Consumer Preferences for Domestic versus Foreign Brands: The Role of Consumer Characteristics and Brand Stereotypes

While consumer stereotyping literature has provided useful insights into how various brand characteristics drive consumers’ stereotypical perceptions of brands, the role of consumer characteristics has been neglected. Drawing on the stereotype content model (SCM), this study investigates the simultaneous roles of consumer xenocentrism and consumer ethnocentrism in driving the brand stereotypes of domestic and foreign brands, and the subsequent impact of these opposing dispositions on behavioral outcomes. A structural equation model based on a sample of 287 consumers from Bosnia and Herzegovina reveals that perceptions of domestic (foreign) brand warmth and competence are driven by consumer ethnocentrism (xenocentrism). Furthermore, perceived domestic (foreign) brand competence mediates the impact of ethnocentrism (xenocentrism) on the purchase intent of domestic (foreign) brands, while the mediating role of perceived brand warmth is limited to foreign brands. The findings shed light on (a) the simultaneous roles of two key consumer dispositions as antecedents of brand stereotypes, and (b) the differential effects of these dispositions in driving consumer preferences for domestic vs. foreign brands via perceived brand warmth and competence.