Brand origin and country of production congruity: Evidence from the UK and China

• Published in: Journal of business research Vol. 69; no. 12; pp. 5703 - 5711
• Main Authors: Eng, Teck-Yong, Ozdemir, Sena, Michelson, Grant
• Format: Journal Article
• Language: English
• Published: New York Elsevier Inc 01.12.2016; Elsevier Sequoia S.A
• Subjects: Brand image; Brand loyalty; Consumer ethnocentrism; Consumers; Developed country; Developing countries; Developing country; Ethnocentrism; International business; LDCs; Localization; Multinational corporations; Production costs; Rule of origin; Studies; Brand loyalty; Consumer ethnocentrism; Brand image; Developed country; Developing country
• ISSN: 0148-2963; 1873-7978
• DOI: 10.1016/j.jbusres.2016.01.045

The process of manufacturing and marketing international products is increasingly complex and especially for multinational corporations that strive to lower production costs while adapting their products and services to match local preferences. Localization of international business has been shown to generate differing country of origin (COO) effects in terms of the brand origin and country of production (COP) congruity issue. Both country of production and brand origin may not be the same, which questions the effect of incongruity on a brand, consumer ethnocentrism and localization issues particularly when a well known brand are from a developed country and COP is in a developing country. This study extends past studies on the COO effect to examine whether a negative COP affects consumer product perception and consumer purchase decision of a well-known brand. Hypotheses are tested empirically against survey consumer data from the UK (developed country) and People's Republic of China (developing country) using Sony as a global brand. The main findings show that both brand origin and COP are particularly important for consumers in a developed country in their product evaluations while perceived brand image of a developing country and price are key factors for consumers in a developing country. In addition, knowledge of the extent of consumer ethnocentrism can be a major determinant for branding decisions related to using product information cues about country of production and/or an international brand image.