An examination of the relationship among consumer lifestyles, ethnocentrism, knowledge structures, attitudes and behavioural tendencies: a comparative study

in two CIS states

Erdener Kaynak Pennsylvania State University at Harrisburg Ali Kara Pennsylvania State University at York
The objective of this study is to investigate ethnocentric and/or regiocentric behaviour of Azeri and Kyrgyz consumers. In particular, the study focuses on how ethnocentrism explains consumers attitudes, intentions and actual purchasing behaviour towards products from major sourcing countries. Data for the study were collected through personal interviews in four districts of Greater Bishkek: the capital city of Kyrgyz Republic, and Baku, the capital city of Azerbaijan. Survey findings lend greater support to earlier studies conducted in the USA, Western and Eastern Europe and Japan. Nonethnocentric Kyrgyz and Azeri consumers have significantly more favourable belief structures, attitudes, intentions and the resultant purchasing behaviour regarding imported products compared to their ethnocentric Azeri and Kyrgyz consumer counterparts. The findings of the study offer important research, public policy and managerial implications for companies, government agencies and international donor agencies alike who are either operating in the region or contemplating an entry in the future. Foreign companies may use pan-regional marketing strategies and may be able to standardise their products and marketing strategies in the region, since consumers have identical and/or very similar use behaviour and uses for the products and services.

International Journal of Advertising, 20, pp. 455482 2001 Advertising Association Published by the World Advertising Research Center, Farm Road, Henley-on-Thames, Oxon RG9 1EJ, UK

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INTRODUCTION The legal-political, social and techno-economic systems evolved over the past five decades have complicated the creation and institutionalisation of effective marketing systems in Eastern/Central European countries, Baltic States and Commonwealth of Independent States (CIS). As the countries of the regions emerge from the ruins of communism, they are all making concerted efforts to continuously develop their indigenous economies and improve the standards of living and quality of life of their citizens. In most cases, the crucial issue confronting foreign companies is identifying the most lucrative consumer market segments in these countries in order to develop appropriate marketing plans and strategies to explore and exploit these emerging markets. During 70 years of a centrally planned command economy period, scant information was available about the consumers and their purchasing/consumption behaviours in these countries. The prevailing supply-oriented economy did not necessitate consumer behaviour information. However, during the past decade, with advances in communication, increased wealth and travel, introduction of satellite TV, infusion of free market economy principles, privatisation efforts and liberalisation in these countries have created distinct consumer market segments. These New Rich consumers are very discerning in their selection and purchase of products and services as well as patronising stores. These consumer groups have the means, intentions and behaviour to purchase foreign-made products. In response to this increased demand for foreign products, more companies are entering into the region, forming strategic alliances with local companies. In addition, more foreign direct investment and contract manufacturing activities are taking place in response to increased business and investment opportunities in the region. In many of these emerging countries, a clandestine market economy and disparity of income concurrently prevail where on the one hand an extremely affluent market (upscale consumers) exists along with low-income consumer market segments. The affluent segments consumption behaviour may be characterised as conspicuous, with strong preferences for shopping for branded, foreign consumer goods originating in Western Europe, North America and Japan (Svennevig et al., 1992). In addition, different types

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of promotional strategies are being utilised in reaching the various market segments in the region. The purpose of this study is to investigate consumer ethnocentrism, and how this variable relates to lifestyles and purchase attitudes/intentions of consumers concerning foreign products. In simple terms, is ethnocentrism likely to influence product/brand attitudes and perceptions, appropriate price and purchase intentions? Furthermore, how should marketers and decision-makers deal with ethnocentric consumers in these newly emerging markets? What marketing strategy changes, if any, should multinational companies undertake to comply with this kind of consumer/user behaviour? Consumer behaviour knowledge of this type will be vital for smooth transformation of these economies into a free market economy in the near future. It will also help domestic and foreign manufacturers alike to better target their products and/or services to the needs of consumers with different ethnocentrism levels. THEORETICAL AND CONCEPTUAL BACKGROUND Over the past decade, a number of theoretical constructs and conceptual frameworks have been developed to better understand the behaviour of ethnocentric consumers (Papadopoulos and Heslop, 1993). However, consumer behaviour-related data are still rather sparse in the newly emerging markets of Central/Eastern Europe, the Baltic States and CIS. Some of the most significant studies conducted so far have been related to demographics, socioeconomics, social class and psychological characteristics of consumers as well as their behavioural tendencies and conative purchase actions. All demographic dimensions have received broader acceptance, and lend themselves easily to quantification and readily available consumer classification. The use of demographics, however, has been questioned and it is argued that demographic profiles have not been deemed sufficient because they lack richness and often need to be supplemented with additional databases and behavioural constructs (Wells, 1975). Social class, on the other hand, adds more depth and richness to demographics, but it, too, often needs to be supplemented with additional parameters in order to obtain meaningful insights into consumer behavioural characteristics. It is known that these variables are far more than simple demographics (Westfall, 1962). Lifestyle
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relates to how people live, how they spend their money, and how they allocate their time among different types of activities. One can propose that there will be differences as well as similarities among nations/cultures. If we are able to identify consumer groups with common attitudinal and behavioural characteristics and tendencies in a foreign environment, we may then be able to develop more precise/targeted marketing plans, programmes and strategies. Consequently, we can reach the target markets better. Hence, consumer lifestyle information may be of additional use to us and it enriches our understanding of how consumers live, what type of activities they engage in, and how these affect their purchasing and consumption-related behaviour. In general, the country-of-origin (COO) cue interacts with other input variables such as product class knowledge, consumer and country characteristics along with other important variables such as nationalism, patriotism and internationalism (Balabanis et al., 2001). These input variables influence product brand attitudes (product brand perceptions of price) and behaviour (purchase intentions and choice of brand). In this process, the relationship is moderated by consumer ethnocentrism (see Figure 1). The effect of the COO cue on product perception, evaluation and selection has been examined from two general perspectives: the content and the process approach (Pecotich et al., 1996, p. 215). The former deals with product and price perceptions and purchase behavioural intentions, whereas the latter deals with the cognitive decision-making process of product choice and purchase. The majority of the research on COO has tended to focus on aspects of content where its effects on product evaluations and perceptions were studied at product class and product brand levels (Han and Terpstra, 1988). Consumer product class information of both intrinsic and extrinsic type does have an impact on consumer evaluations. Intrinsic cues are physical attributes of a product whereas extrinsic cues are related to the augmented part of a product such as brand name, labelling and packaging (Lee and Ulgado, 1996). The augmented part of a product has two components: packaging and support services. The former is used at two different levels such as packaging a promotional device and packaging a protective device. It is believed that consumers are generally more familiar with extrinsic cues than intrinsic cues, and use them to organise their belief structures and knowledge bases about various products/brands. The significant effects of extrinsic cues on
1 Footnote.

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Input

Output

Country-of-origin

Product brand perceptions The content

Attitudes

Product class knowledge

Perceptions of price

Consumer characteristics

Purchase intentions

Country characteristics

Choice of brand

The process

Behaviour

Other variables Consumer ethnocentrism Moderation factor

Purchase of brand

FIGURE 1 THE EFFECTS OF PSYCHOLOGICAL FACTORS, CONSUMER AND COUNTRY CHARACTERISTICS ON CONSUMERS ATTITUDES AND BEHAVIOUR MODERATED BY CONSUMER ETHNOCENTRISM

product evaluations found in numerous empirical studies have substantiated such beliefs (Lee and Ulgado, 1996). In the emerging market of China, for instance, urban consumers rely heavily on such extrinsic cues as foreign brand name and labelling when forming an attitude towards products (Li, 1998; Wu, 1999). In addition, in the high-context culture of Japan, celebrity advertisements using wellknown foreign personalities exert strong influence on consumers in making decisions. Hence, previous studies have demonstrated that brand name along with other abstract attributes has a significant effect on product evaluations, and in most cases consumers rely on a brand name and/or its advertising message to judge the quality of a product (Aaker and Keller, 1990). This is also a trend in most of the emerging markets of Asia, Latin America and Africa. All indications are that it will continue 1 Footnote. to be influential.
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Enduring behavioural patterns, demographic, socioeconomic and personality characteristics of consumers are extremely important in consumer decision-making in the global marketplace (Clark, 1990). In a study by Neese and Hult (1996), four demographic characteristics of consumers are shown to be significant predictors of COO tendencies. These are age, income, race and education. In their studies, Schooler (1971) and Tongberg (1972) discovered that older consumers tended to evaluate foreign products more favourably than did their younger counterparts. The general implications of these results are that firms can predict COO tendencies by examining a select set of demographics and socioeconomic characteristics, thereby increasing the likelihood of achieving a competitive advantage in the marketplace. In addition, COO tendencies become more favourable towards foreign-made products as income levels of consumers increase. Less educated consumers are generally more negative towards imported products, and those with higher education show more positive attitudes towards the quality of foreign-made products (Neese and Hult, 1996). Consumers knowledge and belief structures about a products COO may have an impact on their subsequent product evaluations. Unfortunately, in past COO studies, individual consumer differences were overlooked. In this research, it may be useful to find out whether there are individual consumer characteristics that give rise to the differences in product attribute effects and overall product evaluations. This will be examined mainly using a segmentation approach, where distinct consumer segments are developed based on consumers individual characteristics. Country and/or regional characteristics may also affect consumer product evaluations. This new concept, called COO label, was examined by use of Made in Europe as a distinct construct. Consumers perceptions of the quality of various products within this label are compared to the quality of products Made in the USA and Made in Japan. Results indicated that European products labelled Made in Europe are perceived to be of at least the same quality as products from Europes Japanese and US competitors on world markets (Schweiger et al., 1995). Past studies also indicate that COO effects typically operate in a hierarchical manner where products from more economically advanced countries are generally preferred to those from developing or less-developed countries. Consumers also prefer products from their own country to those from other similar
1 Footnote.

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countries (Kaynak and Cavusgil, 1983; Klenosky et al., 1996). On the other hand, at a country level, COO effects have not been positive in some countries. For instance, being British is not the key to marketing success overseas. Jaguar, the quintessential British car brand, had to adopt a high-tech image and tone down the links with its COO (Barrett, 1996). Its COO is now totally forgotten since it was purchased by FMC, and is perceived as a luxury car aiming at a global upscale consumer market. In view of the past marketing and consumer behaviour literature, this study uses demographic, socioeconomic and lifestyle analysis, along with other research techniques, to identify ethnocentric subpopulations sharing similar patterns of social norms, belief structures, attitudinal orientation and behavioural patterns, using Azeri and Kyrgyz consumers as case examples. Once these variety market segments are identified, appropriate marketing plans and strategies may be purposefully developed to reach these markets effectively. This will also help local manufacturers to improve product design and appeal, and appropriately position or reposition as well as promote their products against imported products so that they can gain competitive advantage in the local and overseas markets. CONSUMER ETHNOCENTRISM Ethnocentrism is a universal phenomenon and is deeply rooted in most areas of intergroup relations. It is defined as the beliefs (knowledge structures and thought processes) held by consumers about the appropriateness, indeed morality, of purchasing foreignmade products in place of domestic ones (Shimp and Sharma, 1987). Ethnocentrism forms the basis of a powerful appeal, too strong for firms to disregard (Pecotich et al., 1996). The degree of strength and intensity of consumer ethnocentrism does vary from culture/country to culture/country, even from region to region. It is posited that generally speaking, members of a high-context culture (i.e. Japan, China) are more ethnocentric than members of a low-context culture (i.e. USA and Western European countries), though there might be some similarities between the two cultural groupings in terms of subgroups (i.e. teen market, upscale consumer market). In recent years, a number of attempts have been made in cross-cultural/national consumer research to investigate this phenomenon (Manrai and
1 Footnote.

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Manrai, 1995). In a study conducted by Pfaff (1994), it was stated that ethnicity and nationalism are the strongest motivating forces in the global marketplace. One of the ways ethnocentric consumers can demonstrate their cultural orientations, beliefs and nationalism is through consumptive behaviour limited to domestic products. Among these, an important contribution to consumer research has been the development and international application of the CETSCALE, which measures consumer ethnocentrism across cultures/nations, and which comprises 17 items. Consumer ethnocentrics are said to view purchasing foreign products as wrong because it hurts the domestic economy, leads to a loss of jobs, and is simply unpatriotic. For non-ethnocentric consumers, foreign products should be evaluated on their own merit and on the basis of the utility they offer consumers, rather than based on where they are manufactured or assembled. The consequences of consumer ethnocentricity include overestimation of the quality and value of domestic products or underestimation of the virtues of imports, a moral obligation to buy domestic products, and preference for domestic products and/or services. After providing support for the psychometric properties of the scale in the USA, Shimp and Sharma (1987) suggested several potential applications of the scale to population groups in other countries and cultures. However, researchers were first cautioned to provide an accurate translation and assessment of the scales psychometric properties. In response, Netemeyer et al. (1991) found strong support for the psychometric properties and nomological validity of the scale across four different developed countries, namely the USA, France, Japan and Germany. Netemeyer et al. (1991) also recommended that researchers translate the CETSCALE in other foreign languages and use it in other countries and regions, such as in the former Soviet-bloc countries. In these countries, renowned for their ethnic diversity and nationalist sentiment, ethnocentrism should not be overlooked as an influence on purchase and consumption decisions. The CETSCALE instrument may be incomplete in such countries. One such study was undertaken among Russian consumers where the CETSCALEs psychometric properties and mean values were compared with the USA. Results of the study support the scales unidimensionality, reliability, and discriminant and nomological validity (Durvasula et al., 1997). The intervening influence of other cultural/national factors on consumers, as well as foreign consumers
1 Footnote.

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personal characteristics, may influence meaningful data interpretation (Hult and Keillor, 1994). To overcome these difficulties, Netemeyer et al. (1991) strongly recommended the accurate translation and application of the CETSCALE in countries that have recently adopted free market economy principles and eased trade restrictions, and are also trying to privatise most of their industries. Along with increased nationalism and heavy emphasis on cultural and ethnic identity, consumer ethnocentrism will be a potent force in the global business environment in the years to come. So far, the CETSCALE has not really been validated and compared in developing country environments. In particular, validation studies involving countries of Eastern/Central Europe and CIS are sparse or nonexistent. This study uses lifestyle analysis as a proxy for ethnocentric tendencies, along with other research techniques, to identify subpopulations who share similar patterns of social norms, beliefs and behavioural tendencies among Azeri and Kyrgyz consumers. Managerial and public policy implications of ethnocentrism are also offered. THE STUDY This study examines the process underlying consumers attitudes towards products being imported into their domestic economies. It seeks to accomplish several objectives. First, it uses a tested scale (CETSCALE) and applies it in different cross-cultural environments. Second, it explains the nature of ethnocentrism for consumers in different demographic, socioeconomic and lifestyle segments. Third, it provides the results of empirical consumer research studies conducted in two emerging markets: Kyrgyz Republic and Azerbaijan. Finally, the findings of the study offer managerial and public policy implications, which may facilitate the development of consumer markets and consumer-oriented public policies in these emerging economies. Consumer behaviour knowledge of this type will also facilitate smooth transformation of these economies into a free market economy in the foreseeable future. Research questionnaire A questionnaire was developed to collect the data for this study, which consisted of five sections. In the first section, 56 AIO statements were obtained from marketing literature used to understand lifestyles of 1 Footnote.
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Kyrgyz and Azeri consumers. The items extracted from Western sources were adapted and modified to Kyrgyz and Azeri market and country environments by use of pre-tests among a group of Kyrgyz and Azeri consumers. A five-point Likert scale was used where 1 was strongly disagree and 5 strongly agree. The second section of the questionnaire included questions about consumer ethnocentrism. The CETSCALE used in this study consisted of 17 items, including Kyrgyz/Azeri people should always buy Kyrgyz/Azeri-made products instead of imports; Only those products that are unavailable in Kyrgyz Republic/Azerbaijan should be imported; and Kyrgyz/Azeri products, first, last, and foremost. In the third section of the questionnaire, questions related to the perceptions of Kyrgyz consumers of product attributes and characteristics coming from five major sourcing countries, namely Japan, the USA, the PRC, Russia and the UK, were measured. (For the Azeri sample the following countries were used: Japan, the USA, Hong Kong, the PRC, Russia and Turkey.1) In addition, information about concrete and abstract product attributes was collected. The final section of the questionnaire included demographic and socioeconomic questions that are used to interpret the responses on other questions. In Kyrgyz Republic, some 22% of the population is Russian, and there are other ethnic groups such as Ukrainians, Uzbeks, Germans, Koreans and Chinese who all speak Russian, and the official language of the republic is Russian. For this reason, a questionnaire was developed first in English, then translated into Russian by a staff member who was fluent in both languages at a Kyrgyz university. Back translation was also done to check for any inconsistencies as well as possible translation errors by using a group of Kyrgyz graduate university students. The questionnaire was also administered to a group of Kyrgyz consumers at different socioeconomic strata to pilot test the questionnaire for clarity, comprehension and consistency. As a result of this pre-test, several questions were reworded and a few of the attitudinal statements were dropped due to their irrelevance to the Kyrgyz environment. For instance, credit cards were not available in Kyrgyz Republic during data collection stage, hence the question related to credit card usage had to be omitted. A similar procedure was also used for the Azeri questionnaire.
1 The reason for selection of these countries was that during data collection, most of the Kyrgyz Republics and Azerbaijans imports originated from these countries.

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Data collection from Azeri consumers The data for the study were collected from Azeri consumers in the capital city of Azerbaijan, Baku. It is estimated that the population of Baku is approximately 2 million. According to the information obtained from the Azerbaijan State Statistical Bureau at the time of the study, there were approximately 358,000 households living in Baku. Hence, to gain a systematic sample from Baku, the city was divided into four regions, namely east, west, north and south (Azerbaijan State Statistical Bureau, 1994). It was decided to target 0.1% of the households in Baku. It was felt that the targeted sample size would create a meaningful type of information base to carry out the different analyses and would also be within the budget and personnel (interviewer) limitations. Hence, the targeted number of respondents from different regions is also illustrated. Forty-four students from the Azerbaijan State Business Administration Institute were used as interviewers. In a classroom setting, these students were trained and instructed about their duties during the data-collection process. To test whether graduate students had understood all the instructions, they were asked to carry out a pilot test among a sample of respondents and their actions observed. In case of difficulties in survey administration, necessary steps were taken by the researchers to correct miswordings in the questionnaire and possible misunderstandings in data collection. A total of 400 questionnaires were distributed to the 44 interviewers, who in turn administered them among the designated four regions of Baku, Azerbaijan. Interviewers were randomly assigned to each region. The interviewers were instructed that they had approximately one week to complete the interviews in their respective regions. A total of 211

TABLE 1 DISTRIBUTION OF HOUSEHOLDS AND TARGET NUMBER OF RESPONDENTS FROM FOUR REGIONS OF BAKU, AZERBAIJAN
Regions East West North South TOTAL Population (%) 37 15 26 22 100 Total no. of households 132,760 53,700 93,080 78,760 358,300 Target no. of households 132 53 93 79 357 No. of interviewers used 16 7 11 10 44

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completed questionnaires were returned. Lack of understanding of consumer surveys and inexperience with survey questionnaire completion on the part of respondents resulted in a high rate of unusable completed questionnaires. However, among these 211 surveys returned, 19% of the questionnaires were considered unusable due to completion errors. Hence a total of 170 questionnaires were finally considered usable for the study. Data collection from Kyrgyz consumers Similarly, the data for the study were collected in the capital city of Kyrgyz Republic, Bishkek. It was estimated that the population of Bishkek was 620,000 in 1995. According to the information obtained from the Kyrgyz State Statistical Bureau at the time of the study, there were approximately 150,000 households living in Greater Bishkek. Hence, to obtain a systematic sample from Bishkek, the city was divided into four districts excluding suburbs, namely Lenin, Pervomay, Sverdlov and Octyabr. Researchers decided to target 0.4% of the households living in Bishkek. It was believed that the targeted sample size would create a meaningful information base to carry out the different analyses, and would also be within the budget and personnel (interviewer) limitations of the researchers (see Table 2). Sixty-eight MBA students from Bishkek International School of Business and Management (BISBM) (renamed Academy of Management) were used as interviewers. They were all taking a marketing research course with one of the researchers. In a classroom setting, these students were trained and instructed about their duties during the data-collection process. To test whether students had understood all of the instructions, they were asked to carry out a pilot test among a sample of respondents, and their actions were observed and the necessary amendments to the questionnaire made. A total of 680 questionnaires were distributed to the 68 interviewers, who in turn distributed them among the four districts of Bishkek. Interviewers were randomly assigned to each district. They were given approximately two weeks to complete the interviews. A total of 638 completed questionnaires were returned. However, of these, nearly 6% of the questionnaires were considered unusable due to completion errors. Hence a total of 601 of the questionnaires were finally considered usable for the study and the analysis was based on these responses. Due to the difficulties of collecting data by means of 1 probability Footnote. samples, since sampling frames were non-existent in
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TABLE 2 TOTAL POPULATION AND HOUSEHOLD SIZE OF FOUR DISTRICTS OF BISHKEK, KYRGYZ REPUBLIC, 1 JANUARY 1995
Target Household no. of size (%) households 30,456 20.4 123 No. of interviewers used 14

Districts Lenin Centre Jal Pervomay Youg II Centre Sverdlov Vostok V Vostok VI Alamedin Tuaguch 1, 2 Octyabr 312 Mikrodistr Asanbay Kok-jar Total Suburbs Orto-say Tshon-aryk Bishkek total

Population 128,541

(%) 21.1

138,258

22.7

33,200

22.3

134

15

179,018

29.3

44,195

29.7

178

20

164,543

26.9

41,127

27.6

166

19

610,360 3,100 6,600 620,060

100.0

148,978

100.0

601

68

4,222 153,200

these two countries, the researchers used stratified sampling by regions. In each region, respondents were selected from low, medium and high-income neighbourhoods. Since we had more and better resources in Kyrgyz Republic, we were able to collect data from a larger sample. ANALYSIS AND RESULTS The data collected from the two parametric and non-parametric demographic and socioeconomic respondents who participated in 1 Footnote. countries were analysed by using statistical techniques. First, the characteristics of the sample of the study were compared to the

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national statistics (census reports) to verify the representativeness of the samples. Table 3 shows demographic and socioeconomic characteristics of the samples of Azeri and Kyrgyz respondents. Second, to understand the existing lifestyle dimensions of the Azeri and Kyrgyz consumers and to discern the kinds of lifestyle characteristics of these consumers, 56 AIO statements were factor analysed. The missing values were substituted by the mean values. The resultant factor matrix was rotated using VARIMAX rotation. Third, the 17-item CETSCALE was subjected to a reliability analysis. The results of reliability analysis showed that overall reliability (Cronbach alpha) was 0.892 for Azeri consumers and 0.91 for Kyrgyz consumers, which may be considered high reliability coefficients. Fourth, based on the results of the reliability analysis, it may be assumed that all 17 items used are measuring the same construct (ethnocentrism), and a summative measure may be used to represent the ethnocentrism score of the respondents. The correlation between the factors extracted and the ethnocentrism score was computed by using Pearson correlation analysis. Fifth, a K-means-type cluster analysis was used on the factors extracted. The objective of this analysis was to identify distinct market segments existing among Azeri and Kyrgyz consumer markets by using attitudinal orientations and lifestyle patterns. Market clusters were then defined using demographic and socioeconomic characteristics, ethnocentrism, household decision-making, product attribute importance and original lifestyle variables. To test the statistical significance among three clusters on demographic and socioeconomic variables, a Chi-square analysis was used. To test the statistical significance among the clusters on ethnocentrism and product attribute importance, a one-way ANOVA was performed. Sixth, to understand COO perceptions that existed among Azeri and Kyrgyz consumers, a correspondence analysis was used. Using a 5point Likert scale, perceptions of products coming from major sourcing countries such as Japan, the USA, Hong Kong, the PRC, Russia, the UK and Turkey with regard to product attributes and characteristics from these countries were measured. Finally, the analysis results of Azeri and Kyrgyz data are compared for better understanding of consumer behavioural tendencies. Ethnocentrism and lifestyle patterns Past consumer behaviour literature indicated that ethnocentric consumers 1 Footnote. had different lifestyle patterns compared to
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TABLE 3 SAMPLE DEMOGRAPHIC AND SOCIOECONOMIC CHARACTERISTICS OF AZERI AND KYRGYZ RESPONDENTS
Azeri respondents (%) 9.4 31.2 34.1 18.2 7.1 Kyrgzy <3,000 35,000 5.17,000 7.19,000 >9,000 Kyrgyz respondents (%) 8.5 44.1 26.1 12.1 9.2

Characteristics Age below 20 2030 3140 4150 over 50 Income1 Azeri <300,000 301601,000 601901,000 9011,201,000 >1,201,000 Marital status Single Married Education Azeri Less than high school High school Some technical school Technical school Some college College graduate Gender Male Female Occupation category Professional/managerial Technical, sales administrative support Service Farming Precision production, craft and repair Operator or labourer Not currently working
1

13.5 40.0 8.8 19.5 18.2 38.3 61.7

36.6 20.1 18.7 10.1 14.5 28.7 71.3

Kyrgyz Less than 10 yrs of schooling 8 plus 2 technical school High school not completed Higher education

2.4 9.6 0.6 12.0 9.6 65.8 58.2 41.8 59.4 14.1 2.9 1.2 2.4 17.6 2.4

8.8 16.8 13.9 60.5

60.5 39.5 8.0 15.6 16.1 1.0 1.7 36.9 20.7

At the time of data collection, US$1

3500 Azeri manat and US$1

10.70 Kyrgyz soms.

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non-ethnocentric consumers (Shimp, 1984). In order to uncover the lifestyle characteristics of ethnocentric Azeri and Kyrgyz consumers, 56 AIO statements were factor analysed. The missing values were substituted by the mean values. The resultant factor matrix was rotated using VARIMAX rotation. The analysis of the Kyrgyz data produced ten factors, which explained approximately 57.9% of the total variance. Only those factors with an eigenvalue greater than 1.00 were retained (see Table 5). The first and second factors account for 11.5% and 8.1% of the total variance and may be labelled Fashion-conscious and Independent factor, respectively. The remaining factors extracted are given in detail in Table 4. Similarly, the analysis of Azeri data also produced ten factors that explained approximately 56.7% of the total variance. The first two factors account for 8.4% and 8.2% of the total variance, and may be labelled Homemaker factor and Family orientation factor, respectively. The remaining factors are given in Table 5. Pearson correlation analysis of the factors extracted and the ethnocentrism score for Kyrgyz consumers indicated that Fashionconscious factor (r 0.29, p  0.04), Adventurer factor (r 0.24, p  0.001) and Perfectionist factor (r 0.12, p  0.001) were significantly negatively correlated with the ethnocentrism score. In other words, as Kyrgyz consumers become more fashion-conscious, more adventurous and more perfectionist, they tend to be less ethnocentric. On the other hand, Homemaker factor (r 0.15, p  0.08), Community-oriented factor (r 0.21, p  0.0001), Price-conscious factor (r 0.17, p  0.001) and Dependent factor (r 0.19, p  0.0001) were positively correlated with the ethnocentrism score. That is, those Kyrgyz consumers who are more homemaker, more community-oriented, more price-conscious and more dependent display more ethnocentric tendencies. Pearson correlation analysis of the factors extracted and the ethnocentrism score of Azeri consumers indicated that only Factor 5 (Fashionconscious) was significantly correlated (r 0.23, p  0.003) with the ethnocentrism level. In other words, as the fashion-consciousness level increased, the ethnocentrism score of the Azeri consumers decreased. All other factor correlations with the ethnocentrism score were not statistically significant. Study results indicated that the Kyrgyz consumer segment of strugglers and the Azeri consumer segment of traditional female consumers showed more ethnocentric tendencies than the other two market segments.
1 Footnote.

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TABLE 4 ROTATED FACTOR PATTERN (VARIMAX ROTATION), KYRGYZ SAMPLE

Factor Variance loadings explained
Factor 1: Fashion-conscious 5. I usually have one or more outfits that are of the very latest style 6. When I must choose between the two I usually dress for fashion, not for comfort 7. An important part of my life and activities is dressing smartly 8. I often try the latest hairstyles when they change Factor 2: Independent 25. I think I have more self-confidence than most people 26. I am more independent than most people 27. I think I have a lot of personal ability 28. I like to be considered a leader 29. My friends or neighbours often come to me for advice 30. I sometimes influence what my friends buy Factor 3: Family-oriented 17. When my children are ill in bed I drop almost everything else in order to see to their comfort 18. My children are the most important things in my life 19. I try to arrange my home for my childrens convenience 20. I take a lot of time and effort to teach my children good habits Factor 4: Homemaker 38. I like to sew and frequently do 39. I often make my own or my childrens clothes 40. You can save a lot of money by making your own clothes 41. I would like to know how to sew like an expert Factor 5: Community-oriented 13. I am an active member of more than one service organisation 14. I do volunteer work for a hospital or service organisation on a fairly regular basis 15. I like to work on community projects 16. I have personally worked in a political campaign or for a candidate or an issue Factor 6: Price-conscious 1. I shop for specials 2. I find myself checking the prices in the grocery store even for small items 4. A person can save a lot of money by shopping around for bargains Factor 7: Adventurer 52. I would like to take a trip around the world 53. I would like to spend a year in a foreign country Factor 8: Dependent 42. I depend on canned food for at least one meal a day 43. I could not get along without canned foods Factor 9: Social 34. I must admit I really dont like household chores 35. I find cleaning my house an unpleasant task Factor 10: Perfectionist 21. I dont like to see childrens toys lying around 22. I usually keep my house very neat and clean 23. I am uncomfortable when my house is not completely clean 0.115 0.516 0.698 0.778 0.687 0.081 0.649 0.705 0.679 0.679 0.561 0.503 0.079 0.757 0.797 0.814 0.681 0.056 0.767 0.800 0.682 0.729 0.047 0.565 0.776 0.744 0.610 0.044 0.721 0.635 0.687 0.042 0.631 0.644 0.040 0.628 0.675 0.038 0.633 0.727 0.037 0.667 0.500 0.607

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TABLE 5 ROTATED FACTOR PATTERN (VARIMAX ROTATION), AZERI SAMPLE

Factor loadings
0.789 0.772 0.722 0.717 0.166 0.468 0.769 0.705 0.732 0.410 0.235 0.491 0.718 0.595 0.612 0.634 0.297 0.519 0.536 0.727 0.562 0.682 0.345 0.526 0.683 0.676 0.566 0.396 0.521 0.543 0.503 0.442 0.413 0.672 0.579 0.485 0.681 0.617 0.549 0.521 0.580 0.466 0.453 0.434 0.567 0.560 0.463 0.511 0.534

Items loaded on each factor

Factor 1: Homemaker 38. I like to sew and frequently do 39. I often make my own or my childrens clothes 40. You can save a lot of money by making your own clothes 41. I would like to know how to sew like an expert Factor 2: Family-oriented 17. When my children are ill in bed I drop almost everything else in order to see to their comfort 18. My children are the most important things in my life 19. I try to arrange my home for my childrens convenience 20. I take a lot of time and effort to teach my children good habits 22. I usually keep my house very neat and clean Factor 3: Community-oriented 13. I am an active member of more than one service organisation 14. I do volunteer work for a hospital or service organisation on a fairly regular basis 15. I like to work on community projects 16. I have personally worked in a political campaign or for a candidate or an issue 51. I participate in sports activities regularly Factor 4: Opinion leader 25. I think I have more self-confidence than most people 26. I am more independent than most people 27. I think I have a lot of personal ability 28. I like to be considered a leader 29. My friends or neighbours often come to me for advice Factor 5: Fashion-conscious 5. I usually have one or more outfits that are of the very latest style 6. When I must choose between the two I usually dress for fashion, not for comfort 7. An important part of my life and activities is dressing smartly 8. I often try the latest hairstyles when they change Factor 6: Independent 33. I spend a lot of time talking with my friends about products and brands 34. I must admit I really dont like household chores 35. I find cleaning my house an unpleasant task 36. I enjoy most forms of homework Factor 7: Night-life 3. I usually watch the advertisements for announcements of sales 10. I like parties where there is lots of music and talk Factor 8: Adventurer 53. I would like to take a trip around the world 54. I would like to spend a year in a foreign city 55. I like to pay cash for everything I buy Factor 9: Optimism 21. I dont like to see childrens toys lying around 32. I often seek out the advice of my friends regarding which brand to buy 37. My idea of housekeeping is once over lightly 48. I will probably have more money to spend next year than I have now Factor 10: Price-conscious 1. I shop for specials 2. I find myself checking the prices in the grocery store even for small items 9. I would rather spend a quiet evening at home than go out to a party 23. I am uncomfortable when my house is not completely clean

Cum. % of variance explained

0.084

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Ethnocentrism and market segmentation In general, irrespective of nationality and ethnic background, consumers prefer to purchase locally produced products over imported ones (Bilkey and Nes, 1982). However, availability of domestic products of the desired quality in Azerbaijan and Kyrgyz Republic is rather limited. An understanding of whether the level of ethnocentrism is a differentiating consumer characteristic for products originating from overseas is useful in the development of marketing strategies for imported and domestic products alike. It would be useful to identify the lifestyle variables that make some Kyrgyz and Azeri consumers ethnocentric and the variables that influence others to change. As a result of cluster analysis (K-means partitioning), three distinct segments were recovered. Strugglers displayed the highest degree of ethnocentrism whereas self-actualisers showed the lowest degree of ethnocentrism. They are mostly concerned about a products concrete (core) attributes as well as functional consequences of its use while their self-actualiser counterparts place more importance on the augmented part (abstract attributes) of the product and psychosocial consequences of its use. The first group of customers displayed the highest levels of ethnocentric tendencies, indicating that these consumers would probably prefer to purchase domestic products (see Table 6). In promotional strategies, different approaches need to be used. While targeting ethnocentric consumers, advertising messages must concentrate on the concrete attributes of the product and use of national, well-known spokespersons, whereas for non-ethnocentric consumers the emphasis must be on aesthetic quality and use of internationally known celebrities. Kyrgyz consumers in each of the three different market segments also differed in their demographic, socioeconomic and behavioural characteristics. Respondents in the strugglers segment are mostly female, married, younger, and low-income earners. Availability of alternative product choices and prestigious brand names are not important whereas product workmanship, price, maintenance and style are important to this market segment. On the other hand, the selfactualisers segment contained mostly male, married and high-incomeearner consumers. Availability of alternative product choices, prestigious brand name, style, product workmanship and maintenance are very important whereas price is not an important consideration. It means that this group is price insensitive. There is also very low
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TABLE 6 CHARACTERISTICS OF CLUSTERS IDENTIFIED (KYRGYZ CONSUMERS) (n = 601)

Strivers (semi-ethnocentric) Cluster 2 (n = 101) Self-actualisers (non-ethnocentric) Cluster 3 (n = 185)

Strugglers (ethnocentric) Cluster 1 (n = 315)

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1. Mostly female consumers1 2. Mostly married2 3. Mostly between 20 and 40 years old1 4. What house to take decision is mostly made by both spouses3 5. What car to buy decision is mostly made by male1 6. Ethnocentrica 7. Availability of alternative product choices is not importantb 8. Prestigious brand name is not importantb 9. Workmanship is importantb 10. Price is very importanta 11. Style is importantb 12. Maintenance is importantb 13. 90% have less than 5000 som annual income (low-income consumer)4 14. Prefers Chinese, Indian, Iranian, Persian Gulf States products

1. Equal number of male and female consumers 2. Mostly single 3. Equally distributed age groups 4. What house to take decision is mostly made by husband 5. What car to buy decision is equally made by male and female 6. Low ethnocentric 7. Availability of alternative product choices is not important 8. Prestigious brand name is not important 9. Workmanship is important 10. Price is important 11. Style is very important 12. Maintenance is not important 13. 65% have income between 5000 to 7000 som annually (medium-income consumers) 14. Prefers Turkish, Russian and Kazakh products

1. Mostly male consumers 2. Mostly married 3. Mostly between 20 and 40 years old 4. What house to take decision is mostly made by both spouses 5. What car to buy decision is mostly made by male 6. Very low ethnocentrism 7. Availability of alternative product choices is very important 8. Prestigious brand name is important 9. Workmanship is very important 10. Price is not important 11. Style is very important 12. Maintenance is very important 13. 70% have more than 7000 som annual income (high-income consumers) 14. Prefers US, Japanese, Western European products

Notes 1 Significant Chi-square at p < 0.001 2 Significant Chi-square at p < 0.10 3 Significant Chi-square at p < 0.05 4 Significant Chi-square at p < 0.01 a Significant F test at p < 0.0001 b Significant F test at p < 0.01 c Significant F test at p < 0.05

A COMPARATIVE STUDY IN TWO CIS STATES

ethnocentrism among this group of respondents. Study results further indicated that non-ethnocentric Kyrgyz consumers tended to have significantly more favourable beliefs, attitudes and intentions regarding imported products compared to ethnocentric Kyrgyz consumers. As a result of cluster analysis on the Azeri data, three clusters were also identified. To test the statistical significance among three clusters on demographic and socioeconomic variables, a Chi-square analysis was performed. On the other hand, to test the statistical significance among clusters on ethnocentrism and product attribute importance, a one-way ANOVA was undertaken. Table 7 gives the characteristics of the clusters. After analysing the characteristics of the three clusters, cluster 1 may be labelled Sophisticated consumers. These consumers are mostly between the ages of 20 to 40, married and earn a high income. Husband and wife joint decision-making is in place. This group of consumers prefers prestigious brand names, and availability of alternative product choices, good workmanship and product price are important to them. They are also fashion-conscious. These consumers have similar demands and requirements to their counterparts in the Western nations. On the other hand, clusters 2 and 3 may be labelled Traditional male and Traditional female consumers. Consumers in these segments are highly ethnocentric and their demands are not as sophisticated as consumers demands in cluster 1. These findings lend support to the classification scheme of Shimp (1984) and the replication study of Netemeyer et al. (1991) in Kyrgyz and Azeri environments. The evidence suggests that the scale may be used with confidence across national and cultural boundaries. To understand the perceptions of Kyrgyz consumers of imported products, a correspondence analysis was used. Using a 5-point Likert scale, perceptions of products from five countries (Japan, the USA, the PRC, Russia and the UK) with regard to the product attributes and characteristics from those countries were measured. Hence, eight product attributes by five-country data matrix was used for the correspondence analysis. The first two dimensions of the correspondence analysis explained 99% of the total variance. Japan and the USA were perceived to be associated with similar attributes such as well-known brand name, technologically advanced, expensive, luxury, good style and appearance, and the products from these countries were perceived to be heavily advertised. On the other hand, Russian products were perceived to be less in reliability, durability and service. This finding
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TABLE 7 CHARACTERISTICS OF CLUSTERS IDENTIFIED (AZERI CONSUMERS) (n = 170)

Traditional male consumers (semi-ethnocentric) Cluster 2 (n = 27) 1. Mostly male consumers 1. Mostly female consumers Traditional female consumers (ethnocentric) Cluster 3 (n = 31)

Sophisticated consumers (non-ethnocentric) Cluster 1 (n = 112)

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8. Workmanship is very important 9. Price is very important 10. Not fashion-conscious 11. 70% earn between 301 and 901,000 manat (medium income) 12. Prefers Turkish products

2. Mostly single 3. Equally distributed age groups 4. What house to take decision is mostly made by husband 5. Highly ethnocentric 6. Availability of alternative product choices is not important 7. Prestigious brand name is not important

2. Mostly married 3. Mostly between 30 and 50 years old 4. What house to take decision is mostly made by both husband and wife 5. Highly ethnocentric 6. Availability of alternative product choices is important 7. Prestigious brand name is not important 8. Workmanship is very important 9. Price is important 10. Not fashion-conscious 11. 82% have less than 300,000 manat (low income) 12. Prefers Iranian, Russian, Chinese, Georgian products

1. Equal number of male and female consumersa 2. Mostly marriedb 3. Mostly between 20 and 40 years oldc 4. What house to take decision is mostly made by both husband and wifea 5. Low ethnocentricd 6. Availability of alternative product choices is very importante 7. Prestigious brand name is very importante 8. Workmanship is importante 9. Price is importante 10. Fashion-consciouse 11. 44% have more than 1,201,000 manat (high income) 12. Prefers Western European, Japanese and US products

Notes aSignificant Chi-square at p < 0.05 bSignificant Chi-square at p < 0.02 cSignificant Chi-square at p < 0.10 dSignificant F test at p < 0.08 eSignificant F test at p < 0.01

A COMPARATIVE STUDY IN TWO CIS STATES

indicates that as Kyrgyz consumers become more acquainted with foreign products, their perception of product attributes as well as the weight of each attribute may change. Similarly, to understand COO perceptions that existed among Azeri consumers, a correspondence analysis was used. Using a 5-point Likert scale, Azeri consumers perceptions of products from six countries (Japan, the USA, Hong Kong, the PRC, Russia and Turkey) with regard to the product attributes and characteristics from those countries were measured. Hence, 11 product attributes by six-country data matrix was used for the correspondence analysis. The first two dimensions of the correspondence analysis explained 97.67% of the total variance. Japan and the USA were perceived to be associated with similar attributes such as well-known brand name, technologically advanced, expensive, luxury, good style and appearance, and the products from these countries are perceived to be heavily advertised. On the other hand, Russian products were perceived to be less in reliability, durability and service. CONCLUSIONS Results of the study indicated that there were several attitudinal, behavioural and lifestyle dimensions apparent among Azeri and Kyrgyz consumers. The most dominant dimensions were family and community orientation factors. In closed societies of several decades, the existence of these dimensions was not surprising. Advertising strategies promoting group decision-making and family-oriented types of themes and messages would be very effective. For this market segment, appeal to consumers status and power position may be very appropriate. However, it is important to note that several dimensions found among consumers of the Western nations such as, risk-taking, consumerism and health-consciousness were not found among Azeri and Kyrgyz consumers. At this stage of their socioeconomic development, consumers in both countries as well as in the region (Turkic Republics) do not perceive any problems in healthcare, since the individual states still take care of their citizens health problems. Because of the low level of market and industry development and prevailing supplyoriented market conditions, most of the consumers are not concerned about consumerism issues at this stage of socioeconomic development of the two countries and the region. Finally, the low level of
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income earned by a majority of the consumers and the fragile nature of present market conditions preclude many Kyrgyz and Azeri consumers from engaging in risky types of undertakings, such as entrepreneurship, business development and portfolio investment. This finding reconfirms our contention that middle and high-income consumers irrespective of nationality and country of residence, demonstrate similar, if not identical, behavioural tendencies and purchasing patterns to their Western counterparts. In these types of market segments, one needs to use a successful achiever theme in advertising. In addition, these consumer market segments have a high regard for environmentally friendly products/companies and socially conscious countries/firms and a desire for novelty, variety and pleasure, hence a strong demand for Western European, North American and Japanese products. Conversely, low-income highly ethnocentric consumers also show similar purchasing practices and behavioural tendencies to their poor counterparts. We can even stipulate that these low-income ethnocentric Kyrgyz and Azeri consumers behave in a similar way to the ghetto poor who reside in less wealthier neighbourhoods of advanced countries in North America (i.e. low-income-earner Hispanic and African American consumers and West Indians in Canada) and Europe (i.e. Asian consumers in the UK, North African consumers in France and Turkish consumers in Germany and Austria) are cases in point (OShaughnessy, 1987). Furthermore, in both countries, there have been a few financial crises in the market which led to bank closures, and many people lost their savings in the process. Because of these incidents, people are very reluctant to invest funds. Successful marketing strategies in these two distinct market segments require significant product and message modifications in the marketing strategy. It was found that those products originating in Japan and the USA were perceived to be associated with similar positive attributes, whereas Russian and Chinese products were perceived to be poor in quality, workmanship and after-sales service. There are several lifestyle dimensions apparent among Azeri and Kyrgyz consumers, which influence their ethnocentric behaviour and tendencies. As time changes and these countries become wealthier, more Westernised and more aware of mass-media communication, Kyrgyz and Azeri consumers will develop more non-ethnocentric tendencies. Significant relationships were found between the lifestyle dimensions of Kyrgyz and Azeri consumers and their ethnocentrism
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levels. Fashion-conscious, Adventurer and Perfectionist factors were significantly negatively correlated with the ethnocentrism score. In other words, as Kyrgyz and Azeri consumers become more fashionconscious, more adventurous and more perfectionist, they become less ethnocentric. On the other hand, Homemaker, Community-oriented, Price-conscious and Dependent factors were significantly positively correlated with the ethnocentrism score. That is, as Kyrgyz and Azeri consumers became more homemaker, more community-oriented, more price-conscious and more dependent, they become more ethnocentric. To achieve organisational objectives, one long-term marketing strategy for these countries as well as the ones at a similar level of development may be to attempt to change cultural values and behavioural tendencies or at least appropriately modify them. This information has significant implications for the companies that are currently operating in the two countries or planning to enter into the region as well as individual markets in the near future in the development of promotion, packaging, labelling and pricing strategies for their products and services. Using the lifestyle dimensions extracted, three distinct market segments were found. After analysing the characteristics of each cluster, it was discovered that consumers in the Self-actualiser customers market segment showed similar behaviour to consumers in Western countries. The net result of this is that companies can standardise their marketing strategies across nations while targeting these kinds of market segments by the use of a more focused type of marketing strategy using a honed rather than a broad-brush approach. These consumers were found to be low in ethnocentrism compared to the other segments; synchronic decision-making, brand name, choice of products and price were considered to be very important, and they paid more attention to fashion and design. This segment may be considered to be very important for marketers manufacturing major consumer goods such as household appliances, consumer non-durable products, automobiles and electronic products, and may require very little or no modification in the marketing strategy/promotion and approach. On the other hand, the other two market segments found were basically similar to each other but the main differentiating factor was the concentration of the different gender groups in each segment. The consumers in these segments were mainly traditional consumers low in consumer sophistication but high in ethnocentrism. They largely worked in traditional professions and/or were unskilled
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workers. Successful marketing strategies in these segments require significant product and message modifications in the marketing strategy. It was found that the products originating in Japan and the USA were perceived to be associated with similar attributes such as wellknown brand name, technologically advanced, expensive, luxury, good style and appearance, and the products from these countries were perceived to be heavily advertised. On the other hand, Russian products were perceived to be less in reliability, durability and service. It was found that there were some negative perceptions of the products (product being imitation and lower quality) from China and Russia. On the other hand, although the perceptions were not as strong as with products from Japan and the USA, the British products were also perceived to be closely related to attributes such as technologically advanced, expensive, luxury, good style and appearance. This finding illustrates that those companies which are not contemplating direct entry into Kyrgyz Republic themselves presently may use Europe, and in particular the UK, as a conduit for entry, or may engage in strategic alliances with British and other European companies who are already well entrenched in the market. It was also perceived by the Azeri respondents that Hong Kong provided a wide choice of sizes and models. On the other hand, although the perceptions were not as strong as in products coming from Japan and the USA, in Azerbaijan, Turkish products were also perceived to be closely related to the attributes such as technologically advanced, expensive, luxury, good style and appearance. This finding illustrates that those companies which are not contemplating direct entry into Azerbaijan themselves presently may use Turkey as a conduit for entry, or may engage in strategic alliances with Turkish companies which are already well entrenched in the market. REFERENCES
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ABOUT THE AUTHORS Dr Erdener Kaynak is presently Professor of Marketing and Chair of the Marketing Department at the School of Business Administration, Pennsylvania State University at Harrisburg. He holds a PhD in Marketing Management from Cranfield University and an honorary DSc degree in Economics from Turku School of Economics and Business Administration. A regular contributor to the IJOA, Dr Kaynak has had 22 books and over 200 articles published, and has sat on the Journals Editorial Board since its inception some two decades ago. He has lectured widely in diverse areas of marketing and international business, and has trained people from business and government officials in over forty countries across five continents. Ali Kara is an Associate Professor of Marketing at the College of Business Administration, Pennsylvania State University at York. He holds a doctorate from Florida International University, Miami, and an MBA degree from the University of Bridgeport, Connecticut. He has been published extensively in scientific marketing journals, such as the Journal of Marketing Research, European Journal of Operations Research and Journal of Global Marketing, and has made several national and international conference presentations. His current research focuses on analytic hierarchy process and conjoint analysis, model comparisons and market organisations.

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