Master Thesis
HALMSTAD
UNIVERSITY
Master's Programme in Strategic Entrepreneurship for International Growth, 60 credits
COUNTRY OF ORIGIN IMAGE APPEALS AND THE PURCHASE PROPENSITY OF CONSUMERS
An experimental study
International Marketing, 15 credits
Halmstad 2020-06-26
Davi Rogerio Waltrick
School of Business and Engineering
Master’s of International Marketing
Halmstad University • PO Box 823 • SE-301 18 Halmstad • Sweden Phone +46 35 16 71 00 • registrator@hh.se • Org. nr. 202100-3203
Page 1 (44)
COUNTRY OF ORIGIN IMAGE APPEALS AND THE PURCHASE PROPENSITY OF CONSUMERS
An experimental study
Dissertation in International Marketing, 60 higher education credits (ECTS) Author: Davi Rogerio Waltrick.
Supervisor: Ulf Aagerup.
Examiner: Klaus Solberg Söilen.
Page 2 (44) ABSTRACT
The purpose of this paper is to investigate how dimensions of Country of Origin Image (COI) can impact the purchase propensity of consumers. Drawing on the literature of international marketing, consumer behaviour, and social psychology, an experiment with a three-product category (experiential, functional, and symbolic) was designed to analyse purchase propensity of Swedish consumers for Brazilian products. To collect the data, Swedish consumers divided into three groups were part of the experiment. Each group had contact with one product category having five advertisements with different appeals, answering a survey sent via e-mail. Overall, COI appeals was found to have a higher purchase propensity benefit than no COI. Evidence was found that dimensions have different purchase propensity benefit among the product categories. The findings offer evidence that in a cultural distance setting, COI appeals should be implemented for the increase of purchase propensity, with adaptation based on context.
Key words: Country of origin image (COI), purchase intent, experiment, advertisement appeals.
Page 3 (44) Table of Contents
1 Problematization and Introduction ... 4
2 Theoretical Background ... 6
2.1 Country of Origin Image ... 6
2.1.1 Country of Origin Image as a competitive advantage for the firm ... 10
2.2 Context of use for products and consumers’ self-image congruity ... 13
2.3 Country of Origin and the Country of Destination ... 15
2.4 Hypothesis development ... 16
3 Methodology ... 19
3.1 Delineating the study ... 19
3.2 Research Context and design ... 21
3.3 Collection and analyse of data ... 23
3.4 Pre-test ... 23
3.5 Experiment ... 28
4 Analyses and Discussion ... 33
5 Conclusion ... 36
6 Reference List ... 38
7 Appendix ... 42
Page 4 (44) 1 Problematization and Introduction
Global brands are successful expressions of significance and experience delivery, valued by consumers worldwide (J. B. E. M. Steenkamp, Batra, & Alden, 2003). To be global is to have an international presence in markets distinct from each other and complex in their own way, facing firms with the challenge of communicating with consumers in possession of specific behaviours based on factors such as cultural heritage and international exposure (Halkias, Davvetas, & Diamantopoulos, 2016).
A brand has functional qualities (Coelho, Bairrada, & de Matos Coelho, 2019), and the perception of consumers with regards to value will be mediated by brand image (Diamantopoulos, Schlegelmilch, & Palihawadana, 2011) and brand experience (Payne, Storbacka, Frow, & Knox, 2009). Adaptation is often needed, in levels depending on the complexity of the market to be accessed and whether consumers prefer to support local businesses. Therefore, in this case adaptation would be irrespective of the attributes displayed by products sold all over the world, such as standardized quality (Winit, Gregory, Cleveland, & Verlegh, 2014).
To address cultural diversity showcased by consumers throughout markets, firms will need specific capabilities. Such capabilities are important for a firm to successfully manage product information and increase consumer’s purchase propensity. Consumer purchase decisions involves several factors, amongst them for foreign products is Country of Origin (Costa, Carneiro, & Goldszmidt, 2016). Furthermore, Country of Origin also plays a major role in determining consumer’s purchase behaviours towards domestic products (Jibril et al., 2020).
The international marketplace has gained momentum with globalization (Alden, Steenkamp, & Batra, 2006). The exposure of firms to a variety of contexts puts into perspective how important is the topic diversity. Firms have been trying to narrow the gap between offer and customer expectations in terms of brand information, using contexts and ideas of experience from the home country towards the country of destination (Sharma, Tam, & Wu, 2018).
The dynamism between differences and similarities among market contexts is such a big part of the international marketplace that it has served as a motivation for several authors such as Akaka, Vargo, and Lusch (2013). The authors have developed a framework to enlighten the social and economic factors of the global marketplace, aiming to provide international marketing managers with a tool to better comprehend this business scenario.
Page 5 (44) A way for firms to ease their way through these complexities that are apparent on
the international marketplace may lie within the multitude of resources they possess. Some of these resources are used to support the success of communication strategies towards consumers, enhancing the mix of marketing with more delineated proposals of value, context and meaning. Among these resources is Country of Origin Image (COI), a communication tool that is part of the total image of a product (Laroche, Papadopoulos, Heslop, & Mourali, 2005).
Firms have enhanced their brands with COI for decades with the support from academia’s research, such as by understanding the real effects of country of origin on imported and local products, to determine whether consumers may have preferences (Papadopoulos, Heslop, & Bamossy, 1990). More recently, Lu, Heslop, Thomas, and Kwan (2016) examined the evolution of Country of Origin Image research, as well as creating suggestions for future studies.
The evolution of the construct done by academia has brought up new ideas about its potential, properly guiding marketing managers to use key information on branding so to create an alignment between what the customers expect and what they experience, resulting in a successful relationship. Such evolution has, among many results, widened the brand management perspective towards country of origin effect on consumers’
purchase intentions (Jibril et al., 2020).
Our reasoning for the development of this thesis is that there is still research to be done on understanding the purchase propensity of consumers reacting to COI appeals.
Globalisation has changed the consumer behaviour with regards to identity, culture, and disposition of buying something (Cleveland, Rojas-Méndez, Laroche, & Papadopoulos, 2016). In the endeavour of firms building a marketing communication, the origin of a product matters for trying to build brand value (Suter, De Moura Engracia Giraldi, et al., 2018), and for customer’s product identification (Jibril et al., 2020). In that sense, it has been found that trust has a mediation effect on the country of origin, affecting the purchase intentions of consumers as a matter of quality validation (Jiménez & Martín, 2014).
Recent articles have opened new ventures for COI studies, among them is the article written by Suter, Borini, Floriani, da Silva, and Polo (2018) addressing the use of COI as a strategic resource for the firm to build competitive advantages. The authors created a scale to measure the dimensions of COI within the firm’s context, while also testing this scale with managers and validating it as a resourceful mechanism for firms to better develop their branding strategy with the use of COI.
Page 6 (44) Among the gaps for further developments Suter, Borini, et al. (2018) have
suggested to study the operation of firms while carrying on COI communication. More specifically, to analyse the differences in performance within cultural settings. This dissertation aims to address this gap by further testing the scale, in order to provide new theoretical and managerial implications regarding the use of COI and its dimensions.
Therefore, within this paper the author proposes to test the scale empirically with consumers. For each dimension, one will focus on acquiring information on how product/country fit combined with home versus foreign market settings may affect the purchase propensity of the consumer.
This dissertation is also supported through the recommendations given by Costa et al. (2016), where the authors are suggesting future studies to be conducted regarding effects of country image over different segments and products. Also, we support our work on recommendations of Suter, De Moura Engracia Giraldi, et al. (2018) with regards to working with the distance between the country of origin and the country of destination moderating the use of country image appeals.
2 Theoretical Background 2.1 Country of Origin Image
People tend to assess stereotyped images about a country, “both foreign countries and their own, and these images are used as information in evaluating products of various origins” (Papadopoulos et al., 1990, p. 284). Countries have attributes, and such attributions work as guidance for people to get an understanding about something, a reference for a belief depending on the person’s ideals and preferences (Kotler & Gertner, 2002). Depending on the functional and emotional appeals of a brand, consumers can be triggered to evaluate a product in a specific manner, and the efficiency of such trigger will depend on how well articulated the advertisement and the underlying country stereotypes are (Herz & Diamantopoulos, 2013).
In today’s global context, the differences are as varied as the similarities between people and their consumer behaviour. Multiculturalism is a reason why global communication for brands has become dynamic towards consumers (Kipnis, Broderick, &
Demangeot, 2014). Brands have incorporated what a country represent through strategic communication called Country of Origin Image (COI) regarded as having a direct influence on brand attitude, and an indirect influence on purchase intention according to Fan (2019).
Page 7 (44) Such incorporation of country appeals can be done in product categories through
advertisement, product packaging, and promotional displays according to Papadopoulos et al. (2011).
A country can be the source of strategic communication when firms are attempting to build their brand internationally (Kotler & Gertner, 2002). A key finding has been consumers to be more willing to buy products from industrialized nations as a result of country image (Kotler & Gertner, 2002). Such finding underlines the positive views consumers have about products exported from developed countries. For example, German cars, Japanese electronics, and Italian fashion are well known national industries. People from all over the world welcome the capabilities that the mentioned countries possess, delivered by their top companies in the form of product experiences and product value. To this extent, according to Kotler and Gertner (2002) a solid body of research has supported the impact of country of origin on consumers’ positive attitude towards foreign products.
Even though people tend to prefer products from developed countries, known by their competitive advantages, COI can be well suited for companies coming from developing countries as well. According to Papadopoulos and Heslop (1993) among the positive global phenomena benefiting the use of countries’ image is the globalisation. The developments in global media, as well as in other technologies can be utilised to promote the origin of a brand. This is because of an increased country exposure boosted by such technologies, consequently a greater awareness of consumers towards the presence of foreign products (Kleppe, Iversen, & Stensaker, 2002).
In the other hand, the relationship between brands and customers has become difficult to manage, as well as to maintain due to this relationship consisting “of comparable and competitive offerings of products and services” (Chiang & Yang, 2018).
Therefore, firms need a new approach towards brand communication, one that can provide new mechanisms to meet the expectations of consumers, and by doing so increasing purchase propensity.
The approach people might have with analysing a product depends on the experience with the brand priory. Through country image consideration, Han (1989) developed two functions potentially influential on people's decision making called the halo and summary views. Regarding Halo effect, it’s a product evaluation done by consumers based on country image due to a lack of capability to detect the quality of a product before purchase (Han, 1989). In contrast, summary approach is based on multiple experiences with products from a country, creating high order appeals that elevates the information
Page 8 (44) towards high stem. (Han, 1989). Furthermore, extrinsic cues gain momentum in the eyes
of consumers when they find it hard to be objective while assessing a product’s quality (Costa et al., 2016).
The strategic advantage for brands incorporating a country’s image then is competitiveness. Countries’ information can serve positively to brands, due to the prior relationship that consumers have had with it, or opinions they may hold (Kleppe et al., 2002). Countries have managed to develop an image of superiority at something based on national branding, displaying skills valued by consumers nationally and internationally.
Contributing to that statement Kotler & Gertner (2002) said that “nations compete with other nations and strive to devise sources of competitive advantage”.
Competition motivates countries towards better understanding their capacities and how to properly manage the advantages they possess. Firms can advertise these advantages through Country of Origin Image communication. The process is difficult, it “must involve government, citizens and businesses, all with a shared vision. It requires setting and delivering the incentives and managing the factors that might affect place buyers’
decisions” (Kotler and Gertner, 2002, p. 254). The image creating moment as a knowledge structure for consumers happens as in the figure 1:
Figure 1
The image creating moment, a consumer’s cognitive outcome
Note. Adapted from “Country images in marketing strategies: Conceptual issues and an empirical Asian illustration”, by I. A. Kleppe, N. M. Iversen and I. G. Stensaker, 2002, theoretical section, Figure 1.
(https://doi.org/10.1057/palgrave.bm.2540102).
Target Market Characteristics - Cultural (value, norms, symbols).
- Psychologic and
sociographic (patriotism, ethnocentrism, animosity) - Consumer
needs/preferences (universal vs unique needs)
Marketing Mix
Product Country Image
Image Creating Moment
Page 9 (44) Therefore, image creating moment is a consumer cognitive outcome delivered by
the mix of marketing and reinforced by the country image, a calculated effort by firms to attract and retain consumers’ attention. The mix also includes the characteristics most welcomed by consumers. According to Kleppe et al. (2002), these characteristics are design, presentation in the stores, and skills of the sellers. The purpose is to deliver an alignment between the consumers’ expectations and the products’ attributes.
Research has been done on understanding the magnitude of the effect of COI in different product classes (Costa et al., 2016, p. 1067). According to Roth and Diamantopoulos (2009), country of origin image is a multidimensional construct, having the dimensions different magnitude of effect on consumer’s evaluation and purchase intention of products. Furthermore, to employ stereotyped values from the home country in a manner to boost the brand image even if the country has no strong image abroad works for enhancing the brand evaluation (Magnusson, Westjohn, & Sirianni, 2019). Such enhancement works through “insulating or circumventing problems associated with an unfavourable country image” (Magnusson et al., 2019, p. 2).
Competition is a major motivator for the use of image attributions from the country of origin according to Papadopoulos (2004). The place of origin has become a major asset for companies to develop strategic communication placing on the brand the advantages of being from a specific country. In terms of efficacy, such advantages will depend on factors like the level of globalization of a country (Zhu, Freeman, & Cavusgil, 2018), therefore the level of cosmopolitanism of consumers and their touch with international standards of service quality.
The research pushed by the era of globalization on domestic versus foreign goods have demonstrated the associations countries and companies have been building.
According to Papadopoulos (2004, p. 38) “the nature and results of such campaigns, along with the broader issues of buyer views about domestic versus foreign goods and consumer ethnocentrism, have been discussed at length by many researchers”. More recently, as a country of origin effect, favouritism towards domestic versus foreign brands have being contrasted by different theoretical explanations, with xenocentrism as a consistent prediction for consumer preference for both domestic and foreign goods (Balabanis, Stathopoulou, & Qiao, 2019).
With a considerable development about the preferences of consumers and how engaging people are towards one’s culture, countries were led to build upon the reputation
Page 10 (44) of their images to attract tourists, increase business partnerships, attract investments, retain
assets, especially high valuable people (Papadopoulos, 2004). In these mixes of country and company image reinforcement, both can benefit from positive correlations between each other, communicating success stories worldwide, increasing viable outcomes for business opportunities (Roth & Diamantopoulos, 2009).
The developments of marketing communication and research on COI broad a new range of attributes to the country image, affective and cognitive components (Maher &
Carter, 2011). Among the necessary range of knowledge, firms must understand the decision-making process of consumers for branding and communication forms (Jibril et al., 2020).
As stated previously, country image has been considered a key asset in the strategic communication mix of firms, both nationally and internationally according to Laroche et al., (2005). Following, we shall discuss a recent development of Country of Origin Image research that considers COI to be a viable source of competitive advantage for the firm.
2.1.1 Country of Origin Image as a competitive advantage for the firm
Recently, the developments of Country of Origin Image as a construct have being researched (Lu et al., 2016). Accordingly, based on the data there has been a decline in the
“appeal of Country Image research” as a result of more of the same. Therefore, the field was in deep need of new sayings.
Following such quest for firms to successfully achieve brand performance enhanced by Country of Origin Image, recent research has been done to scientifically understand the origin of a brand as a strategic resource, building competitiveness upon such an advantage to communicate value, achieve customer preference, and increase consumers’
purchase intentions. (Costa et al., 2016; Halkias et al., 2016; Chiang & Yang, 2018; Suter et al., 2018).
While preparing to expand overseas, is important for a firm to have enough knowledge about the image that the country of origin has on the market of destination. To be positively perceived, the information communicated must be precise regarding what the potential consumers have considered as important when deciding to buy a product (Hussein
& Hassan, 2018). For example, countries like the United States and Japan are well known for their advanced industry, having both solid investments in research and development.
Page 11 (44) Positive stereotype images about a country affects consumers’ interest towards
products from that country and their willingness to buy (Karoui & Khemakhem, 2019).
Markets well advanced, offering to consumers worldwide trust through a competitive capacity to deliver results are known by their top corporations. International marketing managers properly use quality as an asset to increase the brand’s competitiveness, well positioning it while elevating the brand’s performance globally. (Hussein & Hassan, 2018).
Consumer’s affinity towards globality involves culture, lifestyle and social development (Nes, Yelkur, & Silkoset, 2014). A global mindset then contributes to people’s social identity. Affinity has a positive effect on people’s willingness to buy and is conceptualised as a two-dimensional construct, sympathy and positiveness towards the country of origin (Oberecker & Diamantopoulos, 2011). Such topic of study motivated Nes et al. (2014), improving the construct of affinity by connecting it with a four-dimensional rationale: Culture, population and lifestyle, music, and entertainment.
The impact of country of origin over people’s perceptions regarding brand image has a major influence over brand value and perceived attributes, having such a topic received over the course of the last decade important contribution to sustain the rationale (Diamantopoulos et al., 2011; Chen, Su, & Lin, 2011; Costa et al., 2016; Suh, Hur, &
Davies, 2016). Therefore, the asset Country of Origin Image has been significant to firms in international business, more specifically in increase of purchase intentions (Halkias et al., 2016).
Consumers’ familiarity with a brand has strategic importance for international marketers according to Türkel, Uzunoğlu, Kaplan and Vural (2016). The level of familiarity will be mediated by the previous knowledge consumers possess about the brand’s attributes, among them perceived quality and prestige being directly associated with country of origin.
An approach towards COI has been to use it as a keen resource for the firm’s strategy. Suter et al., (2018) have studied the subject as a potentially strong asset for achieving competitive advantage, validating such an understanding with a scale of twelve items and four dimensions. The dimensions are presented in the figure 2.
Page 12 (44) Figure 2
Dimensions of Country of Origin Image
Note. Adapted from “Country-of-origin image (COI) as a country-specific advantage (CSA): Scale development and validation of COI as a resource within the firm perspective”, by M. B. Suter, F. M.
Borini, D. E. Floriani, D da Silva, E. Polo, 2018, Method section, Table 1.
(https://doi.org/10.1016/j.jbusres.2017.11.006).
Strategic resource is every available asset amongst the internal capabilities of a firm. Resources can be reorganized as an answer to market changes, to successfully take advantage of market opportunities, as well as to neutralize threats. Firms change the use of resources to develop competitive advantage or sustain current ones. (Barney, 1991).
Country of Origin Image therefore contributes to branding as a powerful resource for the firm (Suter et al., 2018). COI can be used to disseminate the brand’s global image across markets, a resource that is shaped according to each market reality. Managers of international marketing must be prepared to use every resource available to develop competitive advantage. When the country image is favourable towards purchase propensity, by for example being relevant for consumer quality assessment of a particular class of products, the information must be visible (Costa et al., 2016).
According to findings of Costa et al. (2016, p. 1072), country image and product classes have an interaction effect that determines the effect of country of origin image on product evaluation. Such interaction means certain aspects of COI (dimensions) are
COUNTRY OF ORIGIN IMAGE
Textual and visual elements -product packaging -product design -association with
language, expressions, etc.
-Colours or typical sceneries of the
country of the brand
Natural Resources -Raw material
typical of the country of origin in
the production process -Capacity to
transform commodities into
value added product
Senses -Music in the sales
atmosphere -Product’s design
-Events -Partnerships
Cultural Resources -Positive cultural
myths -Beliefs -Attitudes -Aspirations
-Customs -Norms
Page 13 (44) expected to affect more the evaluation process of consumers (Costa et al., 2016), which is
precisely what is aimed to further test with this dissertation.
Following, we shall focus on context of use and product appeals. More specifically, brand's advertisement congruence with the expectations of the end customer. Such topic is of great importance for the understanding of how firms utilize consumer´s affective and cognitive stimulus in advertisements, with the objective of increasing purchase propensity.
2.2 Context of use for products and consumers’ self-image congruity
In today’s global marketplace firms must deal with a magnitude of factors that affect brand perception. When effective, the message of a brand will drive purchase decision and will properly advertise user experience (D. A. Aaker & Joachimsthaler, 2000).
In terms of strategy, firms can choose to further strength the image of a brand towards a new market by working to develop a new identity (Levi-Europe), by developing endorsements (Obsession by Calvin Klein), or work with subbrands (Gillete Mach3) (D.
A. Aaker & Joachimsthaler, 2000). The benefits are vast; to leverage brand equity, to care for the meaning and influence of a brand’s name, and to promote new offerings as appealing (D. A. Aaker & Joachimsthaler, 2000). In sum, brands hold an image that entails consumer appeals. Such image consists of functioning, experimental, or symbolic benefits (Keller, 1993). The image has a critical role in the ability of a company to successfully communicate value to customers (Payne, Frow, & Eggert, 2017).
Regarding the meaning incorporated in a brand, it becomes apparent through associations with topics like the brand’s name, the perceived product attributes, the typical projected setting when using the product (context of use), including typical users, occasions, and origin perceptions, this term being coined as Country of Origin Image (Iversen & Hem, 2011).
Furthermore, characteristics of brands in terms of meaning will signify which segment of consumers should be the representatives of the brand. The intended meaning is a representation of the brand’s personality appeals (sincerity, excitement, competence, sophistication, and ruggedness) and when consumers can see a fit between brand and themselves, the result will be consumer preference and usage (Aaker, 1997). The fact that a match between the brand personality and the consumer’s self-image will result in higher persuasion towards purchase propensity and customer satisfaction is well supported by
Page 14 (44) academia. Such support demonstrates the benefits of the theory for brand managers, such
as by the work of C. Sweeney and Brandon (2006).
There are two types of consumers, the idealized one (Baker & Churchill, 1977) and the real-world users (Aagerup, 2015). The idealized consumer is a representation of attractiveness that motivates positive evaluation regarding the product being promoted (Baker & Churchill, 1977). The idealized consumer is a persuasion intent, promoting the perfect setting for product use, and human characteristics that match with the brand meaning (Baker & Churchill, 1977). The real-world users can be defined as people who may not necessarily fit the image of the ideal customer but will admire the visual aspect of the brand. Also, such customer will embrace the meaning emanated by the brand, and therefore will wish to be part of the lifestyle (Aagerup, 2015).
The ideal consumer, the real-world user, and brand personality are topics of interest for marketers that are operating advertisements in multiple countries, it is a source of knowledge that can be useful across different cultures. The symbolic meaning of a brand is shaped by consumer appeals and the connotations promoting the context of use (Aaker, 1997). The context can be promoted with appeals from the country of origin, and such appeals can work for promoting different industries, such as luxury products (Godey et al., 2012). These are important for self-image congruity, that is the likeness of a consumer comparing himself with the appeals of a brand, therefore important for understanding brand purchase behaviour (Christodoulides and Veloutsou, 2009).
Another topic important for context and brand usage is usage imagery (Christodoulides and Veloutsou, 2009). It signifies for a consumer the typical use of a brand and what is considered an appropriate situation regarding such use (Biel, 1993).
Furthermore, usage imagery emphasises the situation in which the brand wants to be related with, represented in the form of product usage (Biel, 1993).
Self-image congruity and usage imagery are both key on the quest for brands to achieve consumer attraction. That is because the more people see themselves through the lens of a brand, where values and experiences are identified and positively perceived, higher purchase propensity can be achieved (Aagerup, 2015).
Therefore, in marketing communication when the brand is highlighting both the context of use and brand usage appeals for a product line, it is placing the brand meaning with associations that can promote brand awareness and purchase propensity towards the target customers. With proper marketing efforts, firms can reach brand equity, that is the incremental value of a brand name and what customers know about such brand, holding
Page 15 (44) favourable associations with it in memory (Keller, 1993). As we’ve shown, branding can
be promoted with different mechanisms to display symbolic values. The brand’s origin image can be an attribute to enhance customer awareness of product attributes and to positively impact purchase propensity.
Following, the focus will be on an important topic for contextualizing the meaningful differences in terms of culture between the country of origin and the country of destination.
2.3 Social Context in the Country of Origin and in the Country of Destination
Culture is the main explanation for differences in consumer behaviour across nations (Cleveland et al., 2016), and Hofstede is the father of cultural distance studies. The author has developed a scheme of dimensions that can serve as a measurement of cultural distance between countries. Depending on the mix of attributes, a country can be known to be more open to international exposure. When studying cultural dimensions through Hofstede’s work, the lens is the country instead of the individual. This means that a characteristic that defines a country not necessarily is a description that matches every citizen of that country; therefore, Hofstede’s cultural distance dimensions are a general outlook. (Hofstede, 2011).
Furthermore, we don’t question the importance of having other frames of analyses besides the country, such importance being stated by Craig and Douglas (2006). We agree with the importance of local identities as stated by Cayla and Arnould (2008). Although we say that for framing the dimensions of COI in a way to match the target customer’s expectations, first to understand the social context of countries is important for proper orientation. Subsequently, to be used the image of the home country as an advantage to the firm as stated by Suter et al. (2018).
The dimensions of Hofstede are divided into six constructs: Power distance, uncertainty avoidance, individualism, masculinity, long term vs short term orientation, and indulgence vs restraint (Hofstede, 2011). Respectively related to human inequality, level of stress regarding an unknown future, individuals’ integration into a primary group, division of emotional roles between women and men, the focus of people’s efforts, and gratification or control over human desires (Hofstede, 2001 p. 8).
Cultural distance is important for this thesis because it brings a vision about the differences between countries in terms of social context (Beugelsdijk, Kostova, Kunst,
Page 16 (44) Spadafora, & van Essen, 2018). More specifically, the importance for firms’
internationalization with regards to culture, political views, etc (Beugelsdijk et al., 2018).
Therefore, it can be said that such a knowledge is of great importance to marketing managers operating advertisements towards new markets because culture impacts the decision making of people. Buying behaviour is moderated by cultural factors, such as self- identity, the ability to supress emotional decisions, and normative influences (Kacen &
Lee, 2002).
More and more brands are acquiring “a role as cultural forms in the international marketplace, a way of interpreting and organizing the world” (Cayla & Arnould, 2008, p.
88). As symbolic forms, brands can be benefited when firms are willing to understand the differences among social contexts, so to evolve branding in a way that can meet the needs and desires of the target customers (Cayla & Arnould, 2008).
Hofstede Cultural Dimensions can provide a solid starting ground for firms to understand the context of the country of destination, and the differences of such context with the country of origin. Such approach will benefit the adaptation of the mix of marketing (COI strategy included) to the reality of the target market.
2.4 Hypothesis development
We have understood the importance for brand effectiveness of a match between brand communication and consumer’s expectations, generating as a result consumer attraction and increase of purchase propensity. We’ve seen that a product has a series of appeals that are meant to represent product experience and communication of values (Payne et al., 2017) in a calculated effort to match the customer expectations (Aaker, 1997;
C. Sweeney and Brandon, 2006). If the result of the marketing communication is a match between product attributes and consumer expectations, consumer satisfaction and purchase intentions are achieved (D. A. Aaker & Joachimsthaler, 2000).
Brand managers have a series of tools to operate marketing communication with.
As shown in this dissertation, for international operations Country of Origin Image (COI) is one of these tools (Kleppe et al., 2002; Roth & Diamantopoulos, 2009). COI works for enhancing the brand’s image with appeals from the country of origin that can be positively perceived by consumers as an indicator of product quality (Halkias et al., 2016), positive brand reputation (Jiménez & Martín, 2014) and have increased their purchase propensity (Hussein & Hassan, 2018). Among the line of studies regarding product image effectives,
Page 17 (44) there is one that focus on COI as a resourceful mechanism for the firm. If properly used,
COI can provide competitive advantages to the firm. Such mechanism has dimensions according to Suter, Borini et al. (2018), and the dimensions have different appeals that should be properly managed, therefore adapting the use of such dimensions based on the social context of the brand’s target market.
The study of context is also important for brand managers, because the context of use for products changes with regards to culture, social standards of quality, social norms, people’s values, beliefs, etc. Such changes in context means a need for change in the advertisement appeals (Biel, 1993) that will be operationalized with brand usage appeals and consumer’s self-image congruity (Christodoulides & Veloutsou, 2009) to attract the target customers. Brand usage is promoted through product experience, and self-image congruity is the consumer’s self-look and whether he perceives a fit between himself and the use of a product (Christodoulides & Veloutsou, 2009).
With regards to culture, markets have distance between themselves (de Mooij &
Hofstede, 2010). Sometimes such distance is large, in other cases high proximity between the country of destination and the country of origin can be perceived, with impact in advertisement appeals (Zhou, Poon, & Wang, 2015), and preference formation between global and local brands (Xie, Batra, & Peng, 2014). Such understanding about the differences in social context with regards to culture is of great importance for an efficient management of branding and advertisements appeals, so mistakes with promotion of both customer experience and values aren’t committed. Mitigation of such mistakes have become more determinant with the increase of global brands due to the globalization of markets (J. B. Steenkamp, 2014).
We’ve shown that cultural distance dimensions of Hofstede can be a solid first step to understand how the distance between the home country and the country of destination looks like (Hofstede, 2011). Having the first lens of analyse towards the country can be an efficient way of addressing to market differences and how to advertise the brand and the products in a way to boost consumer attraction and purchase intentions.
Our theoretical support then have included theories from the following topics:
international marketing, consumer behaviour, and social psychology. Such mix of theories was developed to create a solid theoretical support for the use of country image appeals.
Such appeals are divided into four dimensions according to Suter, Borini et. al (2018), and we have followed such article’s approach with the goal of testing such dimensions on consumers. Therefore, based on our theoretical support we present the following: As an
Page 18 (44) overall effect of COI appeals on the increase of purchase propensity of Swedish consumers
for Brazilian product, we expect:
H1: Dimensions of COI to have higher benefit for the increase of purchase propensity than no COI.
According to Kumar and Steenkamp (2013), culture means the descriptions of a society’s customs, principles, rituals, and beliefs that people embraces and follows. Culture has a role on peoples’ consumption choices towards self-expression (Kim & Sherman, 2007). It is a country specific advantage (Suter, Borini, et al., 2018), with impact on product evaluation and purchase intention (Roth & Diamantopoulos, 2009). In consumer self- expression, identity and affect towards a product are important for brand value (Xie et al., 2014), and a match between brand identity expressiveness and consumer self-identity increases consumer attraction and behavioural intentions towards the brand (Xie et al., 2014).
Being culture part of a country’s image (Fetscherin, 2010), in a cultural distance setting it can play a major role on how consumers overseas will assess a product depending on their perception of the country of origin (Cuervo-Cazurra, 2011). Culture can provide a brand with positive image (Suter, De Moura, et al., 2018), and for a symbolic product, focused on experience and feeling (Aaagerup, 2015), a match between the country of origin’s culture and the product image can add value to the product (Suter, De Moura, et al., 2018), and provide internal meaning to consumers (Holbrook, 2005). Therefore, we expect:
H1a: The cultural COI dimension will result in a significantly higher purchase intent for the symbolic item.
The natural resources of a country can serve as a denominator of quality for a brand’s product. For it to be successful will depend on the firm’s ability to translate commodities into value added products (Suter, Borini, et al., 2018). If successful, a firm can expend her brand’s reputation (Kumar & Steenkamp, 2013). The natural resources dimension can translate the biodiversity of a country by using appeals from the natural landscape, such as climate and geo-culture (Suter et al., 2017). Being natural resources of a country, a positive cue perceived locally and internationally, it can be a major competitive advantage for a brand (Suter, Borini, et al., 2018), providing experience from the country of origin. We expect such dimension to work better with experiential products because experiences are judged according to the context (Aagerup, 2015). Therefore:
Page 19 (44) H1b: The natural resources COI dimension will result in significant higher purchase intent
for the experiential item.
Textual and visual elements from the country’s brand when well-articulated into the product communication can be of great value addition (Samiee et at., 2005). For it to be successful depends on the congruence between brand and country of origin associations (Samiee, 2011), such as the country flag (Suter, Borini, et al., 2018). The strength of the textual and visual elements dimension also lies on the endorsement of celebrities (Usunier, 2011) and the country idiom as a textual element (Suter, Borini, et al., 2018). Textual and visual elements can be a cue for quality validation overseas with the made in stimuli (Roth
& Diamantopoulos, 2009) to tackle the barrier against the relatively unknown. As such, it can provide major benefit for a functional product because such item has utilitarian value (Aagerup, 2015). We expect:
H1c: Textual and visual elements COI dimension will result in significant higher purchase intent for the functional item.
The senses dimension is used when is incorporated psychic oriented strategies to promote the feeling and experience of brand’s genuinely and authenticity (D'Antone &
Merunka, 2015). Furthermore, to focus on emotional appeals is the resource of senses dimension (Suter, Borini, et al., 2018). It has an important role on brand experience (Coelho et al., 2019). Being an experiential product related to what a brand means and how does it make you feel (Aagerup, 2016), then product experience is important for consumer’s association with a brand. Therefore, we expect:
H1d: Senses COI dimension will result in significant higher purchase intent for the experiential item.
3 Methodology
3.1 Delineating the study
With the aim of attending the need for methodological rigor, we here by explain about the method of choice for this research. For properly reaching the objectives of this dissertation, we’ve chosen quantitative method as the research approach, and experiment as the statistical method. According to Seltman (2015) the base knowledge about statistical analysis are models, meant to work as a tool for observation of characteristics. Furthermore, Seltman (2015) defines experiment as a “theory of knowledge”. Experiment was originated in psychology, subsequently bringing implications for many fields through empirical observations.
Page 20 (44) The methodology of choice is very well utilized among international business
research, amongst them the work of Costa et al. (2016), Aagerup and Scharf (2018), and Magnusson et al. (2019). Therefore, experiment works well for the scientific field of international marketing and consumer behaviour, being suitable for our quest to test on consumers the scale of Suter et al. (2018) with regards to dimensions of COI.
We intend to confirm (or not) the relationship between consumer’s increase of purchase propensity (dependent variable) for three products from the home market (Brazil), one for each branding communication appeal, following the theory of branding that states that the image of a brand can entail functioning, experimental, or symbolic factors (Keller, 1993). The independent variables shall be the four dimensions of COI (Suter et al., 2018) and a control stimulus (no COI).
Therefore, we operate a within-subject for each product category, in line with Goodwin (2010) suggestions for the care of experiment manipulation, having one dependent variable and five independent variables. Such design means that the proposed experiment is a factorial study due to the manipulation of more than one independent variable towards the response variable.
Figure 3
The design of the study
COI
Appeals Symbolic Experiential Functional
Cell 1 Swedish
Cell 2 Swedish
Cell 3 Swedish Textual and
Visual Cultural
Natural Resources
Senses No COI
Note. Created by the author
Page 21 (44) Generalizations will be avoided so to not overreach the implications of this
dissertation. Such a care for the results is very important, so to avoid distancing from simplicity towards an unnecessary complexity that pushes research quality away (Dalfovo, Lana & Silveira, 2008). Quantitative research has been a prime option for scientific work in the west, being a statistic model to analyse propositions and seek for clarity. The method parts from theory, being the necessary support for a proper understanding about the subject of research, as well as for elevating the interpretation of the statistical model (Reynolds, 1996).
3.2 Research Context and design
The research was done with analyses of variance (ANOVA) as the statistical procedure of choice. The chosen countries were Brazil as the country of origin and Sweden as the country of destination, cultural distant countries according to the Hofstede Insights webpage. We intended to use Hofstede cultural distance dimensions to highlight how does Brazil and Sweden cultural distance looks like when compared to each other. The results are presented in table 1.
Table 1
Comparing Brazil and Sweden based on Hofstede insights web platform for country comparison
Note. The data was collected in the web platform The Hofstede Insights. Source: Created by the author.
0 10 20 30 40 50 60 70 80 90
BRAZIL SWEDEN BRAZIL SWEDEN BRAZIL SWEDEN BRAZIL SWEDEN BRAZIL SWEDEN BRAZIL SWEDEN
Power
Distance Individualism Masculinity Uncertainty
Avoidance Long term
orientation Indulgence
COUNTRY COMPARISON
Page 22 (44) Because we are testing the effectiveness of COI in the purchase propensity of
consumers, our experiment is single factor. The test will be completely randomized. Such test requires that we randomly assign the treatments to the experimental units, according to Anderson, Sweene, and Williams (1998). The introduced products have high fit with the country of origin. Each product is a representation for what Keller (1993) states as image appeals (functional, experiential, and symbolic). Benefits are personal values that consumers identify products to have (Keller, 1993), and Brazilian bikini was our product of choice for a symbolic item, being part of the culture of Brazil as an incorporation of the lifestyle connected to the beach. According to Keller, symbolic items corresponds to an underlying need for personal expression, and self-esteem (Keller, 1993). Being a typical Brazilian drink, caipirinha was our product of choice for experiential item. Keller (1993) states that experiential items relate to product relates attributes, and how felling. And as a functional product, connected to the Brazilian lifestyle as a resourceful item to have, having high frequency of use in Brazil, beach parasol drill was our product of choice. Functional items are all about intrinsic advantages, product-related attributes, problem removal or avoidance (Keller, 1993).
Furthermore, we’ve narrowed the experiment by location, working with a specific region in Sweden. The experiment was made in the city of Halmstad. The region has similarities with what Brazil is internationally known for, the summer experience.
Halmstad is a known place for aquatic tourism in the Scandinavian region, a hotspot for summer experience. The described region has a high percentage of young people (18 to 30) due to the local University hosting courses in both bachelor’s level and master’s level. We have followed similar participants’ profile of Aagerup and Scharf (2018) with regards to age and country of origin, and Costa et al. (2016) with regards to age, educational level, and gender distribution. Furthermore, despite Halmstad being part of a Nordic country, during summer temperatures in the city goes up to 30º degrees and there can be found two beaches, named Tylösand and Västra Stranden.
In developing the experiment, we cared for achieving as many similarities as possible between the contexts of choice, so to better isolate the tested dimensions of COI.
The city chosen for the experiment provide an opportunity to, with such a physic and psychic distance between the country of origin and the country of destination, understand how effective products being promoted overseas can attract potential customers with the use of country image appeals to increase purchase propensity.
Page 23 (44) 3.3 Collection and analyse of data
The study used descriptive statistics, measures of central tendency, and analyses of variance (ANOVA) between group means in the sample. The data was obtained through survey, with a five-point Likert scale. The subjects were students at bachelor’s level or master’s level in Halmstad University. The survey was sent to the subjects by email collected from the University’s database.
3.4 Pre-test
For the pre-test, 20 questionnaires were answered, five respondents per advertisement category. The questionnaires intended to test solely the perception of consumers towards the used appeals. For textual and visual dimension, the Brazilian flag and the country’s name were the chosen appeals as both represent cues of the country of origin (Suter, Borini et al., 2018). Being the senses dimension an emotional cue (Herz &
Diamantopoulos, 2013), national music was the chosen element. According to Suter et al., (2018), senses dimension can be engaged with music during sales advertisement.
For the natural resources dimension, our aim was to promote the biodiversity of the country (Suter, Borini et al., 2018). For such intent, we’ve chosen a typical scenario of Brazilian natural landscape. Lastly, for the cultural dimension, Brazilian art was the element of choice. According to Suter, Borini et al. (2018, p. 49), art produced by the country’s citizens is a way for a marketer to incorporate culture into the brand’s strategy.
The respondents had in average similar age (between 18 to 31). All had higher education (Bachelor’s or Master’s), and the nationalities were varied, but respecting the necessity for cultural proximity with Brazil or Sweden. Also, there was between the respondents a distribution in gender.
For each category of country appeals, the respondents had to answer the same twelve questions with regards to the prominence of the displayed information. The questions can be seen below:
1. How prominently is Brazil’s flag shown in the ad?
None ( ) Very Low ( ) Low ( ) Moderate ( ) High ( ) Very High ( ) 2. To what extent do you associate the colours in the ad with Brazil?
None ( ) Very Low ( ) Low ( ) Moderate ( ) High ( ) Very High ( ) 3. How prominently is the country’s name shown in the ad?
None ( ) Very Low ( ) Low ( ) Moderate ( ) High ( ) Very High ( ) 4. How prominently is Brazilian art shown in the ad?
Page 24 (44) None ( ) Very Low ( ) Low ( ) Moderate ( ) High ( ) Very High ( )
5. The ad uses culture to sell product.
None ( ) Very Low ( ) Low ( ) Moderate ( ) High ( ) Very High ( ) 6. The painting in the ad is a form of cultural expression.
None ( ) Very Low ( ) Low ( ) Moderate ( ) High ( ) Very High ( ) 7. To what extent does the ad portray Brazilian nature?
None ( ) Very Low ( ) Low ( ) Moderate ( ) High ( ) Very High ( ) 8. To what extent does the ad portray Brazilian climate?
None ( ) Very Low ( ) Low ( ) Moderate ( ) High ( ) Very High ( ) 9. To what extent does the ad portray Brazilian environment?
None ( ) Very Low ( ) Low ( ) Moderate ( ) High ( ) Very High ( ) 10. To what extent does the ad create a Brazilian atmosphere?
None ( ) Very Low ( ) Low ( ) Moderate ( ) High ( ) Very High ( ) 11. I feel emotionally connected to Brazil when I experience the ad.
None ( ) Very Low ( ) Low ( ) Moderate ( ) High ( ) Very High ( ) 12. To what degree do you associate the music to Brazil?
None ( ) Very Low ( ) Low ( ) Moderate ( ) High ( ) Very High ( )
The communication appeals for each dimension:
Figure 4
Natural resources appeal: A world-wide famous Brazilian scenery
Note. Created by the author.
Page 25 (44) Figure 5
Textual and visual appeals: Brazilian flag and the country’s terminology
Note. Created by the author.
Figure 6
Cultural appeal: Painting made by a Brazilian artist, Tarcila do Amaral
Note. Created by the author.
Page 26 (44) Figure 7
Senses Appeal: Music “The girls from Ipanema”
Note. Created by the author.
The data was analysed with IBM SPSS. The result of the descriptive analyses was divided in 4 tables. Each table has the mean value, median, and valid number of answers.
The questions asked were as presented in this thesis previously. On the tables, the result per question is presented chronologically. Q1 stands for question one, and so on.
Table 2
Textual and Visual Dimension
Note. Data collection
Table 3
Cultural Distance
Note. Data collection.
Q 1 Q 2 Q 3 Q 4 Q 5 Q 6 Q 7 Q 8 Q 9 Q 10 Q 11 Q 12
Valid answers 5 5 5 5 5 5 5 5 5 5 5 5
Mean 5.40 5.60 4.80 2.60 3.20 2.60 1.60 1.40 1.40 3.80 4.00 1.00
Q 1 Q 2 Q 3 Q 4 Q 5 Q 6 Q 7 Q 8 Q 9 Q 10 Q 11 Q 12
Valid answers 5 5 5 5 5 5 5 5 5 5 5 5
Mean 2.00 4.40 1.80 5.40 5.00 5.20 3.60 3.80 3.20 3.60 3.80 1.00
Page 27 (44) Table 4
Natural Resources Dimension
Note. Data collection.
Table 5
Senses Dimension
Note. Data collection.
As we can see, for each advertisement category the consumers’ answers goes in accordance to the theory in Suter et al. (2018) with regards to perception of the appeals.
For textual and visual COI dimension, the questions with higher perception score (mean) were the first three, in accordance to the definition of such dimension; prominence of the flag, association between the country and the colours in display, and the country’s name.
For cultural COI dimension, the respondents gravitated towards the questions 4, 5 and 6, exactly how we anticipated for answers based in cultural elements; prominence of art, to use culture as a sales mechanism, and art as a form of cultural expression. For Natural resources COI dimension, questions 7, 8, and 9 had the highest mean, respectively addressing climate, environment, and atmosphere. And for senses dimension, regarded as to provide consumers with the brand’s meaning and experience, questions 10, 11, and 12 had the highest mean, respectively addressing to Brazilian atmosphere, emotional connection, and national music.
The results validate our purpose to develop advertisement appeals that can address the theory in Suter et al. (2018) with regards to COI dimensions and the perception of consumers for such appeals. In the following section, a description of the experiment is made. Our purpose is twofold; to verify the purchase propensity of consumers towards the advertisements, and to see the differences in purchase intent among the product categories;
Brazilian beach parasol drill as a functional item, caipirinha as an experiential item, and bikini as a symbolic item.
Q 1 Q 2 Q 3 Q 4 Q 5 Q 6 Q 7 Q 8 Q 9 Q10 Q11 Q 12
Valid answers 5 5 5 5 5 5 5 5 5 5 5 5
Mean 1.80 2.40 1.00 2.00 2.80 2.60 5.40 5.00 4.40 3.80 3.00 2.00
Q 1 Q 2 Q 3 Q 4 Q 5 Q 6 Q 7 Q 8 Q 9 Q 10 Q 11 Q12
Valid answers 5 5 5 5 5 5 5 5 5 5 5 5
Mean 1.60 1.60 2.40 3.40 4.60 3.40 2.00 2.80 2.20 5.20 5.00 5.20
Page 28 (44) 3.5 Experiment
The survey had three outlines, one with the four-dimensional appeal of Suter et al.
(2018) towards Brazilian bikini, one with the same appeals as the previous but towards Brazilian caipirinha, and another following the same design for the two previous but towards Brazilian beach parasol drill. For each product category, we also included a control unit (no COI), the 12 questions from the pre-test for addressing to how the respondents perceived the advertisement to be, and some manipulations check (gender, nationality, parent’s nationality, place of birth, and age). Respectively, the advertisements were sent to the respondents in a video package. Each video package contained a product with five advertisements. Each video unit had 15 seconds. In total, the experiment contained 15 advertisements.
Figure 8 Cultural appeal
Note. Created by the author.
Figure 9
Textual and Visual appeal
Note. Created by the author.
Page 29 (44) Figure 10
Natural resources a
Note. Created by the author.
Figure 11 Senses appeal
Note. Created by the author.
Figure 12
No COI dimensions
Note. Created by the author.
Page 30 (44) Figure 13
Cultural appeal
Note. Created by the author.
Figure 14
Textual and visual appeal
Note. Created by the author.
Figure 15
Natural resources appeal
Note. Created by the author.
Page 31 (44) Figure 16
Senses appeal
Note. Created by the author.
Figure 17
No COI dimensions
Note. Created by the author.
Figure 18 Cultural appeal
Note. Created by the author.
Page 32 (44) Figure 19
Textual and visual appeal
Note. Created by the author.
Figure 20
Natural resources appeal
Note. Created by the author.
Figure 21 Senses appeal
Note. Created by the author.
Page 33 (44) Figure 22
No COI dimensions
Note. Created by the author.
Groups of respondents were formed, one for each product category. In total, each group had 118 participants responding to the survey. The survey had as questionnaire 1 towards functional product, questionnaire 2 towards symbolic product, and questionnaire 3 towards experiential product. The questionnaires were the same for the three groups, with the only difference lying on the questions specifically addressing the respectively product.
Therefore, respondents in group 1, for instance, were asked specifically about the functional item when questions were directed to it. Following the collection of data, from a total of 354 participants, incomplete questionnaires were assigned off. From group one we collected 62 fully answered questionnaires, group two corresponded to 58 fully answered questionnaires, and group three accounted for 71 complete questionnaires.
4 Analyses and Discussion
For each product category was measured the purchase intent of a group of consumers per advertisement. Furthermore, respondents in each group answered for purchase intent towards 4 advertisements with COI appeals, and one advertisement with no COI appeals. The analyses have in its core the descriptive statistics for each group of respondents. That includes the mean and the significance of purchase intent between dimensions, when computed. Table 9 has the results of a computed total score for the four dimensions of COI against a computed total score for no COI dimension. The purpose for that is to verify significance of COI in purchase intent (if any) against no COI.
Page 34 (44) Table 6
Computed mean score for the 4 dimensions of COI versus no COI
N=191 Mean Std. Deviation Mean difference Sig.b
COI 2.10 .952
.264* .000
No COI 1.83 .996
*. The mean difference is significant at the .05 level.
Note. Data collection.
As we can see, COI appeals have indeed benefit for the increase of consumers’
purchase propensity. In table 9, we can see the mean value computed for the four dimensions of COI, against no COI, which has significant difference, as shown. We than have confirmation that COI appeals have higher purchase benefit than no COI, with p- value of .000, validating H1. This is to be highlighted because indeed COI appeals can represent a strategic advantage to the firm, in line with Suter, Borini, et al. (2018).
Nonetheless, some dimensions have higher benefit than others to each product category.
As shown in tables 7, 8, and 9, for each product category some significance was computed.
Further details among the dimensions can also be seen.
Table 7
Functional item and the five advertisement appeals
Note. Data collection. Further details can be seen in table 11 at the appendix.
H1c stated that, for a functional item, textual and visual COI dimension would have represented the highest purchase intent. The highest mean was natural resources COI advertisement, with significance against textual and visual advertisement, as well as against cultural advertisement. Furthermore, Senses ad and No COI ad have had both significance against the cultural ad. Thus, H1c was not supported. One alternative explanation for the no validation of the hypothesis is that of context. Perhaps, it was easier for Swedes to relate to some of the dimensions instead of others.
Purchase Intent Textual &
Visual Ad
Purchase Intent Cultural Ad
Purchase Intent Natural Resources
Ad
Purchase Intent Senses Ad
Purchase Intent No COI Ad
N=62
Mean 1.66 1.45 2.18 1.81 1.87
Sig. against Textual & Visual Ad
Cultural Ad Cultural ad Cultural ad
