Brand Equity and Country of Origin Relationship

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Brand equity is considered a key indicator of the state of health of a brand, and its monitoring is believed to be an essential step in effective brand management (Aaker, 1991, 1992). Both researchers (e.g. Shocker et al., 1994) and practitioners (e.g. Biel, 1992) have argued for the importance of understanding the concept of brand equity. Country of origin is another important variable influencing consumer perceptions of brands (Hulland, 1999) and brand images (Ahmed et al., 2002). In the present study, consistent with the definition offered by Thakor and Katsanis (1997, pp. 79-80), country of origin is defined as “the country in which the product is made”[1]. The impact of country of origin on consumer perceptions or evaluations of products is called the “country of origin effect” (Samiee, 1994). Researchers have suggested that country of origin effects may impact the equity of certain brands (e.g. Thakor and Katsanis, 1997). For example, Aaker (1991) and Keller (1993) both argued that country of origin could affect a brand's equity by generating secondary associations for the brand. Indeed, even a foreign-sounding name is known to affect a brand's equity (Leclerc et al., 1994).

Increasingly, and for a variety of reasons, brands from one country are being made available to consumers in other countries (Shocker et al., 1994). In such instances, international marketers need to understand the sources of the equity of their brands. Some researchers have realized this and advocate extending the international consumer research scope to include brand equity (Wang, 1996). For example, measurement of brand equity across international boundaries is essential if brand managers are “to manage and control brand equity effectively” (Shocker et al., 1994, p. 156).

There is prolific research in both the areas of country of origin effects and brand equity. However, brand equity remains a complex phenomenon in the international context (Onkvisit and Shaw, 1989). Brand equity has been conceptualized as a multidimensional construct (e.g. Aaker, 1991), and the impact of country of origin on some of its components (e.g. perceived quality) has been widely researched in the marketing literature (see Chao, 1998). However, no empirical research to date has evaluated how country of origin may affect brand equity. This paper aims to fill this gap in the international context. More specifically, this research aims to develop a better understanding of the effect of country of origin on brand equity.

Background and justification for the present research
A better understanding of the linkages between brand equity and country of origin is important for a number of reasons. For example, researchers have advocated that managers need to maintain the “core essence of a brand” in their international branding decisions (de Chernatony et al., 1995). “The ‘essence’ of the brand is a single simple value, easily understood and valued by consumer” (Arnold, 1992, p. 17). When brands are competing in the international arena, marketing managers should understand how to maintain the core essence of their brand across international boundaries. Examining how country of origin impacts brand equity and its associated dimensions (e.g. perceived quality, brand associations) should reveal the means to protect or enhance the core essence of a brand.

The country of origin of a product is an important marketing element known to influence consumer perceptions as well as behavior. An improved understanding of how country of origin information influences brand equity is also valuable to marketing practitioners, for whom “quantification of brand equity” and “identification of elements that are likely to impact changes in consumer behavior and lead to changes in brand equity” are two important issues (Biel, 1993, p. 77).

The literature does not provide a satisfactory explanation for the factors influencing brand equity in the international context. Despite exhaustive...
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