nation branding, loyalty towards the country

� HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 10, NO. 3, 233–251 FEBRUARY 2003 233

Audhesh K. PaswanDepartment of Marketing,College of BusinessAdministration, University ofNorth Texas, PO Box 311396,Denton, TX 76203-1396, USA

Tel: �1 940 565 3121Fax: �1 940 565 3837E-mail: [email protected]

Nation Branding

Loyalty towards the country, thestate and the service brandsReceived (in revised form): 19th April, 2002

AUDHESH K. PASWANis Assistant Professor in the Department of Marketing and Logistics, COBA, UNT. He has a PhD (Marketing)from the University of Mississippi, an MBA from IIM, Ahmedabad, India, and a BTech in Aeronautics from IIT,Madras, India. His research has appeared in forums such as Journal of Business Research, Journal of Retaining, Journalof Public Policy and Marketing, Journal of Marketing Education, Journal of Product and Brand Management, Journal ofBusiness and Entrepreneurship, Journal of Business and Industrial Marketing, Journal of International Consumer Marketingand numerous national and international conferences. His research interests include areas such asfranchising/channels, international/cross-cultural, relational norms brand management, knowledge management,technology and organisation, and social issues such as consumerism. His current teaching portfolio includesclasses such as Marketing Research, Marketing Engineering (MBA) and Multivariate Statistics (PhD).

SHAILESH KULKARNIis Assistant Professor of Management Science in the COBA at UNT. His areas of interest lie in stochastic modelsof supply chain management, quality control applications, service operations modelling and themarketing-manufacturing interface. He has published papers in journals such as the International Journal ofProduction Economics and Integrated Manufacturing Systems, among others.

GOPALA GANESHia a professor in the Department of Marketing and Logistics, College of Business Administration, University ofNorth Texas, Denton, Texas. He teaches Marketing Research, Marketing Management and Applied MultivariateMethods at the undergraduate and graduate levels. He has also created a unique class for undergraduatemarketing majors, called Marketing Tools, that seeks to strengthen the analytical and presentation skills of thesestudents using mini-cases, Excel speadsheets and PowerPoint presentations. His current research interests includeprofiling affluent consumers, online shopping by households and business, profiling international students in theUS and household decision making. Dr Ganesh has published papers in journals such as International MarketingReview, Journal of Marketing Theory and Practice, Journal of Consumer Marketing, Journal of Services Marketing, Journalof Marketing Education, Marketing Education Review and Journal of Global Marketing.

AbstractThis study empirically investigates the notion of brand loyalty towards the country, the state and theservice provider, and investigates the relationship between the strength of loyalty towards the three— country, state and service brands. In addition, contingency variables such as national origin, socialclass and educational level are examined. The results indicate that brand loyalty towards thecountry is strongest, followed by that towards the state and service provider. As regards thecontingency variables, both social class and education were found to have significant impact on thebrand loyalty towards the service provider. The results for national origin indicated that loyaltytowards the country, the state and the service brands does differ by country. In summary, theauthors conclude that brand loyalty towards the country and the state tends to be more stable thanloyalty towards the service brand.

or variability, perishability of output,and inseparability of production andconsumption.15 They tend to be low insearch quality (no fixed, temporallystable characteristics such as colour,style, shape, hardness, smell etc), andrelatively high on experience andcredence qualities. In other words,consumers can assess the service qualitymainly during and after the consump-tion. Sometimes, even that is notpossible, and consumers have to assessservice quality based on beliefs that,in turn, may be based on factorsnot necessarily associated with thecore service exchanged.16,17 Interest-ingly, these descriptors sound as thoughthey pertain to the country or even thestate as brands.

The investigation reported here isparticularly noteworthy since it iscarried out in the context of theexchange of higher education servicesbetween US higher educational institu-tions and international students. This isa unique exchange that typically takesa long time to complete, consists ofcore and augmented services, and isdelivered in several stages, with mile-stones along the way. Studies con-ducted in an educational servicescontext have acknowledged educa-tion to be one of the most intan-gible exchange items.18–21 Additionally,‘education’ has a different meaning forpeople of different cultures. It rangesfrom a meal ticket, to a way ofelevating one’s social status, to meetingself-actualisation needs. Moreover, theinternational student body is slowlybecoming a market to reckon with,and its decision-making process in-volves the university and the countryof location in a very complex andinextricable manner.22–24

These arguments, plus the fact that

INTRODUCTIONThe country of origin image as animportant determinant of product orservice brand image has been ex-tensively investigated in internationalmarketing literature.1–3 There seems tobe a general consensus that countryimage and brand image are inextricablylinked.4–6 The causal nature of thisrelationship is not unequivocal, how-ever. Several countries have followedthe path of first enhancing the image oftheir brands in the host country andthen using that to later bolster thecountry image. This was especially truein the post-war era for emergingeconomies, for example, several Asianand Latin American countries. Thenthere are others who have tried toposition their brands as an extension oftheir country image, for example,Germany, Switzerland, etc. Some ob-vious examples may be found in thetravel and tourism service industry,where promotion of the country as abrand is not uncommon. Little atten-tion, however, has been given to thesystematic investigation of nations asbrands, although there are some excep-tions to this.7–10

This study empirically investigatesthe notion of brand loyalty towards thecountry, the state and the servicebrands, and the interactions betweenthem. This is crucial now, whenservices dominate national and interna-tional trade. In the case of theUSA, over 60 per cent of its GNPand 80 per cent of its jobs aretied to the service sector.11,12 Thisscenario is likely to be very similarfor most industrialised nations andeven for developing or emergingeconomies.13,14 Moreover, services aredistinctly different from products interms of intangibility, heterogeneity

234 � HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 10, NO. 3, 233–251 FEBRUARY 2003

PASWAN, KULKARNI AND GANESH

US higher education institutions arelosing ground to competition fromother countries.27–29 Based on theearlier successes of their US coun-terparts, universities in Canada, theUK, Australia, New Zealand, HongKong, Singapore and some Europeancountries have started marketing theirhigher education systems to interna-tional students.

Clearly, the international studentmarkets cannot be ignored. In order totap into this market, universities haveundertaken aggressive marketing cam-paigns. These include bringing studentsto the home campus, setting upcampuses in the host markets (forexample, Indian Business School andINSEAD’s Singapore campus), andeven using commercial means such asfranchising, for example, the entry byWigan and Leigh College (UK) intothe Indian market.30 Added to thiscompetitive pressure, the global highereducation market has had its own upsand downs, trends and cycles based oneconomic, social, legal, regulatory andpolitical happenings.31–33

BRAND LOYALTY — COUNTRY, STATEAND SERVICE BRANDSThe concept of the brand, and itsrelated issues such as brand equity,brand recall, brand insistence and brandevaluation have attracted extensiveresearch scrutiny.34–36 A related body ofknowledge deals with the country oforigin image research stream.37–42 Thenotion of country as brand has hardlyreceived attention, however, except forpioneering works by authors suchas Anholt43 and O’Shaughnessy andO’Shaughnessy.44

A general consensus in the countryof origin literature is that country of

the international student market is aforce to reckon with, make highereducation an interesting setting for in-vestigating the notion of the country,the state and the service provider asbrands. To start with, the findings ofthis study should enrich an understand-ing of the interaction between thecountry-brand versus brands within thenation. At a micro level, the results ofthis study have direct implications forthe international marketing of highereducation as well as any other services,especially ones whose delivery followsa similar process. Finally, service firmscould gain valuable insights into thestrategic and tactical aspects of market-ing across cultures.

This manuscript begins with adescription of the higher educationmarket to contextualise the investiga-tion. This is followed by a discus-sion of brand loyalty towards thecountry, the state and the servicebrands, contingency variables, andthe development of hypotheses. Themethodology is then presented, fol-lowed by the results, and finally adiscussion of the limitations andimplications — both research andmanagerial — of this study.

THE HIGHER EDUCATION SERVICE ANDTHE INTERNATIONAL MARKETForeign student enrolment in USuniversities has been growing steadilyover the years.25 While foreign studentsaccount for only 3 per cent of all UShigher education enrolments, theirpresence in graduate education isdisproportionately high (11 per cent).26

They have an even greater presence insome academic fields such as engineer-ing, business and computer science.There are, however, indications that


LOYALTY TOWARDS THE COUNTRY, THE STATE AND THE SERVICE BRANDS

higher education services especiallyaimed at international students. TheUSA probably has the strongestcountry brand.57 Other countries suchas Canada, Australia and the UK arenot doing too badly either. Studentsfrom all over the world engage indecisions about their field of study, theuniversity, and the country almostsimultaneously. Often, their deci-sions about field of study andcollege/university are strongly linkedto, if not influenced by, their decisionabout the country. In general, thecountries are more easily recognisableto international students than, say, thestate where the university of interestmay be located, or even the universityof choice. As a result, information thatcould shape brand loyalty towards thecountry, ie the USA, is likely to bemore easily accessible to students thanthat for the state and the serviceprovider, ie the university. Someexceptions are universities such asHarvard, Massachusetts Institute ofTechnology, Oxford and Cambridge.Providers of these higher educationbrands have created a brand identitythat somehow transcends the countrybrand image, although some spillover isinevitable.

As a group, most internationalstudents tend to gravitate towardsrelatively well-known and reputeduniversities. As a result, these studentsare likely to be more satisfied withtheir experiences with the educationthey receive; the core of the exchange.Their interaction with the university atlarge is not, however, likely to befavourable all the time. There are likelyto be instances where they encounterinteractions that run contrary to theirprevious expectations. As a result, theirbrand loyalty towards the university is

origin is often used as a cue forevaluating new products. In general,favourable country perceptions result infavourable inferences about productattributes and subsequent favourableevaluations.45–47 Recent studies, how-ever, question the weight given tocountry of origin in the productevaluation process.48,49 These investiga-tions suggest that culture-specific fac-tors tend to determine the weightassigned to the country-of-origin fac-tor. For example, even if people fromcertain parts of China feel positivelyabout Japanese products, they are lesslikely to buy the Japanese productbecause of past negative history. Asimilar conclusion may be drawn fromstudies dealing with brand extension ifa country is treated as a brand.50–53

While O’Shaughnessy and O’Shaugh-nessy have taken a cautious approachto the idea of treating the countryas a brand, Anholt is more en-thusiastic in suggesting the notion ofprovenance.54,55 Anholt further suggeststhat developed countries tend to havevery strong provenance, and do use itin more or less the same way as firmsuse the notion of brand extension, forexample, German automobiles, Swisswatches, Scotch whisky, etc.56 In fact,this phenomenon manifests itself verystrongly in the travel and tourismindustry. For example, countries likethe Bahamas, Brazil, the CaribbeanIslands (including Jamaica), etc, havesuccessfully created a country brandidentity and market their products andservices (travel and tourism, rum andeven entire lifestyles) as an exten-sion. Other examples include productsand services such as Egyptian cotton,Chinese silk, Indian hospitality, etc.

Another example of country brand-ing can be found in the context of



knowledge structure), which suggeststhat brand image is a schematic memoryof a brand.63–65 Relying on thisliterature as well as current thinking onbrand extension, one could argue that amore complex knowledge structure fora country is likely to be associated witha stronger brand image and brandloyalty.66 In addition, one couldspeculate that the complex knowledgestructure associated with the countrybrand is likely to shield it from extremeswings in post-experience loyalty. Incomparison, because of a narrower andmore task-specific orientation, theuniversity is likely to acquire a morediffused brand image. Different peoplehave different expectations from theuniversity, and therefore their post-experience assessments also vary.

An analogous example could be theknowledge structure associated withGod, the religious institution and thepriest. Irrespective of the name used,the imagery associated with the word‘God’ tends to be fairly consistentacross different religious groups —benevolent, protector, creator, saviour,redeemer, judge, etc. When it comes tothe knowledge structure associated withthe (local as well as somewhat dis-tant) institution of religion and thepriest, however, one encounters verydiverse feelings and imageries. Thus theauthors speculate that loyalty towardsthe country brand is likely to be higherin terms of magnitude, and lower interms of dispersion, than the state anduniversity brands. The loyalty towardsthe state and the university brands is,however, likely to be equal in terms ofboth magnitude and dispersion.

— H1a: Loyalty towards the countrybrand will be higher than loyaltytowards the state brand.

likely to be more diffused, and notvery high in comparison to brandloyalty towards the country. Similarthoughts have been alluded to in theservices literature, for example, theamount of contact or interaction,and the continuum of tangible-intan-gible and abstractness.58–61 In addition,O’Shaughnessy and O’Shaughnessy62

suggest that the brand image of anation tends to be nebulous andcomplex. On the other hand, the brandimage of a specific service provider islikely to be narrower in scope andmore task-fulfilment oriented.

Loyalty towards the state brand islikely to be very similar to thatexhibited towards the service brand.Support for this line of thinking comesfrom the choice procedure typicallyadopted by students. For example, afterdeciding on the country for highereducation, students select a universityand/or the state. In fact, it is quitepossible that the choice of statebecomes more or less a default, given adecision about the university. Thechoice of university itself is dependentupon the field of study, financial aid,reputation of the university, andthe student’s performance in requiredtests, for example, Graduate RecordExaminations (GRE), the GraduateManagement Admission Test (GMAT)and the Test of English as a ForeignLanguage (TOEFL). One could alsoargue that a negative experience withthe university brand may have aspillover effect on the state brand,since policies and activities at moststate universities are linked to thestate’s socio-economic conditions andpolicies.

Support for this line of thinkingcomes from the literature on brandimage and schematic memory (or



defined culture in multiple ways.74–

80 Engel et al.81 saw it as ‘thevalues, ideas, attitudes, and othermeaningful symbols that help in-dividuals communicate, interpret, andevaluate as members of society’. Ac-cording to Hofstede,82 culture is ‘thecollective programming of the mindwhich distinguishes the members ofone human group from another’ (p.21). Huntington83,84 suggested thatreligious traditions are the foundationof culture, and divide the world intoeight cultural zones — western Chris-tianity, Orthodox world, Islamic world,Confucian, Japanese, Hindu, Africanand Latin American. In a recentstudy, Inglehart and Baker85 found thateconomic developments change theculture of a society and shift it awayfrom the absolute norms. The broadcultural heritage of a society, however,creates values that endure despitemodernisation. Based on these argu-ments, the authors will use nationalorigin as one of the contingent vari-ables.

Extant literature suggests that brandloyalty towards the country, the stateand the university brands can be placedin some continuum along the levels ofabstractness — abstract versus concrete,high versus low levels of interaction,consistent versus nebulous, etc.86,87

Given the focus here — highereducation — most students (interna-tional or not) come to a university formore or less the same reasons: to gethigher education. The experiences ofthese students are, however, likely tobe very different, and because of theproximal and concrete nature of theinteraction, their experiences at theuniversity are likely to influence theirloyalty towards the university. In addi-tion, students from the same country

— H1b: Loyalty towards the countrybrand will be higher than loyaltytowards the university brand.

— H1c: Loyalty towards the statebrand will be equal to loyaltytowards the university brand.

— H2a: Loyalty towards the countrybrand will be less diffused thanloyalty towards the state brand.

— H2b: Loyalty towards the countrybrand will be less diffused thanloyalty towards the universitybrand.

— H2c: Loyalty towards the statebrand will be equally diffused asloyalty towards the universitybrand.

As indicated in the literature, this no-tion of brand loyalty is not absolute anduniversal. Among the contingent fac-tors identified, cultural and nationalbackground, social class, education andexperience with the brand seem toemerge as more important ones.67–69

The possible relationships are now ex-plored between these contingent fac-tors and the notion of brand loyaltytowards the country brand, state brandand the university-of-choice brand.

National originNational origin is a frequently encoun-tered variable in the country of originliterature, as well as in global andinternational marketing literature.70–73

It seems to be a commonly usedindependent or contingent variableand, for the most part, is presumed tocapture the feelings associated with thecountry of origin in the internationalmarketing of brands. National origin asa variable has also been recom-mended as a surrogate for culturaldifferences, even though scholars have



affluence, social status and power, etc.In the context of this study, theauthors contend that social class islikely to have a strong influence onthe respondent’s comfort level withother cultures. People from the uppersocial class, in most societies, haveaccess to information, travel and othersimilar methods of exposure to othercultures. Consequently, they are morecomfortable than other classes ininteracting with people from othercultures, and while they may or maynot emulate the moral values of thosecultures, these elites are likely tobe more comfortable with differentvalues. This means that people fromthe upper social strata are likely to bemore aware of the minutiae ofdistant countries even without first-hand experience, in comparison topeople from lower social classes. Theknowledge could be gained throughthe medium of interaction (Englishversus vernacular) until high school,type of schools attended in thenative country, international journals,magazines, friends or relatives livingin different countries, films and TVprogrammes. All these are often notwithin easy grasp of people from thelower strata.

There is likely to be a moredivergent brand loyalty towards theuniversity across different social strata.Given the argument that state choice isattached to the university choice, thisscenario should also hold true for brandloyalty towards the state. The country-level brand loyalty, however, is likelyto be similar across different socialstrata due to the fact that people fromall walks of life may identify with asingle enduring value system and,despite being exposed to divergentcountry-level information, they may

tend to share their experiences, andthus induce some homogeneity in theirbrand imagery about the university.Students may not, however, share theirexperiences with others from differentcountries, unless they are very closefriends. Thus one could speculate thatstudents from the same country arelikely to have a more consistent brandimage and hence a more consistentloyalty (measured as propensity torecommend) than students from dif-ferent countries. In other words, theloyalty towards university brands islikely to differ across a range ofstudents from different countries. Simi-lar arguments could be used to specu-late that brand loyalty towards thecountry and the state are also likely tobe different for students from differentcountries. Apart from the rationalepresented earlier, cross-national or cul-tural differences could also determineassessments of experiences and con-sequently the loyalty towards thecountry, the state and the universitybrands.

— H3a: Loyalty towards the countrybrand will differ across nationalorigin.

— H3b: Loyalty towards the statebrand will differ across nationalorigin.

— H3c: Loyalty towards the univer-sity brand will differ across nationalorigin.

Social classIn addition to the national origin,social class has been identified in thecross-culture literature as a key deter-minant of cultural distance.88–91 Socialclass is often used as a surrogate forability to buy, world awareness,



a mediocre educational programmewould be perceived as such byeveryone. Therefore, the authorspropose that the academic level of arespondent is not likely to have anyinfluence on brand loyalty towards theuniversity.

The level of education is, however,likely to be related to loyalty towardsthe country and state brands. For mostinternational students, their tenure ofstay in the country and the state islikely to coincide with their stay attheir university, and there should bea high level of congruence betweenthe three. As international studentsstay on longer in the country they arelikely to experience more of thatcountry’s society, both the good andthe bad. It may erode some of theirpreconceived notions and euphoria,and subsequently lead to lowering ofbrand loyalty towards the state and thecountry as brands. Literature on ac-culturation suggests similar stages ofexperience among expatriates andpeople who travel.100 These argumentsform the basis for the last set ofhypotheses relating to respondents’educational levels and brand loyaltytowards the country, the state and theuniversity:

— H5a: Level of education (seen asmore intimate experience with theenvironment) will be negativelyassociated with loyalty towards thecountry brand.

— H5b: Level of education (seen asmore intimate experience with theenvironment) will be negativelyassociated with loyalty towards thestate brand.

— H5c: Level of education will notbe associated with loyalty towardsthe university brand.

still draw a similar conclusion.92–94 Thenotion of patriotism, ethnic prideand maybe even ethnocentrism enterthe picture, resulting in a morehomogenous image of target countriesas a brand, across different socialstrata. This leads to the next set ofhypotheses:

— H4a: Social class will have noinfluence on loyalty towards thecountry brand.

— H4b: Social class will positively in-fluence loyalty towards the statebrand.

— H4c: Social class will positively in-fluence loyalty towards the univer-sity brand.

Education and experienceThe last contingent variable, the levelof education, has been posited tobe one of the most influentialdemographic variables.95,96 It can alsobe seen as a measure of experiencewith the brand at the service-provider,ie the university, level. Literaturesuggests that education hopefullyenhances one’s awareness about theworld in general. It also typically resultsin a more favourable opinion towardsforeign products, and a reduction inethnocentrism.97–99 In addition, educa-tion also captures the notions ofmaturity, awareness and the passage oftime and hence more experience withthe service under investigation. Asregards the university, internationalstudents, whether they seek under-graduate or graduate education, arelikely to be driven by similarmotivations. In addition, their ex-periences with the university are likelyto be uniform across academic levels.In other words, a university with



students’ willingness to advocate theseas a place for higher education. Theauthors used a nine-point scaleanchored by ‘definitely yes’ (1) and‘definitely no’ (9). Extant studies havesuggested word of mouth andwillingness to be an advocate asacceptable measures.101–104 In addition,students were also asked about theirhome country social class (upper class,upper middle class, middle class andlower middle class), academicclassification (undergraduate (fresh-man/sophomore/undergraduate —junior and senior), master’s and PhD),and their nationality.

ANALYSES AND RESULTSThe data were first tested for non-response error by matching the profileof the respondents with the knownprofile characteristics of the populationof nearly 4,000 international stu-dents. There were no significant dif-ferences. The scale items measuringbrand loyalty were first subjected to atest for internal consistency usingChronbach’s Alpha. The substantive

The following section details themethodology used for testing thesehypotheses.

METHODOLOGYThe respondents for this study wereinternational students currently enroledat four Texas universities with com-prehensive programmes ranging fromundergraduate to doctorate, and enrol-ments ranging from 25,000 to nearly50,000. The sampling frame consists ofaround 8,000 international students(about 25 per cent of all internationalstudents on Texas campuses). Themailing list was generated with thehelp of the international student officeat each university. The survey ques-tionnaire was mailed out to a stratifieddisproportionate random sample of4,000 international students (ie 1 out ofevery 2), 1,000 from each university. Anotification letter plus the single mail-ing resulted in 1,400 responses (aresponse rate of 35 per cent).

The brand loyalty towards thecountry (USA), the state (Texas) andthe university was measured by


Table 1 Propensity to recommend (loyalty to) the country, the state and the university: Pair-wise comparisonresults — means and variance

Paired Samples StatisticsPropensity to Recommend Mean N SD t-stats sig (2-tail) F-stats sig (1-tail) Corr.

Pair 1 Study in the USA 2.401 1261 1.574 –16.689 1.04E-22 1.546 0.00 0.448Study in Texas 3.286 1261 1.957

Pair 2 Study in the USA 2.401 1259 1.574 –15.896 1.04E-22 1.721 0.00 0.380Study at the current

university 3.327 1259 2.065Pair 3 Study in Texas 3.288 1259 1.958 –0.8386 0.401829 1.113 0.03 0.666

Study at the current university 3.327 1259 2.065

Bartlett's test: M = 331.11; C = 1; M/C = 330.99; P-value = 0.00.

SD: Standard deviation.Scale range: 1 = ‘definite yes’ and 9 = ‘definite no’.


as a contingent variable. It suggeststhat the brand loyalty towards thecountry, the state and the universitydiffer across national origin. Thehomogeneity of variance test (Levene’stest), however, indicates that al-though variance in brand loyaltytowards the country and the state arenot homogenous, the brand loyaltytowards the university as a brand ishomogenous. This provides clearsupport for H3a and H3b, but onlypartial support for H3c. Using onlythe frequency counts of respondentswho indicated high brand loyalty(below 5), the authors then tested forindependence (chi square) betweenbrand loyalty towards the country, thestate and the university, and countryof origin. The results (Table 3)indicate that brand loyalty towards thecountry, the state and the universityare independent of country of origin.

relationships captured by the proposedhypotheses were tested using analysis ofvariance (ANOVA).

Table 1 presents the findings ofpair-wise comparison between themean and variance estimates of brandloyalties towards the country (USA),the state (Texas) and the serviceprovider (student’s current university).The Bartlett’s test, F-test and t-testprovide support for H1a, H1b, H1c,H2a and H2b, but not for H2c.In other words, loyalty towards thecountry brand is highest, followed bythe state and the university brands.Loyalty towards the state and theuniversity brands is equal. In addition,the variance in loyalty towards theuniversity brand is highest, followed bythe state brand, and finally by thecountry brand.

Table 2 presents the ANOVA resultsfor the national origin of the student


Table 2 ANOVA results: Propensity to recommend versus national origin

USA Texas Current universityCountry/Recommendation N Mean SD N Mean SD N Mean SD

1.00 People's Republic of China 185 2.411 1.576 185 3.032 1.635 185 3.443 1.9552.00 Taiwan 89 2.798 1.707 89 3.640 1.848 89 3.798 2.0073.00 Hong Kong 56 2.786 1.681 56 3.589 1.766 55 3.982 1.7484.00 India 95 1.905 1.238 94 2.809 1.902 94 2.915 1.9875.00 Japan 70 2.543 1.621 70 4.114 2.313 70 3.800 2.0966.00 Korea 101 3.089 1.850 101 3.842 1.810 101 3.832 2.0697.00 Mexico 52 1.904 1.418 52 2.692 2.119 52 2.404 2.0418.00 Malaysia–Indonesia 52 2.442 1.526 52 3.346 2.177 52 3.173 2.1219.00 Thailand 45 2.733 1.436 46 3.261 1.625 45 3.111 1.58415.00 Western Europe 114 2.140 1.275 113 3.124 1.847 113 3.239 2.12216.00 Eastern Europe 39 1.846 1.329 39 3.128 2.250 39 3.077 2.107Total 898 2.435 1.577 897 3.305 1.923 895 3.393 2.034

Stats Sig Stats Sig Stats Sig

Homogeneity of variance (Levene's test) 2.45 0.01 2.5 0.01 0.939 0.496ANOVA (F-test) 5.556 0.00 4.232 0.00 3.743 0.00

Homogenous subsets: bold — high loyalty; italics — low loyalty; others — average loyalty.

SD: Standard deviation.Scale range: 1 = ‘definite yes’ and 9 = ‘definite no’.


with Korea at the other end of thescale, with very low brand loyalty.Countries like those in westernEurope, China, Malaysia-Indonesia,Japan, Thailand, Hong Kong andTaiwan seem to form the middlegroup. As regards brand loyalty

The means of the brand loyaltyscores across country of origin werethen examined to see if these arehomogenous subsets. For brand loyaltytowards the country, eastern Europe,Mexico and India seem to form onecluster with very high brand loyalty,


Table 3 Test of independence: Brand loyalty versus national origin

Hong Malaysia- Western EasternObserved China Taiwan Kong India Japan Korea Mexico Indonesia Thailand Europe Europe Total

Country 162 77 49 93 58 78 47 45 39 108 35 791State 155 62 43 80 42 67 42 40 36 88 29 684University 134 58 34 73 44 65 44 39 34 86 29 640Total 451 197 126 246 144 210 133 124 109 282 93 2,115

1 Brand loyalty towards the country-state-university versus national origin:Chi sq calc. 3.622Chi sq test 31.41

2 Brand loyalty towards the country-state versus national origin:Chi sq calc. 2.083Chi sq test 18.31

3 Brand loyalty towards the country-university versus national origin:Chi sq calc. 1.558Chi sq test 18.31

4 Brand loyalty towards the state-university versus national originChi sq calc. 1.787Chi sq test 18.31

Table 4 ANOVA results: Propensity to recommend versus social class

Homogeneity Propensity to Descriptive ANOVA results of varianceRecommend N Mean SD F-stats Sig Levene stats Sig

Study in Upper class 98 2.500 1.812 1.232 0.297 1.690 0.167the USA Upper middle class 500 2.292 1.520

Middle class 515 2.468 1.572Lower middle class 118 2.390 1.558Total 1,231 2.391 1.571

Study in Texas Upper class 97 3.113 2.184 2.920 0.033 2.668 0.046Upper middle class 499 3.132 1.870Middle class 516 3.434 1.943Lower middle class 118 3.542 2.190Total 1,230 3.297 1.964

Study at the Upper class 97 2.938 2.135 3.256 0.021 2.077 0.101current Upper middle class 498 3.245 1.992university Middle class 515 3.423 2.095

Lower middle class 118 3.729 2.155Total 1,228 3.342 2.068

SD: Standard deviation.Bartlett’s test for loyalty towards the country, state and service brands resulted in significant p-value.Scale range: 1 = ‘definite yes’ and 9 = ‘definite no’.


across social class, with higher socialclasses exhibiting higher loyalty (thissupports H4a, H4b and H4c). Furthertests were performed for distributionof brand loyalty across social classby using Bartlett’s test for unequalvariance. The results indicate that thedistribution of brand loyalty towardsthe country, the state and the univer-sity differs across social class. Thevariance in brand loyalty towards thecountry increases with an increase insocial class. Brand loyalty towards thestate and the university seems to bemore diverse within the upper socialclass and lower middle social class thanwithin the upper-middle class and themiddle class.

Table 5 presents the ANOVA results

towards the state, Mexico seems tohave the highest brand loyalty, Japanthe lowest, with India, China, Westand East Europe, Thailand, Malaysia–Indonesia, Hong Kong, Taiwan andKorea forming the middle group.When it came to brand loyaltytowards the university as a brand,students from Mexico again scoredvery high, students from Hong Kongvery low, with students from othercountries in the middle.

Table 4 presents the ANOVA resultsfor social class as a contingent variable.The results indicate that the meanscore for brand loyalty towards thecountry does not vary across socialstrata, whereas brand loyalty towardsthe state and the university does vary


Table 5 ANOVA results: Propensity to recommend versus educational level

Homogeneity Propensity to Descriptive ANOVA results of varianceRecommend N Mean SD F -stats Sig Levene stats Sig

Study in Undergraduate —the USA freshman, sophomore 120 2.217 1.502 2.759 0.041 2.601 0.051

Undergraduate —junior, senior 284 2.546 1.776Master's 432 2.299 1.485PhD 385 2.530 1.529Total 1,221 2.421 1.576

Study in Texas Undergraduate —freshman, sophomore 120 3.325 1.954 3.364 0.018 3.932 0.008Undergraduate —junior, senior 284 3.419 2.152Master's 432 3.051 1.849PhD 385 3.439 1.878Total 1221 3.286 1.948

Study at the Undergraduate —current freshman, sophomore 120 3.333 2.243 0.671 0.570 1.343 0.259university Undergraduate —

junior, senior 283 3.463 2.124Master's 432 3.241 2.067PhD 384 3.354 1.968Total 1,219 3.337 2.067

SD: Standard deviation.Bartlett’s test for loyalty towards the country, state and service brands resulted in significant p-value.Scale range: 1 = ‘definite yes’ and 9 = ‘definite no’.


a n d O ’ S h a u g h n e s s y a n dO’Shaughnessy.105–107 Extant literatureon schematic memory (or knowledgestructure) also corroborates the findingsof this study, and the rationale aboutthe strength of the country brandversus the service brand.108–110

Possible explanations for the dif-ferences in brand loyalty across na-tional origin (H3) may lie in thelanguage, cultural and maybe evenhistorical differences. The fact thatstudents from Europe, Mexico andIndia exhibit higher levels of loyaltytowards the country brand could beattributed to their language and/orethnic proximity towards substantialnumbers of mainstream US studentsand the population at large. Evengeographical proximity, in the case ofMexican students, could be a possibleexplanation for high levels of brandloyalty. Another possible explanationcould be the similarities and differencesbetween US society and other societiesinvestigated here.111 It must, however,be kept in mind that this paper isinvestigating students who have ven-tured beyond their normal limits andare generally more cosmopolitan thanthe peers they have left behind. It maybe difficult to explain the behaviourand attitudes by any one single factor.Most country of origin studies havefocused on the national origin andfound it to be a significant influencingfactor.

This brings one to the hypotheses(H4) regarding social class. The resultsclearly indicate that people from uppersocial strata exhibit higher levels ofbrand loyalty towards the state and theuniversity. They are more comfortablein the alien environment, whichresults in higher levels of loyaltytowards service brands. The social class

for the educational levels as the con-tingent variable. The results provideclear support for H5a and H5b. Brandloyalty scores do vary across educa-tional level. For the country and statebrands, the undergraduates (freshmanand sophomore) and master’s studentsexhibit higher levels of brand loyaltythan the undergraduates (senior andjunior) and PhD students. The brandloyalty towards the university does notchange across academic levels (H5calso supported). Further analysis ofvariance (Bartlett’s test) suggests thatvariance in loyalty does differ acrossacademic classification for all — thecountry, state and the university asbrands.

DISCUSSIONThis study presented the results ofempirical investigation of brand loyaltytowards the country, state and serviceprovider (in this case, the univer-sity), and the interrelationships be-tween these and contingency variablessuch as national origin, social class andeducational level. The support forhypotheses 1 and 2 suggests that brandloyalty towards the country brand ismore stable than the brand loyaltytowards the state and the serviceprovider (ie university). Brand loyaltyis also the highest in the context of thefocal country — USA. Clearly, thebrand concept of the nation is muchmore complex than the brand conceptof the service brand. It can be arguedthat, because of this, the nation brandis likely to be more deeply rooted thanthe state or the service brand. As aresult, the stability of the country brandshould not come as a surprise. Sup-port for this line of thinking comesfrom assertions made by both Anholt



(or schematic memory of a brand) isless sensitive to negative experiences.On the other hand, a complexbrand image consisting of a complexschematic structure and network,while initially resulting in a strongerbrand image, is also open to dilutionof these schematic linkages as aresult of unexpected post-purchaseexperience.

LIMITATIONSA key limitation of this study is thesampling frame, which consists ex-clusively of international students at-tending four large universities in Texas.Given the focal service context, how-ever, the authors believe that this is nottoo inappropriate. An obvious researchimplication would be to investigate thisphenomenon in a different marketand in different product contexts.For example, future research attentionshould be directed towards testingwhether country brand loyalty remainsstable across different target nations —developed versus developing, US ver-sus European, or Asian countries, etc.Research should also be conducted ina context that involves product brandas against service brand.

IMPLICATIONSThe findings of this study haveimportant managerial implicationsfor international marketing ofservices.114,115 The authors concludethat brand loyalty towards the country(USA) seems to be more stable, andhigher, than brand loyalty towards thestate (Texas) and the service provider(ie university). Marketers need to becognisant of this phenomenon since itcan be easily exploited for

does not, however, seem to have anyinfluence on the country brand. Thisindicates that while consumers fromdifferent social classes may have similarviews towards a particular country,they may be very divergent in theirviews about products and brands fromthat country. Typically, people fromupper strata have had access toso-called foreign cultures and haveeven taken pride in using thatto differentiate themselves from themasses. This comfort with socialinteraction does not, however, trickledown to comfort with the country asa brand, which is more enduring andstable across social classes. A similaridea seems to be captured by thebrand community concept proposedby Muniz and O’Guinn.112 Finally, theresult for educational level suggeststhat brand loyalty levels get weakerwith experience, and this weakeningprocess seems to be significant forcountry and state brands and not forservice brands. In other words, forboth country and state brands, studentstend to start out with high levelsof brand loyalty, which diminisheswith experience (see the loyaltyscores for freshman/sophomore versusjunior/senior undergraduate students,and for master’s versus PhD students).A possible explanation may comefrom the notion of acculturation.113

Brand loyalty towards a specificservice provider brand does not,however, seem to vary significantlywith experience. Could it be that amore-focused brand image remainsrelatively untainted with experience?Having decided on a service providerfor a specific task, the post-purchaseexperience either fulfils a consumer’sexpectation or it does not. It isconceivable that a simpler brand image



This is especially crucial when productor service brands are marketed ina host country.121,122 It is not un-common for the brand position ofthe product or service to interactwith the brand image of the homecountry.123,124 How will a Germanfirm position its range of cosmeticsgiven its current image of robusttechnology-oriented products such asits automobiles? Given its strong brandequity, can the USA expect all itsproducts to have the same strongimage in every country? The answer,most would agree, is ‘no’. In India,US cars are not perceived to be ofas high a quality as German cars or,for that matter, Japanese cars, even ifall these brands of cars are made inIndia. It is not unreasonable to specu-late that the process of branding aservice or a product must take intoaccount the brand equity of the homecountry.

To complicate matters even more,the brand image of a country isdynamic and is determined by factorsoften not related to the brand imageof the specific service or product. Forexample, the current events triggeredby the September 11th incident arebound to have an impact on the brandimage of the USA. It would beinteresting to investigate what impactit will have on brands marketed byUS companies. Based on the find-ings here, there is one saving grace— loyalty towards a specific servicebrand seems to be less sensitive toexperiential disappointments and re-lated shifts in loyalty towards thecountry brand. It seems that it ispossible for a service brand to sur-vive on its own merit, probably be-cause of its narrow and task-orientedpositioning. So long as a service brand

a more favourable product/brandpositioning.116 A counter-argumentcould be that countries can enlist theprivate sector to enhance countrybrand equity.117 More specifically, thefindings of this study have interestingmanagerial implications for serviceswhere completion takes a long timeand is composed of several stages andsubtasks, for example, highereducation, turnkey projects, civicamenities contracts, once-in-a-lifetimeservices such as extended and riskymedical treatments, and social servicessuch as family planning or projects tobring about changes in social behavioursuch as drug abuse. Because servicestend to be highly intangible, it is notunreasonable to speculate thatconsumers are likely to use other cuesfor assessing their quality. It is quitepossible that the country brand is justone such cue.

Another managerial implication is inthe area of segmentation and targetingof services. It is a fact that in everysociety there will be people who aremore worldly-wise and will wel-come things being different, some-what vindicating the notion of globalmarketing.118 It is possible to marketstandardised services across the globe.The key is to find people who aremore attuned to, and are acculturatedinto, the service provider’s socio-cultural milieu. The other option is tounderstand the socio-cultural moresand values of the target market andalign one’s offering. The relationshipbetween the country brand and serviceor the product brand could be a verygood tool for segmentation and marketsize estimation.

At an operational level, the findingsof this study have interesting implica-tions for brands and branding.119,120



country brand equity. The authorshope that questions such as theseattract the attention of their academiccolleagues, managers as well as policymakers. Clearly, the area of investiga-tion encompassing country brandversus service or product brand is anuncharted one and holds unlimitedsurprises in terms of knowledge to bediscovered.

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fulfils its promise, often relatively nar-rowly defined, the brand image canremain relatively unscathed by shiftsin the country brand image. In con-trast, country brands are more com-plex and hence are more susceptibleto influences from a larger domain offactors. By the same token, the com-plexity of the knowledge structureassociated with the country brand mayactually protect it from extreme fluc-tuations. Research on brand associa-tion provides some corroboration forthese arguments.125

Finally, the findings of this studyhave implications for immigration-related public policies dealing with,and impacting, the future of UShigher education. A related area ofpublic policy would be labour policy,especially pertaining to the highlyeducated international labour market.Recent ups and downs in the hightechnology labour markets due to theupheavals in technology-based in-dustries more than highlight the pointdiscussed here. At an institutionallevel, the findings have implicationsfor methods and procedures formarketing of higher educational in-stitutions, especially to the interna-tional education market. There is alsothe notion of ethics: should onlystudents from certain countries andsocial strata be allowed, with standard-ised offerings to fit their needs? Thismay make life a little easier for serviceproviders including universities. Theother option is more difficult — inviteeveryone from everywhere to studyin the USA, and maybe some of themwill add to the so-called melting pot.A related public policy implication liesin the domain of governments seekingthe help of the private sector, orrequiring the private sector to enhance



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