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What? I thought Samsung was Japanese: accurate or not, perceived country of origin matters
Peter Magnusson
Northern Illinois University, DeKalb, Illinois, USA

454

Stanford A. Westjohn
The University of Toledo, Toledo, Ohio, USA, and

Srdan Zdravkovic
Bryant University, Smithfield, Rhode Island, USA
Abstract
Purpose Extensive research has shown that country-of-origin (COO) information significantly affects product evaluations and buying behavior. Yet recently, a competing perspective has emerged suggesting that COO effects have been inflated in prior research and even that the COO concept has become irrelevant. The purpose of this paper is to reconcile these two competing perspectives by examining the effects of individual brand origin perceptions. Design/methodology/approach The conceptual framework is grounded in consumers learning. Empirically, the authors hypotheses are tested using hierarchical linear modeling on a sample of 4,047 brand evaluations by 544 consumers. Findings The results provide strong evidence that product country image of the consumers perceived brand origin strongly affects brand attitudes, and this happens regardless of the perceptions objective accuracy. The authors also find evidence that educating consumers about brands true COO can contribute to changes in brand attitudes. Practical implications It is concluded that suggestions that COO has become an irrelevant construct in international marketing may be premature. The study offers meaningful insights for managers in understanding how brands country associations affect brand attitudes. Originality/value This study aims to reconcile tensions in the current COO literature and does so by demonstrating that although consumer knowledge of brand origin is often mis-calibrated, consumers perceptions of brand origin still matter. Keywords Consumer behaviour, Brand evaluation, Country of origin, Global marketing, Brand origin recognition accuracy, Global branding, Hierarchical linear modelling Paper type Research paper

International Marketing Review Vol. 28 No. 5, 2011 pp. 454-472 r Emerald Group Publishing Limited 0265-1335 DOI 10.1108/02651331111167589

Country of origin (COO) research has been heralded as one of the most widely researched topics in international marketing (Pharr, 2005). Testifying to the importance of the concept, International Marketing Review recently published two special issues dedicated to the topic, one focussed on the COO phenomenon directly (2008, Vol. 25, No. 4) and a second focussed on nation branding (2010, Vol. 27, No. 4). The vast majority of research from these two special issues as well as the entire COO research history concludes that a products COO does affect product evaluations and purchasing behavior (Demirbag et al., 2010; Phau and Chao, 2008; Sharma, 2011; Verlegh and Steenkamp, 1999), and the management of a countrys image has been brought to the forefront (Anholt, 2010; Dinnie et al., 2010; Heslop et al., 2010). Consistent with the research findings, many multinational firms continue to manage their consumers COO perception in their promotion campaigns. For example, Volkswagen often uses a German-accented narrator, emphasizes that its cars are German-designed, and includes the Das Auto slogan in many advertisements

around the world. The furniture retailer IKEA promotes its Swedish heritage by painting its stores blue and yellow like a Swedish flag, naming all products with traditional Swedish names despite pronunciation difficulties in the local language (e.g. Skanka and Forsiktig), and maintaining a Swedish grocery store and restaurant in all retail outlets. Singapore Airlines uses Singapore Girl to build a brand and country image that is warm, tender, and friendly (Chattalas et al., 2008). Chevrolets Our Country and Budweisers The Great American Lager campaigns emphasize the firms American roots and their importance as a part of American history. However, despite abundant evidence of a COO effect and ongoing marketing practices, the COO phenomenon has come under increasing scrutiny. In effect, a conflicting research stream has emerged, which suggests that most consumers care very little about the origin of products. Liefeld (2004) found that only 1.4 percent of consumers explicitly acquired a products COO and only about 6 percent knew the COO prior to the purchase. In contrast, 88.8 percent reported that they did not know a products origin and suggested they had no interest in finding out. Similarly, two recent studies examining consumers brand origin recognition accuracy showed that consumers knowledge of brands origin is indeed limited. Samiee et al. (2005) found that US respondents were only able to identify the correct origin for 35 percent of the examined brands, whereas Balabanis and Diamantopoulos (2008) found that a sample of UK consumers were able to correctly identify 27 percent of the brand origins for microwave ovens. Combined, these studies demonstrate that consumers neither possess much accurate knowledge of the origins of brands, nor actively seek out such information. This led Samiee et al. (2005, p. 379) to conclude that past research has inflated the influence that country of origin information has on consumers product judgments and behavior and its importance in managerial and public policy decisions. Usunier (2006) added that the COO research field is suffering from a progressively widening relevance gap and Samiee (2010, p. 444) concluded that recent research clearly point to the apparent insignificance of CO as a consideration in purchase decisions in the vast majority of cases. Samiee et al. (2005) and Samiee (2010) draw their conclusion based on multiple studies (e.g. Balabanis and Diamantopoulos, 2008; Liefeld, 2004; Samiee et al., 2005) which found that consumers brand origin knowledge is remarkably poor. In effect, they argue that since consumers are oftentimes unfamiliar with brands true origin, COO cannot be an important factor affecting consumers attitudes and behavior. This study aims to contribute to the COO body of knowledge by reconciling the current tension. We argue that the focus in COO research should be shifted away from the objective accuracy of consumers brand origin knowledge to the relevance of consumers perceived COO associations. We suggest that consumers perceived COO of a brand, regardless of accuracy, affects brand attitude. Consequently, we extend previous literature to conceptualize a new construct, product country image (PCI) of the perceived COO, which explicitly emphasizes consumer perceptions of origin. Empirically, we relate perceived PCI with brand attitude and we demonstrate a significant relationship regardless of brand origin perceptions objective accuracy. Finally, we examine the malleability of consumer attitudes based on learning a brands true home country. This study also responds to Samiees (2010, p. 444) challenge to design COO research that does not artificially expose subjects to [country] locations of products and brands included in the study.

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In addition to a contribution to the research literature, this study has important implications for international marketing practice. Specifically, this study offers some guidance on whether marketing efforts to associate a product with a specific country or culture is worthwhile, despite recent studies concluding that COO effects have been inflated (Samiee et al., 2005) and that the concept has become irrelevant (Usunier, 2006). For the remainder of the paper, we first review the relevant COO literature, outline the theoretical hypotheses, and follow it with a presentation of the empirical results. We conclude by discussing the implications of our study for international marketing research and practice. Literature review and hypotheses development COO as an influential extrinsic cue The COO cue has long been of great interest to both international marketing managers and researchers. Dichter (1962, p. 116) originally suggested the little phrase Made in [y] can have a tremendous influence on the acceptance and success of products with the first empirical tests conducted by Schooler in 1965. COO effects have since been examined with a variety of methodologies, product categories, and source countries and the broad conclusion emerging from almost 50 years of research on this topic is that COO does affect product evaluations (Bilkey and Nes, 1982; Peterson and Jolibert, 1995; Pharr, 2005; Verlegh and Steenkamp, 1999). The theoretical explanation for why COO affects product evaluations and purchase behavior has primarily viewed consumer decision making as a cognitive process (Bloemer et al., 2009). According to this perspective, a product consists of a collection of information cues, such as the physical make-up of the product, including material, color, technical specifications, performance, taste, texture, and design, which have traditionally been referred to as intrinsic cues. However, information cues also come from aspects external to the product, such as reputation, brand equity, price, brand name, and COO (Liefeld, 1993). By definition, consumers face inherent difficulties in gaining access to intrinsic information prior to purchasing, which means that consumers are often forced to rely heavily on extrinsic cues when forming a product judgment (Bredahl, 2004). Extrinsic cues serve as stimuli, which automatically activate internally stored schemas (Shimp et al., 1993) and drive product judgments. Research has shown that consumers view extrinsic cues, e.g. brand name, price, retail outlet, and COO, as consistent and credible predictors of value and quality (Dodds, 1991; Kardes et al., 2004). In other words, extrinsic cues provide a cognitive shortcut when intrinsic cues are difficult to obtain, the motivation to understand intrinsic cues is lacking, or the consumer seeks to expedite the decision process (Bredahl, 2004). Veale and Quester (2009) provide a recent example of the importance of extrinsic cues by finding that product evaluations of wine were affected more by extrinsic cues, COO and price, than an intrinsic taste cue. Has the COO cue become irrelevant? Although our understanding of the COO phenomenon and its underlying psychological drivers have benefited from decades of research, theoretical explanations and empirical examinations have assumed that some sort of COO cue is available and processed by the consumer when making purchase decisions. Recent research has indicated that consumers interest (or ability) to consciously process the COO cue may not be as extensive as prior research has assumed (e.g. Liefeld, 2004).

COO skeptics have argued that COO matters little to the consumer. Empirical evidence suggests that consumers are neither interested in finding out products origin nor care about using COO information in the buying process (Arndt, 2004; Liefeld, 2004). Building on these findings, Samiee et al. (2005) and Balabanis and Diamantopoulos (2008) set out to examine the extent of consumers knowledge about the national origin of brands. Based on two separate samples, one of US consumers and one of UK consumers, they found that consumers are only able to correctly identity brands COO about one-third of the time. The combined conclusions of these studies are that consumers do not know where brands are from, care where brands are from, or use COO information as part of the buying process. Usunier (2006) argues that COO is no longer relevant because COO information has become increasingly difficult for consumers to ascertain, in part due to changing labeling requirements; global sourcing and globalization of the supply chain have made assigning COO to a product a subjective exercise; and global companies prefer to de-emphasize origin. Consequently, consumers view COO information as unimportant and non-salient (Usunier, 2006; Usunier and Cestre, 2008). In sum, traditional COO research has assumed that COO information is readily available (memorized from advertisements or other channels of information or at point of sale) and that consumers use the information to make product judgments and purchase decisions. Accordingly, most traditional experimental COO research has made COO information readily available (through experimental stimuli) and forced respondents to evaluate products based on a COO cue. In contrast, recent research has found that consumers actual knowledge of COO information is often miscalibrated (Balabanis and Diamantopoulos, 2008; Samiee et al., 2005) and that the traditional experimental approach has produced artificial effects sizes that have exaggerated the effects of COO (Samiee, 2010). To reconcile these competing perspectives, we present an explanation, which takes into account advances from both the traditional COO literature as well as the more recent competing perspective. In the coming sections, we develop a hypothesis which shifts the focus away from consumers assumed knowledge to consumers brand origin perceptions, and argue that correct brand origin classification is irrelevant. A graphical illustration of our proposed framework is presented in Figure 1. Perceived COO COO and brand attitude. The relationship between perceived COO and brand attitude can be attributed in part to how consumers respond to complex environments. Cialdini (2001, p. 7) describes such consumer responses as follows: To deal with

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Initial perceived COO

Learned actual COO

Product country image H1a (+) of perceived COO H1b (ns) Brand origin perception accuracy

Brand attitude

Consumer learns actual COO

Product country image of actual COO relative to prior perceived COO

H2 (+)

Change in brand attitude

Figure 1. Conceptual framework

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[environmental complexity], we need shortcuts. We cant be expected to recognize and analyze all the aspects in each person, event, and situation we encounter in even one day. We havent the time, energy, or capacity for it. Instead, we must very often use our stereotypes, our rules of thumb, to classify things according to a few key features and then to respond without thinking when one or another of these trigger features is present. Hence, consumers seek to minimize elaboration, resort to peripheral information processes (Petty and Cacioppo, 1986), and deploy heuristic cue-based cognitive short-cuts (Chaiken, 1987). Over time, these judgments take place automatically as a thoughtless response in the cognitive repository in a manner introspectively unavailable to the actor (Greenwald and Banaji, 1995). In effect, automaticity is the human cognitive ability to complete effortlessly, mundane tasks without conscious thought to intermediate steps or sequence. As a cue-based cognitive short-cut, brand origin information is a place association reflecting the personal meaning about a brand stored in the consumers memory (Keller, 2003). Challenge of learning the correct origin. Given the vast amount of information and diversity of sources of information about brands, it is easy to understand how consumers develop inaccurate brand origin perceptions. For example, if not explicitly and accurately stated in advertisements or on brand packaging, consumers may rely on cues from other sources to determine brand origin, e.g. perceived language of the brand name. Further complicating the learning of accurate origin information is that such information is obtained in a manner that is often incidental rather than intentional (Hutchinson and Alba, 1991). In other words, consumers can actively seek to memorize product information, i.e. intentional learning; or learn about a product unintentionally as a by-product of interactions with the product category, i.e. incidental learning (Markman and Ross, 2003). Although some consumers actively seek out and memorize COO information (Liefeld, 2004), the majority of consumers do not. This is consistent with broader consumer research that shows that the vast majority of product-related experiences are incidental (Hutchinson and Alba, 1991). Thus, it should not be surprising that brand origin perceptions are frequently miscalibrated (Balabanis and Diamantopoulos, 2008; Samiee et al., 2005). Several other factors contribute to consumers challenge in learning brands origin. First, origin perceptions are shaped through features such as the spelling or pronunciation of the brand name (Leclerc et al., 1994), which are not always consistent with the brands home country (Balabanis and Diamantopoulos, 2008). Second, product price points often serve as a proxy for quality, and low-priced products are often associated with emerging markets (Brouthers and Xu, 2002). Third, misperceptions may result from a lack of salience of origin information for a particular brand. Finally, and perhaps most importantly, marketers may employ a foreign branding strategy and deliberately attempt to obfuscate a brands actual origin and instead replace it with another more favorable association. For example, ice cream aficionados may be drawn to Haagen-Dazs thanks to its Scandinavian-sounding brand name, but Haagen-Dazs is an American brand employing a foreign branding strategy. The Chinese Haier brand switched from Qingdao Refrigerator Company to its current German-sounding brand name in 1992. Similarly, Seagull, Jasonwood, Eastcom, Bird, and Draft are all examples of other Chinese brands that have adopted a foreign branding strategy (Zhuang et al., 2008). Accuracy and brand attitude. Samiee et al. (2005) and Samiee (2010) use consumers low correct identification rates to conclude that COO must not matter. However, at the

individual brand evaluation level, we reject the implication that inaccurate brand origin knowledge renders COO information irrelevant. For instance, how can the association of a brand with Germany be any less influential for a consumer who incorrectly perceives Volvo to be German than for the same consumer who correctly perceives Mercedes to be German? Would the stereotypical association of high-quality German engineering have a stronger positive influence on an individual consumers brand attitude toward Mercedes than Volvo simply because of objective accuracy? Josiassen and Harzing (2008) corroborate our argument by suggesting that examples of foreign branding where firms deliberately create an inaccurate brand origin perception serve as evidence that country associations matter, not as indication that COO information has become irrelevant. Thus, rather than arguing that consumers must know a brands correct origin in order for COO effects to exist, we posit that perceived brand origin does influence brand attitude regardless of the degree of accuracy of the perception. The importance of brand origin perception over reality is supported by Thakor and Kohli (1996, p. 28), who suggest that the actual place that the brand originates from is almost irrelevant. Indeed, Usunier (2006, p. 62) acknowledges that COO is increasingly considered as that country which consumers typically associate with a product or brand, irrespective of where it is actually manufactured. Related empirical evidence also supports our argument. For example, Batra et al. (2000) found that Indian consumers have more favorable attitudes toward brands perceived as non-local compared with local brands. Zhuang et al. (2008) and Zhou et al. (2010) found that Chinese consumers rated Chinese brands perceived (incorrectly) as foreign brands more favorably compared with Chinese brands perceived (correctly) as domestic brands. In addition to the dichotomous local or foreign distinction examined by Batra et al. (2000), Zhuang et al. (2008), and Zhou et al. (2010), we posit that specific country associations affect brand attitude. The preceding arguments can be illustrated with the following examples. If a consumer believes Haagen-Dazs is a Danish ice cream brand, Haagen-Dazs is associated with the consumers attitude toward Denmark, which may include images of jovial people, the little mermaid, fine pastries, and other desserts. Alternatively, the consumer who perceives Haagen-Dazs to be a US brand will have completely different country associations. Similarly, someone who perceives Samsung as a Japanese brand may have a favorable attitude toward Samsung based on images of Japan as the place for high-technology innovation and high quality (Anholt, 2010). In contrast, the consumer who associates Samsung with South Korea may still have a less favorable image toward the brand based on associations of South Korea with images such as emerging market, low price, and below-average quality (Anholt, 2010). Research has shown that consumers overall country image is closely related with specific PCIs (Pappu et al., 2007; Pharr, 2005). It is important to note that while the preceding examples may reflect common stereotypes about Denmark, Japan, and South Korea (Anholt, 2010), any individual consumer may have different country images. For example, someone might view South Korea as a newly industrialized country with a highly educated work force and advanced engineering capabilities and consequently have a very favorable PCI of South Korean high-tech electronics. Such a consumer is expected to have a favorable attitude toward Samsung if he or she associates Samsung with South Korea. Traditional COO research has viewed PCI as the place-related images of a brands home country (Baldauf et al., 2009). We extend this construct by making the perceptual

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aspect of place-related associations explicit. Thus, we define PCI of perceived COO as the place-related images of the brands perceived home country. While seemingly minor, this represents an important shift in the conceptualization and subsequent operationalization of PCI. Furthermore, we expect a positive relationship between PCI of perceived COO and brand attitude. More importantly, we posit this relationship holds true regardless of the objective accuracy of consumers perceived brand origin, i.e. the accuracy of brand origin perceptions will not moderate the relationship between the PCI of the perceived COO and brand attitude. Thus, we offer the following hypotheses: H1a. PCI of perceived COO is positively related with brand attitude. H1b. The relationship between PCI of perceived COO and brand attitude is significant regardless of brand origin perception accuracy. In addition to investigating the COO effect in accurate vs inaccurate contexts, we investigate the malleability of consumers brand attitudes in response to shifting country associations. Given the documented high degree of miscalibrated brandcountry perceptions (e.g. Samiee et al., 2005; Balabanis and Diamantopoulos, 2008), we examine the effect on the consumers brand attitude upon learning the true brand origin. Thus, how is brand attitude affected when the consumers knowledge is correctly calibrated following a misperception? The malleability of attitudes has been linked with the process under which the attitude was developed, e.g. Petty and Cacioppos (1986) elaboration likelihood model. Attitudes developed through the peripheral route, such as heuristic-based or simple association-based processing, are less persistent and less resistant to change than attitudes developed as a result of greater elaboration of the arguments central to the merits of the attitude object (e.g. Petty et al., 1991). Bloemer et al. (2009) suggest that of the four different cognitive COO effects, only the summary construct-effect is considered central processing. The remaining three effects, i.e. halo-effect, product attribute-effect, and default heuristic-effect, are all categorized as peripheral processing. While there is no empirical evidence indicating the frequency of central vs peripheral processing in the context of COO effects, the high rate of brand-country misperceptions (e.g. Balabanis and Diamantopoulos, 2008; Samiee et al., 2005) may serve as an indication of a more peripheral processing. Related consumer research also suggests that limited cognitive capacity often forces consumers to rely on peripheral processing. Petty and Cacioppo (1986) and Chaiken (1987) suggest that consumers seek to minimize elaboration, resort to peripheral information processes, and deploy heuristic cue-based cognitive short-cuts. Attitudes developed using the peripheral route should be subject to greater malleability. To investigate the malleability of brand attitudes, we emulate traditional COO research methods by making a brands actual home country explicitly known to respondents, but not until after they have already evaluated the brand and indicated its perceived COO. Then, we examine whether informing consumers of a brands actual home country leads to a change in brand attitude. Presumably, if attitude toward a brands perceived home country affects brand attitude, then upon learning the actual COO, attitude toward the brand will logically change according to the relative favorability of the actual COO compared to the incorrectly perceived COO. For example, if a consumer perceives Samsung to be a Japanese brand, the attitude toward

Samsung is influenced by the PCI of the brands perceived COO ( Japan). That is, a favorable image of Japan leads to a favorable attitude toward Samsung. When the consumer learns that Samsung is actually a South Korean brand, the consumers attitude toward Samsung is expected to improve or deteriorate in accordance with the relative difference between his or her PCI of South Korea and Japan. That is, a less favorable image of South Korea, in comparison with Japan, leads to a less favorable attitude toward Samsung, whereas a more favorable image of South Korea is expected to lead to a more favorable image of Samsung. The preceding arguments are summarized in the following hypothesis: H2. More (less) favorable PCI toward the actual brand home country (compared with the perceived brand home country) leads to more (less) favorable brand attitude. Method Sample Data regarding three diverse product categories (LCD TVs, automobiles, and fashion brands) were gathered in three separate samples of US consumers. The respondents were surveyed via an online questionnaire administered through Questionpro and we adopted the technique suggested by Bitner et al. (1990), in which undergraduate business students from three separate universities trained in recruitment and data collection procedures identified and contacted potential respondents. Each student completed the survey and recruited a maximum of five other non-student respondents. To verify the integrity of the data, each respondent was asked to provide an email address. One week after the close of the surveys, 10 percent of the respondents were randomly contacted to verify their participation in the research project. No problems were detected. Following the elimination of incomplete surveys and surveys taken by non-US citizens, 544 usable responses remained, 210 for the LCD TVs, 194 for automobiles, and 140 for the fashion brands. Although the sample was not randomly collected, the demographic characteristics exhibited broad representation in the categories of income and education levels with equal gender representation and a mean age of 36. We deemed the LCD TV, automobile, and fashion industry as appropriate contexts for this study for multiple reasons. These industries are global in nature with prominent brands originating in multiple countries of varying degrees of economic development; respondents are expected to have a broad familiarity with the product categories; and these product categories have been commonly examined in past COO research, which allows for comparison across the literature. Combined, these arguments suggest that this is an appropriate context to explore the proposed theoretical framework. In total, 35 of the largest brands from diverse country origins were selected for inclusion in the study (see Table I). Each respondent evaluated brands from only one category and following the elimination of incomplete evaluations of individual brands, a sample of 4,047 brand evaluations by 544 respondents remained. Questionnaire design The online format forces respondents to answer each question in a predetermined order, with no opportunity to skip between pages of the survey. Thus, it was possible to minimize response bias by the ordering of the items on the questionnaire.

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Brand LCD TV brands Haier LG Olevia Philips Polaroid Samsung Sanyo Sharp Sony Toshiba Vizio Westinghouse Automobile brands Audi Buick Dodge Hyundai Kia Land Rover Mazda Mini Nissan Saab Volvo Volkswagen Fashion brands Burberry Christian Dior Calvin Klein Gucci H&M Hugo Boss Louis Vuitton Prada Ralph Lauren Shiseido Tag

Brand origin

Accuracy rate (%)

Mean brand attitude

462

China South Korea USA The Netherlands USA South Korea Japan Japan Japan Japan USA USA Germany USA USA South Korea South Korea UK Japan UK Japan Sweden Sweden Germany UK France USA Italy Sweden Germany France Italy USA Japan Switzerland

24.78 15.63 18.95 8.08 80.41 25.46 64.95 25.51 68.42 79.65 41.44 80.53 82.08 97.25 97.38 49.72 51.68 47.95 65.34 66.18 85.71 53.33 54.65 95.08 43.38 47.22 76.83 71.15 15.60 18.26 49.65 59.58 71.34 55.31 30.98

3.16 5.16 3.41 5.02 3.99 4.90 4.46 5.27 5.87 4.89 4.22 3.73 5.57 3.91 4.05 3.63 2.96 4.55 4.51 4.23 4.96 4.78 5.06 4.95 5.06 5.08 5.35 5.16 4.73 4.64 4.93 4.94 5.72 4.36 4.89

Table I. List of brands

Specifically, the first page asked respondents to rate their attitude toward the different brands. The respondents had not yet been prompted to recall any country associations related to that brand, been informed about the correct home country, or even been instructed that the research study was interested in country-related information, which means the relationship between perceived PCI and brand attitude should not be an artifact of the research design. On the following pages of the questionnaire, we asked respondents to indicate each brands COO. At this time, it was impossible for the respondent to return to the set of brand attitude items once country-related associations had been primed. The change in brand attitude item was limited to the LCD TV questionnaire. In this questionnaire, a final page of items asked respondents to once again evaluate each brand, but this time, the brand name was accompanied with the brands actual home country.

Variables Brand attitude. The dependent variable in our study is consumers attitude toward the brand. In order to reduce respondent fatigue due to the number of brands evaluated, we measured attitude toward the brand with a single item asking the respondent to rate their overall attitude toward each brand on a scale from 1 to 7 anchored by dislike very much to like very much. An option of not familiar with this brand was also available, ensuring that the respondents had at least a minimum level of familiarity to provide an attitude rating. Although multiple-item measures are commonly used, evidence shows that single-item measures can perform equally well for doubly concrete constructs (Bergkvist and Rossiter, 2007, 2009). Doubly concrete constructs are constructs for which both the object of measurement and the attribute of measurement are clear and unambiguous for those rating the object on the attribute, such as brand attitude (Drolet and Morrison, 2001; Rossiter, 2002). Furthermore, it has been suggested that increasing the number of items of a doubly concrete construct potentially decreases its validity (Drolet and Morrison, 2001) and that multiple-item scales may actually increase the threat of common methods bias (Bergkvist and Rossiter, 2007). PCI of perceived COO. The measurement of PCI of perceived COO is created by matching each respondents brand origin perception with the associated product-category country image. To measure consumers brand origin perception, each respondent was asked to write each brands home country in an open-ended question. Then, we asked the respondents to rate the PCI for several countries in the relevant product category. The PCI question was similar to the brand attitude question in that it asked a single question: In general, my attitude toward oproduct category4 products from ocountry4 is on a seven-point scale anchored by highly unfavorable and highly favorable. Although it was impossible for us to anticipate all countries with which the respondents would associate the various brands, more than 85 percent (4,047/4,750) of all brands origins were assigned to one of the available countries. Finally, each respondents brand origin perception was matched with the appropriate PCI to assign PCI of perceived COO rating. For example, one respondent associates Volvo with Germany. Accordingly, PCI of perceived COO is based on the respondents attitude toward German automobiles. It should be noted that PCI is not averaged across consumers, but rather measured at the individual consumer level. For instance, Japan had the highest average PCI for automobiles; yet, any individual consumer may rate Japanese automobiles poorly. Brand origin perception. We split the sample into two groups based on whether the brands origin was perceived correctly or not. Correct brand origin classification rates at the brand level are presented in Table I. At the product category level, correct classification rates were 71.1 percent for the automobile brands, 52.0 percent for the fashion brands, and 45.1 percent for the TV brands. This is slightly higher compared with Balabanis and Diamantopoulos (2008) and Samiee et al. (2005) whose respondents provided correct classification rates of 27 percent and 35 percent, respectively. Presumably, this is due to the fact that we studied popular product categories with relatively large, familiar brands, several of which are recognized by Business Week as the worlds Top Global Brands (BusinessWeek, 2009). Change in brand attitude. The second dependent variable is change in brand attitude, which was only tested in the LCD TV sample. The last item of the questionnaire asked the respondents to evaluate all brands yet again with one

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important difference. This time, all brand names were accompanied by the brands actual home country (e.g. Philips The Netherlands). Change in brand attitude is measured as the difference between the second value of brand attitude and the initial value of brand attitude, which did not include a country cue. PCI of actual COO relative to prior perceived COO. We calculated the change in PCI as the difference between the respondents PCI of the brands actual home country (e.g. Samsung South Korea) and the PCI of the brands prior perceived home country (e.g. Samsung Japan). Control variables. To add robustness to the analysis, we also include several individual-level and firm-level control variables. Individual demographic control variables include age, gender, income, and education. We also controlled for consumer ethnocentrism, which was measured with a previously validated (Steenkamp et al., 1999) four-item abbreviated version of Shimp and Sharmas (1987) original CET scale (a 0.92). At the firm level, larger and older brands are expected to be more familiar and also be viewed more favorably. Therefore, we control for brand age (years since founding) and brand size (total brand sales). Results Although all of the hypothesized variables of interest are measured at the brand level, the individual and firm-level control variables are higher-level variables. Hence, the framework is evaluated with hierarchical linear modeling (HLM). The model is a twolevel cross-classified model, where lower-level units (brand-level) are cross-classified by two higher-level units: (1) (2) individual-level variables; and firm-level variables (Raudenbush and Bryk, 2002).

The results for H1 are presented in Table II, combined and separated by product category. As predicted in H1a, there is strong support across all models that PCI of perceived COO is significantly related with brand attitude. More importantly, H1b predicts that this relationship will hold regardless of whether perceived brand origin is accurate or not. For the samples with incorrect perceptions, PCI of perceived COO is significant in the combined sample (b 0.18, po0.001), in the TV category (b 0.16, po0.001), in the automobile category (b 0.21, po0.001), and in the fashion category (b 0.16, po0.05), providing support for H1b across all models. Furthermore, the deviance statistic examines the presented model with a model that excludes PCI of perceived COO. The chi-square test is significant for all models, suggesting that adding PCI of perceived COO to the model improves data fit. For the control variables, as expected, brand size and age are positively related with brand attitude, except in the fashion category, which is consistent with the luxury brand concept. The results testing H2 are presented in Table III. As predicted, we find a significant relationship between the difference between the PCI of a brands actual home country and the PCI of the prior perceived COO and change in brand attitude (b 0.13, po0.001). Model fit statistics also support the inclusion of the difference variable with a significant w2 statistic (w2 12.61, po0.001), and an increase in pseudo r2 from 10 to 12 percent. In terms of control variables, larger brands are less subject to changes in brand attitude (b 0.01, po0.01). This seems reasonable since consumers are more familiar with larger firms and these firms brand equity may be based on multiple facets, brand stereotypes may be more central, and consequently less prone to change based on new information.

All product categories Model 1 Model 2 Model 3 Full Incorrect Correct sample BO BO Model 4 Full sample Model 7 Full sample

LCD TVs Model 5 Model 6 Incorrect Correct BO BO

Automobiles Model 8 Model 9 Incorrect Correct BO BO

Fashion Model 10 Model 11 Model 12 Full Incorrect Correct sample BO BO

4.57*** 0.01 0.03 0.01 0.01 0.05 0.01* 0.01w 0.18*** 0.07 40.33*** 289.61*** 1,281 2,766 16.97*** 1,069 13.29*** 503 6.12* 566 85.42*** 1,917 0.11 0.11 0.18 0.13 0.09 0.07 0.34*** 0.13*** 0.16*** 0.11** 0.33*** 0.21*** 0.48*** 0.28 0.13* 0.04 5.26* 1,061 0.16* 0.06 5.07* 338

4.52*** 4.74*** 4.54*** 4.39*** 4.57*** 4.31*** 0.00 0.01** 0.00 0.01w 0.01 0.00 w 0.06 0.17* 0.18 0.01 0.37** 0.14 0.04 0.09w 0.05 0.07 0.04 0.00 0.02 0.09* 0.01 0.02 0.03 0.07 0.02 0.01 0.03 0.00 0.08w 0.01 0.01* 0.01w 0.02** 0.02** 0.02** 0.01w 0.01w 0.00 0.00 0.00 0.00 0.00

4.28*** 4.55*** 0.00 0.01** 0.05 0.08 0.05 0.10w 0.01 0.09* 0.09 0.03 0.01w 0.00 0.01 0.00

4.91*** 4.89*** 0.00 0.01 0.23 0.25 0.06 0.04 0.04 0.13 0.07 0.02 0.00 0.00 0.00 0.00

5.18*** 0.01 0.13 0.07 0.07 0.07 0.00 0.00 0.13** 0.08 10.59** 723

0.18***

Variables Constant Age Gender (F 1) Education Income Ethnocentrism Brand size Brand age PCI of perceived COO Model fit Explained variance (pseudo r2) Deviance statistic (w2-difference)a Level 1 sample size 21.22*** 322.43*** 440 1,477

0.07

50.86*** 4,047

Notes: aComparison with a model that does not include brand origin perception; wpo0.10, *po0.05, **po0.01, ***po0.001

Accurate or not, perceived COO matters 465

Table II. HLM results: the effect of brand origin perception on brand attitude (H1a and H1b)

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Variables Constant Age Gender (F 1) Education Income Brand size Brand age PCI of actual COO relative to prior perceived COO Model fit Explained variance ( pseudo r2) Deviance statistic (w2-difference) Level 1 sample size Notes: *po0.05, **po0.01, ***po0.001

466

0.17 0.01 0.19 0.10 0.05 0.01** 0.00 0.10 503

0.22 0.01 0.21 0.09 0.03 0.01** 0.00 0.13*** 0.12 12.61***

Table III. HLM results: the effect of changed brand origin perception on change in brand attitude (H2)

Discussion Following nearly five decades of COO research, a number of contemporary studies have begun to question the importance of COO information and argue that traditional COO research has inflated the influence of COO on consumer attitudes and behavior (Samiee et al., 2005; Samiee, 2010) and, consequently, that the field of COO research has become irrelevant for marketing practice (Usunier, 2006; Usunier and Cestre, 2007). Those advancing this perspective convincingly argue that traditional experimental COO research poorly reflects actual consumer product evaluations and buying behavior. Research supporting this point of view (e.g. Balabanis and Diamantopoulos, 2008; Samiee et al., 2005; Usunier, 2006) raise interesting questions, yet, this study empirically refutes the notion that brands country associations do not affect brand attitudes and consumer behavior. As a result, this study serves as a bridge reconciling traditional COO research with the emerging competing perspective. To accomplish our objective, we have conceptualized a new construct that extends prior literature. PCI of perceived COO explicitly captures the perceptual, and often flawed, nature of consumers brand origin perceptions. Empirically, this study demonstrates that the PCI of the brands perceived origin is positively related with brand attitude. More importantly, the findings suggest that the PCI of the brands perceived origin significantly affects brand attitude regardless of the objective accuracy of brand origin perceptions. Hence, we demonstrate that accurate COO knowledge is not a prerequisite for COO to affect brand attitude. Brand origin information has become more ambiguous and difficult to ascertain. Usunier (2006) points to globalization with its accompanying global sourcing, global and foreign branding strategies, and advancements in international trade regulations as main contributors to the confusion over brand origins. Consequently, Usunier (2006) concludes that COO has become an irrelevant construct in international marketing. Consistent with previous studies, this research reveals only relatively modest levels of accurate brand origin perceptions. While we do not dispute the confounding effects of globalization on assigning brand origins, the evidence from this research points to a different conclusion, i.e. it is perceived brand origin, regardless of accuracy, that matters.

Although objective evaluations of the origin of a brand can be difficult, consumers still associate a brand with a particular country and these associations drive consumers attitudes toward the brand. Consequently, while the extent to which consumers actively seek COO information remains debatable, this study offers evidence that an implicit perception about a brands COO influences attitude toward the brand. Acknowledging that consumers make implicit associations between a brand and a particular country can help reconcile recent skepticism about the relevancy of COO effects (Samiee et al., 2005; Samiee, 2010; Usunier, 2006). Managerial implications While the importance of COO information has come under scrutiny in the academic arena, the use of COO image marketing is still a common marketing practice. Despite assertions questioning the relevance of COO image, examples of companies employing some facet of COO marketing stretch the gamut of industries including automobile companies (e.g. General Motors, Volkswagen, and Toyota), furniture companies (e.g. IKEA), food companies (e.g. Pillsbury, Conagra), electronics companies (e.g. Vizio), as well as luxury fashion companies (e.g. Rolex, Gucci). Hence, one can still find many marketers incorporating COO image management as part of their marketing strategy; the results of this study offer some justification for their actions. This studys findings provide further guidance as it relates to branding and promotion. International marketers need to be keenly aware of the country associations consumers draw with their brand. The evidence suggests that for most brands, consumers identify the correct home country less than half the time. Thus, it becomes imperative for brand managers to assure that brand-country associations, whether accurate or inaccurate, add to (or at least not detract from) brand value. For example, less than 10 percent of the respondents in this study were able to identify Philips as a Dutch firm; yet, the majority of respondents believed that Philips is a US firm (75 percent). This inaccurate identification of Philips as a domestic firm (by US consumers) potentially benefits Philips depending upon the relative difference between the perceptions of electronics firms of US vs Dutch origin. Our findings indeed show that being misperceived as a domestic (US) brand (e.g. Philips perceived as American by American consumers) benefits Philips. Alternatively, the findings suggest education efforts that inform consumers of the correct COO can result in a corresponding change in attitude. After informing respondents of a brands actual home country, we found significant changes in brand attitude. For respondents with a more negative attitude toward a brands actual home country, brand attitude became less favorable, whereas when consumers had a more favorable attitude toward a brands actual home country, their attitude toward the brand became more favorable. This serves as evidence that brand-country associations can be managed and that they may have significant positive effects on associated brand evaluations. Limitations and future research Our study is subject to several limitations which offer several fruitful avenues to contribute to the research on COO effects. It may be worthwhile to extend this study and tease apart any moderating effects. For example, consumers with low productcategory knowledge, i.e. novices, may rely more on heuristic decision-making processes by relying on simple cues such as COO information (e.g. Sujan, 1985). These factors suggest that replicating this study in additional product categories as well as

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468

additional environmental contexts would help support, or refute, the findings of this study. Another natural extension would be to examine this model in a different cultural environment. Traditional COO experiments have been conducted with significant findings in multiple cultural environments (e.g. Klein et al., 1998; Roth and Romeo, 1992) suggesting some generalizability across cultures. However, others have suggested that cultural orientations lead to different responses to COO cues (Gurhan-Canli and Maheswaran, 2000; Hsieh et al., 2004). Thus, it would be valuable to examine our model in multiple cultural environments and explore potential moderating cultural factors. Finally, the focal dependent variable in this study is brand attitude, not actual buying behavior. Previous meta-analyses (Peterson and Jolibert, 1995; Verlegh and Steenkamp, 1999) have shown that, in general, COO is a stronger predictor for quality/ attitude perceptions than purchase intentions. Usunier (2006) uses this gap between attitude perceptions and purchase intentions to argue for the irrelevance of COO. However, it has long been established that consumers behavior directly depends on their attitude about the behavior (Fishbein and Ajzen, 1975). Accordingly, Verlegh and Steenkamp (1999) argue that it should be expected that COO effects are stronger for attitudes than buying behavior, due to other external factors such as budget constraints. In effect, even though consumers may like a product very much and prefer to buy it, they may not be able to afford it. Josiassen and Harzing (2008, p. 265) acknowledge this situation and suggest that any good research design in COO research will need to anticipate and accept that COO has a stronger effect on consumers product evaluations than on their purchase intentions. Nonetheless, it may be fruitful to try to determine brand origin perceptions influence on actual buying behavior separately from brand attitude. Limitations notwithstanding, we conclude by restating our core contribution. Despite decades of research finding evidence of COO, recent studies have suggested that the effect of COO on product evaluations and purchase behavior is inflated or irrelevant. This study has aimed to reconcile these two competing perspectives. The empirical findings demonstrate that consumer knowledge of brand origin is indeed limited, but more importantly, we offer evidence that consumers perception of brand origin, regardless of accuracy, significantly affects brand attitude.
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