THE IMPACTS OF CONSUMER PERCEPTIONS ON ATTITUDE AND PURCHASE INTENTION FOR GLOBAL BRANDS,

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1 THE IMPACTS OF CONSUMER PERCEPTIONS ON ATTITUDE AND PURCHASE INTENTION FOR GLOBAL BRANDS, A Cross-Country Validation Study in United Kingdom and Turkey Ediz Edip Ackay, Kaouther Ben Mansour, Sid Ghosh, Kaouther Kooli ABSTRACT Purpose This study aims to investigate the impacts of consumer perceptions on attitude and purchase intention for global brands in different cultures and economies. Design and methodology Two consumer surveys were conducted in United Kingdom (N: 153) and Turkey (N: 192) about the global brand Nescafe in order to examine the hypotheses based on the integrative conceptual framework of Ozsomer and Altaras (2008). The questions of the surveys are adapted from several studies that measured relevant variables (Steenkamp et al. 2003, Erdem and Swait 2004, Holt et al. 2004, Erdem et al. 2006). The results are generated for analysis using structural equation modeling (SEM). Findings The findings of this study show that the global brand credibility is sourced from local icon value and perceived brand globalness and influences the perceptions of quality, prestige and social responsibility dimensions of the global brand in both countries. The impacts of credibility are stronger among developing market consumers who have higher uncertainty avoidance and collectivism levels. Furthermore, perceived global brand quality has an important role between credibility and consumer s attitude toward global brand. The prestige and relative price do not have connection to attitude while social responsibility influences attitude in developed market. The positive relation between consumer s attitude and purchase intention for global brands is valid in both markets. However, the impact of relative price on this relation is not significant. Research Limitations The findings of this study needs improvement by including more global brands from different product categories. By examining the model in different countries, the sample size can be increased. Originality This study contributes to literature by a cross-country validation about the impacts of several global brand dimensions from consumer culture theory, signaling theory and associative network memory model on attitude and purchase intention in an integrated belief attitude behavior model of Ozsomer and Altaras (2008) which was not examined before. This study is the first attempt made to test their conceptual model by using two country samples. Keywords Global Branding, Consumer Perceptions, Attitude, Purchase Intention, Culture 1

2 Introduction In its vision statement, world s giant fast-moving consumer goods company Unilever defines the company as a truly multi-local multinational (Unilever 2012). This is an explicit summary about the global-local dilemma for the multinational companies: Should they adapt their branding strategy to attract local consumers or develop global brands for growth scope and profit margin potential (Gray 2001)? The milestone article of Levitt (1983) about globalisation of markets initiated the multinational companies effort to globalise their brands for cost savings and economies of scale benefits (Keller 2007). Some of the companies such as Coca-Cola or Nescafe use standardised brands in all markets while some choose to adapt their brands like Unilever s various brands in different markets for the same product. Despite the efforts of companies to achieve success in brand globalisation, do consumers really want global brands? Is it just a producer push from companies rather than consumer pull for global brands (Mitchell 2002)? In economic, cultural and psychological domains, global brands are increasing their power and influence (Ozsomer et al. 2012). Even so, the companies are not sure about the exact meanings of their brands globalness in the eyes of consumers (Dimofte et al. 2008). Understanding how consumers perceive global brands attracts attention and interest of both company managers and academicians (Ozsomer et al. 2012). There are several studies that investigated the factors influencing consumer perceptions, attitude and choice for global brands. Consumers can choose global brands for their dimensions such as authenticity, credibility, quality and prestige (Ozsomer and Altaras 2008). International companies arrange their branding strategies to get the maximum benefit of brand globalness (Kapferer 2008). However, perceptions about the brands can differ between countries and consumers. In order to focus on the right aspects of their global brands for their marketing programs, companies need to specify the factors that influence consumer s attitude and purchase likelihood. Past studies focused on various factors to find out the underlying reasons of consumer s choice for global brands. However, they have not included all of these global brand dimensions in one study. Ozsomer and Altaras (2008) developed a framework to integrate concepts from different theories and studies about global brands. Their model offers a conceptual synthesis to explain the process of global brand purchase likelihood that needs to be empirically validated. The research questions of this study are: What is the significance of global 2

3 brand dimensions and associations on consumer s attitude and purchase intention for global brands? and: Do these dimensions have the same importance and impact in different cultures and economies? Research framework and conceptual model Ozsomer and Altaras (2008) developed an integrative framework (see Figure 1) to understand consumer s global brand attitude and purchase likelihood by combining three different consumer behaviour theories (consumer culture theory, signalling theory and associative network memory model). The definitional and measurement inconsistencies about global branding stimulated them to integrate different streams of research. They used global brand authenticity, cultural capital and perceived brand globalness aspects of consumer culture theory. Global brand credibility dimension is added from signalling theory while global brand quality, social responsibility, prestige and relative price are derived from Associative Network Memory Model. Consumer characteristics such as self-construal and cosmopolitanism are the moderator factors in their model. They pointed the need for research to compare the applicability of their model in the developing and developed markets. In addition, they emphasis the necessity of further research to show the impacts of global brand authenticity and perceived brand globalness on brand credibility and brand associations. They provide a belief-attitude-behaviour model following global brand evaluation, attitude and purchase intention steps respectively. Their framework will be adapted to test the hypotheses of this study as explained in the methodology part. However, as the study is focused on the consumer s perceptions about the global brand; factors such as ethnocentrism, cosmopolitanism that define consumer characteristics are not included in the analysis. Research methodology Using a positivist approach, this study aims to reveal the relations between consumer s perceptions, attitude and purchase intention for global brands. A cross-cultural comparison for those associations is aimed by collecting consumer data from United Kingdom and Turkey. The research instrument is chosen as online survey in self-completion questionnaire format. Snowball sampling is used in this research. The online surveys are shared with a group of people using virtual networks in United Kingdom and Turkey. All measures of variables are taken from previous researches because of their already tested reliability and validity. 3

4 Figure 1: Conceptual Model of Global Brand Purchase Likelihood (Ozsomer and Altaras 2008) Global brand purchase likelihood framework of Ozsomer and Altaras (2008) is adapted to build the survey and analysis. They pointed the need to validate their model to express the differences in developed and developing market consumers. Cultural and economic differences between United Kingdom and Turkey are the basis to choose these countries for the surveys. Nescafe was chosen as the global brand to be tested in both surveys because of its long history and market leadership in both countries. Instant coffee product category is chosen as a low involvement and hedonic product. According to Interbrand (2012) Best Global Brands ranking, Nescafe is the world s most valuable 30 th brand in Instant coffee is one of the most popular and global goods in the world and it is mass consumed in Turkey as well as in the UK. Instant coffee consumption has the same meaning and value for both UK and Turkish citizen. Besides, Turkish culture is much westernised. These factors facilitated data collection in the allowed period of time. SPSS and AMOS software are used to assess the reliability and validity of measures, to check the model fit and to estimate the hypothesised relations. Findings and discussion In this study, the global branding issue is investigated in order to show the impacts of consumer beliefs about the global brands on their attitude and purchase intention, in different cultures and economies. Based on the integrated framework of Ozsomer and Altaras (2008), the empirical study is conducted in two countries, United Kingdom and Turkey, which have cultural and economic differences, ensured the cross-country validation of the model. 4

5 The research questions of this study are fulfilled by analysing data from consumer samples in United Kingdom and Turkey. The findings validated most but not all of the relations proposed by Ozsomer and Altaras (2008) for their conceptual framework. The findings of consumer surveys are illustrated on the model in Figure 2. Figure 2: Standardised Estimates of Relations on the Tested Model (p<0.01 for all significant relations, N.S.: statistically Not Significant) The credibility of global brand is sourced from the local icon value and perceived brand globalness for both emerging and mature market consumers. The importance of local icon value on credibility is greater in the developing market while brand globalness has more impact on credibility in the developed market. Consequently, multinational companies should give more emphasis to ties with local culture in developing markets to increase the credibility of their global brand. The findings of this study revealed the impact of global brand credibility not only on quality dimension as stated in previous research but also on perceived prestige and social responsibility dimensions of global brands. Global brand s credibility plays a major role to influence consumer s perceptions about the global brand s quality, prestige and social responsibility in both country contexts. The strongest influence of credibility is found on the quality dimension of the global brand. As consistent with past studies (Erdem et al. 2006), the strength of credibility s influence on global brand associations is more in the culture with higher uncertainty avoidance and collectivism. The globalness and credibility of a brand is associated with a higher relative price in past studies (Holt et al. 2004, Erdem et al. 2006). 5

6 The results of this study supported the positive relation between global brand credibility and perceived relative price for the developed market consumers. The lack of significance for that relation in developing country context is probably about the low-cost characteristic of tested product category in the market. Quality perception is found to be the most significant driver of consumer s attitude toward global brand in both countries. The perceived prestige and relative price dimensions did not influence consumer s attitude in any of the countries while social responsibility perception had a slight impact in the developed market context. However, the results indicated an additional positive impact of relative price on perceived prestige among developed country consumers. The strong influence of credibility on quality perception which positively influences consumer s attitude is a major point of attention for global brand managers. The multinational companies should provide credible signals of their brand s quality to improve the consumer s attitude toward their global brand. Similarly, the companies should reflect their social responsibility projects about their global brands to developed market consumers more to benefit from the positive impact of this dimension on consumer s attitude. In addition to the studies that validated the impacts of global brand perceptions on attitude or purchase intention, this study confirmed the positive relation between consumer s attitude and purchase intention in two culturally and economically different markets. Cross-country validation of this relation is crucial for multinational companies as a way to increase purchase likelihood of their brands in different markets by improving consumer s attitude toward their global brand. Although the relation was not negatively influenced by relative price in this study, the product category of global brand might alter the impact of relative price perception on attitude purchase intention relation. The research contributes to the adaptation-standardisation controversy about global brands by a cross-country study on Nescafe which has a standardised brand across countries with local product adaptations (Kapferer 2008). The results show Nescafe is perceived similarly in globalness, credibility, quality and relative price dimensions in both countries. Conversely, there are significant differences in the consumer s local icon value, prestige, social responsibility perceptions; attitude and purchase intention for the brand. The similarities and differences in the significant relations give an insight to multinational companies to arrange their brand globalisation strategies according to market characteristics. 6

7 References Dimofte, Claudiu V., Johnny K. Johansson and Ilkka A. Ronkainen (2008), Cognitive and Affective Reactions of U.S. Consumers to Global Brands, Journal of International Marketing, 16 (4), Erdem et al Erdem, Tulin, Joffre Swait, Ana Valenzula (2006), Brands as Signals: A Cross-Country Validation Study, Journal of Marketing, 70 (1), Gray 2001 Holt, Douglas B., John A. Quelch and Earl L. Taylor (2004), How Global Brands Compete, Harvard Business Review, 82 (9), Interbrand (2012), Best Global Brands 2011, (accessed June 25, 2012), [available at Kapferer, Jean- Noël (2008), The New Strategic Brand Management: Creating And Sustaining Brand Equity Long Term. London: Kogan Page. Keller, Kevin L. (2007), Strategic Brand Management: Building, Measuring, And Managing Brand Equity. 3 rd ed. Harlow: Prentice Hall.Levitt (1983) Mitchell, Alan (2002), Few Brands Can Achieve a Truly Global Presence, Marketing Week, 25 (6), Ozsomer and Altaras 2008 Ozsomer, Aysegul, Rajev Batra, Amitava Chattopadhyay, and Frenkel ter Hofstede (2012), A global brand management roadmap, International Journal of Research in Marketing, 29(1), 1-4. Ozsomer, Aysegul and Selin Altaras (2008), Global Brand Purchase likelihood: A critical Synthesis and an Integrated Conceptual Framework, Journal of International Marketing, 16 (4), Unilever (2012), Our Purpose, (accessed June 22, 2012), [Available at: 7