New research : How can firms overcome national sentiment and protectionism abroad?

“Firms pursuing expansion abroad increasingly face challenges of protectionism and discrimination against foreign products, a phenomenon widely recognized as domestic country bias”.  A recent study* co – authored by ICIE member, professor Katharina Zeugner-Roth,  published in the Journal of International Business Studies uncovers the psychological mechanisms underlying this bias and sheds new light on the ways firms can avoid such opposition via segment-specific communication.

The researchers from IÉSEG, the Universities of St Gallen, Ghent and Leeds, carried out three experimental studies and a survey involving actual product possessions.

Common explanations for the phenomenon of domestic country bias have included consumers’ affiliation with their ‘national identity’ (Verlegh, 2007) or consumer ethnocentrism where consumers may have moral concerns and fears that purchasing foreign products might hurt the domestic economy and put people out of work (Sharma, Shimp, & Shin, 1995).

The new study demonstrated that national identity and consumer ethnocentrism are associated with different goals, namely, an approach goal and an avoidance goal, respectively.

The findings offer international marketing managers valuable insights into reducing domestic country bias and effectively segmenting international consumer markets.

Professor Zeugner-Roth explains: “Our work highlights that favorable product–country associations (e.g., Swiss chocolate, Japanese cars, French cosmetics) cannot necessarily protect companies from being affected negatively by domestic country bias. Marketing managers should be particularly aware of consumers who strongly identify with their country and/or are ethnocentric when marketing products and services abroad. They can identify and target proactively national identifiers and ethnocentric consumers with tailored international marketing strategies, using a prevention-oriented approach for the former and a promotion focus for the latter”.

More details are available in their paper: *Fischer, P.M., Zeugner-Roth, K.P., Katsikeas, C.S. et al. Pride and prejudice: Unraveling and mitigating domestic country bias. J Int Bus Stud (2022).

New research : How can firms overcome national sentiment and protectionism abroad?