Ethnocentric advertising and its impact on purchase intention and advertisement likeability in a new market

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Ethnocentric advertising and its impact on purchase intention and advertisement likeability in a new market

Name: Ephraim Angelo Reyes Student Number: 11257105 Master’s Thesis

Graduate School of Communication

Master’s programme Communication Science Supervisor’s name: Dr. Rutger de Graaf Word Count: 6476

Date of completion: 31/03/2022

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Table of Contents

Abstract ... 1

Introduction ... 1

Theoretical framework ... 4

SIT and SAT increases the marketability of a product according to a target group ... 4

Race and Ethnicity – mixed-race in a multicultural country ... 5

EA and its association with SIT and SAT ... 5

Country of Origin (COO) and CET as moderating factors ... 7

CET and moderating demographics effects ... 8

IC and demographic effects on purchase intention and advertisement likeability ... 9

Research design ... 11

Stimuli description ... 11

Defining race in participants and its links to ethnicity ... 12

Measuring consumer ethnocentrism ... 13

Measuring IC using the Concise Scale of Individualism-Collectivism (CSIC) ... 13

Experimental survey for 2x2 factorial design ... 14

Questionnaire tools, sequence, and format ... 14

Summary of data collected ... 15

Using Two-way MANOVA, Regression Analyses, and independent t-tests ... 17

Reducing Type I error using Bonferroni corrected α ... 17

Individualism, Collectivism, CET, and advertisement likeability have reliable scales. ... 17

Purchase Intention needs Augmentation in scale... 18

Results ... 18

Research condition groups have different effects on dependent variables ... 18

Two-way MANOVA results on the effect of EA with moderating variables ... 20

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Linear regression analyses do not show age as an influence on individualism, collectivism,

nor CET ... 20

Conclusion, Discussion & Limitations ... 24

EA affects advertisement likeability positively ... 24

Purchase intention is driven by other factors ... 24

Individualism, Collectivism, and CET have minimal effect on the direct relationship – demographic effects only seen for CET ... 25

Limitations ... 26

References ... 28

Appendices ... 35

Appendix A: Application Form for Ethical Review for Student Research in the Framework of Education ... 35

Appendix B: Consent Form ... 43

Appendix C: Questionnaire... 44

Appendix D: Condition Groups ... 48

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1 Abstract

The research focuses on investigating the effect of ethnocentric advertising (EA) on the success of multinational corporations in their new offshore market. The researcher used genuine product images posted on mock Amazon US and Amazon NL e-commerce sites. EA promotes products by using models who are racially and ethnically similar. The study also covers consumer ethnocentric tendency (CET) and Individualism-Collectivism (IC) as covariables with relationship to demographics. The researcher used an experimental survey.

At the end of the study, the researcher concluded that EA has a positive effect on advertisement likeability. However, other factors must be considered when influencing purchase intention. The data gathered and analysis conducted supported this conclusion.

Introduction

Despite the slowdown of global trade in 2020, rebounds and growth in the foreseeable future are expected (Altman & Bastian, 2021; Global economy projected to show the fastest growth in 50 years, 2021). Erixon (2018) states that aside from conducting business in a multinational company’s (MNC) home country, it can stretch out abroad, enlarging the markets in which it is engaged, with the potential for more increased profit. However, there are challenges in engaging in diverse markets. One identified challenge is tailoring the marketing campaigns or services for a specific region to gain customer acceptance.

IKEA is one of the successful MNCs that continuously expands globally. The home furnishings retailer's recent push towards new markets in Asia and Latin America, including its prominent e-commerce presence (Calonzo, 2021)—e-commerce being of note reflected in its steady increase from fiscal years 2020 to 2021 (Wear, 2021; Pleuni, 2021). However, the company still experiences challenges when opening its flagship stores internationally,

wherein the company uses adjusted strategies. For example, IKEA opened its world’s biggest flagship store in the Philippines. According to the Orissa International report (IKEA to open

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2 its largest store in the largest store in the world in Manila by q3/q4 2021, 2021), the furniture giant chose the country due to the country’s large demographic, estimated at 110 million, its fast-growing middle class, rapid urbanization, and the large number of residential projects currently being developed. However, the company’s marketing standards and strategy will need adjustments to cater to local customers. The Manila Bulletin reported how IKEA studied the Filipino consumers’ behaviour to localize their marketing campaign that still incorporates IKEA’s corporate image (Kingsu-Cheng, 2021). Additionally, the flagship store introduced a local sauce to its cafeteria to appeal to its Philippine customers, along with furniture in a local style (Rivas, 2021). During the opening ceremony of IKEA Philippines, the company

showcased a special twist on adobo sauce alongside the famous Swedish meatballs

(Caolonzo, 2021). At the IKEA Philippines cafeteria, the company serves some well-known Filipino dishes. To put it briefly, IKEA studied and incorporated sensitivity to the local customs to gain traction in the new market. Additionally, IKEA leveraged the do-it-yourself similarities between the Swedes and the Filipinos. Oszomer (1991) stated that the perceived ethnic similarities between the home country and the target market impact the standardization of marketing communication.

It is also worth mentioning that there are apprehensions about the opening of IKEA in the Philippines. It is seen that it may unfairly compete with local furniture manufacturers (Kingsu-Cheng, 2021) which triggers the collectivistic local response to the foreign brand.

However, IKEA's response was positive, indicating that the brand is reaching out to local artisans to address the apprehension and further boost the brand image of IKEA through diversity and inclusion.

The result of IKEA's effort on "localisation" in the Philippines will be seen in the coming years as their sales trickle in. According to van der Pligt's (2016) research, studies found that tailoring marketing assets via emulating the target consumer's look, mannerisms,

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3 and language has a positive effect on a potential customer's response, which in turn can positively influence their purchase intention (van der Pligt, 2016). Building upon van der Pligt’s (2016) works, marketing should focus on and consider Social Identity Theory (SIT) and Similarity Attraction Theory (SAT). At a glance, SIT is the conceptualization of oneself and their link to larger social entities such as friend groups, institutions, and demographics (Elbedweihy et al., 2016) and SAT, on the other hand, is a person’s affinity to other

individuals that are perceived to have a likeness to themselves (Boshoff, 2012; van Hoye &

Turban, 2015). The combination of these two frameworks, SAT and SIT, reveals that individuals prefer an “in-group” rather than an “out-group” individual.

Appearing more like a customer can positively affect customer satisfaction, a

mediating factor in purchase intention (Herjanto & Amin, 2020); an approach used by IKEA in the Philippines. With higher repurchase intentions, this may result in greater Corporate Financial Performance (CFP) in the future. Additionally, there is a case to be made for using EA strategies to appear similar to the target audience to increase likability and purchase intention for its products.

Present research on SAT and SIT focuses mainly on service-oriented businesses, where there is face-to-face interaction between a frontline employee and a customer (Mandler et al., 2021; Tan & Sousa, 2013). The research aims to expand existing knowledge on SAT and SIT in communication marketing in visual and digital contexts. Additionally, from a social perspective, this research paper seeks to clarify and provide a potential strategy for online marketing considering globalization, standardization of assets, as well as the potential for more business processes to be made online – it is relevant for businesses to ensure that the user experience online is optimal if this is the case.

RQ1: Is there a positive effect on advertisement likability when using EA?

RQ2: Is there a positive effect on purchase intention when using EA?

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4 Theoretical framework

SIT and SAT increases the marketability of a product according to a target group SIT is a classic social psychological theory that attempts to explain intergroup conflict as a function of group-based self-definitions (Islam, 2014). In this theory, individuals define their identity according to the social group they belong to. The approach bolsters and

establishes self-identity according to their group. The theory makes a clear distinction between the individual’s behaviour toward the in-group, which is the ethnicity or country of the consumers, and the out-groups, the origin of the products or MNC (Zeugner-Roth, Žabkar, & Diamantopoulos, 2015). The concern with SIT is that it creates a bias against the dissimilar group.

On the other hand, SAT focuses on the likeness of attributes between individuals – where attributes can be physical or of personal character (Boshoff, 2012; van Hoye &

Turban, 2015). In advertising, these individual attributes could be race, age, gender, the colour of the skin or other similarities in the physical likeness of the models to the viewers.

The SIT and SAT frameworks help in the marketing approach of MNCs. According to previous multi-study research, viewers have a higher level of satisfaction when the models used have physical similarities (Lee, Suh, Sierra, 2020). Furthermore, Lee (2020) found that social identity and similarity drive online purchasing behaviour through information seeking, where exposure to the advertisement entices the viewer to expand their knowledge on a given topic (Augusta, Mardhiyah, Widiastuti, 2019; Croes & Bartel, 2021; Zhu et al., 2017).

Information seeking has the potential to impact purchase intention positively. In addition to this, the research found that dissimilarity to another individual causes repulsion (Bekk, et al., 2017; van Hoye & Turban, 2015).

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5 Race and Ethnicity – mixed-race in a multicultural country

Race and ethnicity in a multicultural country create great discussions for individuals of mixed backgrounds living in such a country. Race, by definition of scholars and the APA guidelines, is the physical characteristics that are deemed notable and which a person will be able to form an in-group identity (Atkin et al., 2022; Racial and Ethnic Identity, 2019).

Ethnicity, on the other hand, involves the abstract societal practices and language in which a person can form their in-group identity (Racial and Ethnic Identity, 2019). However, in multicultural societies, where people of different racial backgrounds coalesce with the rise of second and third-generation immigrants, identity formation based on race and ethnicity is also affected. This cultural mix can be seen in the classification ambiguity for bi-racial individuals by their peers and on censuses (Atkin, et al., 2022; Boehmer, 2002), whereby a mixed-race individual may be forced to put credence to a racial identity over the other. The identity of immigrants in multicultural societies may also be fluid, and their in-group

validation is challenged due to their racial ambiguity and cultural behaviours (Gaither, 2015;

Sims, 2016). In the case of this study, the use of EA in a multicultural society has not been explored yet. There have been studies in which the universality of cosmopolitanism and individualism has been explored (Fung, 2016; Robinson, 2012), which indicate that the use of EA may be detrimental in such contexts. However, there is a lack of study on such a case for digital media.

EA and its association with SIT and SAT

EA refers to a tailored marketing approach used by MNCs that uses models and products to which consumers can relate. For MNCs, EA plays a distinctively critical role in marketing when entering overseas markets (Karoui & Khemakhem, 2018). EA uses

association, physical, and character similarities to entice local consumers.

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6 The SIT and SAT theoretical frameworks are inclined to support ethnocentric

behaviour, a preference to those of similar people. Localized marketing campaigns of MNCs use these theories to reach out to consumers without losing the company's image.

Furthermore, the advertisements use models and settings familiar to the new market.

From birth, an individual instantly belongs to a group. The individual's group shapes its identity and decision-making. This social identity is inherited: ethnicity and nationality.

Ethnicity and nationality are powerful identities that strengthen patriotism. SIT posits that the stronger an individual identifies with their group, the less favourable attitudes they hold towards different groups (Negy, et al., 2003). Furthermore, it creates an in-group bias in which the individual evaluates their group as superior to other groups (Han & Guo, 2018).

In advertising, the premise of similarity holds that salespeople or models are more likely to encourage potential buyers if they have some characteristic in common with the viewer (Lichtenthal & Tellefsen, 2001). The similarity may be physical, such as age, gender, or behaviour such as a person’s mannerisms.

To build upon SAT, a study conducted on Turkish and Kurdish attitudes toward an advertisement (Hespaci, Merdin, & Gorgulu, 2016) established that exposure to models of similar ethnicity generates greater self-referencing, a cognitive strategy adopted by

individuals that aids in deconstructing messages in reflection to oneself (Burnkrant &

Unnava, 1995). Cases of self-reference are found to positively affect an individual’s

behaviour toward advertisements by increasing recall and salience of the media. This, in turn, increases the likability of the said media. In this study, self-referencing may occur when an individual can relate to the physical appearance of the model.

For MNCs, the use of association and similarities in marketing strategy according to the standards of the new market increases the chance of surviving in it.

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7 H1: Using EA in marketing will lead to a higher advertisement likeability compared to a non-EA marketing approach.

H2: EA provides higher purchase intention to the presented product compared to those not exposed to EA.

Country of Origin (COO) and CET as moderating factors

CET is the degree to which potential customers of services or goods have an affinity toward models of similar ethnicity. CET is strongly linked to SIT as both frameworks supports that individuals are drawn to artefacts or people in which they have a resemblance.

Products made from a similar COO have a positive effect on ethnocentric consumers. This results in higher purchase intention (Blazques-Resino, Gutierrez-Broncano, & Jimenez- Estevez, 2021; Hustvedt, Carrol, & Bernard, 2015). However, the level of ethnocentricity depends on a country-by-country basis. For example, research shows (Zeugner-Roth, Žabkar,

& Diamantopoulos, 2015) that viewers in neighbouring countries like Austria and Slovenia have a different perspective on advertisement likeability. Austria was ethnocentric, while Slovenia was cosmopolitan. An individual who possesses a cosmopolitan identity is less susceptible to ethnocentric based strategies. This difference provides credence to different advertising approaches between these two countries.

The study on ethnocentrism is further supported by Evanschitzky, Wangenheim, &

Blut (2007). Researchers focused on the German market have found that German consumers have a more prominent affinity toward German-made products than their European Union counterparts and those in the U.S. Product affinity may be due to the consumer’s product familiarity or a positive view of the product’s COO.

Although it appears that more ethnocentric countries are more entrenched in buying domestic products, there are methods in which international organizations can influence consumers in these markets. One noted strategy is to emphasize brand image to satisfy the

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8 information-seeking behaviours of individuals from these more ethnocentric countries. The method entices purchase intention (Wei, 2008). To a large extent, Wei's findings (2008) and Evanschitzky, Wangenheim, & Blut's (2007) research articles show that the CET of an individual does have a positive effect on their perceptions and purchase intentions for products from the same COO. These findings bring these hypotheses:

H3: A product shown in a locality of the same COO positively affects advertisement likeability

H4: A product shown in a locality of the same COO positively affects purchase intention

H5: Advertisement likeability increases when exposed to consumers with higher CET compared to consumers with lower CET.

H6: Purchase intention increases when exposed to consumers with higher CET compared to consumers with lower CET.

CET and moderating demographics effects

In EA, the choice of advertisement models' has an impact on the sellability of the product and the corporate image. In CET, it is about the behaviour of consumers, according to their demographics, toward the advertised product.

Perception and affinity are directly affected by demographics such as age and gender.

According to studies, older viewers are more ethnocentric than their younger counterparts (Pentz, Terblanche & Boshoff, 2014). Additionally, ethnocentrically induced advertising affects older viewers with its intended purpose of increasing likability. However, their purchase intention was unaffected. The demographics' behaviour observed could be

explained for two reasons. First, people in their later years are aware that EA is being used to increase likability, and second, they have a better grasp of their financial capacities and what items they need (Josiassen, Assaf, & Karpen, 2011; Shergill, Rosmala, & Parsons, 2010).

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9 In Josiassen’s (2011) study, it was found that gender had a moderating effect on purchase intention, where women were more ethnocentric than men—an explanation being that women tended to associate more with ingroup identification compared to men. However, other studies did not find any significant effect on gender (Qing, Lobo, & Chongguang, 2012). In some cases, both men and women were found to have a generally cosmopolitan attitude, albeit for different reasons based on cultural values (Prince et al., 2019).

Most of the research on CET and demographics focuses on developing countries. This study will cover participants from developed and developing countries, who have migrated, which provides mixed ethnicity. This approach will allow comparisons between participants with roots from developed and developing countries. In this area of the study, these

hypotheses will be explored:

H7: Age is a positive predictor of CET

H8: Women have a higher CET compared to men

IC and demographic effects on purchase intention and advertisement likeability

The research focuses on MNCs opening businesses in foreign countries and using EA.

The MNCs' target countries have their unique ways of choosing what is best for them. The reaction to foreign brands can be impacted by their association or be solely their own. With the changing landscape of demographics and the rapid economic revolution, CET will be affected and may change MNCs' way of using EA.

Individualism affects CET. It is the degree to which a person views themselves as part of a larger social group (Han & Guo, 2018), whereas collectivism has close relations with CET as individuals in this category see themselves as part of a larger group.

However, Han & Guo (2018) conducted a study on the perceptions of EA on Chinese millennials. They found that CET only had a modest effect on the purchase intention of foreign brands compared to domestic brands that used EA. Despite this, Han & Guo (2018)

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10 also found that consumers' tendency to be individualistic was a greater predictor of purchase intention for foreign brands and that they were less susceptible to the effects of EA. This finding implies that the effects of individualism may be separate from that of CET and should be explored as a separate variable. Collectivism, on the other hand, is the emphasis of group orientation, where there is a preference to media that maintains congruency to the group identity (Jozsa, Insch, Krisjanous, & Fam, 2010). Much like individualism, collectivism may have a separate effect on advertisement likeability and purchase intention.

Additionally, referring to Jossiassen’s (2011) findings on gender, women were found to have a more collectivistic attitude compared to men, this, in turn, would mean that

collectivism would influence the direct effects of EA on advertisement likeability and

purchase intention. The alternative would then be expected with individualism, where women would be less individualistic, and individualism’s effects would negatively affect the direct relationship. In conjunction with gender, age had also been found to increase the likelihood of a person holding communal values, where it is not only found in country-specific areas but universally (Fung, 2016; Robinson, 2012).

Because of the connection of a person’s degree of individualism and collectivism to advertisement likeability and purchase intention, these concepts should be examined when assessing the direct effects of EA. Alongside this, by accounting for the moderating effects of demographic information, a clearer effect of individualism and collectivism could be

examined. This area of the research had been missing from previous studies which delved into EA’s effects, such as that of Hespaci et al. (2016).

H9: Age has a positive effect on collectivism

H10: Women have a higher degree of collectivism compared to men H11: Age negatively affects individualism

H12: Women have a lower degree of individualism compared to men

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11 H13: The effects of EA are not as strong in individualistic persons compared to less individualistic persons

H14: The effects of EA are greater in collectivistic persons compared to less collectivistic persons.

Figure 1

Conceptual model

Research design Stimuli description

Because of the potential for a diverse group of participants from many countries, the website locality where the products are displayed will have more weight than the items displayed. By using website locality, the researcher will be able to develop fewer stimuli instead of creating assets for products under the same COO of all participants. These website localities, e-commerce websites, are good platforms for this research.

In this study, the researcher chose Amazon. Amazon uses a variety of geolocations on its website, where online shoppers are redirected to an Amazon website according to their internet protocol address and language that offers products exclusive to their locality. The

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12 research will use a set of stimuli exhibiting a single product across different Amazon e-

commerce localities. The utilization of Amazon U.S. and Amazon NL will limit the number of variations needed by the stimuli. The models used in the promotional material were of White and East Asian individuals. White models were used for the homogenous model condition, as the presumed dominant participant demographic are White Europeans.

Table 1

2x2 multifactorial design

Amazon locality Model groups

Homogenous (White) models

Heterogeneous models

Amazon U.S. (amazon.com) Condition Group 1 Condition Group 3

Amazon NL (amazon.nl) Condition Group 2 Condition Group 4

Defining race in participants and its links to ethnicity

There are difficulties when creating demarcations of race, as definitions of a person’s race can come from one, if not all, of the following criteria: ethnicity, national identity, parentage or ancestry, nationality, citizenship, religion, language, and country of birth (Burton, Nandi, & Platt, 2010). Identifying the race and ethnicity of an individual is a concern in a multiethnic country where demographics are in a constant state of change and deterritorialization of cultures (Hespaci, Merdin, & Gorgulu, 2016; Kaneshiro, et al., 2011). It is therefore impossible to create a meaningful and long-standing categorization between groups. One method of measuring race is by allowing for self-reporting by participants. As stated by Boehmer’s (2002) findings on self-reported versus administrative categories, ethnic

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13 categories defined by the latter tended to be more incorrect when compared to the self-

reporting race. An open-ended question design allows participants to respond to the race with which they strongly identify, with the ability to provide multiple responses.

Measuring consumer ethnocentrism

The researcher will use a consumer ethnocentric tendency scale (CETSCALE) to measure consumer ethnocentrism. It is a 17-item scale used in U.S. marketing research to calculate an individual’s ethnocentric bias (Jiménez-Guerrero, Gázquez-Abad, & Linares- Agüera, 2013). In most studies that measure CET, the term "American" used throughout the 17-items is replaced with different nationalities. The researcher decides on this approach to measure the result of the research better based on expected sample characteristics. For this study, the scales used will have no explicit reference to any nationality. Instead, they will contain ambiguous statements about a locality. This approach allows the use of CETSCALE to different nationalities that the experiment survey may receive responses from. A single item that stated, "We should purchase products manufactured in America instead of letting other countries get rich off us" was also removed. The removal of the statement improved the reliability of the scale. Ultimately, the CETSCALE used for this research is a 16-item scale.

Both these augmentations allow the CETSCALE to cater to different nationalities. However, as noted in other studies (Jiménez-Guerrero, Pérez-Mesa, & Galdeano-Gómez, 2020; Teo, Mohamad, & Ramayah, 2010), the use of the CETSCALE outside of the US may lead to inaccurate measures of ethnocentrism. The main reason is that individuals outside the US have varying attitudes toward ethnocentrism.

Measuring IC using the Concise Scale of Individualism-Collectivism (CSIC)

Chen et al. (2015) designed CSIC using Chinese participants between the ages of 18 and 45. This scale measures the degree of individualism and collectivism of each participant.

The survey used nine (9) items that measure the degree of individualism in a participant.

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14 Likewise, it had also used nine (9) items to measure collectivism. These measures are treated separately during statistical comparisons between groups. Participants receive separate scores for both individualism and collectivism.

Experimental survey for 2x2 factorial design

The researcher will conduct a multifactorial-survey experiment to answer the research questions directly. A survey experiment will provide an opportunity to manipulate the stimuli presented to a group of participants. It will also furnish contrasts between perceptions of the stimuli. The researcher's use of a homogenous versus a heterogeneous set of models and the e-commerce locality on which these models will be presented makes for a 2-factor

experimental, between-subjects design. The respondents will be exposed to multiple media assets, and the experimental condition to which a participant is assigned will be randomized.

The sequence of the stimuli presented in a condition group will not be randomized.

Questionnaire tools, sequence, and format

The researcher will design the questionnaire using Qualtrics, as it offers an easy way of exporting the collected data in both SPSS and MS Excel format. Additionally, it provides a method of dissemination through an anonymous link that could be shared with potential participants. The questionnaire will begin with a disclaimer notifying the participants of the AsCoR ethical guidelines and providing them with the opportunity to opt-out of the survey.

Upon a participant confirming that the ethical guidelines have been understood, they need to provide two demographic questions on their nationality and race, mandatorily. Both questions are open-ended. The open-ended questions allow the possibility to state multiple nationalities if the participant holds multiple passports. Additionally, the participants can register the racial groups that they identify with. The participants will be provided with the CSIC scale once these two demographic questions are completed.

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15 Participants are randomly assigned between the four experimental group conditions and provided with texts contextualizing that their purchase of a lighting product is for a friend with a new unfurnished apartment. This method removes the potential dissonance that may be felt by participants if it was contextualized that their purchase is for personal use when there is no inherent intention in them to buy such a product. The participants are shown an Amazon stimulus from one of the four different experimental conditions and will be coerced to stay on the page for ten seconds. The participant will be allowed to move forward with the survey once the timer is finished.

The participant must complete the 16-item CETSCALE after being exposed to the stimuli in their randomized experimental condition – this is then followed by the

advertisement likability and purchase intention scales. The CETSCALE is moved after being exposed to the experimental stimuli to prevent participants from deducing the different experimental groups and their potential stimuli manipulations.

Summary of data collected

At the end of the experimental survey, the researcher gathered 200 eligible answers—

the participants were all recruited online. The data covers IC and CET responses with gender and age group of participants. The participants' demographics collected in this survey show a bias towards women (n = 121) in the 18-29 (n = 166) age group across all condition groups.

Table 2

Age group count

Age group n

18-29 166

30-41 19

42-53 12

53 < 3

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16 Table 3

Gender count

Gender n

Female 121

Male 76

Other 3

Table 4

Age group and gender count per condition group Condition

Group #

18-29 30-41 42-53 53 < n

F M O F M O F M O F M O

1 25 14 0 3 2 0 1 3 0 0 0 0 48

2 27 24 1 1 3 0 0 2 0 0 0 1 59

3 23 12 0 1 2 0 2 1 0 0 0 0 41

4 30 9 1 5 2 0 1 2 0 2 0 0 52

Legend: F=Female, M=Male and O=Other

Female participants outnumbered male participants in this research where condition group 2 shows a considerable difference. Table 4 presents this statement across all condition groups.

Tables 2, 3, and 4 all indicate that the results found in this study are most applicable to young adult female participants, as the count of female participants across all condition groups and the overall investigation outnumber males.

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17 Using Two-way MANOVA, Regression Analyses, and independent t-tests

The researcher will conduct a two-MANOVA to probe the effect of EA, with the presence of the three moderating variables, on dependent variables. Additionally, the researcher will accomplish three separate multiple regression analyses to investigate the demographic effects of age and gender on moderating variables. This totals four (4) statistical tests, which increases the family-wise error rate (FWER) and the potential for Type I (false- positive) findings. The α will need to be adjusted to reduce the false-positive result.

Reducing Type I error using Bonferroni corrected α

. To reduce Type I errors, the researcher used the Bonferroni correction method. This conservative correction method assures that treatment conditions have the effect desired on the participants (Armstrong, 2014). Bonferroni corrected α = 0.05/4 = 0.0125. FWER = 1 - (1 - 0.0125)4 = 0.05. The adjustment made showed that there is a 5% of finding a false-positive result. This new FWER value is within an acceptable percentage of error.

The adjustment made to the alpha has significantly lowered the FWER to an

acceptable level. The new Bonferroni corrected α (p < 0.0125) is used for the analysis of the data to reduce the probability of incorrectly rejecting true null hypotheses.

Individualism, Collectivism, CET, and advertisement likeability have reliable scales.

Two factors contributed most to the variance when measuring individualism. The first factor used resulted in an eigenvalue of 3.144 which explains 34.93% variance in the 9-item scale. The second factor used has an eigenvalue of 1.079 and explains 11.99% variance. The Cronbach’s alpha was robust for the nine items, scoring 0.76. In line with the results,

Cronbach's alpha is already acceptable. Therefore, when creating the aggregate scale, all questions remained on the scale.

Collectivism's variance, on the other hand, had three factors. The first factor has an eigenvalue of 2.804 and explains 31.16% of the variance in the 9-item scale. The second

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18 factor used has an eigenvalue of 1.439 and explains 15.99% of the variance. Collectivism’s third factor used has an eigenvalue of 1.008 and explains 11.20% of the variance. Cronbach's alpha is already acceptable at 0.71. The researcher kept all items on the scale.

As for the CET scale, three factors were relevant in explaining the variance. The first factor has an eigenvalue of 7.210 and explains the 45.06% variance. The second factor has an eigenvalue of 1.858 and exemplifies the 11.61% variance. Finally, the third factor has an eigenvalue of 1.045 and explains 6.53 of the variances. The Cronbach’s alpha is very high for the CET scale, scoring 0.92. The researcher kept all the items when creating the aggregate scale for CET.

Only the first element, with an eigenvalue of 2.846 and a variance of 47.44%, is regarded as a meaningful result for supporting the variance on the advertisement likeability scale. Cronbach’s alpha is acceptable at 0.761.

Purchase Intention needs Augmentation in scale

There is a need to remove two items from the 6-item purchase intention scale to increase its reliability; the Cronbach alpha of the 6-item scale was 0.179. The new 4 item scale’s first factor has an eigenvalue of 2.541 and explains 63.54% of the variance. All other factors have an eigenvalue of <1. Cronbach’s alpha is acceptable at 0.79.

Results

Research condition groups have different effects on dependent variables Table 5

Means of condition groups by advertisement likeability and purchase intention Condition

Group

M SD n

Advertisement Likeability

Amazon US x White

4.53 0.79 48

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19 Amazon NL x

White

4.54 0.96 59

Amazon US x Mixed

4.20 0.92 41

Amazon NL x Mixed

4.31 1.09 52

Purchase Intention

Amazon US x White

4.35 1.07 48

Amazon NL x White

4.18 1.25 59

Amazon US x Mixed

4.44 1.06 41

Amazon NL x Mixed

4.65 1.20 52

n = 200

Upon analysis of the means of the dependent variables across the condition groups in Table 5, the highest performing group for purchase intention (M = 4.65, SD = 1.20) is the condition group exposed to Amazon NL with the mixed set of models. The condition group exposed Amazon NL with the White set of models, on the other hand, had the highest

advertisement likability (M = 4.54, SD = 0.96). These results show that although participants find advertisements with a Dutch locality and White models are the most likeable, the same cannot be said when influencing purchase intention.

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20 Two-way MANOVA results on the effect of EA with moderating variables

There is no significant effect found when assessing the presence of EA and website locality on advertisement likeability, F(1,193) = 0.17, p = .677. There is also non-significance effect found for the purchase intention F(1,193) = 0.79, p = .375.

The moderating effects of Individualism, Collectivism, and CET likewise had zero influences on the dependent variables. With these results, H1, H2, H3, H4, H5, H6, H13, and H14 can be rejected.

Linear regression analyses do not show age as an influence on individualism, collectivism, nor CET

The researcher excluded third-gender and non-responses for gender from the multiple regression analyses. This decision was made to create a dichotomous variable and properly test H7, H8, H9, H10, H11, and H12.

Table 6

Multiple linear regression table for individualism

β SE t

(Constant) 3.12 0.17 17.94

Age 0.00 0.01 -0.18

Gender 0.07 0.09 0.810

**p < 0.0125

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21 Figure 2

Scatterplot representation for age and individualism

Table 6

Multiple linear regression table for collectivism

β SE t

(Constant) 3.17 0.16 19.90

Age -0.01 0.01 -0.90

Gender 0.01 0.09 0.09

**p < 0.0125

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22 Figure 3

Scatterplot representation for age and collectivism

The results from the multiple regression analysis for individualism show insignificant results for either age or gender (Table 5). Likewise, the multiple linear regression analysis yielded no significant findings for collectivism (Table 6) between the two genders or ages.

Both demographic variables only appear to have a slight effect on collectivism. H9, H10, H11, and H12 can all be rejected, on this basis.

However, looking solely at the unstandardized β, women appear to be slightly more individualistic compared to men, supporting the findings of Jossiassen (2011) and negating Fung’s (2016) findings of the universality of individualism in younger individuals. This result indicates that demographics may not have the most substantial influence on either

individualism or collectivism for individuals.

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23 Table 7

Multiple linear regression table for CET

β SE t

(Constant) 4.03 0.19 21.29

Age -0.02 0.01 -2.33

Gender -0.30 0.10 -3.04

**p < 0.0125 Figure 4

Scatterplot representation for age and CET

Similarly, the demographic variables did not have any significant effect on the degree of CET. The hypotheses, H7 and H8, can be rejected on this basis. However, women have a lower CET against men, β = -0.30. This contrasts with Josiassen (2011), which supports the notion that women have a higher CET. Additional variables may affect CET outside of gender.

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24 Conclusion, Discussion & Limitations

EA affects advertisement likeability positively

The findings of this research confirm that EA and the use of a homogenous set of models have an impact on advertisement likeability. This supports Hespaci’s (2016) findings, but in a European setting, where viewers have an affinity towards other models that seem most alike to their in-group identity. In addition to this, this study supports Negy’s (2003) study on less favourable outlooks on out-group individuals, particularly the White group.

Additionally adding to Zeugner-Roth’s (2015) findings on cosmopolitanism in European nations, it appears that even in cosmopolitan nations, a homogenous set of models with racially similar characteristics is preferred. The findings in this paper highlights that a region’s cosmopolitanism is insignificant in determining whether to use a homogenous or heterogeneous set of models – a homogenous set of models that aligns to the majority in- group race will be preferred. It is unclear to what extent this applies to other cosmopolitan counties – such as in the case of Zeugner-Roth’s (2015) study for Slovenia – this is a point for further research.

Purchase intention is driven by other factors

However, the choice of heterogeneous models in the Amazon NL locality showed the highest purchase intention between the four condition groups. This result indicates that purchase intention within these cosmopolitan regions is not driven by the use of EA and a homogenous set of models. This analysis contrasts with Lichtenthal & Tellefsen’s (2001) findings that commonalities with the target audience increase purchase intention. Other factors may influence purchase intention instead, such as interest in the product, or perception of a brand may be of eminent consideration when increasing purchase intention. However, the utilization of a locality similar to the COO of the product has a positive effect on purchase intention. There is a positive view of products presented in the Netherlands, compared to the U.S.

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25 Both results for advertisement likeability and purchase intention indicate that in a multicultural society, despite preference over the use of homogenous models and those that are racially alike living in the locality, its cultural artefacts such as its flag and national products can be a determinant of purchase intention. This behaviour raises the question of which identity people hold in higher regard in a multicultural society, their racial identity or their ethnic identity. This query pinpoints another research that identifies the dominant identity that takes over in purchase intention.

Individualism, Collectivism, and CET have minimal effect on the direct relationship – demographic effects only seen for CET

Individualism, Collectivism, and CET have minimal to zero effects on the EA’s direct relationship to purchase intention and advertisement likeability. The findings for CET

contradict Shergill. Rosmala, & Parsons's (2010) statement that EA induced advertisements are stronger among the older participants. This contradicts the authors' findings because the results of this research show a negative relationship between age and CET. However, it is critical to note that with many participants in this study being below 30 years old (n = 166), it is difficult to say if this information is actionable as there is a lack of representation in the data for older individuals. However, other research supports that older individuals display stronger ethnocentric tendencies (Pentz, Terblanche & Boshoff, 2014). Furthermore, this research reveals that women have lower CET compared to men. This research result contradicts Josiassen’s (2011) study, where the author found that women had greater

ethnocentricity. However, the results for gender with CET are minimal in this study, and that other factors may affect CET, much like Prince’s (2019) findings. The findings in this study also further support that gender does not affect CET - the ability of a participant to have a tactile experience with a product may be of higher consideration (Qing, 2012).

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26 Neither individualistic nor collectivistic tendencies were heavily influenced by age or gender, supporting Qing’s (2012) finding of these demographic effects’ insignificance as moderating variables. A point of research in the future would be the effect of income and education, alongside age and gender.

Limitations

This study reveals that older people have more ethnocentric tendencies than their younger counterparts. This study has not received enough input from an older audience to reach any conclusive findings on the effects of EA on older age groups. A future study with a more extensive sample set that provides plenty of comparison between older and younger audiences will be required to answer this. Older individuals have more disposable income to spend on products. Hence, an optimized advertisement to attract these individuals may be beneficial. In addition to this, the difference in the number of participants assigned to the various experimental groups is somewhat large. Although none of the results was significant, the Amazon NL with mixed models and Amazon NL with White models condition groups have statistical means for advertisement likability and purchase intention in comparison to the other groups. This result is due to more participants being randomly assigned to these groups

The stimuli used for this experiment used Amazon solely as its e-Commerce platform.

The use of an e-Commerce local to the country provides prominent differences in

advertisement likability and purchase intention. Based on SIT, the use of a local e-Commerce platform is an in-group trait that could be leveraged by a company to increase the product’s likability.

The calculations used for CET in this experiment are an augmented scale based on measuring the CET of U.S. citizens. The use of this scale outside of its intended country may not be applicable due to the minute cultural differences. An improvement point is the creation of custom CET scales by country to better capture an individual’s level of CET. Furthermore,

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27 the multiple statistical tests and the need to reduce Type I error using the Bonferroni

correction may have resulted in false-negative results.

Finally, this experiment was a clear experimental survey that provided a hypothetical scenario to participants—a very lab-centric environment. Providing a hypothetical scenario wherein individuals must try to understand the situation may not be as strong a reason for purchase intention, as it removes personal involvement in the purchase. In the future, the researcher recommends an online setting for this research. This setup allows comparisons of time spent on a page, clicks on the webpage, and overall purchases of a product would be a better indicator of the effectiveness of EA in each country or region.

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35 Appendices

Appendix A: Application Form for Ethical Review for Student Research in the Framework of Education

Students request ethical permission from the teacher of the teaching module.

In case of doubt, the teacher will seek advice from the course coordinator. If the coordinator is also uncertain, advice may be requested through the route for research on juveniles.

For juvenile (< 16 years) respondents or test subjects, the teacher must always submit the application for ethical approval to:

- for Master’s modules, to the representative of the Ethics Committee of the appropriate programme group

- for Bachelor’s modules, to Eva van Reijmersdal

The application consists of the following:

1. The checklist provided below

2. The factsheet and the informed consent form

(if multiple methods are used, all forms should be included) 3. If applicable: Debriefing method

4. If applicable: Participant recruitment text

This checklist mentions “participants”. This refers to the respondents or test subjects participating in your research.

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36 Checklist for ethical permission for research conducted by students in the framework of education

1) Title of the research project:

Ethnocentric advertising: The use of racially similar models and its impacts on purchase intention and advertising likeability

2) Component of the programme (Bachelor’s or Master’s/Name of module):

Masters in Corporate Communication

3) Student(s) who will conduct the research:

Ephraim Reyes

4) Teacher(s) who will supervise the research:

Dr. Rutger de Graaf

5) Brief description of the research (max. 200 words)

The research seeks to understand the effects of ethnocentric advertising on the participants’

advertisement likability and purchase intention of products presented on an e-commerce website. The study will have consumer ethnocentric tendencies, age, and individualism as covariates.

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37 6) Research method (max. 100 words):

The research will be conducted as a 2x2 factorial design and will be disseminated through Qualtrics.

7) Is it standard research?

(that is, the research is not of a medical nature, there is no hospital involved, and any medical or psychological risks to the participants is negligible [e.g., due to the research procedures or as the results of exposure to potential emotion or stress- inducing stimuli]).

O No, explain in the box below O Yes

8) Where will the research be conducted (e.g. online, which location, through which organisation):

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38 Online

9) Duration of the research (from the start of recruitment until the close of data collection):

5-7 minutes

10) Number of participants to be recruited:

300

11) Who are the participants? How will they be recruited?

The participants will be recruited through dedicated survey sharing platforms and groups online

12) Are all participants 16 years or older, and mentally competent individuals?

O No; answer box below O Yes

If no, explain how permission will be obtained from the parents.

13) Is it necessary to screen participants before they participate?

(in this question, screening does not refer to selecting respondents for the purpose of your study (e.g., only women, or only low-educated people), but it refers to preventing

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39 that people participate who are at a higher risk for adverse consequences (e.g.,

because they suffer from a certain (mental) disorder, have experienced specific stressful events, etc).

O No

O Yes, explain in the box below

14) Will participants receive compensation for participating in the research?

O no

O yes, explain in box below how

There is a raffle that allows individuals who placed their e-mails at the end of the of the survey to be eligible to win a 50 EUR e-Giftcard

15) Will any misleading occur?

O No

O Yes; answer box below

Misleading is for example giving incorrect or incomplete information about the study,

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40 giving false feedback (e.g., about intelligence scores, physical attractiveness, or

personality scores), providing false information about people or organizations)

If yes, explain how and why. Also explain how and when participants will be debriefed. Add debriefing text to your request for ethical approval

16) Are there any possible harms that participation in your study could bring for the participants?

(e.g., physical, psychological, mood, self-image, economic, privacy, etc.)

O No

O Yes, explain below

17) Is there a possibility that some participants/test subjects might consider the research unpleasant or troublesome for any reason, or that they may be exposed to information, materials or questions to which they would prefer not to be exposed?

(Answer "yes" if the information (e.g., text, pictures, videos) that research participants are exposed to contains frightening, violent, erotic-pornographic, racist, sexist, undemocratic or blasphemous elements, or elements that could otherwise be deemed offensive. Similarly, mention questions that some respondents might dislike answering. Indicate whether your

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41 stimuli or questions might arouse emotions. Note that if any of the above is the case, the participant should be informed beforehand in the information letter.)

O No

O Yes, explain below

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42 18) Do you collect any personal data?

Personal data are defined as all information on the basis of which someone can be

identified (for example, but not limited to, a name, identification number, telephone number, birthdate, photo, video or voice recordings, handwriting, genetic/biometric data, IP address and location [note that the last two are automatically collected by Qualtrics unless you set

“anonymize responses” in Survey Options].

Personal data are also defined as answers or a combination of answers to research questions which can jointly result in an image so unique that it can only relate to one or a few persons (for example, but not limited to, ethnicity, political preference, religious beliefs, medical data, and sexual preferences).

O No

O Yes, explain below:

1) how you will safeguard the anonymity and privacy of the participants;

2) where you will safely store the data in accordance with the GDPR guidelines.

An individual may put their personal/work e-mail in order to be part of the 50 EUR e- Giftcard raffle.

Participant e-mails will be omitted from the study, and the Qualtrics surveys will be shut down and deleted once the Thesis has been completed.

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43 DO NOT FORGET TO ALSO SUBMIT TO YOUR TEACHER

➢ The factsheet and the informed consent form

(if multiple methods are used, all forms should be included)

➢ If applicable: Debriefing method

➢ if applicable: Participant recruitment text

Signature of student(s) conducting the research: Signature of teacher(s) supervising the research:

Date: 03/02/2021 Date: 03-02-2022

Location: Amsterdam South-East Location: Amsterdam

Appendix B: Consent Form Dear participant,

Welcome to this survey and thank you for taking some time to contribute to this research.

This study is a Master’s Thesis project for the Communication Science at the University of Amsterdam.

As this research is being carried out under the responsibility of the ASCoR, University of Amsterdam, it is guaranteed that:

1) Your anonymity will be safeguarded, and that your personal information will not be passed on to third parties under any conditions.

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44 2) You can refuse to participate in the research or cut short your participation without having to give a reason for doing so.

3) Participating in the research will not entail your being subjected to any appreciable risk or discomfort, the researchers will not deliberately mislead you, and you will not be exposed to any explicitly offensive material.

For more information on the Master's Thesis project, you can contact ephraim.reyes@student.uva.nl.

Should you have any complaints or comments about the course of the research and the

procedures it involves as a consequence of your participation in this research, you can contact the designated member of the Ethics Committee representing ASCoR, at the following

address: ASCoR Secretariat, Ethics Committee, University of Amsterdam, Postbus 15793, 1001 NG Amsterdam; 020‐525 3680; ascor‐secr‐fmg@uva.nl. Any complaints or comments will be treated in the strictest confidence.

I hope to have provided you with sufficient information. I would like to take this opportunity to thank you in advance for your assistance with this research.

Kind regards, Ephraim Reyes.

Appendix C: Questionnaire

1. Which country do you currently hold citizenship? If you hold double citizenship, please add "/" to your answer (e.g. U.S. / Dutch)

2. What ethnicity do you identify as? If multiple, please add "/" to your answer. (e.g.

Asian / European)

3. Please provide your answer to the following statements: (1 = Strongly agree, 7 = Strongly disagree

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45 a. All individuals in the society are absolutely independent from each other.

b. Individuals are much more important than the group.

c. Everyone must put his/her own interests first.

d. One can do better by working alone than in a group.

e. Groups, including the government, should not interfere with personal behavior.

f. A person must follow only his/her own personal achievements.

g. A person must follow only his/her own ideas of how to act and behave.

h. It is more than enough to focus only on one's own business.

i. It is essential to maintain one's personal characteristics in work and daily life.

4. Please provide your answer to the following statements: (1 = Strongly agree, 7 = Strongly disagree

a. All individuals in a society are closely related to each other.

b. Individuals may not be able to survive if there is no group or country.

c. To ensure group interests are met, self-interests must be sacrificed.

d. An individual's talents can be realized only through teamwork/group collaboration.

e. Individuals should be unconditionally submissive to the group and nation.

f. The value of a person is determined primarily by assessments of oneself that are made by others and the society.

g. Every one of us must consult others about how to act and behave.

h. It is much more important to help others than it is to mind your own business.

i. One must conform to the option of the majority in work and daily life.

5. Please read the context scenario:

Figure

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