Local vs. Global Brands: Country-of-Originâ€™s Effect on Consumer-based Brand Equity among Status-Seekers

Sheng Yang Chiu

doi:10.22610/jebs.v7i3(j).577

Abstract

This paper examines the local and global automotive brands in conjunction with country-oforigin effect on consumer-based brand equity. Consumerâ€™s level of status-seeking motivation is considered when analysing the effect of brandâ€™s country-of-origin on consumer-based brand equity. Study conducted on 181 respondents showed that consumers generally prefer Asian than European automotive brands. Asian brands also ranked highest in perceived quality and brand loyalty, followed by European brands and local brands. The main difference of high and low status-seeking consumers is found in brand association, perceived quality, and brand loyalty of local brands. Low status-seeking consumers tend to rate brand association, perceived quality, and brand loyalty of local brands higher than high statusseeking consumers. This paper exhibits that the theory of consumer ethnocentrism and global branding strategies are not mutually exclusive.

Highlights

The rapid globalization and increased international business activity have caused the emergence of global market, where products are available outside its home country (Hsieh, 2002).For years; consumers have been relying on the impression of country-of-origin (COO) as a guidance for making purchasing decisions, especially when they are flooded with enormous amount of choices from both local and global brands
This study further examines the difference in the relationship of COO and consumer-based brand equity between high and low statusseekers
Five status-seeking motivation items were adapted from Eastman et al (1999), two brand awareness items were adapted from Yoo and Donthu (2001), two brand association items were adapted from Pappu et al (2005), five perceived quality items were adapted from Pappu et al (2005), and four brand loyalty items were adapted from Yoo and Donthu (2001), Pappu et al (2005), Yasin et al (2007), and Tong and Hawley (2009)

Summary

Introduction

The rapid globalization and increased international business activity have caused the emergence of global market, where products are available outside its home country (Hsieh, 2002).For years; consumers have been relying on the impression of country-of-origin (COO) as a guidance for making purchasing decisions, especially when they are flooded with enormous amount of choices from both local and global brands. Akerlof (1970) explained the concept of “lemons” in the context of the automobile industry, as consumers may misrepresent the true quality of automobiles because they are too complicated for consumers to evaluate and consumers may lack knowledge on automobile. The rapid globalization and increased international business activity have caused the emergence of global market, where products are available outside its home country (Hsieh, 2002).For years; consumers have been relying on the impression of country-of-origin (COO) as a guidance for making purchasing decisions, especially when they are flooded with enormous amount of choices from both local and global brands. It is important to manage brand equity because of its strategic role of gaining competitive advantage and influencing consumer decision making. In the recent years Roy and Chau (2011) and Ho, Ong, Wang, Tay, and New (2012), have researched on global versus local brands on the automobile industry. Consumers may summarize the information to an accessible level, summarizing information to global and local level may be too vague. This research investigates at a regional level, a more accessible level as compared to COO but not as vague as global and local level

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Results