PDF Smriti

8/13/2019 PDF Smriti

1/78

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


2/78


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.


3/78


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.


4/78


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


5/78


6/78


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


7/78


8/78


9/78


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.


10/78


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 .


11/78


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


12/78


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.


13/78


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).


14/78


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


15/78


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


16/78


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)


17/78


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


18/78


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


19/78


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


20/78


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).


21/78


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


22/78


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.


23/78


24/78


25/78


26/78


27/78


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


28/78


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


29/78


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


30/78


(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


31/78


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


32/78


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


33/78


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


34/78


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


35/78


36/78


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.


37/78


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


38/78


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


39/78


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


40/78


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


41/78


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


42/78


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).


43/78


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


44/78


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


45/78


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


46/78


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


47/78


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


48/78


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


49/78


50/78


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


51/78


52/78


53/78


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


54/78


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


55/78


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

PDF Smriti

Documents

Transcript of PDF Smriti