Globalization and Reluctant Buyers

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Globalization and reluctant buyers-

A study on consumer behavior in Visakhapatnam

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Submitted By
Group- 4
MBA (F) Section A
Gitam Institute of Management

Globalization and Reluctant Buyers

Key Words: International Marketing, Globalization, Age Group, Consumer Behavior,

Abstract

This study attempted to empirically test a debatable hypothesis that globalization has an effect on the consumer buying behavior and consumer awareness across the various age and income groups in Visakhapatnam, in terms of choosing local or a foreign brand. Samples from various age groups ranging from fifteen years to fifty years were collected. The findings indicated that, in the various age and income groups, consumer ethnocentrism plays a mediating role between global openness and the reluctance to buy, although it is on the decrease with the increasing level of global openness. Consumer ethnocentrism is still an important factor in determining the magnitude of reluctance to buy a foreign product in all samples, while product judgment also plays an important role. It is concluded, therefore, that consumers in a different income and age group, who are different in their attitudes and perceptions, tastes and preferences, and values, are still different even after being exposed to the massive wave of globalization.

Introduction

The notion that global thinking would gradually break the wall of economic nationalism and chauvinism (e.g., Levitt, 1983) seems to be no longer taken for granted. There have been counter arguments that it is dangerous to assume that consumers are as well globalizing as companies, and that there is neo-nationalism that resists the globalism in buying behaviors (Belk,1996; Keillor and Hult, 1999; Schütte and Ciarlante, 1998; Thomas, 1991). Schütte and Ciarlante(1998) argue that globalization will not obliterate cultural differences and standardize consumer behavior around the globe. The current literature has yet to address how distinctively the consequences of globalization directly and indirectly influence consumers’ attitudes and behaviors among the various age and income groups in Visakhapatnam. The starting point of this study, accordingly, is on the thought that different timings and dissimilar processes of globalization between various age and income groups may defy the notion of worldwide, unified effects of globalization. As globalization must be rather a human process more than just a technical process, the unique culture and psychology of a particular age and income group may determine the distinctive characteristics of the processes and consequences of globalization (Schütte and Ciarlante, 1998). Further, this study deals with the difference in the impact of buyers’ globalized mind-sets, across the various income and age groups which are operationalized as global openness reflecting a self-conscious level of globalization, on their ethnocentric tendencies and buying behaviors.

Profile of Indian Consumer

A recent research paper as stated that India is a lucrative market even though the per capita income in India is low and it remains a huge market, even for costly products. Among the total 164.8 million households in India, 80.7 million households comes under low income group ( US$ 2465).

The Indian consumers are noted for the high degree of value orientation. Such orientation to value has labeled Indians as one of the most discerning consumers in the world. Even, luxury brands have to design a unique pricing strategy in order to get a foothold in the Indian market.

Indian consumers have a high degree of family orientation. This orientation in fact, extends to the extended family and friends as well. Brands with identities that support family values tend to be popular and accepted easily in the Indian market. Indian consumers are also associated with values of nurturing, care and affection. These values are far more dominant that values of...
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