Final report on Ethnocentrism

1.1 GENESIS OF THE PROBLEM
Ethnocentrism is the tendency to look at the world primarily from the
perspective of one's own ethnic culture. The concept of ethnocentrism has
proven significant in the social sciences, both with respect to the issue of
whether the ethnocentric bias of researchers colours the data they obtain, and
the findings from research in anthropology and sociology. Such research has
revealed ethnocentrism in every culture around the world, based on a number
reasons, including religion, language, customs, culture, and shared history. It
seems natural that people feel pride in the culture in which they have grown
up and from which they have adopted their values and standards of
behaviour. However, the problem is that one may view other cultures not
only as different, but also as inferior, with a great danger of behaving in ways
that are damaging to those from other cultures. However, as increasing
globalization brings different cultures together, people are learning to
overcome their self-centred thinking and see human society from a broader,
more inclusive perspective.

1.2 MAJOR CONCEPTS
Ethnocentrism is a lens through which people examine other cultures. A
person may compare the morals, ethics, history, and religion of another
country to their own, and decide that their own nation's practices are superior.
This is the formation of an ethnocentric thought process. The opposite to this
idea is "cultural relativism," the idea of viewing another culture with no
preconceived notions or judgments. Ethnocentrism establishes the ideas of a
"proper" living, and that these other countries in comparison do not measure
up to the "proper" way of living.

Ethnocentrism can be seen as the backbone of stereotypes. Ideas such as the
work ethic of a particular culture, or lack of morals in another culture, stem
from the idea in ethnocentrism that one's own culture is above a foreign
culture in many regards. The scope of ethnocentrism can also be held
responsible for instigating racism in different societies. Ethnocentric
perspectives are not merely limited to different nations, indeed different races

in the same society often look at other races from an ethnocentric point of
view. The evolution of globalization can lead to a decrease in ethnocentric
evaluations. With the world becoming more connected, and with people
having greater access to information than at any other time, it is possible to
dispel many cultural myths in coming generations, fostering a better universal
understanding of how different cultures function and maintain themselves.
Indeed, ethnocentrism is not a problem that needs to be around forever.

Shimp and Sharma (1987) developed consumer ethnocentrism into a
measurable construct through the use of the consumer ethnocentric tendencies
scale (CETSCALE). The initial development of the CETSCALE began with
225 different questions, which were narrowed down to 100 before being sent
to a survey group for the first purification study. Through repeated purification
studies, the number of questions was finally reduced to 17. Repeated studies
by Shimp and Sharma validated the CETSCALE in the U.S. While the 17-
item CETSCALE is the original version developed by Shimp and Sharma
(1987), shortened versions have been used. One, with 10 items, was developed
alongside the full version. Both the 17-item version and the 10-item version
were tested. It was found that both versions of the CETSCALE were reliable
across the different cultures where it was tested. The results also helped
validate the CETCSCALE as a measure of consumer ethnocentricity. Since
that time, the CETSCALE has been used in many studies in many different
countries and cultures.

1.3 NEED FOR THE STUDY
The motivation for this study is to examine the gaps left by the literature
reviews done. Earlier studies indicated the use of CETSCALE to measure
Ethnocentrism in various sectors in many parts of the world but when
compared in India there seems to be some kind of lagging in this and hence
analysis is done for finding its effect on market penetration prospects and what
drives the customers for purchase decision.

.

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1.4 OVERVIEW OF THE STUDY
The present study focuses only on the ethnocentric behaviour of people
residing in Bangalore into categories like Automobiles and FMCG. A
predefined CETSCALE is used as the basic tool and results are analysed
accordingly.

1.5 CHAPTERIZATION
The dissertation is organised into six chapters. Following the introductory
chapter, Chapter 2 provides the review of literature which consists of research
done by different researchers on effect of disclosures on stock returns. Chapter
3 deals with the research methodology. Chapter 4 gives us the overview about
the industry and the analysis of the industry as a whole. In Chapter 5 the data
analysis is done which would give quantitative figures to the questions which
have to be addressed in the thesis. Finally Chapter 6 is outlined with the
findings, conclusion and suggestions for the future research.

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2.1 INTRODUCTION
Review of literature involves study of existing papers, which have been
published by various scholars across the globe, with variables suiting their
geography of study. It helps to indicate the researches that have been done
over the years on online banking and information security issues. Technology
is constantly on the pace of development. In the same way the factors that
determine the adoption of internet banking influencing customers have also
changed and evolved.

The review of literature helps in identifying what are the different areas that
have been studied in relation to online banking and information security. The
technology aspect, the security aspect, the perceived usefulness, the financial
risk, the operational risk, the process clarity and simplicity have all been
studied. Therefore the review of literature is very important to help us identify
the various factors that influence customers‟ perception towards adoption of
various security measures in online banking. These factors can then be used to
relate to studies and measures taken in banks towards these security issues.

2.2 IMPORTANCE OF REVIEW LITERATURE
Literature review actually helps in clarifying the problem tried to be solved
through the dissertation process. It helps in identification of the various
variables based on which the research hypothesis have to be framed. It also
provides clarity on how to go about the entire dissertation process. It also
helps in defining the sample, framing the questionnaire and using statistical
tools in some cases. It mostly helps in knowing the research gap between,
what research has been done so far on the topic and what can be done to do the
review of literature first the research paper is selected in accordance with the
topic of research. Once the research papers are selected, the problem statement
and objective of the research paper are identified. After identifying the
objective of the research, the tools used and the methodology used is
identified. In the process of doing a literature review, we must see its
relevance. At last the conclusion and the limitation of the research are
identified to fill this gap.

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The development of the literature review has been done in 4 stages:
Problem formulation: which topic or field is being examined and
what are its component issues?
Literature search: finding materials relevant to the subject being
explored
Data evaluation: determining which literature makes a significant
contribution to the understanding of the topic
Analysis and interpretation: discussing the findings and
conclusions of pertinent literature.

2.3 REVIEWS DONE

Bellizzi, Hamilton, Krueckeberg and Martin (1981) conducted a study
titled Consumer perceptions of National, Private and Generic brands
which investigated consumer perception and revealed that consumer perceive
many differences among the three product types. Discriminant analysis was
used to determine how well behavioural scales predict brand ratings.

Ho (1998) in his study of The effects of Individualism-Collectivism on
brainstorming: a comparison of Canadian and Taiwanese samples tests
the general hypothesis and finds out the culture differences.

Alden, Batra, Ramachander, Ramaswamy and Steenkamp (2000) in their
study Effects of Brand Local and Nonlocal Origin on Consumer Attitudes
in Developing Countries tested whether, among consumers in developing
countries, brands perceived as having a nonlocal country of origin, especially
from the West, are attitudinally preferred to brands seen as local, for reasons
not only of perceived quality but also of social status. They found that this
perceived brand non-localness effect was greater for consumers who have a
greater admiration for lifestyles in economically developed countries, which is
consistent with findings from the cultural anthropology literature. The effect
was also found to be stronger for consumers who were high in susceptibility to
normative influence and for product categories high in social signaling value.

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This effect was also moderated by product category familiarity, but not by
consumer ethnocentrism. The results suggested that in developing countries, a
brand's country of origin not only serves as a "quality halo" or summary of
product quality (cf. Han, 1989), but also possesses a dimension of non-
localness that, among some consumers and for some product categories,
contributes to attitudinal liking for status-enhancing reasons.

Bandyopadhyay (2001) in his study Competitiveness of foreign products as
perceived by consumers in the emerging Indian market compares the
electronics and electrical products from United States, Japan, South Korea,
Germany, Britain and India by means of an empirical study on various product
attributes and gives the result along with its future implications.

Dixon, Hattie and Shulruf (2003) in their study about Development of a
New Measurement Tool for Individualism and Collectivism establish a
reliable and easy to use measurement tool for collectivism and individualism,
which avoids weaknesses of previous tools. In particular the new tool attempts
to avoid the „cultural deprivation‟ bias and the confounding influence of
familialism as well as to include the vertical and horizontal dimensions of
collectivism and individualism in a more practical way.

Bawa (2004) in his study Consumer Ethnocentrism: CETSCALE
Validation and Measurement of Extent examined the psychometrics of the
CETSCALE, the extent of consumer ethnocentrism in India, and the
relationship of socio-demographic variables and quality consciousness with
consumer ethnocentrism.

Borja, Descals, Eckman and Hyllegard (2005) in their research titled
Spanish consumers' perceptions of US apparel speciality retailers'
products and services examined consumers' store patronage and apparel
purchase behavior, acceptance of US apparel brands, perceptions of retailers'
products and services, and perceptions of the impact of foreign retailers on
local communities. Data was collected from 375 consumers in Barcelona,
Madrid and Valencia. The influence of retailer characteristics on consumers'
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store patronage varied by age and income. Product characteristics that
influenced apparel purchases varied by gender, income and age, while
acceptance of US brands differed by gender and age. The perceptions of
Spanish, European and US retailers differed regarding quality, fashionability,
product assortment, extent and quality of customer service, convenience of
location, payment options, national brands and store layout. Consumers'
acceptance of US apparel brands was a function of age, household income,
apparel product country of manufacture and price. Perceptions of US retailers
were a function of household income, selected apparel characteristics and
consumer acceptance of US apparel brands. Differences among perceptions of
the impact of retail development were found by city. The findings provide
insights into the opportunities and challenges for US apparel speciality
retailers as they contemplate entry into the Spanish market. The affinity for
US apparel among young Spanish consumers, particularly males, suggests
optimism regarding opportunities in this market.

Nowak (2011) in his master thesis titled Trends in consumer behavior on
the Polish market. Consumer ethnocentrism, Country-of-origin effect,
national and foreign brands aims to evaluate the level of consumer
ethnocentrism against socio-demographic variables such as age, gender and
education level of respondents. Furthermore, the study attempts to assess
consumer ethnocentrism impact on evaluation of domestic and foreign food
products among Polish consumers.

Mohamad, Ramayah and Teo (2011) in their study Testing the
dimensionality of Consumer Ethnocentrism Scale (CETSCALE) among a
young Malaysian consumer market segment test the dimensionality of the
Consumer Ethnocentrism Scale (CETSCALE). Their research assessed a two
dimensionality, namely uni-dimensional and two dimension measure, of
CETSCALE in order to determine which one is better in explaining
consumers‟ perceptions towards domestic brands in the Malaysian context.
Their findings show support for the 2 component model that was proposed
with good reliability values and validity assessment.

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Kongsompong and Powtong (2012) in their study titled Collectivism and
Ethnocentrism: an inter and intra national analysis among the Thais,
Chinese and Indians presents empirical results of ethnocentrism in relation to
the collectivist strength among subjects in three countries: Thailand, China,
and India. The inter-national analysis on the subjects attempts to diagnose and
contrast the cultural diversity between the people of the three countries. As for
the intra-national analysis, the men and women within the countries are
separately examined to analyze the cultural differences. Results show that
Thais, Chinese, and Indians are significantly diverse on the realm of
collectivist and ethnocentric strengths. Regardless of the nationalities those
who are more collectivist show the tendency to be more ethnocentric in their
consumption behavior. In contrary to the prediction from the literature review,
however, the intra-national results for subjects of the three countries show that
men are generally more collectivist than women. Therefore, the Thai, Chinese,
and Indian men are likely to be more ethnocentric with their purchase
endeavors than their counterparts.

2.4 CONCLUSION
The review of literature thus tells us about the other similar thesis published
earlier and makes us aware about the problems and better understanding of the
methodology and how we can approach to the solutions reduce the gap.

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3.1 INTRODUCTION
Research is the journey from known to unknown or from problem to solution.
Research methodology refers to the design of the study method and processes
by which data is gathered for a research project. It is also important in a
research work because it also specifies the sampling design. The researcher
also defines the target population and the sampling method used. Additionally,
the researcher identifies the data collection method. This could be
questionnaires, surveys, or interviews. The researcher identifies significant
methodology such as sampling errors, response and constraints of cost and
time. Finally, the chapter examines the different statistical tests used to
analyze the gathered data, the reliability, and the validity of the results.

3.2 STATEMENT OF THE PROBLEM
The problem is understanding how “perceived” product foreignness equates to
in-group/out-group inclusion and ultimately influences attitudes toward
products purchase and usage.

3.3 VARIABLES OF THE STUDY
The variables considered are value for money, reliability, quality, technicality
and ethnocentric sum.

3.4 OBJECTIVES OF THE STUDY
The objectives of the study are:
1. To study the level of ethnocentrism among the people in Bangalore.
2. To find out what drives the customers for purchase decision
irrespective of its country of origin.

3.5 HYPOTHESES
The hypotheses include:
Hypothesis 1
H01: Indian consumers are ethnocentric

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Ha1: Indian consumers are not ethnocentric.

Hypothesis 2
H02: The product attributes are not important for purchase decision
irrespective of ethnocentrism of the consumers.
Ha2: The product attributes are important for purchase decision
irrespective of ethnocentrism of the consumers.

3.6 SAMPLING PROCEDURE
For the present study, primary data was collected through a structured
questionnaire among the people of Bangalore. a field study is mainly used but
online support is also taken. As per the procedure "random sampling" is used
for collecting data.

3.7 EXPLANATION OF THE INPUTS
Value for Money
The measure how the product delivers its value depending the price paid and
its brand equity mainly for consumers. It's a product attribute.

Reliability
Reliability defines how well the product can be trusted upon and how well it
performs as per expectations. It is also a product attribute.

Quality
This defines how well the product is as per the customers satisfaction. It
measures the efficiency of the product, It is also an attribute.

Technicality
This deals with the features and recent developments needed.

Ethnocentric Sum
The summation of each individual on a 7 point scale as per the questionnaire.

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3.8 STATISTICAL TOOLS
The main statistical tools used are:
Descriptive Statistics
Hypothesis Testing
Cluster Analysis.

3.9 CONCLUSION
The research methodology thus makes us aware about the process and
methodology used in the study and thus provides the reader to analyse the
given problem and how we can approach the given problems.

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4.1 AUTOMOBILE MARKET IN INDIA
The automobile industry, one of the core sectors, has undergone metamorphosis
with the advent of new business and manufacturing practices in the light of
liberalization and globalization. The sector seems to be optimistic of posting
strong sales in the couple of years in the view of a reasonable surge in demand.
The Indian automobile market is gearing towards international standards to meet
the needs of the global automobile giants and become a global hub.

Indian Auto Industry is the
Largest Three Wheeler Market in the World
Second largest Two Wheeler Market in the World
Fourth largest Passenger Vehicle Market in Asia
Fourth largest Tractor Market in the World
Fifth largest Commercial Vehicle Market in the World

4.2 DIFFERENT ASPECTS OF AUTOMOBILE INDUSTRY

4.2.1 PRODUCTION
The cumulative production data for April-March 2012 shows production growth
of 13.83 percent over same period last year. In March 2012 as compared to
March 2011, production grew at a single digit rate of 6.83 percent. In 2011-12,
the industry produced 20,366,432 vehicles of which share of two wheelers,
passenger vehicles, three wheelers and commercial vehicles were 76 percent, 15
percent, 4 percent and 4 percent respectively.

4.2.2 DOMESTIC SALES
The growth rate for overall domestic sales for 2011-12 was 12.24 percent
amounting to 17,376,624 vehicles. In the month of only March 2012, domestic
sales grew at a rate of 10.11 percent as compared to March 2011.

Passenger Vehicles segment grew at 4.66 percent during April-March 2012 over
same period last year. Passenger Cars grew by 2.19 percent, Utility Vehicles
grew by 16.47 percent and Vans by 10.01 percent during this period. In March
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2012, domestic sales of Passenger Cars grew by 19.66 percent over the same
month last year. Also, sales growth of total passenger vehicle in the month of
March 2012 was at 20.59 percent (as compared to March 2011). For the first
time in history car sales crossed two million in a financial year.

The overall Commercial Vehicles segment registered growth of 18.20 percent
during April-March 2012 as compared to the same period last year. While
Medium & Heavy Commercial Vehicles (M&HCVs) registered a growth of 7.94
percent, Light Commercial Vehicles grew at 27.36 percent. In only March 2012,
commercial vehicle sales registered a growth of 14.82 percent over March 2011.

Three Wheelers sales recorded a decline of (-) 2.43 percent in April-March 2012
over same period last year. While Goods Carriers grew by 6.31 percent during
April-March 2012, Passenger Carriers registered decline by (-) 4.50 percent. In
March 2012, total Three Wheelers sales declined by (-) 9.11 percent over March
2011.

Total Two Wheelers sales registered a growth of 14.16 percent during April-
March 2012. Mopeds, Motorcycles and Scooters grew by 11.39 percent, 12.01
percent and 24.55 percent respectively. If we compare sales figures of March
2012 to March 2011, the growth for two wheelers was 8.27 percent.

4.2.3 EXPORTS
During April-March 2012, the industry exported 2,910,055 automobiles
registering a growth of 25.44 percent. Passenger Vehicles registered growth at
14.18 percent in this period. Commercial Vehicles, Three Wheelers and Two
Wheelers segments recorded growth of 25.15 percent, 34.41 percent and 27.13
percent respectively during April-March 2012. For the first time in history car
exports crossed half a million in a financial year. In March 2012 compared to
March 2011, overall automobile exports registered a growth of 17.81 percent.

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Figure 4.1: Automobile's Market Share

Source: Secondary Data(SIAM website)

4.3 FMCG MARKET IN INDIA
Fast-moving consumer goods (FMCGs) are products that are sold quickly at a
relatively low cost. They are popularly referred to as consumer packaged goods.
The most common things in the list are toilet soaps, detergents, shampoos,
toothpastes, shaving products, shoe polish, packaged foodstuff and household
accessories. The term even extends to certain electronic goods. These items are
meant for daily or frequent consumption. A major portion of the monthly budget
of each household is reserved for FMCG products. The volume of money
circulated in the economy due to FMCG products is very high, as the number of
consumers for such products is very high. The Indian FMCG industry began to
shape during the last 50-odd years. The FMCG sector is a cornerstone of the
Indian economy, touching every aspect of human life. The Indian FMCG market
is divided between the organised sector and the unorganised sector.

4.4 DIFFERENT COMPONENTS OF THE FMCG MARKET

4.4.1 HOUSEHOLD CARE
Household care products include bath soaps and detergents. The market size for
soaps is estimated at Rs 83 billion, comprising the premium, economy and
popular. The penetration level of soaps is 92 per cent. They are available in 5
million retail stores, of which 75 per cent are in the rural areas. Hindustan
Unilever Limited (HUL) is the leader with a market share of 53 per cent; Godrej

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occupies second position with a market share of 10 per cent. With increase in
disposable incomes, rural demand is expected to increase because consumers are
moving up towards premium products. The size of the detergent market is
estimated at Rs 120 billion. Small unorganised players account for a major share
of the detergent market. In washing powders, HUL is the leading company with
38 per cent of the market share. Other major players are Nirma, Henkel, and
Proctor & Gamble.

4.4.2 PERSONAL CARE
Personal care products include skin care, hair care and oral care products. The
total skin care market is estimated at Rs 34 billion. This market is at a nascent
stage in India. The penetration level of this segment in India is around 20 per
cent. With changing lifestyles, increase in disposable incomes, greater product
choice and availability, people are becoming more aware about personal
grooming. Major players in this segment are HUL with a market share of 54 per
cent, followed by CavinKare with a market share of 12 per cent, and Godrej with
a market share of 3 percent.

The hair care market in India is estimated at Rs 38 billion, including hair oils,
shampoos, hair colourants, conditioners and hair gels. Marico is leader in hair
oil segment with a market share of 33 per cent; Dabur occupies second position
at 17 percent. The Indian shampoo market is estimated at Rs 27 billion. It has a
penetration level of only 13 per cent. Sachets make up 40 per cent of the total
shampoo sales. It has a low penetration level even in metros. Again, the market
is dominated by HUL with around 47 per cent of market share; P&G occupies
second position with a market share of around 23 per cent.

The oral care market can be segmented into toothpastes (60 per cent),
toothpowder (23 per cent) and toothbrushes (17 per cent). The total toothpaste
market is estimated at Rs 35 billion. The penetration level of toothpowder and
toothpaste in urban areas is three times that of rural areas. This segment is
dominated by Colgate-Palmolive with a market share of 49 per cent, while HUL

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occupies second position with a market share of 30 per cent. In the toothpowder
market, Colgate and Dabur are major players.

4.4.3 FOOD AND BEVERAGES
The food category in FMCG is gaining popularity with a string of launches by
HUL, ITC, Godrej and others. This category has 18 major brands aggregating
46 billion. Nestle and Amul slug it out in the milk powder segment. The food
category has also seen innovations like softies in ice creams, ready-to-eat rice by
HUL, and pizzas by Godrej Pillsbury.

The tea market is dominated by unorganised players, who control over 50 per
cent of the market. The leading branded tea players are HUL and Tata Tea. More
than 50 per cent of the market is dominated by loose, unbranded coffee. Major
players in this segment are Nestlé, HUL and Tata Coffee.

4.5 SWOT ANALYSIS

Figure 4.2: Indian Automobile Industry SWOT

.

Source: Secondary Data

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The above picture gives us a clear idea about the strength, weakness, opportunity
and threat of Indian automobile industry.

Figure 4.3: Indian FMCG Industry SWOT

Source: Secondary Data

The above picture gives us a clear idea about the strength, weakness, opportunity
and threat of Indian FMCG industry.

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5.1 INTRODUCTION
In the background of the methodology of the study outlined in chapter 3 and the
ideas gained from previous literature reviews along with the data collected, this
chapter consists of finding and analyzing forward looking words and testing the
hypothesis using statistical tools in the later part.

5.2 DESCRIPTIVE ANALYSIS
For the present study, primary data was used from the questionnaire and then it
was coded in MS-EXCEL as per the software understanding capability with final
analysis done using XL-STAT.

Table 5.1: Data Summary
Summary Statistics:

Obs. Obs.
with without
missing missing Std.
Variable Observations data data Minimum Maximum Mean deviation
Gender 109 0 109 1.000 2.000 1.376 0.487
Occupation 109 0 109 1.000 5.000 1.862 1.014
V1 109 0 109 4.000 7.000 5.688 0.604
V2 109 0 109 4.000 5.000 4.275 0.449
V3 109 0 109 3.000 5.000 3.661 0.531
V4 109 0 109 4.000 6.000 5.220 0.497
V5 109 0 109 5.000 6.000 5.468 0.501
V6 109 0 109 5.000 6.000 5.734 0.444
V7 109 0 109 4.000 5.000 4.523 0.502
V8 109 0 109 4.000 5.000 4.220 0.416
V9 109 0 109 6.000 7.000 6.229 0.422
V10 109 0 109 2.000 4.000 2.807 0.518
Value for
Money 109 0 109 5.000 6.000 5.514 0.502
Technicality 109 0 109 5.000 6.000 5.468 0.501
Quality 109 0 109 5.000 7.000 5.917 0.337
Reliability 109 0 109 5.000 6.000 5.651 0.479
Source: Primary Data on XLSTAT

The above table gives the total data collected and also the variables used for the
study. It also gives the mean for each variable and the standard deviation in each.
The variables V1 to V10 are all the part of the modified CETSCALE and named
so as per writing convenience.

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Ethnocentric Sum

Table 5.2: Ethnocentrism Display
Obs. Obs.
with without
Sum 109 0 109 44.000 53.000 47.817 1.695

Figure 5.1: Ethnocentrism Display
Histogram (Sum)
0.25

0.2
Relative frequency

0.15

0.1

0.05

0
44 46 48 50 52 54

Sum


The above table and figure gives us idea about the range of the ethnocentric sum
and the number of people fall in the range of the 7 point rating scale. the mean
being 47.817 which indicates the people in Bangalore are slightly ethnocentric in
nature when comes to purchase decision making. The ethnocentric sum is
calculated based on the modified 10 point CETSCALE(adapted from Shimp and
Sharma,1987 17-point CETSCALE).

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5.3 HYPOTHESES TESTING
Test 1
Table 5.3: Test for Value for Money
Obs. Obs.
with without
Value
for
Money 109 0 109 5.000 6.000 5.514 0.502

Difference 0.514
z (Observed value) 10.682
|z| (Critical value) 1.960
p-value (Two-tailed) < 0.0001
alpha 0.05

In decision making the Value for Money plays an important part and the
alternate hypothesis acceptance proves its importance, depending on the result
obtained from the z-test done and the data collected.

Test 2
Table 5.4: Test for Technicality
Obs. Obs.
with without

Technicality 109 0 109 5.000 6.000 5.468 0.501

Difference 0.468
alpha 0.05

In decision making Technicality plays an important part and the alternate
hypothesis acceptance proves its importance, depending on the result obtained
from the z-test done and the data collected.

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Test 3
Table 5.5: Test for Quality
Obs.
Obs. withou
with t Std.
Variabl Observation missin missin Minimu Maximu Mea deviatio
e s g data g data m m n n

Quality 109 0 109 5.000 7.000 5.917 0.337

Difference 0.917
alpha 0.05

In decision making Quality also plays an important part and the alternate
hypothesis acceptance proves its importance, depending on the result obtained
from the z-test done and the data collected.

Test 4
Table 5.6: Test for Reliability
Obs. Obs.
with without

Reliability 109 0 109 5.000 6.000 5.651 0.479

Difference 0.651
alpha 0.05

In decision making the Reliability factor also plays an important part and the
alternate hypothesis acceptance proves its importance, depending on the result
obtained from the z-test done and the data collected.

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All the above four tests are about the attributes which influence purchase
decision making and from the results obtained it can be seen that more than the
country of origin and culture relation, the purchase decision is made depending
on the attributes and the ethnocentrism factor hardly effects the buying process
in Automobiles(two and four wheelers) and FMCG.

Test 5
Table 5.7: Test for Ethnocentrism
Obs. Obs.
with without

Sum 109 0 109 44.000 53.000 47.817 1.695

Difference -0.183
z (Observed value) -1.130
p-value (Two-tailed) 0.258
alpha 0.05

From the test run and the result obtained the null hypothesis cannot be rejected
which proves that Indians are ethnocentric in nature when it comes to choosing
and making decisions but the mean value obtained is 47.817 which states that
only slightly ethnocentric in nature.

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5.4 CLUSTER ANALYSIS
Analysis 1
Table 5.8: Cluster Analysis 1
Results by class:

Class 1 2 3 4
Objects 4 2 1 3
Sum of weights 4 2 1 3
Within-class variance 31.333 150.500 0.000 51.667
Minimum distance to centroid 3.536 8.675 0.000 3.902
Average distance to centroid 4.773 8.675 0.000 5.711
Maximum distance to centroid 5.874 8.675 0.000 7.157
V1 V2 V3 V4
V5 V10 V7
V6 V8
V9

The total variables in the 10 point CETSCALE is divided into 4 clusters
showing similar properties and behaviour. the above cluster division is results as
per class division and gives us the variable division. Class 1 has V1,V5,V6 and
V9. Class 2 has V2 and V10. Class 3 has only V3. Finally, Class 4 has V4, V7
and V8.

Analysis 2
Table 5.9: Cluster Analysis 2

Results by object:

Observation Class Distance to centroid
V1 1 4.583
V2 2 8.675
V3 3 0.000
V4 4 7.157
V5 1 5.099
V6 1 3.536
V7 4 3.902
V8 4 6.074
V9 1 5.874
V10 2 8.675

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Again dividing the variables in the CETSCALE into 4 groups the above table is
obtained and the here the clustering basis is distance to the centroid. V1, V5, V6
and V9 fall into Cluster 1. V2 and V10 fall into Cluster 2. V3 is the single
variable in Cluster 3. V4, V7 and V8 are in Cluster 4.

5.5 CONCLUSION
Based on the primary data analysis it can be concluded that Indian consumers are
just slightly ethnocentric in nature from the hypothesis test number 5 and the
product attributes like Value for Money, Technicality, Quality and Reliability
has an impact on the purchase and decision making process can be proved from
the hypothesis test number 1 to 4.

The cluster analysis groups the variables into four main groups depending on
class and object and the results obtained from their k-means cluster analysis.

24

6.1 FINDINGS
The success of research depends on its findings, the findings of the present study
are:
The descriptive studies indicate that gender and occupation does have an
impact on the purchase decision and ethnocentrism level of people.
The hypotheses test proves that product attributes are important and
ethnocentrism just slightly impacts the decision making. The better the
attributes the more the chance of product/service success.
The efficient and effective products/ services sell.
Self-culture belief needs to be respected.
The descriptive study shows the ethnocentric mean to be 47.817 out of 70
which makes the customers to exhibit some level of ethnocentrism but not
that strong enough.
The level of ethnocentrism and product attributes when taken together, the
better the attributes the product sells irrespective of its origin and customers
Motherland association.
The most important attribute being the Quality of the product/service
followed by Reliability, then comes Value for Money and finally
Technicality.
The marketers are at times unsure about the psychographic segmentation.

6.2 CONCLUSION
From the present study, which was conducted on Indians to check the effect of
ethnocentrism on the purchase of high involvement product(two and four
wheelers) and low involvement goods(fast moving consumer goods), it is
observed that in Indians there is no high level of ethnocentrism which effects the
purchase decision making rather it's the product attributes that makes the product
acceptable among the people.

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6.3 SUGGESTIONS
Level of ethnocentrism should be found out for each category of product to
estimate its acceptance in the Indian market.
Product features and its advantages and benefits should be laid stress upon for
the product/ service to be successful.
Culture and self-belief of all the communities in India should be respected by
all the foreign companies.

6.4 SCOPE FOR FUTURE STUDY
The present study deals only with two product categories, i.e. automobiles and
FMCG and finding of ethnocentrism among the consumers. The further study
needs to be done on other categories of high involvement and low involvement
goods.

The further study needs to be done on how we can develop a better model to find
out ethnocentrism and make the research in a large population in various
geographical regions.

6.5 LIMITATIONS
The main limitations of the study was that it was carried out only at Bangalore
region and also in two product categories for determining the ethnocentrism
among Indian consumers.

The other limitation being absence of only Indian manufacturing companies in
the categories making people go for foreign brands and being habituated using
that which does not give a valid ethnocentric score. Most companies present are
either joint ventures or acquisitions or franchises running which is a major
limitation for the study.

26

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