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International Marketing Review 13,5 76

A cross-national investigation of the effects of country of origin and brand name on the evaluation of a new car
Gerald Häubl
Faculty of Business, University of Alberta, Edmonton, Alberta, Canada
Country-of-origin effects The impact of products’ country of origin on consumers’ purchase decisions has been an issue of increasing importance to marketing and consumer behaviour researchers, as well as to marketing managers. As more companies based in industrialized countries move the production of their goods to foreign locations, the way their brands are perceived by consumers changes (see e.g. Cordell, 1993; Tse and Gorn, 1993). Lower costs of labour, the reduction of transportation costs, and the achievement of global presence of the company have been the main reasons for such decisions. However, manufacturers have been paying little attention to the effects of a product’s new country of origin on consumers’ perception of its quality. Most published studies on country-of-origin effects found that country stereotypes do exist and that they have some impact on product evaluations and purchase decisions. Country-of-origin effects have been found to exist for products in general (Darling and Wood, 1990; Howard, 1989), for certain product categories (Cordell, 1992; Hong and Wyer, 1989, 1990; Roth and Romeo, 1992), and for specific brands (Chao, 1993; Han and Terpstra, 1988; Tse and Gorn, 1993; Witt, 1990). Country stereotypes have an impact on the purchasing behaviour both of individual consumers (see e.g. Lin and Sternquist, 1994) and organizations (see e.g. Chang and Kim, 1995). There have been a number of empirical studies on issues such as the effects of country of origin on products’ perceived quality (Hong and Wyer, 1989, 1990; Johansson and Thorelli, 1985) and on consumers’ propensity to use a product’s “Made in” label (Han and Terpstra, 1988; Johansson et al., 1985; Tse and Gorn, 1993). However, most of the work in this area has been descriptive rather than explanatory in nature (Obermiller and Spangenberg, 1989, p. 454). The vast majority of the empirical findings on country-of-origin effects indicate which countries, product categories, or consumer groups exhibit or possess which
The author is indebted to the Austrian Federal Research Fund (FWF) and Mercedes-Benz Corporation for supporting this research. He also wishes to express his thanks to Günter Schweiger and Rick Bagozzi for their helpful comments on an earlier draft of this article, as well as to two anonymous IMR reviewers for their valuable suggestions.

International Marketing Review, Vol. 13 No. 5, 1996, pp. 76-97. © MCB University Press, 0265-1335

stereotypical effects, while only a few studies have considered the antecedents of these effects. As a consequence of the globalization of business activities, there are an increasing number of products for which the country of origin is different from the initial home country of the brand. Such products may be referred to as binational or hybrid products (Chao, 1993; Ettenson and Gaeth, 1991). The study of consumers’ perception and evaluation of hybrid products is of key importance with respect to the advancement of our understanding of countryof-origin effects (Johansson, 1989, p. 56; Kochunny et al., 1993, p. 23). In spite of the vast number of empirical country-of-origin studies, little is known about the psychological structure of the effects of a product’s country of origin and brand name on the evaluation of and the purchase intention towards a product. In the present study, a structural equation modelling approach is used to test a hypothetical model containing relationships among psychological constructs including country image, brand image, the evaluation of the product’s functional characteristics and appearance, the attitude towards the product, and the behavioural intention with regard to the product. The structural equation modelling approach is in line with the suggestions for further country-of-origin research expressed by Han and Terpstra (1988, p. 252), Thorelli et al. (1989, p. 44), and Tse and Gorn (1993, p. 73). In order to study the structure of country-of-origin effects, a product had to be chosen in connection with which the occurrence of significant “Made in” effects could be expected. The findings of a number of empirical studies suggest that the country of origin generally has a significant impact on the evaluation of automobiles (see e.g. Han, 1989; Han and Terpstra, 1988; Johansson and Nebenzahl, 1987). Therefore, subcompact cars were chosen to be the product category used in this study. Cross-national theory testing Most consumer behaviour constructs and theories have been developed and tested exclusively in a single country, typically the USA. As a consequence, the extent to which theories, models, constructs, measures, and relationships among constructs are culturally bound is unknown in many cases (Durvasula et al., 1993). While the importance of examining the applicability of theories and models across countries and cultures has been expressed by many researchers (Hui and Triandis, 1985; Lee and Green, 1991), very few studies have actually addressed this issue. By contrast, a large number of researchers have assumed that models developed and tested in one country apply in other countries without actually validating model constructs and/or relationships among constructs (Durvasula et al., 1993, p. 626). This assumption can result in grossly invalid cross-national inferences. In order to be able to draw any conclusions regarding the cross-national generalizability of a theory or model, both the equivalence of the measurement of constructs and the equivalence of structural relationships must be established. The assessment of measurement equivalence includes an

Evaluation of a bi-national new car 77

p. Pisharodi and Parameswaran. The proposed model is tested for invariance across the two countries in order to assess its cross-national applicability and. 23. Studies on country-of-origin effects should incorporate not only the product-specific evaluation of but also the general attitude towards a particular country (Kochunny et al.International Marketing Review 13. Singh. 1995). The focus of the present study is on testing the cross-national applicability of a model of the effects of country of origin and brand name on consumers’ evaluations of a product. a hypothetical structural model was developed. Specifically. In the hypothetical model the automobile’s country of origin is represented by the following four constructs: (1) the affective evaluation of the country (feelings. 1985). • evaluation of the brand. 1974. and • evaluation of the product. These constructs are considered to be latent psychological variables which cannot be measured directly and without error. 28). each of them has to be measured indirectly through multiple indicators. Once the equivalence of the measurement of constructs across countries has been established. p. 1994. p. 46). 1992). 192). Halfhill. such as internal consistency reliability. p. . one can distinguish between the country’s general “Made in” image and the evaluation of products manufactured in that country (Etzel and Walker. Instead. 1993. 1995.5 78 examination of the psychometric properties of a construct’s measures. 44. and of the invariance of the factor structure across countries (Mullen. 1990. General country attitude is considered to consist of two dimensions: affective and cognitive evaluation of the country (Han. the structure of country-of-origin and brand effects on the evaluation of a new automobile by German and French car owners is investigated. thus. The model contains nine theoretical constructs.. its generalizability to other countries. Recent research findings suggest that country of origin is a multidimensional construct (Parameswaran and Pisharodi. 1980. the crossnational invariance of the patterns and strengths of relationships among constructs may be assessed (Hui and Triandis. With regard to the product-specific evaluation of a country.. 1988. If a model turns out to be invariant across a number of countries. p. emotions). p. Hypothetical model Constructs of the model To study the psychological process by which the country of origin and the brand name of a new automobile are integrated in the formation of attitude and related behavioural intention. 31. (2) the cognitive evaluation of the country (fact based). Martin and Eroglu. Papadopoulos et al. 1993. The nine constructs of the hypothetical model may be grouped into the following three categories: • evaluation of the country of origin. the hypothesis of the model’s crossnational generalizability is supported.

1994. 1975). and (4) the evaluation of automobiles made in the country in general (production output. Hong and Wyer. Stayman et al. Based on the theory of consumer information processing (Bettman.. Tse and Gorn. form the hypothetical model. brand name information enters the model through a single construct. are exogenous Evaluation of a bi-national new car 79 . The graphical representation of the model contains both the 17 hypothesized structural relationships among the nine constructs and the measurement models for these latent variables. To study country-of-origin effects on consumers’ product evaluations and purchase decisions in a context which closely resembles real-world decisionmaking situations. the evaluation of the overall appearance (design) of a car and the summary evaluation of its features (other than appearance) were incorporated as two separate constructs. product). Wright. pp. The importance of such multi-cue studies in the area of country-of-origin effects. 1992. Eagly and Chaiken. attitude theory (Ajzen and Fishbein. 1989a. While the former two reflect the general perception of a country. etc. 1990. Two of the nine constructs of the model. 1980. Kochunny et al.(3) the evaluation of the country’s automobile industry (production process). 123-4). 1990.e. 1993). Lin and Sternquist. 1993.. Hypothetical structural relationships The hypothetical model (Figure 1) consists of the nine latent constructs described above and the expected relationships among them. In addition. The 17 structural paths of the model are depicted as arrows labelled γ 1 – γ 5 and β 1 – β 12 in Figure 1. In order to avoid cluttering. 1979. and recent findings in the area of country-of-origin research (Han. intended showroom visit. the image of the manufacturer’s brand. 1992. Ozanne et al. consumers’ overall evaluation of the model as well as their behavioural intention with regard to the automobile (further information acquisition. the latter two refer to the evaluation of a country with regard to the specific product category under study. has been pointed out by Witt and Rao (1992. Bagozzi. the arrows for errors in equations.) are represented as latent constructs in the model. 1993. Four distinct aspects of the evaluation of the product are represented in the model. 1989. Maheswaran. 1994). 1989.. 1993). Table I lists the references that were used in selecting each of the 17 paths which. the affective evaluation of the country (ξ1) and the image of the manufacturer’s brand (ξ2). the attitude towards the automobile. In the hypothetical model. Each of the hypothesized structural relationships is supported by the findings of published empirical research. especially of studies which incorporate a product’s brand name. respondents should be asked to evaluate products for which information on a number of salient attributes is available (Ettenson. i. as well as for measurement errors are not shown. as a whole. At the level of attribute beliefs. 17 hypothesized relationships among the constructs were determined.

Jacoby et al. Each construct is connected to two observable indicators which serve as measures of the former. Jan and Qualls. Lee et al. Jacoby et al. 1977. 1990. 1993 Hong and Wyer. Ozanne et al.. 1975. 1992 Jacoby et al. 1986..International Marketing Review 13.. 1993 Cohen and Basu. 1990. Hong and Wyer. 1975. 1989. 1974. 1977. 1992. 1989. 1989a Johansson and Nebenzahl. 1971.. 1984.5 80 rt ai ep ip sh tr l an ss lit e en km ce qu bi ia W or fre uc In R S no lg rs -a nt he te -o f-t pe bl te om ia C R S y1 + y3 t an ly fu l nd ce as y2 + y4 ch -a y 9 + y 10 ce or rd s st y 11 + y 12 λ (y) 6 qu -o ra l-t te W el h ta λ (x) 1 λ (x) 2 ig ra pp A A S le tt ek Affective ξ 1 evaluation of country γ1 e g iv ct ea lin β1 M H S ot iv at x1 + x3 x2 + x4 he ed w λ (y) 1 λ (y) 2 oy λ n (y) 5 e ea le ic Fr te kf rt η1 Cognitive evaluation of country ity an N P P or da ie η3 β2 Evaluation of cars made in the country f-t in al y5 + y7 λ (y) 3 y6 + y8 λ (y) 4 γ2 λ γ3 ξ2 λ (x) 3 y 14 (y) 7 y 13 + y 15 λ (y) 8 β3 η2 β4 Evaluation of country’s car industry io β6 η4 γ5 Evaluation of the model’s appearance β8 η6 β 10 λ 11 β 11 (y) β5 Attitude towards the model β9 β 12 η 7 Behavioural intention λ (y) 13 Brand image β7 λ (x) 4 γ4 x5 + x7 y n et io bi af ct ia fe S x6 + x8 y y Q Evaluation of η 5 the model’s features λ 12 (y) λ 14 (y) y 20 + y 22 y rs lit ai bi ep an ia y 21 + y 23 ip ity sh al qu rm y 24 + y 26 n e riv io at td p y 25 + y 27 vi rc ha se si t bl ab ira le ur xc es vo D Path References Han. Han. Pisharodi and Parameswaran. Kochunny et al. 1991. Wright. Jaffe and Nebenzahl. Fa E P le as el in Figure 1. Hong and Yi.. Halfhill.. Monroe. References used in selecting the hypothesized relationships β7 β8 β9 β10 β11 β12 variables. 1988. Wright. Jaffe and Nebenzahl. Maheswaran. 1991 γ1 γ2 γ3 γ4 γ5 β1 β2 β3 β4 β5 β6 Table I. Measurement issues.. 1988. 1989. Jacoby et al. 1971. 1992. Wright.. 1987 Bagozzi. 1987. 1989. 1994 Han. 1980. 1990. 1989b. 1991. The seven endogenous constructs are denoted η1 – η7 Figure 1. 1992.. 1985. Maheswaran. Monroe. Pisharodi and Parameswaran. Johansson et al. Monroe. 1992. 1987. 1985 Jacoby et al. Kochunny et al. 1994 Hong and Wyer. Yi. 1990 Erickson et al. 1985 Etzel and Walker. 1993 Jacoby et al. 1971. Bagozzi. 1975. Lee et al. Yi.. Hypothetical model λ R el (y) 9 λ 10 er ua (y) lit lit Te s tr el km hi fo R en W or ea er fre In le nt e g Fu rth D W S y 16 + y 18 y 17 + y 19 er in le rs qu up is e pu P b S up ta el el er b qu fu y al ity ... 1994 Scott and English. Yi. All other latent variables are endogenous. Hong and Wyer. 1989 Bagozzi. 1976. 1989a Johansson and Nebenzahl. 1992 Papadopoulos et al. such as the selection of indicators and their treatment within the measurement models. 1976. Stayman et al.. 1993. are discussed in more detail in the method and results sections. Han. 1993.. 1992.. Jan and Qualls. 1987 Johansson and Nebenzahl. Hong and Wyer. Maheswaram.

a cross-national study based on face-to-face interviews was conducted in Germany and France. it planned to manufacture the Vision A. The company did not. it also represents an attractive manufacturing location for German companies from a logistics perspective. France was chosen as the country of comparison because it is one of the largest foreign markets for Mercedes-Benz. In the course of the face-to-face interview. Since the Czech Republic borders with Germany. Respondents both in Germany and in France were led to believe that the company had recently decided to manufacture the new car in the Czech Republic. The concept of the new model named “MercedesBenz Vision A” was introduced to the public at the Frankfurt Motor Show in August 1993. shortly before the study was carried out. as well as a verbal description of the key features of the model[3]. Bagozzi. however. as well as on pilot studies conducted in both countries aimed at determining attribute importance with respect to subcompact automobiles. product-related ones[1]. In order to test the hypothetical model of the effects of a new automobile’s country of origin and brand name on consumers’ relevant attitudes in connection with the vehicle. in which country. Germany. each subject was presented with a one-page description of the automobile.Based on the assumption that the more general constructs affect the more specific. i.g. the manufacturer announced that the new automobile would be for sale in 1997. Mercedes was seriously considering to locate the plant for the new car in the Czech Republic. Method Design of the study A subcompact automobile developed by German car manufacturer MercedesBenz was used in the study. comment on where. the wages of Czech skilled workers amounted to less than 10 per cent of those of their German counterparts. the direction of the hypothesized effects among the country-of-origin variables is from the affective evaluation of the country to the cognitive evaluation of the country. both of these latent variables were hypothesized to affect the attitude towards the car. The selection of key attributes was based on the results of a joint focus-group session of automotive market research specialists from both Germany and France. represents the single most important market for the company. This stimulus consisted of a photograph of a Vision A prototype.e. the home country of Mercedes-Benz. from that to the evaluation of the country’s automobile industry. the evaluation of the automobile’s appearance was expected to have an influence on the evaluation of its features[2]. the Czech Republic was selected as the country of production of the Vision A. At the time of the study. When the interviews were conducted. At that time. The following features of the car were included: fuel Evaluation of a bi-national new car 81 . In terms of the relationships between the four constructs representing the evaluation of the product. 1989a). For the purpose of the study. and from that to the evaluation of automobiles made in the country in general. Based on the belief ³ attitude ³ behavioural intention model of attitude (see e.

Quotas were established for the selection of the subjects. it was reasonable to assume that the majority of respondents in either country were familiar with at least one of these vehicles. 30 per cent from 31 to 35 years of age. horsepower. Thus. “VW Golf”. Car owners typically have at least moderately high product familiarity with respect to automobiles. At the time of the study. and the Mercedes E series were included next to that of the Vision A. Sample Face-to-face interviews were conducted with 309 car owners in Germany and 313 car owners in France[4]. The silhouette of the Mercedes E was included to provide the size of the most popular Mercedes model as a reference.5 82 mileage. 1997 was stated to be the year in which the manufacturer planned the introduction of the new car to the market. which roughly reflect the importance of different market segments for the car used in the study: Age (20 per cent under 30 years of age. For the purpose of performing cross-national comparisons of the results obtained in the two countries. The same quotas for the selection of respondents were used in Germany and in France. and high speed. 30 per cent female). Both in the German and the French product description. in order to provide some information on the approximate length and height of the concept car. i. No other information about these three cars was provided. income. which overstates the . silhouettes of the VW Golf. the German-made VW Golf and the French-made Renault Twingo were the subcompact cars with the highest market share in Germany and France. the Renault Twingo. The true attribute levels which the Vision A will actually have when introduced to the market were provided both in Germany and France.International Marketing Review 13. a side-view silhouette of the Vision A was printed next to those of three popular European automobiles. each was presented as an item of information embedded among the product attributes and as an insert in the photograph of the automobile. 1994). gender (70 per cent male.e. as well as in all major regions of both Germany and France. In addition. 25 per cent over 40 years of age). respectively (see VDA. and “Mercedes E series”. The only exception to this is the 30 per cent share of Mercedes owners in the sample. “Renault Twingo”. They were established on the following criteria. it was necessary that the German and the French sample should be of similar size and equal demographic structure. and car ownership (30 per cent Mercedes-Benz. built-in safety equipment. an individual had to be the owner of a passenger automobile at the time of the interview[5]. Finally. These criteria were based on the profiles of subcompact car buyers in the two countries (EAS. In order to qualify. 25 per cent from 36 to 40 years of age. The silhouettes were labelled “Mercedes Vision A”. air bags and anti-lock brakes. To ensure that the brand name (Mercedes-Benz) and the country-of-origin information (Czech Republic) were noticed by respondents. 1994). and gender groups. Interviews were conducted with car owners in different age. 70 per cent other brands[6]).

and Chaiken and Maheswaram (1994) for the evaluation of the vehicle. One additional criterion used for the selection of subjects was their place of residence.3 29. Three measures were obtained for the evaluation of the appearance of the new automobile. it shows the actual structure of the two samples. Pisharodi and Parameswaran (1992) and Jaffe and Nebenzahl (1993) for the evaluation of countries in connection with automobiles. None of the differences between the German and the French sample with respect to age. McGee and Spiro (1991) and Gupta and Ratchford (1992) for brand image.0 31.2 69.2 26. The main sources used in this selection process were Parameswaran and Yaprak (1987) and Martin and Eroglu (1993) for items measuring the general evaluation of the country of origin. a prime target group for the Vision A with respect to second-vehicle purchases. Gupta and Ratchford (1992).4 25. The selection of these indicators was based on an extensive literature review.0 69. This indicates that the two samples are equal in demographic structure to the extent that this was controlled by the quotas. and Scott and English (1989).0 Gender Car ownership Table II. gender.8 31. For both samples. all quotas were met with only insignificant deviations.5 20.4 27.8 69. Structure of the German and French sample Measures The questionnaire contained multiple measures of all nine latent variables of the model.importance of this group in terms of past sales.2 30. in order to obtain a sufficient number of responses from current Mercedes owners. Interviews were conducted in all main regions of Germany and France in proportion to the number of cars registered in each of them.4 29. however. In addition.0 31. The evaluation of cars made in the . Table II provides an overview of the quotas used in selecting the respondents.0 68. or car ownership are statistically significant at the 0. Bayus (1991). This was necessary. All measures used in the present study had already been by used and found to be valid and reliable indicators of the corresponding constructs in one or more previous studies. Evaluation of a bi-national new car 83 Sample Criterion Age Quotas 20 per cent under 30 30 per cent 31 to 35 25 per cent 36 to 40 25 per cent over 40 70 per cent male 30 per cent female 30 per cent Mercedes 70 per cent other brands Germany (%) 19. while four questionnaire items were used to measure each of the other eight constructs of the model.05 level.8 France (%) 22.

The results of the estimation of these models indicate that the constructs were measured adequately through their indicators in both countries. 1991) and should. The maximum-likelihood (ML) method was selected as the method of model estimation. single-group and multi-group analyses – using the data from both samples simultaneously – were performed in LISREL 8 (Jöreskog and Sörbom. Covariance matrices of the observed variables were used as data matrices. The strategy of summing subsets of the observed measures of a construct called partial disaggregation has been found to improve the fit of multiple-indicator measurement models (Bagozzi and Heatherton.International Marketing Review 13. ratings were obtained on a six-point scale ranging from 1 = “does not apply at all” to 6 = “fully applies. Bollen. For all of these directly observed variables. pairs of observed measures were combined additively within constructs to form indices which.987 in Germany and from 0. Within each construct. one of these items (y14) was not combined with any other measure and remained an indicator of its own. 1990) and of the Tucker and Lewis . Their standardized estimates range from 0. All factor loadings are highly significant (p < 0.86 to 0. Model estimation A structural equation modelling approach (Bagozzi. 1994. therefore. in turn. 1996. 1989) was used to test the hypothetical structural model against the data collected from the samples of German and French car owners. p. Combining items into indices tends to smooth out random error to the degree that the aggregated measures share common variance (Bagozzi and Heatherton. were treated as the indicators of the latent variables in the model. The values of the comparative fit index (CFI.. For the estimation of the models. pairs of these observed variables were combined additively to form two new indicators. 1994. Hull et al. For each of the eight constructs represented by four questionnaire items. Since the analysis of the relationships among latent variables requires adequate measurement of these constructs. 1994. The same pattern of aggregation was used for the German and the French sample. increase the reliability of the estimates of structural parameters between constructs.5 84 country in general and the overall evaluation of the vehicle used in the study were measured on the same four attributes.” A list of the indicators used to measure the nine constructs is provided in the Appendix.001). Bentler and Dudgeon.74 to 0. Analysis and results National-level analysis The proposed model was first estimated independently for the German and the French sample. 1993). see Bentler. the measures were grouped into pairs at random. the psychometric properties of the measures of the nine latent variables of the model were first examined via maximum-likelihood confirmatory factor analysis. The other two observed variables were summed to form the second indicator for that construct. 39). Specifically.981 in France. Since only three measures were obtained for the construct η4(evaluation of the car’s appearance).

972 (France). which is more than satisfactory (Bagozzi and Yi. CFI values of 0. Specifically. the corresponding parameter is significant at the 0. Tests of the discriminant validity of the nine constructs were also performed via confirmatory factor analysis. the fit of all of these alternative models was clearly inferior to that of the nine-factor model which corresponds to the proposed factor structure. The unstandardized estimates of the structural parameters resulting from the separate estimation of the model for Germany and France are provided in Table III along with their t values. Four parameter estimates are not significant in either country (γ2.05) around the estimates of the interfactor correlations do not contain a value of 1 (Anderson and Gerbing. indicating a very good fit of the measurement models. respectively. For both Germany and France.(1973) index (TLI)[7] for the confirmatory factor analysis models are.96. For each structural path. the internal consistency reliability (Carmines and Zeller. respectively.989 for the German and 0. p = 0. the parameter estimates obtained from the German and the French data are very similar (see Table III). γ3.975 and 0. the estimate of β 12 .977. β 5 . pertaining to the path from consumers’ overall evaluation of the car to their behavioural intention with respect to the vehicle.821 to 0. a chi-square ( χ2) value of 133.978 were obtained for the German and the French data. In addition. The t value is equal to the ratio between a parameter estimate and its standard error (Jöreskog and Sörbom. In addition. The majority of path coefficients are statistically significant (p < 0. p. This indicates that the nine latent variables of the model do represent distinct constructs. 1979) of the measures of the latent constructs ranges from 0. 82) and provides further evidence of the fact that the model’s constructs were measured with little error. This indicates that the psychological processes underlying the effects of country of origin and brand name on consumers’ evaluations of an automobile might not be nationally bound.05) for both samples. is insignificant in Germany. The TLI values are 0. 1988). and β 6 ). The model’s χ 2 value in connection with the French sample is 202. the full structural model containing both the measurement models and the hypothesized structural relationships was estimated separately for each of the samples. If the t value exceeds 1. The overall fit of the hypothetical model was good. p = 0.972 for the French sample. Once the satisfactory quality of measurement with respect to the model’s latent variables had been determined.868 (dƒ = 117. models representing different factor structures (fewer latent constructs) were estimated. discriminant validity was also supported by the fact that the confidence intervals ( p < 0. 1988. In order to determine whether the empirical data support the hypothesis that the model is truly invariant across the two countries. For the data collected in Germany. 1993).99 and 0.388 (dƒ = 117.996 (Germany) and 0. a series of formal tests Evaluation of a bi-national new car 85 . Finally.05 level. 0.997 and 0. These measures indicate a good fit of the model[10]. Also.000002)[9].136) was obtained[8]. the pattern of significant and insignificant structural parameters is identical in the two samples with the exception of β 12 .

324 6.454 7.962 β2 0.133 γ5 0.006* 0.312 4.061* 0.286 4. For this model a χ2 value of 242.International Marketing Review 13.051 7. a number of LISREL multi-group analyses (see Jöreskog and Sörbom.058* 0.05 level involving the simultaneous analysis of the German and French data had to be performed.168 0. The χ2 difference between the two multi-group confirmatory factor analysis models of 15. Multi-group analysis The national-level analysis assessed whether the measures of the model’s constructs were psychometrically sound and whether the hypothesized relationships among the constructs applied in each country separately.397 5.694 10.299 γ2 0. a CFI of 0.657 9.858 β1 0.568 β3 0.358 6.164 2. A more stringent test of the model is now offered by assessing the invariance of the measurement and structural model relationships across countries.054* –0.78 .405 0.093* 1.558 (dƒ = 204.782 86 γ4 0.800 β4 0. p = 0.996.471 10.470 γ3 0.045 β8 0.838 11. two multi-group confirmatory factor analysis models were estimated.0591).270 0.104 β9 0. 1993.480 β5 –0.097 3.128* 0. β10 0.873 1.033 0. This less constrained model has a χ2 value of 226.230 t .996. the factor loadings were allowed to vary between groups.457 Table III.493 –0.551 parameter estimates for 0.value 9.100* 1.190 0.5 Parameter Germany Estimate t . and a TLI of 0.276 0.730 the German and French β12 sample Note: * Parameter estimates not significant at the 0.729 0.778 (df = 195.0334).227 0. A chi-square difference test may be used to assess whether the improvement in model fit due to relaxing between-groups equality constraints of certain parameters is statistically significant.907 β6 0. In order to examine the invariance of the measurement models in Germany and France.548 1.313 National-level structural β11 0.727 0.103* 1. all measurement parameters (factor loadings) were constrained to be equal in both groups. In the second model.076 4. pp.469 0.561 β7 0.value Sample France Estimate 0.505 4.250 3.065 4.824 0. 51-84) with parameters of interest either constrained to be equal across groups or free to vary across groups were performed.238 4.098* –0.481 2. In the first one.173 9.994 were obtained.440 γ1 0. p = 0.717 3. and a TLI of 0. For this purpose.328 6. a CFI of 0.981 2.077 2.124 0.994.166 0.

086 (dfdiff = 17) is not significant at the 0.010 t-value – 25.696 – 23. The model in which the structural parameters were allowed to vary between groups yielded a χ2 value of 326.013 1.987.05 level.009 1.155 1. .000 1. Allowing the structural parameters to vary across groups does not improve the fit of the model.798 – 38.000 0.00008).933 1. one model with all structural parameters constrained to be equal in both groups and another model in which these parameters were allowed to vary across samples were estimated via the maximum-likelihood method.000 2.0002).544 – 24.99. a CFI of 0. Since allowing the measurement parameters to vary across groups does not improve the fit of the model. and a TLI of 0. the factor structure can be considered invariant across the two countries.000 1.008 1.989. p = 0.964 1.000 1.843 1. This indicates that the model relationships are invariant across countries.276 (dƒ = 257.900 Evaluation of a bi-national new car 87 λ1(x) λ2(x) λ3(x) λ4(x) λ1(y) λ2(y) λ3(y) λ4(y) λ5(y) λ6(y) λ7(y) λ8(y) λ9(y) λ10(y) λ11(y) λ12(y) λ13(y) λ14(y) Table IV.000 0. Since we had established the invariance of the factor structure across countries.988. only one measurement parameter was estimated per construct.208 – 28. and a TLI of 0. Since the scale of the latent variables was determined by fixing one of their measurement relationships to a value of one.000 0. Parameter Estimate 1. p = 0.05 level.998 – 28. Common measurement parameter estimates for the German and French sample For examining the invariance of the relationships among the latent variables.19 (df = 240. The estimation of the model in which all structural paths were constrained to be equal in both groups resulted in a χ2 value of 351.(dfdiff = 9) is not significant at the 0.000 1.230 – 14.786 – 34. The χ2 difference between the two multi-group models of 25.051 1. a CFI of 0. the measurement parameters were constrained to be equal across groups in both of these models.000 1.905 – 35. The common measurement parameter estimates (unstandardized) for the German and the French sample are provided in Table IV. The common structural parameter estimates (unstandardized) for the German and French sample are provided in Table V.

and from that to the evaluation of cars made in the country in general (γ1 = 0.133 β4 0.702.505 0.695 Table V. The country of origin turned out to affect the evaluation of the automobile in various ways.518 10.826 β3 0. The image of the manufacturer’s brand was found to have a strong impact on the evaluation of the automobile’s features (γ4 = 0.645.797 7.239).253 β1 0.213 the German and French sample Note: * Parameter estimates not significant at the 0. The evaluation of the car’s appearance also turned out to have an impact both on the attitude towards the new model (β8 = 0.037* β7 0. the discussion of the substantive findings of the study should focus on the common parameter estimates. as well as a somewhat weaker impact on the evaluation of the new model’s appearance (γ3 = 0.702 β2 0. was found to be strong and highly significant.133) and of its features (β4 = 0.560 2. β10 0.771 –0.826.343 parameter estimates for β12 0.679 2. The hypothetical structural path from the perception of the new car’s appearance to the evaluation of its other features was found to be very strong (β7 = 0.05 level International Marketing Review 13.087 γ4 0.266) and on the .361) and on the attitude towards the vehicle (γ5 = 0.497).087).239 β5 –0. from that to the evaluation of the country’s automobile industry.754 Since both the factor structure and the structural model relationships were found to be invariant across countries. from the affective to the cognitive evaluation of the country.076).266 β9 0.772 3. The evaluation of the country’s automobile industry affects the evaluation both of the model’s appearance (β3 = 0. The affective evaluation of the country has an impact on the perception of the vehicle’s appearance (γ2 = 0. β1 = 0.5 Parameter Estimate t-value 17.530 4.253). i. specifically the common estimates of the structural relationships (see Table V).076 γ3 0.985 25.e.361 88 γ5 0.497 β8 0.240 4.γ1 0.241 17. respectively).645 γ2 0.115 7.434 8. The expected sequence of effects among the four constructs representing the car’s country of origin.606 4.336 7.456 Common structural β11 0. and β2= 0.037* β6 0.960 4.

The evaluation of the model’s features affects both the attitude towards the car (β10 = 0. the attitude towards the car turned out not to be the main antecedent of behavioural intention. It is mediated by the evaluation of both the vehicle’s appearance and its other features. A model that describes the process by which these two pieces of product information are incorporated in the formation of attitude and behavioural intention with respect to a car was proposed. Both the psychometric properties of the measures of the model’s constructs and the structural relationships among the constructs were found to be highly similar across the two countries. the attitude towards the vehicle affects behavioural intention (β12= 0. This finding has profound implications for the development of new automobiles which will be discussed – among other things – in the following section. The behavioural intention with regard to the new automobile is affected significantly by the evaluation of both its appearance and its other features. The effect of brand name on the attitude towards the vehicle is composed of a direct and two indirect routes.343) to a large extent. 1989a).456) and the behavioural intention (β11 = 0. At the same time. as well as by the attitude towards the vehicle. Instead.behavioural intention with regard to the vehicle (β9 = 0. Interestingly. Mercedes-Benz’s concept car Vision A was used in the study. The effect of the country of origin on the attitude towards the car is predominantly indirect. The cross- Evaluation of a bi-national new car 89 . The Czech Republic was presented as the vehicle’s country of production. Finally. Of the latter. The results of the national-level analysis indicate that the hypothetical model closely resembles the mental process by which the country-of-origin and brand name information influence consumers’ evaluation of a new automobile in Germany as well as in France. the results of the study indicate that consumers attitudes and behavioural intentions with respect to a new automobile are influenced significantly both by the brand name and the country of origin. the direct effect of the perception of the car’s appearance on intention is stronger than that of the attitude towards the vehicle. data were collected in face-toface interviews of 309 German and 313 French car owners. the indirect effect mediated by the evaluation of the automobile’s features turned out to be stronger than the one mediated by the perception of its appearance.213). Overall.695). Our findings provide support for the belief µ attitude µ behavioural intention hypothesis (Bagozzi. we find evidence for a direct belief µ behavioural intention link as indicated by the significant estimates for parameters β9 and β11. It is interesting to note that the direct effect of the perception of the car’s appearance on behavioural intention ( β 9) is more than twice as strong as its effect on the attitude towards the vehicle (β8). Discussion The purpose of the present study was to examine the cross-national applicability of a model of the psychological structure of the effects of country of origin and brand name on consumers’ evaluations of a new automobile. In order to test whether the hypothetical model applies in different countries.

With respect to the actual product. Both the brand name and the country of origin were found to have a significant impact on consumers’ attitudes towards the new automobile.) as possible in order to capture effects such as the direct influence of a car’s appearance on behavioural intention found in this study. Thus. Studies aimed at predicting the adoption and future success of new products should include evaluative measures as closely related to the actual behaviour (information acquisition. to look at the vehicle at a dealer’s showroom. product concept testing. new automobiles. the country-of-origin effect was found to be predominantly indirect. It had been expected that. This finding provides support for the hypothesis of the model’s cross-national generalizability. Thus. foreign production of automobiles is likely to have an impact not only on car buyers’ overall evaluation of a vehicle. but also on their perception of specific product attributes. e. intended showroom visit. The impact of the country of origin on the overall evaluation of the automobile was mediated by the evaluation of the car’s appearance and that of its other features to a large extent.International Marketing Review 13. One of the most fundamental concerns of marketers in many industries is the uncertainty about the future adoption of new products by consumers. . which in turn affect the attitude and the behavioural intention with respect to the vehicle. according to the belief µ attitude µ behavioural intention model of attitude. While the effect of brand name on the attitude towards the car turned out to be composed of a direct route.g. it can have a strong direct impact on the new product’s adoption by consumers. the behavioural intention with regard to the new automobile was found to be affected directly by the evaluation of the vehicle’s appearance to a large extent. As a result of the invariance of the measurement relationships and the structural paths. in particular. various technical features or the appearance of the car. etc. By contrast. The behavioural intention construct of our model represents mental states including customers’ motivation to acquire further information about the automobile. Both the measurement of the constructs and the structural relationships in the model turned out to be invariant across the two countries. This indicates that the “Made in” information typically affects beliefs about a car’s product attributes. what can be done at the development stage in order to induce the trial and adoption of a new product? What characteristics of the new product determine its success in the marketplace? One finding of this study should have profound implications for the development of new products. This finding has implications not only for the actual development of new products. as well as two indirect routes. This direct effect of consumers’ perception of the car’s appearance on intention bypasses the attitude construct. while the appearance of a new product may not affect the attitude towards the product to a large extent. most of the antecedents’ effects on the behavioural intention with respect to the car would be channelled through the attitude construct. trial. and premarket forecasting. and to test-drive the new car. the substantive findings of the study were discussed at the cross-national rather than at the national level. but also for new-product market research.5 90 national applicability of the model was tested by means of multi-group analysis.

a standard procedure of back-translation (Brislin. 1996) was used. this would have been extremely difficult. was used. All interviews were conducted at respondents’ homes. Future research could extend this work by testing the proposed model in connection with other manufacturers’ cars and other countries of origin. The number of owners of each of the 12 models was proportionate to market share. However. the influence of the car’s appearance on the perception of its other features dominates the reverse effect. have matching samples in two countries. 1970. A rationale similar to that discussed in Note 1 applies here. This would also provide an opportunity to test for brand by country interaction effects. The TLI is equivalent to Bentler and Bonett’s (1980) non-normed fit index (NNFI). 7. The generalizability of this study’s findings may be limited owing to the fact that only one automobile by a German manufacturer was used. It would have been desirable to draw samples consisting exclusively of individuals who were in the market for a new subcompact car at the time of the interview. 2. While reciprocal effects between the two constructs are quite plausible. the Czech Republic. only one country of origin. was used as the criterion for the selection of 70 per cent of the subjects. The latter was also responsible for the selection of subjects based on the quotas specified by the author. as well as consumers’ evaluation of the manufacturer’s models when associated with the potential countries of origin before making a decision on the location of a production facility. A longer-term extension of this area of research would be to test the model for other highinvolvement product categories. Ownership of one of the 12 automobile models with the largest market shares in Germany and France. especially if one wished to maintain the same standards of demographic composition. Of course. 5. 3. respectively. This does not take into account the possibility of reverse effects from the more specific to the more general constructs (e. for a totally new automobile. we hypothesize that. To ensure the equivalence of the survey instruments. However. The interviewers called the selected individuals to set up an appointment for the interview. the finding that an automobile’s country of origin has a significant impact on consumers’ perception of the various features of an automobile and on their evaluation of the car as a whole – even in connection with a very strong brand name – should encourage companies to investigate thoroughly consumers’ perceptions of the relevant countries and their car industries. The product description and questionnaire had been translated from English into German as well as French and subsequently translated back into English from both other languages by independent professional translators. Also. Evaluation of a bi-national new car 91 . and collect data from individuals in all major regions of the two countries. respectively.As more car manufacturers based in industrialized nations consider moving the production of their vehicles to low-wage countries which typically have rather unfavourable “Made in” images. Notes 1. Harpaz.g. the magnitude of such reciprocal effects can be expected to be insignificant compared with that of the proposed relationships. both the product descriptions and the questionnaires were in German and French for the respondents in Germany and France. 4. the impact of automobiles on the image of the cars’ country of origin). 6. All face-to-face interviews were conducted by native German and French interviewers who were recruited and co-ordinated by a multinational market research firm.

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International Marketing Review 13.5 96 Appendix: measures Affective evaluation of the Czech Republic To what degree do you associate each of the following attributes with the Czech Republic? Not at all Completely x1 Nice 1 2 3 4 5 6 x2 Friendly 1 2 3 4 5 6 x3 Pleasant 1 2 3 4 5 6 x4 Peaceful 1 2 3 4 5 6 Cognitive evaluation of the Czech Republic To what degree do you associate each of the following attributes with the Czech Republic Not at all Completely y1 Competent 1 2 3 4 5 6 y2 Reliable 1 2 3 4 5 6 y3 State-of-the-art 1 2 3 4 5 6 y4 Successful 1 2 3 4 5 6 Evaluation of the Czech Republic’s automobile industry To what degree do you associate each of the following automobile industry? Not at all y5 State-of-the-art technology 1 y6 High quality standards and control 1 y7 Well-trained workforce 1 y8 Highly motivated workers 1 statements with the Czech Republic’s 2 2 2 2 3 3 3 3 4 4 4 4 5 5 5 5 Completely 6 6 6 6 Evaluation of automobiles made in the Czech Republic in general To what degree do you associate each of the following statements with automobiles manufactured in the Czech Republic in general? Not at all Completely y9 High reliability 1 2 3 4 5 6 y10 Perfect workmanship 1 2 3 4 5 6 y11 Infrequent repairs 1 2 3 4 5 6 y12 Superb quality 1 2 3 4 5 6 Image of manufacturer’s brand To what degree do you associate each of the following expressions with Mercedes-Benz? Not at all Completely x5 Passenger safety 1 2 3 4 5 6 x6 Reliability 1 2 3 4 5 6 x7 Perfection 1 2 3 4 5 6 x8 Quality 1 2 3 4 5 6 Evaluation of the appearance of the new model In your opinion. to what degree does each of the following attributes apply to the appearance of the new automobile shown in this photograph? Not at all y13 Appealing 1 2 3 4 y14 Attractive 1 2 3 4 y15 Sleek 1 2 3 4 5 5 5 Completely 6 6 6 .

Evaluation of the model’s features In your opinion. to what degree does each of the following attributes apply to the other features of the new automobile described here? Not at all Completely y16 Desirable 1 2 3 4 5 6 y17 Excellent 1 2 3 4 5 6 y18 Favourable 1 2 3 4 5 6 y19 Pleasing 1 2 3 4 5 6 Attitude towards the model To what degree do you associate each of the following statements with this new automobile? Not at all Completely y20 High reliability 1 2 3 4 5 6 y21 Perfect workmanship 1 2 3 4 5 6 y22 Infrequent repairs 1 2 3 4 5 6 y23 Superb quality 1 2 3 4 5 6 Behavioural intention in connection with the new automobile Imagine you are about to buy a new car of about the size of the Vision A. To what degree would each of the following statements about the new model apply to yourself? Not at all Completely y24 I will request further information on the new model 1 2 3 4 5 6 y25 I would like to take a look at the car at a Mercedes dealer 1 2 3 4 5 6 y26 I would like to test-drive the new model 1 2 3 4 5 6 y27 The purchase of the new car would be a wise decision 1 2 3 4 5 6 Evaluation of a bi-national new car 97 .