Abstract
Purpose: This study examines the relationships between cultural openness, world-mindedness (WMD), product-country image (PCI) and the purchase intentions of South African consumers situated in the South African marketplace. In addition, distinctions between PCI and the purchasing intention (PI) concerning smartphones made-in South Korea and China are analysed and discussed as in relation to the South African consumers.
Design/methodology/approach: Constructs were measured using a self-administered survey conducted on 355 South African consumers residing in South Africa. A multivariate analysis was conducted to distinguish the differences between South African consumers’ perceptions of PCI along with purchase intention towards smartphone products from South Korea and China. Thereafter, the study hypotheses were examined using a structural model for consumer perceptions towards South Korea and China.
Findings: The results from the study confirm that both consumer cultural openness and WMD increase the purchase intention and the PCI towards Korean smartphones, whilst only WMD increased the PCI together with the purchase intention towards Chinese smartphones. Findings from the study also suggest that PCI has a considerable effect on the purchase intention of both Korean and Chinese products.
Practical implications: This study expects to provide practical marketing knowledge to organisations hoping to understand the South African marketplace when developing and promoting further their PCI and enhancing the PI of their products.
Originality/value: This study presents nascent literature on research surrounding the country-of-origin effect in a multicultural African context. It fills an important gap by providing greater clarity with regard to South African consumer purchase intention.
Keywords: cultural openness; world-mindedness; product-country image; purchase intention; South African consumers; Korea; China.
Introduction
The tireless efforts of international market mechanisms such as the World Trade Organization (WTO) to promote global fair trade have resulted in a greater number of commercial institutions to internationalise than ever before (Nuruzzaman, Gaur, & Sambharya, 2021). However, as firms strive to expand their market share away from domestic markets, the institutional-based framework (proposed by Peng, Sun, Pinkham, & Chen, 2009) suggests that various socio-cultural and informal institutional factors associated with the destination countries provide additional barriers to firm’s success (Boddewyn & Peng, 2021). A factor of particular importance observed in marketing literature that is associated with firm’s success during the process of internationalisation is the country-of-origin effect (COO) (Diamantopoulos, Kalajdzicb, & Moschikc, 2020; Lee & Robb, 2019). The COO refers to the affective or cognitive images related to a country or the products emanating from the country by foreign consumers (Roth & Diamantopoulos, 2009). It has been observed in past literature that the COO associated with a particular country by a consumer from another country has the potential to drastically impact a firm’s performance (Gammoh, Koh, & Okoroafo, 2020). The image held against a country or foreign product by the consumers of a host nation, therefore, remains an important research area (Diamantopoulos, Matarazzo, Montanari, & Petrychenko, 2021). Whilst research in COO continues to expand, seminal research into the country and product image literature has particularly focused on consumer culture positioning (Strizhakova & Coulter, 2019), thus referring to a belief in ‘global citizenship’ as an emerging topic of rejuvenated interest (Gammoh et al., 2020). Research suggests that a particular population’s attitude towards universal issues such as cultural openness (COP) or world-mindedness (WMD) may influence the level of sincerity of a particular populace towards foreign products or brands (Strizhakova & Coulter, 2019). Mueller, Belch and Honea (2019) in a review of global orientation theory found that global traits such as WMD drew connections with consumer cognitive attitudes towards the image they perceived of specific countries, which were related to consumer openness and to purchasing foreign products (Carter & Maher, 2015). Likewise, Dash, Zhang and Zhou (2021) in a review of source credibility theory observed that the cognitive associations of consumers’ perceptions of product-country image (PCI) were related to their willingness to become world-minded and more open to other cultures. Therefore, it becomes an imperative task for managers and marketers alike to understand these concepts at great length. For example, Nesdale and Todd (2000) found that factors such as COP and collectivist feelings towards the world’s problems in some population groups reduced ethnocentric and patriotic behaviour, whilst Woo (2019) concluded that ethnocentric behaviour remained a burden to the potential success of foreign firms in a particular market. In this regard, it may be assumed that through these shared ideals, certain foreign products may be viewed in a similar way or even receive preferential treatment, when compared with domestic products in some markets (Boddewyn & Peng, 2021). Thus, firms and products emanating from certain countries may receive intangible benefits when they are able to identify markets in which they are perceived by the general populous as being superior or favourable when compared with other foreign brands (Lee & Robb, 2019). This may allow companies to achieve greater competitive advantages in certain markets, assisting these organisations to free-up resources, which may be leveraged to build further firm competencies in other markets (Peng et al., 2009).
Although the stream of research regarding the phenomenon of PCI and purchasing intention (PI) have veered off into several directions (Diamantopoulos et al., 2020), there has been less focus on the roles of consumer’s openness and cosmopolitan attitude towards foreign brands invading their home markets (Chan, Chan, & Leung, 2010; Roth & Diamantopoulos, 2009). Consequently, this study aims to understand how COP and consumer WMD amongst a sample of South African consumer’s, influences the PCI of their PI of Korean and Chinese products. South Korea and China were designated as suitable reference points to condition the construct of PCI as the smartphone industry was assumed to be the best option to measure this construct. Gluhović (2019) observed that smartphones are categorised as high-involvement products in which consumers invest large amounts of time, thus making them an important product for measuring PCI. To this affect, two smartphone brands were studied and evaluated namely,: Samsung (from South Korea) and Huawei (originating from China). South Africa is valued as the largest smartphone market in Africa, further adding to the sample’s applicability, with Samsung and Huawei accounting close to 75% of the smartphone market in South Africa; making these two smartphone institutions the leading mobile device vendors (by market share) in the country (Statista, 2021). According to Hughes, McEwan and Bek (2015), South Africa has emerged as an important market for global brands, characterised as having a growing middle class with increased purchasing power because of rapid population growth and urbanisation. These factors have boosted consumerism in the country, encouraging global organisations to include South Africa as a logical addition to their international portfolios. For organisations, the fact that South Africa occupies more than 20% of the total gross domestic product (GDP) of sub-Saharan Africa adds to the appeal of this particular African nation. Finally, South Africa is regarded as a hub for African logistics and is considered as the southern gateway for the African continent through which foreign companies are more easily able to enter into other African countries (Lee & Robb, 2019).
This investigation into the above-mentioned constructs may provide beneficial information to managers and marketers alike, which could trigger the development of practical marketing strategies for the South African consumer market, by addressing these important questions: (1) What differences exist in PCI between South Korea and China amongst South African consumers?, (2) What are the differences regarding the PI of products (smartphones) from South Korea and China amongst South African consumers? and (3) What are the impacts of COP and WMD of South African consumers on PI and PCI of products from South Korea and China? Through an understanding of these questions, the study expects to provide practical and managerial implications for corporations targeting South Africa, thus allowing these organisations to establish more detailed and sophisticated marketing strategies for their overall success. South Africa being an African nation with a well-established market and economic system, findings from this study could potentially act as a blueprint, benefitting organisations hoping to expand into other African countries (Kamwendo, Corbishley, & Mason, 2014). In addition, this study is also expected to present academic implications, expanding on PCI, COP and WMD studies in the framework of emerging markets, in this case, South Africa.
Literature review and hypothesis
Product-country image
Whilst COO has been conceptualised in several ways (Diamantopoulos et al., 2020), an approach towards measuring the construct from the perspective of both the product and the country has gained acceptance in COO literature (Woo, 2019). The consumer knowledge structure regarding the products’ origin country and the ability of consumers to make sense of all this new information is referred to as PCI. Samiee (2010) considered PCI to be multidimensional in nature, meaning that the construct would include products and brands and the country involved in the production and marketing of the product (Lee & Robb, 2019). The PCI therefore represents the overall global appeal of a nation’s products, central to the ability of a country to produce products that are competitive and affect consumers’ perceptions, evaluation and psychological depiction of that country (Andéhn, Nordin, & Nilsson, 2016). Accordingly, PCI may stimulate and potentially provide reinforcement to consumers whilst purchasing (Chung & Chen, 2017).
The concept of PCI therefore remains an important research area as this information may help in creating a better understanding regarding the decision-making and evaluation process of products by consumers (Lee & Robb, 2019). Furthermore, Heslop, Papadopoulos, Dowdles, Wall and Compeau (2004) concluded that the importance of PCI research could not be understated. They observed that whilst the scope of the results could differ over products, situations or consumers, the influence of studies related to PCI remains pervasive. Therefore, it may be assumed that the association of PCI with consumers’ purchasing habits could act as a significant strategic opportunity for firms looking to engage in foreign expansion. The importance of this construct is further echoed by Kotler and Gertner (2002) who observed that consumers utilise product or country image-based information to support their purchasing judgements when they potentially lack other forms of knowledge about the product (Woo, 2019). This information is guided either by a consumer who is engaged in the act of thinking about or being emotionally stimulated when choosing a product (Roth & Diamantopoulos, 2009).
Whilst certain studies (Lee & Robb, 2016) classified product image using several product categories, Kim and Chao (2018) focussed on smartphones to represent a relevant product category and industry for measuring COO literature, as these products are popular amongst most consumers and provide a means to assess consumer perceptions effectively. In addition, high-involvement products (both Samsung and Huawei smartphones) represent items with visible brand awareness in South Africa. According to Global Stats (2021) Samsung demands about 47.77% of the smartphone market in the country, whilst Huawei commands about 26.44% of the market. For this reason, this study chose to focus on the smartphone industry when establishing a conceptual model for the COO research.
Cultural openness
Cultural openness refers to an individual’s inclination to engage in and search out information and proficiencies in cultures other than their own (Saef, Porter, Woo, & Wiese, 2019). In a review of consumer culture theory, Arnould and Thompson (2018) observed that the behaviours and choices made by consumers ‘openness’ were often reflected from a cultural or social perspective as globalisation resulted in consumers identifying as global citizens through their purchase of global products (Strizhakova & Coulter, 2019). Previous studies have found that COP has an adverse correlation with ethnocentrism (Nesdale & Todd, 2000; Nguyen & Pham, 2021) as frequent contact and experience of other cultures reduces ethnocentrism and allows people to form COP (Shankarmahesh, 2006). Shankarmahesh (2006) also argued that researchers needed to additionally examine consumers’ attitudes, such as their self-reference criteria or WMD as a way of analysing the consequence of COP on consumer ethnocentrism. Gammoh et al. (2020) found that COP contributed to consumers desiring foreign lifestyles and becoming disposed to other cultures through the ownership of consumption representations from those countries (Gammoh et al., 2020). Accordingly, COP led to a greater desire to purchase foreign products (Arnould & Thompson, 2018). According to source credibility theory, customers make decisions to repurchase products based on a cognitive comparison of their purchasing process (Dash et al., 2021). Based on credibility theory, this cognitive identification is also reflected as an action or behaviour brought about by the consumers’ internal openness to foreign cultures (Dash et al., 2021). Therefore, consumers would be further prepared to procure products from a country they are familiar with, especially if they were more culturally open to foreign products (Arnould & Thompson, 2018). Also, Saef et al. (2019) found that COP was associated with greater levels of trust between culturally dissimilar partners. As trust increases, consumers are inclined to perceive symbols or brands of foreign cultures more positively (Gammoh et al., 2020).
South Africa as a society comprises many ethnic groups with their own languages and religions (Kamwendo et al., 2014). Cultural openness, therefore, plays a vital role in the determination of PCI in South Africa. Although several studies have presented contradictory research results on the topic of PCI, empirical analysis highlighting opportunities related to COP and firms’ success are found (Afzal, Shao, Sajid, & Afzal, 2019). Bowden (2009) distinguished further that COP represented the degree to which ethnic, religious and cultural diversity would be accepted in a country, which was especially true under the mantra for which foreigners are accepted as ‘neighbour’ in a country and can coexist. Han, Kim and Kim (2011) claimed that the more a consumer had contact with the cultural contents (e.g. dramas or movies) of foreign countries, the higher was the COP, which had a positive effect on the attitudes of patrons towards foreign products. Therefore, the greater the COP of South African consumers, the more positive foreign product image is cultivated and the more positive a consumer’s foreign product PI is expected to become. Regarding a review of PCI literature and source credibility theory, the following hypotheses are presented in the study:
H1: Cultural openness has a positive impact on PCI.
H2: Cultural openness has a positive impact on PI.
World-mindedness
World-mindedness is used in many social disciplines such as sociology and marketing. Sampson and Smith (1957) are considered to have pioneered the concept of WMD (Purwanto & Christin, 2017), arguing that WMD represented a type of value alignment to assist in dealing with problems from a global perspective (Nijssen & Douglas, 2011). Accordingly, people considered to be world-minded would be concerned with global issues such as inequality and other ecology factors. Meanwhile, a related concept associated with the construct, ‘cosmopolitanism’ has been defined as a personal orientation, preferring a broad network of connections or acquaintances outside of someone’s own community (Kleingeld & Brown, 2019). Although an assortment of disciplines of social science exists, researchers have assumed an array of perspectives on cosmopolitanism and WMD (Nijssen & Douglas, 2011), as they have defined these terms diversely when considering the perspective of consumers’ attitude and behaviour (Purwanto & Christin, 2017). Later, Hett (1991) developed a scale that is more personal, reflective and emotion-based than the Sampson and Smith’s (1957) scale, which comprises more issue-based items (Purwanto & Christin, 2017). Thus, several new factors such as ‘race’, ‘quality of life’ and ‘global government’ were established (Brokaw, Achenreiner, & Elfessi, 2007).
Strizhakova and Coulter (2019) provided novel findings on the concept of WMD as they diversified upon research related to cultural anthropology and cross-cultural psychology allowing the authors to establish a framework of consumer cultural identity. Their findings suggested an association between consumption-based cultural identity and a general cultural identity, which led to a global orientation of cultural immersion (Gao, Andras, & Huang, 2013), global citizenship (Mueller et al., 2019), weak nationalistic identity (Strizhakova & Coulter, 2019) and global product preferences (Roberts, 2016) in further developing the WMD construct. Accordingly, WMD is viewed as a personal attitude that recognises the world as one economic community based on the consumer-specific measure, rather than general attitudes and behaviour (Gao et al., 2013). Hence, the concept is operationalised as a consumer-specific measure (Strizhakova & Coulter, 2019), encompassing ‘WMD’ and ‘quality of life’ and having a possible effect on consumer behaviour regarding foreign products (Mueller et al., 2019). According to Hett’s (1991) assessment of the construct, this research directs particular attention to the economic dimension of WMD as a means of examining PCI and the intention to purchase foreign products. It therefore seems safe to assume that world-minded consumers would have a moral orientation towards benefiting the global community in any way possible (Kleingeld & Brown, 2019). Based on previous arguments, we predict that consumers with higher WMD would have a more positive image of product from a foreign country. Hence, this study assumes that a consumers’ WMD will positively impact his or her intention to purchase foreign products as well. Therefore, we present the following hypotheses:
H3: World-mindedness has a positive impact on PCI.
H4: World-mindedness has a positive impact on PI.
Prospective buyers of foreign products are forced to make purchasing decisions based on various cues afforded to them as they intend to conclude various market transactions (Diamantopoulos et al., 2021). Hence, the study felt it was imperative to conduct further analysis based on the relationship between PCI and PI. Busler (2002) measured PI with three dimensions: ‘consumer’s plan in purchasing a product’, ‘probability in purchasing a product’, and ‘certainty in purchasing’. A common theme to these measures revolves around the process of purchasing based on various decisions aligned with a consumer’s cognitive and affective dispensation of information related to the products. As individuals possess unique attitudes in their purchasing behaviour based on the evidence and information provided to them, the information made available greatly promotes the concept of customer-thinking and assists in the process of choosing from an extensive range of products. Whilst making sense of this new information, consumers are often drawn to the PCI during the purchase as this acts as an indicator for many attributes associated with assessing the product (Ghazali, Othman, Yahya, & Ibrahim, 2008). Therefore, consumers use their knowledge or belief about a product, whilst relying on their PCI as a proxy to enhance their information processing to make meaningful decisions about the quality of the product. Hence, PCI possesses an ability to influence a consumers’ decision-making style and his or her evaluation of a products quality when considering the purchase of a product (Busler, 2002). Consequently, PCI may influence a consumer’s perception of the characteristics of products and therefore their intention to purchase (Diamantopoulos et al., 2020). Thus, an affiliation between PCI and PI may exist, influencing consumer perceived belief of the product quality, before the commercial transaction takes place. As such, this study expects that PCI will influence PI resulting in the following hypothesis:
H5: Product-country image has a positive impact on PI.
Study model
In view of a comprehensive review of the current literature, a conceptual framework is proposed. The framework captures the impression of improved consumer COP and WMD on PCI and the intention to purchase products from foreign countries (see Figure 1). Global orientation theory is introduced to conceptualise the model and provide support for WMD (Gammoh et al., 2020) and consumer openness (Carter & Maher, 2015) on the PI of foreign products (Mueller et al., 2019). According to this theory, consumers’ cultural standing, as a global consumer, leads them to accept other countries and products emanating from those countries (Strizhakova & Coulter, 2019). Each of the mentioned constructs is predicted to affect consumer PCI and the product PI of foreign countries. Country image is defined as traits and perceptions related to a country, as it is associated with a consumer’s memory or experience with a country; therefore, it is an essential conjecturer of product selection (Nebenzahl, Jaffe, & Lampert, 1997). Utilising favourable country image is an influential strategy international marketers may rely on to develop their products in new or foreign markets (Aichner, 2014).
Jain and Griffith (2011) associated consumer openness with the acceptance of norms and values from other cultures. This requires individuals to adopt ideas and products from other cultures and to be free from prejudice or bias towards these products or ideas (Diamantopoulos et al., 2020). This rational follows previous study results of a culturally open person as one who has a favourable attitude to foreign products and is thus willing to purchase foreign products (Nijssen & Douglas, 2011). Thus, source credibility theory (Dash et al., 2021) is used in the study to further develop the model by providing an avenue with which to measure both the cognitive and affective dimensions of PCI. Source credibility theory also provides this research with an opportunity to create an association between WMD and country-product image (Nesdale & Todd, 2000) as the theory suggests that the development of consumers’ perceptions towards a foreign product is a derivative of their level of world orientation (Boddewyn & Peng, 2021; Sampson & Smith, 1957). This reflects a consumer’s interest in buying products from other countries, thus promoting welfare and equal living standards with a world-perspective in mind (Brokaw et al., 2007). Therefore, we expect that consumer COP and WMD are related in forming a positive image of, and intent to purchase foreign merchandise. Based on the given argument, a study model is presented in Figure 1.
Data collection and measurements
Data collection
To achieve the study’s results, data were collected in South Africa using a survey instrument. South Africa was considered a suitable setting to observe consumer COP because of the countries’ own varied cultures and belief systems. The country continues to increase trade with distant trading partners such as China and the United States (US). About 45% of South African imports by value were delivered from importers in Asia, whilst about 13% were imported from fellow African countries. According to the COMTRADE database on international trade of the United Nations (UN), roughly 19% ($17.09B) of South African imports in 2018 were delivered from Chinese trade partners and about 1% ($1.05B) of South African imports in 2018 were delivered from South Korean trade partners. Based on the COMTRADE database on international trade, China remains South Africa’s most important trading partner by volume, whilst South Korea is positioned as South Africa’s fourth largest key trading partner throughout Asia in this regard. Whilst South Korea’s exports to South Africa are not as large as China’s, as of 2020, South Africa features as Korea’s largest trading partner in Africa according to the South African Department of International Relations and Cooperation. Therefore, for South Korean companies, the South African market remains an important gateway and test market to enter the African continent and an important market overall. In particular, the country image of Korea seems to be more positive than that of China (Lee & Robb, 2016). However, this phenomenon needs to be examined further, so that the determinants of PCI and their effect on South African consumers can be tested and compared with the differences between countries as a means of finding more successful and suitable marketing strategies for the South African market. Therefore, this study collected data using an online survey method from June 2019 to July 2019 for consumers in South Africa. Further data were collected from randomly selected consumers in several local shopping malls in South Africa. This study employed fieldworkers located in three major cities (Cape Town, Gauteng and Port Elizabeth) to assist in the data collection. However, because of geographical and financial constraints, the shopping malls (stocking both product brands represented in the study) were selected based on convenience sampling, as a type of non-probability sampling method. Of the 420 questionnaires obtained, 335 were used for the final study; questionnaires which were poorly answered with incomplete or unengaged responses to the questions were excluded from the study.
Measures of the construct
The study questionnaire comprised of two parts: the first measured the concepts of respondents’ COP, WMD, PCI and PI, whilst the second determined demographic information as shown in Table 1. All measurements of the constructs used a 7-point Likert scale. Ijabadeniyi, Govender and Veerasamy (2015) mentioned that researchers should remind themselves that South Africa is characterised by both cultural and linguistic diversity, therefore, consumer-related studies should consider this issue when creating consumer questionnaires in the country (Lee & Robb, 2019). Furthermore, Lee and Robb (2019, 2021) found that the translation of the questionnaire into other official languages in South Africa greatly improved the response rate, reliability and engagement of the respondents’ participation in the questionnaire. Therefore, to secure the external validity of the questionnaire (to ensure conceptual equivalence), it was developed in English and was then translated into Xhosa and Afrikaans, and finally back-translated into English (Lee & Robb, 2019). The translation process was conducted with the assistance of bilingual marketing research specialists during the pilot study phase. During this process, the study was pre-tested on 15 individuals from each language group. After the pre-test, certain items were adjusted or corrected to improve the understanding of the questions. In the original questionnaire, three product categories/industries were included in the study: smartphones, electronics and automobiles. As per the suggestion of two professors at a university located in South Africa, two of the product categories were removed as the majority of consumers would be more familiar with smartphones than the other two categories (Gluhović, 2019).
Items were obtained from existing scales. The degree of consumer COP focused on two main proportions: consumers’ intimacy and interest of foreign culture and people, and were adopted from Black’s (1990) scale. For consumer WMD, we focused on the economic dimension of WMD. The three items corresponding to economic component were collected from Sampson and Smith’s (1957) measure and several ‘quality of life’ items from Brokaw et al. (2007). We measured PCI by the workmanship, value, design and reliability of products made in a country. These four items were adopted from Leong, Cote and Ang (2008). These items were then pre-tested and then slightly modified based on recommendations from industry specialists to ensure clarity and respondents’ understanding (Nijssen & Douglas, 2011). Thereafter, we assessed the PI of products (smartphones) made in China (Huawei) and South Korea (Samsung) on the basis of a scale developed by Wang, Li, Barnes and Ahn (2012). Purchase intention towards smartphones from South Korea and China were evaluated using five statements regarding the willingness to buy and appeal of the products. Table 2 provides a summarised indication of the measurement items.
| TABLE 2: Constructs and measurement items. |
Results
Variance test and correlation analysis of variables
A t-test was performed to examine the general tendency of South African consumers’ perceptions of ‘PCI’ and the ‘PI’ of Chinese and Korean products. Outcomes of the analysis are presented in Table 3. It was found that South African consumers generally have a more positive PCI and higher PI for Korean products than Chinese products. More specifically, the difference between South African consumers’ PCIs for Korean and Chinese products is relatively large, but the difference in PIs for Korean and Chinese products is not that large. This shows that South African consumers perceive Korean products as more technologically advanced products compared to Chinese products, but the PI for Korean and Chinese products does not show much difference for South African consumers.
Furthermore, a Pearson correlation method was used to test the strength amongst the variables. The correlation values range from 0.01 to 0.50 and are statistically significant at p < 0.05. Although low Pearson correlation values amidst variables for Chinese products are found, a relationship could still occur amongst the variables (Boslaugh & Watters, 2008). That is, there may not be a linear relation, but a non-linear relation may exist. To examine the structural relationship amongst variables a structural equation modelling (SEM) was performed. A SEM permits certain questions to be assessed that require the involvement of a multiple regression analyses of variables. The correlation matrices shown in Table 4 include a p-value for each correlation.
Validity and reliability test of measurement items
An exploratory factor analysis (EFA) was conducted on the survey data set and four principal component factors were extracted. The variables have significant factor loadings of above 0.6, and the eigenvalues are larger than 1. The first factor ‘COP’ was extracted, and it accounts for 16.36% and 16.87% of the total variance for each structural model of South Korea and China. The second factor ‘WMD’ accounts for 12.16% and 13.28% of the total variance, the third factor PCI’ accounts for 15.12% and 14.56% of the total variance and the fourth factor ‘PI’ accounts for 22.66% and 20.21% of the total variance for each structural model of South Korea and China. Table 5 presents the rotated component matrix of the EFA and the factor loading scores for each variable on each factor. Construct reliability was measured by Cronbach’s alpha which all held the acceptable threshold of 0.7 providing evidence of reliability amongst the study instrument (Hair, Black, Babin, & Anderson, 2010).
| TABLE 5: Validity and reliability test results. |
Results of the structural equation modelling analysis
This study aimed to verify the impact of COP and WMD towards consumers’ PI and their PCI of foreign products. First of all, we evaluated the SEM. Even though the chi-square (χ² = 322.282, df = 98 / χ² = 348.998, df = 98) is significant (p < 0.01), the test could be sensitive based on the size of the sample (Bagozzi & Yi, 1988). Therefore, we computed additional fit indexes: χ²/df = 3.28/3.56 (South Korea/China), Goodness of Fit Index (GFI) = 0.890/0.889 (South Korea/China), Normed Fit Index (NFI) = 0.870/0.846 (South Korea/China), root mean square error of approximation (RMSEA) = 0.083/0.088 (South Korea/China), with all obtained indexes meeting the threshold of good model fit (Browne & Cudeck, 1993). Under an assurance on the adequacy of the GFIs, we tested the hypotheses.
We proposed five major study hypotheses. H1 and H2 projected that COP is positively related with PCI and PI of foreign products. H3 and H4 predicted that WMD is positively associated with PCI and PI of foreign products. Lastly, we assumed that positive PCI increases PI of foreign products. Our results show that the consumer COP and WMD significantly associated with the two dependent variables, PCI and PI, thus providing support for the four hypotheses for South Korea (H1: path estimate = 0.375***, H2: path estimate = 0.300*, H3: path estimate = 0.136**, H4: path estimate = 0.763***). Concerning China, no significant results were observed with regard to COP, thus H1 and H2 do not receive support (H1: path estimate = 0.041, H2: path estimate = 0.065). However, significant positive relationships were found between the WMD, PCI and PI of foreign products (H3: path estimate = 0.450***, H4: path estimate = 0.270*), thus providing support for H3 and H4 for China. In addition, according to the results of path estimates between PCI and PI in H5, product country image had a significant impact on PI, therefore providing support for both countries. Table 6 provides a summary of relationships confirmed for the study model, and the country comparisons between South Korea and China, whilst Figures 2 and 3 provide an observable image of the study results.
| TABLE 6: Structural equation modelling results of country-of-origin-image (COI) effects. |
Conclusion and implications
Conclusion
As international competition increases, more research has focused on the behaviour of consumers in global markets. A prominent topic that has been studied in this regard is the ability of PCI to affect the consumer decision-making process when purchasing foreign products (Diamantopoulos et al., 2021). The PCI by its very nature focuses on the process of consumer decision-making whilst addressing elements of a consumer’s inclination to purchase particular products (Roth & Diamantopoulos, 2009). This, coupled with a general psyche of the consumers may aid in answering several questions related to new venture strategic operationalisation. Therefore, research related to PCI remains imperative for the success of organisations around the globe as they increase their global market share (Diamantopoulos et al., 2020).
Findings from this study also provide further support for COO research when it is associated with cosmopolitan research (Lee & Robb, 2021). The introduction of global orientation theory in explaining this relationship provides benefits to overall COO research (Strizhakova & Coulter, 2019). As a result, this study provides further evidence to the notion that globally orientated consumers are more likely to purchase products from foreign countries (Mueller et al., 2019). Stemming from cosmopolitan theory, the concept of ‘cosmopolitanism’ or ‘citizen of the world’ has emerged as an important concept to explain WMD and the willingness of cultures to accept products emanating from foreign nations (Kleingeld & Brown, 2019). This study builds upon this theory and suggests that both COP and WMD have an important part to play in the observations of consumers towards foreign brands. Findings suggest that South African consumers tend to perceive Korea positively in this regard, whereas room for improvement still exists for China and its product offerings. The positive results for COP and WMD in South Africa may be attributed to the countries’ recent past (Muposhi, Dhurup, & Shamhuyenhanzva, 2018). Throughout the country, since the end of the apartheid regime, secondary and tertiary educational institutions in South Africa have focused a great deal on the study of COP, equality and pluralism (Hughes et al., 2015; Lee & Robb, 2019). This ideology in the country has to a large extent been inherited by younger generations of South Africans thanks to the tireless work of the country’s former president, Nelson Mandela. The former President Nelson Mandela incorporated the Bantu motto of ‘umuntu ngumuntu ngabantu’ into his presidency, which translates to ‘we are people through other people’; the former leader focused on incorporating a mutual interdependence in the country, where the common ground is greater and more enduring than the differences that divide. This approach provides a strong argument as to why South Africa is considered very open to other cultures (Lee & Robb, 2016). Similarly, the introduction of source credibility theory (the cognitive association with COO) to the research has assisted researchers in drawing comparisons between, for example, the favourable perceptions consumers could hold towards foreign brands (Lee & Robb, 2016) and the reduced levels of ethnocentric behaviour in a particular nation (Dash et al., 2021). These findings contribute additional theoretical advantages to the field of COO research, as practitioners are able to align both affective and cognitive PCI (Diamantopoulos et al., 2020) with WMD (Mueller et al., 2019) and COP literature (Lee & Robb, 2021).
Regarding COP, the results of the study show that hypotheses H1 and H2 were significant for South Korea but not for China. Therefore, COP towards China and its products did not factor into the equation of South African consumers whilst making purchasing decisions. These results are similar to those observed by Saef et al. (2019) who observed that cultural dissimilarities could cause lower levels of COP. Also, Muposhi et al. (2018), for example, found that South Africans displayed moderate feelings of ethnocentrism against products from China because of a feeling of encroachment by Chinese products on the South African markets, putting local jobs at risk. This sentiment was echoed by Gao et al. (2013) who observed that emerging countries have higher levels of animosity and ethnocentrism against China because of their dumping of low-quality products on these markets. A further reason for the insignificant results regarding the findings for hypotheses H1 and H2 in China could be a lack of cultural understanding or commonality between South Africa and China.
As discussed, PCI plays a focal role in consumers’ market behaviour. The benefit of encouraging information regarding product image affords unlimited opportunities to organisations. The results of path estimate between PCI and PI (hypothesis H5) shows that PCI had a significant impact on the PI for China and Korea related to the perceptions of South African consumers. These results are similar to those of Roth and Diamantopoulos (2009) who observed that the influence of a countries’ image would factor into the cognitive and emotional characteristics of consumers when making purchasing decisions. As a country’s consumer market grows, additional product choices become available to consumers. Therefore, consumers are confronted with a need to use alternative means of making their purchasing choices. An emphasis on PCI is further supported by the fact that South Africa has a growing, cosmopolitan population, where international brands compete for market share (Lee & Robb, 2016). Consequently, improving a firm’s PCI would allow these organisations to distinguish themselves from other firms when competing for the loyalty of South African consumers. This study shows that although South African consumers perceive Korean products as more technologically advanced over Chinese products, the PI to Korean and Chinese products does not show much of a variance for South African consumers (refer to Table 3).
Implications
From an academic perspective, findings of the study contribute to the theoretical literature by providing several suggestions for scholars. A dominant theme followed by this study relates to the importance of COP and WMD in influencing the foreign product consumption behaviour of South African consumers. These findings add to literature devoted to source credibility theory (Dash et al., 2021) and consumer culture theory (Arnould & Thompson, 2018), as the findings promote further knowledge to supplement research related to global citizenship and global orientation (Mueller et al., 2019). Furthermore, whilst some PCI research has pursued the tendency of assuming that consumers will respond to PCI cues in a standardised way (Samiee, 2010) the results of this research dispense additional knowledge to the PCI construct related to the adaptive nature of the construct (Diamantopoulos et al., 2020). Also, this study has contributed to the research on the concept of the ‘halo effect/theory’ in COO studies by providing theoretical findings for the halo effect based on a specific product category (Woo, 2019). It is, therefore, imperative for scholars to continue research in this field and treating customers in a localised fashion as these perspective consumers are influenced by the PCI phenomenon. There is also hoped that this study’s results would reintroduce interest in the WMD construct as current literature considers its importance in developing cultural identity amongst consumers in the marketing field (Strizhakova & Coulter, 2019).
For managers representing the interests of international firms, the implications of the study results present an argument associated with the maintenance of firm’s capabilities in creating an understanding of consumer preferences. As a result, in certain environments, firms should be more willing to commit additional resources, thus maintaining their market share and overall performance in those markets. Johansson (1989) observed that customers are likely to use PCI evidence as their awareness of a particular product increases because their trust in the product is growing. According to Dash et al. (2021), global citizenship could act as a proxy for trust, resulting in a willingness by consumers to accept foreign products. Therefore, organisations are afforded an opportunity to allocate scarce resources towards markets attuned with world-minded behaviour as these managers could achieve greater returns on their investments in such markets (Kleingeld & Brown, 2019). However, managers should take caution when developing strategies and understanding differences between markets, as certain emerging economies such as South Africa, which are characterised by multiculturalism, may be incompatible with current firm marketing strategies to achieve competitive advantages for firms. For Korea and China, geographical or cultural distance between the two countries could factor into the ideology that South African consumers don’t fully connect with Korean or Chinese products. As a result, Chinese and Korean firms are encouraged to undertake a process of integrating strategies into their global expansion plans that would incorporate PCI or focus on particular consumer segments, which show the highest degree of COP and WMD when entering a market. Using a strategy of market segmentation upon entry for firms would result in a greater connection with consumers. This approach may be categorised by the introduction of complementary or consumable products readily used by South African consumers to enhance consumer awareness. Roth and Diamantopoulos (2009) found that the intent to purchase a product was influenced by product attributes, as well as the perceptions of the source product and country. Therefore, it remains important for governments and companies alike to focus on continually striving to enhance and utilise the global image of their countries. A final suggestion that this research offers to strengthen managerial implications relates to the process of knowledge sharing and acquisition with reference to social capital theory (Huang & Liu, 2019). Whilst results of a study conducted by Balabanis and Siamagka (2017) suggested that product visibility did not strengthen the behaviour of consumers to buy foreign products, our findings suggest otherwise. Results from this research advise that managers enhance their product knowledge diffusion in the South African market. Whilst many consumers in the market thought they were aware of the product brands a simply visual presentation of the products allowed consumers to develop a clearer image and understanding of the product (Aichner, 2014). It is therefore advised that managers aim to further differentiate their products from competitor’s products in the South African market through detailed advertising or visual presentations of the products.
Limitations and recommendations for future research
Within this study, several contributions towards COO theory have been achieved with regard to the PCI construct and seminal work regarding WMD and COP. However, we acknowledge the existence of several limitations, whose consideration may offer opportunities for further research. Findings from this study suggest that both the PCI and PI for Korean and Chinese products are significant. However, in many cases, consumer bias concerning overseas products may vary depending on the product’s origins, where consumers might favour global products over domestic ones or vice versa. Therefore, it remains an important area of future research to focus on product quality or product characteristics whilst not neglecting PCI. Research conducted by Lee and Robb (2016) as an example, found that product category influenced the PCI construct. From a theoretical viewpoint, conducting COO studies in the future could benefit from a more in-depth analysis of the effects of product categories on PCI. This assessment of the COO literature is also championed by Balabanis and Siamagka (2017) who observed inconsistency in the predictions of purchase behaviour based on the category of products incorporated in COO research. As a multicultural society, consumer studies sampled in South Africa on occasion provide unique and varied outcomes. Consequently, results from this study should not be generalised as being indicative of the broader population of South Africa. Furthermore, with regard to the demographic features (e.g. location, education, age, income etc.) of the study sample, this study focused mainly on population groups located in Gauteng, the Eastern Cape and Western Cape provinces. As such, the study results could vary if future tests choose to include a larger portion of the population. Future research may focus on some issues not addressed in this study. This may include the measure of particular products, rather than presenting a generalised concept for the term. In addition, diversity with regard to ethnicity or tribal totalitarianism may be more prevalent in certain multicultural countries, but less widespread in others. Future research should thus investigate the possibility of incorporating multiple ethnic groups into the study to gauge possible differences in any response rates.
Acknowledgements
Competing interests
Both the authors declare that no competing interests exist.
Authors’ contributions
As far as the current research is concerned, both the authors contributed equally to the work.
Ethical considerations
This article followed all ethical standards for research without direct contact with human or animal subjects.
Funding information
The research was conducted without any assistance regarding funding. All fees were shared by the authors.
Data availability
This study’s data are not applicable to any study. However, upon request for the required data, it will be made available to the Journal.
Disclaimer
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any affiliated agency of the authors, and the publisher/s.
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