Indian consumers' purchase intention toward a United States versus local brand ☆ Archana Kumar ⁎, Hyun-Joo Lee ⁎, Youn-Kyung Kim ⁎ Retail and Consumer Sciences, University of Tennessee,110 Jessie Harris Building,1215 West Cumberland Avenue, Knoxville, TN 37996-1911, United States abstract article info Article history: Received 1 November 2007 Received in revised form 1 June 2008 Accepted 1 June 2008 Keywords: Need for uniqueness Attitudes Purchase intention Indian consumers This study of Indian consumers examines the effects of individual characteristics (i.e., consumer's need for uniqueness and attitudes toward American products) and brand-specific variables (i.e., perceived quality and emotional value) on purchase intention toward a U.S. retail brand versus a local brand. A total of 411 college students in India participated in the survey. Using Structural Equation Modeling (SEM), this study finds that Indian consumers' need for uniqueness positively influences attitudes toward American products. Attitudes toward American products positively affect perceived quality and emotional value for a U.S. brand while this effect is negative in the case of a local brand. Emotional value is an important factor influencing purchase intention toward a U.S. brand and a local brand as well. Implications for both U.S. and Indian retailers are provided. © 2008 Elsevier Inc. All rights reserved. 1. Introduction Consumers in developing countries such as India and China have increasing choices to select between local and foreign brands. In this competitive environment, both foreign and local retailers must understand why and how consumers in these markets make their brand choices. India, one of the fastest growing developing economies in the world (Kearney, 2006), has been the subject of relatively little research in terms of consumer purchase behavior. Several studies on consumer attitudes toward local and foreign brands are limited to consumers from U.S., U.K, and more recently from China (Beaudoin et al., 2000; Wang et al., 2004). This study aims at increasing understanding Indian consumers' brand choice behavior in relation to a U.S. brand versus an Indian local brand. Economists predict that India is set to become a major global economic power in the near future (Indian Economy Races, 2006). While a majority of India's population is still below the poverty line, increases in household incomes and dual income families have led to a boost in leisure and personal expenditures (Spreading the Sales, 2005). This increase in consumer spending has stimulated the growth of the Indian retail industry that is expected to reach $500 billion by the year 2010 (Field, 2005). India is the second largest untapped retail market after China (Field, 2005). India is “the nation of shopkeepers” due to a large number of traditional family-run stores that primarily carry unbranded products from local manufacturers. Recently, modern retail stores featuring attractive displays and a wide selection of local and foreign brand merchandise are quickly emerging. The rapidly expanding middle class consumers in India, with their increasing purchasing power, constitute the primary market for branded foreign goods (Bharadwaj et al., 2005). These consumers are becoming more brand-conscious and are adopting casual wear as part of their lifestyle (Shashidhar, 2004). Consumers choose products and brands to receive emotional benefits (e.g., display of status, wealth, and prestige) as well as utilitarian benefits (e.g., quality and low price) (Batra et al., 2000). Using foreign brands to exhibit one's social standing is more prominent in developing countries where higher income disparities and status mobility exist (Kottak, 1990). Wishing to lead a life similar to Western cultures, consumers in developing countries often seek to emulate Western practices by purchasing foreign brands (Batra et al., 2000; Kinra, 2006). In the past India limited imports of Western consumer goods which made them scarce, expensive, and available only to the rich and the elite (Batra et al., 2000). However, as the Indian government loosens its restrictions on the entry of foreign retailers into local markets, U.S. brands and other foreign brands increasingly vie with domestic brands for the growing consumer market (Field, 2005). As a result, the branded apparel segment now accounts for the second largest retail sales in India (Vaid, 2007). Some of the popular U.S. apparel brands available in India are Levi's, Calvin Klein, Gloria Vanderbilt, Guess?, Esprit, and Wrangler (IBEF, 2006). These brands are available in new shopping formats such as malls and department stores, similar to those in the U.S. and Europe. 2. Conceptual background: the cognitive–affective model of buying intentions Several researchers recognize that cognitive and affective states influence purchase behavior (Li et al., 1994; Zajonc, 1984). This Journal of Business Research 62 (2009) 521–527 ☆ This project was funded by the U.S. Department of Education. ⁎ Corresponding authors. Kumar is to be contacted at Tel.: +1 865 974 1025. Lee, Tel.: +1 918 594 8422; fax: +1865 974 5236. Kim, Tel.: +1865 974 1025. E-mail addresses: kumar@utk.edu (A. Kumar), hyunjoo.lee@okstate.edu (H.-J. Lee), ykim13@utk.edu (Y.-K. Kim). 0148-2963/$ – see front matter © 2008 Elsevier Inc. All rights reserved. doi:10.1016/j.jbusres.2008.06.018 Contents lists available at ScienceDirect Journal of Business Research