According to Zareei and Ashtiani (2015), states that the youth certainly bought international products so that they can say that they are accepted in a group. This usually happens at ages 15-18 years old because of peer pressure. Ninety percent of the youth purchased foreign and local brand as a status symbol. The youth mainly focused in where did the brand was manufactured. Majority of the consumers’ 75% males and 74% females considered it as an important factor in purchase decisions and preferred local brand instead of foreign brand, when foreign brand is absent.
Quality is also one of the important factors in deciding whether the consumers would go for the foreign brand or stick with the local brand if both brands have the common quality. The prestige of the branded product was considered as the most important factor in reshaping the consumers.
As stated by Desiderio (n.d.), Philippines is quickly turning into a country which offers varying opportunities for brands to expand their horizon in the Southeast Asian markets.
Due to a strong economic performance and a young growing Philippine workforce, buying power has increased. Because of high demand for international goods, franchises of overseas brands are flourishing.
According to the findings of Kantar Worldpanel’s Brand footprint (2018), the Filipinos prefer to use global brands instead of local. Local brands consists of 28% in spend share, while global brands consists of 72%. The Filipino brand, Lucky Me, was one of the chosen products in the grocery that reaches 98% of the Filipino households. Followed by the Nescafe and Surf which were the chosen brands for beverage and homecare.
Then, other Filipino brands also made it to the top 10 most chosen brands. As a result, the report revealed that in 2017, the local brands grew, it consists of 64.6% spend share, while global brands got 35.4%.
As stated by Soniaga (2014), Filipinos often buy and patronize foreign product than local products. Some country import raw materials from Philippines that they will use in producing their product but Filipinos are not able to see that. In short, some foreign products are made up from the materials from Philippines. As mentioned by her also, when businesses are selling local products to a Filipino, many would inspect the product carefully but when it is an identical but foreign product, they will not inspect much.
Armecin (2017) agrees that aside from the price of a product, Filipinos think that foreign products are better than anything from their local one. She also emphasize that this kind of thinking is rooted in Filipino perception.
According to Terpstra (1987) and Kapferer (1991), local brands are seldom taken out, not because they represent strong brand franchises, but due to the fact that relative sales volumes do not tolerate various economies. More international brands are being made because of cost considerations rather than consumer interest.
According to Kotabe and Helsen (2010), there are advantages of global branding. Global branding is evident in attaining economies and global brand development to lessen cost in producing, distributing, and promoting global market. Global branding influences the creation of a better awareness and visibility of the brand. Consumers are aware of the brand and continue to buy it wherever they are located.
According to Lim (2015), the people’s local apparel outlets have been challenged by the entry of international brands to improve their products because the Filipino consumers loves the design and quality of the apparel especially the young ones. Apparel will always enjoy taking a massive chunk of the market.
The decision whether to buy local or international products can be clarified from supply and demand of the consumer. Developing countries are using their comparative advantages. According to Hayes (2019), comparative advantages is a person or nation that has an advantage in the production of a product when it can produce the product at a lower opportunity cost than another person or nation. The product features are manufactured in advance at the same time it highlights the personal evaluations of internal and external factors of a certain product. As a result of these factors consumers will finally determine the specific product want to purchase of origin of the goods based on the country (Agrawal & Kamakura, 1999).
Winit, Gregory, and Verlgh (2014) stated that the preliminary study confirmed the distinctiveness of brand globalness and ownership approved that the distinctiveness of the essence of global brand and ownership. Consumers assessed the global brand more positively regarding the brand ownership of local and foreign brands. The main study discovered that the price and common external tarrifs also known as (CET), affects the product categories. The findings suggests that the distinguished brand globalness positively impacts brand assessments.
As Demir and Tansuhaj (2011) indicated, people in a developing country are aware of the meaning of international and local brands. Some people in developing countries upgrade their social status using global brand as a tool and recognized themselves as a part of international consumer society (Batra et al., 2000). In addition, international brands known for a high quality and high standard of products (Medina & Duffy 1998).
Competition between local and foreign products (2018), describes that consumers are exposed with different kinds of international brands such as Apple, Mercedes-Benz, and Rolex. The international and local brands are competitively occupying the local market. Consumers’ reference for both differ in some ways and one of that is brand personality. As stated by Asker (1996), the consumers prefer to use products that are according to their brand personality. Most of them are more exposed to international brands as these products are globally recognizable worldwide (Hassle, 2004). Compared to local brands which are only limited in stores. In addition to that, consumers’ preference are based on the location and environment of the products. Both local and international merchandises have specific places. The local ones are located in the streets which are the street foods, but people will eventually choose products that have a decent place and more hygienic which is the non-local ones. The advantage of local brands is that it is easier to reach compared to international brands. Example, customers can go to their nearby store to buy local products. Foreign products such as pasta or seasonal fruits are located in supermarkets and hypermarkets.
Bajaj (2007) determined that Indians travelling to abroad are imitating the style of the Western people because the Western style are much more attractive compared to their own style, that made the Indian customers buy international products. Increase in Westernisation is responsible for the materialistic attitude of the Indians which led them to consume brands as the symbol of status and prestige. According to the respondents’ preference, it was observed that they should maintain a particular status that leads them to buy a foreign brands. Indian customers said that their local retailers were not focusing to the customer’s complaints because when they purchase Indian brands there money will not be returned nor exchange with something else and with global brands it is vice versa. Global brands like H&M, Primark, Zara, and Forever 21 provides the Indians their desired look and status that results the foreign brands to increase its popularity and purchases.
The study investigates the difference between U.S. global and local brands in the Indian market. It is postulated that global and local brand influence brand equity, which is composed of brand image, brand awareness, emotional value, perceived quality, brand loyalty, and purchased intention; and as a result, the Indian consumers perceive global and local brands differently based on brand equity.
As Bhardwaj, Kumar, and Kim (2010) concluded that the Indian consumers do perceive U.S global and local brands differently based on the components of brand analysis. It is evident that Indian consumers lack faith in the quality of local brands and hence are more loyal toward global brands. However, many consumers in developing countries associate global brands with a higher price due to a perception of better quality, even if those brands are manufactures locally (Eckhardt, 2005).
According to the collected data of Tantiwongwat (2013), it can be summarized that the majority of the samples consumed cola few times a month. Based on the results, percentage in brand preference Pepsi has the highest percentage followed by Coca-Cola, EST Cola, and AJ Big Cola. It has been considered that there is no relation regarding brand preference and frequency of drinking, simply there is relation regarding brand preference and taste preference. As a result, if customers cannot find their preferred brand, some of them will substitute to the other brands. The customers loyalty makes it unlikely for them to switch brand (Aaker & Mcloughlin, 2010; Pride et al., 2011) it means that the customer loyalty cannot be easily to switch to another brand. Customer’s loyalty means they would buy only the preferred brand and avoid brand substitution (Pride & Ferrell, 2011). Researchers found out that Coca-Cola has the highest percentage who would not change to other brands with 6.4 %, which means that Coca-Cola has the highest brand loyalty, followed by Pepsi at 5.9 %. However, the demographics are important factors as well, and they are used to measure the relation regarding demographics and brand preference. After the analysis and calculation process, researchers found that age is the only demographic factor that has relation with brand preference other demographics (gender, marital status, education, and income) do not affect the brand preference at all. It is related in this study in terms of many Senior High School students who are under the generation of post-millennials prefer international than the local brands. According to Serafino (2018), post-millennials are born in 1997 up until now. The age of post-millennial range from 0-21 years old. Age is a demographic factor that affects the brand preference. A 21 years old single professional would be currently purchase a different set of items than a 65 years old retired grandparent. It highlights how 21 years old post-millennials and 65 years old baby boomers search for products, how they want to buy a product, and what they expect from the companies with which they do business. It is important to understand what different people expect from a purchase experience. Looking at generational tendencies is one piece of information that can help shape the strategy for catering the consumers whether to run a coffee shop that appeals to post-millennials or a grocery store that caters to all age groups.
According to Latif and Khan (2016), it is concluded that global branding should be considered as a significant part of the marketing plan to boost company sales. Therefore, managers should design their marketing campaign in such a way that may boost consumers’ emotional values and increase life satisfaction through purchasing of global brands.
The operationalization of comparative advantages and country of origin concepts in prior research has provided insights into the effects on individuals, industries, and countries. The study advances the literature by conceptualizing them with the purpose of investigating the determinants of decisions to buy local or international brands products among non-income consumers in a developing country, as suggested by Pappu et al. (2006). The former argues which is the supply and demand side that the products from developed countries are superior in quality, while goods from developing countries are often sold cheaper and with minimum quality. According to the research of Verlegh and Steenkamp (1999), the results show that local brands are preferred by female students, those who are price conscious, influenced by family and received a scholarship while the students who are conscious of image and quality are more likely to buy international products from developed countries. This study focuses on the three East European countries which are Croatia, Poland, and Slovakia about the customers’ preferences on their selected product categories (Mi?kic et al., 2017). Most respondents prefer to choose local products if the product is at the same price. It was analyzed that the price is an important factor even if the local product has the same quality with global because customers prefer cheaper products. Based on the findings, the global brand is more dominant compared to local.
According to Krishna, Prakash, and Suresh (2018), they conclude that competitions in the market are already high. Products seem already similar to each other so it is essential to give them distinct identity through branding. If Indian continuously patronize foreign good and products, the earnings will proceed to the foreign. This scenario is the reason why everything is becoming costly and dollar price is continue rising. The people of India are complaining on the government but it is the people who are showing of their prestige on patronizing foreign products are to be blamed off. India has all resources to produce domestic product but it is costly and local people will not buy those products thinking they are not quality because they are made locally. The prime minister of India brought solutions for the problem which is encouraging foreign investors and multinational company to invest in the country that will help the Indian economy and give brand awareness to the consumer to distinguish whether the product is local or foreign.
It is stated by Castillo (2018) that Filipinos are known for their characteristic as a consumer that they search for the product that they need and want. The presence of big malls and shopping center in the Philippines varies that buying and selling of goods and different products is fluid. The buying decisions of a typical Filipino consumers are dependent on their budget in some extent. The recent global finance crisis influenced Filipinos to think of buying more durable products which can last for a long time.
As Buragohain (n.d.) stated, local clothing brands are less preferred compared to the foreign brand Levi’s. The factors that affect these preferences are emotional value, perceived quality, brand loyalty, brand association, brand equity, and purchase intention. However, the present study has several limitations. The variables examined in the study were measured by multiple items in the previous studies from where the scale items have been adapted. The results would have been improved if the variables were measured through other different brands.
Local brands attained higher usage rates than international brands did, while the results concerning usage intention showed the opposite effect. This seemed to indicate that consumers prefer to use local brands despite being attracted to international brands. Local brands had attributes such as trust, health, tradition, authenticity, care for clients, and restrain. On the other hand, international brands were defined as fashionable, distinct, kind, fun, prestigious, and up-to-date.