Does image of country‐of‐origin matter to brand equity?

Abstract

PurposeThe purpose of this study is to explore the effects of brand's country‐of‐origin image on the formation of brand equity.Design/methodology/approachTo accomplish this, the brand equity of household electrical appliances, particularly televisions, refrigerators and air‐conditioners, in the Malaysian market is examined. A conceptual framework in which brand's country‐of‐origin image is postulated to influence the dimensions of brand equity, which is made up of brand loyalty, brand awareness, perceived quality, and brand associations. These dimensions, in turn, influence brand equity. Data were collected from consumers of household electrical appliances using probability sampling.FindingsFactor analysis conducted on brand equity dimensions, produced three factors namely, brand distinctiveness, brand loyalty, and brand awareness/associations. The regression analysis results show that brand's country‐of‐origin image positively and significantly influences dimensions of brand equity. The results also show that brand's country‐of‐origin image influences brand equity, either directly or indirectly, through the mediating effects of brand distinctiveness, brand loyalty and brand awareness/associations.Research limitations/implicationsThe study investigates brand equity of durable goods of three product categories namely television, refrigerator and air‐conditioner. It only considers brand's country‐of‐origin image as one of the sources of brand equity. The conceptual framework does not take into consideration factors that moderate the influence of antecedent of brand equity on brand equity.Practical implicationsProducers of household electrical appliances should put greater emphasis in creating brand loyalty for their products. The good image of brand's original country should be highlighted in order to enhance the overall image of the brand. Favorable country image can also be capitalized in brand‐naming strategy.Originality/valueThis is paper important in identifying the sources of brand equity.