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Country of origin and stereotypes’ influence on the brand evaluation of a product
1
Exposé
Country of origin and stereotypes’ influence on the
brand evaluation of a product
Submitted by
Roberto Bertagnolli
European Master in Business Studies
University of Kassel
Kassel, Germany 10th December 2013
Country of origin and stereotypes’ influence on the brand evaluation of a product
2
Abstract
Title: Country of origin and stereotypes’ influence on the brand evaluation of a
product
Keywords: Culture, Stereotypes, Country of origin effect, Brand CO recognition
Background: During the last fifty years, the Country of origin (COO) effect concept,
as a variable able to influence consumers’ decisional processes during the purchasing
process, has been broadly discussed and usually considered as a conscious and
controlled process by the international economic literature. Nevertheless, recent
researches have started to question such supposition by demonstrating that this
process may be automatic and unconscious too. Accordingly, consumers may not
completely realize the country correlations they make. In this context, the variety of
activated country stereotypes can considerably affect and produce different brand
evaluations of a product, usually categorized as cognitive and affective. Furthermore,
due to the relation between COO and Brand origin (BO), possible resulting brand
misclassifications can affect the image of a country both positively and negatively.
Purpose: The purpose of this Master Thesis is to analyze and test the impact of
emotional and functional country stereotypes on consumers’ brand evaluations and
classifications of a product.
First of all, I will focus on the different impact of COO cues from a country
with a functional country stereotype and COO cues from a country with an emotional
country stereotype.
Secondly, I will take into consideration the factors influencing the COO
effect and then the Brand origin effects of possible brand misclassifications
highlighting the relative advantages and disadvantages. Accordingly, some
hypotheses will be developed to prove the statements’ validity.
Method: The required information will be collected through a quantitative research
analysis by means of a self-administered online questionnaire that will be spread to
both social media pages and personal contacts.
Country of origin and stereotypes’ influence on the brand evaluation of a product
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Table of Content
Abstract ....................................................................................................................... 2
Table of Content ......................................................................................................... 3
List of Abbreviations .................................................................................................. 4
Introduction ................................................................................................................ 5
1. Overview of chapters .............................................................................................. 7
1.1 Detailed explanation ......................................................................................... 7
1.2 Outline of chapters ............................................................................................ 8
CHAPTER I: Introduction ................................................................................. 8
CHAPTER II: Literature review (General part) ............................................. 8
CHAPTER III: Literature Review: (Outlining COO effect) .......................... 8
CHAPTER IV: Methodology ............................................................................. 9
CHAPTER V: Empirical Findings and Discussion of Results ...................... 10
CHAPTER VI: Conclusions ............................................................................. 10
Bibliography .............................................................................................................. 10
Table of Figures ........................................................................................................ 10
Table of Appendices ................................................................................................. 10
2. Theoretical Background ....................................................................................... 11
2.1 Stereotyping process ....................................................................................... 11
2.2 The framing concept ....................................................................................... 11
2.3 The COO concept ............................................................................................ 13
2.3.1 COO effect and Product country image ................................................. 14
2.3.2 Country image perceptions...................................................................... 14
2.3.3 COO effect and Brand origin recognition .............................................. 14
2.3.3.1 Categorization theory............................................................................ 15
2.3.3.2 Cognitive process ................................................................................... 16
2.3.3.3 Affective and normative process .......................................................... 16
3. Review of Literature ......................................................................................... 17
3.1 Definition of culture ........................................................................................ 18
3.2 Definition of stereotypes ................................................................................. 19
3.3 The framing concept ....................................................................................... 20
3.4 Definition and scope of COO effect ............................................................... 21
3.5 Outlining COO effect ...................................................................................... 21
4. Hypotheses ......................................................................................................... 23
5. Methodology....................................................................................................... 29
6. Work plan .......................................................................................................... 31
7. Bibliography....................................................................................................... 32
Country of origin and stereotypes’ influence on the brand evaluation of a product
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List of Abbreviations
CI
PCI
Country image
Product country image
COO
CO
COBO
Country of origin
Country origin
Culture of brand origin
BO Brand origin
BOR Brand origin recognition
Country of origin and stereotypes’ influence on the brand evaluation of a product
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Introduction
COO influence on the perception and evaluation of a product has been one of the
most widely studied phenomena in the literature of international negotiation,
marketing and consumer behavior in the last three decades (Martin, Lee, & Lacey,
2011). The research of this study began with the contributions of Schooler in 1965,
who proved that COO effect really existed. In the following twenty years, the
existence of such phenomenon was tested through different kinds of products,
brands, prices, individual product attributes and the influence of social and economic
development of the countries where products were made. According to the results of
these studies, the image of the country or national reputation was considered as an
intangible asset generating competitive advantage for businesses and their brands,
besides playing a key role in the purchasing decisions of consumers and firms
(Chowdhury & Ahmed, 2009). It emerged that this effect is reflected in the consumer
as a clue that provides different varied information about the quality and other
product characteristics. Indeed, several studies have already supported that COO
provides consumers with information about the quality of the product they buy, or at
least, this is perceived by them (Canhuan & Kumara, 2010). During the last
fifty years in most COO researches, this phenomenon was assumed as an automatic
process. In such process consumers are usually likely to consider any COO cues as
relevant information and, accordingly, employ such information to make the
evaluation of the products (Liu & Johnson, 2005). In fact, as Westjohn and
Magnusson (2011) argued, until some years ago consumers were usually conceived
as cognitive and rational decision makers. However, recent researches (Liu &
Johnson 2005; Martin et al. 2011) have proved that COO can be considered as an
automatic and unconscious process too and, consequently, consumers cannot actually
be certain about the country correlations they make (Herz & Diamantopoulos, 2012).
Since the study of country stereotypes presents several theories about brand
evaluations activation, according to Herz and Diamantopoulos (2012), it would be
interesting to analyze how such evaluations can differ according to the type of
activated country stereotype. Indeed, as it cannot be sure whether a certain country
stereotype (e.g., cognitive for Austria and affective for Portugal) can be applied
independently of the product category involved, Herz and Diamantopoulos (2012)
stated that future research should be conducted in order to investigate how country
stereotype activation can differ between national cultures, especially between
Country of origin and stereotypes’ influence on the brand evaluation of a product
6
individualist and collectivist ones. Therefore, as the authors already investigated the
effects among some countries such as Italy, Brazil, Austria, and Switzerland, they
maintained that it would be interesting to analyze other national cultures such as
Spanish on one hand (collectivist) and German on the other hand (individualist).
Accordingly, the main research question to be answered by this study is:
Do functional and emotional country stereotypes have the same impact on
consumers’ brand evaluation and classification of a product?
Country of origin and stereotypes’ influence on the brand evaluation of a product
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1. Overview of chapters
1.1 Detailed explanation
1) Introduction: In this first section, the context, background, and the purpose of this
Master thesis will be outlined.
2) Literature review: General part: This section will be dedicated to define the basic
topics, starting from the concepts of culture and stereotypes.
3) Literature Review: Outlining COO effect: In the first part of this section, it will be
provided the definition and scope of COO. Then, it will be explained how COO can
be activated and how can influence consumers’ product evaluations. In the second
part, the factors influencing COO, such as consumer’s characteristics, ethnocentrism
and animosity will be described. In addition, special attention will be dedicated to the
cognitive, affective and normative mechanisms for COO effects and the importance
of Country image (CI) and Brand CO recognition in consumers’ perception,
highlighting the potential advantaged and disadvantages of possible brand
misclassifications.
4) Methodology: In this section the foreseen conduction of the research will be
explained.
5) Empirical Findings and Discussion of Results: In this part, special attention will be
given to the research hypotheses and purposes, in addition to the description of the
instruments used. Then, after having analyzed the obtained data through statistical
methods, a detailed discussion on the attained results will be provided.
6) Conclusions: In this part, conclusions will be drawn according to the results obtained
and some implications and limitations will be described.
Exposé: Country of origin and stereotypes’ influence on the brand evaluation of a product
1.2 Outline of chapters
CHAPTER I: Introduction
1. Introduction
1.1 Context and background
1.2 Relevance of the topic
1.3 Purpose of the thesis
1.4 Research question
1.5 Outline of the thesis
CHAPTER II: Literature review (General part)
2. Theoretical Background
2.1 Introduction to the topic
2.2 Definitions
2.2.1 Definition of culture
2.2.1.1 Hofstede and Schwartz evidence
2.2.1.2 The Globe study
2.2.2 Definition of stereotypes
2.2.2.1 National stereotypes
2.2.2.2 Emotional and functional country stereotypes
2.3 The framing concept
2.4 Definition and scope of COO
2.4.1 COO as an information cue
2.4.1.1 Extrinsic cues
CHAPTER III: Literature Review: (Outlining COO effect)
3. COO influence on consumers’ brand evaluation and classification
3.1 Activation of COO effect
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3.2 Factors influencing COO effect
3.2.1 Consumer characteristics
3.2.2 Emotions
3.2.3 Companies’ reputation
3.2.4 Ethnocentrism
3.2.5 Animosity
3.2.6 Purchasing intention
3.2.7 Country image
3.3 Cognitive, affective and normative brand evaluations
3.4 The importance of brand image: from COO to Brand CO recognition
3.4.1 Determinants of Brand CO recognition
3.4.1.1. Brand denomination congruence
3.4.1.2 Brand equity
3.4.1.3 Product category dominance
3.4.1.4 Product category involvement
3.4. 2 Effects of Brand CO recognition misclassifications
3.4.2.1 Losses and gains of brand image and purchasing intention
3.4.2.2 Misclassification effects on weak and strong brands
CHAPTER IV: Methodology
4.1 Research approach (hypotheses)
4.2 Data collection
4.2.1 Methodology and samples
4.2.2 Survey design
4.2.3 Pre-test
4.2.4 Original study
10
CHAPTER V: Empirical Findings and Discussion of Results
5. Empirical Study
5.1 Research hypotheses
5.2 Research objectives
5.3 Analysis of the survey
5.4 Hypotheses testing
5.5 Discussion of Results
CHAPTER VI: Conclusions
6.1 Limitations
6.2 Theoretical implications
6.3 Managerial implications
6.4 Further research
Bibliography
Table of Figures
Table of Appendices
11
2. Theoretical Background
As I already stated above, in this study it is my intention to investigate the Country of
origin effect and the power of stereotypes on consumers’ brand evaluations and
classifications. Therefore, I will take as a reference the previous theories and models
adopted by authors dealing with such subjects and their related topics too, such as
the relation between country stereotypes, COO, Country image, and Brand CO
recognition.
2.1 Stereotyping process
The literature concerning stereotyping distinguishes two kinds of processes: a
controlled and an automatic one ( M a r t i n e t a l . , 2 0 1 1 ) . On one hand, most
researchers h a v e stated that it is a controlled process and that s o m e cognitive
resources are needed. On the other hand, from recent research it emerged that
such process can be considered automatic, resulting from an exposure to a
stereotypical item in the environment. Such process implies that a stereotype is a
representation of information that needs to be activated before it can be employed to
make evaluations (Martin et al., 2011).
2.2 The framing concept
As it was discussed above, people are naturally inclined to stereotype.
Now, I would like to focus on the existent link between stereotypes and
emotions. In fact, it is not something new that the two concepts are interrelated. This is
because when one person stereotypes he or she also delivers emotions included in the
process. In this regard, according to many authors like Gross and D’Ambrogio (2004),
Orth, Koenig and Firbasova (2005) such process is related with cognitions and
emotions and it can be “framed”. Indeed, through a review of the literature about this
process, it emerged that “framing” can produce emotions, which subsequently
influence the level of cognitive exertion and, in turn, forms the so called “framing
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effect”. Clearly, such effect occurs during the decision making process. In this regard,
Gross and D’Ambrogio (2004) provided a cognitive-affective trade off pattern with the
aim of clarifying the framing effect resulting from a trade-off among the cognitive
exertion necessary to determine the supposed values of an alternative and the affective
value of such alternative. According to this model, people usually tend to spend more
cognitive exertion taking decisions framed in terms of losses rather than in terms of
gains. This is due to the perceived risk involved when taking a decision, a concept that
will be described in detail in the following chapters. In addition to this component,
according to Orth, Koenig and Firbasova (2005) also the context plays a key role in the
emotional response. In fact, if one takes into account just people’s emotions without
considering the motivations for such responses, he or she might leave out relevant
framing effects.
As far as the causes of message framing effects are concerned, from recent
researches it emerged that the most traditional ones are: involvement, personal
experience, age, and education. However, there are also social dimensions that include
national culture. In fact, according to Aaker and Sengupta (2000), the dissimilarities
emerged in their research studies may be attributable to individual dissimilarities in
thinking processes that subsequently were discovered to be formed by cultural context.
In this context, the familiarity and recognition of several emotions emerged to be cross-
culturally strong. Nevertheless, relevant dissimilarities emerged too. Indeed, such
findings confirmed Hofstede’s theories, according to which, emotional affection is
affected by culture and that some cultures freely envisage emotions, whereas, others
tend to hinter them (Hofstede, 1984). Accordingly, it can be stated that emotional
response models vary across cultures.
Now, I would like to apply the framing concept described so far, to the main
topic of my research, that is, the Country of origin (COO) effect. In this regard,
Nagashima (1970) stated that consumers usually classify and assess brands according
to the features of the related products. However, when such consumers have a limited
knowledge and familiarity with a certain product, their assessments will be mainly
based on surrogate or replacing indicators. For instance, price may be employed to
assess the quality of a new soft drink. Such replacing indicators phenomenon has been
denominated "stereotyping”. In this regard, Nagashima (1970), through several
13
research studies, measured the change of attitudes of a group of American managers
towards some selected countries: Japan, UK, Germany, Italy and France. In fact, the
author stated that the "Made in” concept represents the “picture, the reputation and
stereotype” that businessmen and consumers associate to the products of a specific
country or specific historical event. Indeed, from several research studies it emerged
the existence in consumers’ minds of a sort of "hierarchy between countries" according
to which the evaluations of a country are developed. Such evaluation scale is mainly
based on the level of economic development of a country (Nagashima, 1970). For
instance, in the early nineties, for U.S. consumers, American products represented their
first choice, followed by German and Japanese ones. However, as Bilkey and Nes
(1982) argued, those rankings can be highly variable over time. Furthermore, the effect
is even more evident when referring to products coming from a country recognized as
the undiscussed leader in a particular category (e.g. Italian fashion, French perfumes,
Swiss chocolate, etc.). In this regard, Cattin, Jolibert and Lohnes (1982) showed that
American consumers preferred mainly machinery made in Germany, due to the
historical tradition boasted by this country in industrial goods, rather than the same
goods made in the U.S.
From this review, two important conclusions can be drawn: firstly, it can be
stated that stereotypes and emotions are strongly linked in a frame according to which
individuals associate one product category to a specific country without even having to
think about it. Secondly, as it was also confirmed by a study conducted by Roth and
Romeo (1992), the predisposition to purchase a product from a certain country will be
favourable when the country image is a relevant feature for the product category. This
concept will be further described in the following subchapter.
2.3 The COO concept
As regards the COO topic, according to Balabanis and Diamantopoulos (2004),
COO effect is neither uniform across all product categories nor between all the
countries. This effect is moderated mainly by the knowledge and familiarity with
such product and the product brand. Moreover, it is also moderated by the related
14
degree of involvement and experience as well as consumer’s ethnocentrism and
socio-demographic characteristics (Balabanis & Diamantopoulos, 2004).
2.3.1 COO effect and Product country image
One of the most important COO aspects is the relation between the COO of a
certain country and the intention to purchase products made in such s p e c i f i c
country. Indeed, consumers' perceptions about a determined country will be
extremely important when taking a purchasing decision (Diamantopoulos et al.,
2011). Since the first studies on the COO effect, researchers have been realized
that when certain product categories were associated to a particular country, they
were able to generate strong COO effects on consumers’ mind (Diamantopoulos et
al., 2011). The intensity of this effect seems to be able to hinder the negative
reputation of a particular country. In the extant literature, such phenomenon is
known as Product-Country Image (PCI) and it is considered to be one of the most
powerful components of COO effect (Diamantopoulos et al., 2011).
2.3.2 Country image perceptions
Furthermore, also the cross-national component of COO is important. Research has
shown that country image perceptions may vary depending upon the consumer's
nationality (Diamantopoulos et al., 2011). Several studies have demonstrated that
positive images of a country influence consumers’ evaluations of the products made
in such country and the related purchasing intention too (Diamantopoulos et al.,
2011). Likewise, the image of a country influences the perception of its related
brands. Thus, a positive image of a country contributes to the good perception of its
related brands (Diamantopoulos et al., 2011).
2.3.3 COO effect and Brand origin recognition
Recently, the relation between brand and COO has been analysed under a new
perspective. Indeed, greater emphasis has been given to what the brand is able to
15
evoke in consumers’ mind rather than the mere place where the production of such
products takes place. Indeed, it has been gradually given much more importance to the
BO concept that somehow tries to overcome the traditional paradigm of COO
(Balabanis & Diamantopoulos, 2004). In this regard, according to Thakor and Kohli
(1996) BO corresponds to:
“[...] the place, region or country to which the brand is perceived to belong
by its target consumers” (Thakor & Kohli, 1996, 31).
2.3.3.1 Categorization theory
According to Chowdhury and Ahmed (2009), “Categorization theory” reveals to be
very useful because it permits better comprehension of consumer behaviour. In this
regard, Balabanis and Diamantopoulos (2011) stated that categorization can be
considered as a conceptual operation that involve considering an object as a sample of
a category. This is because nowadays consumers have to deal with difficult choices on
a daily mode, as they dispose of several products characterized of both common and
unique peculiarities. According to such theory, mindsets related to a certain stimulus
are connected to mindsets related to the activated category. Consequently, when
consumers deal with a country name related to a positive image, consumers will imply
positive opinions about the product produced in such country. Conversely, according
to Chowdhury and Ahmed (2009), when the image of a country is not good,
consumer’s opinion of the product will be negative accordingly. Indeed, such image is
able to strongly influence and develop consumers’ perceptions of a determined brand
related to such country. This is because, when identifying the product origin, also the
perception of other attributes of such products will be influenced.
16
2.3.3.2 Cognitive process
As far as the cognitive process is concerned, Balabanis and Diamantopoulos (2011)
stated that according to Obermiller and Spangenberg (1989), COO’s cognitive
components influence brand evaluations or attitudes indirectly.Indeed, consumers by
means of COO can deduce brand attributes (e.g., reliability) that can be later employed
to make attitudes or quality evaluations.
2.3.3.3 Affective and normative process
As regards the affective and normative processes, COO can also provoke
emotional considerations of a brand that may have the priority on the cognitive
inferential evaluations. In fact, affect and attachment to a certain country usually
creates the ground of such responses, for instance consumer animosity, consumer
affinity, and home country bias” phenomena. Affective and normative processes are
considered to be responsible for some discrepancies in COO influence on brand
evaluations and purchase intentions. Indeed, as Balabanis and Diamantopoulos
argued:
“[...] Peterson and Jolibert’s (1995) and Verlegh and Steenkamp’s (1999) meta-
analytical evidence indicates that COO influence on brand evaluations is
substantially stronger than that on purchase intentions” (Balabanis &
Diamantopoulos, 2011, 98).
This is because according to Balabanis and Diamantopoulos, Peterson and Jolibert
17
assigned this inconsistency to the major degree of personal commitment included in the
purchase intentions when compared to perceptual considerations, which leads
consumers to answer with less interest. In addition, we need to consider that brand
evaluations have fewer antecedents than purchase intention, and accordingly the effects
are weaker. Clearly, one needs to take in mind that all these studies consider
consumers as people willing and capable of classifying brands to their COOs correctly.
In order to be sure about this aspect, COO is not revealed during the research process.
Nevertheless, consumers constantly associate brands to their COOs by employing
processes that are not perfect. Anyway, it emerged that consumers’ preferences are not
defined by the “real” COO category but rather by the category that consumers have in
their memory. Such wrong perceptions may be provoked by a lack of information,
ignorance, or as Balabanis and Diamantopoulos (2011) stated, even because of planned
vagueness provided by firms worried about consumers’ possible effects to an adverse
origin.
3. Review of Literature
In the following section, I selected and categorized the existing literature about the
topics of my study. As the main aim is the junction of more than one topic, the
literature review will cover two main block studies: The first one will deal with the
definition of culture and stereotypes, while the second one with the Country of origin
effect and its related topics such as Brand origin recognition and more specifically,
Brand CO recognition.
18
3.1 Definition of culture
Title Reference Content
The GLOBE
study:
applicability of
a new typology
of cultural
dimensions for
cross- cultural
marketing and
advertising
research
Terlutter, R.,
Diehl S., &
Mueller B.
(2006)
Cultural dimensions frameworks:
1.Hofstede’s cultural dimensions (five value
dimensions grounded on the main problems faced by
most societies);
2.Schwartz’s cultural dimensions (seven national-
cultural areas);
3.Inglehart’s World Values Survey (two core
dimensions: the polarization between traditional
values and secular-rational values; and the
polarization between survival values and self-
expression values);
4. GLOBE study: a recent and innovative framework
(nine cultural dimensions) that make a distinction
among societal values and societal practices).
On the misuse
and
misinterpretatio
n of dimensions
of national
culture
De Mooij, M.
(2013)
Differences among the methodology employed by
Hofstede and GLOBE models are very important. The
misapplication of these models can be caused by
misidentification of values and questions.
-
High power,
low power, and
equality:
culture beyond
individualism/
Collectivism
Oyserman,
D. (2006)
Through a meta- analysis it is explained that
individualism and collectivism are orthogonal.
Accordingly, it is necessary to test their effects on
psychological processes separately. This is because it
is assumed that both of them exist to some extent in all
societies, and influence psychological processes when
they are made notable.
19
3.2 Definition of stereotypes
Title Reference Content
The impact of
national
stereotypes on
the country of
origin effect: A
conceptual
framework
Chattalas, M.,
Kramer,
T.,&Takada,
H. (2008)
The dimensions of perceived warmth and perceived
competence of national stereotypes hold COO
effects.
Main findings: The Stereotype Content Model is a
helpful instrument to understand the link among
national stereotypes and COO-based consumer
evaluations of products because it shows a better
theoretical improvement in study of stereotypes.
Activation of
Country
Stereotypes:
Automaticity,
Consonance,
and Impact
Herz, M.F. &
Diamantopoul
os, A. (2013)
COO can be considered as an automatic and
unconscious process too and, accordingly,
consumers cannot actually be certain about the
country correlations and brand evaluations they
make.
Countering
negative country
of origin effects
using imagery
processing
Martin, B.
A.S., Lee, M.
S. W. and
Lacey, C.
(2011)
COO can be viewed as a stereotype that consumers
can employ as a proxy for product quality. Most
researchers state that stereotype activation occurs
consciously. Indeed, it is considered a process that
leads to stereotypic reflections because they are more
accessible in memory.
20
3.3 The framing concept
Title Reference Content
Additivity
Versus
Attenuation:
The Role of
Culture in the
Resolution of
Information
Incongruity
Aaker, J.L.
and Sengupta,
J. (2000)
This paper deals with the causes of message
framing effect such as: involvement, personal
experience, age, and education. However, there
are also social dimensions that include national
culture. Indeed, the dissimilarities emerged in
this research study may be attributable to
individual dissimilarities in thinking processes
that subsequently were discovered to be formed
by cultural context. In this context, the
familiarity and recognition of several emotions
emerged to be cross-culturally strong.
Nevertheless, relevant dissimilarities emerged
too. Indeed, such findings confirmed Hofstede’s
theories.
Cross-national
differences in
consumer
response to the
framing of
advertising
messages: An
exploratory
comparison from
Central Europe
Orth, U.,
Koenig, F., &
Firbasova, Z.
(2007)
The findings of this research article in addition to
provide diverse emotional, cognitive and attitudinal
responses across countries, also illustrate differences
in how positively versus negatively framed messages
are being processed by consumers.
It emerged that the context plays a key role in the
decision and evaluation process. It emerged that also
the content of emotional reactions is very important.
Indeed, if one takes into account merely people’s
emotions without considering the motivations for such
reactions, he or she would leave out inferred but
relevant framing effects.
21
3.4 Definition and scope of COO effect
Title Reference Content
Country of
origin effects: a
literature review
Al-Sulaiti, J. &
Baker,M.
(1998)
This article offers a detailed literature review,
mainly focused on COO effect on consumer
perceptions of products. Different definitions and
theories about COO effects are structured in a
chronological way.
Main findings: It emerged that consumer perceptions
considerably vary according to the product and
service category and COO. COO is considered a
key element in consumer’s perceptions about
products and services, particularly when little
information is provided. Moreover, the paper
review dwells upon other several topics related to
COO and CI such as stereotyping, product
evaluation and COO effects on service decisions.
3.5 Outlining COO effect
Title Reference Content
An examination
of the effects of
partitioned COO
on consumer
product quality
perceptions
Chowdhury,
H.K., &
Ahmed, J.U.
(2009)
This article dwells upon the effects of COO
associations on consumer product quality
evaluations. The main purpose is to analyze the
cognitive processes by which COO information
influences consumer’s evaluation of a product.
22
Country of
origin, brand
image
perception, and
brand image
structure
Koubaa, Y.
(2008)
The aim of this article is to empirically contrast two
perspectives about the influence of country of origin
image (COI) on purchase intentions (“orthogonality”
and “irradiation” perspectives). Main findings: from
the analysis it emerged that COI influences
purchasing intentions indirectly because its influence
is completely mediated by brand image. Such
findings are related to the “irradiation” and make
evident that consumers’ COI perceptions are already
included in brand image evaluations.
Brand origin
recognition
accuracy: its
antecedents and
consumers'
cognitive
limitations
Saeed, S.,
Shimp, T., and
Sharma, S.
(2005)
Analysis on factors that moderate consumer bias of
national origins of products.
First study: consumers are assumed to have a good
knowledge of brand origins, and such knowledge
considerably influences product quality evaluations
and brand attitudes.
Second study: it was concluded that BO recognition
is mainly grounded on consumers' associations of
brand names related to languages that infer country
origins. It emerged that many previous researches
had overestimated the influence that COO has on
consumers' product evaluations.
Gains and
Losses from the
Misperception
of Brand
Origin: The
Role of Brand
Strength and
Country of
Origin Image
Balabanis, G.
&
Diamantopoul
os, A. (2011).
From recent COO research it emerged that
consumers frequently ignore the real origin of many
(even the most famous) brands and that they often
classify a brand to the incorrect COO.
The purpose of the study is to empirically test the
effects of BO misclassification and consumers’
incapability to categorize and match a brand to a
COO on brand image evaluations and purchase
intentions.
23
4. Hypotheses
The last part of the theoretical framework will include ten hypotheses. As I already
stated above, mounting empirical evidence pointed out that some countries are usually
linked more with an emotional country stereotype, while others with a functional
country one. For instance, on one hand the country image of Italy and France convey
hedonism, and accordingly indicate an emotional country stereotype. On the other hand,
countries such as Switzerland or Austria convey utilitarianism, thus indicating a
functional country stereotype. When such stereotypes are linked to a brand, consumers’
evaluations can be influenced by them (Martin et al, 2011). This is because of the power
of stereotypical cues that instigate such associations that can happen unconsciously.
Therefore, the following hypothesis can be formulated:
“H1a: COO cues from a country with a functional country stereotype have a
stronger impact on cognitive brand evaluations than COO cues from a country
with an emotional country stereotype” (Herz & Diamantopoulos, 2012, 405).
“H1b: COO cues from a country with an emotional country stereotype have a
stronger impact on emotional brand evaluations than COO cues from a country
with a functional country stereotype” (Herz & Diamantopoulos, 2012, 405).
Accordingly, it is my interest to verify whether my findings will be in line with the
results of Herz and Diamantopoulos (2012) and the previous Liu and Johnson (2005).
Indeed, such authors, by taking into account other countries, found out that the presence
of a functional country stereotype conducts to stronger cognitive brand evaluations. This
is because it conveys a relevant major utilitarian behaviour in relation to a brand. In
addition, it leads also to a better perceived brand trust and quality of a product. On the
other hand, according to Herz and Diamantopoulos (2012), it emerged that the presence
of an emotional country stereotype conveys a much stronger hedonic behaviour in
relation to the brand. Moreover, it provides a much stronger affect towards the brand,
24
and, sometimes even a real “brand love” (Herz &Diamantopoulos, 2012, 405).
Accordingly, should H1a and H1b be rejected, it would be interesting to see whether the
country stereotypes have remained the same or whether have changed during the last
few years.
As far as the Brand CO recognition topic is concerned, so far most researches
dealing with the determinants of such concept have focused almost exclusively on the
characteristics of the consumers such as Paswan and Sharma (2004). In this regards,
Martin and Cerviño (2011) stated that also variables like country image and product
category are significant and proposed an integrative framework of brand CO recognition
antecedents. As regards the consumer and brand characteristics, first of all they argued
that education plays a key role in recognizing Brand CO. Indeed, they stated that persons
with higher income and education are more likely to recognize a brand CO properly.
Thus, the following hypothesis can be formulated:
“H2: Education is positively related with Brand CO recognition” (Martin and
Cerviño, 2011, 538).
In addition to education, there is a correlated variable that has to be taken into account
while analysing the determinants of Brand CO recognition, that is, the experience
consumers can gain with brands and products. Such experience may derive from several
different sources and circumstances, such as a strong internationalization of some
brands. Even though Samiee et al. (2005) stated that young consumers have a good
knowledge of foreign brands and pay particular attention to the related CO, Martin and
Cerviño (2011) stated that older and more experienced consumer may be more aware of
Brand CO recognition. Therefore, the following hypothesis can be formulated:
“H3: Experience with brands is positively related with Brand CO recognition”
(Martin and Cerviño, 2011, 539).
25
Recent studies (Harun A., Wahid A. N., Mohammad O., Ignatius, J., 2011) have further
developed the Brand CO recognition concept presenting a more evolved paradigm for
evaluating the COO effect, called the culture of brand origin (COBO), which focuses on
the cultural linguistic factors (phonetics, morphology, etc. ) applied to brand in order to
stimulate people’s positive perception. Therefore, according to this new trend, linguistics
applied to brand has a primary role in indicating the origin of a product since the
language is considered the heart of every culture. In this regards, according to the
categorization theory, brands spelled in a determined language prompt consumers to a
specific CO (Chowdhury and Ahmed, 2009). Indeed, for example consumers may
associate “Barilla” to Italy or “Louis Vuitton” to France. Moreover, from recent
researches it emerged that brand denomination incongruence negatively influences
consumers’ ability to detect the true COO of a product (Balabanis and Diamantopoulos,
2008). Therefore, the following hypothesis can be formulated:
“H4: Congruence between a brand’s name and its true origin is positively related
with Brand CO recognition” (Martin and Cerviño, 2011, 540).
As far as the brand equity concept is concerned, certain brands of a specific field
may have a much higher brand equity compared to others. This can be due for example
to a better and more favourable image and worldwide reputation. Usually, they are
MNEs brands offering high quality products at a premium price. (Martin and Cerviño,
2011). As companies with a higher brand equity usually adopt a family branding
strategy, the knowledge of such companies’ CO may make easier for consumers to
deduce the CO of their brands. Thus, the following hypothesis can be formulated:
“H5: Brand equity is positively related with Brand CO recognition” (Martin and
Cerviño, 2011, 540).
26
With regard to product category and country characteristics, as it was already
stated above, consumers tend to associate certain product categories to specific COOs.
The concept of dominance was explained by Balabanis and Diamantopoulos (2008),
defining it as a source that is often and promptly called forth in a product category.
Frequently, the reasons for such dominance have to be searched in some product
features such as design and quality. Over time, thanks to a particular product category, a
country may improve its reputation, such as Switzerland with watches and France with
perfumes. Accordingly, another hypothesis can be formulated:
“H6: Product category dominance is positively related with Brand CO
recognition” (Martin and Cerviño, 2011, 540).
Another antecedent of CO recognition correlated with the one described above is
the consumers’ involvement in purchasing decisions that can differ according to a
product category. The motivation is that, when consumers buy products from different
categories, they usually sense different levels of risk (Martin and Cerviño, 2011).
Accordingly, risk is often considered as an antecedent of involvement. Indeed, when
there is stronger perceived risk, consumers tend to spend more time looking for
important information and, accordingly, they are more involved in rational decision-
making processes. Thus, as Mittal (1989) maintained, diverse categories of products
result in diverse perceived risk and, accordingly, in a different involvement level. This
involvement may happen and affect either the product category or brand levels. As
regards the categories, these can vary for example in the price and in the self-
expressiveness of a certain product. Thus, it is assumed that when there is a strong
consumer involvement in a certain product category, it will reflect a favourable effect on
consumers’ ability to correctly classify brands related to such category. Therefore, the
following hypothesis can be formulated:
27
“H7: Consumer involvement with a product category is positively related with
brand CO recognition” (Martin and Cerviño, 2011, 541).
Another important determinant of Brand CO recognition is the image of a
country. Indeed, several studies have demonstrated that positive images of a country
influence consumers’ evaluations of the products made in such country and the related
purchasing intention too (Diamantopoulos et al., 2011). Likewise, the image of a country
influences the perception of its related brands. Thus, a positive image of a country
contributes to the good perception of its related brands (Diamantopoulos et al., 2011)
reinforcing the brand CO recognition Therefore, another hypothesis can be formulated:
“H8: Better country image is positively related with Brand CO recognition”
(Martin and Cerviño, 2011, 541).
Moreover, it is my interest to discover what the possible consequences of a brand
origin misclassification are. Indeed, from a recent COO research it emerged that
consumers frequently ignore the real origin of many (even the most famous) brands and
that they often classify a brand to the incorrect COO (Balabanis & Diamantopoulos,
2011). The purpose of Balabanis and Diamantopoulos’s study, conducted in 2010, was
to empirically test the effects of BO misclassification and consumers’ incapability to
categorize and match a brand to a COO on brand image evaluations and purchase
intentions. As regards their results, they showed that both misclassification and no
classification usually have negative consequences on both brand evaluations and
purchase intentions. Moreover, it emerged that even strong brands are subject to such
misclassification and, that it is vital for companies to make sure that consumer know a
brand’s real COO (Balabanis & Diamantopoulos, 2011). In this regard, I need to further
explain that when the COO of a brand is not clearly identified, consumers are used to
connect the related behaviours and evaluations to the COO from which they are
convinced the brand has its origin. Consequently, consumers may link a brand with a
28
weaker COO than its actual origin. In this case, BO misclassification is supposed to
provoke losses (i.e. a less positive brand perception and weaker purchase intention). The
opposite is also possible for the same reason, that is, a favourable misclassification (i.e.,
classification to a COO that is stronger than the true COO) is supposed to convey gains.
Thus, the following adapted hypothesis from Balabanis and Diamantopoulos (2011) can
be formulated:
“H9a: Adverse COO misclassification of any brands leads to misclassification
losses in terms of country image perceptions.
H9b: Favourable COO misclassification of any brands leads to misclassification
gains in terms of country image perceptions.
In this concern, I need to further explain that H9a and H9b are related only to the effects
of misunderstanding a brand’s COO in relation to its true COO. Thus, I do not indicate
that, in case of a negative misclassification the brand will be related to a COO with a
negative image but rather with a less positive image than the brand’s true COO. As a
result, as it can be easily understood, less strong brands can benefit much more from
positive COO misclassification than strong brands. This is because, according to the two
authors, a favourable misclassification concerning the quality and attitude toward a
product, may reward the effect of a less strong brand (Balabanis &Diamantopoulos,
2011). In fact, strong brands that have their origin in countries with a positive image do
not need to further improve it. Therefore, according to Balabanis and Diamantopoulos
(2011) the following hypotheses can be formulated:
H10a: Adverse COO misclassification of strong brands results in greater country
image perception losses compared with weak brands.
H10b: Favourable COO misclassification of weak brands results in greater
country image gains compared with strong brands.
29
In this regards, I need to point out that even though H10a and H910b represent an
occasion to offer a better comprehension on how the power of a brand is connected to its
perceived COO, however, COO can only be partly responsible for a brand’s strength.
Indeed, the misclassification effects that do not differ among strong and weak brands, as
it is expected from H9a and H9b, would point out that COO and brand power are cues
that independently influence customers’ consumer behaviour.
It is my interest to verify whether Balabanis and Diamantopoulos’s hypotheses
can be applied to the countries I selected and, if possible, to discover the potential
benefits or drawbacks that such countries may obtain. In fact, on one hand it would be
interesting to see what Spain, a very collectivist country could do in order to improve its
image. Indeed, during the last few years Spain has been facing a severe economic crisis
that has been tarnishing the image of the country inevitably (Schwartz, 2013). On the
other hand, Germany still benefits of a good image all over the world, especially for the
good economic situation and general development of the country. In this regard, the
question is: does also a country like Germany need to improve its image in order to
continue to be among the European country leaders? (Hallerberg, 2013).
5. Methodology
The above mentioned hypotheses will be tested through a quantitative research analysis,
more precisely with a self-administered online questionnaire. Indeed, the required
information will be collected through the survey software Sphinx. I chose this kind of
method to reach a big number of respondents and to collect representative data for each
country in a standardized and economic way.
In this study two different groups of participants will be recruited to fill in the
survey: on one hand Spaniards, and, on the other, Germans. The questionnaire will be
spread to both social media pages (such as Facebook, Twitter, Linkedin,
Xing) and personal contacts, including 300 persons (150 Spaniards and 150
Germans, mainly graduated students or young workers of an age bracket between 18
and 40 years). According to Herz and Diamantopoulos (2012) such target groups may
30
represent a good sample because so far their hypotheses have not been tested to
such countries. In this regard, a similar sample was used by Roth and Romeo
(1992) for their researches. Indeed, in their investigation, questionnaires were
distributed to graduated students in Ireland, Mexico, and the United States. The
authors explained that they decided to rely on graduate students who usually
have a better knowledge and are more familiar with several product categories
and countries. This allowed them evaluating several many product-country
matches, therefore offering more generalizable findings. For such investigation,
the total responses were 139 for the U.S., 130 for Mexico, and 99 for Ireland
(Roth & Romeo, 1992). Another motivation for such choice is due to a geographical
reason: as I am currently studying in Germany, I have the chance to meet and get to
know more German students. This represents a good asset for me because most of
my friends and acquaintances are collectivist (Italian, Spanish, Portuguese, Greek
and from South America). Accordingly, also thanks to my language skills I will
translate the survey in Spanish and German in addition to the original English
version that will be reviewed by some native speakers. In this regard, a pre-test will be
useful to verify whether respondents understand the questions or not and whether
there may be some differences in the three versions of the questionnaire. Such pretest
will be sent to 14 people as Hamzaoui-Essoussi, Merunka and Bartikowski (2011) did
in their research study about BO and Country of manufacture influence on brand
equity.
The survey consists of 45 questions and can be divided into three thematic parts
whose transitions are defined by short instructions. Respondents are introduced with a brief
covering letter aiming at providing information and explaining the topic, objectives and
time frame of the survey. Moreover, it guarantees that respondents’ answers are
anonymous and provides them with an email address that they can contact in case of
questions, doubts or queries. As far as the category of products is concerned, three main
categories will be considered: on one hand the food and beverages sectors and, on the
other, the clothing, leather and footwear sector.
31
6. Work plan
Time Phase Description
09.09.13 – 21.10.13 Exposé Selecting a topic, literature review and exposé
drafting
01.11.13 – 30.11.13 Desk Research -
Theory
Intensive literature review and draft of the
theoretical part of the Master Thesis
01.12.13 – 19.12.13 Intermediate
presentation Creating the intermediate presentation
01.12.13 – 21.12.14 Methodology Studying the methodology, creating the
online questionnaire
07.12.13 – 15.12.13 Field Research Pre-test of the online survey
15.12.13 – 15.02.13 Field Research Launching the online survey
06.01.14 – 20.01.14 Intermediate
Report Finalising the intermediate report
16.02.14 - 15.03.14 Analysis Finalising the method for the analysis,
analysis of the online questionnaire results
15.03.14 – 31.03.15 Thesis Drawing implication and conclusions
01.04.14 – deadline Finalisation
Reviewing the work (adaptation &
corrections), preparing final report and
presentation
32
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