Perception of foreignness of brands: An investigation of consumers classification schema and its impact on brand evaluations

Abstract

Country-of-origin (COO) affects consumers’ perceptions towards brands and products. However, research also suggests that consumers rarely recognize brand origins accurately (Balabanis & Diamantopoulos, 2008; Samiee, Shimp & Sharma, 2005). This research probes the categorization of foreign brand origins by consumers to understand how COO information is used by consumers during purchase decisions. Based on categorization theory, this thesis argues that consumers are more likely to form clusters of countries that are similar on one or more parameters. These similarity-based clusters are captured through a a new construct of Brand Ethnicity.Brand Ethnicity will be recalled and used through labels that will be shaped by the most typical country/countries of the clusters. Three studies were conducted to empirically test these hypothesis, where Study 1 and Study 2 investigate whether consumers categorize COOs in similarity-based clusters or perceive them to be discrete and mutually exclusive. Study 2 also describes the effects of Brand Ethnicity on consumers’ transaction with foreign brands.Study 3 was conducted to test the efficacy of several marketing tools used in promoting COO cues. This research extends the understanding of COO and brand origin literature and assists marketing professionals to effectively utilize COO based on their target audiences' perceptions.