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Country of Origin Effects and Consumer Based
Brand Equity
Conference Paper · July 2000

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Ravi Pappu

Pascale Genevieve Quester

University of Queensland

University of Adelaide

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Australia Please address all correspondence to Ravi Pappu Associate Lecturer School of Marketing and Management Faculty of Economics.au . 2351 NSW Australia Phone: +61 2 6773 2965 Fax: +61 2 6773 3914 Email: rpappu@metz. Australia Associate Professor Pascale Quester.Country of Origin Effects and Consumer Based Brand Equity Working Paper Ravi Pappu. Business and Law University of New England Armidale.une. The University of New England. The University of Adelaide.edu.

are known to affect brand equity (Leclerc. Brand equity is treated as a combination of brand awareness. The literature offers a multitude of definitions for brand equity (e. Researchers (e. Simon & Sullivan 1993. Douglas & Nonaka 1985). The influence of COO effects on brand equity is yet to be empirically tested for. which are the perceptual components of brand equity as conceptualized by Aaker (1991). Despite prolific research in the area of COO effects (Peterson & Jolibert 1995). brand equity and COO effects. Brand equity is argued to be a key indicator of the state of the health of a brand.g.Country of Origin Effects and Consumer Based Brand Equity Working Paper Abstract Globalization and the rapidly increasing international business are making brands from one country increasingly available to consumers in other countries. Srivastava & Ruekert 1994) have suggested that COO effects may be part of the brand equity of certain brand names. the concept of brand equity is not well understood. Park & Srinivasan 1994.g.g. based on consumer perceptions. Johansson & Chao 1984. perceived quality and brand loyalty. consistent with definitions offered by Aaker (1991) and Keller (1993). This research integrates and extends theory in two important areas of marketing. brand associations. Farquhar 1989. Even brands with foreign sounding names. Srivastava & Shocker 1993). Shocker. Han 1989. But. COO associations are known to . This research conceptualizes brand equity from a marketing perspective. The COO could affect a brand’s equity by generating secondary associations for the brand (Keller 1993). From a consumer’s perspective. it becomes important for marketers to understand the complexity of brand equity in the international context. Brand equity has acquired prominence in the marketing literature since 1980s (Chernatony. Halliburton & Bernath 1995). the present research integrates literature from both the areas to provide a theoretical framework explaining the impact of country image on consumer based brand equity. Johansson. 1977) as well as country level (Martin & Eroglu 1993) images. Study of the above area is generally called ‘country of origin effects’ (Samiee 1994). In order to address some of the issues. Marketing Science Institute 2000). The principal contribution of this research is a theoretical framework explaining the influence of COO effects on a brand’s equity. We conceptualize country image as a combination of consumers’ product level (Nagashima 1970. Thus. The COO of a product/brand is found to influence consumers’ product evaluations and purchase decisions (Erickson. how does a brand’s COO affect the equity of the brand in a selected product category? Does consumers’ notion of country image affect various components of a brand’s equity? Does the affect of country of origin differ from one product category to another? These remain unanswered questions in the marketing literature. Research on building and measuring brand equity is one of the current priorities for marketing researchers (e. This research is based on the premise that the COO generates COO associations in consumers’ minds and consequently the notion of a country image. Schimidt & Dube 1994). particularly in the international context (Onkvisit & Shaw 1989). for a selected product category and in a given market. there appear to be no studies explaining how the COO effects affect consumer based brand equity. The main objective of this research is to understand the relationships between country of origin (COO) effects and consumer based brand equity. Marketing managers are exhorted to build and track brand equity with a view to creating a sustainable competitive advantage for a firm (Aaker 1991).

Section four of the questionnaire includes conjoint questions. New York: Free Press. Section one of the questionnaire includes questions about respondents’ prior knowledge. Consumers’ COO associations could affect consumer based brand equity by influencing the dimensions/components of brand equity. Section five includes questions on demographics. while the last five questions measure perceived quality. A nested design based conjoint methodology coupled with a Hierarchical Linear Bayes Model is used to estimate parameters. treated as a multi-dimensional construct as a combination of consumers’ product level as well as country level images. sophistication and ruggedness. A convenience sample of undergraduate business students will be drawn at an Australian university for this exploratory study. Respondents will be asked to rate various product profiles. Green & Young 1996). Scales for these measures have been provided in Aaker (1996a). Major trading partners of Australia (e. Cheong & Congdon 2000) is used to estimate the model. 2 . excitement. 1977) and Martin and Eroglu (1993). Section three includes questions measuring various components of brand equity namely. Japan. USA) are the countries included in the study. competence. brand awareness. Lawrence. Bryk. For example. Indirect measures of brand equity are used in this study. which are provided by Aaker (1991) and Keller (1993). are used as measures of brand awareness. The self-completion questionnaire used as the data collection instrument includes five sections and will be administered to the respondents during the lectures. Previous research (e. brand associations. Managing Brand Equity. References Aaker. Brand name. Based on Aaker (1997). with anchors.g. which are empirically tested (Agarwaal & Rao 1996) and are used in a number of studies. The impact of COO effects on each of the sub-components of brand equity will be estimated. Organizational associations and brand personality provide measures of brand associations. A scale of 1-11. price. five questions are used to measure brand personality. usage and ownership of a selected product category. DeSarbo. Marr & Pendergast 1995) demonstrated COO effects for these product categories. perceived quality and brand loyalty. country of origin. brand name. namely sincerity. David A. price and relevant physical attributes are included in the conjoint design for each product category.influence consumers’ product evaluations. Brand name is varied at three levels. HBCA methods have the ability to infer part worth utilities at the individual level even when ordinary least squares method fails due to insufficient data (Lenk. Consumer purchase intent is used as the dependent variable. is used to measure the purchase intent of respondents for the different product profiles provided in the conjoint study. for each of the brands included in the study. Three brands from each country are included in the study. Aided and unaided recall. Televisions and cars are the two product categories in which the model will be tested.g. 'extremely unlikely to buy' and 'extremely likely to buy'. This is to minimize the problem of unrealistic product profiles respondents often experience in conjoint studies. Respondents will rate all the three brands under each product profile. This study will be followed by a larger study including a mail survey drawing a national sample. Germany. Each of these five questions test the five dimensions of brand personality developed by Aaker (1997). Measures of country image are adopted from Nagashima (1970. screen size and country of origin are the attributes selected for the televisions. (1991). Parameters are estimated at individual level. Pride and trust are used to measure organizational associations. Section two includes questions about country image. HLM 5 (Raudenbush.

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