnorms,whichoughtto differdependingon
the degreeof collectivismin a culture.WhereasIndiais relatively less collectivistic,other developingcountries(such as
China)are more so. Futurestudiesshouldalso collect dataon
brandsoriginatingfrom a wider range of developed-country
COsto studyhow the imageof theparticular
CO moderatesthe
nonlocalnesspreferenceeffectsfoundin thisstudy.In addition,
ourtheoreticaldiscussionaboutthedifferencesin COprocesses
in developedversusdevelopingcountriesalso needto be more
rigorouslytestedthroughthe collectionandcomparativeanalysis of datafrombothtypes of countries.
Workis also neededto improvethemeasurementqualityof
some of the scales we used, especiallythe generationandtesting of additionalitems for scales in which we only used one
item (e.g., categoryfamiliarityandcategorysignalingvalue),
becausequestionscanbe raisedabouttheirvalidity.Itcouldbe
argued,for instance,thatour categoryfamiliarityresultsappearanalogousto those one wouldexpectforcategoryknowledge, even though our scale did not explicitly refer to the
degree of knowledgeaboutthe category.Relatedly,research
is needed to refine the constructof admirationof EDC lifestyles, whichappearedto be a crucialinteractionvariable.The
interactionswith it (Hypotheses2 and 5b) supportthe argumentofBatra,Myers,andAaker(1996)that"itis possiblethat
the apparentincreasein demandacross the world for certain
well-known brandssuch as Coca-Colaand Levi's is largely
becausethey areseen by consumers... as symbolsof thefreedom andaffluentlifestyles of the West, and not becausethey
are seen as global brandsper se" (p. 716). Thus, what may
sometimes mattermore than a brand's nonlocalness is its
Westernicon-ness. This hypothesis, and constructsto measureit, also warrantfutureresearchusingmulticountrydata.
ACKNOWLEDGMENTS
We gratefullyacknowledgethe financialsupportof the Academy for ManagementExcellence,Madras,India;the William
Davidson Institute; the University of Michigan Business
BusinessEducationat
School;andthe Centerfor International
theUniversityof Michigan,in supportingthedatacollectionfor
thestudyreportedin thisarticle.We thankthe specialissueeditors andreviewersfor theirhelpfulcomments.

BRAND LOCAL AND NONLOCALORIGIN

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Accepted by DurairajMaheswaran.