Domestic vs. foreign consumer attitudes toward global retail brands: the case of Starbucks in the US and in Italy

Purpose of the paper: When retail brands enter new foreign markets, they often opt for a global brand positioning. However, brand images and the processes through which they emerge may differ between the home market and foreign markets. Drawing on these premises, this paper investigates how the affective and cognitive dimensions of ethnocentrism influence a retailer’s brand quality and brand image formation in the home market and in a new foreign market which a retailer is going to enter. Methodology: The analysis focuses on the case of Starbucks which opened its first ever store in Italy in Milan in September 2018. Data were collected through a questionnaire-based survey among two samples of consumers: one in Italy and one in the USA. A convenience sampling technique was used. Data were then analyzed through the partial least squares – structural equation modeling (PLS-SEM) multigroup analysis. Main Findings: Findings show that ethnocentrism influences brand quality and brand image through different patterns in the two countries. Moreover, while the analysis confirms the expected effects for the affective dimension of ethnocentrism, unexpected results emerge for the cognitive dimension. Practical implications: This study suggests that global retailers that select a global brand positioning strategy are nonetheless required to implement different processes to establish their brand image in different countries. In the case analysed in this paper, the firm could leverage on the positive effect of the cognitive aspect of ethnocentrism to strengthen perceived brand quality (and in turn brand image) in the new foreign country it is entering. Originality/value: While several studies have assessed the different brand images that consumers hold for same retailer brand in the countries in which it operates, this work is the first to consider the separate impacts of the affective and cognitive dimensions of ethnocentrism on brand image formation. In addition, this study shows that when a global retailer enters a new foreign market, local customers may have already indirectly developed perceptions about the quality and image of the retailer’s brands.