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Consumer ethnocentrism is a psychological concept that refers to individuals who believe that their country's products are superior to those of other countries. This concept also describes consumers in one country thinking that purchasing products in other countries is immoral or inappropriate because doing so is unpatriotic. It is a common belief amongst groups showing signs of consumer ethnocentrism that purchasing foreign-made products means not supporting the economy and the job market of the home country.
Businesses often study consumer ethnocentrism to develop strategic marketing plans for entering new foreign markets. By understanding the attitudes and beliefs of the foreign consumers, a business can better position itself to come across in a more positive light. For example, a business entering a market showing ethnocentrism may want to include in its advertisements that purchasing from them means supporting their country because the business has local offices employing their neighbors.
Characteristics of countries with this mindset include skepticism of foreign goods, strong patriotism and high availability of domestic brands. If consumers believe that foreign goods are generally inferior to their own home goods, then they will be less likely to support foreign brands. These consumers also are aware of economic conditions and want to support local jobs and businesses by not buying items that will take their money outside of the country. If there are no local brands to satisfy a need, then consumers will purchase foreign goods until their needs are fulfilled locally.
The types of countries likely to develop consumer ethnocentrism include small countries with animosity toward larger countries, countries with low levels of exposure to other cultures and those with low levels of domestic alternatives. Small countries that have experienced struggles with outside countries through political, military and social events, for example, are more likely to carry those negative feelings to the marketplace when it comes time to make a purchase. Additionally, if a country is more isolated without much exposure to other cultures, then it will be more skeptical and less likely to buy the outside brands. If people feel like they have no other choice but to buy the foreign good since it is not available locally, however, they will reluctantly do so.
Based on the general theory of ethnocentrism, consumer ethnocentrism is specific to consumers of a particular country. Ethnocentrism refers to general groups of people, wherein there is an "in-group" and an "out-group." In terms of consumer ethnocentrism, the "in-group" is the home country and the "out-group" is foreign countries. In 1987, Terence Shimp and Subhash Sharma first recognized the phenomenon and created the CETSCALE to measure its levels in various countries.
The problem is, it is more and more expensive for a company to continue manufacturing in the United States because of the country's strict environmental and labor laws.
Fortunately, other countries that traditionally overlooked child labor and other manufacturing issues, like China, have begun to take a serious interest in making changes that could restore a global marketplace for production.
Ethnocentricity is not just a trait in smaller countries.
In the 1980s in the United States, economic turmoil that included a shift of production of products like steel and automobiles to foreign countries resulted in a strong movement to buy American.
In many political and social factions in the United States, this sentiment is stronger than ever, and the push to provide incentives to keep companies in the country is often incorporated into political campaigns.