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Consumer perceptions of Global and Local Brands in the Indian retail Industry 1
Consumer Perceptions of Global and Local
Brands in the Indian Retail Industry
By Smriti Bajaj
(2006-2007)
A dissertation submitted to the University of NottinghamIn part consideration for the degree of MA in Marketing
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 2
Abstract
Purpose The purpose of this dissertation is to investigate, in an emerging market,consumer attitudes towards local and foreign brand purchases against a background of
factors like Culture, Country of Origin, Product quality and services. A comprehensivemodel broadens knowledge on consumer behaviour by incorporating the abovementioned factors.Design/methodology/approach- India is the emerging market studied. A total of 18respondents were interviewed face-to-face using a semi structured questionnaire in thecity of Mumbai and Indian students studying in the United Kingdom.Findings- It was found that the quality of global brands was perceived to be generallyhigher and superior to local brands. Most consumers also associated greater accessibilityof foreign brands in the Indian market with better quality at lower prices. Indianconsumers were not prejudiced against foreign brand names. In fact, they evaluated themhigher on technology, quality, status and esteem than Indian brands and attributed higher
credibility to those countries of origin.Research Limitations/implications- This study adds to the body of knowledge aboutconsumer behaviour and their perceptions of global vs. local brands, in a massive and fastdeveloping market.Managerial Implications- As companies become global, managers must possess athorough understanding of the attitudinal and behavioural characteristics of emergingconsumer markets, because what is known about consumers in one part of the world isnot applicable to consumers in other parts.Key words- Global Brands, India, Culture, Country of Origin and Product and ServiceQuality, Materialism.
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 3
Acknowledgements
I would like to convey my heartiest gratitude to my supervisor Dr Prithwiraj Nath for
intensifying my learning curve. Without his guidance and support, this dissertation would
not have been possible.
I also extend my appreciation to my Mom, Dad and my family for their unconditional
love and support throughout my work. Their unwavering support and encouragement
accompanied me through this journey.
I would like to give my special thanks to all my friends, and the other respondents who
took time out to participate in this research, acknowledging that this study would not
have been possible without their assistance and support. I also extend my gratitude
towards Mr Kishore Biyani who gave me really valuable insights on the Indian retail
sector without which my research would have been incomplete.
Specifically I would like to thank my friends at the University of Nottingham for their
cooperation and support and making this year extremely unforgettable for me.
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 4
Table of Contents
CHAPTER 1- INTRODUCTION.................................................................................... 61.1 Introduction........................................................................................................... 6
1.2Objectives of the Study.......................................................................................... 81.3Dissertation Outline and Structure......................................................................... 8
CHAPTER 2-LITERATURE REVIEW ...................................................................... 10Introduction............................................................................................................... 10Conceptual Model affecting Consumer Purchases112.1 Global Brands ..................................................................................................... 12
(a) Consumer Perceptions of Global and Local brands ......................................... 12(b) Reasons for preferences for global over local brands ...................................... 14
2.2 Antecedents of Global Brand Purchases............................................................. 16(a) The impact of Product Quality in Consumer Satisfaction Responses,
Country of Origin and Brand Image ................................................................ 16(b) The impact of Service Quality in Customer Satisfaction Responses
Country of Origin and Brand Image. ............................................................. 192.3Impact of Culture on Brand Image..212.4 Materialism and Self Identity.232.5 Consumer Segmentation25
Summary............................................................................................................ 29
CHAPTER 3- METHODOLOGY ................................................................................ 353.1Introduction........................................................... Error! Bookmark not defined.3.2Research Method ................................................................................................. 36
3.3 Why Qualitative Research .................................................................................. 373.4 Research Design.................................................................................................. 373.5Data Collection .................................................................................................... 383.6 Conducting the Interviews .................................................................................. 393.7 Data Analysis..413.8 Concept Map...433.9 Summary44
CHAPTER 4- ANALYSIS AND DISCUSSION .......................................................... 454.1 Consumer Perceptions of Global and Local Brands........................................... 454.2 Cues of Product and Service Qualities that Affect Consumer
Purchases..474.3 Consumer Segmentation..494.4 Impact of Culture on Consumption Patterns...504.5 Materialism and Social Identity..514.6 Discussion and Findings.52
CHAPTER 5- CONCLUSION....................................................................................... 575.1 Managerial Implications ..................................................................................... 575.2 Key Findings....................................................................................................... 62
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 6
Chapter One
Introduction
1.1. Introduction
This study aims in understanding consumer perception of global brands vs. local brands
in the Indian retail industry. The Indian retail industry is undertaken for the study for the
simple reason being the strong growth of the retail sector in India. Organized retailing is
at its infancy in India and presents huge growth opportunity. Standing on the threshold of
a retail revolution and witnessing a fast changing retail landscape, India is all set to
experience the phenomenon of a global village. India presents a grand opportunity to theworld at large, to use it as a business hub. A vibrant economy, India tops A.T. Kearneys
list of emerging markets for global retailers and it has climbed up three notches to emerge
as the second most attractive investment destination for global retailers (A.T Kearney,
2005)
India is very often called as the nation of the dukandars (shop keepers) - around 12
million retailers- consisting of more retail shops than those in the rest of the world put
together. The retail trade is highly fragmented in nature and it is often remarked that retail
in India is nascent and mostly unorganized. The local bania or kirana store, the paanwala
and the vegetable vendor who are very much a part of the Indian retail landscape are
termed together by many as the unorganized sector. While it is true that they do not use
technology, they are well aware of the needs and wants of their customers, are aware of
their likes and dislikes and they know what and how much to stock. Many of them also
know their customers by name and offer add-on services like free home delivery and
credit facilities. This is the traditional form of retail in India (Pradhan, 2007)
However the business of retail in India has seen significant changes in the last few years.
We have seen the emergence of new formats and the application of global concepts and
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 9
which lead consumers towards global brand purchases. In addition market segmentation
has also been discussed in order to relate to the class of people which help us achieve our
objective of why people particularly from the upper middle classes construct symbolic
meanings of brands.
A model explaining the various antecedents that lead consumers to purchase global
brands has been developed based on the literature review. Based on the model relevant
hypothesis has been proposed in this chapter. The validity of these hypotheses will be
tested and further examined in the following chapters.
Chapter Three-Methodology
This chapter clearly defines the basic purpose of this study. It then discusses in depth the
relevant methodology that has been made use of to carry out this research. It also explains
in detail how data for this purpose has been collected by briefing on the method of
sampling and the technique used for collecting relevant information.
Chapter Four -Analysis and Discussion
This chapter discusses the findings from the data collected and concluding discussions
are presented. For the purposes of analysis and to achieve the objectives of this research
the results from the interviews have been broken down to various themes so that the
hypothesis proposed in chapter Two can be tested. The themes have been broken down
such that they correlate to the literature review to facilitate discussion of each issue in
depth.
Chapter Five-Conclusion
This chapter presents a key summary of findings obtained from the above chapter. These
findings would be of interest to managers to understand consumer perceptions of globaland local brands in a developing country like India. It then provides various implications
for managers of various global retailers like Tesco, H&M etc before entering the Indian
markets based on the responses of the Indian retailers and lastly it discusses the
limitations of this study.
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 10
Chapter 2
Literature Review
In light of the primary objective of this research to understand consumer perceptions of
global and local brands this chapter will examine and present a detailed review on the
reasons as to why consumers in emerging in emerging markets prefer foreign brands over
local brands. Several studies show that preference for imported, branded products over
domestic ones seems to prevail among consumers in developing countries (Batra et al,
2000). Consumers in developing economies appear to perceive that products from
developing countries are of lesser quality and will result in higher levels of dissatisfaction
(Okechuku and Onyemah, 1999: cited in Batra et al)
A conceptual model has been developed which explains what are the basic factors that
lead consumers in emerging markets to purchase global over local brands. This model
will be applied and tested in our analysis to conclude and explore the main reasons for
consumer purchases of global over local brands and what are the further implications that
managers need to keep in mind while moving into emerging markets.
This chapter has been divided into several sections. The first part throws light upon the
consumer preferences for global brands. It then moves on to explaining the antecedents of
global brand purchases that affect consumers like Service Quality and Product Quality,
Culture, and Materialism . It also discusses Consumer segmentation in order to identify
different classes in different societies in order to study the consumption behaviour.
Figure: The figure below depicts a conceptual model for understanding Consumer
Purchase Behavior .
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 11
Self Identity SocialStatus
Value Prestige
Service Quality
Materialism
Culture
Consumer as Interpreter
Purchase of Global
Brands
Antecedents Intermediaries Consequences
Country of
Origin
Consumer
Satisfaction
Product
Quality
Brand
Image
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 12
2.1 Global Brands
People are pawns in the hands of giant companies with huge advertising budgets and
global reach. Brands bring something that people think is better than what they feel.
- (The Economist)Today brands have come to represent a fascist state where we all salute the logo and have
little opportunity for criticism because our newspapers, television stations, Internet
servers, streets and retail spaces are all controlled by multinational corporate interests
(The Economist, 2004). With globalization touching the nooks and corners of every
nation a global consumer segment has arisen whose needs and interests are becoming
increasingly homogeneous. The growing integration of international markets as well as
the growth of competition on a worldwide scale implies that adoption of a global
perspective has become increasingly imperative in planning marketing strategy (Douglas,
1987)
As the world is shrinking in to a global marketplace, it is increasingly significant to
understand the consumers perception of global brands and local brands. Studying
consumer perceptions towards global vs. local brands have substantial implications in
marketing and will also serve as a citation for future research. There would also be
several reasons for consumers perceptions and attitudes towards these brands. Thus there
is a need to uncover the reasons for consumers preference for global brands over local
brands.
2.1. (A) Consumer perceptions of global and local brands.
A local brand can be defined as a brand that exists in one country or in a limited
geographical area (Wolfe, 1991). Schuiling et al (2004) point out that local brands belong
to a local, international, or a global firm, they also provide a link between national
economy and individual well-being. Several researchers define global brands as a brand
that is marketed under the same name in multiple countries with similar and centrally
located coordinated marketing strategies.
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 13
Schuiling et al (2004) conducted an exploratory study across European countries to see
how consumers perceive local brands. The study revealed that local brands benefit from
strong brand equity and also benefit from higher consumer awareness than international
brands do and they enjoy a strong brand image. They not only benefit from a good
quality image but also from a better value and trust perception than international brands
do (Holt et al, 2003). Value is linked with the fact that prices of local brands are usually
lower than those of international brands, providing consumers as sense of better value for
money (Schuiling et al, 2004). Local brands are perceived as more down to earth than
an international brand, which means that local brands offer a more basic/no frills brand
proposition. Local brands are also linked more to local traditions and local cultures than
international brands are. It was also found that trust is an important advantage for local
brands because it provides a unique relationship with consumers that take years to
develop. Local brands are not more flexible than global brands in terms of their
marketing activities when they compete in a foreign product category due to cultural
categories being associated with the product category (Eckhardt, 2005). Just as global
brands need to conform to international marketing dictums, local brands sometimes need
to conform to deeply held preconceptions about product category in which they operate.
When a brand is marketed around the world, that fact alone gives it an aura of excellence-
and a set of obligations (Holt et al, 2004). A study conducted by Douglas et al (2004)
revealed that consumers all over the world associate global brands with three main
characteristics and evaluate them on those while making purchase decision. These
include Quality Signal, global myth and Social responsibility. Corsby, (1979) defines
quality as conformance to requirements. Lewis and Booms (1983) are of the view that
quality is a comparison between Expectations and Performance. Consumers prefer global
brands because they usually offer more quality and better guarantees than other products.
That perception often serves as a rationale for global brands to charge premiums.
Consumers look to global brands as symbols of cultural ideas. They use brands to create
an imagined global identity that they share with like-minded people. They feel that
Local brands show them what they are while global brands show them what they want
to be, global brands often make them feel like citizens of the world, and they somehow
give them a sense of identity (Holt et al, 2004).
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 14
Much of the assumed advantage of global brands centres on the status and prestige
associated with global reach. A study of more than 10,000 consumers by Johansson and
Ronkainen (2005) revealed that even though domestic brands are likely to be more
familiar than global brands, where familiarity is equal, the global brands will have higher
esteem. The researchers asserted that global branding will arguably face different
challenges by product category. Certain categories such as automobiles and computers
are deemed more global in terms of the similarity in consumer preferences. Apart from
discussing the consumer perceptions of local and global brands it is also worthwhile
exploring the reasons of preferences for global over local brands.
2.1. (B) Reasons for preferences for global over local brands
According to Steenkamp, (2003) consumers become perceptive to global brands when
consumers believe the brand is marketed in multiple countries and is recognised as global
in these countries This perception occurs in two forms; consumers realize that the same
brand is found in other countries through media exposure, word of mouth
communication, or during travel overseas. Secondly as studied by Alden et al (1999) that
a brand may assert or imply its globalness through marketing communications that use
brand names, endorsers, advertising themes, etc.. Consumers prefer brands that they
perceive as originating from a non-local country, especially from Western countries,
more than they do local brands and that preference is linked not only to perceived quality
but also to social status (Alden et al, 1999). According to Peterson and Jolibert (1995),
consumers in developing countries generally seek to emulate western consumption
practices and lifestyles and purchase foreign brands. It is asserted that considerable
similarities exist in the needs of consumers around the world (Domzal and Unger, 1987)
and this convergence in consumer needs is largely attributed to increased cross border
population mobility and electronic mobility facilitated by telecommunications technology
(Quelch, 1999).
Kapferer (1997) suggests that consumers may prefer foreign brands because of
associations of higher prestige. Steenkamp et al (2002) argue that the influence of
perceived prestige on purchase intention is stronger when product category is more
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 15
conspicuous and its ownership or consumption is more publicly visible. The world scale
of global brands allows people to associate themselves with globally recognized events
(World Soccer Cup, Formula one, Olympics, etc) and celebrities (Brad Pitt, Beckham
etc). Through a process of meaning transfer, the prestige attached to these events and
celebrities may be transferred to the sponsoring global brand (Mc Cracken, 1986).
Empirical study conducted by Steenkamp et al (2003) has revealed that prestige is the
second factor driving global brand preference. Foreign brands of most consumer durables
and non durable categories were given significantly higher mean attribute ratings on
status and esteem except where cold drinks and ice creams were concerned. A study
conducted by Kinra (2006) held that COO credibility of foreign brands was a significant
factor influencing consumer attitudes and preferences as it was correlated highly with
quality and higher status and esteem.
According to Kapferer (1997), if a brand is viewable as globally available, consumers
may attribute higher quality to the brand because such quality is likely to be thought of as
critical to global acceptance. According to Kirmani and Baumgartner (2000), perceived
quality is defined as a consumers evaluation of a brands overall excellence based on
intrinsic (e.g. performance, durability) and extrinsic cues (e.g. brand name warranty)
Global brands often appeal to human universals and are purchased to signal membership
in worldwide consumer segments. This signifies that global brands are often seen by
consumers as brands that convey worldwide citizenship, when consumed (Dawar and
Parker, 1994). A number of authors (Appadurai, 1990; Hannerz, 1990) note that media
flows, increased travel, and other factors are creating widely understood symbols and
meanings reflected in global brands that, in turn, communicate membership in the global
consumer community with all its positive connotations (Mc Cracken, 1986). Although
this was being said some twenty years back, this condition has grown eventually stronger.
Global Brands are viewed as luxury goods for an average Indian. The market for luxury
goods has recently experienced a considerable growth. From the above it can be
concluded consumers in developing countries tend to evaluate global brands in terms of
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 16
better product and service quality, they also tend to relate global brands as symbols of
social status. The COO of origin has also been found as a significant factor influencing
global brand preferences in terms of status and quality. All these factors are discussed in
detail below.
2.2Antecedents of Global Brand Purchases
Quality affects consumer behaviour to a great extent. The importance of quality is further
enhanced by Aaker (1991), who categorized perceived quality as one of the key sub-
dimensions of brand equity. Quality can be defined as the consumers judgement about a
products overall excellence or superiority (Zeithmal, 1988). Similarly, the definition of
quality by Aaker (1991) is the customers perception of the overall quality or superiority
of a product or service with respect to its intended purpose, relative to alternatives.
Satisfaction is the result of a post consumption or post usage evaluation, containing both
cognitive and affective elements (Olivier, 1997). According to the expectancy
disconfirmation paradigm (Olivier, 1980), customers judge satisfaction by comparing
previously held expectations with perceived quality or service performance. Managerially,
it is extremely important to understand how to create and offer customer satisfaction.
Therefore, both in practice and in academic research, quality has emerged as a critical
issue for determining customer satisfaction.
2.2 (A)The impact of Product Quality in Consumer Satisfaction Responses, Country
of Origin and Brand Image.
Products constitute an array of intrinsic and extrinsic attributes that consumers use to
determine product quality. Intrinsic attributes are an integral part of and inseparable from
physical product. Extrinsic attributes (e.g.-price, country of origin, or a brand name) are not
physical components of a product, and changes have no material effects on the actual
product, yet they often serve as cues that may affect consumers quality perceptions
(Ghauri and Cateora, 2006)
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 17
Garvin (1984: 1987) cited in Tamni et Sebastianelli (2002) provides a well-known
framework for thinking about product quality that is often used by consumers to evaluate
products that deliver satisfaction. These include: performance, features, reliability,
conformance, durability, serviceability, aesthetics and perceived quality. The table below
provides an explanation of the above.
Table 1
Dimension Definition
Performance The primary operating characteristics of a product
Features The secondary characteristics of a product that supplement its
basic functioning.
Reliability The products profitability of failure-free performance over a
specified period of time.
Conformance The degree to which a products physical and performance
characteristics meet design specifications.
Durability A measure of useful product life, i.e., the amount of use a customer
gets from a product before it deteriorates or must be replaced.Serviceability The ease, speed, courtesy, and competence of repair.
Aesthitics How the product looks, feels, sounds, tastes or smells, a matter of
personal preferences
Perceived Quality based on image, brand name, or advertising rather than
Product attributes and, of course, is subjectively assessed.
Source: Garvins Eight product quality dimensions cited in (Tamni et Sebastianelli)
(International Journal of Quality and Reliability Management)
Hooley et al (1998) found that consumers often tend to relate product quality to pricing as
well. High pricing is generally associated with higher quality, superior brand image and
strong reputations. German manufacturers such as Mercedes, BMW and Audi have
successfully positioned their offerings at the high quality end of spectrum through superior
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 18
design, technical engineering skill and attention to quality control. For quality positioning
to be viable, customers must be prepared to pay for superior quality as there are usually,
though not always higher costs associated with offering a higher quality product. In the
automotive industry, German manufacturers such as Mercedes, BMW and Audi have
successfully positioned their offerings at the high quality end of spectrum through superior
design, technical engineering skill and attention to quality control through the
manufacturing process.
Zhang (1999) defines COO as information pertaining to where a product is made. It is
operationalised and communicated with the phrase Made in and the country name.
Johansson et al (1985) define country of origin as the country where corporate headquarters
of the company marketing the product or brand is located. Typically, this is the home
country for a company. It can also be defined as any influence that the country of
manufacture has on a consumers positive or negative perception of the product and
services (Cateora, 1996).
Consumers in emerging countries consciously shop for quality goods but often are
unfamiliar with product category attributes and benefits (Batra, 2000). Therefore, brands
and COO serve as surrogates to inform the consumer about products quality. A study
conducted by Schooler (1965) in Guatemala revealed that products made in less
developed countries were not evaluated as quality products. Consumers were biased for
or against products from a less developed country when they were evaluating products
made in different, less developed countries.
Consumers hold stereotyped images about countries and these images are used as
information cues in judging products from different origins (Lotz and Hu, 2001). They also
tend to generalize their attitudes and opinions across products from a given country, based
on their familiarity and background with the country and their own personal experiences of
product attributes such as technological superiority, product quality, design, value
for money, status and esteem, and credibility of country of origin of a brand.
Favorable country perceptions are known to lead to favorable perceptions of associated
attributes such as product quality indicating thereby, that consumer evaluations are
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 19
governed by influences other than the quality of the product (Peterson and Jolibert, 1995).
In this context COO effect refers to the extent to which the place of manufacture influences
consumers product evaluations.
One might generalize that the more technical the product, the less positive is the perception
of one manufactured in a less developed country. There is also the tendency to favor
foreign-made products over domestic-made ones in less developed countries. Not all
foreign products fare equally well because consumers in developing countries have
stereotypes about the quality of foreign- made products even from industrialized countries.
A survey of consumers in Czech Republic found that 72 percent of Japanese products were
considered to be of the highest quality, German goods followed with 51 percent, Swiss
goods with 48%, Czech goods with 32% and last, the United States with 29% (Cateora,
1996)
2.2 (B) Service Quality Impact on Customer Satisfaction, Country of Origin and
Brand Image
Over the past two decades the theory and practice of service quality has received
considerable attention. Viewed as a means by which customers distinguish between
competing organisations (Marshall and Murdoch, 2001), service quality is known to
contribute to market share and customer satisfaction. Thus the pursuit of quality services in
organisations is driven by the need to survive and remain competitive (Agus et al, 2007).
Perceived service quality can be defined as a global judgement or attitude related to the
superiority of a service (Parsuraman et al, 1988). The term perception pertains to the
consumers beliefs concerning the received or experience. (Brown and Swartz, 1988).
Service quality has been discussed in only a handful of writings (Gronroos 1982; Lehtinen
and Lehtinen 1982; Lewis and Booms 1983; Sasser, Olsen and Wyckoff 1978). According
to them Service quality is a measure of how well the service level delivered matches
customer expectations. Delivering quality service means conforming to customer
expectations on a consistent basis. In line with this thinking Parsuraman et al (1988)
developed a global measurement for service quality, namely SERVQUAL. SERVQUAL
has been applied to measure service quality in various service industries by many
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 20
researchers. They highlighted five dimensions of service quality (tangibles, assurance,
reliability, responsiveness and empathy) which are explained in the table below.
Table 2
Tangibles Physical facilities, equipment, and appearance of personnel.
Reliability Ability to perform the promised service dependably and accurately
Responsiveness Willingness to help customers and provide prompt service
Assurance Knowledge and courtesy of employees and their ability to inspire
Trust and confidence
Empathy Caring, individualized attention the firm provides its customers.
Source : Parsuraman et al, 1988 (Journal of Retailing)
Most of the studies on country of origin have revealed that COO of a product does affect
product evaluation. Studies also reveal that COO affects the consumption of services.Javalgi et al. (2002) examined three types of services that were affected by COO. These
include core services e.g. (travel services), supplementary services, e.g. (warranties) and
cross-national service comparison where services are produced (source) and consumed in
individual countries.
When examining core services by COO, consumers tend to prefer their own, and from
economically progressed countries (Javelgi et al, 2002). Supplementary services, those
offered along with the sale of products, tend to be important in developing, competitive
advantage (Lovelock, 1995, 1999) as cited in Javelgi et al. It appears that most consumers
hold negative images of products from economically less progressed countries (Javelgi et
al, 2002).
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 21
Finally when services are produced and consumed in individual countries, consumers tend
to exhibit similar attitudes and preferences with regard to the criteria they deem important
when evaluating services (Javalgi et al, 2001). The challenge for service providers is that
they must anticipate consumers concerns regarding a specific COO, especially services
originating from less developed economies.
On the basis of the above literature it is hence proposed:
H1: Customer satisfaction is enhanced by product and service quality which are
perceived higher in global brands.
H2: There are country specific advantages for brands from countries which are seen
as strong in that product category. Such a country of origin effect has a direct impact
on product quality which provokes consumers to purchase global brands.
H3: Service Quality is affected by the country of origin which affects purchase of local
brands.
2.3 Impact of Culture and Acculturation on Brand Image
Globalisation of markets and international competition are requiring firms to operate in a
multicultural environment. In addition, migration patterns and transnational
communication media like satellite television are creating multicultural populations in
domestic markets and exposing consumers to alternative behaviours and wants (Craig
and Douglas, 1997). Hence it is very important to understand people and the background
from which they prevail. Understanding people means understanding their background,
from which present and future behaviour can be predicted. Their background has
provided them with a certain culture. The word culture is used here in the sense of the
collective programming of the mind which distinguishes the members of one category of
people from another (Hofstede, 1994).
Culture is the main determinant for consumer behaviour. Since the literature on culture is
very broad, it is necessary to narrow down the focus of this research to meet the purpose of
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 22
findings of this study by describing certain points of culture influencing consumer
behaviour.
Usuiner (2000) points out factors like individualism, collectivism, independence,
interdependence, loyalty, consumers involvement, and cognitive styles and have cultural
implications on human behaviour which affect consumption of which only the
independent and Interdependent self is explained below as it realtes directly to our
research purpose.
Independent and Interdependent self.
As cited in Usuiner (2000), Markus and Kitayama (1991) have outlined two construals
of the self: the independent and interdependent. The independent self corresponds to the
western conception: it is based on assumption of individualism (people are seen as
inherently separate and distinct). In the area of consumption personal preferences are
suppose to reflect a persons tastes, values and convictions; expression of self is
encouraged. On the other hand, the inter dependant self of most Asians is based on the
assumption of collectivism (people are seen as not fully separable that is they are
connected to each other by a multiple of overlaps and links: they share a common
substance). As a result in identity lies in familial and social relationships. People withinterdependent selves tend to value the criteria of appropriate social conduct in their
consumption behaviour. Chiou (1995) notes that individuals in Asian societies have to
consider the wider implications of their actions and it causes consumers to identify
certain roles and behaviors and to have less personal freedom in adopting new products.
Independent and Interdependent selves are reflected in the concept of belonging to a
certain class.
India represents a cultural society in which most people belong to a particular group or a
society which expects the people in behaviour of a special kind and certain obligations as
well. Indias collective culture has significant impact on individuals consumption
behaviour. Cultural variables influence the symbolic meanings individuals give to brands
and thereby leading them to purchase global brands due to a better brand image.
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 27
lower classes may exhibit upward mobility, showing buying behaviour similar to that of
upward classes. But in other cultures where a caste system gives people a distinctive role,
buying behaviour is more firmly linked to social class. Upper classes in almost all societies
are often similar to each other than the rest of their own society. While making purchases
they make choices that are less culture bound than those of the lower classes. This tendency
accounts for the strength of global luxury brands such as Burberry, Tag Heuer and Mont
Blanc. Generally the lower social classes are more culture bound, although young people of
all classes are less so and account for the global youth brands like Nike, Coca-cola and
Swatch.
Wong and Ahuvia (1995) argue that Americans generally see ones social class as
primarily reflecting ones personal income level which in turn is believed to reflect (atleast
in part) ones individual professional merit. But to the interdependent Chinese, class does
not belong to oneself, but also to ones group, usually ones family. Relatives and kinship
clan. Like many other elements of the self and others, social classes are important for
consumer behaviour, people expressing their class differences, real or fantasized, by
consumption (Usuiner, 2000).
Marketers have also used personality variables to segment markets, giving their products
personalities that correspond to consumer personalities. Honda used personality
segmentation to power its way into the US market.
Behavioural segmentation- divides buyers into groups based on their knowledge, attitudes,
uses or responses to a product. Many marketers believe that behaviour variables are the
best starting point for building market segments. Here elements such as user status, usage
rate, loyalty status are taken into consideration.
Tam and Tai (1997) identified five distinct segments in China that can be extended to the
Indian markets as well. The largest segment to emerge were identified as traditionalists
and accounted for 41% of the population. According to the findings the traditionalists
adhered closely to the old attitudes and beliefs. They were resistant to change and reluctant
to try new and premium products. They also tended to remain strongly loyal to the brands
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that they had frequently purchased. Strivers and achievers were defined mainly by their
spending habits and materialistic values. Strivers were very materialistic, immersed in an
aggressive pursuit of achievement and made up about 20% of the population. Most of them
wanted to change their roles in lives but it is probable that the majority would not achieve
this. Strivers were impulse buyers and insisted on instant gratification. Achievers also
valued achievement and materialism, but they have been more successful than strivers.
They could be described as yuppies and were found to be more keen on luxuries that they
constituted a special sub group: super-achievers. They were the first to latch onto new
trends, products and premium brands. Adapters were generally older people who were
comfortable with their accomplishments in life but were still open to new experiences.
China and India have over a billion consumers, presenting tempting prospects for
international companies. The experience of international companies suggests that despite
the attractiveness of these emerging markets, their consumers remain an elusive target. A
common fallacy lies in the thinking that there are huge margins to be gained from
skimming the 3-5% affluent consumers in emerging markets who have global preferences
for luxury goods and purchasing power. In India Coca cola came in at the top and tried
to trickle down. It launched pricey 350 ml bottles instead of offering cheaper smaller ones.
Rather than concentrating on the main towns, it went for the whole of India with a single
size and price, using expensive and flawed distribution and advertising. Ford and other
motor manufacturers also misjudged the Indian market. They started with medium-sized
cars in a market dominated by small ones, and expected to compete with nearly 70%
overcapacity in medium sized car manufacturing. Kelloggs offered premium priced cereals
supported by expensive marketing. They soon learnt that, although market research showed
that India was the largest cereal-consuming nation on earth, consumers were choosing to
buy Champions products costing a fifth price of Kelloggs. Analysts argue that it is
important to define the Indian market not by income alone, but by consumption. (Kotler et
al, 2004)
2.6Summary
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The table below summarises the key findings of the authors that are directly related to our
research objectives. From this table it also becomes clear how the conceptual model has
been developed.
Section Author/ Article Key Findings
Consumer Perceptions of
Global and Local Brands.
Holt et al (2003)Managing theTransnational Brand: HowGlobal Perceptions DriveValue, working paper,Harvard Business School.
Local brands have strong
brand equity and higher
consumer awareness but
global brands do have a
higher brand image
Douglas et al (2004) HowGlobal Brands Compete,Harvard Business Review
Global brands are associated
with Quality Signal, Global
Myth and Social
Responsibility
(Alden et al, 1999),Brand Positioning
through advertising inAsia, North America andEurope: the role of globalconsumer culture, Journalof Marketing, Vol. 63,pp.75-87.
Consumers prefer brands
that they perceive as
originating from a non-
local country, especially
from Western countries,
more than they do local
brands and that preference is
linked not only to perceived
quality but also to social
status.
Peterson, R.A. andJolibert, A.J.P (1995), Ameta-analysis pf country-of-origin effects, Journalof International BusinessStudies, Vol. 26 (4), pp.883-900
Consumers in developing
countries seek to emulate
western consumption
practices and lifestyles and
purchase foreign brands
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 30
(Culture)
Steenkamp et al (2003) ),
How perceived brandglobalness creates brandvalue, Journal ofInternational BusinessStudies, Vol. 34 (1), pp.53-65.
Studies revealed that
prestigewas one of the
important factors driving
global brand preferences.
Foreign brands of most
consumer durables and non
durable categories were
significantly given higher
mean attribute ratings on
status and esteem.
Product Quality Ghauri, P. and Cateora, P(2006), InternationalMarketing, 2NDEDN,McGraw-Hill Companies,Berkshire.Cateora (2000)
Extrinsic cues (Price,
Country of Origin, Brand
name) and Intrinsic cues
were identified which affect
quality of Products
Garvin (1984: 1987), cited iSebastianelli et al, 2002)
International Journal of
Quality and Reliability
Management
Performance, Features,Reliability, Conformance,
Durability, Serviceability,
Aesthetics and perceived
Quality were identified as
cues to judge product
Quality
Hooley, G.J., Mller, K.
and Broderick, A.J. (1998)Competitive Positioningand the Resource BasedView of the Firm, Journalof Strategic Marketing,6(2), 97-115.
Product Quality is also
associated with high pricing
leading to superior brand
imageand strong reputation
thereby affecting customer
satisfaction
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 31
Batra et al, (2000) Effectsof Brand Local andNonlocal Origin onConsumer Attitudes in
Developing Countries,Journal of ConsumerPsychology, Vol. 9 (2), 83-95.
Consumers use COO as an
important cue to shop for
quality products, COO
informs the consumers
about a products quality
when they are unfamiliar
about a products.
Peterson, R.A. andJolibert, A.J.P (1995), Ameta-analysis pf country-of-origin effects, Journalof International BusinessStudies, Vol. 26 (4), pp.883-900
Consumers generalise their
attitudes and opinions
across products from a
given country, based on
their familiarity and
background with the
country and their own
personal experiences of
product attributes such as
technologicalsuperiority, product
quality, design, value
for money, status and
esteem, and credibility
of country of originof a
brand.
Service Quality
Parsuraman et al (1998),
SERVQUAL: A Multiple-Item Scale for MeasuringConsumer Perceptions ofService Quality, Journalof Retailing, Vol. 64(1)
Five dimensions affecting
service quality were
identified tangibles,
assurance, reliability,
responsiveness and
empathy that have an
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 32
impact on brand image
Javalgi, R., White. D.(2002), StrategicChallenges for themarketing of services
internationally,International MarketingReview, VOL.19, no.6,pp.563-581
Service quality is affected
by COO.
Culture/ AccultuartionUsunier. J, (2000),Marketing AcrossCultures, Chapter 3 andChapter 4, Third Edition,
Prentice Hall, PearsonEducation.
Factors like Individualism,
Collectivism
Independence,
Interdependence, loyalty
and cognitive styles have
cultural implications on
human behaviour which
affect consumption
thereby affecting brand
image.
Douglas S.P. and Craig,C.S. (1997), Thechanging dynamic ofconsumer behaviour:implications for cross-cultural research,International Journal ofResearch in Marketing,Vol. 14, pp.379-95.
Increased migration is one
of the forces that are
causing radical changes
in consumer behaviour.
Immigrants not only adapt,
or acculturate, to their host
culture, but also they
change the culture
themselves. Because of the
mutual influence between
immigrants and their host
culture, some researchers
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 33
refer to acculturation as
one of the components of a
more general construct,
cultural interpenetration,
which includes the
bidirectional links between
immigrants and their host
culture
Self Identity Burgess, 1999 Individuals want to make
sense in the increasingly
complicated world and one
way of doing this is from
the shift to social identity,
the categorisation from
which they belong to and
to be recognised as part of
MaterialismInglehert, R. (1994)Economic Security andValue Change, TheAmerican Political ScienceReview,
a persons basic sense of
economic insecurity isformed during childhood.
If a person experienced
affluence and economic
stability as a child, later
they will pay less attention
to economic concerns and
allocate more attention to
higher order needs, such as
self-actualisation,
freedom and quality of
life.
Richins. M, and Dawson.R, (1992), A Consumer materialist tend to judge
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 34
Values Orientations forMaterialism and ItsMeasurement: ScaleDevelopment andValidation, Journal of
Consumer Research,Vol.19, pp.303
themselves and others
success by the quality and
quality of possessions
attainted thus the value of
the possessions stem not
only from their ability to
reflect status, but also
their ability to project a
sought after self-image
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 36
Semi structured interviews of executives in four nationally recognized retail
organizations and of Indian customers residing in the U.K. and India were conducted to
gain insights about the following questions:
What are the main reasons for consumer preferences of global over localbrands?
What do managers of retail organizations perceive to be the key attributes of abrand that delivers customer satisfaction? What problems and tasks are
involved in delivering products that maintain customer satisfaction?
What do consumers perceive to be the key attributes of a brand that deliverssatisfaction?
Do discrepancies exist between the perceptions of consumers and brandowners/ retailers?
3.3Why Qualitative Research...
The main purpose of this research is to explore the impact of various factors like culture,
country of origin, quality on the consumption patterns of consumers and also to explore
the materialistic attitudes among the Indians which makes them class and prestige
conscious that lead them to purchase foreign brands. The changes in the retail sector has
also been looked into as a result of foreign brand entry which has affected the
consumption patterns of the consumers, thus making qualitative research the best method
for exploring the outlooks, opinions, interplay of feelings and ideas of consumers. With
this method the researcher could interact more freely with the retailers and consumers
and gain an indepth insight on consumer purchase behaviour. By using qualitative
research, the experience can be described and the opinions of how and why questions
can also be answered.
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3.4Research Design (Sampling Method)
In order to opt for the appropriate data collection approach, a researcher should plan out
the sampling method. Sampling involves selection of the research participants for a
particular study. Various types of sampling methods are used by researchers which can
broadly be divided into probability and non-probability sampling. Probability sampling
refers to sample designs where units are selected by some probability mechanism,
allowing no scope for the influence of subjectivity (Greenfield, 1996). There are various
approaches to probability sampling some of which are random, systematic, stratified and
stage sampling (Coleman and Briggs, 2002). Non probability sampling allows
interviewers to choose sample members at random (meaning as they wish or where
ever they find them) which is not random sampling.
Due to the availability and accessibility of the sampling frame, a probability sample was
not feasible for the present research. Non probability sampling which is non-random and
subjective (Cooper and Schindler, 1999) is applied in the study to carry out the
interviews. A combination of two non-probability subcategories were selected which
were more feasible for the study. The Convenience and Judgement sampling were
made use of (Coleman and Briggs, 2002). Convenient sampling is one which is
composed of members most easily available to the researcher. Convenient sampling was
chosen by the researcher, mainly due to the selection of participants who were
geographically convenient. Judgement sampling occurs when a researcher selects sample
members to conform to some criterion. The aim is to produce data representative of the
population to be sampled, but judgement is used in the sample selection procedure in
order to make data more useful to the decision maker (Crouch and Housden, 1996) With
the application of Judgement sampling, people who belong to the upper middle class who
normally spend a major portion of their income on branded products were picked up as
per the researchers choice from the general public for study.
This study primarily focuses on India One (The upper middle and middle class). There
are vast differences in consumption patterns of all the three classes. Also among India
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One the desire to acquire wealth and products as symbols of success and wealth is greater
as compared to India Two (lower middle class) and Three (service class). In order to
understand the symbolic meanings of brands created by individuals this study focuses on
the consumption patterns and habits of India One.
3.5Data Collection
Secondary data collection has been made use of in the first part of this research.
Secondary data can be collected from internal and external sources. Internal data
collection source is collected from company documents like sales report or customer data
base while external information is collected from outside sources like government
reports, books and periodicals etc. This research involved data collection from secondaryexternal sources. Various academic journals like Journal of Consumer behaviour,
Harvard Business Review, Journal of Marketing Management etc and various
databases like EBSCO, Emerald and Mintel were used to gather information on the
relevant topics. Various academic textbooks and industry reports have also been made
use of that were useful in reviewing the existing literature on branding and in
understanding consumer purchase behaviour.
Primary research has been used for the second part of the research. Primary data can be
collected through various methods which include interviewing, direct observation, the
analysis of artifacts, documents and cultural records; the use of visual materials and the
use of personal experiences (Denzin and Lincoln, 2005). Interviews were used as the
primary source of data collection. They are considered one of the most fundamental
methods of qualitative inquiry and can reveal what guides and determines peoples
actions, bringing to life their thoughts, perceptions and emotions (Darlington and Scott).
Interviews can be used conducting various techniques such as telephone interviews, face-
to-face interviews and focus group interviews. In qualitative research interviews may be
classified as semi-structured, unstructured and group based. Semi structured interview is
normally a mixture of pre-coded and open-ended questions combined in the
questionnaire. The interviewer is bound by the structure of the questionnaire but the
respondent is free to answer the open ended questions in any way but more skill is needed
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in interpretating the responses. However danger exits that the interviewer will edit the
responses to those which seem to be most appropriate, or most required.
In the current research face to face semi interviews were conducted to gather empirical
material. According to Saunders et al (1997) face to face interviews consist of open
ended questions thus allowing the respondent to describe the perceptions in detail.
Researchers have a list of themes and questions to be covered and can vary from
interview to inter looking at the appropriateness. This form of an interview provided the
researcher with the prospect of exploring answers where the researcher wanted
interviewees to explain and build up on the responses and obtain facts. The interviews
were conducted in the homes of the informants (all lived in apartments or with parents),
lasted for 45 minutes to one hour. In each interview I sought to elicit numerous
perceptions of consumers towards brands and what are the main cues of a brand that lead
them towards purchase of global brands. The conversations were loosely structured by
questions that introduced the importance of various factors like Country of Origin,
Culture, Quality of Product and Services in evaluating consumer decision for brand
purchases. The interview structures for the executives were built around managerial
perceptions about key attributes of a brand that deliver customer satisfaction. The
interviews with managers and consumers enabled to uncover the discrepancies that exist
in perceptions between both the groups.
3.6Conducting the Interviews
A pilot interview was conducted before interviewing the actual chosen respondents. The
main purpose of this pilot interview was to test the designed questions for flaws. The
pilot interview helped the researcher to examine the flaws in the questions that were
designed and accordingly rectify the mistakes. The pilot interview was conducted with a
respondent from Mumbai (India). During the pilot interview it was discovered that global
brands were really popular with the upper middle and middle class that is basically India
One. Brands were consumed as symbols of status and self-identity only among the upper
middle classes. The lower classes that is India Two and Three did not give too much
importance to global branding. The consumption patterns between all the three classes
vary distinctively. Thus in order to make the study meaningful the researcher focused on
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only the upper middle classes who relate to brands as symbols of self identity and
personality.
Consumer Interviews
The consumers who belonged to the upper middle and middle class and those who
connected themselves with highly social people were selected. These consumers were
from the age group of 20-30 and included teenagers and married people. In total 15
consumers were interviewed out of which 7 were students currently studying in the UK
since a year and the rest 7 were of consumers residing in the city of Mumbai. They all
belonged to the age group of 20-25. The students belonged to different parts of India
from metropolitan cities like Jaipur, Delhi, and Kolkatta. They were selected from
various cities in order to gain consumer opinions about global and local brands from all
over India. These interviews were conducted in order to show a comparison in the
perceptions of Indians living here and the ones who have always been purchasing high
street/ global brands in India.
Executives Interviews
Nationally recognised companies from the retail sector of India participated in the study.
Semi structured interviews with open ended questions were conducted with four
executives totally from the retail sector. The executives were selected from customer
relations, production, and senior management. The respondent held titles such as
production head, senior manager of customer relations, and managing director. Four
executives were interviewed about a broad range of questions which mainly pertained to
issues on factors affecting purchases of local brands and why do local brands face tough
competition from global brands. These questions were manly asked to get a retailers
perspective on foreign competition. Although this study required a large number of
interviews of retailers, but due to time and availability of retailers interviews with only
four could be conducted. The executive interviews lasted for about 45 minutes.
The research questions varied slightly according to the age group interviewed. Questions
were posed to obtain factual information: some attitudinal information and some targeted
both purposes. A sample of the questions asked and the rationale behind each question
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is displayed in Appendix 2 as an Interview template. Due to the lack of time only one of
the interviews is transcribed. As far as the retail interviews, out of 4 interviews one
sample interview is transcribed and shown in the appendix
3.7Data Analysis
The interviews were analysed using the grounded theory approach recommended by
Strauss and Corbin (1998). The grounded theory approach allows for the identification of
different concepts that emerge and allows for a descriptive analysis of consumer
preferences of global over local brands. This was done by interpreting, segregating and
combining responses pertaining to consumer perceptions. Subsequently the anecdotal
data transcribed was able to follow pattern coding. Pattern codes are explanatory or
inferential codes, ones that identify an emergent theme, configuration, or explanation.
They pull together a lot of material into more meaningful and parsimonious units of
analysis. They are a sort of meta- code (Miles and Huberman, 1994). They usually turn
around four, often interrelated, summarizers: themes, causes explanations, relationships
among people and more theoretical constructs.
During fieldwork the researcher is looking for threads that tie together bits of data,
pattern coding enables the researcher to bring common bits of data by breaking them
down into themes. Pattern coding was chosen by the researcher since the course of the
interview took place in terms of the literature review which was divided into various
segments, it would be easier for the researcher to interpret the data from interviews which
would be broken into themes that correlate to the literature review presented. During the
interview a number of themes were discussed with the consumers: the notion of brands,
what it means to them, what are their perceptions about global and local brands, the
impact of culture, country of origin and materialism on their buying behaviour and also
how the coming in of high street brands have affected their consumption patterns.
The first step during the analysis, using pattern coding was listening to the audio-taped
interviews several times and transcribing the same. The transcriptions was then broken
down into discrete part and examined closely. Lastly the transcriptions were compared
for differences and similarities (Strauss and Corbin, 1988). Concepts that were similar in
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 42
nature were then grouped together under more abstract concepts which can be termed as
categories (Strauss and Corbin, 1988).
The final results of the categories were then conceptualised and compared to secondary
data which led to formulating key themes and ideas. This helped form a perception of
Global brands amongst the Indian consumers.
After the key themes, ideas and concepts have been grouped under common categories a
concept map was used to illustrate the relationships between concepts. A concept map is
a graphical illustration that is used to organise information by systematically linking the
relationships between categories using connecting lines (Novak & Gowin, 1984). The
subject is represented in a circular box and the related concepts are illustrated in square
boxes. These linking lines have clarifying words to clarify the specific relationships
among concepts (Nowak & Gowin, 1984). The concept map is used as a tool to easily
visualis the main concepts and analyse the emerging themes (Strauss and Corbin, 1998).
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3.8Table: Concept Map of Factors leading Consumers to Purchase Global Brands
Global BrandPurchases
Lead to
Believe in society,status and imageSuch
as
Materialistare
Consumers whobelieve in symbolicconsumption
Collectivist
are
Consumers whobelieve in
westernisation
Due to
Impact of Culture/Acculturation
Country of Origin,Price,Brand Image areextrinsic cues
ProductQuality
ServiceQuality
Performance,features,reliability
are
are
Lead toExtrinsiccues
Intrinsiccues
Are cues
of
Assurance,reliability,
Responsiveness
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3.9Summary
This chapter clearly outlined the research method followed and the method of analysis for
the data gathered. It elucidated the purpose of this research, the research techniques
adopted and the reasons for adopting the respective techniques. The above is a summary
of pathway that was adopted in order to reach a desired result. The grounded theory
approach, and concept mapping helped to generate themes and form a map that depicted
reasons for global brand purchases (This map was developed based on the respondents
replies).
I
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Chapter Four
Analysis and Discussion
The results of the interviews produced various themes related to consumer preferences of
global brands. The themes were: Consumer perceptions of Global and Local Brands,
Cues of Product and Service Quality that affect purchases, Consumer Segmentation
Impact of Culture on Consumption and lastly Materialism and Social Identity.
4.1Theme One: Consumer Perceptions of Global and Local Brands.
The emergence of a global marketplace has fuelled the growth and awareness of fashion
brands across India. As India opened up its economy to the rest of the world a whole lot
of foreign brands like Benetton, Tommy Hilfiger, Mango etc entered India thus
influencing the minds of the consumers in decision making. Due to the immense
exposure of these global brands there have been major changes in perceptions of Indians
as far as local brands are concerned. It was observed that consumers tend to evaluate
global brands in terms of better quality and perceived globalness. International brands
appeal to me to a great extent. I think they are better quality than Indian brands and
give more customer satisfaction. They may be more expensive but then one has to pay
for quality products. said a respondent from Mumbai. A citizen fromJaipur studying in
U.K agreed:I like global brands because they usually offer more quality and better
guarantees than other products.
Consumers exhibited that global brands made them feel a part of the global consumer
culture and gave them recognition. It was also revealed that consumers preferred paying
for brands which were recognised as they gave them a sense of global identity.
I can afford global brands and local designer brands but everywhere you go it is
like D&G OR Channel and Dior..Rocky S is also a good brand but not recognised
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 46
globally...so why pay for local designer brands that are not recognised said a
respondent from Mumbai.A respondent from Calcutta studying in the U.K echoedThe
main difference between a global and local brand is just the name I guesspeople
recognise the brand that I am wearing and this makes me feel a part of something
bigger..Like for instance before coming to the U.K I purchased a pair of sunglasses
which read Ted Baker. I didnt know what a Ted Baker was! It was only until I got to
the U.K that people around me noticed and remarked OH youre wearing
Ted!which made me realise it was a big brand in the U.K. and it gave me a sense of
a global identity
Not only did the consumers associate global brands with quality but also trust.
innovation and technological advancement. This is very evident with responses like:
My ideal brand would be Sony, as they have over several years maintained the high
standards set by them by offering great quality products and constantly innovating and
staying ahead of competition.
If given a choice between global and a local brand I would go in for a global brand
for sureI mean Indian (local) brands are good but not as good as the foreign ones in
quality technical expertise and designs..Global brands are always upgrading
themselves and keep coming out with new products all the time whereas local brands
are pretty predictable ya...
For certain product categories local brands exhibited a higher level of satisfaction and
trust. In terms of household products it is only the Indian retailer who can understand
the mindset of the consumer. They know the tastes and preferences rather the priorities
of the Indians when buying a product. When I want to buy butter or yogurt I would
only go in for Amul because of its quality and trust and not for any foreign brand
for sure.
If I have to buy a car for travelling purposes...Like travelling for long distances it
would be a TATA SUMO because of the trust that I have in TATA but for a status
symbol I would never go in for a local brand it would probably be Mercedespointed
another respondent. Quality and Trust was found to one of the major influencers for
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 47
possessing local brands. Recognition and status had only a submissive role in
respondents perceptions who owned a local brand.
Earlier Indians use to correlate to branded goods as luxury items but today due to the
immense exposure and more and more Indians travelling abroad there has been a
tremendous change in the way Indians perceive branded goods.
4.2Theme Two: Cues of Product and Service Qualities that Affect Consumer
Purchases.
Similar to the findings of Cateora and Ghauri (2000) it was found that consumers used
certain intrinsic (reliability, performance, aesthitics etc) and extrinsic cues (Price,
Country of Origin and Brand Image) to evaluate quality of products and services. In the
study conducted by Garvin (1984: 1987) eight dimensions were identified which affect
product quality. However when this study was analysed only three intrinsic cues were
identified. Product Performance, Aesthetics and Reliability were prevalent amongst the
consumer responses.
In terms of aesthetics consumers felt that global brands were more appealing than local
ones. My ideal brand is Mango (apparel brand).I like it because the finishing of their
garments is excellent and their quality is very good. Their styles and designs are always
in sync with the forthcoming trends. Global brands evaluated higher in terms Product
performance and reliability especially in products pertaining to automobiles and
electronics. My favourite brand is Apple..it symbolises the youth and constantly keeps
coming up with newer products for generation next- the I pod is the biggest example.
The performance of Apple Products is very steady...in my social set of friends I think
all of us possess an I-Pod and never have I never heard of any of us complaint that
freak my ipods giving problems or Mac notebook has crashed
As far as extrinsic cues are concerned Price and Brand Image were found to be the most
impactful on quality. Price and Brand Image were found to be correlated by the
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consumers which were in relation to the findings of Hooley et al (1998) that consumers
often relate pricing and brand image to superior quality. Louis Vuitton and Gucci are
my ideal brandsI mean they are high priced but u know one has to pay for the
quality of products. The fact that these brands are expensive and global recognised
(higher brand image) says it all.
Country of Origin seemed to affect very few consumers. When asked how big a role did
country of origin play in terms of product purchases, most of the consumers replied Not
that much,, depends from product category to product category, but I would
definitely not pay too much for a made in India label not because of quality standards
but because its made in my country.. These were the standard replies of most of the
respondents. These findings seemed to be in consistent with the findings of Lotz and Hu,
(2001) who assert that consumers tend to generalise products based on familiarity and
background such as technological superiority- which was associated by the Indian
consumers from Goods that originated from China, status and esteem were mainly
associated to goods from European countries, and design- goods from U.S.A and U.k
and value for money- to Indian goods.
As far as service quality was concerned in line with the thinking of Parsuraman et al
(1988) who identified five dimensions that consumers use to evaluate service quality,
consumers conformed to three dimensions: Assurance, reliability and responsiveness.
When asked consumers what aspect of service quality they consider extremely important
for customer satisfaction? The above three dimensions were the most common.
If I go and buy clothes from Mango..and the next day if I decide to go and return it
due to my mind change..i dont have to think twice yathey are very quick in action
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usually called the upper middle and India two (serving class) includes people like
drivers, household helps, office peons, liftmen, washer men, etc. They are the people who
make life easier and more comfortable for the consuming class or India One. For every
India One there are at least three India Twos, making up almost 55% of the population.
But India One doesnt care to pay India Two too well. While their numbers are huge they
still have disposable income to spend on buying aspirational products and services.
Then there is the struggling class or India Three, which lives a hand to-mouth existence
and cannot afford to even aspire for a better living. Unfortunately, this segment will
continue to be on the peripheries of the consumption cycle in India for quite a few years to
come. Their needs cannot be addressed by the business models.
From the interviews it was observed that Upper middle class popularly called as the
socialites or India One are becoming more and more brand conscious. They consider
possession of global brands as status symbols which give them self identity. This is very
evident from responses like People dont admit it-but I feel Global brands can be
correlated to symbols of identity and status
In relation to the findings of Tam and Tai it can be concluded that India Two could be
called as Achievers- who valued achievement and materialism, and they are more keen
on luxuries that they constituted a special hub and India One the upper middle class can be
called as Strivers- very materialistic and immersed in an aggressive pursuit of
achievement.
4.4Theme Four: Impact of Culture on Consumption Patterns
Culture amongst the Indians depicted status, gratitude, approval and disapproval which
were consistent with the findings of Usunier (2000). India represents a collectivist society
where people are seen as not fully separable: they are connected to other people by a
multiple of overlaps and links). They come to represent the interdependent selves
wherein identity lies in familial and social relationships and they tend to move in their
social circles. Class and Status also need to be maintained in the social circles in which
one moves. This was very evident from responses of consumers when asked how much
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1. Increase In WesternisationIt can be seen from the above analysis that consumption patterns have changed to a
great extent. It has been taken for granted that westernisation in India is on a rise.
With the entry of foreign brands in India and more Indians travelling abroad there has
been an immense exposure to these brands and western culture. Indians travelling
abroad tend to dress and imitate the western styles particularly the manner in which
they dress thereby leading to western consumption behaviour. This is very evident
when consumers particularly studying in the U.K. were asked how their shopping
habbits have differed after coming to the U.K.
When I got to the U.K. I was very fascinated with the way women dress
hereboots, scarfs and long over coats and lots of makeup.it mad them look
very attractive and prettyI know its kinda embarrassing for me to saybut I too
wanted to look like them and dress the way they are
After coming to the U.K I have become terribly brand consciousmy shopping
habbits have changed to a great extent especially the way I dress the mostI mean
it has become more western and modernnot typical Indian types
Similar to the above replies were noticed amongst Indian students studying in the
U.K.
It can thus be concluded that increase in Westernisation which has resulted in the change
and needs of the consumers has led to a transformation of the Indian economy from a
socialist to a consumption-led economy. The current generation is therefore more proud
of being an Indian, and more modern when it comes to their lifestyles, than their
predecessors. It is a generation that feels that everything is within their each and aspires
for it. And this is true for everyone, whether they live in large metros or small towns. I
call this paradigm shift- the 3-C theory: Confidence AND Change bringing in an
unprecedented era of Consumption. The increase in Westernisation is responsible for the
materialistic attitude among the Indians which have led them to consume brands as
symbols of status and prestige.
2. Symbolic Consumption of Products
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 54
Due to westernisation of consumption patterns more Indians particularly who belong to
the upper middle classes are developing a materialistic attitude and consuming more and
more brands for symbolic purposes. Consumption in India is affected by a symbolic
identity which basically means that brands are creating a social identity for the consumers
thus affecting their purchase behaviour.
India represents a collectivist society wherein a lot of emphasis is given to the outer self,
basically the way in which a person carries him/herself in public. A lot of importance is
given to society, norms and values. From the replies of the respondents it was observed
that people had to maintain a particular status amongst the reference groups that they
move in and this prompted them to purchase global brands in order to maintain a
particular status.
3. Key Discrepancies between Manager and Consumer PerceptionsA set of key discrepancies or gaps exists regarding executive perceptions of product and
service quality and the tasks associated with service delivery to consumers. These gaps
can be major hurdles in attempting to deliver a service or a product which consumers
would perceive as being of high quality. From the replies of the managers it was reviled
that they gave a lot of importance to the concept of Indian-ness the younger generation
will continue to embrace the values of family and community and live the Indian way.
They have managed to interpret, understand and deliver consumer satisfaction in a way
that takes into account the Indian context. But due to increase in westernisation the
consumers feel that in when judging a product quality in terms of aesthetics they have
failed to understand the needs of the audience and hence pushing consumers to look for
brands outside India (Global brands). This is very evident as when consumers were asked
that do you think Local retailers understand the needs of the Indian consumers well and
deliver better customer satisfaction. Replies like Get life and colour in the
clothesCopy some of the big designer brands I would definitely purchase
Today brands like Gucci, Dior etc can give me the status symbol that I want...tell
me of any one single good local Indian brand that can give me the status that I
want.ah I seriously cant think of any.
In terms of service delivery too there existed a gap between consumer expectancy and
management delivery especially in terms of responsiveness. The consumers reviled that
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Consumer perceptions of Global and Local Brands in the Indian retail Industry 55
local retailers were not really prompt and responsive to their service complaints. As
mentioned above respondents felt that Indian brands when purchased and returned next
day would never give you the money back without purchasing something else whereas
that wasnt the case with global brands. Once the money comes in. never let go
commented one of the respondents which was believed to be the philosophy of most of
the retailers by the consumers.
The gaps between manager and consumer expectancy has led to the demand for low cost
global fashion brands like H&M, Primark and Zara, and Forever 21. These brands would
cater to the needs of not only the upper middle class by providing them with better
aesthetics of products and better services but also cater to the price sensitive segments of
India like the lower middle classes who desire to be trendy and fashionable but cannot
due to unavailability of these characteristics in local Indian brands.
4. Growth of the Indian Retail SectorThe gradual trend towards liberalization of the Indian economy during the past decade
has served as a major factor in its progressive shift towards a global economy and the
entry of foreign brands from Europe and US into this market.
The materialist attitude among the Indians to possess products that provide them with a
sense of self-identity and status and also due to changes in consumption patterns has
increased the popularity of these brands thereby