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Copyright page:
© [2013]
Ahmet Bayraktar
ALL RIGHTS RESERVED
UNDERSTANDING THE EFFECT OF COUNTRY EQUITY ON CONSUMER-
BASED BRAND EQUITY: A FOUNDATION TO COUNTRY BRANDING
STRATEGIES
by
AHMET BAYRAKTAR
A dissertation submitted to the
Graduate School-Newark
Rutgers, The State University of New Jersey
in partial fulfillment of the requirements
for the degree of
Doctor of Philosophy
Graduate Program in Management
written under the direction of
Sengun Yeniyurt
and approved by
________________________
Sengun Yeniyurt
________________________
Lei Wang
________________________
Can Uslay
________________________
Goksel Yalcinkaya
Newark, New Jersey.
May, 2013
ii
ABSTRACT OF THE DISSERTATION
UNDERSTANDING THE EFFECT OF COUNTRY EQUITY ON CONSUMER-
BASED BRAND EQUITY: A FOUNDATION TO COUNTRY BRANDING
STRATEGIES
By AHMET BAYRAKTAR
Dissertation Director:
Sengun Yeniyurt
The notion “brand equity” has recently been extended to countries by researchers
proposing the concept “country equity.” They suggest that countries, like brands, have
equity, which affects consumers‟ evaluative judgments of their products. Country equity
is defined as the value that consumers associate with the name of a country. Despite the
prolific research on both country of origin (COO) and brand equity over the past few
decades, the extant marketing literature does not explain whether consumer-based equity
of a brand is linked to the equity of its COO. Furthermore, whether this effect holds
across different cultures is an important issue to be addressed.
The purpose of this dissertation is four-fold. The first objective is to examine the
effect of country equity on consumer-based brand equity and understand the mechanism
that explains the process. In this context, seven variables are examined as the potential
moderators of the country equity effect. The second goal is to examine whether the
country equity effect holds across different cultures. The third objective is to contribute to
our understanding of country equity and brand equity constructs by developing new and
iii
more comprehensive measures. The final objective is to introduce the relatively new
concept “consumer mindfulness” to consumer behavior and international marketing
literature and examine its role as the potential moderator of COO effect.
This dissertation utilized survey method in order to test the structural soundness of
the proposed model and 18 propositions that have been developed mainly based on
associative network memory (ANM) model, cue evaluation theory, categorization theory
and hierarchy of effects model. The data was collected from convenience samples of 509
college students in Turkey and the United States. Structural Equation Modeling (SEM)
was used to test the proposed conceptual model and relationships among the constructs.
From a managerial perspective, the results of this dissertation suggest that country
equity represents an important part of the competitive advantage of firms in global
markets. More specifically, it suggests that the mere association of products with a
particular country significantly influences consumers‟ brand image and quality
perceptions, brand loyalty and willingness to pay a price premium. In this context, while
firms with high country equity might achieve competitive advantage in the global
markets and have strong bargaining power with channel members, firms with low
country equity might face significant problems.
Whether positive or negative, developed intentionally or by default, every country
has equity. The strategic management of country equity and the recognition of its
significance will be key to successful global marketing in the years ahead in which the
global competition is expected to rise further. Considering the effect of country equity on
consumer-based brand equity and the strategic role of country equity in global marketing,
iv
this research suggests that three key groups, namely, government, industry groups and
individual firms should manage country equity and seek strategies to increase it in order
to help firms from that country develop strong brand equity in the global markets,
overcome entry barriers in foreign markets, have strong bargaining power with channel
members, and be less vulnerable to fierce global competition.
v
Acknowledgement
I would like to thank Dr. Sengun Yeniyurt, my advisor and committee chair. His ongoing
understanding, mentoring, and enthusiastic support were invaluable during my whole
doctoral pursuing process. It gives me a great pleasure to acknowledge here his
contributions to my academic life. His knowledgebase and critical mind motivated me to
achieve success in my doctoral education.
I would also like to convey my deepest gratitude to Dr. Can Uslay, Dr. Lei Wang and
Dr. Goksel Yalcinkaya for serving on my committee and for their exceptional
mentorship, encouragement and precious comments and feedbacks. I appreciate the
assistance provided by Sengun Yeniyurt, Can Uslay, Erich Toncre, Aparna Krishnan,
Sitki Gulten and Seyfullah Turkmen in the data collection. I would like to thank Goncalo
Filipe for his continuous help during my doctoral education. Finally, I would like to
convey my deepest gratitude to my sponsor, Turkish government.
This work is dedicated to my mother and father, Halime and Mehmet Bayraktar. I
convey my sincere appreciation to them for their never-ending prayers and support. Also,
many thanks to everyone else who stood by me.
vi
Table of Contents
Abstract …………………………………………………………………………………..iii
Acknowledgement ……………………………………………………………………….vi
List of Tables ……………………………………………………………………………..x
List of Figures ……………………………………………………………………………xi
Chapter 1 Introduction …………………………………………………………………...1
Chapter 2 Literature Review …………………………………………………………….6
2.1 Country of Origin Effect ……………………………………………………………...6
2.2 Conceptualization of Country of Origin …………………………………………….. 8
2.3 Country Equity .……………………………………………………………………….9
2.4 Consumer-based Brand Equity ……………………………………………………...22
2.5 The Proposed Model ………………………………………………………………...28
2.5.1 Associative Network Memory Model ……………………………….……….28
2.5.2 Cue Evaluation Theory ……………………………………………..………...30
2.5.3 Categorization Theory …………………………………………………….….32
2.5.4 Hierarchy of Effects Model …………………………………………………..35
2.6 Moderators ………………………………………………………………………..…37
2.6.1 Consumer Mindfulness …………………………………………..…………...37
2.6.2 Product Familiarity and Product Complexity ……………………..…….……41
2.6.3 Product Performance/Health Risk Level and Product Importance
and Value ……………………………………………………………………..43
vii
Chapter 3 Methodology …………………………………………………………….…..47
3.1 Research Method and Sample ……………………………………………………….47
3.2 Questionnaire Design ……………………………………….…………………….…49
3.3 Construct Measurement …………………………………..…………………………51
3.3.1 Attitude-based Country Equity ………………….……………………………51
3.3.2 Intention-based Country Equity ………………………………………………53
3.3.3 Attitude-based Brand Equity ……………..………………………………..…54
3.3.4 Intention-based Brand Equity ……………..………………………………….54
3.3.5 Consumer Mindfulness ………………….……………………………………56
3.3.6 Other Moderators ……………………….…………………………………….57
3.4. Measurement Reliability and Validity ……………………………………………...59
Chapter 4 Results ……………………………………………………………………….70
4.1 Main Effects ………………………………………………………………………....70
4.2 Moderation Effects …………………….………………………………………….…75
Chapter 5 Conclusion and Discussion ……...…………………………………………..79
5.1 Conclusion ………………………………….……………………………………….79
5.2 Discussion ………………………………………………………………………...…81
5.3. Future Research ……………………………………………………………….……91
Bibliography ……………………………………………………………………………95
viii
Appendix A ……………………………………………………………………………106
Appendix B …………………………………………………………………………....112
Appendix C ……………………………………………………………………………113
Appendix D ……………………………………………………………………………114
Appendix E ……………………………………………………………………………115
Appendix F ……………………………………………………………………………116
Appendix G ……………………………………………………………………………118
Curriculum Vitae ……………………………………………………………..………119
ix
List of Tables
Table 1: Overview of Literature on Country Equity …………………………………….12
Table 2: Overview of Studies Incorporating Mindfulness Concept
into Marketing Research ……………………………………………………….38
Table 3: Demographic Profile of the Sample ……………………………………...……47
Table 4: Scale for Attitude-based Country Equity ………………………………………52
Table 5: Scale for Intention-based Country Equity ……………………………………..53
Table 6: Scale for Attitude-based Brand Equity ……...……………………….…...……55
Table 7: Scale for Intention-based Brand Equity …………………………………..……56
Table 8: Scale for Consumer Mindfulness ………………………………………………57
Table 9: Items Included in the Scales for Other Moderators ……..……………………..58
Table 10: Variables Measurement ………………………………………………………61
Table 11: Measurement Model of Brand Equity ………………………..………………64
Table 12: Measurement Model of Country Equity ……………………………………...66
Table 13: Measurement Model of Consumer Mindfulness ………………………..……67
Table 14: Measurement Model of Other Constructs …………………………………….67
Table 15: Correlation Matrix ……………………………………………………………68
Table 16: Results of Moderation Effects ………………………………………………..76
x
List of Figures
Figure 1: Attitude-based and Intention-based Country Equity ………………….………19
Figure 2: Attitude-based and Intention-based Brand Equity ……………………………28
Figure 3: The Moderating Role of Consumer Mindfulness ………………………..……41
Figure 4: The Model of the Proposed Relationships ……………………………………45
Figure 5: Full Model (ALL DATA) …………………………………….…………….…71
Figure 6: Full Model (Turkey) ………………………………………….………….……73
Figure 7: Full Model (USA) …………………………………………………………….74
Figure 8: The Moderating Role of Product Health Risk Level ………….………………78
Figure 9: The Moderating Role of Product Performance Risk Level ………………...…78
1
Chapter 1
Introduction
For the past three decades, the effect of products‟ country of origin (COO) on consumer
behavior has been one of the most widely studied phenomena in marketing and consumer
behavior literature. Although Dichter (1962) was the first who argued that a product‟s
country of origin might have influence on its acceptance and success, Schooler (1965)
was the first who empirically tested the notion. He found that the “made in” labels
created significant differences in the evaluation of products that were identical in all other
aspects. There have been over 1.000 published studies, several books (e.g. Papadopoulos
and Heslop 1993) and meta-analyses (e.g. Bilkey and Nes 1982; Ozsomer and Cavusgil
1991; Baughn and Yaprak 1993; Verlegh and Steenkamp 1999; Pharr 2005) dedicated to
this stream of research. While some researchers have found that a product‟s COO
significantly affects consumer evaluations, others have found modest effect. Despite the
significant interest in COO, a few studies have examined its effect on consumer-based
brand equity (e.g. Pappu, et al., 2007).
Many studies in COO literature have examined the effect of country image on
consumers‟ product evaluations and judgments. Particularly, they examine how the
development level of a country influences consumers‟ quality perceptions of products
originated from or made in that country. That is, these studies have focused on “quality
perception” as the dependent or outcome variable. In these studies, origin information, an
extrinsic cue, has been regarded as a signal for product quality perceptions. However, the
effect of COO cannot be explained entirely by a quality signaling process (Verlegh and
2
Steenkamp, 1999; Sharma, 2011; Pharr, 2005). In addition to its role as a signal for
quality, this extrinsic cue has symbolic and emotional meanings to consumers (Verlegh
and Steenkamp, 1999; Li and Wyer, 1994; Hong and Wyer, 1989). Country of origin of a
product may sometimes serve as a way to reflect patriotism (Batra, et al., 2000; Sharma,
2011; Balabanis and Diamantopoulos, 2004; Lantz and Loeb, 1996; Jimenez and Martin,
2009), social status (Batra et al., 2000; Verlegh and Steenkamp, 1999), authenticity and
exoticness (Verlegh and Steenkamp, 1999). Furthermore, avoiding products from certain
country of origins reflect consumer animosity (Sharma, 2011; Pharr, 2005; Jimenez and
Martin, 2009). In addition, COO associates a product to a developed and rich country
imagery, with sensory, affective and ritual connotations (Askegaard and Ger, 1998).
Considering these findings, we can argue that using “consumer-based brand equity,” a
multi-dimensional construct, as a dependent measure or an outcome variable will
contribute more to our understanding of COO phenomenon.
In global marketing, perceptions about and attitudes toward particular countries often
extend to brands originated from these countries. Brand equity refers to the value
associated with a brand name, as reflected in the dimensions of brand awareness, brand
associations, perceived quality and brand loyalty (Pappu, et al., 2007). This notion has
recently been extended to countries by researchers proposing the concept “country
equity.” They suggest that countries, like brands, have equity, which affects consumers‟
evaluative judgments of their products. It is defined as the value that consumers associate
with the name of a country (Pappu and Quester, 2011). In another definition, country
equity is “the value-added brought forth by the association of a product or brand with a
given country name, as perceived by the individual consumer” (Zeugner-Roth et al.,
3
2008: p. 583). Country equity is a broad construct that also includes country image. The
deductions from COO and country equity literature suggest that examining the effect of
country equity, instead of country image, on consumer product evaluations will yield
better results and have more significant managerial and practical implications.
Despite the prolific research on both COO and brand equity over the past few
decades, the extant marketing literature does not explain whether consumer-based equity
of a brand is linked to the equity of its country-of-origin. Furthermore, whether this effect
holds across different cultures is an important issue to be addressed. Therefore, this study
examines the effect of country equity on consumer-based brand equity, and the
mechanism that explains the process. Furthermore, it examines whether this effect holds
across different cultures.
Research argues that three key groups, namely, government, industry groups and
individual firms, play significant role in managing country equity (Papadopoulos and
Heslop, 2002). These three groups employ “country branding strategies” in order to
achieve a variety of objectives, including enhancing country brand image and
repositioning country brands (Pappu and Quester, 2010). The findings of this study have
significant implications for these three groups. Determining the dimensions of country
equity and brand equity constructs and the relationships between them as well as the
factors that influence the process will be useful for these groups to develop better
strategies and to improve the equity of their brands. In other words, determining how
country equity influences consumer-based brand equity will be of significance for these
groups in order to manage “country branding activities.”
4
This study suggests that the strategic management of country equity and the
recognition of its significance will be the key to successful global marketing and
corporate strategies in the years ahead. In other words, country equity will be a valuable
tool for differentiating brands in the global marketplace. In today‟s business world, the
nature of the hyper-competitive global marketplace and the easiness of product imitation
with new technologies are gradually forcing firms, industry groups and governments to
consider their country equity and develop strategies to manage it successfully. While
competing firms from other countries can imitate products, services, technologies and
processes, they cannot copy well-managed country branding strategies and country
equity. Understanding the effect of country equity on brand equity and the mechanism
that explains the process can help firms, industry groups and governments control and
manage their country equity and use it strategically to increase the equity of their brands.
Therefore, this study contributes to our understanding of the factors influencing brand
equity in the international context.
The purpose of this dissertation is four-fold. The first objective is to examine the
effect of country equity on consumer-based brand equity and understand the mechanism
that explains the process. In this context, seven variables that were expected to moderate
the country equity effect have been examined. These variables are consumer mindfulness,
product familiarity, product complexity, product health/performance risk level, product
importance and perceived product value. The second goal is to examine whether this
effect holds across different cultures. The third objective is to contribute to our
understanding of country equity and brand equity constructs by developing new and more
5
comprehensive measures. The final objective is to introduce the relatively new concept,
“consumer mindfulness,” and examine its role as a moderator of COO effect.
6
Chapter 2
Literature Review
2.1 Country of Origin Effect
Consumers‟ evaluative judgments of products are based on their evaluation of intrinsic
(e.g. design, color and shape) and extrinsic (e.g. price, brand name and country of origin)
product cues (Manrai et al., 1998; Klenosky et al., 1996). A large number of studies have
shown that extrinsic cues act as signals for product quality. In many COO studies, origin
information, an extrinsic cue, has been regarded as a signal for product quality
perceptions. However, the effect of COO cannot be explained entirely by a quality
signaling process (Verlegh and Steenkamp, 1999; Sharma, 2011; Pharr, 2005). In
addition to its role as a signal for quality, this extrinsic cue has symbolic and emotional
meanings to consumers (Verlegh and Steenkamp, 1999; Li and Wyer, 1994; Hong and
Wyer, 1989). Whichever role it plays, COO has been found to influence consumer
evaluations and preferences significantly (Han, 1989; Sharma, 2011; Srinivasan et al.,
2004; Johansson et al., 1985; Ettenson et al., 1988; Insch and McBride, 1998; Chowdhury
and Ahmed, 2009). Furthermore, it is an important source of brand equity (Hamzaoui et
al., 2011; Pappu and Quester, 2010; Yasin et al., 2007).
Based on the discussion above, country of origin has three aspects: cognitive
(Obermiller and Spangenberg, 1989; Verlegh and Steenkamp, 1999; Klenosky et al.,
1996; Srinivasan et al., 2004), affective (Batra et al., 2000; Sharma, 2011; Obermiller and
Spangenberg, 1989; Hong and Wyer, 1989; Balabanis and Diamantopoulos, 2004; Lantz
and Loeb, 1996) and normative aspects (Verlegh and Steenkamp, 1999; Sharma, 2011;
7
Pharr, 2011; Jimenez and Martin, 2009). As a cognitive cue, COO influences consumer
product evaluations through “halo effect” and “summary construct.” Under the halo
effect, consumers make inferences about the quality of products based on their perception
about the origins of products (Manrai et al., 1998; Jimenez and Martin, 2010; Han, 1989).
Under the summary construct, country image becomes a construct that summarizes
consumers‟ beliefs about product attributes and directly influences their perceptions of
brands. Affective aspects of COO refer to its symbolic and emotional meanings.
Specifically, COO may link a brand to status (Sharma, 2011; Batra et al., 2000),
authenticity, exoticness and a sense of national identity and pride (Sharma, 2011;
Balabanis and Diamantopoulos, 2004; Lantz and Loeb, 1996). Normative aspects of COO
refer to the fact that preference of brands from a certain country may be perceived as an
endorsement of its policies, practices and actions (Sharma, 2011). Therefore, animosity
toward a particular country may lead consumers to develop negative attitudes toward the
brands from that country or to punish that country by boycotting its products (Klein et al.,
1998; Yuksel and Mryteza, 2009; Sandikci and Ekici, 2009). Similarly, ethnocentrism
(Jimenez and Martin, 2010; Balabanis and Diamantopoulos, 2004; Klein et al., 1998),
consumer affinity (Oberecker et al. 2008) and home country bias (Zeugner-Roth et al.,
2008) may influence consumers‟ evaluations and judgments.
Based on the extant literature, the antecedents of COO effect can be classified as
“internal” and “external” antecedents. Internal antecedents refer to measurable
characteristic dispositions within individuals such as beliefs or “psychographic
dimensions” (Pharr, 2005: p. 35) that explain variance in COO influence. In other words,
part of the variance in COO influence stems from certain traits within consumers. The
8
followings are the internal COO antecedents derived from the relevant literature:
ethnocentrism, domestic country bias, consumer animosity, materialism,
individualism/collectivism, country stereotypes, value consciousness and conservatism.
External antecedents refer to structural dimensions or features of the target country to
explain variance in COO influence. In other words, some part of variance in COO effect
stems from certain structural features of the target country, a source outside consumers.
The external COO antecedents derived from the extant literature are as follows: macro
country image, micro country image, country image, economic development,
technological development, political development, country loyalty and perceived quality
of country brands.
2.2 Conceptualization of Country of Origin
The conceptualization of country of origin in the extant literature varies across studies.
While most studies define COO as the country where the product is actually made, some
other studies define it as the country to which the brand is perceived to belong by its
target consumers. The former has been termed in different ways such as COO (Li et al.,
1993; Li et al., 1994; Irwin et al., 1993; Li and Wyer, 1994; Ettesson et al., 1988),
branded product of origin (Aurier and Fort, 2007), product origin (Cattin et al., 1982; Lee
et al., 2009), country of manufacture (Hamzaoui-Essoussi et al., 2011), country of
assembly (Chao, 1993; Jun and Choi, 2007; Insch and McBride, 2004; Chowdhury and
Ahmed, 2009; Paul, 1993), and manufacturing country (Srinivasan et al., 2004).
Similarly, the latter has been termed in various ways such as COO (Erickson et al., 1984;
Jimenez and Martin 2010; Johansson, et al. 1985; Han 1989; Zeugner-Roth, et al. 2008),
9
brand origin (Thakor and Kohli, 1996; Lee et al., 2009; Hamzaoui-Essoussi et al., 2011;
Thakor and Lavack, 2003; Kim and Chung, 1997; Shukla, 2011), branding country
(Srinivasan et al., 2004), country of brand headquarters (Chen, 2004; Madden, 2003),
country of brand (Lee and Bae, 1999), and country of brand origin (Yasin et al., 2007). In
addition to these two conceptualizations of country of origin, other definitions can be
seen in the extant literature such as country of parts (Chowdhury and Biswas, 2011;
Chowdhury and Ahmed, 2009; Insch and McBride, 2004; Chao, 1993), which refers to
the country where the parts of a product come from, and country of corporate ownership
(Thakor and Lavack, 2003), which refers to the nationality of those that own the product.
Finally, country of design (Chao, 1993; Jun and Choi, 2007; Insch and McBride, 2004;
Chowdhury and Ahmed, 2009; Chowdhury and Biswas, 2011) refers to the country
where the product is originally designed. On the other hand, in many studies (e.g. Batra et
al., 2000; Auger et al., 2010; Pappu et al., 2007; Sharma, 2011; Baldauf et al., 2009;
Balabanis and Diamantopoulos, 2004), the conceptualization of COO is not clear. In
other words, which form of origin definition the authors refer to is not evident in a great
number of COO studies. In this dissertation, COO is defined as the country where the
product is actually made.
2.3 Country Equity
The term brand equity refers to the value associated with a brand name, as reflected in the
dimensions of: brand awareness, brand associations, perceived quality and brand loyalty
(Pappu et al., 2007). This notion has been extended to countries by researchers proposing
the concept “country equity.” Research suggests that country equity is the value that
consumers associate with the name of a country (Pappu and Quester, 2010). In the
10
literature, different terms have been used to refer to country equity. For example,
Maheswaran and Chen (2006) use the term “nation equity” to refer to this concept.
Similarly, Jun and Choi (2007) use the term “country brand” to represent a country‟s
equity. Finally, Zeugner-Roth et al. (2008) approach the notion of country equity from
individual consumer perspective and use the term “country brand equity” to refer to it.
They define country equity as “the value-added brought forth by the association of a
product or brand with a given country name, as perceived by the individual consumer” (p.
583).
The main logic behind the country equity construct is that a country is like a
corporation that manufactures many different products, and enjoys various equity profiles
in different product categories across different markets. The name of a country can often
act in similar way as the name of a brand (Anholt, 2002) and hence, add to or subtract
from the perceived value of a product (Aaker, 1991; Keller, 1993). For example, products
made in Japan or the USA are generally evaluated much more favorably by consumers
than products made in Hungary or Malaysia, due to the high reputation of the former
countries as manufacturer of products in certain categories. Consequently, it can be
considered that countries whose names generate positive associations also include
positive country equity (Zeugner-Roth et al., 2008).
Country equity is of significant importance not only for entering foreign markets
(Shimp, Samiee and Madden, 1993) but also for attracting tourists, foreign direct
investment (FDI) and even talented people (Kotler and Gertner, 2002). In this respect, the
literature review suggests that country equity can be viewed from three perspectives.
First, countries can engage in improving their image as a tourist destination (Kotler and
11
Gertner, 2002). Second, countries can attempt to improve their image as an attractive FDI
location (Papadopoulos and Heslop, 2002). Third, countries can develop an image in
foreign markets as manufacturers of quality products or producers of favorable brands
(Shimp et al., 1993). The present study adopts the third perspective.
In an extensive literature review on COO, country branding and place branding,
seventeen studies mentioning or referring to the construct of country equity have been
detected. As can be seen in Table 1, five of these studies do not contain a conceptual
definition of country equity, and only three of them propose potential dimensions of
country equity. Furthermore, only two of these studies contain concrete scale of country
equity and only one of them examines the effect of country equity.
A comparison of different conceptualizations of country equity demonstrated in Table
1 reveals that thirteen of the studies (e.g. Shimp et al., 1993) refer to country equity at the
consumer level, meaning that they are mainly interested in the differential effect of the
COO as a non-physical product attribute on consumer behavior. An example for such a
conceptualization is given by Iversen and Hem (2001, p. 141) who define country equity
as “commercial value that a country possesses due to positive or negative product related
associations and affect in a given target market.” On the other hand, four studies (e.g.
Papadopoulos, 2004; Kotler and Gertner (2002) refer to country equity at the country
level and conceptualize it in terms of general assets and liabilities that a country has
(Zeugner-Roth et al., 2008). An example for such a conceptualization is provided by
Papadopoulos (2004, p. 43), who defines country equity as “the real and/or perceived
assets and liabilities that are associated with a place (country) and distinguish it from
others.” In another conceptualization at the country level, country equity is “the value
12
Table 1: Overview of Literature on Country Equity
Author
Definition
Conceptu
alization
Level
Dimensions
Scale
Shimp, Samiee and Madden
(1993, p. 328)
“Country equity serves to disentangle the equity
contained in a brand […] from that contained in the
country with which the brand is associated”
Consumer
Level
n.a.
No
Kim (1995) n.a. Consumer
Level
n.a. No
Thakor and Katsanis (1997) n.a. Consumer
Level
n.a. No
Pappu and Quester (2001,
p. 2)
“The value endowed by the name of the country on to a
product”
Consumer
Level
Country Awareness,
Country
Associations,
Country Loyalty,
Perceived Quality
No
Iversen and Hem (2001, p.
141)
“Commercial value that a country possess due to positive
or negative product related associations and affect in a
given target market”
Consumer
Level
n.a.
No
Kotler and Gertner (2002) n.a. Country
Level
n.a. No
Papadopoulos and Heslop
(2002, p. 295)
“The value that may be embedded in perceptions by
various target markets about the country, and the ways in
which these perceptions may be used to advance its
interests and those of its constituents”
Country
Level
n.a.
No
Kleppe, Iversen and
Stensaker (2002, 62)
“That portion of consumer affect toward a brand or
product that is derived purely from the product‟s
associations with a particular country.”
Consumer
Level
n.a.
No
Papadopoulos and Heslop
(2003, p. 427)
“A set of country assets and liabilities linked to a
country, its name and symbols, that add to or subtract
from the value provided by the country‟s outputs to its
various internal and external publics.”
Country
Level
n.a.
No
13
Author
Definition
Conceptu
alization
Level
Dimensions
Scale
Papadopoulos (2004, p. 43)
“The real and/or perceived assets and liabilities that are
associated with a place (country) and distinguish it from
others.”
Country
Level
n.a.
No
Viosca, Bergiel and
Balsmeier (2005)
“The emotional value resulting from consumers‟
association of a brand with a country.”
Consumer
Level
n.a. No
Jaffe and Nebenzahl (2006) n.a. Consumer
Level
n.a. No
Maheswaran and Chen
(2006, p. 375)
“Like brands, countries also have equity associated with
them, termed „nation equity,‟ that goes beyond product
perceptions and may also have an emotional component.”
Consumer
Level
n.a.
No
Pappu, Quester and
Cooskey (2007, p. 728)
“Brands from the same country share images or
associations, which is referred to as country equity”
Consumer
Level
n.a.
No
Jun and Choi (2007) n.a. Consumer
Level
n.a. No
Zeugner-Roth,
Diamantopoulos and
Montesinos (2008, p. 583)
“The value-added brought forth by the association of a
product or brand with a given country name, as perceived
by the individual consumer.”
Consumer
Level
Country brand
loyalty, perceived
country brand
quality, country
brand awareness/
associations
Yes
Pappu and Quester (2010,
p. 279)
“The value endowed by the name of the country onto
products from that country.”
Consumer
Level
Country awareness,
macro country
image, micro
country image,
perceived quality,
country loyalty
Yes
14
that may be embedded in perceptions by various target markets about the country, and the
ways in which these perceptions may be used to advance its interests and those of its
constituents” (Papadopoulos and Heslop, 2002, p. 295).
This study approaches the notion of country equity from the individual consumer
perspective and defines it as the perceptual value derived from the associations of a
brand with a particular country name. Therefore, country equity is consumer-based
equity and may vary across different consumers. While brand equity is the value
associated with a particular brand name (Pappu et al., 2007), country equity is the value
shared by the brands in a specific industry from a particular country (Zeugner-Roth et al.,
2008). These arguments suggest that even new or unknown brands may benefit from
positive country equity, since the association with a country with high consumer-based
equity might increase their consumer-based brand equity. Furthermore, while a country
has high equity in certain industries, it might have low equity in others.
The extant literature suggests that country equity is a multi-dimensional construct
(Zeugner-Roth et al., 2008; Pappu and Quester, 2010; Iversen and Hem, 2001). Table 1
demonstrates that only three studies have proposed the potential dimensions of country
equity. While Pappu and Quester (2001; 2010) propose that country awareness, country
associations (macro country image and micro country image), perceived quality and
country loyalty are the dimensions of country equity, Zeugner-Roth et al. (2008) suggest
that it is a three-dimensional construct comprising country awareness-associations,
perceived country brand quality and country brand loyalty. Different from Pappu and
Quester (2001; 2010), Zeugner-Roth et al. (2008) combine country awareness and
country associations into a single dimension.
15
The only studies that have provided scale of country equity are those by Zeugner-
Roth et al. (2008) and Pappu and Quester (2010). The country equity constructs in both
studies are mainly adapted from Aaker‟s (1991), Keller‟s (1993) and Yoo and Donthu‟s
(2001) brand equity measures. Both studies approach the country equity construct from
an attitudinal perspective rather than intentional or behavioral. Different from the extant
literature, this study approaches the country equity construct from both attitudinal and
intentional perspectives. In other words, in this study, country equity is based on
consumer attitudes and intentions.
From an attitudinal perspective, country equity has four dimensions: country
awareness, country associations (macro country image and micro country image) and
perceived quality (at the country level). Although Zeugner-Roth et al. (2008), who
adapted Yoo and Donthu‟s (2001) consumer-based brand equity scale for country brand
equity measurement, combine awareness and associations, this study treats them as
distinct dimensions in line with Pappu and Quester‟s study (2010). Research findings
from both the brand equity literature (e.g. Pappu and Quester, 2006; Pappu et al., 2005)
and country equity literature (Pappu and Quester, 2010) suggest that awareness and
associations are separate dimensions of brand equity and country equity. Furthermore,
although Pappu and Quester (2010) consider “country loyalty” an attitudinal dimension,
this study considers it an intentional dimension of country equity.
In addition to country loyalty dimension, “willingness to pay (WTP) a price
premium” is considered another intentional dimension of country equity. The extant
literature on brand equity (e.g. Koschate-Fischer, Diamantopoulos and Oldenkotte, 2012;
Netemeyer et al., 2004) suggests that “willingness to pay a price premium” is a
16
dimension of brand equity. Applying this logic to country equity construct, this study
suggests that willingness to pay a price premium is a dimension of country equity from
an intentional perspective. To sum up, in this study, country equity consists of two sub-
constructs: attitude-based country equity and intention-based country equity. Attitude-
based country equity has four dimensions: country awareness, macro country image,
micro country image and perceived quality (at the country level). Intention-based country
equity has two dimensions: country loyalty and WTP a price premium (at the country
level).
The first dimension of attitude-based country equity construct is country awareness.
The primary requirement of the existence of country equity is the consumers‟ awareness
of the country. Without any awareness of the country, consumers are unable to have
quality perceptions, country associations or loyalty toward the country. Pappu and
Quester (2010) define country awareness as “consumers‟ ability to recognize or recall
that the country is a producer of certain product category” (Pappu and Quester, 2010, p.
280). According to the definition, country awareness does not involve only the
knowledge of the country. It also requires consumers‟ ability to recall the name of the
country when the product category is mentioned. Therefore, consumers would have high
country awareness, when the link between the country node and certain product category
node is strong in their memory. Research suggests that consumers‟ country image beliefs
are generalized at product category level (Agarwal and Sikri, 1996) and that a products‟
COO information often activates a product category level knowledge in consumers‟
minds (Hong and Wyer, 1990). Therefore, strong product category-country associations
indicate high country awareness.
17
The second dimension of attitude-based country equity is country associations.
Country associations refer to the associations linked to a particular country‟s products
(Zeugner-Roth et al., 2008). In other words, they refer to “descriptive, inferential and
informational beliefs one holds in memory about a particular country, both at the product
and the country level” (Pappu and Quester, 2010, p. 280). This definition suggests that
country associations include macro and micro country image dimensions (Pappu et al.,
2007). While macro country image is defined as “the total of all descriptive, inferential
and informational beliefs one has about a particular country” (Martin and Eroglu, 1993,
p. 193), micro country image is defined as “the total beliefs one has about the products of
a given country” (Pappu et al., 2007, p. 727). Research suggests that consumers have
memory-based associations towards countries at both country (macro) and product
category (micro) levels (Pappu and Quester, 2010). Therefore, in line with Pappu and
Quester‟s study (2010), this study considers “country associations” two-dimensional,
comprising macro and micro country images. For example, at the macro level, consumers
may have associations such as “developed economy” or “developed technology” towards
America whereas at the micro level, consumers may consider that American cars are
“high on prestige value, but low on economy.”
Another dimension of attitude-based country equity is perceived quality at the
country level. It refers to “consumers‟ subjective evaluations about the overall excellence
or superiority of a particular country‟s products” (Zeugner-Roth et al., 2008, p. 583).
Therefore, it is the perception of quality, rather than the actual quality, of products from a
particular country. This conceptualization of perceived quality is similar to Aaker‟s
(1991) definition of perceived brand quality. Consumers have different quality
18
perceptions of products from different countries. For example, consumers might have
better quality perceptions of products from the US or Japan than those from Malaysia or
Vietnam, in a given product category. These arguments suggest that even if a product has
low actual quality, it may benefit from its country-of-origin‟s high perceived quality.
The first dimension of intention-based country equity is country loyalty. It refers to
consumers‟ intention to be loyal to the brands of a particular country (Zeugner-Roth et
al., 2008). In another definition, country loyalty is “the tendency to be loyal to a focal
country as demonstrated by the intention to buy products from the country as a primary
choice,” (Pappu and Quester, 2010, p. 280). This conceptualization is similar to Aaker‟s
(1991) and Yoo and Donthu‟s (2001) conceptualization of brand loyalty. Given the
attitude-intention-behavior sequence (Warshaw and Davis, 1985; Barry, 1987), and the
cause-and-effect relationship in this sequence, it is considered that consumers‟ loyalty
intention is influenced by their attitude towards the country, which is reflected by the
dimensions of country awareness, country image and quality perceptions. Then, loyalty
intention might turn to an actual loyalty behavior. Since this study examines individuals‟
loyalty intention, not their actual behavior, it conceptualizes country loyalty as the
dimension of intention-based country equity.
The second dimension of intention-based country equity is willingness to pay (WTP)
a price premium. Netemeyer et al. (2004) define WTP as “the amount a customer is
willing to pay for his/her preferred brand over comparable/lesser brands of the same
package size/quantity” (p. 211). According to Aaker (1996), it is one of the strongest
indicators of brand loyalty and may be the most reasonable summary measure of overall
brand equity. Applying this concept to country equity, this study defines WTP a price
19
premium (at the country level) as the amount a customer is willing to pay for brands from
a particular country over comparable brands of the same package size/quantity from
another country. Figure 1 demonstrates the attitude-based and intention-based country
equity sub-constructs developed in this study.
Figure 1: Attitude-based and Intention-based Country Equity
________________________________________________________________________
Attitude-based Country Equity Intention-based Country Equity
________________________________________________________________________
Understanding country equity measurement and determining its effect on brand
equity is important for several reasons. Measuring and managing brand equity has
received considerable interest from researchers (e.g. Aaker, 1991, 1996; Keller, 1993,
2003; Farquhar, 1989) and been considered essential for effective brand building (Aaker,
1991; Keller, 1993; Yoo and Donthu, 2001). High brand equity can help firms have
strong bargaining power with channel members and high customer loyalty. Furthermore,
it can help firms attain the ability to launch brand extensions and enter foreign markets
easily (Shimp, Samiee and Madden, 1993; Kotler and Gertner, 2002; Aaker, 1991).
Similarly, the management of country equity of a brand could reap considerable benefits
Country awareness
Micro country image
Macro country image
Perceived quality
Country Loyalty
Willingness to Pay a
Price Premium
20
for the firm because of its potential effects on consumer preferences (Zeugner-Roth et al.,
2008) and on brand equity.
Many countries tend to offer more than one product category in international markets.
It would be helpful for the exporters in these countries to develop a better understanding
of their country equity and its potential effect on brand equity and consumer preferences.
High country equity may help firms to overcome entry barriers in foreign markets and
have strong bargaining power with channel members. In addition, high equity of a
country may increase the ability of firms from that country to launch brand extensions in
foreign markets. Furthermore, high equity of a country may increase the power of brands
from that country relative to competition in international markets. Brands with higher
equity are less vulnerable to competition and competitive marketing actions in the global
markets. Similarly, brands originated from countries with higher equity may be less
vulnerable to strong global competition. For these reasons, understanding and managing
country equity is of vital importance for firms in global markets.
In addition, the management of country equity of a brand can benefit the nation as a
whole since country equity may be transferable to other brands originating from that
country (Kleppe et al., 2002; Pappu and Quester, 2010). For example, the brand equity of
Honda, which consumers generally associate with Japan, is likely to be affected by
Japan‟s own equity. This equity may also be transferable to other new brands from Japan.
This suggests that high country equity can increase export volume of a country and help
the firms from that country create strong brands with lasting brand value in the
international markets. Furthermore, not only can brands be associated with certain
countries, but also countries can become brands themselves (Viosca, et al., 2005). Any
21
nation can be perceived as a brand as it can be perceived as contemporary and historical
associations that have meaning for marketing. The identities of some brands are bound up
with their national affiliation. For example, brands of Swiss chocolate, French perfume
and Japanese electronics are instantly meaningful partly because their countries function
as a brand (O‟Shaughnessy and O‟Shaughnessy, 2000).
Due to the significant effect of country name on consumer evaluations, governments
and industry groups in some countries employ “country branding strategies” in order to
increase the image of their country as a brand. The idea of country branding has received
broad acceptance and been practiced at the national and regional levels (Viosca et al.,
2005). These country branding efforts help increase the consumer-based equity of nations
which in turn helps the firms from these nations have competitive advantage in global
markets. For these reasons, understanding and managing country equity is crucial for
government and industry groups in a country.
To sum up, three key groups, namely, government, industry groups and individual
firms, play significant role in managing country equity (Papadopoulos and Heslop, 2002).
In many countries, these three groups employ “country branding strategies” in order to
achieve a variety of objectives, including enhancing country brand image and
repositioning country brands (Pappu and Quester, 2010). Therefore, understanding
country equity –its nature, mechanism and dimensions- and its potential effect on brand
equity is expected to have significant implications for these three groups. Determining
the dimensions of country equity, and how they influence the dimensions of brand equity
will be useful for these groups to develop better country branding strategies and to
improve the equity of their brands.
22
2.4 Consumer-Based Brand Equity
Brand equity has drawn widespread attention from both practitioners and researchers
since 1980s. It has been considered as the added value that a brand name endows upon a
product as a result of the firm's marketing efforts. Furthermore, it has been viewed as an
index of measuring the effectiveness of branding strategies (Lin and Kao, 2004). The
general view is that brand equity is the outcomes of marketing efforts that accrue to a
product given its brand name compared with those that would accrue if the same product
does not have the brand name (Aaker, 1991; Farquhar, 1989; Lassar, Mittal and Sharma,
1995; Keller, 2003). It provides value to firms and customers (Aaker, 1991; Keller, 1993;
Washburn and Plank, 2002).
Brand equity has been conceptualized from both marketing and financial
perspectives. This study conceptualizes brand equity from marketing or consumer
perspective, in accordance with Aaker (1991), Keller (1993) and Yoo and Donthu (2001).
From a marketing perspective, researchers (e.g. Yoo and Donthu, 2001; Pappu et al.,
2007) have measured brand equity based on consumer perceptions and called it
“consumer/customer-based brand equity.” Aaker (1991) defines brand equity as “a set of
brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract
from the value provided by a product or service to a firm and/or to that firm‟s customers”
(p. 15). In this context, assets or liabilities must be linked to the name and/or symbol of
the brand in order for them to underlie brand equity. Focusing on the perceptual
components of brand equity, similar to Yoo and Donthu (2001), Pappu, et al. (2007)
define consumer-based brand equity as “the value consumers associated with a brand, as
reflected in the dimensions of: brand awareness, brand associations, perceived quality
23
and brand loyalty” (p. 728). According to this definition, brand equity assets and
liabilities will differ across consumers and add or subtract value for them.
The extant literature suggests that country equity is a multi-dimensional construct
(Aaker, 1991, Keller, 1993; Yoo and Donthu, 2001; Kamakura and Russell, 1993; Pitta
and Katsanis, 1995). In his book “Managing Brand equity,” Aaker (1991) argues that
brand equity has five dimensions: brand awareness, brand associations, perceived quality,
brand loyalty and other proprietary brand assets. While the first four dimensions reflect
customers‟ perceptions and reactions to the brand and marketing efforts, the last
dimension represents patents, trademarks and channel relationships. Therefore, “other
proprietary brand assets” dimension is not relevant to the consumer-based brand equity
measure. Considering this view, Yoo and Donthu (2001) focus on the first four
dimensions that comprise the construct of consumer-based brand equity. Many
researchers (e.g. Pappu et. al., 2007; Washburn and Plank, 2002) have adopted Yoo and
Donthu‟s (2001) measurement using brand awareness, perceived quality, brand
associations (brand image) and brand loyalty as the dimensions of consumer-based brand
equity construct. In addition, other dimensions such as willingness to pay a price
premium (Aaker, 1996; Netemeyer et al., 2004), uniqueness and perceived value for the
cost (Netemeyer et al., 2004) can be found in the literature.
Researchers have approached the brand equity construct from different perspectives.
Attitudinal, intentional, behavioral or mixed perspectives have widely been used by
researchers. Different from the extant literature, this study approaches the brand equity
construct from both attitudinal and intentional perspectives and develops two sub-
constructs, namely, attitude-based brand equity and intention-based brand equity.
24
From an attitudinal perspective, brand equity has three dimensions: brand awareness,
brand image and perceived quality. Although Yoo and Donthu (2001) combine brand
awareness and brand associations (brand image), this study treats them as distinct
dimensions in line with Aaker‟s study (1996). As noted earlier, awareness and
associations are separate dimensions of brand equity and country equity (Pappu and
Quester, 2006; Pappu et al., 2005; Pappu and Quester, 2010). This study uses the term
“brand image” instead of “brand associations.” The reason for such a use is to avoid any
possible conflict in the meaning of the dimension. As mentioned before, COO is also a
brand association. In other words, brands can be associated to certain COOs. By terming
the dimension as “brand image,” this study clarifies that this dimension does not include
“COO associations.” After all, the operationalization of brand associations in the
literature does not include COO associations. In addition, attitude-based country equity is
conceptualized as a four-dimensional construct consisting of country awareness, macro
country image, micro country image and brand quality. By using the same term “image”
for the brand equity dimension, this study ensures the consistency across the two
constructs.
Although many researchers (e.g. Pappu et. al., 2007) consider “brand loyalty” an
attitudinal dimension, this study considers it as an intentional dimension of brand equity.
In this respect, its conceptualization accentuates consumer intentions to be loyal to a
brand. In addition to brand loyalty dimension, “willingness to pay (WTP) a price
premium” is considered another intentional dimension of brand equity. The extant
literature on brand equity (e.g. Koschate-Fischer, Diamantopoulos and Oldenkotte, 2012;
Netemeyer et al., 2004) suggests that “willingness to pay a price premium” is a
25
dimension of brand equity. To sum up, in this study, brand equity consists of two sub-
constructs: attitude-based brand equity and intention-based brand equity. Attitude-based
brand equity has three dimensions: brand awareness, brand image and perceived quality.
Intention-based brand equity has two dimensions: brand loyalty and WTP.
The first dimension of attitude-based brand equity construct is brand awareness.
Brand awareness is a significant and sometimes undervalued dimension of brand equity.
It refers to “the ability of a potential buyer to recognize or recall that a brand is a member
of a certain product category” (Aaker, 1991, p. 61). It is considered as the degree to
which consumers think of a brand when a product category is mentioned or the degree to
which consumers think of a product category when a brand is mentioned. The definition
of brand equity suggests a link between product class and brand. Therefore, brand
awareness does not involve only the knowledge of the brand name. Research suggests
that brand awareness can affect consumer perceptions and attitudes (Aaker, 1991, 1996;
Keller, 1993; Kamakura and Russell, 1993; Pitta and Katsanis, 1995). It can be a driver
of brand choice and loyalty (Aaker, 1996; Keller, 1993). Furthermore, it can increase
consumer trust and even taste of a product (Lin and Kao, 2004; Aaker, 1996). Keller
(1993) argues that brand awareness consists of two sub-dimensions: brand recall and
brand recognition. On the other hand, Aaker (1996) suggests that it consists of six sub-
dimensions: recognition, recall, top-of-mind, brand dominance, brand knowledge and
brand opinion.
The second dimension of attitude-based brand equity construct is brand image (brand
associations). Aaker (1991, p. 109) defines brand associations (brand image) as “anything
linked in memory to a brand.” In another definition, brand image is “the other
26
informational nodes linked to the brand node in memory and contain the meaning of the
brand for consumers” (Keller, p. 3). These associations have a level of strength and the
link between the associations and brand will be stronger when it is based on more
experiences and exposures (Aaker, 1991; Keller, 1993; Yoo and Donthu, 2001). In other
words, the more experiences or the more messages associated with a brand, the stronger
the brand image (Lin and Kao, 2004). These associations can be positive or negative.
The third dimension of attitude-based brand equity construct is perceived quality.
Perceived quality is defined as “the consumer‟s judgment about a product‟s overall
excellence or superiority” (Zeithaml, 1988, p. 3). Therefore, it is based on consumers‟
subjective evaluations of product quality, not the actual quality of the product. The
importance of perceived quality in consumers‟ product evaluations and judgments has
been increasingly recognized by researchers and marketers (Lin and Kao, 2004). Various
factors such as brand name, country of origin, price and store image can act as quality
signaling cues and significantly affect perceived quality of products (Uslay and
Bayraktar, 2013). Perceived quality has been considered a core dimension of brand equity
construct because it is associated with the willingness to pay a price premium and brand
preference (Netemeyer et al., 2004).
The first dimension of intention-based brand equity construct is brand loyalty.
Previous research has focused on either behavioral or perceptual aspects of brand loyalty.
From behavioral perspective, brand loyalty is “the degree to which a buying unit, such as
a household, concentrates its purchases over time on a particular brand within a product
category” (Lin and Kao, 2004, p. 38). From perceptual perspective, brand loyalty refers
to “the tendency to be loyal to a focal brand, which is demonstrated by the intention to
27
buy the brand as a primary choice” (Yoo and Donthu, 2001, p. 3). While the
conceptualization of brand loyalty based on behavioral perspective emphasizes
consumer‟s actual loyalty as reflected in brand preference, the conceptualization based on
perceptual perspective focuses on consumer‟s intention to be loyal to the brand. This
study adopts the second approach and considers brand loyalty as an intention-based
dimension of brand equity. Brand loyalty is affected by a variety of factors such as first-
time purchase experience, price premium, perceived quality, brand image and
competitors‟ promotional events (Biel, 1993; Lin and Kao, 2004).
The second dimension of intention-based brand equity construct is willingness to pay
(WTP) a price premium (at the brand level). WTP a price premium is defined as “the
amount a customer is willing to pay for his/her preferred brand over comparable/lesser
brands of the same package size/quantity” (Netemeyer et al., 2004, p. 211). The
definition suggests that the price premium is conceptualized with respect to a competitor
or set of competitors that must be clearly specified (Aaker, 1996). For example, a
consumer may be willing to pay 10% more for Toyota than for Honda. Similarly, a
consumer may be willing to pay 30% more to shop at Versace rather than at Perry Ellis.
This is called “price premiums” associated with the brand. The price premium can be
high or low and positive or negative depending on the brands involved in the comparison.
WTP a price premium may be the most reasonable summary measure of overall brand
equity (Aaker, 1996).
Figure 2 demonstrates the attitude-based and intention-based brand equity sub-
constructs developed in this study.
28
Figure 2: Attitude-based and Intention-based Brand Equity
________________________________________________________________________
Attitude-based Brand Equity Intention-based Brand Equity
________________________________________________________________________
2.5 The Proposed Model
This section will introduce the hypotheses and theoretical background of the proposed
relationships. The hypothesized relationships in this dissertation are mainly based on
associative network memory (ANM) model, cue evaluation theory, categorization theory
and hierarchy of effects model.
2.5.1 Associative Network Memory Model
Associative network memory (ANM) model provides a strong basis for explaining
country equity and brand equity constructs and the relationships between them. While
Aaker (1991) and Keller (1993) used ANM model to explain the notion of brand equity,
Pappu and Quester (2010) utilized this model to explain the notion of country equity.
This study will also elucidate the relationships between these two constructs using ANM
model.
Brand awareness
Brand Image
Perceived quality
Brand Loyalty
Willingness to Pay a
Price Premium
29
The ANM model aims at explaining the nature of human intelligence and how
people think. It suggests that human semantic memory consists of networks, and each
network is composed of several nodes (Anderson, 1976). These nodes are stored
information in memory and linked to each other in some way (Keller, 1993). For
example, if a country (e.g. Germany) is a node in memory, there could be other nodes
(e.g. engineering) that are linked to this country node and serve as associations (Pappu
and Quester, 2010). The activation of a node in memory leads to the activation of other
linked nodes. This spreading activation process determines the extent of retrieval in
memory. In addition, the links among nodes vary in strength (Keller, 1993). Therefore,
the strength of link between the activated node and all linked nodes determines the extent
of the spreading activation process and the related information that can be retrieved from
memory. For example, a consumer may develop strong associations in his/her memory
between “Japan” and “reliability” nodes. This consumer might readily recall the
association “reliability” whenever he/she thinks of “Japan.” In other words, whenever
he/she thinks of “Japan” the “reliability” node will be activated depending on the strength
of the association. Therefore, whenever he/she considers a Japanese car, say Honda,
he/she will think of “reliability.” In other words, the “reliability” node will be indirectly
connected to Honda. Thus, this positive association will increase consumer-based brand
equity of Honda. This equity will be generated for all Japanese cars. Furthermore, the
link between nodes can be unidirectional or bi-directional. In this context, when the
consumer considers the “reliability” node, he/she might consider the “Japan” and
“Honda” nodes. Conversely, if a country is linked to negative associations (e.g.
backwardness, poverty, hostility) in consumer memory, the brand names from this
30
country could be tarnished. Thus, the negative associations will decrease consumer-based
equity of these brands. Certainly, all of the above claims are based on the assumption that
consumers have the country of origin knowledge of the brands.
2.5.2 Cue Evaluation Theory
“Cue Evaluation Theory” suggests that consumers evaluate products based on intrinsic
(e.g. design, quality and shape) and extrinsic (e.g. price, brand name and country of
origin) product cues (Manrai et al., 1998; Klenosky et al., 1996). The literature suggests
that extrinsic product cues serve as indicators of quality and affect consumers‟ perception
of overall brand image. A large number of studies (e.g. Han, 1989; Wall, Liefeld and
Heslop, 1991; Insch and McBride, 2004) have shown that country of origin of a product
is an extrinsic cue –an intangible product attribute- that is distinct from a physical product
characteristic and that significantly influences consumers‟ product evaluations. This
extrinsic cue influences individuals‟ evaluations of brand personality and thus brand
image (Thakor and Kohli, 1996). Cue evaluation theory suggests that COO of a product
serves as an indicator of quality particularly when consumers face with a lack of
information or ambiguous information about the product quality (Auger et al., 2010).
Previous research has mostly attempted to explain COO effect through quality
signaling process, ignoring the other aspects of this extrinsic product cue. From an
information processing or cognitive perspective, origin information is used as an
intangible product attribute that serves as an indicator of product quality. This view
suggests that origin information influences consumer product evaluations through “halo”
and “summary” effects (Sharma, 2011). “Halo effect” suggests that consumers make
31
inferences about the quality of products or services based on the overall image they have
about their COOs. On the other hand, “summary effect” argues that consumers make
abstractions of the product information into a country image, which influences their
evaluative judgments.
Another stream of research considers COO cue from affective perspective and argues
that COO information also has symbolic and emotional meanings (Verlegh and
Steenkamp, 1999; Li and Wyer, 1994; Hong and Wyer, 1989). It may sometimes serve as
a way to reflect patriotism (Batra et al., 2000; Sharma, 2011; Balabanis and
Diamantopoulos, 2004; Lantz and Loeb, 1996; Jimenez and Martin, 2009), social status
(Batra et al., 2000; Verlegh and Steenkamp, 1999), authenticity and exoticness (Verlegh
and Steenkamp, 1999). Furthermore, avoiding products from certain country of origins
reflect consumer animosity (Sharma, 2011; Pharr, 2005; Jimenez and Martin, 2009). In
addition, COO associates a product to developed and rich country imagery, with sensory,
affective and ritual connotations (Askegaard and Ger, 1998).
Finally, it has been argued that COO information has normative meanings. In this
context, preference of products or services from a certain country may reflect the
endorsement of its policies, practices and actions (Sharma, 2011). Therefore, consumers
attempt to punish some countries by boycotting the products originated from these
countries.
The above discussion shows that COO cue can be viewed from three perspectives.
From cognitive perspective, COO cue is considered as a signal for product quality. From
affective perspective, COO cue has symbolic and emotional meanings for consumers.
32
Finally, from normative perspective, COO cue is linked to social and personal norms.
Considering these arguments, this study proposes that country equity significantly affects
consumer-based brand equity and that this effect reflects the abovementioned three
perspectives.
Previous research mostly focused on one of the above perspectives. For example,
while some studies (e.g. Wall et al., 1991; Chandrasen and Paliwoda, 2009; Cordell,
1992; Manrai, Lascu and Manrai, 1998) examined the effect of development level of
COO on consumer quality perceptions or product evaluations, others (e.g. Roth and
Romeo, 1992; Chao, Wuhrer and Werani, 2005; Zeugner-Roth et al., 2008) examined the
effect of country image on perceived quality or consumer preferences. Furthermore,
while some studies (e.g. Sharma, 2011) examined how consumer animosity influences
consumer preferences or evaluations, others (e.g. Batra et al., 2000; Lantz and Loeb,
1996; Balabanis and Diamantopoulos, 2004; Verlegh, 2007) examined how ethnocentric
tendencies affect consumer evaluation of products. All of these examples show that the
researchers considered one of the above perspectives. This study argues that examining
the effect country equity on consumer-based brand equity will reflect the three
perspectives and yield more comprehensive and better results.
2.5.3 Categorization Theory
Since categorization theory plays a significant role in consumer behavior and country of
origin forms an important category for consumers, this study utilizes categorization
theory to underpin the propositions. Smith (1995, p. 27) simply defines categorization as
“the mental act of coming to think of some object as an instance of the category.”
33
Categorization describes “the characteristic manner in which individuals organize and
structure perceptual inputs deriving from the external environment” (Block et al., 1981, p.
770).
Categorization theory suggests that consumers generally structure their knowledge of
specific product alternatives in categories and that they utilize category structures to
organize and differentiate brands (Balabanis and Diamantopoulos, 2011). Therefore,
consumers code their experiences and then use them to make inferences. This coding
activity reduces individuals‟ need for perceptual processes, storage space in their minds
and reasoning processes (Smith, 1995). The deduction from this categorizing activity is
that consumers can reduce mental efforts and economize cognitive resources by
classifying brands into categories according to COOs and applying organized prior
knowledge about the categories to evaluate products (Maheswaran, 1994). In this context,
categorization is the activity of making inferences about an object (brand) from the
category to which it belongs (COO). The label of a category (e.g. Japan) serves as a
signal (Balabanis and Diamantopoulos, 2011) so that all members of the category (e.g.
Honda, Toyota, etc.) are likely to share some similar features (e.g. reliability, economy).
According to categorization theory, attitudes towards an object are directly related to
attitudes towards the category (Chowdhury and Ahmed, 2009). Therefore, when
consumers recall a country name to which they associate positive features, they will infer
positive attitudes towards the brands from that country. This inference can affect not only
the quality perceptions of brands, but also consumer purchase decisions and overall brand
image (Chowdhury and Ahmed, 2009).
34
Similar to the discussion about cue evaluation theory, category-based information
processing of COO can influence consumer evaluations and judgments through three
processes: cognitive, affective and normative processes (Balabanis and Diamantopoulos,
2011). From a cognitive process perspective, consumers make inferences about the
features of a brand from its category (COO). These attributes are then used to constitute
quality perceptions. From an affective process perspective, category membership can
activate emotional responses that might override cognitive evaluations. In this context, a
consumer may negatively evaluate a brand due to his/her negative attitudes towards its
category (COO) even if the brand is a superior one. Finally, from a normative process
perspective, category membership can be related to social norms and activate normative
pressures. In this context, a consumer may reject buying from certain categories (COOs)
due to normative pressures stemming from some social norms. Admittedly, these
discussions are based on the assumption that consumers are able to categorize the brands
to COOs correctly.
The above discussions suggest that significant part of consumer-based equity of a
brand in the international marketplace will be explained by the equity of its COO. In
addition, the ways through which category-based information processing of COO can
influence consumer evaluations and judgments suggest that using broader independent
and dependent variables will yield more comprehensive and better results. Therefore,
examining the effect of country equity on consumer-based brand equity is expected to
reflect the outcomes of cognitive, affective and normative processes.
35
2.5.4 Hierarchy of Effects Model
The proposed relationships among sub-constructs of country equity and consumer-based
brand equity are also based on hierarchy of effects model. The model has been used in
the advertising literature for more than a century. The traditional hierarchy framework
suggests that consumers respond to marketing messages in a very ordered way (Yoo, Kim
and Stout, 2004). According to the model, consumers follow seven steps in a purchase
decision, beginning with unawareness of product or service existence to the actual
purchase (Barry, 1987). These steps suggest a causal relationship from cognition to
affect, and from affect to conation.
While cognition is defined as "a system of beliefs structured into some kind of
semantic network" (Holbrook and Batra, 1987), affect is viewed as feelings and emotions
that have physiological components (Barry and Howard, 1990). On the other hand,
conation has been considered as “either intentions to perform a behavior or the
performance of the actual behavior” (Yoo, Kim and Stout, 2004, p. 50). This cognition-
affect-conation sequence points out attitude-intention-behavior sequence. Attitude is
considered a major determinant of a consumer‟s intention to perform purchase behavior
(Warshaw and Davis, 1985). Intention is a significant dimension of the hierarchy of
effects model because of the presumed amount of inertia that exists between the attitude
change and actual behavior (Barry, 1987).
Given the attitude-intention-behavior sequence and the discussion about country
equity and consumer-based brand equity constructs, causal relationships can be expected
between the sub-constructs of country equity and consumer-based brand equity. In this
36
context, while attitude-based country equity is expected to affect intention-based country
equity significantly and positively, attitude-based brand equity is likely to affect
intention-based brand equity significantly and positively. In addition, given the proposed
relationship between country equity and consumer-based brand equity constructs, it can
be argued that attitude-based country equity will affect attitude-based brand equity
significantly and positively. Furthermore, intention-based country equity is expected to
affect intention-based brand equity significantly and positively. This study does not
expect a significant relationship between intention-based country equity and attitude-
based brand equity due to the hierarchy of effects model. Moreover, it does not expect a
direct relationship between attitude-based country equity and intention-based brand
equity.
The above considerations lead to the following hypotheses:
H1: There is a positive relationship between “attitude-based country equity” and
“intention-based country equity.”
H2: There is a positive relationship between “attitude-based country equity” and
“attitude-based brand equity.”
H3: There is a positive relationship between “intention-based country equity” and
“intention-based brand equity.”
H4: There is a positive relationship between “attitude-based brand equity” and
“intention-based brand equity.”
37
2.6 Moderators
This section introduces the factors that are expected to moderate the relationships
between country equity and consumer-based brand equity. The proposed moderators are
consumer mindfulness, product familiarity, product complexity, product health risk level,
product performance risk level, product importance and product value.
2.6.1 Consumer Mindfulness
As noted earlier, consumers are influenced by both intrinsic (e.g. quality, design) and
extrinsic (e.g. country of origin, brand name, price) product cues when evaluating
products. Research (e.g. Thakor and Lavack, 2003; Hamzaoui-Essoussi, Merunka and
Bartikowski, 2011; Chowdhury and Biswas, 2011) suggests that COO, an extrinsic
product cue, serves as indicators of quality and affects consumers‟ overall brand
evaluations. However, this stream of research generally assumes that consumers are faced
with a lack of information or ambiguous information about product quality and use
heuristics or peripheral route when evaluating products. In other words, the researchers
assume that consumers utilize COO information as a signal for product quality due to
their limited knowledge about products or brands.
This study proposes the “consumer mindfulness” concept as a moderator of COO
effect. It is one of a few studies that incorporate the mindfulness concept, a topic
examined in social psychology, into international marketing research. To the best of the
author‟s knowledge, Table 2 presents the studies that incorporate the mindfulness concept
into marketing research. This study introduces consumer mindfulness as a moderator of
38
Table 2: Overview of Studies Incorporating Mindfulness Concept into Marketing
Research
Authors The Scope of the Study
Bjurstrom
(2012)
The paper presents a holistic picture of Eastern and Western views of
mindfulness in relation to quality management research and practice.
Dong and
Brunel
(2006)
This study is a working paper that offers a definition of consumer
mindfulness, discussing how mindfulness can be helpful in
conducting consumer research. It also presents the result of a study
where mindfulness is considered a persuasive agent.
Liozu et al.,
2012
The paper examines how managerial and collective mindfulness
influence the adoption of value-based pricing approach. It attempts to
answer the research question by conducting interviews with 44
managers of small to medium size US industrial firms.
Malhotra,
Lee and
Uslay (2012)
The paper integrates three distinctive stream of research in marketing
orientation, quality orientation and organizational mindfulness. It
demonstrates how to facilitate the implementation of mindful
marketing by integrating marketing and organizational research on
mindfulness with market and quality orientations.
Ndubisi
(2012)
Based on the mindfulness theory, the paper examines the effects of
service reliability, pre-emptive conflict handling, and customer
orientation on customer satisfaction and loyalty in healthcare service
delivery in Malaysia.
Owusu-
Frimpong
and
Nwankwo
(2012)
The paper connects mindfulness with service quality and applies the
resultant framework to the analysis of strategic perspectives and
philosophical orientations of SMEs in Ghana towards service quality
management.
Roger (2011)
The paper examines the role of mindfulness in a brand manager's self-
direction of his/her professional experience, and analyzes the effects of
experience of brand management, general marketing, general
management and financial analysis on the person's self-perceived
mastery of the brand management role.
Valentine,
Godkin and
Varca (2009)
The paper examines the relationships among mindfulness, role conflict
and organizational ethics in an education-based healthcare institution.
Van de Veer
et al. (2001)
The paper examines whether mindful attention increases
responsiveness to hunger cues and whether it matters where this
attention is directed. It utilizes three experiments to answer the research
questions.
39
COO effect, based on cue evaluation theory, elaboration likelihood model, and
mindfulness literature.
Mindfulness refers to “a state of conscious awareness characterized by active
distinction drawing that leaves the individual open to novelty and sensitive to both
context and perspective” (Langer, 1992, p. 291). In another definition, mindfulness is “a
frame of mind in which an individual maintains a continuous attention to detail” (Hales et
al., 2011, p. 571). It involves efforts “to focus one‟s attention on the concrete aspects of
one‟s behavior, thereby eliminating the abstract, deliberative, high-level self-thoughts
that can interfere with enacting automatic and complex behaviors” (Leary et al., 2006, p.
1827).
Mindfulness captures a quality of consciousness characterized by clarity and
vividness of present experience and functioning, and stands in contrast to the mindless
states of habitual or automatic functioning (Brown and Ryan, 2003). Thus, it plays a
significant role in preventing individuals from engaging in automatic thoughts, habits and
unhealthy behaviors, and fostering behavioral regulation and self-control (Ryan and Deci,
2000).
The literature review suggests that a mindful individual has the following main
characteristics: greater sensitivity to his/her environment, greater attention to details,
more openness to new information, greater skills in cognitive categorization, advanced
awareness of multiple perspectives in problem solving (Langer, 1989), greater attention
to the participation in the ongoing process of living (Gunaratana, 2002), a more receptive
attention to and awareness of current events, realities and experiences (Brown, et al.,
40
2007a, 2007b), greater interest and concern for life (Neff, 2003), greater empathy for
others (Beitel et al., 2005), better self-control, self-awareness and self-regulatory
capacity, greater attentional and concentrative capacity (Brown et al., 2007a), greater
capacity as an observer (Baer, 2007), greater ability to respond flexibly to contextual cues
(Argote, 2006), greater awareness, acceptance and understanding of one‟s emotions and
greater ability to repair negative moods (Leary and Tate, 2007). Therefore, “individuals
who are mindfully engaged in a task are both motivated and able to explore a wider
variety of perspectives, make more relevant and precise distinctions about phenomena in
their environments, enabling them to adapt to shifts in those environments” (Ndubisi,
2011, p. 538).
Applying this concept to consumer behavior in an international context, this study
proposes that mindful consumers will have high motivation and involvement in their
decision making and pay greater attention to product features and details. Therefore,
instead of using heuristics and peripheral route, they will utilize central route. As a
conclusion of this process, they will use COO information as one of the product attributes
rather than the primary product attribute or an attitude determining cue. In this case, COO
information will have less effect on consumers‟ evaluative judgments. Figure 3
summarizes how consumer mindfulness influences COO effect.
The above considerations lead to the following hypotheses:
H5: Consumer mindfulness negatively moderates the relationship between attitude-
based country equity and attitude-based brand equity. The effect of attitude-based
41
country equity on attitude-based brand equity will be weaker for highly mindful
consumers.
H6: Consumer mindfulness negatively moderates the relationship between intention-
based country equity and intention-based brand equity. The effect of intention-based
country equity on intention-based brand equity will be weaker for highly mindful
consumers.
Figure 3: The Moderating Role of Consumer Mindfulness
________________________________________________________________________
____________________________________________________________________
2.6.2 Product Familiarity and Product Complexity
Research suggests that intrinsic product cues have a more powerful effect on consumer
quality judgments than do extrinsic cues and that consumers use extrinsic product cues
more often when intrinsic cues are not available (Batra et al., 2000). However, extrinsic
cues are more important than intrinsic cues when consumers feel less able to judge the
product‟s origin-free quality (Han, 1989; Insch and McBride, 2004; Batra et al., 2000). In
this situation, consumers feel more uncertain about which brands to choose from the
product category. The uncertainty may result from consumers‟ unfamiliarity with the
High
Consumer
Mindfulness
Low Consumer
Mindfulness
The use of COO
information as one of the
product attributes,
Low COO effect
High Motivation,
High Involvement,
Greater Attention to Details,
The Use of Central Route
Low Motivation,
Low Involvement,
Less Attention to Details,
The Use of Peripheral Route
The use of COO
information as a primary
product attribute,
High COO effect
42
product category, the lack of information to judge the product or the complexity of the
product category. Since COO information is an extrinsic cue, consumers will use it more
as an attitude determining cue when they are less familiar with the product category.
Similarly, they will use COO information more as an attitude determining cue when the
product is too complex to make judgments. In other words, when familiarity with a
product is limited or when the product complexity is high, consumers will resort to COO
information in order to evaluate the product (Maheswaran, 1994). These expectations are
supported by previous research on COO (e.g. Han, 1989; Insch and McBride, 2004; Batra
et al., 2004; Li and Wyer, 1994). Since COO information will be used more, the effect of
country equity on consumer-based brand equity will be stronger under the
abovementioned situations. These considerations lead to the following hypotheses:
H7: Product familiarity negatively moderates the relationship between attitude-based
country equity and attitude-based brand equity. The effect of attitude-based country
equity on attitude-based brand equity will be weaker when the product familiarity is
high.
H8: Product familiarity negatively moderates the relationship between intention-
based country equity and intention-based brand equity. The effect of intention-based
country equity on intention-based brand equity will be weaker when the product
familiarity is high.
H9: Product complexity positively moderates the relationship between attitude-based
country equity and attitude-based brand equity. The effect of attitude-based country
43
equity on attitude-based brand equity will be greater when the product complexity is
high.
H10: Product complexity positively moderates the relationship between intention-
based country equity and intention-based brand equity. The effect of intention-based
country equity on intention-based brand equity will be greater when the product
complexity is high.
2.6.3 Product Performance/Health Risk Level and Product Importance and Value
Previous research suggests that when the product‟s performance/health risk level is high
consumers base their judgments on COO information more (Hampton, 1977; Cordell,
1992; Biley and Nes, 1982). Furthermore, previous research shows that consumers use
COO information more when the product is important for consumers or when the
product‟s perceived value is high (Li and Wyer, 1994; Pharr, 2005; Ahmed and d‟Astous,
1996). This study proposes that when the risk level of the product category is high or
when the product is important for consumers, brands originated from countries with high
equity will be evaluated more positively. Furthermore, it proposes that when the
product‟s perceived value is high, brands originated from countries with high equity will
be evaluated more positively. Therefore, product risk level, product‟s perceived
importance and value will moderate the relationship between country equity and
consumer-based brand equity. These considerations lead to the following hypotheses:
H11: Product health risk level positively moderates the relationship between attitude-
based country equity and attitude-based brand equity. The effect of attitude-based
44
country equity on attitude-based brand equity will be greater when the product health
risk level is high.
H12: Product health risk level positively moderates the relationship between
intention-based country equity and intention-based brand equity. The effect of
intention-based country equity on intention-based brand equity will be greater when
the product health risk level is high.
H13: Product performance risk level positively moderates the relationship between
attitude-based country equity and attitude-based brand equity. The effect of attitude-
based country equity on attitude-based brand equity will be greater when the product
performance risk level is high.
H14: Product performance risk level positively moderates the relationship between
intention-based country equity and intention-based brand equity. The effect of
intention-based country equity on intention-based brand equity will be greater when
the product performance risk level is high.
H15: Perceived product importance positively moderates the relationship between
attitude-based country equity and attitude-based brand equity. The effect of attitude-
based country equity on attitude-based brand equity will be greater when the
perceived product importance is high.
H16: Perceived product importance positively moderates the relationship between
intention-based country equity and intention-based brand equity. The effect of
45
Figure 4: The Model of the Proposed Relationships
* Moderators: Consumer mindfulness, product familiarity (negative moderation), product complexity, product
performance/health risk level and perceived product importance and value (positive moderation).
Attitude-based
Country Equity
Country
awareness
Micro country
image
Macro country
image
Perceived quality
Intention-based
Country Equity
Country
Loyalty
Willingness to
pay a price
premium
Moderators *
Willingness to
pay a price
premium
Brand Loyalty
Intention-based
Brand Equity
Attitude-based
Brand Equity
Brand awareness
Brand Image
Perceived quality
Country
Loyalty
46
intention-based country equity on intention-based brand equity will be greater when
the perceived product importance is high.
H17: Perceived product value positively moderates the relationship between attitude-
based country equity and attitude-based brand equity. The effect of attitude-based
country equity on attitude-based brand equity will be greater when the perceived
product value is high.
H18: Perceived product value positively moderates the relationship between
intention-based country equity and intention-based brand equity. The effect of
intention-based country equity on intention-based brand equity will be greater when
the perceived product value is high.
Figure 4 illustrates the model of the hypothesized relationships.
47
Chapter 3
Methodology
3.1 Research Method and Sample
Since individuals‟ beliefs, attitudes and perceptions are retroactive in nature, survey
methodology is appropriate for examining existing information from participants. Due to
the advantages of survey method and the nature of the research questions, a self-
administered survey questionnaire was developed and utilized to collect data for the
purposes of testing the structural soundness of the proposed model and the above-
mentioned propositions.
The data was collected from convenience samples of undergraduate business and
MBA students in Turkey and the US. A meta-analysis on COO effect conducted by
Verlegh and Steenkamp (1999) showed no significant difference between student and
non-student samples. In addition, the literature review demonstrates that early studies
(e.g. Han 1989; Erickson et al. 1984; Ettenson et al. 1988; Li and Wyer 1994; Johansson
et al. 1985) were mostly conducted in developed countries, particularly in the US and the
UK. This is one of the biggest concerns about the generalizability of COO effect. It is
evident that consumers in developed and developing countries differ in their response to
COO information. Although not sufficient, some recent studies (e.g. Klenosky et al.
1996; Jun and Choi 2007; Chowdhury and Ahmed 2009; Yasin et al. 2007; Chowdhury
and Biswas 2011) have used samples from developing countries. Furthermore, some
researchers (e.g. Insch and McBride, 2004; Shukla, 2011; Sharma, 2011; Auger et al.,
2011) have used samples from both developed and developing countries, making
48
comparison between consumers from these countries. Using samples from Turkey, a
developing country, and the US, a developed country, was expected to yield more
generalizable results, and allow determining whether the model holds across different
cultures.
Table 3: Demographic Profile of the Sample
________________________________________________________________________
Demographic Characteristics Sample (n)
Gender (n=509)
Male 268
Female 240
Missing 1
Age (n=509)
17-21 327
22-26 142
27-31 25
32-36 6
37-42 6
Missing 3
Marital Status (n=509)
Single 478
Married 30
Missing 1
Nationality (n=509)
American 177
Turkish 258
Chinese 26
Indian 13
Korean 7
Other 28
____________________________________________________________________
The sample was composed of 509 undergraduate business and MBA students, 255
from Turkey and 254 from the US. While 268 of the participants were male, 240 of them
49
were female. One participant did not specify his/her gender. The age of the participants
ranged from 17 to 42. However, 64% of the participants were between the ages of 17 and
21. Table 3 demonstrates the demographic profile of the participants.
3.2 Questionnaire Design
A review of the literature and a pilot study provided the input for identifying the items to
be included in the self-administered survey questionnaire. Three product categories were
included in the study: LCD televisions, sport shoes and chocolates. It was assumed that
many respondents had used products from these categories, and were able to evaluate
them. The selection of televisions and sport shoes as the product categories is in line with
the previous COO studies (e.g. Pappu et al., 2007; Yasin et al., 2007; Sharma, 2011). The
inclusion of chocolates as the third product category was considered significant due to the
distinctive features of the product category and its omission from the previous research.
Furthermore, as a product category, LCD televisions, sport shoes and chocolates were
expected to vary in terms of the moderating variables in the study, namely product
category familiarity, product complexity, product performance/health risk level, product
importance and perceived product value.
Japan, South Korea and India as the producers of Sony LCD televisions and Adidas
sport shoes; and Belgium, Malaysia and Vietnam as the producers of Snickers chocolates
were included in the study, following the results of the pilot study. The pilot study
showed that respondents held a higher equity of Japan than of South Korea and India in
television and sport shoes categories. The results of the pilot study also indicated that
respondents held a higher equity of South Korea than of India. In chocolates product
50
category, respondents held a higher equity of Belgium than of Malaysia and Vietnam;
and a higher equity of Malaysia than of Vietnam.
The study used a within-subject design. A meta-analysis conducted by Peterson and
Jolibert (1995) suggests that COO effect sizes are not significantly influenced by the type
of research design used, whether a within- or between-subjects design. Three versions of
the questionnaire, one for each product category, were developed. The only difference
among the three versions was the product category.
The questionnaire consisted of two parts. The first part started with a general
introduction about the content of the survey and instructions for filling out. The
introduction was followed by the descriptions of three products in one of the three
categories. The first version of the questionnaire described three forms of an actual LCD
television brand (Sony), presenting multiple-cues (e.g. price, features, COO information)
about each product. The only difference among the three products was the COO
information conveyed through “made in …” phrase. These COOs were Japan, South
Korea and India. Other information about the products was the same. Similarly, the
second version of the questionnaire described three forms of sport shoes brand (Adidas),
presenting multiple-cues (e.g. price, features, COO information) about each product. The
only difference among the three sport shoes was their COOs. These COOs were Japan,
South Korea and India. Other information about the sport shoes was the same. The last
version of the questionnaire described three forms of chocolate brand (Snickers),
presenting multiple-cues (e.g. price, features, COO information) about each product. The
only difference among the three chocolates was their COOs. These COOs were Belgium,
Malaysia and Vietnam. Other information about the chocolates was the same. The second
51
part started with the measurement of attitude-based and intention-based brand equity of
each product and attitude-based and intention-based equity of each country, respectively.
Next, it measured consumer mindfulness, product familiarity, perceived product
complexity, product (performance/health) risk level and product importance and value.
Finally, it included demographical questions (age, gender, income, place of birth). One
form of the survey questionnaire is presented in Appendix A.
3.3 Construct Measurement
The variables of interest in this dissertation were measured using scales established by
previous researchers and those developed in this study. A Likert-type scale of 1 to 7 was
adopted for all construct measures, using the anchors “strongly disagree” (1) and
“strongly agree” (7). Eleven primary constructs were under investigation: attitude-based
country equity, intention-based country equity, attitude-based brand equity, intention-
based brand equity, consumer mindfulness, product familiarity, product complexity,
product performance risk level, product health risk level, perceived product importance
and perceived product value.
3.3.1 Attitude-based Country Equity
Attitude-based country equity construct consists of four dimensions: country awareness,
macro country image, micro country image and perceived quality. The measures for these
dimensions were developed by Pappu and Quester (2010). The country awareness
dimension captures consumers‟ ability to recall the country when a certain product
category is mentioned. The macro country image dimension captures consumers‟ country
level associations. These associations are not related to a certain product category. They
52
Table 4: Scale for Attitude-based Country Equity
________________________________________________________________________
Country Awareness
1. Sport shoes (televisions/chocolates) made in country X are advertised widely.
2. I can recognize sport shoes (television/chocolate) brand names from country
X.
Macro Country Image
3. Country X has a high level of industrialization.
4. Country X has a highly developed economy.
5. People in country X are highly literate
6. Country X has a free-market system.
7. Country X is a democratic country.
Micro Country Image
8. Sport shoes (televisions/chocolates) made in this country have quality
workmanship (“quality ingredients” for chocolates).
9. Sport shoes (televisions/chocolates) made in this country are innovative
(“delicious” for chocolates).
10. Sport shoes (televisions/chocolates) made in this country are dependable.
11. I trust this country as a producer of sport shoes (televisions/chocolates).
Perceived Quality (at the country level)
12. Sport shoes (televisions/chocolates) made in this country are of very good
quality.
13. Sport shoes (televisions/chocolates) made in this country have excellent
features (“are healthy” for chocolates).
14. Sport shoes (televisions/chocolates) made in this country are of consistent
quality.
15. Sport shoes (televisions/chocolates) made in this country are very reliable.
________________________________________________________________________
reflect a country‟s economic, political and technological aspects. On the other hand, the
micro country image dimension captures consumers‟ product level associations towards a
country (Pappu and Quester, 2010). Therefore, these associations are related to a certain
53
product category and may not hold for other categories. Finally, perceived quality
captures consumers‟ perception of quality of products from a certain country. Table 4
illustrates the scale for attitude-based country equity construct, indicating the measures
for each dimension separately.
Table 5: Scale for Intention-based Country Equity
________________________________________________________________________
Country Loyalty
1. Country X would be my preferred choice for sport shoes
(televisions/chocolates).
2. I will not buy sport shoes (televisions/chocolates) made in other countries, if I
can buy the same product made in country X.
3. I (would) consider myself loyal to buying sport shoes (televisions/chocolates)
from country X.
4. Country X would be my first choice for sport shoes (televisions/chocolates).
Willingness to Pay a Price Premium (at the country level)
5. I am willing to pay a higher price for sport shoes (televisions/chocolates) from
country X than sport shoes (televisions/chocolates) from other countries.
6. The price of sport shoes (televisions/chocolates) from country X would have
to go up a bit before I would switch to sport shoes (televisions/chocolates)
from another country.
7. I am willing to pay a lot more for running sport shoes (LCD televisions/candy
bars) from country X than running sport shoes (LCD televisions/candy bars)
from other countries.
________________________________________________________________________
3.3.2 Intention-based Country Equity
Intention-based country equity construct consists of two dimensions: country loyalty and
willingness to pay a price premium (at the country level). The measures for country
loyalty dimension were developed by Pappu and Quester (2010). This dimension captures
54
consumers‟ intention to be loyal to products from a country in a given product category.
The measures for the dimension of “willingness to pay a price premium” have been
adapted from Netemeyer et al. (2004). This dimension captures consumers‟ willingness
to pay a price premium for the products from a country in a given product category.
Therefore, both country loyalty and willingness to pay a price premium are category
specific. Table 5 illustrates the scale for intention-based country equity construct,
indicating the measures for each dimension of it separately.
3.3.3 Attitude-based Brand Equity
Attitude-based brand equity construct consists of three dimensions: brand awareness,
brand image and perceived quality. The measures for these dimensions have been
empirically tested (Agarwal and Rao, 1996; MacKay, 2001) and used in a number of
studies (e.g. Yoo and Donthu, 2001; Pappu et al., 2007). Since the brand names of the
products from three country of origins were the same and could not be manipulated,
brand awareness was expected to be the same across the three products. A seven-point
rating scale was used for all items. Table 6 demonstrates the scale for attitude-based
brand equity construct, indicating the measures for each dimension separately.
3.3.4 Intention-based Brand Equity
Intention-based brand equity construct consists of two dimensions: brand loyalty and
willingness to pay a price premium (at the product level). Previously developed scales
were utilized to measure brand loyalty (Yoo, Donthu and Lee, 2000; Yoo and Donthu,
2001; Pappu et al., 2007) and willingness to pay a price premium (Netemeyer et al.,
2004). A seven-point rating scale was used for all items in the scale. Table 7
55
demonstrates the scale for intention-based brand equity construct, indicating the measures
for each dimension separately.
Table 6: Scale for Attitude-based Brand Equity
________________________________________________________________________
Brand Awareness
1. I am aware of the brand ________ (brand name) in sport shoes
(television/chocolate) category.
Brand Image
2. I associate product X to sincerity.
3. I associate product X to excitement
4. I associate product X to competence
5. I associate product X to sophistication
6. I associate product X to ruggedness
7. I like the company that makes product X.
8. I (would) feel proud to own products from the company that makes product X.
9. I trust the company that makes product X.
Perceived Quality (at the product level)
10. Product X is of very good quality.
11. Product X is reliable.
12. Product X has excellent features (“taste” for chocolates).
13. Product X is durable (“healthy” for chocolates).
14. Product X offers consistent quality.
________________________________________________________________________
56
Table 7: Scale for Intention-based Brand Equity
________________________________________________________________________
Brand Loyalty
1. Product X would be my preferred choice.
2. I (would) consider myself loyal to product X.
3. Product X would be my first choice.
Willingness to Pay a Price Premium (at the product level)
4. The price of product X would have to go up a bit before I would switch to
another brand of sport shoes (television/chocolate).
5. I am willing to pay a higher price for product X than other sport shoes
(television/chocolate) brands.
6. I am willing to pay a lot more for product X than other brands in this category
of sport shoes (televisions/chocolates).
________________________________________________________________________
3.3.5 Consumer Mindfulness
Several scales have been developed and used to measure individual mindfulness,
including the Five Factor Mindfulness Questionnaire (FFMQ; e.g. Baer et al., 2006), the
Kentucky Inventory of Mindfulness Skills (KIMS; e.g. Baer et al., 2004), and the
Mindful Attention Awareness Scale (MAAS; e.g. Brown and Ryan, 2003; Carlson and
Brown, 2005; Christopher and Gilbert, 2010). These scales represent a robust measure of
the operationalization of mindfulness and capture the components of attention/awareness,
non-judgment/acceptance and present moment focus (Christopher and Gilbert, 2010).
Among these scales, the MAAS appears to be the most widely adopted one so far.
Developed by Brown and Ryan (2003), the MAAS is a 15-item scale designed to
measure the level of individual mindfulness, namely, open or receptive awareness of and
attention to what is taking place at the moment. The items in the MAAS scale measure
57
“mindlessness.” This is considered a more robust way to test mindfulness level, since the
statements that reflect mindlessness are likely to be more accessible to most individuals,
given that “mindless states are much more common than mindful states” (Brown and
Ryan, 2003, p. 826). This study adopted 9 items from the MAAS. A seven-point rating
scale was utilized for all items in the scale. Table 8 illustrates the items used to measure
consumer mindfulness.
Table 8: Scale for Consumer Mindfulness
________________________________________________________________________
1. I break or spill things because of carelessness, not paying attention, or
thinking of something else.
2. I find it difficult to stay focused on what is happening in the present.
3. I tend to walk quickly to get where I am going without paying attention to
what I experience along the way.
4. I tend not to notice feelings of physical tension or discomfort until they really
grab my attention.
5. I forget a person‟s name almost as soon as I have been told it for the first time.
6. I do jobs or tasks automatically, without being aware of what I‟m doing.
7. I find myself listening to someone with one ear, doing something else at the
same time.
8. I find myself preoccupied with the future or the past.
9. I find myself doing things without paying attention.
________________________________________________________________________
3.3.6 Other Moderators
The items in the scales for other moderators were drawn to the maximum extent possible
from scales that had previously validated. The scales for product category familiarity and
product health/performance risk level were adapted from Batra et al. (2000). The items
included in the scales for product complexity, product importance and perceived product
58
value were checked for their relevance by several scholars in the marketing department.
A seven-point rating scale was used for all items in the scales. Table 9 illustrates the
items included in the scales.
Table 9: Items Included in the Scales for Other Moderators
________________________________________________________________________
Product Category Familiarity
1. I am very familiar with sport shoes (televisions/chocolates).
2. I know a lot about sport shoes (televisions/chocolates).
Product Health Risk Level
1. It would be risky for my health if I make a mistake in choosing sport shoes
(television/chocolate).
2. A poor choice of sport shoes (television/chocolate) would be a threat for my
health.
Product Performance Risk Level
1. It would be risky for running/walking (display/flavor) performance if I make a
mistake in choosing sport shoes (televisions/chocolates).
2. A poor choice of sport shoes (television/chocolate) would pose a threat in
terms of running/walking (display/flavor) performance.
Product Complexity
1. In my opinion, sport shoes (television/chocolate) are very complex products.
2. If I had to purchase sport shoes (television/chocolate) today, I would need
assistance in order to understand the technical features of the sport shoes
(television/chocolate).
Product Importance
1. The decision of which sport shoes (television/chocolate) to purchase is very
important to me.
2. I (would) pay very much attention to select which sport shoes
(television/chocolate) to buy.
3. Sport shoes (television/chocolate) is one of the most important products in a
person‟s life.
59
(Table 9 continued)
Perceived Product Value
1. The money I (would) spend on my sport shoes (televisions/chocolates) is a
significant amount in my budget.
2. Sport shoes (televisions/chocolates) provide a high level of utility to people.
3. The sport shoes (television/chocolate) a person selects tells something about
him/her.
4. The sport shoes (television/chocolate) one uses (“eats” for chocolate) can
contribute to his/her social status.
5. The brand of sport shoes (television/chocolate) one has (“eats” for chocolate)
can make an impression on me.
________________________________________________________________________
3.5 Measurement Reliability and Validity
Structural equation modeling (SEM), using EQS 6.1 statistics software, was utilized to
test the proposed conceptual model and the hypothesized relationships among the
constructs. SEM is suitable for the purposes of this research, since it enables the
examination of relationships among latent constructs in a holistic manner and since it
adopts a confirmatory factor analysis (CFA) of the data, explicitly estimating the
measurement error by providing the fit of the conceptual model. The analysis procedure
in this study consists of three main stages. First, all the factors were assessed in terms of
reliability and validity. Second, a structural path analysis was conducted to test the
structural model and the related research hypotheses. Third, the structural path model was
reexamined to test the potential moderators and the related hypotheses.
A three-step approach, as outlined by Churchill (1979) and Anderson (1987), was
employed to assess the validity and reliability of the measures. First, Cronbach‟s alpha
coefficients were computed with STATA 12 statistics software in order to assess the
60
reliability of each scale. Coefficient alphas were evaluated relative to the minimum .70
level recommended by Nunnally (1978). The only coefficient alpha that did not meet the
criteria set forth in the literature was the one for the product complexity scale (α = .64),
which is still acceptable. All other alphas exceeded the minimum criteria, with the lowest
coefficient being .86 for consumer mindfulness scale, indicating adequate reliability for
the measures employed in the study.
Second, a confirmatory factor analysis (CFA) with EQS 6.1 statistics software was
performed to test the convergent validity and the entire measurement of the factors
included in the structural model. The measurement model that included all constructs was
fitted by the elliptical reweighted least squares (ERLS) procedure of the EQS statistics
software. The elliptical distributions are not constrained by the normality assumptions
and their use is recommended when these assumptions are not met (Browne, 1984).
ERLS performs as well as ML with normal data and better than ML with non-normal
data (Yeniyurt, Henke and Cavusgil, 2012).
Results of the CFA strongly confirmed the structure of the constructs developed in
this study. The chi-squared statistic of the model was slightly greater than the
recommended minimum level (χ² = 15012.244, p < .001, df = 1960). Considering the
large number of cases in the study, which is 1527, the chi-squared value can be
acceptable. The goodness of fit measures were higher than the usually accepted cut-off
value. The comparative-fit index (CFI) was equal to .947. The Bentler-Bonett Normed Fit
Index (NFI) was equal to .939 and the mean root square error of approximation
(RMSEA) was equal to .069.
61
Table 10: Variables Measurement ______________________________________________________________________________________
Construct Code Item
______________________________________________________________________________________
Attitude-based Brand Equity ABBE
ABE1 I associate product X to sincerity.
ABE2 I associate product X to excitement.
ABE3 I associate product X to competence.
ABE4 I associate product X to sophistication.
ABE5 I associate product X to ruggedness.
ABE6 I like the company that makes product X.
ABE7 I (would) feel proud to own products from the company that
makes product X.
ABE8 I trust the company that makes product X.
ABE9 Product X is of very good quality.
ABE10 Product X is reliable.
ABE11 Product X has excellent features (“taste” for chocolates).
ABE12 Product X is durable (“healthy” for chocolates).
ABE13 Product X offers consistent quality.
Intention-based Brand Equity IBBE
IBE1 Product X would be my preferred choice.
IBE2 I (would) consider myself loyal to product X.
IBE3 Product X would be my first choice.
IBE4 The price of product X would have to go up a bit before I
would switch to another brand of sport shoes
(television/chocolate).
IBE5 I am willing to pay a higher price for product X than other
sport shoes (television/chocolate) brands.
IBE6 I am willing to pay a lot more for product X than other brands
in this category of sport shoes (televisions/chocolates).
Attitude-based Country Equity ABCE
ACE1 Sport shoes (televisions/chocolates) made in country X are
advertised widely.
ACE2 I can recognize sport shoes (television/chocolate) brand
names from country X.
ACE3 Country X has a high level of industrialization.
ACE4 Country X has a highly developed economy.
ACE5 People in country X are highly literate.
ACE6 Country X has a free-market system.
ACE7 Country X is a democratic country.
ACE8 Sport shoes (televisions/chocolates) made in this country have
quality workmanship (“quality ingredients” for chocolates).
ACE9 Sport shoes (televisions/chocolates) made in this country are
innovative (“delicious” for chocolates).
ACE10 Sport shoes (televisions/chocolates) made in this country are
dependable.
62
(Table 10 continued)
ACE11 I trust this country as a producer of sport shoes
(televisions/chocolates).
ACE12 Sport shoes (televisions/chocolates) made in this country are
of very good quality.
ACE13 Sport shoes (televisions/chocolates) made in this country have
excellent features (“are healthy” for chocolates).
ACE14 Sport shoes (televisions/chocolates) made in this country are
of consistent quality.
ACE15 Sport shoes (televisions/chocolates) made in this country are
very reliable.
Intention-based Country Equity IBCE
ICE1 Country X would be my preferred choice for sport shoes
(televisions/chocolates).
ICE2 I will not buy sport shoes (televisions/chocolates) made in
other countries, if I can buy the same product made in country
X.
ICE3 I (would) consider myself loyal to buying sport shoes
(televisions/chocolates) from country X.
ICE4 Country X would be my first choice for sport shoes
(televisions/chocolates).
ICE5 I am willing to pay a higher price for sport shoes
(televisions/chocolates) from country X than sport shoes
(televisions/chocolates) from other countries.
ICE6 The price of sport shoes (televisions/chocolates) from country
X would have to go up a bit before I would switch to sport
shoes (televisions/chocolates) from another country.
ICE7 I am willing to pay a lot more for running sport shoes (LCD
televisions/candy bars) from country X than running sport
shoes (LCD televisions/candy bars) from other countries.
Consumer Mindfulness CM1 I break or spill things because of carelessness, not paying
attention, or thinking of something else.
CM2 I find it difficult to stay focused on what is happening in the
present.
CM3 I tend to walk quickly to get where I am going without
paying attention to what I experience along the way.
CM5 I forget a person‟s name almost as soon as I have been told it
for the first time.
CM6 I do jobs or tasks automatically, without being aware of what
I‟m doing.
CM7 I find myself listening to someone with one ear, doing
something else at the same time.
CM8 I find myself preoccupied with the future or the past.
CM9 I find myself doing things without paying attention.
Product Familiarity PF1 I am very familiar with sport shoes (televisions/chocolates).
PF2 I know a lot about sport shoes (televisions/chocolates).
Product Health Risk Level PHR1 It would be risky for my health if I make a mistake in
choosing sport shoes (television/chocolate).
63
(Table 10 continued)
PHR2 A poor choice of sport shoes (television/chocolate) would be a
threat for my health.
Product Performance Risk Level PPR1 It would be risky for running/walking (display/flavor)
performance if I make a mistake in choosing sport shoes
(televisions/chocolates).
PPR2 A poor choice of sport shoes (television/chocolate) would
pose a threat in terms of running/walking (display/flavor)
performance.
Product Complexity PC1 In my opinion, sport shoes (television/chocolate) are very
complex products.
PC2 If I had to purchase sport shoes (television/chocolate) today, I
would need assistance in order to understand the technical
features of the sport shoes (television/chocolate).
Product Importance PI1 The decision of which sport shoes (television/chocolate) to
purchase is very important to me.
PI2 I (would) pay very much attention to select which sport shoes
(television/chocolate) to buy.
PI3 Sport shoes (television/chocolate) is one of the most important
products in a person‟s life.
Product Value PV1 The money I (would) spend on my sport shoes
(televisions/chocolates) is a significant amount in my budget.
PV2 Sport shoes (televisions/chocolates) provide a high level of
utility to people.
PV3 The sport shoes (television/chocolate) a person selects tells
something about him/her.
PV4 The sport shoes (television/chocolate) one uses (“eats” for
chocolate) can contribute to his/her social status.
PV5 The brand of sport shoes (television/chocolate) one has (“eats”
for chocolate) can make an impression on me.
______________________________________________________________________________________
Table 10 displays the scales finally employed in the study along with the codes for
the items. All items loaded on their respective constructs and were statistically significant
except for two items. The item “brand awareness” in attitude-based brand equity
construct was discarded because of its low correlation with the scale. Indeed, the low
correlation results from the structure of the study. Since the structure of the study did not
allow for the manipulation of brand awareness, this item did not correlate with the other
items in attitude-based brand equity scale. As noted earlier, brand awareness was not
64
expected to vary across the three versions of the products included in the study. In
addition, the item “I tend not to notice feelings of physical tension or discomfort until
they really grab my attention” was discarded because of its low correlation with the
consumer mindfulness scale.
Table 11: Measurement Model of Brand Equity ______________________________________________________________________________________
Factor Standardized Loading t Value a α
______________________________________________________________________________________
Attitude-based Brand Equity ABBE .9301
ABE1 .645 22.575
ABE2 .586 20.111
ABE3 .661 23.301
ABE4 .622 21.604
ABE5 .551 18.704
ABE6 .749 27.353
ABE7 .767 28.289
ABE8 .815 30.787
ABE9 .819 30.982
ABE10 .833 31.753
ABE11 .716 25.773
ABE12 .670 23.682
ABE13 .770 28.450
Intention-based Brand Equity IBBE .8971
IBE1 .860 33.076
IBE2 .745 26.972
IBE3 .867 33.485
IBE4 .707 25.155
IBE5 .759 27.667
IBE6 .716 25.574
______________________________________________________________________________
Goodness-of-fit statistics: CHI-SQUARE = 15012.244, df = 1960, p < .001, NFI = .939, NNFI = .944,
CFI = .947, RMSEA = .069 a t values from the unstandardized solution
65
Table 11 demonstrates the factor loadings, t statistics and the reliability coefficients
for the brand equity constructs, and shows that all the items loaded upon their
hypothesized factors in a statistically significant manner (p < .001), with the smallest
standardized coefficient of .551, indicating that the scales possess convergent validity. As
noted earlier, the item “brand awareness” (ABE14) was discarded because of its low
correlation with the scale. Appendix B indicates the brand equity items along with their
means and standard deviations for the data derived from Turkey and the US separately.
Table 12 demonstrates the factor loadings, t statistics and the reliability coefficients
for the country equity constructs. As shown in the table, all the items loaded upon their
hypothesized factors in a statistically significant manner (p < .001) and the standardized β
values are above .5, with the smallest standardized coefficient of .654, indicating that the
scale has convergent validity. Appendix C indicates the country equity items along with
their means and standard deviations for the data derived from Turkey and the US
separately.
Table 13 indicates the factor loadings, t statistics and the reliability coefficient for
the consumer mindfulness construct. The table shows that all the items loaded upon their
hypothesized factor in a statistically significant manner (p < .001) and the standardized β
values are above .5, with the smallest standardized coefficient of .530, indicating
convergent validity. As noted earlier, the item CM4 was discarded because of its low
correlation with the scale.
Similarly, Table 14 shows the factor loadings, t statistics and the reliability
coefficients for the other constructs, namely, product familiarity, product health risk
66
level, product performance risk level, product complexity, product importance and
product value. The table demonstrates that all the items loaded upon their hypothesized
factors in a statistically significant manner (p < .001) and the standardized β values are
above .5, indicating convergent validity. Table 15 provides the inter-factor correlations.
Besides, appendix D, E and F show the standardized coefficients and R-squares for all the
factors in the study and appendix G shows the mean value of each construct.
Table 12: Measurement Model of Country Equity ______________________________________________________________________________________
Factor Standardized Loading t Value a α
______________________________________________________________________________________
Attitude-based Country Equity ABCE .9648
ACE1 .771 28.737
ACE2 .702 25.407
ACE3 .756 27.971
ACE4 .762 28.310
ACE5 .768 28.574
ACE6 .689 24.807
ACE7 .654 23.240
ACE8 .894 35.654
ACE9 .851 33.041
ACE10 .870 34.150
ACE11 .878 34.672
ACE12 .908 36.535
ACE13 .777 29.053
ACE14 .882 34.881
ACE15 .872 34.270
Intention-based Country Equity IBCE .9328
ICE1 .793 29.634
ICE2 .801 30.080
ICE3 .746 27.232
ICE4 .856 33.113
ICE5 .861 34.615
ICE6 .837 32.024
ICE7 .862 33.475
______________________________________________________________________________
Goodness-of-fit statistics: CHI-SQUARE = 15012.244, df = 1960, p < .001, NFI = .939, NNFI = .944,
CFI = .947, RMSEA = .069 a t values from the unstandardized solution
67
Table 13: Measurement Model of Consumer Mindfulness ______________________________________________________________________________________
Factor Standardized Loading t Value a α = .8585
______________________________________________________________________________________
CM1 .586 19.522
CM2 .738 26.077
CM3 .581 19.318
CM5 .634 21.481
CM6 .735 25.949
CM7 .710 24.769
CM8 .530 17.347
CM9 .815 17.347
______________________________________________________________________________________
a t values from the unstandardized solution
Table 14: Measurement Model of Other Constructs ______________________________________________________________________________________
Factor Standardized Loading t Value a α
______________________________________________________________________________________
Product Familiarity .8830
PF1 .929 30.214
PF2 .871 28.314
Product Health Risk Level .9321
PHR1 .925 36.258
PHR2 .965 38.650
Product Performance Risk Level .9380
PPR1 .974 39.444
PPR2 .916 35.934
Product Complexity .6371
PC1 .687 21.698
PC2 .709 22.342
Product Importance .8605
PI1 .880 33.672
PI2 .848 31.924
PI3 .776 28.180
Product Value .8590
PV1 .704 24.575
PV2 .722 25.392
PV3 .749 26.682
PV4 .767 27.546
PV5 .778 28.097
______________________________________________________________________________________
a t values from the unstandardized solution
68
Table 15: Correlation Matrix
________________________________________________________________________
ABBE IBBE ABCE IBCE CM PF PHR PPR PC PI PV
-------------------------------------------------------------------------------------------------------------------------------- ABBE 1.0000
IBBE 0.7269 1.0000
ABCE 0.7001 0.5648 1.0000
IBCE 0.6228 0.6875 0.7638 1.0000
CM -0.0941 -0.0844 -0.0200 -0.0674 1.0000
PF 0.0022 -0.0487 0.0365 0.0079 0.2464 1.0000
PHR -0.1097 0.0369 -0.1066 -0.0203 -0.1694 -0.0865 1.0000
PPR -0.0195 0.0809 -0.0337 0.0436 -0.2015 -0.0547 0.6262 1.0000
PC 0.1084 0.1522 0.0029 0.0727 -0.3947 -0.3425 0.3158 0.4086 1.0000
PI 0.0157 0.1494 -0.0181 0.0905 -0.2026 0.0631 0.5435 0.5756 0.4220 1.0000
PV 0.1611 0.2636 0.0250 0.1560 -0.4065 -0.0649 0.3602 0.3993 0.4873 0.6812 1.0000
____________________________________________________________________________________________________________
As the third step in the reliability and validity assessment, the discriminant validity
was examined using the procedure recommended by Anderson (1987) and Bagozzi,
Youjae, and Lynn (1991). This procedure required analyzing all possible pairs of
constructs in a series of two-factor CFA models using EQS statistics software (Yeniyurt
et al., 2012). Each pair of constructs was included in CFAs estimated by constraining the
correlation between factors to one and then releasing this constraint. Next, a chi-square
difference test was conducted on the nested models to assess whether the chi-square
values were significantly lower for the unconstrained models. In all cases, the critical
value of 3.84 was exceeded, which shows that the measures included in the study have
discriminant validity.
Finally, a multi-group CFA was performed to assess the cross-cultural equivalence
of the measurement model. The dataset was divided into two groups based on the country
where the survey was conducted. A constrained two group CFA indicated that, according
69
to the chi-squared difference statistic, there were no statistically significant differences in
the factor structure and item loadings across the two groups.
70
Chapter 4
Results
4.1 Main Effects
This research examined the proposed structural model by a path analysis using EQS. It
applied the ERLS procedure within the EQS program to the variance-covariance matrix
of the factors. No anomalies or special problems were encountered, and the program
converged properly. Figure 5 indicates the parameter estimates and fit statistics of the
structural model.
The chi-squared statistic of the path model was slightly greater than the
recommended minimum level (χ² = 8725.756, p < .001, df = 774). Considering the large
number of cases in the study, which is 1527, the chi-squared value can be acceptable.
Since the chi-square should not be used alone to evaluate model fit, other fit indices were
also examined. The analysis shows that the Beniler-Bonett normed fit index (NFI) is
.955, the non-normed fit index (NNFI) is .956, the comparative fit index (CFI) is .959,
and Bollen's fit index (IFI) is .959. In addition, the standardized residuals are small, and
all parameter estimates are in the expected direction. The high fit indices and the
theoretically consistent parameter estimates suggest that the structural path model fits the
data well. Thus, it is concluded that the coefficients of the path model adequately
represent the relationships between the country equity and brand equity sub-constructs.
Next, the estimates of the path coefficients were used to test the hypothesized
relationships between country equity and brand equity sub-constructs. The path
coefficients in Figure 5 indicate that intention-based country equity is influenced
71
Figure 5: Full Model (ALL DATA)
ABCE
ACE1E21
ACE2E22
ACE3E23
ACE4E24
ACE5E25
ACE6E26
ACE7E27
ACE8E28
ACE9E29
ACE10E30
ACE11E31
ACE12E32
ACE13E33
ACE14E34
ACE15E35
IBCE D3
ICE1 E36
ICE2 E37
ICE3 E38
ICE4 E39
ICE5 E40
ICE6 E41
ICE7 E42
ABBE
D2
ABE1
E2
ABE2
E3
ABE3
E4
ABE4
E5
ABE5
E6
ABE6
E7
ABE7
E8
ABE8
E9
ABE9
E10
ABE10
E11
ABE11
E12
ABE12
E13
ABE13
E14
IBBE D1
IBE1 E15
IBE2 E16
IBE3 E17
IBE4 E18
IBE5 E19
IBE6 E20
.767
.692
.759
.765
.769
.693
.659
.897
.858
.875
.883
.909
.785
.884
.877
.792
.808
.802
.753
.864
.866
.806
.831
.742
.653 .580 .674 .620 .540 .754 .766 .816 .831 .841 .724 .689 .784
.366
.557
.871
.745
.878
.683
.742
.709
72
positively and significantly by attitude-based country equity (t = 22.068, p < .05). Thus,
H1 is supported. In addition, attitude-based brand equity is influenced positively and
significantly by attitude-based country equity (t = 17.743, p < .05). Therefore, H2 is
supported. Besides, intention-based brand equity is influenced positively and
significantly by intention-based country equity (t = 11.775, p < .05) and by attitude-based
brand equity (t = 14.996, p < .05). Thus, H3 and H4 are supported.
The structural path model was also analyzed based on the data obtained from Turkey
and the US separately. Figure 6 indicates the path coefficients based on the data obtained
from Turkey. The structural path model fits the data well (χ² = 6167.376, p < .001, df =
774, NFI = .948, NNFI = .951, CFI = .954, IFI = .954). The model demonstrates that
intention-based country equity is influenced positively and significantly by attitude-based
country equity (t = 19.285, p < .05). Furthermore, attitude-based brand equity is
influenced positively and significantly by attitude-based country equity (t = 13.987, p <
.05). Finally, intention-based brand equity is influenced positively and significantly by
intention-based country equity (t = 9.875, p < .05) and by attitude-based brand equity (t =
11.794, p < .05). On the other hand, figure 7 indicates the path coefficients based on the
data obtained from the USA. The structural path model fits the data well (χ² = 5317.407,
p < .001, df = 774, NFI = .936, NNFI = .942, CFI = .945, IFI = .945). The model shows
that intention-based country equity is influenced positively and significantly by attitude-
based country equity (t = 12.783, p < .05). In addition, attitude-based brand equity is
influenced positively and significantly by attitude-based country equity (t = 10.955, p <
.05). Finally, intention-based brand equity is influenced positively and significantly by
intention-based country equity (t = 7.641, p < .05) and by attitude-based brand equity
73
Figure 6: Full Model (Turkey)
ABCE
ACE1E21
ACE2E22
ACE3E23
ACE4E24
ACE5E25
ACE6E26
ACE7E27
ACE8E28
ACE9E29
ACE10E30
ACE11E31
ACE12E32
ACE13E33
ACE14E34
ACE15E35
IBCE D3
ICE1 E36
ICE2 E37
ICE3 E38
ICE4 E39
ICE5 E40
ICE6 E41
ICE7 E42
ABBE
D2
ABE1
E2
ABE2
E3
ABE3
E4
ABE4
E5
ABE5
E6
ABE6
E7
ABE7
E8
ABE8
E9
ABE9
E10
ABE10
E11
ABE11
E12
ABE12
E13
ABE13
E14
IBBE D1
IBE1 E15
IBE2 E16
IBE3 E17
IBE4 E18
IBE5 E19
IBE6 E20
.796
.719
.809
.809
.811
.774
.769
.900
.863
.889
.892
.899
.844
.884
.872
.859
.888
.866
.801
.905
.840
.768
.790
.779
.698 .585 .679 .633 .711 .735 .773 .820 .829 .851 .732 .831 .824
.399
.574
.889
.772
.895
.688
.746
.740
74
Figure 7: Full Model (USA)
ABCE
ACE1E21
ACE2E22
ACE3E23
ACE4E24
ACE5E25
ACE6E26
ACE7E27
ACE8E28
ACE9E29
ACE10E30
ACE11E31
ACE12E32
ACE13E33
ACE14E34
ACE15E35
IBCE D3
ICE1 E36
ICE2 E37
ICE3 E38
ICE4 E39
ICE5 E40
ICE6 E41
ICE7 E42
ABBE
D2
ABE1
E2
ABE2
E3
ABE3
E4
ABE4
E5
ABE5
E6
ABE6
E7
ABE7
E8
ABE8
E9
ABE9
E10
ABE10
E11
ABE11
E12
ABE12
E13
ABE13
E14
IBBE D1
IBE1 E15
IBE2 E16
IBE3 E17
IBE4 E18
IBE5 E19
IBE6 E20
.740
.680
.678
.716
.715
.600
.539
.889
.848
.853
.867
.920
.701
.877
.879
.683
.695
.720
.787
.811
.893
.849
.880
.669
.568 .537 .676 .618 .359 .746 .724 .791 .822 .815 .671 .593 .703
.320
.571
.847
.794
.852
.662
.730
.686
75
(t = 10.409, p < .05). The two structural models show that the effect of country equity on
consumer-based brand equity is slightly higher for the Turkish sample than for the
American sample.
4.2 Moderation Effects
The moderation effects were examined by applying a multi-group analysis, which is
called a split-group approach, where the initial sample is divided into two sub-groups on
the basis of cut-off values of each individual moderator. For each potential moderating
variable, the sample was divided into two groups (low and high) based on their respective
median. The two structural path models were subsequently estimated for each
hypothesized moderation effect. One of these models was a constrained model, where the
path affected by the moderating variable was fixed to 1, and the other one was a
constrain-released model, where all paths of the structural model were allowed to be
freely estimated. A significant chi-square difference (∆χ²(1) > 3.84 for p < .05) between
these two models implies that the moderating variable has a significant effect on the
proposed relationship. The outcomes of these analyses are presented in Table 16.
The results show that consumer mindfulness, product familiarity, product
complexity, product importance and value have no moderation effect on the relationships
between country equity and brand equity, thus leading to a rejection of H5, H6, H7, H8,
H9, H10, H15, H16, H17, and H18. The results also indicate that the effect of attitude-based
country equity on attitude-based brand equity is significantly moderated by product
health risk level. In other words, the effect of attitude-based country equity on attitude-
based brand equity is stronger for products that have high health risk level (β = .566, t =
76
16.11, p < .05) than products that have low health risk level (β = .403, t = 10.22, p < .05).
Thus, H11 is supported. However, product health risk level has no moderating effect on
the relationship between intention-based country equity and intention-based brand equity,
which fails to support H12. In support of H13, the results demonstrate that product
performance risk level significantly moderates the relationship between attitude-based
country equity and attitude-based brand equity. In other words, the effect of attitude-
based country equity on attitude-based brand equity is stronger for products that have
high performance risk level (β = .569, t = 15.44, p < .05) than products that have low
performance risk level (β = .419, t = 9.82, p < .05). However, it does not significantly
moderate the relationship between intention-based country equity and intention-based
brand equity, thus leading to the rejection of H14. Figure 8 and Figure 9 demonstrate the
significant moderation effects.
Table 16: Results of Moderation Effects
________________________________________________________________________
Consumer Mindfulness as a Moderator
------------------------------------------------------------------------------------------------------------
Main Effect High Consumer Low Consumer
Mindfulness Mindfulness
ABCE ABBE .523 .523
IBCE IBBE .369 .369
________________________________________________________________________
Product Familiarity as a Moderator
------------------------------------------------------------------------------------------------------------
Main Effect High Product Low Product
Familiarity Familiarity
ABCE ABBE .532 .532
IBCE IBBE .390 .390
________________________________________________________________________
77
(Table 16 Continued)
Product Health Risk Level as a Moderator
------------------------------------------------------------------------------------------------------------
Main Effect High Product Low Product
Health Risk Health Risk
ABCE ABBE .566 .403
IBCE IBBE .345 .345
________________________________________________________________________
Product Performance Risk Level as a Moderator
------------------------------------------------------------------------------------------------------------
Main Effect High Product Low Product
Performance Risk Performance Risk
ABCE ABBE .569 .419
IBCE IBBE .357 .357
________________________________________________________________________
Product Complexity as a Moderator
------------------------------------------------------------------------------------------------------------
Main Effect High Product Low Product
Complexity Complexity
ABCE ABBE .519 .519
IBCE IBBE .366 .366
________________________________________________________________________
Product Importance as a Moderator
-----------------------------------------------------------------------------------------------------------
Main Effect High Product Low Product
Importance Importance
ABCE ABBE .547 .547
IBCE IBBE .364 .364
________________________________________________________________________
Product Value as a Moderator
------------------------------------------------------------------------------------------------------------
Main Effect High Product Low Product
Importance Importance
ABCE ABBE .493 .493
IBCE IBBE .335 .335
________________________________________________________________________
Notes: * The unstandardized β values are presented.
** P < .05
78
Figure 8: The Moderating Role of Product Health Risk Level
________________________________________________________________________
.860
.566* .403** .345
.835
______________________________________________________________________________
* High Product Health Risk Level
** Low Product Health Risk Level
Figure 9: The Moderating Role of Product Performance Risk Level
________________________________________________________________________
.840
.569* .419** .357
.862
______________________________________________________________________________
* High Product Performance Risk Level
** Low Product Performance Risk Level
Intention-
based Country
Equity
Attitude-
based Brand
Equity
Attitude-
based Country
Equity
Intention-
based Brand
Equity
Product
Health Risk
Level
Attitude-
based Country
Equity
Intention-
based Brand
Equity
Intention-
based Country
Equity
Attitude-
based Brand
Equity
Product
Performance
Risk Level
79
Chapter 5
Conclusion and Discussion
5.1 Conclusion
Despite the prolific research on both COO and brand equity over the past few decades,
the extant marketing literature does not explain whether consumer-based equity of a
brand is linked to the equity of its COO. This dissertation sought to explain whether
consumer-based brand equity was influenced by country equity, which was
conceptualized as the perceptual value derived from the associations of a brand with a
particular country name. Furthermore, it attempted to explain whether this effect was
moderated by consumer mindfulness, which was defined as “a receptive attention to and
awareness of present events and experience” (Brown et al., 2007a, p. 212). In addition to
consumer mindfulness concept, other factors, namely, product familiarity, product
complexity, product health/performance risk level, product importance, and product value
were examined as potential moderators of country equity effect.
Different from the extant research, this dissertation approached the country equity
and brand equity constructs from both attitudinal and intentional perspectives. It
developed attitude-based and intention-based sub-constructs for both country equity and
brand equity constructs. While attitude-based country equity was conceptualized as a
four-dimensional construct consisting of country awareness, macro country image, micro
country image and perceived quality (at the country level), intention-based country equity
was conceptualized as a two-dimensional construct consisting of country loyalty and
WTP a price premium (at the country level). On the other hand, while attitude-based
80
brand equity was conceptualized as a three-dimensional construct consisting of brand
awareness, brand image and perceived quality (at the brand level), intention-based brand
equity was conceptualized as a two-dimensional construct consisting of brand loyalty and
WTP a price premium (at the brand level). The measure for each construct was shown to
be highly valid and reliable and thus sufficiently sound for use in substantive empirical
research.
This research has overcome certain generalizability problems existent in previous
COO studies. First, early studies were mostly conducted in developed countries,
particularly in the US and UK. This was one of the biggest concerns about the
generalizability of COO effect. It is not surprising that consumers in developed and
developing countries differ in their response to COO information. This study used
samples from both developed and developing country.
Second, previous research mostly utilized COO information as the single product cue
in their study, which leads to the overestimation of the COO effect. Consumers evaluate
products and services based on both the intrinsic and extrinsic product cues. Therefore,
presenting COO information to the subjects as the only cue would lead them to base their
judgments on only this extrinsic cue, and make assumptions about other product cues.
This study used multiple-cues in the study in order to avoid a potential overestimation
problem.
Third, previous research mostly selected televisions and cars as the product category.
The use of expensive and luxury products in research might increase participants‟
involvement level and the importance of evaluations, leading them to pay more attention
81
to COO information in their evaluations. Thus, this might generate an overestimated
COO effect. This study selected televisions, sport shoes and chocolates as the product
categories, which might increase the generalizability of COO effect.
Previous COO research mostly focused on the development level of the country as
the independent variable. In this context, based on pilot studies, the researchers selected
different countries that varied according to development level, particularly economic
development level. Participants evaluated the quality of different brands coming from
these countries. That is, these studies focused on “quality perception” as the dependent
variable. On the other hand, some researchers focused on the effect of country image on
consumer product evaluations or quality perceptions. In other words, the emphasis was
on country image, which also includes the development level of a country. As noted
earlier, the effect of COO cannot be explained entirely by a quality signaling process. In
addition to its role as a signal for quality, COO cue has symbolic and emotional meanings
to consumers. The results of this study justify a higher order construct, country equity,
which also includes country image. Therefore, this study suggests that countries should
enhance not only their country image, but also other country equity dimensions such as
country awareness and quality perceptions.
5.2 Discussion
The results demonstrated that COO equity significantly influenced consumer-based brand
equity. More specifically, there was a positive relationship between “attitude-based
country equity” and “attitude-based brand equity.” Furthermore, there was a positive
relationship between “intention-based country equity” and “intention-based brand
82
equity.” In addition to these relationships between country equity and brand equity sub-
constructs, the results also showed a positive relationship between “attitude-based
country equity” and “intention-based country equity” and between “attitude-based brand
equity” and “intention-based brand equity.” Revealing the effect of country equity on
consumer-based brand equity serves to disentangle the equity endowed by the brand
name from that endowed by the country name with which the brand is associated.
The results indicated that product health risk level and product performance risk
level moderated the relationship between “attitude-based country equity” and “attitude-
based brand equity.” However, these factors do not moderate the relationship between
“intention-based country equity” and “intention-based brand equity.” In addition,
consumer mindfulness, product familiarity, product complexity, product importance and
product value have no moderating effect on the relationships between country equity and
brand equity.
The results of the examination of the potential moderators are surprising considering
the previous findings in COO studies. As noted earlier, previous research found that
product familiarity, product complexity, product importance and product value
significantly moderated the COO effect. Indeed, the results of this study concerning the
potential moderators justify the examination of higher-order constructs, country equity
and brand equity, as the independent and dependent variables. As mentioned before,
previous COO research mostly focused on the development level of the country and
country image as the independent variable, and quality perceptions as the dependent
variable. In these cases, product familiarity, product complexity, product importance and
product value significantly moderates the COO effect, since the COO effect is only
83
explained by quality signaling process. The symbolic and emotional meanings to
consumers are not in effect. Thus, even if a consumer develops negative attitudes or
animosity towards a country, he/she can evaluate the quality of products from that
country positively. More specifically, if the product complexity, product importance and
value are low to the consumer, he or she may ignore the COO of the product. Similarly, if
the consumer is familiar to the product category, he or she may ignore the COO
information. The consumer may ignore the origin information in all these cases, because
the focus is on brand quality. However, when the focus point is broadened and we
consider the higher-order constructs the consumer will probably pay attention to the COO
information even if the product complexity, product importance and value are low to
him/her. As an example, consider the purchase of printer papers. In this case, the product
complexity, product importance and value are relatively low and consumers‟ product
familiarity is high. Therefore, a consumer may not take into account the COO
information, because he/she ignores the quality of the papers or does not worry about it.
This leads to the low effect of COO cue. In other words, when the emphasis is on quality
signaling process, product familiarity, product complexity, product importance and
product value will probably moderate the COO effect. On the other hand, if we broaden
the scope of the emphasis, and take into account the symbolic and emotional meanings
through higher-order constructs, country equity and brand equity, these factors may not
moderate the COO effect. The consumer may negatively evaluate the image of the
product, if it is originated from a country towards which he/she develops negative attitude
or animosity. Similarly, he/she may not develop brand loyalty or may be unwilling to pay
a price premium to the product. Therefore, the negative COO equity will influence the
84
consumer-based brand equity of the printer papers, although the product complexity,
product importance and product value are low and familiarity is high. Thus, these factors
will not moderate the relationship between country equity and brand equity.
The lack of moderation effect of consumer mindfulness concept might result from the
omission of the adaptation of its measurement to consumer behavior context. As noted
earlier, this study utilized the MAAS scale developed by Brown and Ryan (2003) that has
been the most widely used measurement of mindfulness in social psychology and related
research area. The adaptation of this scale to consumer behavior context might reveal the
proposed relationships. In this context, based on the related literature, consumer
mindfulness might be a multi-dimensional construct consisting of awareness, attention,
motivation, concentration, involvement, need for cognition, openness to novelty, self-
regulation and self-control dimensions.
We proposed that since consumers low on mindfulness used heuristics and peripheral
route and utilized COO information as the primary product attribute or an attitude
determining cue, their product evaluations would be highly influenced by the country
equity of the products. This proposition can also be extended to other extrinsic product
cues such as brand name, price, store image and advertising. That is, consumers low on
mindfulness might utilize extrinsic product cues more than intrinsic product cues, and
base their judgments on extrinsic cues.
From a managerial perspective, the results of this dissertation suggest that country
equity represents an important part of the competitive advantage of firms in global
markets. More specifically, it suggests that the mere association of products with a
85
particular country significantly influences consumers‟ brand awareness, brand image,
quality perceptions, brand loyalty and willingness to pay a price premium. In this context,
while firms with high country equity might achieve competitive advantage in the global
markets and have strong bargaining power with channel members, firms with low
country equity might face significant problems. This argument has several managerial
implications. If a firm with high country equity suffers from low brand equity in the
global markets, it can overcome this problem by emphasizing its association with its
country-of-origin. This emphasis can be conveyed to consumers through any marketing
communication channel such as advertising or packaging. On the other hand, if a firm
with low country equity suffers from low brand equity in the global markets, it might
overcome this problem by getting associated with a country with positive country equity.
The use of a foreign-sounding brand name (e.g. Established in New York, the brand
Häagen-Dazs is a Scandinavian-sounding ice cream brand, but is originally American),
the acquisition of a foreign brand (e.g. the acquisition of Grunding by the Turkish firm
Beko) or the formation of strategic alliances with firms from countries with positive
country equity (e.g. Richtek, a Taiwan fables IC design firm, is working with Intel, an
American firm, to develop next-generation power-management chips) are the examples
of strategies to overcome this problem. Finally, if a firm with high brand equity suffers
from being located in a country with low equity, it can overcome this problem by
choosing a different country of assembly with high equity and thus concealing the actual
product origin.
The findings also suggest that country equity is important to consumers regardless of
the level of consumer product familiarity, product complexity, product importance and
86
product value. In other words, the COO equity of products is of significant importance
regardless of the product types and characteristics. These findings suggest that the
marketers of all kinds of products should pay attention to country equity phenomenon
and consider the potential effects of COO information on consumer behavior. Therefore,
not only the marketers of products that are valuable and important to consumers, but also
the marketers of everyday products that are ordinary to consumers should engage in
managing the country equity effect, and take it into account when developing their
marketing mix strategies.
The results indicate that country equity is particularly important when the perception
of product health and performance risk level is high in the target market. In these cases,
consumers utilize COO information more, and thus country equity has stronger effect on
their decision making. This research suggests that marketers should carefully examine
and consider consumers‟ perception of product health and performance risk level in their
target market before developing their marketing mix. If the product health and
performance risk levels are high in the target market, firms with high country equity
should attempt to emphasize their COO in order to increase the equity of their brands,
whereas firms with low country equity should find ways to deal with the negative country
equity effect.
This study suggests that country equity is of vital importance for entering foreign
markets. High country equity may help firms to overcome entry barriers in foreign
markets and have strong bargaining power with channel members. Furthermore, it may
improve the ability of firms from that country to launch brand extensions in foreign
markets. In addition, it may increase the power of brands from that country relative to
87
competition in international markets. Brands originated from countries with higher equity
may be less vulnerable to strong global competition.
According to the literature, the external globalization drivers can be classified into
four categories: market, cost, government and competition drivers (Uslay, Yeniyurt and
Lee, 2013; Ananthram and Pearson, 2008; Morrison, 1990; Levitt, 1983; Yip et al.,
1997). Considering its significant effect on consumer-based brand equity, this research
introduces country equity as the fifth external globalization driver that enables the
extension of an industry‟s scope beyond its national boundaries.
High country equity provides a firm the opportunity to enjoy the high value that
consumers in the global markets associate with the name of the country in the relevant
product category. As an example, consider a local Japanese firm in electronics industry.
Since Japan has high country equity in electronics category, this local firm possesses the
opportunity to enjoy the value that consumers in the global markets associate with Japan
by developing global strategies and getting to global. Therefore, high country equity is a
significant external driver that encourages firms‟ global expansion and use of global
strategy. Furthermore, it significantly influences firms‟ performance in global markets.
Global firms with higher country equity will likely to achieve higher global market
performance. Therefore, high country equity is an external pulling force that provides
important opportunities and advantages in the global marketplace.
This dissertation suggests that high country equity is of vital importance for SMEs‟
internationalization and market performance in the global markets. Country equity is the
value shared by the brands from a particular country. In this context, even new or
88
unknown brands may benefit from positive country equity, since the association with a
country with high consumer-based equity might increase their consumer-based brand
equity. More specifically, even if it is a new or unknown brand in the global markets, a
brand can increase consumers‟ perception of brand image and brand quality and thus
develop brand loyalty and willingness to pay a price premium due to its association with
a country with high equity. Therefore, SMEs from developed countries or SMEs from
countries with strong image in the related product category can enjoy the value that
consumers in the global markets associate with their country of origins. In conclusion,
high country equity not only encourages their internationalization, but also helps them
achieve strong competitive advantage in the global markets.
Whether positive or negative, developed intentionally or by default, every country
has equity. The strategic management of country equity and the recognition of its
significance will be key to successful global marketing in the years ahead in which the
global competition is expected to rise further. Considering the effect of country equity on
consumer-based brand equity and the strategic role of country equity in global marketing,
this research suggests that three key groups, namely, government, industry groups and
individual firms should manage country equity and seek strategies to increase it in order
to help firms from that country develop strong brand equity in the global markets,
overcome entry barriers in foreign markets, have strong bargaining power with channel
members, and be less vulnerable to fierce global competition. In other words, these three
key groups should employ country branding strategies in order to enhance country brand
image and reposition the country brands in the global markets. More specifically, the
three key groups should develop strategies to increase country awareness, improve macro
89
and micro country image and perceived quality of country brands and thus enhance
consumers‟ country loyalty and WTP a price premium for country brands. The distinctive
measures of country equity developed in this study can enable managers from these key
groups to better understand, measure, track and manage country equity.
This research suggests that government, industry groups and individual firms should
work together to generate country awareness in certain industries. In other words, they
should engage in activities to increase consumers‟ ability to recognize or recall that the
country is a producer of certain product categories. The first step in a well-established
country equity management program might be determining the product/service categories
in which the country can compete and introduce strong brands into global markets. After
choosing the industries, the country should utilize marketing communication channels
and try to appear with these selected product/service categories.
Second, government, industry groups and individual firms should spend efforts and
develop strategies to enhance macro country image, which is “the total of all descriptive,
inferential and informational beliefs one has about a particular country” (Martin and
Eroglu 1993: p. 193). These efforts may include certain initiatives to influence
consumers‟ perception of country‟s social, political, economical and technological
conditions. For example, the government of a country may use communications
professionals on their behalf in foreign nations to receive favorable press coverage. In
addition, they may engage in public diplomacy, in which they seek to communicate to
foreign nationals directly to influence individuals‟ perception about the country.
Furthermore, the country may attempt to appear in the movies positively. All of these
efforts may emphasize labor skills, industrialization, safety, environment, natural
90
resources and political stability in the country. These attempts may lead a large number
of individuals to change their opinions about the country intentionally or subliminally.
Third, government, industry groups and individual firms should work together to
increase micro country image, which is the total beliefs one has about the products of a
country in a given product category. These three groups should act and speak in a
coordinated and repetitive way about themselves in order to differentiate themselves from
other countries in certain product categories. Influencing consumers‟ perception of micro
image of a country requires well-developed positioning strategies at the country level. To
enhance a country‟s micro image, it may be easier to generate new positive associations
than to deny the previous negative ones.
Fourth, the three key groups should attempt to influence consumers‟ quality
perceptions of country brands. This may be the hardest part of country branding
strategies. The dimensions of macro country image such as political, technological and
economical conditions of the country and the dimensions of micro country image such as
workmanship, innovation, and prestige are all external to the products. However, quality
is an internal product cue. Therefore, it may be more difficult to influence consumers‟
perception of product quality than consumers‟ perception of macro and micro country
image. In this context, influencing consumers‟ country awareness may be the easiest part
of country branding program.
The results of this study demonstrate that there is a positive relationship between
attitude-based country equity, which consists of country awareness, macro and micro
country image and perceived quality, and intention-based country equity, which consists
91
of country loyalty and WTP a price premium. Therefore, government, industry groups
and individual firms can enhance intention-based country equity by managing attitude-
based country equity successfully. More specifically, they can enhance consumers‟
country loyalty and WTP a price premium by increasing country awareness and
improving consumers‟ perception of macro and micro country image and product quality
at the country level.
In conclusion, the management of country equity could reap considerable benefits
for the firms from that country and the nation as a whole because of the significant effect
of country equity on consumer-based brand equity. Moreover, the management of
country equity can be applicable not only to countries low on equity, but also to countries
high on equity. This study offered valuable tools and suggestions for governments,
industry groups and individual firms to understand, measure, track and manage country
equity in order for them to succeed in the global markets. Furthermore, the measures
developed in this study can help a manufacturer identify manufacturing countries with
high equity. By locating the manufacturing countries with positive equity and moving the
production facilities to one of these countries, a firm may increase consumer-based equity
of its brands in the global markets.
5.3 Future Research
A couple of new research attempts can contribute to our understanding of country equity
notion and its effects on brands‟ success in the global markets, and of implications for
country branding strategies. First, future research should examine the relationships
among the dimensions of country equity and consumer-based brand equity. Although this
92
study examined the relationships among the sub-constructs of country equity and brand
equity, it did not study the relationships among the dimensions of these sub-constructs. A
study in this direction can reveal the relative importance of each dimension and their
comparative effects on consumer product evaluations. Such research attempt may have
significant implications for country branding strategies. It may reveal which dimension of
country equity is of more significance for country branding programs.
Second, future research should address whether the effect of country equity on
consumer-based brand equity is significant for other product categories and whether this
effect holds across various cultures. This research examined three product categories,
namely, television, sport shoes and chocolates. The strength of country equity effect
might vary depending on the product category. By including different product categories
and conducting the study in various countries with different cultures, future researchers
can obtain more generalizable results. Furthermore, they can analyze whether culture
moderates the effect of country equity on consumer-based brand equity. In addition, the
employment of student samples, while perfectly acceptable for theory testing in COO
studies, places limitations on the generalizability of findings. Therefore, future research
should employ non-student samples for further generalization of the results.
Third, future research should examine the effect of country equity on consumer-based
brand equity by utilizing different conceptualization of country-of-origin. As noted
earlier, this study conceptualizes COO as “product origin,” which refers to the country
where the products are actually made. Future research may focus on brand origin, design
origin, parts origin or ownership origin. Moreover, future researchers may include more
than one origin information and introduce multi-national products. Such research attempt
93
may point out the issue of “brand origin recognition accuracy.” Due to the increase in the
number of multi-national products, it has become difficult for consumers to recall the true
product, brand, design, ownership and parts origin of products. Instead, they may identify
certain brands to particular countries, which influence their evaluations and judgments.
Therefore, future researchers may develop a new and more comprehensive COO concept
that will refer to a country with which a brand is identified. Furthermore, even if the
country where a product is produced or the country where the headquarters of the brand
are located has changed, consumers may continue to identify the brand with its former
origin. Therefore, the introduction of the concept “core origin” of a product may help
improve our understanding of COO influence and have significant managerial
implications.
Fourth, future research should analyze the strategies or the instruments for managing
or influencing country equity. Particularly, future research should examine how to deal
with negative country equity and eliminate its effect on consumer-based brand equity.
More specifically, researchers should study the strategies or the instruments that will
increase country awareness and that will enhance consumers‟ perception of macro and
micro country image and product quality at the country level. Researchers should also
address how to enhance consumers‟ country loyalty and WTP a price premium at the
country level. This stream of research will be of significant importance particularly for
underdeveloped or developing countries most of which suffer from negative country
equity.
Finally, further research is needed to examine the role of consumer mindfulness in
consumers‟ product evaluations and judgments. Future research should examine whether
94
the potential moderating effect is applicable to extrinsic product cues such as COO, price,
brand name, store image, social product attributes and advertising. Moreover, the
potential role of mindfulness in consumers‟ use of intrinsic product cues merits distinct
attention by future researchers. In addition, a new and more comprehensive consumer
mindfulness scale can be developed. As noted earlier, this study adopted previously
developed and commonly used the MAAS scale. Adapting this scale to consumer
behavior context, future researchers can develop a multi-dimensional mindfulness scale.
Based on the literature on mindfulness, such scale might include awareness, attention,
motivation, concentration, involvement, need for cognition, openness to novelty, self-
regulation and self-control dimensions.
95
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Appendix A: Survey Questionnaire (Form A)
Dear Participant,
Thank you for participating in the survey. This study examines a popular issue in
international marketing. The findings of this study are expected to help both researchers
and managers understand a significant topic and fill a gap in international marketing and
consumer behavior literature. The information you provide will be used to understand the
subject matter and to answer the research questions. Your answers will be put together
with others‟ anonymously.
INSTRUCTIONS FOR COMPLETING THE QUESTIONNAIRE
Please, read the descriptions of the three products first. The questions in section 1 are
related to your opinions about these products. The questions in section 2, 3 and 4 are not
related to the product descriptions. Please, respond to each question using the seven point
scale where 1 = Strongly Disagree, and 7 = Strongly Agree. Please, write the number you
choose in each column to indicate how much you agree with that statement.
PRODUCT DESCRIPTIONS
Product 1: SONY LCD TV
- Bravia BX520 Series
- 55-inch HDTV
- 1080p Resolution
- 120Hz technology for smooth
motion
- Made in Japan
- Price: $1,398.00
Product 2: SONY LCD TV
- Bravia BX520 Series
- 55-inch HDTV
- 1080p Resolution
- 120Hz technology for smooth
motion
- Made in South Korea
- Price: $1,398.00
Product 3: SONY LCD TV
- Bravia BX520 Series
- 55-inch HDTV
- 1080p Resolution
- 120Hz technology for smooth motion
- Made in India
- Price: $1,398.00
107
SECTION 1
The following questions are intended to measure your opinions about the three products
described above. Please use the seven-point scale to indicate how much you agree with
below statements. The terms “this product / this television” in the below statements refer
to the product corresponding to related column.
1 2 3 4 5 6 7
Strongly
Disagree
Disagree Neutral Agree Strongly
Agree
Product 1
(Sony TV
made in
Japan)
Product 2
(Sony TV
made in
South
Korea)
Product 3
(Sony TV
made in
India)
a. I associate this product to sincerity.
b. I associate this product to excitement.
c. I associate this product to competence.
d. I associate this product to sophistication.
e. I associate this product to ruggedness.
f. I like the company which makes this television.
g. I (would) feel proud to own products from the
company that makes this television.
h. I trust the company that makes this television.
i. This television is of very good quality.
j. This television is reliable.
k. This television has excellent features.
l. This television is durable.
m. This television offers consistent quality.
n. This television would be my preferred choice.
o. I (would) consider myself loyal to this television.
p. This television would be my first choice.
q. The price of this television would have to go up a
bit before I would switch to another brand of tv.
108
r. I am willing to pay a higher price for this
television than other tv brands.
s. I am willing to pay a lot more for this television
than other LCD television brands.
t. I am aware of the brand Sony in television category.
(Please, mark one of the boxes.)
SECTION 2
The following questions are intended to measure your opinions about and perceptions of
Japan, South Korea and India. The questions are not related to the products described
above. The term “this country” in the below statements refers to the country
corresponding to related column.
1 2 3 4 5 6 7
Strongly
Disagree
Disagree Neutral Agree Strongly
Agree
Japan South
Korea
India
a. Televisions made in this country are advertised widely.
b. I can recognize television brand names from this
country.
c. This country has a high level of industrialization.
d. This country has a highly developed economy.
e. People in this country are highly literate.
f. This country has a free-market system.
g. This country is a democratic country.
h. Televisions made in this country have quality
workmanship.
i. Televisions made in this country are innovative.
j. Televisions made in this country are dependable.
k. I trust this country as a producer of televisions.
l. Televisions made in this country are of very good
quality.
m. Televisions made in this country have excellent
features.
1 2 3 4 5 6 7
109
n. Televisions made in this country are of consistent
quality.
o. Televisions made in this country are very reliable.
p. This country would be my preferred choice for
televisions.
q. I will not buy a television made in other countries, if I
can buy the same product made in this country.
r. I (would) consider myself loyal to buying televisions
from this country.
s. This country would be my first choice for televisions.
t. I am willing to pay a higher price for televisions from
this country than televisions from other countries.
u. The price of televisions from this country would have to
go up a bit before I would switch to TVs from another
country.
v. I am willing to pay a lot more for LCD televisions from
this country than LCD televisions from other countries.
SECTION 3
The following questions are intended to measure your opinions about several issues.
Please, indicate how much you agree with the following statements.
1 2 3 4 5 6 7
Strongly
Disagree
Disagree Neutral Agree Strongly
Agree
a. I break or spill things because of carelessness, not paying attention,
or thinking of something else.
b. I find it difficult to stay focused on what is happening in the
present.
c. I tend to walk quickly to get where I am going without paying
attention to what I experience along the way.
d. I tend not to notice feelings of physical tension or discomfort until
they really grab my attention.
e. I forget a person‟s name almost as soon as I have been told it for the
first time.
110
f. I do jobs or tasks automatically, without being aware of what I‟m
doing.
g. I find myself listening to someone with one ear, doing something
else at the same time.
h. I find myself preoccupied with the future or the past.
i. I find myself doing things without paying attention.
j. I am very familiar with televisions.
k. I know a lot about televisions.
l. It would be risky for my health if I make a mistake in choosing a
television.
m. A poor choice of television would be a threat for my health.
n. It would be risky for display performance if I make a mistake in
choosing a television brand.
o. A poor choice of television would pose a threat in terms of display
performance.
p. In my opinion, televisions are very complex products.
q. If I had to purchase a television today, I would need assistance in
order to understand the technical features of the tv.
r. The decision of which television to purchase is very important to
me.
s. I (would) pay very much attention to select which television to buy.
t. Television is one of the most important products in a person‟s life.
u. The money I (would) spend on my television is a significant
amount in my budget.
v. Televisions provide a high level of utility to people.
w. The television a person selects tells something about him/her.
x. The television one uses can contribute to his/her social status.
y. The brand of television one has can make an impression on me.
111
SECTION 4
Please, answer the following demographical questions.
a. What is your age in years? _________
b. What is your gender? □ Male □ Female
c. What is your marital status? □ Single □ Married
d. What is your annual income in U.S. dollars?
□ Less than $10.000 □ $10.000 – $25.000 □ 26.000 – 50.000 □ Over $50.000
e. What is your family‟s annual income in U.S. dollars?
□ Less than $15.000 □ $15.000 – $40.000 □ 41.000 – 60.000 □ Over $60.000
f. What is your country of citizenship? ______________
g. What is your ethnicity?
□ American □ African American □ Chinese □ Mexican □ Japanese □ Other
_____________________________________________________________
This is the end of the survey. Thank you very much for your help. If you have any further
questions about this study, please contact Ahmet Bayraktar at
112
Appendix B: Brand Equity Items and their Means (Standard Deviations)
_________________________________________________________________________________________________________________________________________________________
Turkey USA
Attitude-based Brand Equity
ABE1: I associate product X to sincerity. 3.8710 (1.7666) 4.2334 (1.4670)
ABE2: I associate product X to excitement. 3.7309 (1.8431) 4.2524 (1.5539)
ABE3: I associate product X to competence. 4.4383 (1.7972) 4.5848 (1.5202)
ABE4: I associate product X to sophistication. 4.0804 (1.7824) 4.1832 (1.6560)
ABE5: I associate product X to ruggedness. 4.4813 (1.7974) 4.3596 (1.6890)
ABE6: I like the company that makes product X. 3.9834 (1.9075) 4.9118 (1.4433)
ABE7: I (would) feel proud to own products from the company that makes product X. 3.6449 (1.9547) 4.5739 (1.5064)
ABE8: I trust the company that makes product X. 3.9917 (1.9105) 4.8467 (1.5026)
ABE9: Product X is of very good quality. 4.3454 (1.7524) 4.8738 (1.4110)
ABE10: Product X is reliable. 4.1983 (1.7138) 4.8928 (1.3626)
ABE11: Product X has excellent features (“taste” for chocolates). 4.2663 (1.7484) 4.9701 (1.3008)
ABE12: Product X is durable (“healthy” for chocolates). 4.2094 (1.7886) 4.0244 (1.8071)
ABE13: Product X offers consistent quality. 4.3620 (1.8221) 4.8969 (1.3920)
Intention-based Brand Equity
IBE1: Product X would be my preferred choice. 3.7379 (1.9356) 3.9837 (1.7515)
IBE2: I (would) consider myself loyal to product X. 4.1956 (1.9534) 3.4885 (1.7462)
IBE3: Product X would be my first choice. 3.5756 (1.9770) 3.6079 (1.8414)
IBE4: The price of product X would have to go up a bit before I would
switch to another brand of sport shoes (television/chocolate). 3.2039 (1.9561) 3.6594 (1.7552)
IBE5: I am willing to pay a higher price for product X than other sport
shoes (television/chocolate) brands. 2.9140 (1.8711) 3.1479 (1.7627)
IBE6: I am willing to pay a lot more for product X than other brands in
this category of sport shoes (televisions/chocolates). 3.1581 (2.0180) 2.7883 (1.6976)
113
Appendix C: Country Equity Items and their Means (Standard Deviations)
_________________________________________________________________________________________________________________________________________________________
Turkey USA
Attitude-based Country Equity
ACE1: Sport shoes (televisions/chocolates) made in country X are advertised widely. 3.7947 (2.1310) 3.9145 (1.8866)
ACE2: I can recognize sport shoes (television/chocolate) brand names from country X. 3.2386 (2.0238) 3.2497 (2.0397)
ACE3: Country X has a high level of industrialization. 4.3842 (1.9905) 4.8195 (1.6037)
ACE4: Country X has a highly developed economy. 4.4411 (2.0041) 4.5346 (1.7490)
ACE5: People in country X are highly literate. 4.5562 (1.9902) 4.7178 (1.6621)
ACE6: Country X has a free-market system. 4.4452 (1.8341) 4.4206 (1.6015)
ACE7: Country X is a democratic country. 4.3870 (1.8578) 4.3338 (1.7739)
ACE8: Sport shoes (televisions/chocolates) made in this country have quality workmanship
(“quality ingredients” for chocolates). 4.0291 (1.9424) 4.5251 (1.5896)
ACE9: Sport shoes (televisions/chocolates) made in this country are innovative
(“delicious” for chocolates). 4.0499 (1.9236) 4.4138 (1.6087)
ACE10: Sport shoes (televisions/chocolates) made in this country are dependable. 4.0485 (1.9117) 4.4179 (1.5601)
ACE11: I trust this country as a producer of sport shoes (televisions/chocolates). 3.8669 (1.9000) 4.4138 (1.7110)
ACE12: Sport shoes (televisions/chocolates) made in this country are of very good quality. 3.9140 (1.8651) 4.4532 (1.5994)
ACE13: Sport shoes (televisions/chocolates) made in this country have excellent features
(“are healthy” for chocolates). 3.6727 (1.8366) 3.9213 (1.6760)
ACE14: Sport shoes (televisions/chocolates) made in this country are of consistent quality. 3.9667 (1.8919) 4.4559 (1.5255)
ACE15: Sport shoes (televisions/chocolates) made in this country are very reliable. 3.7434 (1.8987) 4.3853 (1.5440)
Intention-based Country Equity
ICE1: Country X would be my preferred choice for sport shoes (televisions/chocolates). 3.4327 (2.0114) 3.8901 (1.8990)
ICE2: I will not buy sport shoes (televisions/chocolates) made in other countries, if I can
buy the same product made in country X. 3.0028 (1.9025) 3.2415 (1.8427)
ICE3: I (would) consider myself loyal to buying sport shoes (televisions/chocolates) from country X. 3.6144 (2.0999) 2.8915 (1.7544)
ICE4: Country X would be my first choice for sport shoes (televisions/chocolates). 3.1498 (1.9853) 3.2917 (1.9246)
ICE5: I am willing to pay a higher price for sport shoes (televisions/chocolates) from country X than
sport shoes (televisions/chocolates) from other countries. 2.5492 (1.8784) 2.9037 (1.7998)
ICE6: The price of sport shoes (televisions/chocolates) from country X would have to go up a bit before
I would switch to sport shoes (televisions/chocolates) from another country. 2.6158 (1.9093) 3.0529 (1.8559)
ICE7: I am willing to pay a lot more for running sport shoes (LCD televisions/candy bars) from country X
than running sport shoes (LCD televisions/candy bars) from other countries. 2.6824 (1.9756) 2.7110 (1.7544)
114
Appendix D: The Standardized Coefficients for the Full Model (USA)
_______________________________________________________________________
STANDARDIZED SOLUTION: R-SQUARED
Attitude-based Brand Equity
ABE1 =V4 = .570 F1 + .822 E2 .324
ABE2 =V5 = .537*F1 + .844 E3 .288
ABE3 =V6 = .676*F1 + .737 E4 .457
ABE4 =V7 = .618*F1 + .786 E5 .382
ABE5 =V8 = .359*F1 + .933 E6 .129
ABE6 =V9 = .746*F1 + .666 E7 .556
ABE7 =V10 = .724*F1 + .690 E8 .524
ABE8 =V11 = .791*F1 + .612 E9 .626
ABE9 =V12 = .822*F1 + .570 E10 .675
ABE10 =V13 = .815*F1 + .579 E11 .665
ABE11 =V14 = .671*F1 + .741 E12 .450
ABE12 =V15 = .593*F1 + .805 E13 .351
ABE13 =V16 = .703*F1 + .711 E14 .495
Intention-based Brand Equity
IBE1 =V17 = .847 F2 + .532 E15 .717
IBE2 =V18 = .794*F2 + .607 E16 .631
IBE3 =V19 = .852*F2 + .523 E17 .727
IBE4 =V20 = .662*F2 + .750 E18 .438
IBE5 =V21 = .730*F2 + .684 E19 .533
IBE6 =V22 = .686*F2 + .727 E20 .471
Attitude-based Country Equity
ACE1 =V25 = .740 F3 + .673 E21 .547
ACE2 =V26 = .680*F3 + .734 E22 .462
ACE3 =V27 = .678*F3 + .735 E23 .460
ACE4 =V28 = .716*F3 + .698 E24 .513
ACE5 =V29 = .715*F3 + .700 E25 .511
ACE6 =V30 = .600*F3 + .800 E26 .360
ACE7 =V31 = .539*F3 + .842 E27 .291
ACE8 =V32 = .889*F3 + .458 E28 .790
ACE9 =V33 = .848*F3 + .530 E29 .719
ACE10 =V34 = .853*F3 + .521 E30 .728
ACE11 =V35 = .867*F3 + .498 E31 .752
ACE12 =V36 = .920*F3 + .393 E32 .846
ACE13 =V37 = .701*F3 + .714 E33 .491
ACE14 =V38 = .877*F3 + .481 E34 .768
ACE15 =V39 = .879*F3 + .476 E35 .773
Intention-based Country Equity
ICE1 =V40 = .695 F4 + .719 E36 .482
ICE2 =V41 = .720*F4 + .694 E37 .518
ICE3 =V42 = .787*F4 + .616 E38 .620
ICE4 =V43 = .811*F4 + .586 E39 .657
ICE5 =V44 = .893*F4 + .451 E40 .797
ICE6 =V45 = .849*F4 + .528 E41 .721
ICE7 =V46 = .880*F4 + .475 E42 .775
________________________________________________________________________
115
Appendix E: The Standardized Coefficients for the Full Model (Turkey)
________________________________________________________________________
STANDARDIZED SOLUTION: R-SQUARED
Attitude-based Brand Equity
ABE1 =V4 = .697 F1 + .717 E2 .486
ABE2 =V5 = .583*F1 + .812 E3 .340
ABE3 =V6 = .678*F1 + .735 E4 .459
ABE4 =V7 = .631*F1 + .776 E5 .398
ABE5 =V8 = .712*F1 + .702 E6 .507
ABE6 =V9 = .734*F1 + .680 E7 .538
ABE7 =V10 = .770*F1 + .637 E8 .594
ABE8 =V11 = .818*F1 + .575 E9 .669
ABE9 =V12 = .829*F1 + .559 E10 .688
ABE10 =V13 = .850*F1 + .527 E11 .723
ABE11 =V14 = .732*F1 + .681 E12 .536
ABE12 =V15 = .832*F1 + .555 E13 .692
ABE13 =V16 = .826*F1 + .564 E14 .682
Intention-based Brand Equity
IBE1 =V17 = .884 F2 + .467 E15 .782
IBE2 =V18 = .767*F2 + .642 E16 .588
IBE3 =V19 = .894*F2 + .448 E17 .799
IBE4 =V20 = .694*F2 + .720 E18 .482
IBE5 =V21 = .754*F2 + .657 E19 .568
IBE6 =V22 = .746*F2 + .666 E20 .557
Attitude-based Country Equity
ACE1 =V25 = .796 F3 + .605 E21 .633
ACE2 =V26 = .719*F3 + .695 E22 .517
ACE3 =V27 = .809*F3 + .587 E23 .655
ACE4 =V28 = .809*F3 + .588 E24 .654
ACE5 =V29 = .811*F3 + .584 E25 .658
ACE6 =V30 = .774*F3 + .633 E26 .599
ACE7 =V31 = .769*F3 + .640 E27 .591
ACE8 =V32 = .900*F3 + .436 E28 .810
ACE9 =V33 = .863*F3 + .506 E29 .744
ACE10 =V34 = .888*F3 + .459 E30 .789
ACE11 =V35 = .892*F3 + .452 E31 .795
ACE12 =V36 = .899*F3 + .438 E32 .808
ACE13 =V37 = .844*F3 + .536 E33 .713
ACE14 =V38 = .885*F3 + .466 E34 .783
ACE15 =V39 = .872*F3 + .489 E35 .761
Intention-based Country Equity
ICE1 =V40 = .891 F4 + .455 E36 .793
ICE2 =V41 = .865*F4 + .502 E37 .748
ICE3 =V42 = .801*F4 + .599 E38 .642
ICE4 =V43 = .905*F4 + .426 E39 .819
ICE5 =V44 = .837*F4 + .547 E40 .701
ICE6 =V45 = .765*F4 + .644 E41 .585
ICE7 =V46 = .788*F4 + .616 E42 .621
________________________________________________________________________
116
Appendix F: The Standardized Coefficients for the Full Model (All Data)
________________________________________________________________________
STANDARDIZED SOLUTION: R-SQUARED
Attitude-based Brand Equity
ABE1 =V4 = .645*F1 + .764 E2 .416
ABE2 =V5 = .586*F1 + .810 E3 .344
ABE3 =V6 = .661*F1 + .750 E4 .437
ABE4 =V7 = .622*F1 + .783 E5 .387
ABE5 =V8 = .551*F1 + .834 E6 .304
ABE6 =V9 = .749*F1 + .663 E7 .560
ABE7 =V10 = .767*F1 + .641 E8 .589
ABE8 =V11 = .815*F1 + .579 E9 .664
ABE9 =V12 = .819*F1 + .574 E10 .670
ABE10 =V13 = .833*F1 + .554 E11 .693
ABE11 =V14 = .716*F1 + .698 E12 .512
ABE12 =V15 = .670*F1 + .742 E13 .449
ABE13 =V16 = .770*F1 + .637 E14 .594
Intention-based Brand Equity
IBE1 =V17 = .860*F2 + .510 E15 .740
IBE2 =V18 = .745*F2 + .667 E16 .555
IBE3 =V19 = .867*F2 + .498 E17 .752
IBE4 =V20 = .707*F2 + .707 E18 .500
IBE5 =V21 = .759*F2 + .651 E19 .576
IBE6 =V22 = .716*F2 + .698 E20 .512
Attitude-based Country Equity
ACE1 =V25 = .771*F3 + .637 E21 .594
ACE2 =V26 = .702*F3 + .712 E22 .493
ACE3 =V27 = .756*F3 + .655 E23 .571
ACE4 =V28 = .762*F3 + .647 E24 .581
ACE5 =V29 = .768*F3 + .641 E25 .589
ACE6 =V30 = .689*F3 + .724 E26 .475
ACE7 =V31 = .654*F3 + .756 E27 .428
ACE8 =V32 = .894*F3 + .447 E28 .800
ACE9 =V33 = .851*F3 + .526 E29 .724
ACE10 =V34 = .870*F3 + .494 E30 .756
ACE11 =V35 = .878*F3 + .478 E31 .771
ACE12 =V36 = .908*F3 + .418 E32 .825
ACE13 =V37 = .777*F3 + .629 E33 .604
ACE14 =V38 = .882*F3 + .472 E34 .777
ACE15 =V39 = .872*F3 + .490 E35 .760
Intention-based Country Equity
ICE1 =V40 = .793*F4 + .609 E36 .629
ICE2 =V41 = .801*F4 + .598 E37 .642
ICE3 =V42 = .746*F4 + .666 E38 .556
ICE4 =V43 = .856*F4 + .517 E39 .733
ICE5 =V44 = .881*F4 + .472 E40 .777
ICE6 =V45 = .837*F4 + .547 E41 .701
ICE7 =V46 = .862*F4 + .506 E42 .744
Consumer Mindfulness
117
CM1 =V47 = .586*F5 + .810 E43 .344
CM2 =V48 = .738*F5 + .675 E44 .545
CM3 =V49 = .581*F5 + .814 E45 .338
CM5 =V51 = .634*F5 + .773 E47 .402
CM6 =V52 = .735*F5 + .678 E48 .541
CM7 =V53 = .710*F5 + .704 E49 .504
CM8 =V54 = .530*F5 + .848 E50 .281
CM9 =V55 = .815*F5 + .579 E51 .664
Product Familiarity
PF1 =V56 = .929*F6 + .369 E52 .864
PF2 =V57 = .871*F6 + .491 E53 .759
Product Health Risk Level
PHR1 =V58 = .925*F7 + .381 E54 .855
PHR2 =V59 = .965*F7 + .263 E55 .931
Product Performance Risk Level
PPR1 =V60 = .974*F8 + .228 E56 .948
PPR2 =V61 = .916*F8 + .402 E57 .838
Product Complexity
PC1 =V62 = .687*F9 + .726 E58 .472
PC2 =V63 = .709*F9 + .705 E59 .502
Product Importance
PI1 =V64 = .880*F10 + .475 E60 .774
PI2 =V65 = .848*F10 + .530 E61 .719
PI3 =V66 = .776*F10 + .631 E62 .602
Product Value
PV1 =V67 = .704*F11 + .710 E63 .496
PV2 =V68 = .722*F11 + .692 E64 .521
PV3 =V69 = .749*F11 + .662 E65 .562
PV4 =V70 = .767*F11 + .641 E66 .589
PV5 =V71 = .778*F11 + .628 E67 .606
________________________________________________________________________
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Appendix G: Factor Means
________________________________________________________________________
Variable Obs. Unique Mean Min Max Label
----------------------------------------------------------------------------------------------------- ----------------------------
ABBE 1525 94 4.344592 1 7 Attitude-based Brand Equity
IBBE 1525 42 3.453891 1 7 Intention-based Brand Equity
ABCE 1527 112 4.17334 1 7 Attitude-based Country Equity
IBCE 1527 45 3.063975 1 7 Intention-based Country Equity
CM 1527 48 4.136788 1 7 Consumer Mindfulness
PF 1524 13 3.533465 1 7 Product Familiarity
PHR 1524 13 3.894685 1 7 Product Health Risk Level
PPR 1527 13 4.679764 1 7 Product Performance Risk Level
PC 1527 13 4.061886 1 7 Product Complexity
PI 1527 21 4.191879 1 7 Product Importance
PV 1524 34 3.854298 1 7 Product Value
______________________________________________________________________________________
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Curriculum Vitae
Ahmet Bayraktar
1982 Born in Rize, Turkey
2000-2004 B.S. in Business Administration
Trakya University, Edirne, Turkey
2005-2007 MBA
Trakya University, Edirne, Turkey
2005-2007 Lecturer
Trakya University, Havsa Community College
2008-2009 Language Education in ELS Language School
Houston, TX
2009-2013 PhD in Management
Rutgers, The State University of New Jersey, U.S.A.