International region as a brand origin: conceptualization and review.
Chlivickas, Eugenijus ; Smaliukiene, Rasa
1. Introduction
The relationship between brand origin and product image has long
been the central theme of research on branding; however, business
internationalization effects clear boundaries between countries and
challenges the perception of a brand origin. Moreover, the variety of
international cooperation, international clustering, and manufacturing
in low pay countries trouble the positioning of products. The
development of broader perception of a brand origin is supposed to be
one of the strategies to overcome such a challenge. The present research
discusses some solutions on how to compete effectively in the presence
of international region-related intangible assets. Thereby, our study
provides suggestions for business clusters. In particular, the purpose
of this research is to examine the international region-relation and
transform it into a brand.
Our interest centred on a specific international area--the Baltic
Sea Region. This region embodies the principles of shared values and
common purpose better than any other region (Mrugank 1996) and outlines
many advantages for regional branding. Furthermore, companies in the
Baltic Sea Region have become increasingly active in cluster and
competitiveness efforts in the national and global markets (Van Ittersum
et al. 2003). Baltic Development Forum is exploring the possibility to
brand this region as the "top of Europe" not only
geographically, but also in terms of economic growth, educational
levels, innovation, research and development (Ahmed and d'Astous
2008). Taken together these elements portray a promising situation for
regional branding; however, a strategic marketing question whether this
region is attractive enough to serve as a brand arises.
This article reviews the brand origin literature, presents the
definition of brand origin in international region, and clarifies the
relationship between product brand image and international region image.
The empirical study was designed to test the theoretical model and
hypotheses and to expand the relatively few existing empirical studies on international region as a brand origin. Data for this study was
collected through an Internet survey of emigrants from the Baltic Sea
Region as international customers. The research was based on the
residents in the UK and Spain. These areas were selected as they are
geographically dispersed and were expected to have variations in
customers' perception. It was decided to study the model for food
and telecommunication service products. These product categories were
chosen because most consumers are familiar with these products and
purchase them on a regular basis.
The theoretical value of our study lies in the synthesis of
fragmented knowledge about branding international region. It provides
some theoretical framework for international region-related branding and
presents the results of empirical research based on the Baltic Sea
region as a brand origin. From the practical standpoint the paper
provides understanding of the influence of regional image on products
positioning in international market.
2. Literature review
In this section, we firstly characterize the definition of brand
origin as the most preferable concept for analysing a product place
phenomenon. Next, we present the definition of brand origin in
international region as one of the solutions for branding international
business. Then, we outline the theoretical framework of brand origin by
connecting two complementary views, where one describes the effect of
brand origin on stereotyping the perception of products, while the
second depicts a few brand origin associations as the outcome of
well-known brand names of particular product.
To begin with, brand origin is a place, region or country to which
the brand is perceived to belong by its target consumers (Mrugank 1996).
The influence of a brand origin on a product evaluation has mainly been
studied from a country-of-origin perspective (Van Ittersum et al. 2003).
A number of studies disclose the importance of the country image to the
customer buying decisions by analysing the relationship between country
evolution and manufacturing dimensions of a product. As the concept of a
product made in a single country is no longer totally representative of
today's market-place reality (Ahmed et al. 2002), we should be
cautious in analysing the single product place phenomenon and the impact
of country-of-origin. The unsolvable problem for the studies on
country-of-origin remains the internationalization of business, when
manufacturing dimensions such as the country of design and the country
of assembly are different. Big differences between the factors that
determine the perception of country-of-origin confuse the customers and
decrease the influence of a brand. Brand origin as a concept and as a
reference to the large territory can reasonably solve this problem;
therefore, we use the term 'brand origin' in this study.
Since international regions are less homogeneous in terms of
social, economic and political factors than countries, only a few
studies are focusing on international region as a brand origin.
Heterogeneous regions involve highly industrialized countries where the
products are designed and newly industrialized countries where the
products are manufactured. From this viewpoint, international regions
are very attractive as a brand origin for international business. At the
same time, representing the ultimate level of complexity, the
development and management of regional brands crossing nations and
cultures currently lack any empirically researched systematic theory
(Kaufmann and Durst 2008). By analysing international regions as a brand
origin we focus on regional similarities. In this way, the international
region is perceived as one entry or an area with common components that
are different from those of surrounding areas (Alexander et al. 2001).
From the brand origin perspective, international brands can achieve a
positive regional positioning by focusing on regional innovativeness
(Cayla and Eckhardt 2007) and dynamics. This focus can be reached by
stressing on associations with highly industrialized countries as
prospective innovators and with new industrialized countries as the
potential for growth and changes. Therefore presenting international
region as a brand origin we are increasing its attractiveness by linking
two positive attributes--innovativeness and dynamics. At the same time
we do not confuse consumers with dual manufacturing dimensions if the
country of design and the country of assembly are different.
The argumentation on brand origin as an up-to-date concept and the
discussion on international region as a brand origin led us to some
theoretical framework. Detailed review below on this topic brings
specific instruments and linkages between the elements in this
theoretical framework.
A great number of studies substantiate the idea of brand origin as
a construct of emotional and cognitive components where researchers
define the cognitive component as knowledge about physical attributes,
while the affective component as feelings towards the attributes. The
cognitive components explain why consumers may rationally think that a
certain country is expert at some product categories, but overall
negative feelings associated with the country may lead to negative
behavioral consequences (Han et al. 2005). When consumers are highly
motivated, they tend to use cognitive components by evaluating products
according to their brand origin (Karunaratna and Quester 2007); but when
motivation is low, individuals may use emotional cues to form attitudes
(Gurhan-Canli and Maheswaran 2000).
Theoretical analysis reveals two complementary views on brand
origin. The representatives of the first research direction argue that
consumers use the information on brand origin to evaluate products and
that the place of origin influences evaluations by signalling product
quality (Moon and Jain 2002). The economic, social and cultural systems
of countries as well as their relative stage of economic development are
pieces of information which serve to position countries hierarchically in consumers' mind (Ahmed and d'Astous 2008). Most of the
studies indicate that the image of brand origin depends on the
perception of the level of economic development of the country (Roth and
Romeo 1992). The higher economic development of a country, the more
positive is the perception of the product quality (Ahmed and
d'Astous 2007). From this perspective, the development of
international region as brand origin solves the problem when the product
from less industrialized country is perceived by consumers as less
reliable.
The scholars of the second direction show the relationship between
single brand origin and the associations with other brand names from the
same place. The direction of this research is based on the idea that the
familiarity with products made in a country is the strongest predictor
of country perceptions, followed by nationality and the manufacturing
process and product complexity dimensions of country evaluation (Ahmed
and d'Astous 2008). Therefore, perceived origin associations are
evident within brand names, created through long term communication with
the consumers. According to that, the brand origin is a construct
consisting of affective and cognitive components.
3. Conceptual model and hypotheses
Following the review on the literature concerning the concept of
brand origin, let us now propose a conceptual model. Since the effect of
a brand origin has been mainly studied from the country-of-origin
perspective (Van Ittersum et al. 2003), the country-of-origin literature
is used as the main source for our model and hypothesis. Specifically,
we continue the second direction of the brand origin studies and analyse the effect of communication on the associations with origin.
[FIGURE 1 OMITTED]
We deal with the simplest model that will suffice to isolate the
forces in question. The main forces for the discussion are visualized in
Fig. 1. According to our theoretical model it is predicted that
communication with the consumers spreading from the strong business
clusters (X and Y in part I of the figure) in the region creates
emotional attitudes towards a brand origin. At the same time, the
quality of the products of the same clusters creates cognitive attitudes
towards a brand origin. Both of these attitudes make an impact on the
associations that consumers experience with the single origin. This
point is essential in our model as it solves one of the main problems
which appear in analysing the general images of the region and explain
the product-specific influence on the origin. Based on the results from
the previous studies and taking generally accepted approach we
hypothesize:
H1: The products from the industries of high employment intensity
and dominance in the regional economy create the main emotional and
cognitive associations with brand origin.
The image of the region has been created by dominant industries and
it is descending to other industries of the same origin. Consequently,
the attitude towards the new product depends on the image consumer holds
onto that origin (Van Ittersum et al. 2003). It has been expected that
the association with brand origin will synergize with the associations
of new products of the same origin if the product components are similar
to prevailing in this region. Hence, we hypothesize that:
H2: New products that contain the same emotional and cognitive
components as products from dominant industries are perceived by
consumers as more reliable for international consumers than the products
without these components.
4. The Baltic Sea Region as a brand origin
Specifically, the empirical study of our research focuses on the
case of the Baltic Sea region. This region is unique as it consists of
economically different countries. More specifically, the business
environment across the Baltic Sea Region exhibits strong heterogeneity (The State of the Region Report 2004), even among countries of similar
prosperity (Tvaronaviciene et al. 2008) and this situation brings new
capabilities for international business clustering. Consequently, the
Baltic Sea Region has become increasingly active in cluster and
competitiveness efforts in the national and global markets in recent
years (The Baltic Sea Region as a Place ... 2007). Strong networking
relations, established in the competitive environment, serve as the main
driving forces of innovation in this region (Adekola et al. 2008). This
expansion can be explained by guarantees associated with products, that
are supported by positive cognitive and emotional components. The Baltic
Sea region is a good case for analysis as Baltic Development Forum is
exploring the possibility to brand this region as the "top of
Europe" in terms of economic growth, educational levels,
innovation, research and development (Kalnins 2007).
On the other hand, countries of the Baltic Sea Region are evaluated
differently by the consumers concerning a brand origin. For example,
Finnish brands are conveying an image of Nordic life that is
progressive, responsible and technologically advanced (Ryan 2008).
Danish brands are advertised as being of a superior quality due to the
use of local dairy output produced under traditional practices (Regmi
and Gehlhar 2005). At the same time, Lithuania, Latvia and Estonia are
perceived as one region where a complex process of political, economic
and social transformation emerged (Melnikas 2008). For example, Estonian
products are perceived as good value for the money, whereas Polish
brands are found to be technically superior (Kaynak and Eronen 2004).
These examples show the perceptional differences between countries and
raise the query whether this region can serve as a homogeneous brand.
Following that, we analyse not only the associations with brand origin
of the clusters but also the perceptional homogeneity of this region.
5. Method
In order to test the model we used a pretested, self-administered
online questionnaire. The respondents in this research were the
emigrants from the Baltic Sea region representing the UK and Spain as
international consumers. Since the research population could not be
identified reliably due to the unknown real amount of emigrants, the use
of probability sample was impossible. Consequently, the sample was
chosen on the basis of convenience and accessibility. The UK and Spain
were selected as these areas are geographically dispersed and were
expected to have variations in customers' perception. It was
decided to study the model for food and telecommunication service
products. These categories of these products were chosen as most
consumers buy them on a regular basis. These products are manufactured
in strong clusters in the Baltic Sea region and represent high
employment size and dominance in the regional economy (The Baltic Sea
Region as a Place ... 2007), moreover, the specific characteristic of
the telecommunications and food industry is its perceived role within
society (Jurkstiene et al. 2008).
By aiming to test the hypothesis the questionnaire was developed.
Cognitive and emotional components firstly were tested on regional
basis, afterwards the same components were checked on product basis. 1-4
brand names were chosen from each country of the Baltic Sea region from
food and communication industries. Altogether 17 brand names were tested
by asking respondents to evaluate cognitive and emotional components of
the brands on five-point scale (ranging from 1--very poor fit to
5--excellent fit). Additionally, to test the second hypothesis, we
created a tentative brand name and asked respondents to identify the
attributes that influence their positive evaluation of the product.
Questionnaire was designed to test respondents' attitudes
toward cognitive and emotional components of the selected brands.
Drawing on the literature on brand origin, we adopted Van Ittersum et
al. (2003) methodology to test cognitive components of the Baltic Sea
region as a brand origin. The image of a brand origin is expected to be
a construct of two dimensions: a human factor and a natural environment
factor. The human factor represents the expertise in the region of
origin for making the product (enough quality, enough knowledge, etc.),
while the natural environment refers to the physical condition that
influences the qualities of the product (sufficiently clean environment,
etc.). In our questionnaire we used all seven human and five environment
factors originated with van Ittersum et al. (2003).
As for measuring cognitive components, we borrowed Vergult's
(2008) typology of brand personality to test the emotional components.
According to Vergult (2008), 34 brand personality statements can be
grouped into 5 underlying dimensions: emotional, simple, aggressive,
conscientious, and innovative.
The last section of the questionnaire included respondents'
demographic variables. As the analysis implied two scores from each
variable (associations with the region and associations with the
brands), the paired comparison test was used.
The Internet link to online questionnaire was personally sent to
150 respondents by using snowball approach; 112 responses were obtained
through this channel. An overall response rate was nearly 75 percent,
which determined an extremely good response. This can be explained due
to the use of nonprobability sampling. A total of 68 Spain and 44 UK
residents completed and returned usable questionnaires for data
analysis. The majority of respondents were 26-35 years old (59.8%, n =
67), women (70.5%, n = 79). More than one third of the respondents had
college education, whilst one fourth of the respondents had high school
degree. The descriptive data of these demographics are given in Table 1.
6. Analysis of the results
Each emotional (N = 34) and cognitive (N = 12) dimension was
measured and the scores were obtained for the region and each brand name
(Table 2). Furthermore, and in order to facilitate the use of
statistical tools, each individual's sequence was aggregated and
the attribute correlation matrices were calculated and subjected to
principal component analysis. The components extracted were using the
varimax procedure, orthogonally rotated. From this procedure, seven
components accounting for approximately 79% of the total variation on
attitudes toward the Baltic Sea region as a brand name were identified:
as emotional components: mature and credible (group
"conscientious"), familiar (group "simple"), modern
(group of "innovative"); as cognitive components such human
factors emerged as enough quality, enough knowledge, and enough
tradition. The same method was used to build the model of the components
in the communication with the consumers on the brands from food and
telecommunication industries.
In the food industry such components as credible and familiar,
enough quality and tradition account nearly to 62%. In the
telecommunication industry the following components were identified:
mature, familiar, modern and innovative, enough quality, knowledge, and
tradition (71%).
In order to test the first hypothesis, Person's correlation
was used. We tested the relationship between consumer attitude toward
the Baltic Sea region and components in the communication on the brands.
Respondents gave high evaluations for telecommunication brands on
innovativeness, but the correlation between region and brands
innovativeness was low (r = 0.12), whereas correlations between other
attitudes and components in the communication were very strong: for
mature r = 0.73 (food) and r = 0.80 (telecommunication), in that order
for credible--0.84/0.87, for familiar--0.62/71, for modern--0.66/0.89,
for enough quality--0.84/81, for enough knowledge--0.61/0.75, and for
enough tradition--0.86/67. Consequently, we can maintain that the brand
names from food and telecommunication industries create emotional
associations as credible, familiar and modern and cognitive associations
as enough quality, enough knowledge, and enough tradition. Table 3 shows
the relationships between emotional and cognitive components of region
and brands, which shows high interdependence too.
To test hypothesis two, attractiveness of a tentative brand name
was tested. Varimax procedure was applied repeatedly aiming to develop a
new model of influencing factors. In the case of new product, all the
same components have lumped together, except familiar. Mature, credible,
modern, enough quality, knowledge and tradition compose the first model
(71%). Strong correlation between attributes of known and new products
was identified (0.84-0.91). Thus, the results provide evidence for
confirming the second hypothesis.
7. Conclusions
Consumer perceptions of brand origin have been investigated widely
over the years. Marketing researchers continue to show great interest in
this research paradigm. This is because researchers realize the
importance of the consumer perceptions of brand origin as one of the
main influencing factors in consumer decision making process. However,
most of these studies are undertaken on the basis of one country as a
brand origin. Hence, neither the empirical findings nor the conceptual
frameworks of these studies can be directly extrapolated to the domain
of international region. This study is one of the first attempts at
filling this gap in international region as a brand origin.
The results of the theoretical analysis of this study provide a
foundation for making suggestions about theoretical relationships
between components of the brand origin. According to proposed
theoretical model, communication with the consumers spreading from the
strong business clusters in the region creates emotional attitudes
towards a brand origin; in addition, the quality of the products of the
same clusters creates cognitive attitudes towards a brand origin.
Performed empirical research allowed the analysis of both emotional and
cognitive components of the brand origin. Hence, the direct effects of
the attributes of local brands on the brand origin were tested. Direct
effect of identified attributes in communication on the attitudes toward
brand origin was observed, as hypothesized. In the case of the Baltic
Sea region the influencing model of seven components was identified for
food and telecommunication industries. Mature, credible, familiar,
modern, enough quality, knowledge, and tradition account for nearly 62%
of the associations with the region. All these components correlate
significantly (0.64-0.87) with identified components in communication on
the brands form the Baltic Sea region. Consequently, the first
hypothesis was confirmed: the products from the industries of high
employment intensity and dominance in the regional economy create the
main emotional and cognitive associations with brand origin.
Another important finding of this research is empirical testing of
the relationship between attitude toward a brand origin and new product
from this origin. According to the study, consumers prefer and expect
the same attributes of new product as the attributes of already known
products. Hence, the second hypothesis is confirmed: new products that
contain the same emotional and cognitive components as products from
dominant industries are perceived by consumers as more reliable for
international consumers than the products without these components.
There are some limitations in this study and thus future research
should continue to test and to refine relationships investigated in the
present study. Only products from food and telecommunication industries
and only the Baltic Sea region as the origin were considered for
evaluation in this study. Additionally, emigrants from the Baltic Sea
region were chosen as respondents and too big familiarity with the
products was able to arise. Future studies must explore how the
underlying model works for a wider range of products, other
international regions, and populations. The findings' failure to
replicate is evidence of a limit to the generalizability of the results.
Nevertheless, the results of this study confirm and extend conclusions
of the recent researches conducted in different fields of brand origin.
The results reveal the major influences on international region as a
brand origin and enable to assess possibilities to increase the
attractiveness of the Baltic Sea region. The study suggests that one of
the main factors that determine the attractiveness of brand origin is
long-term communication with the international consumers kept by
companies and their brands.
Received 10 May 2008; accepted 19 March 2009
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DOI: 10.3846/1611-1699.2009.10.
Eugenijus Chlivickas (1), Rasa Smaliukiene (2)
International Economics and Management Department, Vilnius
Gediminas Technical University, Sauletekio al. 11, 10223 Vilnius,
Lithuania E-mails: (1)
[email protected]; (2)
[email protected]
Table 1. Frequency distribution of demographics
Frequency
Variable (n = 112) Percentage
Age
18-25 32 28.5
26-35 67 59.8
36-45 11 9.8
46+ 2 1.8
Gender
Male 33 29.5
Female 79 70.5
Residential area
UK 44 39.3
Spain 68 60.7
Educational level
High school 37 33.0
College 31 27.6
Graduate School 32 28.6
Not finished
graduate school 12 10.7
Table 2. Descriptive analysis of construct
Attitude toward
Variable group the region as a Identified components in
(qty of variable brand origin the communication on
in each) Mean (SD) the brands Mean (SD)
tele-
Food communication
Emotional:
innovative (10) 2.4 (3.25) 1.2 (1.00) 4.1 (3.59)
simple (4) 3.7 (1.12) 4.2 (0.92) 2.8 (1.47)
emotional (7) 1.2 (1.90) 1.1 (1.04) 1.9 (2.37)
aggressive (4) 2.4 (2.42) 1.3 (1.23) 3.2 (3.71)
conscientious (9) 3.8 (2.10) 4.1 (2.10) 3.0 (1.09)
Cognitive:
human (7) 4.3 (1.54) 4.5 (1.98) 4.1 (1.15)
natural
environment (5) 2.1 (2.52) 1.4 (2.20) 2.5 (2.89)
Table 3. Pearson correlation coefficient between respondents'
attitude toward the Baltic Sea region as a brand and perception
of the communication on the brands on emotional and cognitive
level
Attitude toward the
region as a brand origin
emotional cognitive
Attitude toward the region
as a brand origin:
Emotional (r) 1.000 --
Sig.(2-tail) --
N 112
Cognitive (r) -- 1.000
Sig.(2-tail)
N
Identified components in -- --
the communication on the
brands in food industry:
Emotional (r) 0.706 --
Sig.(2-tail) 0.00
N 110
Cognitive (r) -- 0.687
Sig.(2-tail) 0.01
N 109
Identified components -- --
in the communication
on the brands in
telecommunication:
Emotional (r) 0.823 --
Sig.(2-tail) 0.00
N 110
Cognitive (r) -- 0.743
Sig.(2-tail) 0.01
N 109
Identified components in
the communication on the
brands in food industry
emotional cognitive
Attitude toward the region
as a brand origin:
Emotional (r) 0.706 --
Sig.(2-tail) 0.00
N 110
Cognitive (r) -- 0.687
Sig.(2-tail) 0.01
N 109
Identified components in -- --
the communication on the
brands in food industry:
Emotional (r) 1.000 --
Sig.(2-tail)
N
Cognitive (r) -- 1.000
Sig.(2-tail)
N
Identified components -- --
in the communication
on the brands in
telecommunication:
Emotional (r) -- --
Sig.(2-tail)
N
Cognitive (r) -- --
Sig.(2-tail)
N
Identified components in the
communication on the brands
in telecommunication
emotional cognitive
Attitude toward the region
as a brand origin:
Emotional (r) 0.823 --
Sig.(2-tail) 0.00
N 110
Cognitive (r) -- 0.743
Sig.(2-tail) 0.01
N 109
Identified components in -- --
the communication on the
brands in food industry:
Emotional (r) -- --
Sig.(2-tail)
N
Cognitive (r) -- --
Sig.(2-tail)
N
Identified components -- --
in the communication
on the brands in
telecommunication:
Emotional (r) 1.000 --
Sig.(2-tail)
N
Cognitive (r) -- 1.000
Sig.(2-tail)
N