Brand, Identity and Reputation: Exploring, Creating New Realities ...

Country-of-Origin Effects on Brand Equity – Accounting for Valence of Association
Mikael Andéhn, Stockholm University, Sweden
Introduction
The infancy of the third millennium has been characterized by the onset of globalization perhaps more than any other
change in society overall. A defining characteristic of globalization is the convergence of markets, which have brought
with it an accelerated rate of competition between multinational corporations. This accelerating competitiveness serves
to make the means of which a firm can differentiate itself to its potential customers increasingly relevant. In the
information overflow of the 21 st century establishing a brand reputation has become a more and more costly, difficult
and volatile affair, making any means of a positive reputational differentiation worthy of consideration. One
characteristic that can serve as a path to a reputational differentiation identified in the research literature is the countryof-origin
of the offering of the firm, be it a commodity (Bilkey & Nes, 1982; Peterson & Jolibert, 1995), service
(Javalgi et al, 2001) or even the brand of the firm (Steenkamp et al, 2003; Paswan & Sharma, 2004).
Recent contributions to the country-of-origin effect research area have stressed that the perceived association to a
country is the key determinant of what county the effect is derived from (Samiee, 1994; Li et al, 2000; O‘Shaughnessy
& O‘Shaughnessy, 2000; Josiassen & Harzing, 2008). The ―country‖ construct itself becoming relevant as a ―countryimage‖
which serves as a potent carrier of associations (Nagashima, 1970). This more consumer perception-oriented
turn in country-of-origin research appears reasonable as well as overdue since the country-of-origin effect arguably
always has been a phenomenon that takes place on the level of consumer perception. This development has also
heightened the importance of the firm-brand in the context of the country-of-origin effect. Since the country-ofassociation
(from which the country-of-origin effect is derived) is often the same as the perceived country-of-brand or
the country the brand is perceived to ―belong to‖ (Lim & O‘Cass, 2001; Ulgado, 2002; Thakor & Lavack, 2003;
Srinivasan et al, 2004). Changing the logic of how the country-of-origin effect is sourced from a ―physical locus of
manufacture‖-based view to a ―perceived country-of-brand‖-view.
Conceptualization
In this vein of adjusting the effect to a perceptual logic the present paper will approach the country-of-origin effect in
terms of consumer-based brand equity (Keller, 1993), conceptualizing the effect as being due to a brand triggering an
association to a country. Addressing a previously overlooked issue; that the intensity or valence of the connection
between a country-image and a brand can varies by degree. A highly systematic review of the literature of country-oforigin
effects, featuring 147 peer-reviewed articles from the last 10 years, revealed that the potential of variability of
association has not been taken into account at this point in time. Accounting for the perceived intensity of the
connection between a country-image and a firm-brand may help explain situations like why for instance Audi is less
likely to evoke a country-of-origin effect from the country-image of Germany than would Volkswagen. Or put
differently; to capture that perceived origin varies by degree.
The idea that consumers use brands to infer knowledge about products via associations triggered by the brand is a well
established concept (Keller, 1993; Henderson et al, 2002; Roedder et al, 2006). This conceptualization approaches the
brand as a node that can be linked to other nodes representing various characteristics and concepts in a network-like
structure based on the idea of associative learning (Mitchell et al, 2009). In a hypothetical network of nodes
representing concepts and characteristics what determines which ―path‖ through the network an evaluation process
takes is determined by the presence and valence of the links between concepts (Krishna, 1996). A country-node would
play a special role in the network of most consumers since countries are particularly charged concepts which would
enjoy a large number of links to concept and characteristics, and would therefore transfer a large number of secondary
association onto the brands associated with them (Keller, 1993; Pappu et al, 2006). Since countries play a vital part in
how human beings categorize and make sense of the world (Jaworski & Fosher, 2003), countries can even be described
as ―super-brands‖ citing their exceptional salience as concepts (Kaynak et al, 2000) and the richness of associations
they can trigger.
This conceptualisation of brands as a node in a network of associations invites a view of the country-of-origin effect as
a brand being given access to a large number of salient associations by way of an association to a country. Figure 1 is a
simplified representation of how the country-of-origin effect can be thought to work in terms of associative learning. In
this case the firm-brand is associated with the characteristic ―x‖ not by being directly associated with the characteristic,
but by the characteristic being attributed to the firm-brand via the firm-brands association to a country, which in turn is
directly associated to the characteristic ―x‖.
Figure 1 Here
The ―intensity‖ or ―valence‖ of the connection between the firm-brand and the country becomes relevant in two ways in
this conceptualisation. First, one may conceive intensity of connection as being the determinant of the likelihood of the
association to trigger on exposure to the firm-brand. Secondly, intensity could be construed as determine how readily a
characteristic would transfer from a country to a firm-brand.
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