Consumer Ethnocentrism – Marketing Challenge for Companies: The Case of Serbia

Research Question: This paper examines consumer ethnocentrism (CE) as marketing challenge for companies. Motivation: The purpose of the paper is to examine the antecedents and consequences of CE, who high-ethnocentric consumers are and whether CE can be used in marketing. Data: Results are derived from primary data collected from a consumer sample in Serbia during 2016 in retail stores of different retail chains in Belgrade. Sample included 200 examinees between 16 and 74 years. Tools: CE is measured by CETSCALE (consumer ethnocentric tendencies scale, 17 statements) developed by Shimp and Sharma (1987). Findings: The results indicate that CE can best be explained by a combination of national culture, the characteristics of consumers, product categories, the perceived value of companies and the integrated marketing communications of companies and countries. Furthermore, the results show that significant differences in CE exist between different groups of consumers and product categories. The theoretical contribution and the managerial impactions based on the findings are provided. The conceptual frameworks (Figure 1 and Figure 2) represent the theoretical contribution. The frameworks can be used by marketers for their effective target marketing (market segmentation, market targeting and market positioning). This study underlines the different practical implications of the high level of CE for domestic and foreign companies in the Serbian market. Domestic companies have the opportunity to encourage CE. This study provides marketers with useful marketing strategies and tactics for domestic and foreign companies with respect to CE. The high level of CE is a marketing opportunity for domestic companies. Foreign companies face a bigger challenge with certain product categories which are directed towards certain groups - high-ethnocentric consumers. Particular challenges for foreign companies are promotional campaigns of domestic companies and governments in countries that are directed towards domestic products purchasing. Contribution: This study suggests the marketing strategies and tactics for the encouragement of CE for domestic companies. On the other hand, the high level of CE is a marketing threat to foreign companies. This study suggests the marketing strategies and tactics for decreasing the influence of CE for foreign companies. The results of this study can be used both for further research and in practice.