How Do Consumers Respond to Brand Origin Misclassifications?

by | Jan 4, 2023

Made-In Labels

The country-of-origin (COO) effect is one of the most widely studied phenomena in international marketing and consumer behavior research. Extant research suggests that country associations can significantly affect consumers’ product evaluations and purchase intentions. The mechanism underlying such COO effects is that consumers infer some intrinsic attributes of a product or brand from the image of the associated COO (i.e., the country in which the headquarters of the brand’s parent firm are located). Although COO research is abundant, findings regarding the phenomenon of brand origin misclassification (i.e., consumers’ association of a brand with the wrong COO) remain limited and inconclusive.

“Consumers’ inability to identify brands’ origins should come as no surprise. Some marketers aim to de-emphasize or disguise the origin of a brand due to their pursuit of global marketing strategies or even deliberately to associate a brand with a country that has a better image than its source country.”

This study fills this research gap by investigating how consumers react upon learning the true origin of a previously misclassified brand: Do consumers’ thoughts and feelings about a brand change once they learn that it originates from a different country than they initially believed? And to what extent do these responses depend on their level of certainty regarding the previously assumed country-brand association?

To study how consumers respond to brand origin misclassifications, we conducted a study that was set in the South Korean fashion market. This market is characterized by fierce competition between domestic brands and foreign brands from various countries. Many South Korean fashion brands disguise their domestic origin and pretend to be foreign by using foreign brand names (e.g., Us n them, Who.a.u, Basso Homme), increasing the possible incidences of BOM. Furthermore, consumers purchase fashion products for both utilitarian and hedonic reasons, unlike other product categories commonly investigated in that context.

Consistent with previous research, we found that consumers’ ability to identify the correct origin of brands is very limited. Despite high levels of brand awareness, consumers could identify the correct brand origin in only 34% of all cases. On average, we observed higher rates of correct brand origin identification for domestic brands than for foreign brands.

“In approximately 30% of all cases, consumers classified a brand to a wrong COO, which underscores the prevalence of the phenomenon.”

Interestingly, the study results show that consumers tend to adjust their brand evaluations only if the true COO is perceived more favorably. Yet, if the revealed COO is peceived as having an inferior image, they do not update their brand evaluations. In short, consumers appear to embrace “gains” but deny “losses” from learning about the true origin of a brand.

Moreover, negative emotions (upon learning about a brand’s less favorable origin) lead to greater losses in brand evaluation than positive emotions (upon learning about a brand’s more favorable origin) lead to gains in that respect. These effects are contextualized by the degree of consumers’ confidence in their initial brand origin identification. Consumers’ denial of losses on the one hand, and their acknowledgment of gains on the other, are particularly strong when they initially are very confident about a brand’s origin.

Full reference: Mandler, Timo, Sungbin Won, Kyungae Kim (2017), “Consumers’ Cognitive and Affective Responses to Brand Origin Misclassifications: Does Confidence in Brand Origin Identification Matter?” Journal of Business Research, 80, 197–209.

Cite for: Country-of-origin, brand origin identification, brand origin misclassification, misperception, confidence in specific response, prospect theory, within-subject design, use of a single product category, spotlight analysis

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