How Country of Origin Influences Overall Brand Equity

Author Name(s): Mohammad Ali Abdolvand, *Mahmood Ghanbari, Karim Mokhtari
Author Email: M_ghanbaribnd@yahoo.com

Abstract

The Present study is an attempt to explore how brand equity of branded cars is influenced by “the country-of-origin image”. In this regard, the perception of Iranian consumers of Hyundai, country-of-origin of which is Korea, was measured. A conceptual framework was applied to investigate the influence of country-of-origin image upon dimensions of brand equity. One should note that brand equity includes brand loyalty, brand awareness/brand associations, perceived quality, and brand strength. Accordingly, 362 Iranians were sampled out of a selected university and they were interviewed face-to-face applying a structured questionnaire. It was revealed that evaluation of country image affects brand evaluation. Marketing measures should be taken to improve brand strength, perceived quality, awareness/association, and loyalty level. Country of origin is a multi-dimensional concept which must be taken into consideration for enhancing brand equity.

Introduction

Today, the world has changed into a huge trading arena. Increasing demand for products that are out of reach in one hand, and the possibility to achieve the desired product for a less price somewhere else on the other hand ((O’Rourke & Williamson, 2002)), as well as the constant exposure of consumers to a great deal of product information through packaging, branding, advertising, and other channels has intensified this trading. Using information supplied to consumers via above-mentioned channels, their preferences and purchase decisions are shaped. It as well stimulates certain kinds of emotions, feelings, imagery, and fantasies. It was Dichter (1962) who mentioned first the contribution of a product’s country of origin to “the acceptance and success of products” (p. 116). Schooler (1956) empirically tested this hypothesis. He noticed a significant difference in acceptance of products that their only difference was their “made in” label (Verlegh et al., 1999). The impact of Country of Origin (COO) of brands on consumer perception has attracted wide attention since 1960’s (Schooler, 1965; Ditchter,1962) and has extensively been probed in marketing discipline (Peterson and Jolibert, 1995; Papadopoulos and Heslop, 2002).  Several studies (Leifeld, 1993; Peterson and Jolibert, 1995; Verlegh and Steenkamp, 1999) have stressed the significant impact of COO on consumers’ brand perception and COO is a measure against which consumers evaluate the quality of the product. Personal experience or other sources form a product-country image for each consumer (Johans-son and Thorelli, 1985). These images associate peculiar products with peculiar countries, for example, Swiss watches, German Automobiles, Japanese electronics, USA appliances, etc.

References

  1. Aaker, D. A. (1991). Managing Brand Equity. New York, NY: Macmillan.
  2. Aaker, D. A. (1996). Building Strong Brands. New York, NY: The Free Press.
  3. Aaker, D. A., & Biel, A. (2013). Brand equity & advertising: advertising’s role in building strong brands: Psychology Press.
  4. Ahmed, Z. U., Zbib, I. J., Sikander, A., & Gilbert Noujaim, R. (2012). Does country of brand origin (COBO) matter for the Lebanese consumers? EuroMed Journal of Business, 7(2), 108-128.
  5. Ambler, T. (2003). Marketing and the bottom line: the marketing metrics to pump up cash flow: Pearson Education.
  6. Arnold, D. (1992). The handbook of brand management: Basic Books.
  7. Baldinger, A. L. (1990). Defining and Applying the Brand Equity Concept. Journal of Advertising Research, 3, P2. Bamber, D.,  Phadke,  S.,  &  Jyotishi,  A.  (2011). Product-knowledge, ethnocentrism and purchase intention: COO Study in India. Global Markets and Workforce.
  8. Baumgartner, H., & Homburg, C. (1996). Applications of structural equation modeling in marketing and consumer research: A review. International Journal of Research in marketing, 13(2), 139-161.
  9. Bentler, P. M. (1990). Comparative fit indexes in structural models. Psychological bulletin, 107(2), 238.
  10. Biel, A. L. (1993). Converting image into equity. Brand equity and advertising: Advertising’s role in building strong brands, 67-82.
  11. Bilkey, W. J., & Nes, E. (1982). Country-of-origin effects on product evaluations.
  12. Bilkey, W. J., & Nes, E. (1982). Country-of-origin effects on product evaluations.
  13. Brasco, T. C. (1988). How brand names are valued for acquisition. Paper presented at  the  Defining, measuring and managing brand equity: A conference summary report.
  14. Buil, I., Martínez, E., & de Chernatony, L. (2013). The influence of brand equity on consumer responses. Journal of Consumer Marketing, 30(1), 62-74.
  15. Chaimanat, P., & Rackchamroon, P. (2011). Influences of the country of origin in Thai consumers’ buying decision toward beer purchasing.
  16. Chao, P. (1993). Partitioning country of origin effects: consumer evaluations of a hybrid product. Journal of International business studies, 291-306.
  17. Chen, C.-F., & Tseng, W.-S. (2010). Exploring customer-based airline brand equity:  Evidence from Taiwan. Transportation Journal, 24-34.
  18.  Cordell, V.  V. (1992). Effects of consumer preferences for foreign-sourced products. Journal of International business studies, 251-269.
  19. Cordell, V. V. (1993). Interaction effects of country of origin with branding, price, and perceived performance risk. Journal of International Consumer Marketing, 5(2), 5-20.
  20. De Chernatony, L., Halliburton, C., & Bernath, R.  (1995).
  21. International      branding:      demand–or      supply-driven opportunity? International Marketing Review, 12(2), 9-21.
  22. Delgado-Ballester, E., & Luis Munuera-Alemán, J.  (2005).Does brand  trust  matter  to  brand  equity?  Journal of Product & brand management, 14(3), 187-196.
  23. Dichter,  E.  (1962).  The  world  customer.  Harvard Business Review, 40(4), 113-122.
  24. Erickson, G. M., Johansson, J. K., & Chao, P. (1984). Image variables in multi-attribute product evaluations: country-of-origin effects.  Journal  of  consumer  research,  11(2),694-699.
  25. Farquhar, P.  H. (1989).  Managing brand equity.  Marketing research, 1(3).
  26. Fetscherin, M., & Toncar, M.  (2010).  The  effects  of  the country  of  brand  and  the  country  of  manufacturing of automobiles: An experimental study of consumers’ brand personality perceptions. International Marketing Review, 27(2), 164-178.
  27. Floyd, F. J., & Widaman, K. F. (1995). Factor analysis in the development and refinement of clinical assessment instruments. Psychological assessment, 7(3), 286.
  28. Garvin, D. (1983). Quality on the line. Harv. Bus. Rev., 65-75. Han, C. M., & Terpstra, V. (1988). Country-of-origin effects for uni-national and bi-national products.
  29. Hair, J. F., Hult, G. T. M., Ringle, C., & Sarstedt, M. (2013). A primer on partial least squares structural equation modeling (pls-sem). Sage Publications.
  30. Han, C. M., & Terpstra, V. (1988). Country-of-origin effects for uni-national and bi-national products.
  31. Häubl, G., &  Elrod,  T.  (1999). The impact of congruity between brand name and country of production on consumers’   product   quality   judgments.   International Journal of Research in marketing, 16(3), 199-215.
  32. Hoeffler, S., & Keller, K. L. (2003). The marketing advantages of strong brands.  The Journal of Brand Management,10(6), 421-445.
  33. Holbrook, M. B., & Corfman, K. P. (1985). Quality and value in the consumption experience: Phaedrus rides again. Perceived quality, 31(2), 31-57.
  34. Hong, S.-T., & Wyer Jr, R. S. (1989). Effects of country-of-origin and product-attribute information on product evaluation: An information processing perspective. Journal of consumer research, 16(2), 175-187.
  35. Hsieh, M. H. (2002). Identifying brand image dimensionality and measuring the degree of brand globalization: A cross-national study. Journal of International Marketing, 10(2),46-67.
  36. Hui, M. K., & Zhou, L. (2003). Country-of-manufacture effects for known brands. European journal of marketing, 37(1/2),133-153.
  37. Jin, Z., Chansarkar, B., & Kondap, N. (2006). Brand origin in an  emerging  market:  perceptions  of  Indian  consumers. Asia Pacific Journal of Marketing and Logistics, 18(4), 283-302.
  38. Johansson, J.  K., & Thorelli,  H.  B.  (1985).  International product positioning. Journal of International business studies, 16(3), 57-75.
  39. Johansson, J. K., & Nebenzahl, I. D. (1986). Multinational production: effect on brand value. Journal of International business studies, 101-126.
  40. Johansson, J. K., & Nebenzahl, I. D. (1986). Multinational production: effect on brand value. Journal of International business studies, 101-126.
  41. Johansson, J. K., & Nebenzahl, I. D. (1986). Multinational production: effect on brand value. Journal of International business studies, 101-126.
  42. Kapferer, J.-N. (2008). The New Strategic Brand Management: Creating and Sustaining Brand Equity
  43. Keller,   K.   L.   (1993).   Conceptualizing,   measuring,   and managing customer-based brand equity. The Journal of Marketing, 1-22.
  44. Keller,   K.   L.   (1993).   Conceptualizing,   measuring,   and managing customer-based brand equity. The Journal of Marketing, 1-22.
  45. Keller, K. L., Parameswaran, M., & Jacob, I. (2011). Strategic brand management: Building, measuring, and managing brand equity: Pearson Education India.
  46. Kim, C. K., & Chung, J. Y. (1997). Brand popularity, country image and market share: an empirical study. Journal of International business studies, 361-386.
  47. Kim, D., & Lehmann, D. (1989). The role of brand equity in modeling the impact of advertising and promotion on sales. Columbia University.
  48. Kim, H.-b., Gon Kim, W., & An, J. A. (2003). The effect of consumer-based brand equity on firms’ financial performance. Journal of Consumer Marketing, 20(4), 335-351.
  49. Knox, S.,  &  Bickerton, D.  (2003). The six conventions of corporate   branding.   European   journal   of   marketing,37(7/8), 998-1016.
  50. Krejcie, R. V., & Morgan, D. W. (1970). Determining sample size for research activities. Educational and psychological measurement, 30(3), 607-610.
  51. Lee, H.-M., & Lee, C.-C. (2011). Country-of-origin and brand redeployment impact after brand acquisition. Journal of Consumer Marketing, 28(6), 412-420.
  52. Leuthesser, L. (1988). Defining, Measuring, and Managing Brand Equity: A Conference Summary by: Marketing Science Institute.
  53. Liefeld, J. P. (1993). Experiments on country-of-origin effects: Review and meta-analysis of effect size. Product-country images: Impact and role in international marketing, 1, 17-56.
  54. Lusk, J. L., Brown, J., Mark, T., Proseku, I., Thompson, R., & Welsh, J. (2006). Consumer behavior, public policy, and country-of-origin labeling. Review of agricultural economics, 28(2), 284-292.
  55. Mahajan, V., Muller, E., & Bass, F. M. (1990). New product diffusion models in marketing: A review and directions for research. the Journal of Marketing, 1-26.
  56. Martin, I. M., & Eroglu, S. (1993). Measuring a multi- dimensional construct: Country image. Journal of business research, 28(3), 191-210.
  57. Mohd Yasin, N., Nasser Noor, M., & Mohamad, O. (2007).Does image of country-of-origin matter to brand equity? Journal of Product & brand management, 16(1), 38-48.
  58. Murtiasih, S., Sucherly, S., & Siringoringo, H. (2014). Impact of country of origin and word of mouth on brand equity. Marketing Intelligence & Planning, 32(5), 616-629.
  59. Nagashima,  A.  (1970). A  comparison of  Japanese  and  US attitudes   toward   foreign   products.   the   Journal   of Marketing, 68-74.
  60. Narasimhan, R., & Jayaram, J. (1998). Causal linkages in supply chain management: an exploratory study of North American manufacturing firms. Decision sciences, 29(3), 579-605.
  61. Nath Sanyal, S., & Datta, S. K. (2011). The effect of country of origin  on  brand  equity:  an  empirical  study  on  generic drugs. Journal of Product & brand management, 20(2),130-140.
  62. Nebenzahl, I. D., & Jaffe, E. D. (1996). Measuring the joint effect of brand and country image in consumer evaluation of global products. International Marketing Review, 13(4),5-22.
  63. O’rourke, K. H., & Williamson, J. G. (2002). When did globalisation begin? European Review of Economic History, 6(1), 23-50.
  64. Osgood, C. E., & Tannenbaum, P. H. (1955). The principle of congruity in the prediction of attitude change. Psychological review, 62(1), 42.
  65. Papadopoulos, N., & Heslop, L. (2002). Country equity and country branding: Problems and prospects. The Journal of Brand Management, 9(4), 294-314.
  66. Pappu,  R.,  Quester,  P.  G.,  &  Cooksey,  R.  W.  (2006).Consumer-based brand equity and country-of-origin relationships: some empirical evidence. European journal of marketing, 40(5/6), 696-717.
  67. Pappu, R., Quester, P. G., & Cooksey, R. W. (2007). Country image and consumer-based brand equity: relationships and implications for international marketing. Journal of International business studies, 726-745.
  68. Park, C. S., & Srinivasan, V. (1994). A survey-based method for measuring and understanding brand equity and its extendibility. Journal of Marketing Research, 271-288.
  69. Peterson, R. A., & Jolibert, A. J. (1995). A meta-analysis of country-of-origin effects. Journal of International business studies, 883-900.
  70. Phau, I., & Suntornnond, V. (2006). Dimensions of consumer knowledge and its impacts on country of origin effects among Australian consumers: a case of fast-consuming product. Journal of Consumer Marketing, 23(1), 34-42.
  71. Pinar,  M.,  Trapp,  P.,  Girard,  T.,  &  E.  Boyt,  T.  (2014).University brand equity: an empirical investigation of its dimensions. International Journal of Educational Management, 28(6), 616-634.
  72. Rackchamroon, P., & Chaimanat, P. (2011). Influences of the country of origin in Thai consumer’s buying decision toward beer purchasing.
  73. Rangaswamy, A., Burke, R. R., & Oliva, T. A. (1993). Brand equity and the extendibility of brand names. International Journal of Research in marketing, 10(1), 61-75.
  74. Samli, A. C., & Fevrier, M. (2008). Achieving and managing global brand equity: a critical analysis. Journal of global marketing, 21(3), 207-215.
  75. Schooler, R. D. (1965). Product bias in the Central American common market. Journal of Marketing Research, 394-397. Shahin,   A.,   Kazemi,   A.,   &   Mahyari,   H.   (2012).   How consumer’s perception of the country of origin affects brand equity:  A  case  study  in  Iran.  Middle-East  Journal  ofScientific Research, 12(6), 878-885.
  76. Shimp, T. A., Samiee, S., & Madden, T. J. (1993). Countries and their products: a cognitive structure perspective. Journal of the Academy of Marketing Science, 21(4), 323- 330.
  77. Shocker, A. D., Srivastava, R.K. and Rueckert, R.W. (1994).
  78. Challenges and opportunities facing brand management: an introduction to the  special    Journal  of  Marketing Research, 31, May, pp. 149-158.
  79. Shocker, A. D., & Weitz, B. (1988). A perspective on brand equity principles and issues. Report (88-104), 2-4.
  80. Simon, C. J., & Sullivan, M. W. (1993). The measurement and determinants of brand equity: A financial approach. Marketing science, 12(1), 28-52.
  81. Smutkupt, P.,  Krairit, D., & Ba Khang, D. (2012). Mobile marketing and consumer perceptions of brand equity. Asia Pacific Journal of Marketing and Logistics, 24(4), 539-560
  82. Srinivasan, V. (1979). Network models for estimating brand- specific effects in multi-attribute marketing models. Management Science, 25(1), 11-21.
  83. Srinivasan,  V.,  Park,  C.  S.,  &  Chang,  D.  R.  (2005).  An approach to the measurement, analysis, and prediction of brand equity and its sources. Management Science, 51(9),1433-1448
  84. Srivastava, R. K., & Shocker, A. D. (1991). Brand equity: a perspective on its meaning and measurement: Marketing Science Institute.
  85. Steenkamp, J.-B. E., & Van Trijp, H. C. (1991). The use of LISREL in validating marketing constructs. International Journal of Research in marketing, 8(4), 283-299.
  86. Thakor, M. V., & Lavack, A. M. (2003). Effect of perceived brand origin associations on consumer perceptions of quality. Journal of Product & brand management, 12(6), 394-407.
  87. Thorelli,  H.   B.,  Lim,  J.-S.,  &  Ye,  J.  (1989).  The relative importance of country of origin, warranty, and retail store image on product evaluations. International Marketing Review, 6(1).
  88. Till, B. D., Baack, D., & Waterman, B. (2011). Strategic brand association maps: developing brand insight. Journal of Product & brand management, 20(2), 92-100.
  89. Ulgado, F. M., & Lee, M. (1993). Consumer evaluations of bi-national products in the global market. Journal of International Marketing, 5-22.
  90. Verlegh, P. W., & Steenkamp, J.-B. E. (1999). A review and meta-analysis of country-of-origin research. Journal of economic psychology, 20(5), 521-546.
  91. Yoo,   B.,   &   Donthu,   N.   (2002).   Testing   cross-cultural invariance of the brand equity creation process. Journal of Product & brand management, 11(6), 380-398

284 total views, 1 views today

Download PDF File

About the author: admin