Country of origin effect

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The effect of country-of-origin on foreign brand names in the Indian market
Neelam Kinra
Indian Institute of Management, Lucknow, India
Purpose – To investigate consumer attitudes in India towards local and foreign brand names, against a background of increasing prevalenceof foreign brand names and stereotypes of countries of origin covering the range from positive to negative. Design/methodology/approach – A structured questionnaire administered face-to-face to 112 consumers in the city of Lucknow. Attitudes to brands categorized as “foreign” or “Indian” were measured by seven-point semantic differential scales, and consumer ethnocentrism by CETSCALE. Factoranalysis with varimax rotation was used to identify factors contributing to the observed degree of ethnocentrism in brand choices. Findings – It was found that the quality of foreign brands was perceived to be generally higher and superior to local brands. Most consumers also associated greater accessibility of foreign brands in the Indian market with better quality at lower prices. Despite high levelsof nationalism and preference for indigenous manufacture, as evidenced in high factor ratings on an ethnocentrism scale, which might indicate a positive bias towards local brands, Indian consumers were not prejudiced against foreign brand names. In fact, they evaluated them higher on technology, quality, status and esteem than Indian brands, and attributed higher credibility to thosecountries-of-origin. Research limitations/implications – This study adds to the body of knowledge about country-of-origin effect, in a massive and fast developing market. Practical implications – The strategy of marketers of foreign brands in the Indian market should be to position their products on attributes of technology and quality, rather than economy and value for money. Originality/value – Shows thatethnocentricity does not necessarily result in hostility to foreign brands. Keywords Country of origin, Brands, India, Consumers, Ethnocentrism Paper type Research paper

Effect of COO on foreign brands

Received April 2004 Revised September 2005 Accepted October 2005

Introduction Products with foreign brand names are frequently associated with the country-of-origin (COO) of the brand.The promotion of such brands means, either emphasizing the COO as has been the case with “American Jeans”, “Marlboro” cigarettes, “Italian pasta”, and French perfumes such as “Chanel” or alternately, ignoring the COO depending on the perception of consumers in the foreign country market. Numerous firms have used positive associations with the COO to good advantage in the marketing of goods(Papadoupoulos et al., 1993), as for example, the favorable association of Germany with beer, Sweden with cars, and Japan with microelectronics. However, if the COO stereotype is negative, it can pose formidable barriers for marketers attempting to position their goods within a foreign market ( Johansson et al., 1994). In yet other cases, there are product categories not distinctively

MarketingIntelligence & Planning Vol. 24 No. 1, 2006 pp. 15-30 q Emerald Group Publishing Limited 0263-4503 DOI 10.1108/02634500610641534

MIP 24,1


associated with any COO image as in the case of the car industry, where it has been less easy to market global brands such as “Mercedes”, “Audi”, “Toyota”, “Jaguar” for which brand images have developed quite apart from their COO, and which do not use theirnational COO association in their promotion and marketing strategies. The gradual trend towards liberalization of the Indian economy during the past decade has served as a major factor in its progressive shift towards a global economy and the entry of foreign brands from Europe and US into this market. In fact the 1990s decade and beyond have been characterized by major structural changes in...