Academic journal article Irish Journal of Management

Consumer Ethnocentrism and Conspicuous Consumption of Domestic and Foreign Consumer Goods in Mozambique, a Less-Developed SADC Country

Academic journal article Irish Journal of Management

Consumer Ethnocentrism and Conspicuous Consumption of Domestic and Foreign Consumer Goods in Mozambique, a Less-Developed SADC Country

Article excerpt

ABSTRACT

The focus of this study is on implications of consumer ethnocentrism and conspicuousness on buyers' behaviour in one of the least researched but rapidly growing economic groups in the world - the Southern African Development Community (SADC). This study examines how ethnocentric tendencies and conspicuousness of foreign products influence consumer preferences in the context of imports from South Africa, the most developed SADC state, into Mozambique, the least developed SADC state. The survey involved 273 representatives of different ethnic groups. Structural equation modelling was employed to test the model and hypotheses (using LISREL 8.8). The paper suggests that the outcome of the consumer dilemma between ethnocentric consumption of domestic products on the one hand, and conspicuous consumption of foreign products on the other, depends upon the consumption mode of products - whether products are publicly or privately consumed.

Key Words: Mozambique; South Africa; consumer ethnocentrism; conspicuousness

INTRODUCTION

The rapid pace of integration in the Southern African Development Community (SADC) has revealed new opportunities and challenges for international marketers in the region. A free trade area was established for the twelve member states of the SADC in January 2008, resulting in a significant reduction of tariff barriers (Free Trade Area, 2008; Southern African Development Community, 2009). However, new non-tariff and intangible barriers have been re-enforced by national governments. One such barrier is consumer ethnocentrism.

A factor of domestic product bias, consumer ethnocentrism is used by the least developed SADC states as a powerful tool in 'buy local' campaigns aimed at supporting national industry while competing with intra-regional imports. However, the effects of consumer ethnocentrism in the least developed SADC states may be mitigated by the conspicuousness of products imported from the more developed SADC states.

This study examines how ethnocentric tendencies and conspicuousness of foreign products influence consumer preferences in the context of imports from South Africa, the most developed SADC state, to Mozambique, the least developed SADC state (Free Trade Area, 2008). Although the primary focus of the study is on the variables of consumer ethnocentrism and conspicuous consumption (CC), an additional variable of susceptibility to interpersonal influence is embedded into our analysis to trace the origin of conspicuous consumption of foreign products in the Mozambican context.

The choice of the countries is justified for three major reasons. First, the two countries have geographic proximity and thus are closely related to each other economically. Second, the countries exemplify two extremes of economic development in the SADC region: South Africa is the most developed state and Mozambique is the least developed state (Free Trade Area, 2008). This may influence the impact of ethnocentrism and conspicuousness on attitudes of Mozambican buyers towards products imported from South Africa. Finally, the two countries have strong trade bonds. South Africa is the largest importer into Mozambique, with 33 per cent of Mozambican imports. Additionally, Mozambique is a key market for South African produce as it accounts for 20 per cent of South African exports to the SADC (Instituto Nacional de Estatistica, 2007a; Instituto Nacional de Estatística, 2007b; Department of Trade and Industry of South Africa, 2010).

The objective of the study is twofold: (1) to show the validity of a proposed model of consumer ethnocentrism and conspicuousness effects in the Mozambican context, and (2) to show that consumer goods with personal and public modes of consumption differ in their susceptibility to the effects of consumer ethnocentrism and conspicuousness of South African products in Mozambique.

The paper is organised into six sections. First, we discuss the background of the study and then, in the second section, review prior research into major issues of the study. …

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