Assessing the Impact of Country of Origin Perception on Purchase: A Case of K-Pop

Abstract

The aim of this paper is to expand upon previous research into the CO perception effect through use of empirical data by formulating an analysis method which allows measurement of the extent of the CO effect by proxy of an object associated with CO image (ex. Pop musicians) and to propose an alternative framework which provides an explanation as to the discrepancies between empirical data and prior research. This paper proposes a generalizable analysis method to assess the extent of the CO perception effect and test how strongly a brand is associated with its CO regardless of brand attitude, involvement level, or product type. The level of exposure and interest in musicians associated with their CO was selected as a variable for measuring CO association strength, which was then compared with the purchase data of two automobile brands from the same CO, measured in terms of export and sales, and analyzed empirically. Study 1 suggests that K-pop musicians’ popularity overseas had a high effect on Korean exports in both B2B and B2C industries. A larger extent of the CO effect was found among high GDP per capita countries than in long GDP per capita countries. Study 2 reveals that the impact of CO effect associated with ‘PSY’ on the auto sales of two Korean brands in U.S. was significant. The extent of the CO effect differed between the two brands of the same industry group and dissipated over time as ‘PSY’s popularity faded away. An asymmetric pairwise CO effect was found vis-a-vis American and Japanese brands. In contrast to previous research, this paper investigates the extent of the CO effect associated with popular musicians and directly assesses their effect purchase behavior. Our findings do confirm the existence of the CO perception effect on real purchase behavior and propose possible future research expansion into a two track process of CO effect: long term attitude change and short term memory lift.