THE MODERATING EFFECT OF PERCEPTION AND … · 280 The Moderating Effect of Perception and Attitude...

International Journal of Business and Management Studies,

CD-ROM. ISSN: 2158-1479 :: 04(01):279–298 (2015)

THE MODERATING EFFECT OF PERCEPTION AND ATTITUDE ON

PURCHASE INTENTION TOWARDS FOREIGN MNES: EVIDENCE

FROM INDONESIAN BANKING AND RETAIL INDUSTRY

Muhammad Bin Majid

Asia Pacific University of Technology and Innovation, Malaysia

Muliadi

Vrije Universiteit, The Netherlands

Sarminah Samad

Universiti Teknologi MARA, Malaysia

This research study examines the moderating effect of perception and attitude on Indonesian

consumers� purchase intention towards foreign MNEs in the banking and retail industry. In particular, it

looks into how nationalism, ethnocentrism and foreign animosity among the different age group strata

in Indonesia have shaped their perception and attitude towards foreign MNEs which in turn influence

their purchase intention. The findings show that consumers� purchase intention towards foreign MNEs

is negatively correlated at a very significant level to their perception and attitude as shaped by their

nationalism, ethnocentrism and foreign animosity background. The more nationalistic, ethnocentric or

foreign hostile an individual is, the more negative their perception and attitude towards foreign MNEs

will be. Consequentially, the individual�s purchase intention to the said MNEs will drastically decrease

the more negative one�s perception and attitude become.

Keywords: Purchase intention, Nationalism, Ethnocentrism, Foreign animosity, Indonesian banking

and retail industry.

Introduction

1.1 Background of the Research

Contemporary research works !Cleveland and "oroche, #$$%& 'teenkemp and de (ong, #$1$& )hang and

*hare, #$$+- consider globali/ation as a pivotal force that exerts a ma0or influence on consumers world.

Thomas Friedman !#$$2- calls such phenomenon as the world becoming flat, signifying that there�s a

level playing field where all competitors have equal opportunity in the global market as geographical

divisions becoming more and more irrelevant.

In line with the above, Indonesia, a previously overlooked country due to the financial turmoil and

political instability, started to gain more and more international attention. The current President

279

280 The Moderating Effect of Perception and Attitude on Purchase ...

Yudhoyono pledged to attract more investment through cutting the interest rates which was proven when the Central Bank (Bank of Indonesia) cut interest rates to a record low, amounting to a more than six percent economy growth last year (Bloomberg, 2012). President Yudhoyono also pledged to fight against

the rampant corruption as well as to fix the infrastructure problem which was a major shortcoming in attracting investors previously.

It is, hence, not a strange occurrence that in the midst of the recent global downgrades, Indonesia is

actually upgrading (Vice President Boediono as cited in Mellor & Adi, 2012). In the last quarter of 2011, Indonesia’s GDP growth of 6.5 percent (Wibosono, 2011), while lagging behind China’s 8.9 percent, still exceeded India’s 6.1 percent, Russia’s 4.8 percent as well as Brazil’s 1.4 percent (Bloomberg, 2012).

Pong Ho Yin who runs the Munich-based Allianz’s Indonesia fund, believes that the country could soon be ranked alongside Brazil, Russia, India and China, the emerging BRIC giants (Mellor & Adi, 2012).

Due to the above mentioned, for the past few years Indonesia has been experiencing a phenomenon

more popularly known as the ‘Indonesia Rush’ (Bloomberg, 2012). MNEs are racing against each other to enter the nation’s market. A variety of mode of entry has been utilized by MNEs from ranging industries.

In the retail industry, Carrefour pioneered the move through entering the Indonesian market in 1996

via Greenfield investment (Carrefour, 2012), opening their own subsidiary. In 2003, Giant followed suit when PT. Hero Groups (a local Indonesian retailer chain) had a JV with Dairy Farm International Holding (of which Giant is the subsidiary) (Hero, 2012). Very recently in October 2008, LotteMart, a South

Korean-based retailer entered the market through the acquisition of PT. Makro Indonesia (LotteMart, 2012). The latest one to join the ‘Indonesia Rush’ is IKEA which had just signed a franchise deal with PT. Hero Supermarket and will begin operating in 2014 (Bloomberg, 2012).

In the banking sector, there have been major acquisitions of 4 national banks by foreign banks. BII1 was acquired by Maybank2 (Malaysia), owning 97.5% of BII assets (Sharidan, 2012). Likewise, Bank Niaga was acquired by CIMB3 (Malaysia) with the latter owning 96.9% share of the former asset.

Following them, Bank Buana was acquired by UOB4 (Singapore) while NISP5 by OCBC6 (Singapore) (Lin, 2012).

Despite all of the above mentioned, foreign MNEs are still facing some sort of hindrance in the

Indonesian market due to a level of protectionist behaviour exerted by not only the Indonesian central government but also the consumers in general. In fact, some U.S. officials claimed privately that Indonesia, for all its growth potential, is now regarded as one of the hardest places to do business in

Asia, and by far the most difficult in Southeast Asia (Bellman& Hariyanto, 2012). This will be the basis of the discussion in 1.2.

1.2 Problem Statements & Research Questions

Firstly, looking into the banking industry, Indonesia rejected 3 acquisitions by foreign banks7 back in 2011(Lin, 2012). Moreover, when DBS8, a Singapore-based bank made an acquisition proposal of US$ 7.3 billion to acquire Bank Danamon (the biggest in history), the Indonesian Central Bank (Bank of

Indonesia) blocked the acquisition by enacting a new policy effective end of May-June 2012 whereby foreign banks can only hold at most 49% of the share of a national bank (AGI, 2012).

This has not only blocked DBS but has also threatened Maybank and CIMB, both of which has over

96% share in their respective Indonesian banks. Past research studies (Muchtar et al, 2012; Hawkins,

�� 1 Bank Internasional Indonesia. 2 Malayan Banking Berhad. 3 Commerce International Merchant Bankers. 4 United Overseas Bank. 5 Nilai Inti Sari Penyimpan. 6 Oversea-Chinese Banking Corporation. 7 Bank Ina Perdana (BIP) by Affin Holdings, Bank Mestika Dharma (BMD) by RHB Capital and Bank Maspion by the China Construction Bank. 8 Development Bank of Singapore.

Muhammad Bin Majid et al. 281

Best ! Coney "##1$ %oyer ! MacInnis, "##&$ 'chiffman, (anuk ! )isenblit "#1#* shows that such

case may be due to negative public perception and attitude directed towards foreign entities, and the

general believe that foreign control in the industry is bad for the country. )hile the above can be

considered as an act of government intervention, what does the general public perception and attitude

regarding this issue+ )ill the degree of nationalism, ethnocentrism and foreign animosity affects their

perception and attitude towards this new policy by the Central Bank+

'econdly, several past studies regarding the degree of nationalism, ethnocentrism and foreign

animosity shows that there might be distinct characteristics among consumers in different age groups with

regards to their nationalism, ethnocentrism and foreign animosity level -Cheng ! /hen, "##&$ %uddleston

et al, "##1$ (aya and )alker, "##0$ Rawwas, Re2endran and )uehrer, 1003$ 'wee et al, "#1"$ 4arman

! Belk, "##0*. 5iven the fact that the older age groups in Indonesia consumers� pool experienced the

gruesome ))II and the uncertain decades where several foreign countries including 6apan and the

Netherlands coloni7ed or occupied the country$ will this cause the older age group of consumers to show

more nationalistic value as well as show a higher degree of foreign animosity+ 8re there correlations

between age and the level of nationalism, ethnocentrism and foreign animosity among the Indonesian

consumers as a result of their different upbringings+

Thirdly, studies regarding the topic of nationalism, ethnocentrism and foreign animosity -8khter

"##9$ 8pil "##3$ Cheah ! Phau "##3$ %uddleston et al "##1$ (aya and )alker "##0$ Mayda ! Rodrik

"##"$ Rawwas, Re2endran and )uehrer 1003$ 'unardi "##0$ )atson ! )right "###* have shown how

these three factors influence consumers� perception and attitude towards foreign products. 5iven that

products are closely attributed to the company which produces or sells them, can the same concept be

applied to the foreign MNEs as a whole and not 2ust the product that they offer+ Can the concept of

consumer�s perception and attitude be used as the moderating factors to Indonesian consumers� purchase

intention towards foreign MNEs in the banking and retail industry+

:astly, in the retail industry, PT. Trans Indonesia acquired &#; of the Carrefour�s share to make it

such that the ma2ority share is held by a national company -the remaining 3#; shares are divided

amongst < other foreign enterprises* -Carrefour, "#1"*. :ikewise, PT. %ero 5roups acquired 5iant

Indonesia�s share a little after the company was established in Indonesia -%ero, "#1"*. )as this move

done in order to appease the general consumers in an attempt to capture more market share+ Is there a

certain degree of preference among the Indonesian consumers as to the entry=level strategies that foreign

MNEs adopt when operating in the Indonesian banking and retail industry+

1.< 8ims ! >b2ectives

The aims and ob2ectives of this research are as follow?

To look at whether there are correlations between age and the level of nationalism, ethnocentrism

and foreign animosity among different age groups in the Indonesian population due to their

different upbringing

To investigate whether the level of nationalism, ethnocentrism and foreign animosity in

Indonesian consumers can exert influence on their perception and attitude towards foreign MNEs

To explore the possibilities of perception and attitude acting as moderating variables to

Indonesian consumers� purchase intentions towards foreign MNEs

To discover Indonesian public preference foreign MNEs entry level strategy to enlighten future

MNEs intending to enter the market

>verall, this research attempts to find out the distinguishing attitudes and perceptions of the

Indonesian public as shaped by their nationalistic and ethnocentric upbringing and investigate whether

these attitude and perception will influence their purchase intention towards foreign MNEs. In so doing, it

is possible to scrutini7e possible ways to minimi7e if not overcome such heavy barriers exerted by the

consumers, possibly promoting the appeal and attractiveness of Indonesian market to potential foreign

MNEs which will further propel Indonesia�s role in the global economy.


Literature Re!iew

.1!Introduction!to!the!Concept!of!Perception!and!"ttitude!#M$s%

The! concept! of! public! perception! and! attitudes! has! been! regularly! discussed! in! academic! literatures,!

especially!ones!that!are!pertaining!to!the!field!of!marketing.!!

.1.1!Perception!#M$1%!

Consumer! act! and! re&act! on! the! basis! of! their! perception.! For! each! individual,! reality! is! based! on! the!

person�s! needs,!wants,! values! and! personal! experience.! Consumer!makes! decision! based! on!what! they!

perceive!to!be!reality!#'chiffman,!(anuk!)!*isenblit,! +1+-1/ %.!If!one!thinks!about!something,!it!may!

not! be! necessarily! be! what! it! actually! is0! instead! it! is! what! the! customers! think! it! to! be.! 2ence!

understanding!perception!is!important.!!

'chiffman!)!(anuk!# ++/-1340!'chiffman,!(anuk!)!*isenblit,! +1+-1/5%!defines!perception!as!the!

process!by!which!an!individual!selects,!organi6es,!and!interprets!stimuli!into!a!meaningful!and!coherent!

picture!of! the!world.!These!stimuli!are!registered!by!one!of!the!five!senses-!vision,!hearing,! taste,!smell!

and!touch!#2oyer!)!MacInnis,! ++3-71%.!

Consumers! subconsciously! exercise! a! great! deal! of! selectivity! as! to! which! aspect! of! the! stimuli!!

they! perceive.!"n! individual!may! look! into! something! and! turn! away! from!others.! In! actuality,! people!

perceive! only! a! small! fraction! of! the! stimuli! they! are! exposed! to! #'chiffman!)!(anuk,! ++/-158%.!"s!

such,! people! tend! to! 9ump! into! conclusion! before! examining! all! the! relevant! evidence! #'chiffman! )!

(anuk,! ++/-183%.!

Moreover,! stimuli! have! meaning! only! when! individuals! interpret! them.! Individual! characteristics!

influence! interpretation.! Individual! characteristics! is! formed! through! a! process! called! :learning�,!which!

does!not!refer!to!the!formal!academic!setting,!but!rather!the!accumulation!of!life!experiences!#2awkins,!

Best!)!Coney,! ++1- 7/%.!

.1. !"ttitude!#M$ %!

"ttitude,!on!the!other!hand,!is!defined!as!an!overall!evaluation!that!expresses!how!much!a!person!like!or!

dislike!an!ob9ect,!issue,!person!or!action!#Petty,!;nnava!)!'trathman,!1771!as!cited!in!2oyer!)!MacInnis,!

++3-1<+%.!'chiffman,!(anuk!)!*isenblit!# +1+- 38%!further!defines!attitude!as!a!learned!predisposition!

to!behave!in!a!consistently!favourable!or!unfavourable!way!with!respect!to!a!given!ob9ect7.

In! other! words,! attitude! is! an! enduring! organi6ation! of! motivational,! emotional,! perceptual! and!

cognitive!processes!with!respect!to!some!aspect!of!our!environment.!It!is!the!way!one!think,!feel!and!act!

toward!some!aspect!of!their!environment!#Petty,!*egener!)!Fabriger,!177/!as!cited!in!2awkins,!Best!)!

Coney,! ++1-<73%.!!

=enerally,! attitude! may! influence! consumers! cognitively,! affectively! and! behaviourally! #2eath! )!

2eath,! ++4%.! Cognitive! effect! refers! to! the! influence! of! attitude! over! the! consumers�! belief! about! an!

ob9ect.! Meanwhile,! affective! effect! describes! how! attitude! will! influence! the! consumers�! feelings! and!

emotional!reaction!towards!an!ob9ect.!>astly,!attitude!may!also!influence!consumers�!tendency!to!respond!

in!a!certain!manner!towards!an!ob9ect!or!activity.!This!is!called!the!behavioural!effect!#2awkin,!Best!)!

Coney,! ++1-! <73&<77%.!Much! like! perception,! attitudes! are! shaped! or! formed! as! a! result! of! learning,!

either!directly1+!or!indirectly11.

7!broad!interpretation!including!concept,!product,!company,!people,!advertisement,!service,!etc.!1+!e.g.!direct!experience!in!the!past,!upbringing!11!e.g.!reading!on!the!news?!internet,!family!and!friends!influence


. !Factors!Contributing!to!Perception!and!"ttitude!#I$s%

. .1!Nationalism!#I$1%!

The!study!of!nationalism!in!the!economic!and!marketing!field!has!a!very!long!history&!however,!this!study!

focuses! on! the!most! recent! researches! conducted! in! the! past! decade! or! so.!'ne! of! the!most! prominent!

recent! studies! on! the! construct! of! nationalism! #and! world(mindedness%! was! carried! out! by! Rawwas,!

Re)endran! and! *uehrer! #1++-%,! whereby! they! analy/ed! the! influence! of! nationalism! and! world(

mindedness! on! consumers�! evaluation! of! domestic! and! foreign! product.! It! is! argued! that! nationalistic!

consumers!perceive!that!purchasing!foreign0!imported!products!is!wrong!as!it!is!deemed!as!unpatriotic,!in!

fact,! it!can!be!observed!that!consumer!nationalism!is!negatively!correlated!with! the!purchase!of!foreign!

products!#2himp!3!2harma,!1+45!as!cited!in!2unardi,! 66+7-4%.!!

In!line!with!the!above,!nationalism!can!be!defined!as!the!sentiment!of!a!supreme!level!of!consumer!

loyalty!towards!nation(state!which!significantly!affects!their!preference,!attitudes!and!purchase!intentions!

towards!domestic!products!over!foreign!ones.!8ighly!nationalistic!consumers!are!inclined!to!put!emphasis!

on! the!positive!aspects!of!domestic!products!while! ignoring! the!virtues!of! foreign!products.!9osterman!

and! Feshbach! #1+4+! as! cited! in!"khter,! 6657:%! associate! nationalism!with! the !erce!tion of national

s"!eriority, an orientation to#ard national do$inance, as #ell as a do#n#ard co$!arison of other

nations.! 8an! #1+44! as! cited! in! Rawwas,! Re)endran! and! *uehrer,! 1++-%! further! discovered! that!

nationalistic!consumers!tend!to!be!willing!to!make!sacrifices!to!purchase!a!domestic!brand!with!the!view!

that!purchasing!foreign!products!may!damage!their!country�s!economy!or!cause!)ob(loss.!

The! findings! of! Rawwas,! Rehendran! and!*uehrer�s! study! #1++-%! shows! that! to! varying! degrees,!

there! are! significant! differences! in! product! quality! perception! among! people! with! different! degree! of!

nationalistic! ideology.! By! appealing! to! this! sentiment! through! showing! that! the! firm! shares! the! same!

beliefs,! attitudes! and! values! with! the! target! market,! perceived! quality! of! foreign! products! can! be!

improved.!

Even! so,! the! above! studies! took! on! the! point! of! view!of! the!marketing! of! products! instead! of! the!

direct!perception!and!attitude!of!the!public!towards!the!foreign!corporate!bodies!themselves!#i.e.!MNEs%.!

In! line!with! this,!9aya!and!*alker! # 66+%!have!attempted! to!provide!another!perspective! to!perception!

and! attitude! by! analy/ing! their! effects! towards! the!MNEs! themselves.! Their! study! concluded! that! the!

feelings! of! patriotism! and! nationalism! will! influence! an! individual! propensity! to! be! friendly! towards!

MNEs.!It! is!further!discovered!these!tendencies!are!associated!with!the!protectionist!and!anti(immigrant!

attitudes!#Mayda!3!Rodrik,! 66 &!'�Rourke!and!2innott,! 661!as!cited!in!9aya!3!*alker,! 66+711%.!!

In!the!context!of!the!Indonesian!consumers,!2unardi!# 66+%,!Toharudin!et al # 664%!were!among!the!

few!to!have!embarked!on!the!study!of!the!nationalism!construct!in!Indonesian!consumers�!perception!and!

attitude.!Their! findings! indicates! that! Indonesian!consumers!do!have!a!high! level!of!nationalistic!nature!

and! tend! to! show! a! more! positive! attitude! towards! domestic! products! compared! to! imported! ones.!

8owever,!2unardi!# 66+75 %!also!noticed!a!degree!of!!rag$atis$!in!the!Indonesian!consumers!in!that!if!

the!imported!products!are!cheaper!and!of!a!higher!quality!than!domestic!ones,!Indonesian!consumers!may!

readily!accept!such!foreign0!imported!products.!Nevertheless,!no!Indonesian!study!has!been!conducted!to!

see!the!perception!and!attitude!of!the!public!towards!foreign!MNEs.!

. . !Consumer!Ethnocentrism!#I$ %!

The! concept! of!Consumer! Ethnocentrism! originates! from! sociology! body! of! knowledge! and!were! first!

coined!by!2umner!#1+6-!as!cited!in!Cheah!3!Phau,! 66-%!to!distinguish!attitudes!towards!in(group!and!

out(group.!In!line!with!this,!Cheah!and!Phau!# 66-%!made!use!of!;e$ine!and!Campbell!#1+5 !as!cited!in!

Cheah!3!Phau,! 66-&!2wee!et al,! 66<%!argument!that!ethnocentrism!is!specified!to!differentiate!various!

groups!based!on!the!perceive!events!that!shaped!the!group!interest!and!their!view!that!they!are!the!centre!

of!universe!and!is!superior!to!other!groups.!'ther!similar!researches!also!use!the!same!construct!in!order!

to!define!the!scope!of!ethnocentrism!#Cheng!3!=hen,! 66<&!Ma,!8ao!3!;in,! 664%!


s!such,!it!can!be!argued!that!ethnocentric!people!will!show!a!favourable!attitude!towards!those!they!

see!as!their!in"groups!and!unfavourable!attitude!to!those!they!see!as!out"groups.!Booth!#1$%$!as!cited!in!

Cheah!&!Phau,!'(()*! further!associated!ethnocentrism!with! the! tendency!of!a!group!of!people! to! think!

that!their!nationalities,!ethnic!groups!and!values!are!far!superior!and!dominant!than!others�.!

+himp!and!+harma!#1$-%!as!cited!in!+unardi,!'(($/)-0!2amin!and!Elliot,!'(()*!attempted!to!adapt!

the!above!concept!of! ethnocentrism! to! the!marketing!perspective!of! consumer!behaviour.!The! result!of!

their!research!generated!the!term!cons !er"ethnocentris!"whereby!it!represents!the!belief!hold!by!a!group!

of! consumer! about! the! appropriateness! and!morality!of!purchasing! a! foreign"made!product! #+himp!and!

+harma,!1$-%!as!cited!in! khter!'((%*.!!

Pfaff!#1$$3!as!cited!in! pil,!'(()*!believes!ethnocentrism!is!a!strong!motivating!force!to!consumers!

all!over! the!world.! It! is!argued!that!one!of! the!way!that!ethnocentric!consumer!will!demonstrate!his4her!

preference! to! their! in#gro $"val es! is! by! limiting! their! buying4! consumption! to!domestic!products!only!

#5aynak! and!5ara,! '((10!2uddleston!et" al,! '((1*.! Findings! of! studies! such! as!Balabanis! et" al! #'((1*,!

Balabanis!&!6iamantopoulos! #'((3*,! 7ossiasen! et" al! #'(11*! show! that! ethnocentric! consumers! have! a!

tendency!to!evaluate!their!in#gro $ $rod ct"more!favourably!than!foreign!products.!!

Consumers!in!developed!countries!tend!to!show!a!degree!of!ethnocentrism!towards!their!own!locally"

produced!products!before!products! from!other!develop!countries!and!products! from!a! less"developed!or!

developing! countries! #Parker,!2aytko!&!2ermans,! '(110!8ang!&!9amb! 1$-(! as! cited! in!5aynak! and!

5ara,!'((1*.!8atson!&!8right!#'(((*!also!propose!that!ethnocentrism!is!consumer!maybe!the!results!of!

fear!that!foreign"made!products!may!cause!harm!to!their!local!economy.!This!fear!will!prevent!them!from!

buying!or!consuming!foreign!made!product.!!

Recent! study!by!:;soy!&! pil! #'((<*! shows! that! ethnocentrism! tendency!differs! from!country! to!

country.!They!also!find!that!in!countries!where!domestic!production!is!non"existent4!if!the!local!products!

are!of! low!quality,! the! consumers! tend! to!have! a! low! level! of! ethnocentrism!and!will! readily!welcome!

foreign!products.!!

There!has!been!little!study!about!ethnocentrism!in!Indonesia!and!how!it!contributes!to!the!perception!

and!attitude!of!the!public!towards!foreign!MNEs1'.!8hile!the!concept!of!ethnocentrism!and!nationalism!

are! similar! on! its! core,! it! is! important! to! note! that! a! consumer! maybe! ethnocentric! without! being!

nationalistic!and!vice!versa!as!described!in!the!literatures!above.!

'.'.=!Foreign! nimosity!#I>=*!

side! from! the! nationalistic! ideology! as!well! as! the! ethnocentric! tendency! of! the! people,! there! exist! a!

certain!level!of!hostility!and!animosity!towards!foreigners!due!to!unpleasant!past!experiences.!5lein!et"al

#1$$-*!define!animosity!as!the!remnants!of!antipathy!feelings!that!are!related!to!the!previously!ongoing!

events!which!are!unpleasant!#war,!military!campaign,!political!issue,!economic!issue,!etc*.!The!findings!of!

their! research! supported! this! hypothesis! when! consumers! in! Nan?ing,! China! show! a! high! level! of!

animosity! towards! 7apanese! products! and!brand!because! of! 7apan! involvement! in!8orld!8ar! II!which!

killed! =((,(((!Nan?ing! citi;ens.! This! is! also! further! supported! by!Ni?ssen!&!6ouglas�! #1$$$*! findings!

which!show!that!6utch!consumers!have!a!high!animosity! level! towards!@erman!product!because!of! the!

@erman!occupation!of!6utch!during!88II.!

Moreover,! 2ett! #1$$=*! shows! that! while! individual! may! be! world"minded,! there! may! still! exist!

foreign!animosity! to! a! certain!country!due! to!unpleasant!past! experiences.! In!other!words,!nationalism,!

ethnocentrism!and!foreign!animosity!are!not!diametrically!the!same!#Barnes!and!Curlette,!1$-<!as!cited!in!

8atson!&!8right,!'(((0!Richardson,!'(1'*.!

6oob!#1$)3!as!cited!in!Rawas,!Ra?endran!&!8uehrer,!1$$)*!further!reported!that!there"is"no"reason"

to" s $$ose" that" $ersonality" traits" associated" %ith" love" of" a" co ntry" are" the" sa!e" as" those" connected""

%ith" hostility" to%ard" foreign" co ntries" or" foreigners&! In! other! words,! while! nationalistic4! ethnocentric!

people! may! show! tendency! to! love! their! country! products! and! hate! foreign"made! products,! one! does!!

1'!one!of!the!few!studies!on!ethnocentrism!is!by!Aulganef!&!Rachim,!'(1'.!


not necessarily follow the other. !s such, it is possible for nationalistic to love both their country and

foreign"made products, or even hate both #Richardson, $%1$& Nakos ' (a)idimitriou, $%%*& +wee et al,

$%%-/.

Rawwas, Ra)endran ' 0uehrer #1223/ shows that foreign animosity maybe due to social cohesion

and as such it can be modified through several marketing efforts. For example, through free trials or

sample on the products, MNEs may be able to convince the consumers that their products are trust"worthy

and dependable. Furthermore, taking into consideration the case study of Mc4onald�s in 5ugoslavia

during the 6osovo crisis in $%%2 whereby the +erbian people show a very high level of animosity towards

!merican products and brand #6otabe ' (elsen, $%117 12%/, high animosity can be reduced through

gaining trust of the consumers.

$.8 Purchase Intention #49/

$.8.1 Introduction to the Concept

There has been a very wide array of perspectives into consumers� purchase intention as discussed in

previous research studies #Chintagunta ' :ee, $%1$& :ee ' ;reen, 1221& Tang et al, $%11& 0ang et al,

$%1$/. It is primarily argued that positive purchase intentions towards foreign products originate from a

good perceived quality and emotional value that consumers shared from the product offerings #6umar et

al, $%%2/. In other words, the concept of perception is assumed to have played a role in consumers�

purchase intention.

The earliest purchase intention model was developed by Fishburn #123< as cited in Muchtar et al,

$%1$/ in which he argued that personal attitudes and social norms across different cultures impact

purchase intentions differently. Muchtar et al #$%1$/ further discovered that it is tantamount to know

exactly which variables impact these purchase intention.

Taking into account the argument outlined by Fishburn model, the diverse nature of socio"cultural

value among Indonesian consumers #Irawan, $%%*/ implies that there will also be variance in

consumption patterns for foreign products due to the distinct socio"cultural value. Moreover, another past

study regarding the topic of Indonesians� purchase intention towards foreign product has been conducted

by +rinivasan et al #$%%8/ whereby they found out that Indonesian consumers refuse to use foreign

product as a result of fearing to be perceived by their social groups as being unpatriotic citi=en. It can

therefore be deduced that purchase intention is largely contingent upon both the society underlying values

as well as the cultural diversity in the nation #(u ' 0ang, $%1%/.

Regardless of the above, the question remains as to the possible ways to determine the level of

purchase intention with a quantifiable figure. The most obvious way to obtain numerical data is by

analy=ing actual market transaction data #:ange et al, $%%$& 0ertenbroch ' +kiera, $%%$/. (owever, this

method is highly unfeasible should the market data is not readily available.

!s an alternative to quantify purchase intention when market data is not available, it is possible to

collect statements of intention directly from consumers. Even so, Morwit= #$%%1/ argued that measuring

purchase intention simply by collecting statements of intention, while can be done easily and efficiently,

does not always perfectly correlate with actual purchases.

To overcome the above predicament, Backhaus et al #$%%>/ as well as +un and Morwit= #$%%>/

proposed a way to measure expressed intention to purchase by using a scale composed of several

positively worded statements. This method is called the contingent valuation which was originally

designed by Mitchell and Carson #12<2 as cited in Barber et al, $%1$/, whereby respondents were given

scaled statements which they have to choose based on their purchase intention for a product or service.

0hile using this form of contingent valuation during self"administered survey can be challenging #Franke

' Piller, $%%-& +ichtmann ' +tingel, $%%*/, the fact remains that the purchase intention figure as

quantified in this survey will be more accurate.


.!"The"Concept"of"MNEs�"International"Business"and"F#I

$ccording"to"%EC#"& '1 (,"the"issue"of"foreign"MNEs"international"business"operation"in"a"local"market"

has"always"been"a"considerable"controversy."This"is"due"to"the"fact"that"free"capital"movements"from"the"

MNEs" which" originate" from" other" countries" may" raise" some" concerns" regarding" the" loss" of" national"

control"as"well"as"other"consequences."In"other"words,"the"government"or"other"domestic"authorities"may"

fear" that" the"MNEs" are" having" too"much" control" over" the" national"market" and" capital"movements" and"

hence"decide" to"put"some"restriction"which"will"hinder" the" international"business"operation"of"MNEs"in"

Indonesia.

The"issue"of"MNEs"entry"to"the"Indonesian"market"is"very"crucial"because"it"is"one"of"the"many"forms"

of" F#I."$" recent" report" shows" that" )outh*East"$sia"Region" has" had" a"massive" growth" of" inward" F#I"

inflow" in" '11,"whereby" the"F#I"growth" increased"by"1+-,"outperforming"East"$sia" &including"/apan,"

China"and")outh"0orea(."#espite" its" rapid"2#P"growth,"however," inward"F#I"flow"to"Indonesia" is"still"

rather" limited" at"3)4"15.6"billion" in" '11," compared" to"China�s"3)4"1 !"billion,")ingapore�s"3)4"!1"

billion"and"India�s"3)4"7!"billion"&3NCT$#," '1 (."Furthermore"the"numerous"issue"regarding"foreign"

acquisition"and"2reenfield"investments"&see" ha!ter"#$%("still"dampened"the"F#I"inflow"to"the"country."

In"most"past"researches,"the"issue"of"low"F#I"has"always"been"done"with"regards"to"corruption"&8ei,"

'''(,"information"proxies"&9oungani"et"al," ''7(,"taxes"&B:nassy*;u:r:," ''6(<"all"of"which"falls"under"

the"category"of"formal"barrier"&%EC#," '1 (."=ery"little"references"have"been"made"with"regards"to"the"

effect" of" perception" and" attitude" of" the" consumers" which" directly" affects" their" purchase" intention" for"

foreign"MNEs."This" is"very"pertinent" to" the" issue"at"hand"because"unattractive"and"unappealing"market"

will"deter"potential"MNEs"to"come"into"the"country�s"market,"hence"hindering"potential"economic"growth"

of"the"country."

Research Methodolo!y

7.1"Primary"Research

7.1.1"Population">")ampling

The"population"under" study" in" this" research"pro?ect" is" Indonesian" citi@en" currently" living" in" the" city"of"

Bandung."The"city"is"chosen"as"a"representative"of"the"whole"Indonesian"population"due"to"the"fact"that"it"

is"the" nd"most"populous"metropolitan"city"in"Indonesia"as"well"as"7rd"largest"in"terms"of"the"si@e"of"the"city"

&Country"%verview," '1 (.""

Based" on" the" population" census" in" '1'" &The" Economist" Intelligence" 3nit," '11(," the" total"

population"of"Bandung"is"7,165,'''."8hile"the"population"under"study"may"be"considered"as"too"large"to"

some,"the"mathematics"of"probability"has"proven"that"si@e"of"the"population"is"irrelevant"in"determining"a"

sample"si@e"if"the"population"si@e"is"very"large"or"even"unknown17."$s"such,"when"the"population"under"

study"is"too"large"or"unknown,"population"si@e"will"be"excluded"in"the"calculation"of"a"sample"si@e"&)iege,"

'1 (."

In" line"with" the" above," to" be" 5A-" confident" &@" valueD" 1.5+(" that" the" survey" proportion" is" correct"

within"GH*"6-"error"allowance,"the"required"number"of"sample"si@e"for"a"representative"result"of"the"true"

population"isJ""

)ample"si@e"D"&1.5+H K'.'6( "D"15+""

17" for" example," a" sample" si@e" of" A''" is" equally" as" useful" in" examining" a" population" of" 1'','''" as" it" would" a"population"of"1',''','''"


Furthermore, taking into consideration the fact that there may be contingencies such as no respond,

lost or damaged questionnaires as well as recording error, the sample si!e is further increased by 1"#. $s

such,

Final sample si!e % 1&'(".1)1&' % *1+.' - *1'

In order to arrive into findings that are representative of the true population, *1' questionnaires will

be distributed through a strati ied! random! sam"lin# based on age groups strata. Burns / Burns

0*""23*""4 defines strata as divisions of the population, therefore, the term stratified random sampling

refers to the division of a population into appropriate strata and a simple random sample is taken from

each stratum 0Cooper / 5chindler, *""631&64.

The reason behind the use of stratified random sampling is because it is much more efficient

statistically than simple random sampling and will provide adequate data for analy!ing various

subpopulations. Moreover, this sampling is also able to highlight the contrast of perception and attitude

between the older and the younger generation of respondents, which is one of the primary bases under

study.

6.*.7 Pilot Test

Pilot test is conducted to detect weakness in design and instrumentation and to provide proxy data for

selection of probability sample 0Cooper / 5chindler *""632'4. 5ub8ects are drawn from the target

population and simulate the procedures and protocols that have been designated for data collection.

9owever, the respondents, does not have to be statistically selected. In line with this, a pilot test has been

carried out on the second week of :une *"1* with 1+ respondents.

Findin#s!and!the!Im"lications!

7.1 Introduction

;iven the data collected from both the secondary research 0see ha!ter"#4 and the primary research 0see

ha!ter"$4, this chapter will give focus on the overall findings of this pro8ect as well as the implications

for future studies as well as for foreign MNEs which are already operating in Indonesia or which are

planning to enter the Indonesian market in the near future.

7.* <b8ective 1

orrelation"%et&een"Age"and"the"'egree"of"Nationalis(,")thnocentris(,"*oreign"Ani(osity"

7.*.1 Nationalism = $ge

The findings of this study shows that there is a relati$ely!wea%!"ositi$e!correlation between $ge and the

degree of national=liberal tendency with the linear equation of y% ".*">x ( *.6>67. This means that as!the!

"o"ulation!#rows!older, they tend to be more!nationalistic!and less liberal, vice versa. 9owever, the

extent to which a#e! in luences!nationalism of an individual is not!$ery!si#ni icant given the r=square

value of "."7>>. In other words, it is only roughly 7.>># likely that a change in the degree of nationalism

is attributed to a change in age.

The above correlation analysis answers the question why even though it is generally observed that

liberalism value decrease and nationalism value increase according to the respondents� age, the highest

degree of liberalism is shown at the age group of 71='" years old instead of on the youngest generation of

12=*+ years old. This finding is certainly contradicting with the general assumption drawn up by past

study 05unardi, *""&4 whereby it was argued that the degree of nationalism in Indonesia is strongly

correlated to the age of the individual.


ith! regards! to! the! above!data,! the! implication!of! the! finding! is! that! foreign!MNEs!attempting! to!

enter! the! Indonesian!market! in! the!near! foreseeable! future!will! face! rather! strong!nationalist! consumers!

because! the!population!demographic! in!Indonesia! is!still!predominantly!held!by!the!age!group!of!"#$%&!

years! old! '"nd! most! nationalistic! after! above! #&! years! old! age! group(.! )owever,! by! careful! market!

segmentation!and!targeting,!MNEs!can!appeal!to!the!more!liberal$minded!consumers!of!age!%1$#&!and!the!

young!adults!of!age!1*$"+.!!

%."."!Ethnocentrism!$!-ge

In!terms!of!ethnocentrism!and!age!relationship,!it!is!observed!that!there!is!a!relati ely!moderate!"ositi e!

correlation!between!the!variables,!with!the!linear!equation!of!y/!&.0*22x!3!1.*222.!As!the!"o"ulation!

#rows!older,! they! tend! to!be!more!ethnocentric.!The!extent! to!which!a#e! in$luence! the!ethnocentric!

alue!in!an!individual!is!#enerally!more!si#ni$icant!if!compared!to!the!nationalistic!value,!with!r$square!

value! of! &.1%4%.! This! shows! that! it! is! 1%.4%5! likely! that! a! change! in! the! degree! of! ethnocentrism! is!

attributed!to!a!change!in!age.!

The!implication!of!this!particular!finding!is! that!Indonesian!consumers!might!be!more!ethnocentric!

than!they!are!nationalist.!In!other!words,!even!those!who!consider!themselves!as!liberal$minded!may!still!

show!a!tendency!to!be!ethnocentric!towards!domestic!firms!and!products,!as!proven!by!the!fact!that!while!

only!2&5!people! consider! themselves! nationalistic! 'i.e.! the! rest! 0&5!are! liberal$minded(,! roughly! 4&5!

respondents!agree!with!the!proposal!to!limit!foreign!ownership!of!local!banks!as!well!as!the!fact!that!2#5!

respondent!still!prefer!local!retail!stores!compare!to!foreign!ones.!

%.".0!Foreign!-nimosity!$!-ge

Thirdly,! the! finding! of! this! study! also! shows! that! there! is! a!moderately! stron#! "ositi e! correlation

between!foreign!animosity!and!age,!with!the!linear!equation!of!y!/!&.+%%2x!3!".1*0*.!The!extent!to!which!

a#e!in$luence!the!$orei#n!animosity!tendency!in!an!individual!is!the!most!si#ni$icant!if!compared!to!the!

previous! I6s! at! r$square! value! of! &."**".! 7hould! there! be! a! change! in! the! foreign! animosity! of! an!

individual,!it!is!roughly!"*.*"5!likely!that!this!can!be!attributed!to!the!change!in!age.!

The!high!significance!between!age!and!foreign!animosity!relationship!can!be!explained!as!a!result!of!

the!older!age!groups!'i.e.!%1$#&!and!above!#&!years!old(!having!grown!up!in!an!era!of!foreign!coloni8ation!

during!the! II.!This!is!in!line!with!previous!findings!by!past!researchers!'9lein!et al,!144*:!9otabe!;!

)elsen,!"&11:!Ni<ssen!;!=ouglas,!1444:! atson!;! right!"&&&(.!The! implication! for! this! finding!has!

open!up!possibilities! for! further!studies! in! Indonesia! to! look! into!specifics!country! to!which!Indonesian!

consumers!show!a!high!animosity!level!against,!and!for!ways!that!foreign!MNEs!originating!from!these!

countries!can!remedy!the!situation.!

%."!>b<ective!"

!"tent of Infl#ence of Nationalis$, !thnocentris$ and %oreign Ani$osity on Perce&tion and Attit#de

ith!regards!to!the!extent!of! influence!of!nationalism,!ethnocentrism!and!foreign!animosity!on!the!

consumers�! perception! and! attitude,! it! can! generally! be! observed! that! there! are! ery! stron#! ne#ati e!

correlation!between!the!I6s1%!and!the!M6s1+.!-s!the!consumer!become!more!nationalistic,!ethnocentric!

or!hostile!against!foreign!entities,!perception!and!attitude!will!become!more!and!more!negative.!

-mong! the! three! I6s,! $orei#n! animosity! shows! the! stron#est! ne#ati e! correlation! between! the!

three!at!$&.4*".!It!is!also!the!most!si#ni$icant!attributor!to!negative!perception!and!attitude,!given!r$square!

value! of! &.4#%!which! shows! that! it! is! 4#.%5! likely! that! negative! perception! and! attitude! is! a! result! of!

strong! foreign! animosity.! Even! so,! it! is! important! to! note! that! all! three! I6s! do! affect! perception! and!

attitude!to!a!significantly!large!extent1#.

1%!i.e.!nationalism,!ethnocentrism!and!foreign!animosity.!1+!i.e.!perception!and!attitude.!1#!the!closer!the!correlation!value!to!1,!the!stronger!and!more!significant!is!the!correlation.


The implication of this finding is that in accordance to past findings by other researchers !"khter,

#$$%& Cheah ' Phau, #$$(& )aya ' *alker, #$$+& -uddleston et al, #$$1& )lein et al, 1++.& )otabe '

-elsen, #$11& Rawwas, Re/endran and *uehrer, 1++(0, it is undeniable that nationalism, ethnocentrism

and foreign animosity do exert influence on consumers� perception and attitude2

324 5b/ective 4

Perce!tion and Attit"de as Moderating #actors to P"rchase Intention to$ards #oreign MN%s

The main finding of this research study shows that there is a ery! stron"! #ositi e! correlation

between the M6s !perception ' attitude0 and the 76 !purchase intention towards foreign MNEs0, with

the correlation coefficient of $2+#.2 This means that perception and attitude is +#2.8 positively correlated

to purchase intention2 The more!#ositi e!the!#erce#tion!and!attitude are, the!hi"her!and!the!#urchase!

intention will be2 In fact, given the r9square value of $2.(1, it can be deduced that a change in purchase

intention is .(218 very likely to be due to a change in the perception and attitude2

:ooking into a more in9depth analysis of the data by separating positive and negative perception and

attitude, the finding shows that when the perception and attitude is negative, the degree of influence it has

on purchase intention is more significant !at $2.$;0 if compared to when they are!#ositi e !at $24#402 In

other words, when!the!consumers!ha e!ne"ati e!#erce#tion and attitude towards foreign MNEs their

#urchase!intention!dro#s!more!drastically the more negative they feel2

It can therefore be implied that foreign MNEs must put more emphasi<e on efforts to change

negative perceptions and attitudes of the Indonesian consumers, rather than to maintain the positive ones

because it will be slightly less effective given the difference in the r9square value !i2e2 when trying to

improve purchase intention, changing negative perception and attitude is 3.21;8 more effective than

maintaining positive perception and attitude02

323 5b/ective 3

Indonesian &ons"'ers Preference to #oreign MN%s

:astly, the findings of this research also show that the nationalism, ethnocentrism and foreign

animosity of Indonesian consumers which shaped their perception and attitude towards foreign MNEs has

also caused them to perceive specific entry mode as more acceptable than other modes2 ($8 of the

respondents in this study feel that =6 is the most acceptable entry9level strategy to be taken by foreign

MNEs2 The reason behind this preference is because the respondents believe that through =6, the local

company which is partnered with the foreign company can gain experience, technology and core

capabilities from the =6, thus making it more advantageous2

This preference does play a huge role in Indonesian consumers� choice whereby it can clearly be

seen that >iant which applied =6 seems to be the most frequently foreign retail stores than its competitors

!%1 out of the #1( respondents stated that they go to >iant0, i2e2 Carrefour !3. out of #1( respondents0 and

:ottemart !#+ out of #1( respondents0, which applied green field and acquisition respectively2

The implication of this finding is that past case studies of other foreign MNEs which have

successfully tapped into the Indonesian market with the correct entry9level strategies can aid other firms

who are trying to enter the market in the near foreseeable future to choose the most suitable strategies,

given the consumers� characteristics2

Recommendations!$!Conclusion!

;21 ?uggestions to Foreign MNEs

?everal suggested approaches are as follow@


.!.1"C#R"Initiatives

$otler" and"$eller" %!&&'(" describe" C#R" as" analogous" to" the" concept" of" socially" responsible"marketing"

which"is"one"of"the"four"dimensions"in"the"holistic"marketing"concept1)."It"is"believed"that"an"arrangement"

between"the"MNE"to"give"back"to" the"community"will"help" to"enhance"both" the"corporate" image"which"

results" in" an" increase" in" product" sales," a" sure*tale" sign" that" consumers" purchase" intention" towards" that"

particular"firm"has"increased"%Frit+,"!&11(."

Echoing" the" same" argument," Bhattacharya" %!&&-(" argue" that" C#R" can" act" as" a" very" effective"

marketing"strategy,"especially"in"order"to"boost" the"company"image"to"compensate"negative"perceptions"

towards" their"country*of*origin."By" looking"at" the" findings"of" this" study" %see" !"#$%estion#&(," the"most"

negative"perception"and"attitude"originates"from"the"opinion"that"foreign"MNEs"threaten"local"companies,"

the"nationalism"spirit"of"youths,"and"the"westerni+ation"which"destroys"local"cultures."

It" can"be"argued" that"by"engaging" in"C#R" initiatives"which" shows" that" the" foreign"MNEs"actually"

care"about"the"local"market"competition"and"the"livelihood"of"the"local"companies,"as"well"as" initiatives"

which" shows" that" the" foreign" MNEs" are" willing" to" promote" local" cultures" %e.g." culture" fairs" and"

promotions(," they"will"have"a"more"positive"perception"and"attitude" towards" these"companies." In"fact,"a"

recent" study" by" Cone" %!&&/(" shows" that" / 0" of" his" respondents" had" a" positive" attitude" towards" a"

company"when"the"company"engaged"in"charity"by"donating"part"of" their"sales,"a" form"of"C#R."This" is"

certainly"a"good"case"study"for"foreign"MNEs"attempting"to"reduce"the"negative"perception"and"attitude"of"

Indonesian"consumers."

.!.!"#trategic"2lliance"through"34"with"5ocal"Firms

Taking"into"account"the"finding"of"this"study,"whereby"consumer"preference"lies"on"foreign"MNEs"which"

collaboratively"work"with"local"companies"%see"'! ("as"well"as"the"success"of"past"MNEs,"such"as"6iant,"

in" securing"market" share" in" the" predominantly" nationalistic" and" ethnocentric"market," foreign" firms" are"

encouraged"to"adopt"34"with"a"local"firm"as"their"entry*level"strategy."This"is"supported"by"past"researches"

have"shown"many"positive"consequences"of"34"between"MNEs"and"local"companies"in"developing"nations"

to"both"organi+ations"%5ane,"#alk"7"5ynes,"!&&18"5uo,"!&&)(.""

It"is,"however,"very"important"to"note"that"foreign"MNEs"attempting"to"adopt"34"entry*level"strategy"

approach"must"address"the"concern"of"potential"loss"of"valuable"knowledge,"trademarks"and"technological"

secrets"to"the"local"partner"%5uo,"!&& 8"M9oen"and"Tallman,"1--)(.":ence,"it"is"necessary"to"adopt"34"with"

rigorous"considerations"especially"in"choosing"the"local"partner"firm."

Through"a"34"with" local" firm,"foreign"MNEs"can"utili+e" the" local"partner�s"core"competencies"and"

capabilities" in" the" local"market," as"well" as"en9oy"a"degree"of"positive"brand"awareness"especially" if" the"

chosen"local"partner" is"well*established"in" the" local"market"%5i,";hou"7";a9ac,"!&&-(."This"will"help"to"

combat"negative"perception"and"attitude"because"consumers"will"likely"attribute"a"34"as"beneficial"to"the"

local"firm,"market"and"the"economy"unlike"other"entry*level"strategies."

.!.<"Integrating"5ocal"Public"Figures"in"Marketing"Efforts

5astly,"foreign"MNEs"who"are"trying"to"become"successful"in"the"Indonesian"banking"and"retail"industry"

must"engage"local"public"figures"in"their"advertisement"and"promotional"activities."=ne"way"to"do"so"is"by"

getting" respected" individuals" in" the" local" community" %e.g." local" activist"or"past"governors(" to" appear" in"

their" advertisements." This" will" induce" a" positive" image" in" the" consumers" mind" as" argued" by" Faulisi"

%!&11(,"reducing"the"negative"perception"and"attitude"directed"towards"the"firm"which"consequentially"will"

increase"consumers�"purchase"intention"for"that"firm."

1)"other"<"includes"relationship"marketing,"integrated"marketing"and"internal"marketing."


.!"Current"#imitations"$"Recommendations"for"Future"%tudies

This"study"is"not"without"limitations,"in"fact,"there"are"several"limitations"which"should"be"noted.""

Firstly," even" though" the" study" has" meticulously" followed" the" theoretical" sampling" approach" to"

calculate" the"minimum"number"of"required"samples" in"order" to"get"a"representative"result"of" the"overall"

population1&,"a"higher"amount"of"samples"from"a"wider"pool"of" target"respondents"will"always"facilitate"

improved"accuracy"and"confidence" level"of" the" result."The"predicaments"of" limited" time"and" resources,"

unfortunately," have"made" this" highly" unfeasible" to" be" done" for" this" study."'owever," future" studies" are"

highly"encouraged"to"do"so"should"the"resources"become"available"and"more"easily"accessible."

Furthermore," in" striving" for" rigorous" research" design," many" other" variables" have" been" heavily"

controlled"under"ceteris !ari"#s$%"assumption."Through"the"analysis"of"the"findings"in"&ha!ter ' and (,"it"

can" be" identified" that" there" is" a" knowledge" gap" in" the" influence" of" other" demographic" characteristics"

which" have" been" controlled" during" this" study" (e.g." gender)."*n" earlier" study"by" +osiassen" et al" (-/11)"

shows" that" by" accepting" the" logic" of" relational" versus" collective" interdependence" theory-/0" it" can" be"

deduced"that"males"tend"to"be"more"ethnocentric"than"females."This"is"definitely"an"interesting"research"

area"for"future"studies"in"Indonesian"consumers�"perception"and"attitude"towards"foreign"MNEs."

*dditionally,"as"aforementioned"(see"()*)+),"older"group"of"Indonesian"consumers"might"show"a"high"

degree"of"foreign"animosity"towards"specific"countries"especially"those"which"are"previously"involved"in"

the"coloni2ation"of"the"country"during"the"3orld"3ar"II"period"(i.e."the"Netherlands"and"+apan)."%imilar"

assumption"can"also"be"made"on"the"other"age"groups"based"on"the"respective"mega4trauma"events-1"on"

their" respective" era" which" caused" them" to" direct" animosity" towards" specific" countries" that" they" held"

accountable"for"the"unfortunate"events"(Erickson"-//&0"Po22i"-//&0"3elsh"and"Bra2ina"-/1/)."*s"another"

remarkable" area" of" research," this" deserves" to" be" made" a" focus" area" for" future" studies" in" the" topic" of"

Indonesian"consumers�"perception"and"attitude"towards"foreign"MNEs."

#astly,"while"the"finding"of"this"study"resonance"past"studies"('uang"et al.,"-/1/0"5lein"et al.,"166&0"

7erlegh,"-//8)"in"that"despite"the"perceived"higher"quality"of"foreign"MNEs"products"or"service"offerings,"

there"is"still"a"knowledge"gap"which"can"be"an"appealing"area"of"research."*"very"recent"study"by"Muchtar"

et al"(-/1-)"identified"that"foreign"MNEs"(specifically"bank)"have"a"myriad"service"offerings"which"can"

be" viewed" as" superior" to" the" local" bank" counterparts." Nationalist" or" Ethnocentric" consumers"may" still"

show"bias"against"deposit"accounts"but"show"more"favourable"attitude" towards"credit"card"service."This"

has"very"wide"managerial"implications"and"hence,"warrants"further"investigation"for"future"studies."

Conclusion

In" conclusion ! "erce"tion! and! attitude" as" shaped" by" the" nationalism," ethnocentrism" and" foreign"

animosity"background"of"Indonesian"consumers"do!act!as!moderatin#!$actors"(to"a"very"large"extent)!on!

their! "urchase! intentions! towards! $orei#n! MNEs" in" the" banking" and" retailing" sector." In" fact," an"

improvement"of"purchase"intentions"is"6-.&9"attributed"to"improvement"in"the"consumers�"perception"and"

attitude"towards"the"foreign"MNEs."

Most" importantly," the" finding" of" this" research" study" has" shed" some" light" to" the" fact" that" negative"

perception" and" attitude" influence" purchase" intention" to" a"much" greater" extent" than" positive" perception."

The"implication"of"this"is"that"foreign"MNEs"currently"operating"in"Indonesia"or"attempting"to"follow"the"

:Indonesia" Rush�" and" enter" the" market" must" exert" more" efforts" directed" towards" the" nationalistic,"

ethnocentric"and"foreign4hostile"consumers"with"negative"perception"and"attitude.

1&"it"was"calculated"that"only"-1;"samples"are"required"for"a"result"that"is"<=4"89"accurate"with"6 9"confidence"level."16"other"things"remain"constant."-/"asserts"that"female"self4identity"revolves"around"personal"relationships"and"male"self4identity"revolves"around"less"

intimate"group"relationships."-1"for"example,"the"-//&"credit"crisis"in"the">%*"which"affect"global"economy"negatively."


everal! suggested! approaches! are! by! engaging! in!C R! initiatives! to! boost! the! company! image! in!

order! to! compensate! negative! perception! of! their! country"of"origin,! by! collaborating! with! local! firms!

through!strategic!partnerships!or!#oint"ventures,!as!well!as!by!constantly!integrating!respected!local!public!

figures! $e.g.! local!activist,! local!government! representative,!past!presidents,! etc%! for! their!advertisement!

and!promotional!activities.!!

In!hindsight,!several!limitations!to!the!current!study!have!been!identified!and!recommendations!have!

also!been!presented!for!future!studies!in!this!area!of!research!to!embark!on.!Most!pertinently,!to!research!

on!other!variables!in!the!demographics!which!may!also!affect!perception!and!attitude,!to!research!on!the!

animosity!level!of!Indonesian!consumers!towards!specific!countries!as!well!as!to!fill!the!knowledge!gap!of!

possible!perceived!quality!influence!on!nationalistic!and!ethnocentric!consumers.!

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!. "uang,#$.%.,#Phau,#I.#and#&in,#C.#'()1)*.#Consumer#animosity,#economic#hardship#and#normative#influence+#

how#do#they#affect#consumer�s#purchase#intention.# !ro"ean#$o!rnal#of#Marketing,#-ol.#//,#pp.#0)02 3.#

4. "uddleston,#P.#et#al.#'())1*.##Consumer#ethnocentrism,#product#necessity#and#Polish#consumers5# #perceptions##

of##quality.##International#$o!rnal#of#Retail#%#&istri'!tion#Manage(ent.#-ol.#(0#Iss+#!,#pp.#( 42/4.#

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