What Is Ethnocentrism in Business?
Define
Ethnocentrism
“Ethnocentrism in marketing refers to the preference of products from one's own home country rather than
purchasing items from other countries. It can also refer to the way a
company markets its products”
Perhaps the greatest example of ethnocentrism is the case
of explorers going to new found lands. The anthropologists, missionaries,
colonialists, and explorers who would come into contact with the indigenous
tribes of people in these lands would often describe them as primitive. But
what standards were they using to make that judgment? They would, of course,
use the culture and lifestyle of Europe as it was in the 17th, 18th and 19th
centuries. By their standards, people who didn’t put on much in the way of
clothes lived in the woods, and could neither read nor write were no more than
savages. They didn’t measure up to the cultural standards of Spain, France,
Portugal, or England as they were back then.
Ethnocentrism didn’t start there, however; it was there
long before. It can be argued that ethnocentrism has been around about as long
as human beings have existed in societies. Before the days of Christopher
Columbus, we had ethnocentrism in the days when slave trade was rife, or when
the East Indian Trading Company charted the seas, or when the Romans conquered
a large portion of the world.
And yet, even today, ethnocentrism is a significant part
of us. It lives on today just as strongly as it did back then. It may be a bit
more subtle, but it is there, always lurking beneath the surface.
The thing about this condition is that you can’t point to
a particular group of people and say that only they are ethnocentric. No
particular people or nation holds a monopoly on ethnocentrism. The feeling of
superiority over others is just as strong among the Japanese as it is among the
Koreans, or the Russians, the Germans, the Americans, and even the Ugandans.
Perhaps these days we don’t use such terms as third world
or primitive. They would understandably be frowned upon. And therein lies the
subtlety. However, we will use certain terms that have more than a whiff of
ethnocentrism behind them, such as “emerging culture” or “exotic country”. Who
are we to say what is exotic and what is normal?
Political correctness has got us thinking that the way we
label people, behaviors, and cultures is perfectly normal and respectful.
However, the fact is that we are labeling and that is the core of ethnocentrism.
No matter how we label people, the fact that we label people at all means that
we are ethnocentric.
It can be argued, from a philosophical standpoint, that
even people who do not believe that they are ethnocentric are, in fact, just
so. People who believe that every culture has something to offer and no culture
is inferior to another are often at risk of looking down at people who think
their cultures are better; people from the very cultures supposedly
non-ethnocentric people celebrate. How many times have you looked down on
someone for being bigoted? Did you not see them as being inferior since their
culture wasn’t civilized enough to realize that it wasn’t superior to any other
culture. At the back of their minds, people who do not consider themselves
ethnocentric may believe that a superior culture is one that is not
ethnocentric, which is a bit of a paradox because the fact that such a culture
would be considered superior would make it, by definition, ethnocentric.
The Pitfalls
Ultimately, there isn‘t anything wrong with being proud of
your country, your ethnicity, or your heritage. It shows that you are
comfortable in your skin and you certainly need a thick skin to survive taunts
from those who feel that you should be ashamed of who you are. Everyone should
be perfectly proud of their identity. The trick is not to do it at the expense
of others. Ethnic pride and ethnocentrism can look the same from a distance,
but they aren’t.
The Implications for Business
Ethnocentrism naturally comes with doing business, both
locally and internationally. There certainly is an ethnocentric approach in
international business. If you’re a small business owner, you should understand
that your consumers will tend to ethnocentricity and know what kind of effect that
can have on your operations. If you fail to understand ethnocentrism, you risk
alienating your customers. However, if you recognize and understand it, you
could find a way to benefit from it.
Functional Ethnocentrism
Like mentioned earlier, people tend to measure other
people and cultures against the yardstick of their own culture. When it comes
to business, ethnocentrism will show itself in the form of a preference for
products and services from particular countries and cultures. A country that is
highly ethnocentric will tend to encourage local industry and most purchases
will be done domestically or at least from countries that share the culture of
the given country. Cultures that are seen as inferior will have their products
shunned.
This can benefit your business. As a domestic company, you
will see consumers are more likely to buy your products and less likely to buy
products that have been manufactured abroad. This can keep foreign companies
out of the market and allow your company to flourish. You, therefore, won’t
have to deal with the stiff competition that often comes from cheap foreign
products.
The Disadvantages
As an ethnocentric firm, operating locally, ethnocentrism
can come as a boon to your business. However, it could also be a major setback
for you when you try to expand abroad. If you try to expand into an
ethnocentric company, you will be seen as a foreigner and consumers may not be
very receptive to your products and services. A good example of this is when
American companies try to get a foothold in China. Many of them do not make it
because the Chinese are strongly nationalistic and support their own.
How Do You Deal With Ethnocentrism?
As a company, you should look to minimize the setbacks
brought about by ethnocentrism and maximize the opportunities as much as you
can. It helps to show how tied you are to a country and culture when you are
promoting your products in your ads.
When you want to expand into a foreign country that is
highly ethnocentric, it may help to play down your ties to your home country as
much as you can. You can even establish a subsidiary in the country that you’re
expanding to, with a different name and a different marketing campaign
altogether. That subsidiary can then focus on strengthening ties with the locals
and getting them to accept your products.
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