International Busines Research-Research proposal

Business Problem: Background Introduction to business problem

In the present competitive world, the companies are focusing on luring the customers through

introducing various lucrative offers and they also focus on following various standards and

benchmarks so that can remain successful. But still, the customers are more conscious about

their spending and they made their purchase towards products that are more apt for fulfilling

their need and also the origin of the products as it has a psychological impact on the minds of

the customers. The marketers nowadays focus more on attracting the young generations or the

millennials those are more inclined towards purchasing the products based on their origin and

category. Still the older people prefer those products that are made in the domestic country and

also have lower prices as compared to the imported goods (Moreno et al., 2017). It makes the

marketers focus on using the strategies that could help them to attract the people based on their

preferences that will help in attaining competitive advantage. In this research, we will focus on

understanding the purchase intention of the consumers towards buying a commodity based on

product of origin and the effect of product category on this relationship.

Background

It has been expanded to incorporate customer behavior in a wider context to illustrate how

consumer's purchase intention behaves before making a purchase, and it now includes five

phases of the problem-solving process that include problem detection, knowledge search,

alternative assessment, purchase decision, and implications (Oke et al.,2016). In the present

context, marketers are more focused on catering to the individual needs of the customers. This

helps the marketers to derive more information about the needs and preferences of the

customers and they can easily find out their views and thinking process like as purchase

intention.

Consumers are concerned not only with the quality and price of a product but also with other

factors such as the product's country of origin. Consumers of different countries differ in their

purchase intention according to the origin of the manufactured goods. These differences vary

according to economic, demographic, sociological, religious, and cultural characteristics.

Research done in this perspective on Bangladeshi consumers shows that the country of origin

does play a role when the consumers of this nation intend to buy any foreign product (Haque et

al., 2015). Similarly, another report mentions that the consumers of Pakistan do hold different

views on the products of different countries with regard to value, image, quality, and promotion.

The same report also mentions that the value of the brand and the country of origin together

decide the level of the intention of the consumers to buy the product (Diamantopoulos,

Schlegelmilch & Palihawadana, 2011). Studies in this regard also show that the consumers

consider the products made in developed countries to be of higher quality. In such a scenario,

they often prefer to get the brand even when they are not from the home country (Bhakar,

Bhakar & Bhakar, 2013).

However, this purchasing intention may change in different product categories (food, car,

medical technology, etc.). The food market is blossoming day by day and the choice of the

people is also changing. The changing preferences of the customers is widely understood by

marketers and they have started focusing on cultivating organic food (Slabakova, 2020). At an

average estimate, nearly US$6 billion of various fruits and vegetables (fresh and organic) are

imported into the country to satisfy the needs of the customers (FAO, 2020). On the other hand,

there is another scholarly report that mentions the study report that shows that there are many

determinants of whether the customer would be buying the concerned fast food item which

includes the identity of the product as locally made (Pérez-Villarreal, Martínez-Ruiz &

Izquierdo-Yusta, 2019). Also, there is a well-established judgment in terms of customer's

purchase intention in some product categories; Such as German car, Japanese technology,

French perfume, Belgian chocolate, Russian caviar, Colombian coffee.

The changing customer intention towards purchasing the products that are categorized and the

country of origin requires that the marketers must focus on understanding them to remain

successful.

Against this background, we set out to assess a variety of factors with different types of roles

that are related to the increase or decrease of the purchase intention of the consumer. We will

take a precise look at the influence of the origin from a specific product in the relation with

purchase intention. Also, we will investigate the same relation with a variety of different types

of products to see what the moderating effect on this relation will turn out to be, will the

importance of the country of origin increase, decrease, or remain similar.

C.-L. Hsu et al. (2016) notices the importance of the role that the origin of a product has in this

relation. They mention that the impact of country of origin has a noticeable effect on the

consumers’ perceptions and purchase intentions because it does affect the relation attitude, the

subjective norm, and perceived behavioural control have with purchase intentions towards a

specific product.

Orth and Firbasova (2003) give an explanation on the effect that the country of origin has on

purchase intentions. They believe that a negative country perception could limit the success of

a product in a specific environment where that negative image lives. For example, in the

Netherlands it is often believed that a product originated from Germany will be of high quality

because ‘’the Germans made it’’.

The relation that we are bringing into the daylight could be in the high interests of marketers

because it could perhaps give them a better understanding of the factors and relations that

correlate with the country of origin that could have an influence on the evaluation made by

consumers regarding a product. Strategies coming out of the marketing department could be

more effective or more perfect if the marketers take into account these types of relations.

2. Problem Statement and Research Questions

Theoretical questions:

• What different types of product categories are there? (conceptualization) • How does the origin of the product (home country or foreign country) affect the

purchase intention of the customers? (relations) • How does the relationship between the origin of the product (home country or foreign

country) and the purchase intention of the customers depend on the product categories (clothing, beauty and personal care and electronics)? (relation)

Practical questions:

• To what extent does the origin of the product (home country or foreign country) influence the purchase intention of the customers? (magnitude of relations)

• To what extent does the relationship between the origin of the product (home country or foreign country) and the purchase intention of customers depend on different product categories (clothing, beauty and personal care and electronics)?

• Which managers producing the mentioned product categories (clothing, beauty and personal care and electronics) do or do not need to focus on private international shopping, depending on the purchase intention from customers and therefore on whether the product is from the home country or a foreign country? (implications)

3. Relevance 3.1. Academic Relevance

The importance of having a worthy contribution to the already available knowledge is of high value. Therefore, we took a sharp look on the limitations of already executed research and modified our paper in such a way that it will contribute to filling these gaps with new knowledge.

For example, C.-L. Hsu et al. (2016) values the importance of the influence the country of origin has on the consumers decision making. However, in their research they investigate their relation with firms that produce and sell mainly trusted goods. So, for our research C.-L. Hsu et al. (2016) highlight the added value of investigating firms that not only sell goods but services/experiences as well, the moderating effect of the types of product on the purchase intention could add to the available research knowledge.

A second addition of our paper that would contribute extra knowledge comes from Petty et al. (1983). They suggest adding the moderating effect of the degree of consumers’ involvement regarding the chosen product, with the involvement being the personal importance of the product, which is formed by attitude extremity, amount of prior knowledge, and more. This way we take into account the effect of personal factors of consumers on purchase intention and its antecedences.

With these specific two additions our research will contribute valuable new knowledge to this topic and will therefore be academically relevant.

3.2. Managerial Relevance

Our findings of this research will be of great interests for retailers with an online market, especially the retailers who are wondering if spreading to an international online market would benefit their business. The answer could differ substantially depending on the products they have in possession and distribute and the country their business is based in. We provide insights on whether or not the customer, on average, will or will not be interested in the product, depending on the combinations of products and whether the business is located in the customer’s country or not. By implementing our advice based on our findings of the research, business owners with an online market can focus their attention on what would be most beneficial to them: expending their products into the international market and potentially start marketing internationally, or keeping their products in the country the business is based in and focussing on the marketing in that country.

4. Theoretical Framework

4.1. Conceptual Model

In this part we will introduce our conceptual model existing out of an independent variable,

dependent variable, and a pure moderator.

Independent variable = The product’s country of origin

Dependent variable = Purchase intention

Quasi Moderator = The product category

For our independent variable we have chosen the product’s country of origin. We are

investigating the effect of the origin of a particular product on the consumers’ purchase

intention. We will look if that effect varies if the product nationality changes. With the origin

of the country, we mean what is the nationality of the firm that produces this specific product.

Multinationals operate in several countries, but we will be looking at the mother country for

this variable. The levels we have stated for this variable are home or foreign country.

Our dependent variable is purchase intention. Through our research we will focus on the

increase or decrease of purchase intention in our established relation. We will centre our

attention on the strength of consumers' intention to buy a specific service or product.

Our moderator is the product’s category, this moderator is a pure one because it has no direct

effect on purchase intention. With this moderator we will try to investigate the effect of the

category of a product on the relation that country of origin has with purchase intention. Does a

specific category have a positive effect on the relation, which causes for an increase in purchase

intention. Is the strength for purchasing a product from a specific category noticeable more

present than in other categories? The categories we will be conducting into our research will be

the levels for this variable: clothing, beauty and personal care, and electronics.

lothing

Beautyand personal care

lectronics

omestic

oreign

4.2. Hypotheses

Please formulate and justify hypotheses, taking into account the Research Proposal and

Conceptual Framework content included in the 1 st appendix.

1-First, formulate a hypothesis for each relationship in the conceptual framework.

2-Second, provide a justification for only 2 hypotheses. We expect you to justify two

hypotheses: one main effect hypothesis and one moderator hypothesis.

3- Your justification should be based on at least two academic references per hypothesis,

combined with some logical reasoning from your side, followed by the formal hypothesis

itself. Please select the references from the journals listed in the 2nd appendix.

Expacted result: The phrasing of the hypotheses is correct. and The justification for the

hypotheses is convincing and clear, through the combination of the extant literature with

one’s own argumentation (synthesis takes place).

References

Bhakar, S. S., Bhakar, S., & Bhakar, S. (2013). Relationship between country of origin, brand image

and customer purchase intentions. Far East Journal of Psychology and Business, 10(2), 25-47.

Diamantopoulos, A., Schlegelmilch, B., & Palihawadana, D. (2011). The relationship between country‐

of‐origin image and brand image as drivers of purchase intentions: A test of alternative perspectives.

International Marketing Review. 28, 508-524.

Haque, A., Anwar, N., Yasmin, F., Sarwar, A., Ibrahim, Z., & Momen, A. (2015). Purchase intention of

foreign products: A study on Bangladeshi consumer perspective. Sage Open, 5(2), 2158244015592680.

Lembregts, C., & Pena‐Marin, J. (2021). Numbers and Units Affect Goal Pursuit Organization and

Motivation. Journal of Consumer Psychology, 31(1), 37-54.

Moreno, F. M., Lafuente, J. G., Carreón, F. Á., & Moreno, S. M. (2017). The characterization of the

millennials and their buying behavior. International Journal of Marketing Studies, 9(5), 135-144.

Pérez-Villarreal, H. H., Martínez-Ruiz, M. P., & Izquierdo-Yusta, A. (2019). Testing model of purchase

intention for fast food in mexico: How do consumers react to food values, positive anticipated emotions,

attitude toward the brand, and attitude toward eating hamburgers?. Foods, 8(9), 369.

Oke, A. O., Kamolshotiros, P., Popoola, O. Y., Ajagbe, A. M., & Olujobi, J. O. (2016). Consumer

behavior towards decision making and loyalty to particular brands. International Review of Management

and Marketing, 6, 43-52.

Slabakova, B. (2020). Organic Food Statistics About the 2020 Market (Infographic). Retrieved 5 April

2021, from https://healthcareers.co/organic-food-statistics/

Stendahl, E., Schriber, S., & Tippmann, E. (2021). Control changes in multinational corporations:

Adjusting control approaches in practice. Journal of International Business Studies, 52(3), 409-431.

Weingarten, E., & Goodman, J. K. (2021). Re-examining the Experiential Advantage in Consumption:

A Meta-Analysis and Review. Journal of Consumer Research, 47(6), 855-877.