Understanding the relationship between country of origin image and brand equity : Case of cosmetic brands in Ho Chi Minh city
Abstract
Brand equity is one of the key topics in marketing in recent years. A strong
brand with positive brand equity has several advantages such as higher margins, brand
extension, more powerful communication effectiveness and higher consumer preferences
ad purchase intentions ((Keller, 1993; Rangaswamy et al., 1993; Cobb-Walgren et al.,
1995). Measuring brand equity is important due to its strategic value guiding marketing
strategy, aiding tactical decisions and providing a basis for assessing brand extendibility
(Ailawadi et al., 2003). Country of origin is another importantvariable influencing
consumer perceptions of brands (Hulland, 1999). Information processing theory posits
that consumers use product cues to form beliefs and evaluations about a product, which
in turn influence their purchase behaviors. Generally the country of origin is considered
as an extrinsic product cue (Norjaya, 2007).
There are many researches in both the areas of country of origin effects and
brand equity, but not many empirical researches to date has evaluated how country image
may affect brand equity. Understanding the relationship between consumers’ country of
origin and consumer-based brand equity is important for some reasons. Globalization and
increased international business activity have facilitated the availability of brands from
one country to consumers in other countries (Hsieh, 2001). A better understanding of the
relationships between and consumer-based brand equity would assist marketing decisionmakers seeking to improve marketing productivity (Kleppe et al., 2002).
This study investigates into the reflections of “country of origin image” on
consumers’ brand equity through consumer-based brand equity model. In this context, a
research design was formed to measure the perceptions towards cosmetic products.
Female consumers who have used cosmetic products were the target population and the
data was collected from 350 respondents at several malls located in Ho Chi Minh City
through mall intercept survey by using structured questionnaires. The findings of the data
were evaluated in terms of designing an international or global competitiveness. These
findings have several managerial implications for both overseas and local cosmetic brand
owners. The findings reported in this study that evaluations about country image have an
effect on the brand evaluation processes of consumers from various aspects. However,
this paper falls in market research, which is unstable and the way to study is practical so
that it is impossible to avoid limitations.
Key words: Country of origin, Brand equity, the country of origin-brand
equity relationship, cosmetic market, customer-based brand equity model.