Journal of International Business Research (Print ISSN: 1544-0222; Online ISSN: 1544-0230 )

Research Article: 2018 Vol: 17 Issue: 1

International Consumer Based Modeling of Foreign Country Brand Trust for Markets Improvement

Yaser Sobhanifard, Iran University of Science and Technology

Maryam Akhavan Kharazian, Shahid Beheshti University

Keywords

Consumer, Brand, International trust, International market.

Introduction

Currently exporters in many cases involved to some problems that do not relate to them and their efforts. Sometimes exporters work well of a product in all areas of the supply chain and implement appropriate techniques in their products quality and company management, but for reasons beyond their control cannot be successful in global markets. One of the main reasons is the name of the country they belong to. As the name of a country can improve its sales and exports, on the other side, sometimes in some countries, the name of the country has inverted effect and causes products haven't enough sales as they are qualified to sell in foreign markets.

In this regard and in recent years, many studies have been conducted about the effect of the country name on the product brand. For instance, one of the main concepts is Country-of-origin. Country-of-origin is an important factor effect on consumers’ brand perceptions and offers competitive advantage of a brand. Regarding related literature, researchers country-of-origin image play a significant role in consumer’s perceptions towards products and brands from a country (Hanzaee & Khosrozadeh, 2011). Brand origin can provide a strong competitive advantage in creating a favorable brand image. A country with a positive image is an enhancer for product positioning, reducing the perceived risk related to product acquisition (Adina et al., 2015). One study shows that consumers care about which country the product came from and where they were made (Parkvithee & Miranda, 2012).

Furthermore, some other studies of the country-of-origin effect have shown how the country image has a direct effect on purchase intention (Rezvani et al., 2012). In contrast, local brands, are defined as brands “only available in a specific geographical region” or a “concentrated market” (Dimofte, Johansson & Ronkainen, 2008). Many researchers suggest that brand globalness associations strengthen brand preference by boosting consumers' perceptions of quality, prestige and credibility (Özsomer, 2012; Steenkamp et al., 2006), while brand localness associations create brand value by building on the local identity, supporting the local culture and adapting the brand to local tastes and needs (Özsomer, 2012; Schuiling & Kapferer, 2004; Halkias et al., 2016). Also, several studies demonstrate that products and brands, which are essentially identical in every aspect, may be rated differently depending on their origin; a phenomenon referred to as the country-of-origin (COO) effect (Wilcox, 2015). Some previous research show image of a country has a positive effect on the opportunities faced by companies in both domestic and non-domestic markets (Batra, Ramaswamy, Alden, Steenkamp & Ramachander, 2000).

However, despite numerous studies that conducted about the impact of the country name on the consumer behaviour, Specific studies haven't been conducted focusing on foreign country brand trust. In the other words, there is lack of studies about international brand trust in the national level and there is no effort about understanding how the trust can shape about all of a countries brand in the international consumers mind.

In this regard, for the first time, the main contribution of this study is to develop a model that introduces the factors affecting a national brand trust in view of international consumers. Theoretically, this model can show a pattern helping a country to improve it`s all brands. The results of this study can solve an important problem about their international brand trust that does not relate to exporters and their efforts. By this model, exporters can see a reduction of reasons beyond their control. This study seeks to reduce the problems that are beyond the control of marketers and managers at the micro level. The study can provide prescriptions in the both at public and business decision-making levels. In fact, results of this study can be used for both macro and micro marketing and economic policymakers.

Managerially, our findings can help: First, this study explores public factors affecting the export and national brand. Since an export or macro level of a country dependent on foreign consumers perception to the products are made in this country, In terms of management, prescriptions of this model can lead to a general rise in the level of a country's exports. Considering variables of this model, decision makers of the country can develop policies that increase their country's export in the long term. This increases the level of GDP and reduces the level of unemployment in a country. This research could help governments to make a more effective approach to increase exports to the international markets. Also, this study can help marketers at the macro level. With the aid of this study, they will know that what should be considered in the context of product experience to have a good effect on consumer trust to their compatriot products in the global market? It can also lead to promote themselves brand and other compatriot brands in the global markets.

Literature Review

Brand and Foreign Country Brand Trust (FCBT)

A brand is defined as: “Name, term, design, symbol or any other feature that identifies one seller’s good or service as distinct from those of other sellers” (American Marketing Association, 2012). The concept of a brand can be divided into the two concepts of brand value and brand equity (Jones, 2005). Jones’ (2005) define the brand value as to how the value of a brand is created, while equity defined as how a brand and its value are measured and accumulated. Previous studies in the field of branding show that a number of conceptual refinements to define the consumer’s perceptions linked to a brand, such as brand knowledge, brand equity, brand image, brand association or brand awareness (Chanavat, Martinent & Ferrand, 2009). About trust Agustin & Singh (2005) define it as “a consumer`s confident beliefs that he or she can rely on the seller to deliver promised services”, whereas a relational value can be defined as “consumer's perceptions of the benefits enjoyed versus the cost incurred in the maintenance of an on-going exchange relationship”. Finally, the concept of brand trust is related to the brand communication and satisfaction of consumers toward a particular brand in a product class and is gaining increasing importance in consumer behaviour. Consumer trust for the brand is the important consequence of brand satisfaction and brand communication (Azizea et al., 2012). As for the brand trust, foreign country brand trust can be defined as a concept. With the difference that here the trust isn’t not only about a product but about all of the products of a country. Indicators of this concept have been introduced in the research methodology and study proposes it`s operational definition in the measures section.

Brand Experience of Foreigner Country (BEFC)

Brand experience has attracted a lot of attention in the Marketing practice. Various studies have analysed the effect of experience marketing and tried to measure its outcomes (Cleff et al., 2013). Fransen & Lodder (2010) identified a positive influence of brand experience on brand attitude and brand relation. Brand experience does not presume a motivational state. Experiences can happen when consumers do not show interest in or have a personal connection with the brand (Brakus et al., 2009). Also brand experience is different from brand associations and brand image (Keller, 1993). One of the most studied constructs of brand associations is the brand personality (Aaker, 1997). Brakus et al., (2009), explore 4 factors with 12 Items for measuring the brand experience using exploratory factor analysis. These factors are of this scale are: Sensory, affective, behavioural and intellectual. In their study, it is confirmed that brand experience has positive effects on consumer satisfaction and loyalty.

Inclined to Foreigner Country

Inclined to foreigner country shows the level of him/her nationalism or patriotism. In the previous studies, nationalism defined variously, as are the relationships between “Nationalism” and such concepts as “patriotism” and “national attachment” (Bonikowski, 2016). Sociologists conceptualize nationalism as an ideology mobilized by political elites: “A political principle, which holds that the political and the national unit should be congruent” (Gellner, 1983). Psychologists describe “nationalism” as “patriotism’s” invidious evil twin, defining the former as “a perception of national superiority and an orientation toward national dominance” and the latter as “a deeply felt affective attachment to the nation” (Kosterman & Feshbach, 1989; Bonikowski & DiMaggio, 2016). Feshbach and his colleagues in their research focused on feelings about one's own country. Strong loadings were obtained for such items as “I love my country”, “I am proud to be an American” and “In a sense, I am emotionally attached to my country and emotionally affected by its actions”. This factor was labelled “patriotism” by Feshbach and his associates (Feshbach, 1987 & 1990; Kosterman & Feshbach, 1989). In the case of the Inclined to Foreigner country, Druckman (1994) introduce a scale that when a person has moved from positive feelings toward another nation to identification with that other nation. Items of this scale are:

(1) Motivated toward becoming a member;

(2) Assuming the group's norms and values;

(3) Using the group's standards for evaluating performance;

(4) Taking a positive orientation toward the group;

(5) Understanding the group's norms and values;

(6) Recognizing the group's existence.

Power of Foreigner Country

In the early years of the 21st century, the concept of power and national power is more important than ever. Feshbach and his colleagues in their research, define nationalism with two item as “In view of America's moral and material superiority, it is only right that we should have the biggest say in deciding UN policy” and “Other countries should try to make their governments as much like ours as possible”. They discover Correlations between nationalism and such variables as early familial attachments, attitudes toward nuclear arms and readiness to go to war suggest distinct patterns (Feshbach, 1987, 1990; Kosterman & Feshbach, 1989). Treverton & Jones study (2005) introduce 8 items for measuring the national power of 164 countries. Items of this scale are: Domestic socio-political, International political, Population, Economic German's Agriculture situation is suitable, Energy, Technology, Environmental resources and quality.

Conceptual Model and Research Hypotheses

To build the conceptual model, the paper first develops hypotheses regarding the foreign country brand trust. As Figure 1 illustrates effects of all these factors on foreign country brand trust. The effects of Brand Experience of Foreigner Country (BEFC) on foreign country brand trust (FCBT) because of reducing the perceived risk and provides more reliable information, direct experience has a good benefit for consumers. It is beneficial for retailers because it can lead to more Positive attitudes and to a feeling of ownership among consumers (Groot, 2009). Some studies show that country image evolves with the brand and product experience (White, 2012; Rubini, Motta & Di Tommaso, 2013; Ferilli et al., 2016). These results shoes that product experience has a positive impact on the country image. Because the trust is one of the constituent elements of the image so we can make the hypothesis that product experience has an effect on foreign country brand trust. Furthermore, since brand experience has a significantly positive effect on brand trust (Shahin et al., 2011) and regarding the systematic view that a whole includes the sum of its components brand experience of various products of a country can affect the total experiences of one consumer about all of that countries brands.so so we hypothesize that:

Figure 1: Conceptual Model and Hypothesis

H1 Brand experience of foreigner country (BEFC) has a significantly positive effect on foreign country brand trust (FCBT).

The effects of perceived power of foreigner country on foreign country brand trust (FCBT) level of socio-economic development is affecting to both country image and branding (Laforet & Chen, 2012). In developing countries, brand identification with a Western country of origin rather than with a local one has a positive impact on the quality perception of some categories of customers (Batra et al., 2000). Although the effect tends to be sector and product-specific (Pappu, Quester & Cooksey, 2007) and the interplay among country of origin effect and various socio-cultural mediating factors tend to be itself country-specific (Sharma, 2011). For example, a “made in Italy” fashion product is usually perceived as high-class, whereas Italian electronic devices and electrical equipment are considered less favourably in many markets when compared to similar products made in Germany. Therefore based on these two mechanisms we hypothesize that:

H2 Perceived power of foreigner country has a significantly positive effect on foreign country brand trust (FCBT).

The effects of Brand experience of foreigner country (BEFC) on the Perceived power of foreigner country.

Generally, countries with a long track history of successful achievement and maintenance of high product quality standards and experiences have a strong appeal to consumers in developing countries (Josiassen & Harzing, 2008). When consumers in a country consume high quality of product from foreigner country and gain a positive experience of this product, they infer the high power of national socio-economic about this country. Therefore we believe that:

H3 Brand experience of foreigner country (BEFC) has a significantly positive effect on the Perceived power of foreigner country.

The effects of inclined to Foreigner Country on Foreign Country Brand Trust (FCBT).

Ethnocentrism and nationalism have a strong impact on animosity or antipathy towards a country (Jimenez & San Martin, 2010). Watson & Wright (2000) established that consumers from developed countries tend to prefer their home products and that a similar culture can be a decisive factor in consumers’ buying decision.

Ethnocentrism or misidentification may lead to attraction/repulsion reactions towards domestic/foreign products. These reactions are related to social and personal values, as well as to the normative level, which is influenced by both cognitive and affective processes (Adina et al., 2015). Furthermore, Scholars have recognized the impact of nationalism on both everyday life and perceived value of a nation`s product (Billig, 1995; Calhoun, 1997; Lieven, 2004; Smith, 1997). This extent of impact can conclude that nationalism also has an impact on brand and foreign country brand trust and brand experience of foreigner country. So we hypothesize that:

H4 Inclined to Foreigner country has a significantly positive effect on foreign country brand trust (FCBT).

H5 Inclined to Foreigner country has a significantly negative effect on Brand experience of foreigner country (BEFC).

Data Collection and Research Methodology

In the process of this research, 2000 forms were distributed to international respondents and 1776 responses were usable for analysis. In all, 51% of the respondents were female and the median age of the sample was 36 years old; 52% of the sample had a bachelor's degree, 32% had a master's degree and 14% had the doctoral degree, while 19% had only a high school degree. All of the respondents had experience of German car brands. Table 1 shows their demographic information.

Table 1
Demographic Characteristics
Items N %
Gender
Male 882 49
Female 894 51
Age
18–30 534 30
30–50 732 41
Above 50 510 29
Nationality
Iran 425 24
Iraq 268 15
East Asia 163 9
Bahrain 112 6
Kuwait 87 5
Lebanon 110 6
Turkey 45 2
Azerbaijan 140 8
Pakistan 187 11
South East Asia 89 5
Others 150 9
Education
Only a high school degree 255 14
Bachelor's degree 921 52
Master's degree 567 32
Doctoral degree 33 2

Results

Measures

The questionnaire is designed using a ten-point Likert scale whenever appropriate and it ranges according to appropriate answers for each question, e.g. strongly agree to strongly disagree the items were adapted to solicit dichotomous outcomes based on an average of each construct. Wittink & Bayer (2003) noted that a ten-point Likert scale can improve measurement reliability, reduced multicollinearity problems and minimized skewness in the distribution of the data. This study measured brand trust using three items from Han et al. (2015) and modified to foreign country brand trust scale. Nationalism was measured by examining the extent of consumers' psychological commitment to a brand (Druckman, 1994). Also, national power was measured by Treverton & Jones study in 2005. Finally, Foreigner brand experience (FBE) was adapted from Brakus et al. (2009) study. In this study, the Germany is equivalent to the foreign country. Table 2 shows all this study’s measures. In this study SEM used for modelling. To assess the reliability Cronbach alpha coefficients has used. As seen in Table 2, reliabilities ranged from 0.856 to 0.888, in the study. Assessment of the measurement model for reliability, CR, R Square and AVE with all constructs have done using the PLS.2 software. Table 3 shows a good fit. Also as we can see in Table 3, the composite reliabilities (CR) are upper than 0.70; the average variance extracted per construct (AVE) ranging from 0.77 to 0.93 and all R square is upper 0.5 that these show us a good Construct Reliability and validity for this model.

Table 2
Study’s Measurement Items
Construct Items Loading on latent construct Cronbach alpha
Foreign country brand trust Foreign country brand trust 0.923 0.857
German's brand guarantees satisfaction 0.965
I have confidence in German's brand 0.963
Inclined to Foreigner country I Motivated toward becoming a member of Germany country 0.882 0.856
I assume the German norms and values 0.932
I use the German standards for evaluating performance 0.956
I take a positive orientation toward the Germany 0.969
I understand the German's norms and values 0.936
I recognize the German's existence 0.857
Perceived power of foreigner country German's Domestic socio-political situation is suitable 0.845 0.857
German's International political situation is suitable 0.919
German's Population situation is suitable 0.972
German's Economic situation is suitable 0.955
German's Agriculture situation is suitable 0.968
German's Energy situation is suitable 0.94
German's Technology situation is suitable 0.947
German's Environmental resources and quality situation is suitable 0.896
Brand experience of foreigner country German's brands make a strong impression on my visual sense or other senses 0.999 0.888
German's brands do not appeal to my senses 0.964
German's brands induce feelings and sentiments. 0.961
I do not have strong emotions for German's brands. 0.957
German's brands are an emotional brand 0.939
I engage in physical actions and behaviours when I use German's brands. 0.972
German's brands result in bodily experiences 0.979
German's brands are not action oriented 0.971
I engage in a lot of thinking when I encounter German's brands 0.983
German's brands do not make me think 0.987
German's brands stimulate my curiosity and problem-solving 0.954
Table 3
Average Variance Extracted Per Construct (Ave), R Square and Composite Reliabilities (Cr)
Latent constructs AVE R Square CR
FC Power 0.77 0.57 0.96
FC Tendency 0.82 0 0.96
FCBE 0.88 0.71 0.98
FCBT 0.93 0.69 0.97

Structural Equation Modelling and Hypotheses Testing

To test hypotheses Structural equation modelling using Smart PLS 2 software was used). The path analysis and hypotheses testing are shown in Figure 2 and Table 4 and as seen, all hypotheses were supported. Brand experience of foreigner country has a significantly positive effect on foreign country brand trust (Path coefficients=0.35, t-Value=2.83), the Perceived power of foreigner country has a significantly positive effect on foreign country brand trust (Path coefficients=0.27, t-Value=3.29), the brand experience of foreigner country has a significantly positive effect on the Perceived power of foreigner country (Path coefficients=0.75, t-Value =20.95), inclined to foreigner country has a significantly positive effect on foreign country brand trust (Path coefficients=0.26, t-Value=2.27) and inclined to foreigner country has a significantly negative effect on the brand experience of foreigner country (Path coefficients=0.84, t-Value =28.52).

Figure 2: Causal Relationship Diagram

Table 4
Standardized Path Estimates and T-Value
Hypostasis Path coefficients t-Value Support or not
H1 0.35 2.83 Yes
H1 0.27 3.29 Yes
H1 0.75 20.95 Yes
H1 0.26 2.27 Yes
H1 0.84 28.52 Yes

Discussion

The necessity of investigating the main effective factors in Brand trust is evident from numerous studies (Han et al., 2015; Lassoued, 2015). For the first time, this paper explores a model that introduces and explains the factors affecting a foreign country brand trust (FCBT) in view of International consumers.

Theoretically, this model can show a pattern helping a country to improve its all brands. In the present study, factors for the measurement of main concepts were extracted using the literature review and update them regarding the national level and a foreigner country. These measures tested in a large number of consumers (1776 consumers).

The results of SEM confirm that these factors can be explained by the model. Indeed, it can be concluded that the performed SEM entails a new model in this context. This model shows that brand trust of the foreign country can be affected by three factors: The perceived power of foreigner country, inclined to foreigner country and brand experience of foreigner country. These three factors have a positive effect on the brand trust of a foreign country. This means that improving them can improve it. Using the SEM model, we found that eight variables are components of the perceived power of foreigner country and six variables are components of the inclined to foreigner country and twelve variables are components of the brand experience of foreigner country. This means that the consumers in our study believe that these variables can improve the level of the foreign country brand trust.

Regarding the proven effect of the trade on development, (Trade & development report, 2016) we conclude that marketing policy maker in the national level should focus on these concepts and their variables to improve foreign country brand trust as one of the main factor affecting on all a country trade improvement. This improvement can lead to increase a country's exports and thus increase the economic growth of the country.

Policy makers and marketers in both micro and macro level can use our findings and model to satisfy all consumers’ needs and enhance their trust to overall brand of one nation. They can increase a nation`s overall market size by the improvement of their accounting of consumers’ trust. This model can provide prescriptions in the both at public and business decision-making levels. In fact, this model can improve all brands of a country.

Managerially, our findings can help: First, this study explores perceived factors of consumers affecting the foreign country brand trust. Since an export level of a country dependent on foreign consumers perception to the products is made in this country, In terms of management, prescriptions of this model can lead to a general rise in the level of a country's exports and development. Considering variables of this model, decision makers of a country can develop policies that increase their country's export in the long term. This increases the level of GDP and reduces the level of unemployment in a country. The results of this study led to the identification of the factors are independent of the efforts of manufacturers to sell their products on foreign markets. This research could help governments to make a more effective approach to increase exports to the global markets. Also, this study can help international marketers at the macro level. With the aid of this study, they know what should be considered in the context of product experience to have a good effect on consumer trust to their compatriot's products in the global and international market. It can also lead to promote themselves brand and other compatriot brands in the global markets.

By the proposed model, exporters can see a reduction of reasons beyond their control. The study can help to reduce the problems that are beyond the control of marketers and managers at the micro level. Finally, German and other international marketers and policymakers can use these results as a strong competitive advantage in creating a favourable brand image in both micro and macro level and both for native and international consumers. Also with this study marketer can improve native and international consumers purchase intention. In fact, results of this study can be used for both macro and micro marketing and economic policymakers.

Research Limitation and Future Direction

This research has some limitation. One of these limitations is sampling territory. Our target foreigner nation was limited to Germany. If we could expand it to more nations we could get more accurate results. This study only examined factor affecting on foreign country brand trust but no other factors of consumer behaviour, such as demographics, value, social class factors and so on. We hope that our study’s findings will foster future research investigating other factors of consumer behaviour in Iran and other countries.

Conclusion

This paper explored SEM model of the foreign country brand trust. The study discovered the original aspect of foreign country brand trust in a developing country as a market for compatriot and foreign marketers. This model shows that brand trust of a foreign country can be affected by three factors: The perceived power of foreigner country, inclined to foreigner country and brand experience of foreigner country. These three factors have a positive effect on the brand trust of a foreign country. This means that improving them can improve it. All hypotheses were supported so we can conclude all of the study factors have a positive impact on the foreign country brand trust. The results of this study can be used for both macro and micro marketing and economic policymakers.

References