Does image of country-of-origin matter to

brand equity?
Norjaya Mohd Yasin
School of Business Management, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, Selangor, Malaysia
Mohd Nasser Noor
Marketing Section, School of Management, Universiti Sains Malaysia, Penang, Malaysia, and
Osman Mohamad
Graduate School, Universiti Sains Malaysia, Penang, Malaysia

Abstract
Purpose – The purpose of this study is to explore the effects of brand’s country-of-origin image on the formation of brand equity.
Design/methodology/approach – To accomplish this, the brand equity of household electrical appliances, particularly televisions, refrigerators and
air-conditioners, in the Malaysian market is examined. A conceptual framework in which brand’s country-of-origin image is postulated to influence the
dimensions of brand equity, which is made up of brand loyalty, brand awareness, perceived quality, and brand associations. These dimensions, in turn,
influence brand equity. Data were collected from consumers of household electrical appliances using probability sampling.
Findings – Factor analysis conducted on brand equity dimensions, produced three factors namely, brand distinctiveness, brand loyalty, and brand
awareness/associations. The regression analysis results show that brand’s country-of-origin image positively and significantly influences dimensions of
brand equity. The results also show that brand’s country-of-origin image influences brand equity, either directly or indirectly, through the mediating
effects of brand distinctiveness, brand loyalty and brand awareness/associations.
Research limitations/implications – The study investigates brand equity of durable goods of three product categories namely television, refrigerator
and air-conditioner. It only considers brand’s country-of-origin image as one of the sources of brand equity. The conceptual framework does not take
into consideration factors that moderate the influence of antecedent of brand equity on brand equity.
Practical implications – Producers of household electrical appliances should put greater emphasis in creating brand loyalty for their products. The
good image of brand’s original country should be highlighted in order to enhance the overall image of the brand. Favorable country image can also be
capitalized in brand-naming strategy.
Originality/value – This is paper important in identifying the sources of brand equity.

Keywords Brand equity, Country of origin, Brand image, Brand loyalty, Brand awareness, Malaysia

Paper type Research paper

An executive summary for managers and executive value that the brand name brings to the producers, retailers
readers can be found at the end of the article. and consumers of the brand.
The equity of a brand is the result of consumers’ perception
of it which is influenced by many factors. Brand equity cannot
Introduction be fully understood without carefully examining its sources,
that is, the contributing factors to the formation of brand
Building strong brands has become a marketing priority for
equity in the consumers’ mind. Most of the brand equity
many organizations today because it yields a number of
research focuses on the marketing mix variables such as
advantages. Strong brands help the firm establish an identity
advertising, distribution, price and product quality as the
in the market place (Aaker, 1996), less vulnerability to
contributing factors (Cobb-Walgren et al., 1995; Yoo et al.,
competitive actions, larger margins, greater intermediary
2000). However, not much attention is given to the non-
co-operation and support and brand extension opportunities
marketing mix factors. In the process of buying, consumers
(Delgado-Ballester and Munuera-Aleman, 2005). In
are not only concern about the quality and price of a product
measuring the overall value of a brand, marketing
but also other factors such as the brand’s country-of-origin.
researchers and practitioners have begun to examine the
Many consumers use country-of-origin stereotypes to
concept of “brand equity” (Aaker, 1991; Baldinger, 1990;
evaluate products for example, “Japanese electronics are
Keller, 1993) which has been referred to the tremendous
reliable”, “German cars are excellent”, “Italian pizza are
superb”. Many consumers believe that a “Made in . . .” label
The current issue and full text archive of this journal is available at means a product is “superior” or “inferior” depending on
www.emeraldinsight.com/1061-0421.htm their perception of the country. Brands from countries that
have a favorable image generally find that their brands are
readily accepted than those from countries with less favorable
Journal of Product & Brand Management image. Since country of origin could be one of the influencing
16/1 (2007) 38– 48
q Emerald Group Publishing Limited [ISSN 1061-0421]
factors in determining consumers’ choice, the purpose of this
[DOI 10.1108/10610420710731142] study is to explore the effects of brand’s country-of-origin

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 Does image of country-of-origin matter to brand equity? Journal of Product & Brand Management
Norjaya Mohd Yasin, Mohd Nasser Noor and Osman Mohamad Volume 16 · Number 1 · 2007 · 38 –48

image on the formation of brand equity. To accomplish this From these definitions, brand equity can be said as the value
goal, the brand equity of household electrical appliances incrementality due to brand name. Although the classic
particularly television, refrigerator and air-conditioner, in the definition of brand equity refers to the added value of the
Malaysian market is examined. brand endowed by its name, recent writings about brand
To address this objective, this paper is organized as follows. equity have expanded its definition to include a broad set of
We begin by presenting the theoretical framework that depicts attributes that drive customer choice (e.g. Yoo et al., 2000;
the linkages between the variables of interest. Consequently, Rust et al., 2001).
we present a definition of the constructs under study, and Regardless of its definitions, brand equity actually
discuss the manner in which brand’s country-of-origin image represents a product’s position in the minds of consumers in
contributes to the development of brand equity. the marketplace. It is precisely the well-established
Subsequently, the data collection procedures and variable representation and meaningfulness of the brand in the
measures are discussed. The study hypotheses are then minds of consumers that provides equity for the brand
presented based on the results of the exploratory factor name. Therefore, what the consumers think of a particular
analysis. Finally, we discuss the results of regression analysis brand determines the value it has to its owner. As suggested
and its implications for managerial practice and some by Kim (1990), a brand is the totality of thoughts, feelings,
suggestions for future research are given. sensations, and associations it evokes. Therefore, a brand is
said to have equity if it has the ability to influence the behavior
of those who behold the brand, routinizing their preference,
Theoretical framework attitude and purchase behavior. Thus, for the purpose of this
The conceptual framework of brand equity that guides this study brand equity is defined as the “consumers’ favoritism
study appears in Figure 1. This framework is built upon the towards the focal brand in terms of their preference, purchase
conceptual framework for brand equity presented by Yoo et al. intention and choice among brands in a product category,
(2000) by incorporating country-of-origin image as the that offers the same level of product benefits as perceived by
antecedent of brand equity. In this model, the country-of- the consumers.” The consumers’ preference, intention to
origin image is treated as the independent variable, the purchase, and brand choice to a brand indicate the
dimensions of brand equity as the mediating variables and consumers’ favorable responses to the marketing mix
brand equity as the dependent variable. The brand equity elements of the brand in comparison with other brands.
construct shows how individual dimensions of brand equity Since customer-based brand equity occurs when the
are related to the brand equity. The antecedent of brand consumer is familiar with the brand and holds some
equity is related to brand equity through the mediation of the favorable, strong, unique brand associations in memory
dimensions of brand equity. Therefore, to create, to manage, (Keller, 1993), preference, purchase intention and choice
and to exploit brand equity, the relationship between the behavior of a brand indicates the existence of brand equity.
dimensions of brand equity and brand equity, and the
relationships between the antecedents and brand equity Brand equity dimensions and brand equity
dimensions must be determined.
The marketing literature contains empirical research on the
linkages between each of the dimensions of brand equity
Brand equity (brand awareness, brand loyalty, perceived quality, brand
Brand equity refers to the tremendous value inherent in a well- associations) and brand equity. The value of a brand or brand
known brand name. It appears when consumers willingly pay equity is largely created by brand loyalty. Aaker (1996) has
more for the same level of quality due to the attractiveness of contemplated that to a greater extent, the equity of a brand
the name attached to the product (Bello and Holbrook, 1995). depends on the number of people who purchase it regularly.
In the marketing literature, brand equity is referred to the The regular buyers have considerable value because they
intangible brand properties. Brand equity arose from customer represent a revenue stream for the firm. Thus, the concept of
brand-name awareness, brand loyalty, perceived brand quality brand loyalty is a vital component of brand equity. It has been
and favorable brand symbolisms and associations that provide a found to have a positive and direct role in affecting brand
platform for a competitive advantage and future earning equity (Atilgan et al., 2005). If customers are loyal to a brand
streams (Aaker, 1991). The equity that the strong brand even in the face of competitor’s brands with superior features,
possesses can give the company a loyal consumer franchise that it means that the brand has a substantial value to the
could bring substantial returns to the firm. Similarly, the 1989 customers.
Marketing Science Institute defines brand equity as: The equity of a brand is partly measured in terms of the
. . . the value that is added by the name and rewarded in the market with
awareness it evokes. The role of brand awareness in brand
better profit margins or market shares. It can be viewed by customers and equity depends on the level of awareness that is achieved. The
channel members as both a financial asset and as a set of favorable higher the level of awareness the more dominant is the brand,
associations and behaviors. which will increase the probability of the brand being
considered in many purchase situations. Therefore, raising
Figure 1 A conceptual framework of brand equity the level of awareness increases the likelihood that the brand
will be in the consideration set (Nedungadi, 1990) which will
influence consumers’ decision making. Past researches have
shown that brand awareness is a dominant choice tactic
among consumers (e.g. Cobb-Walgren et al., 1995; D’Souza
and Rao, 1995; Reynolds and Olson, 1995). If the awareness
of brands is high among consumers, it means the brand is

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 Does image of country-of-origin matter to brand equity? Journal of Product & Brand Management
Norjaya Mohd Yasin, Mohd Nasser Noor and Osman Mohamad Volume 16 · Number 1 · 2007 · 38 –48

familiar and reputable. Studies show that consumers who that of Nagashima (1970). He defined the image that
recognize a brand name are more likely to buy that brand consumers associate with a given country-of-origin as:
because familiar products are normally preferred to those that . . . the picture, the reputation, the stereotype that businessmen and
are less familiar (Hoyer, 1990; Macdonald and Sharp, 2000). consumers attach to products of a specific country. This image is created by
variables such as representative products, national characteristics, economic
Purchase decisions that are in favor of the brand helps in and political background, history, and traditions (Nagashima, 1970).
building brand equity.
Consumers’ perceived quality of a brand is due to their Some other researchers view country image as consumers’
perception process involved in the decision-making process. general perceptions about the quality of products made in a
High perceived quality occurs when consumers recognize the particular country (Han and Terpstra, 1988; Parameswaran
differentiation and superiority of the brand relative to and Yaprak, 1987) while some others view it as the “defined
competitors’ brands. This will influence their purchase beliefs about a country’s industrialization and national quality
decisions and would drive them to choose the brand rather standard” (Srikatanyoo and Gnoth, 2002).
than competitors’ brands. This implies that high perceived In the existing literature, there is a proliferation of studies to
quality would influence consumer’s choice, which will document country-of-origin perspectives. From these studies,
consequently lead to an increase in brand equity. To the marketers and consumer behavior researchers generally
marketer, high perceived quality could support a premium accept that a product’s or brand’s country-of-origin is an
price, which in turn can create a greater profit margin for the important influencing factor in consumer decision-making
firm that can be reinvested in brand equity (Yoo et al., 2000). (Khachaturian and Morganosky, 1990; Knight, 1999; Piron,
Aaker (1991) also suggest that perceived quality is an 2000). Most of the previous studies suggest that country-of-
association that is usually central to brand equity. origin information which is indicated by the “Made in . . . ”
Brand equity is largely supported by the associations that label serves several purposes in consumer decision-making. It
consumers make with a brand, which contributes, to a specific act as a salient attribute in consumer product evaluation
brand image. Brand associations are complicated and (Johansson, 1989), stimulates consumer’s interest in the
connected to one another, and consist of multiple ideas, product (Hong and Wyer, 1989), affect behavioral intentions
episodes, instances, and facts that establish a solid network of through social norms (Fishbein and Ajzen, 1975) and
brand knowledge (Yoo et al., 2000). It is formed as a result of influences buyer behavior through affective processes as in
the consumer’s brand belief, which can be created by the the case of consumer’s patriotic feelings about their own
marketer, formed by the consumer himself through direct country (Han and Terpstra, 1988). The overall evaluation of
experience with the product, and/or formed by the consumer products is influenced by country stereotyping, that is, the
through inferences based on existing associations (Aaker, image that consumers have about a certain country will
1991). Consumers’ favorable brand beliefs will influence their influence their perceptions of products from that country
purchase intentions and choice of the brand. These behavioral (Bilkey and Nes, 1982). Since consumers’ perception of a
responses have implications on brand equity. In the context of particular country-of-origin influence their evaluation of
products such as electrical appliances, brand associations products from that country, this will influence their
would represent the functional and experiential attributes preference, purchase intention and choice of a particular
offered by the specific brand. The intangible qualities that brand. Obviously, this has implications on the brand’s equity.
consumers associate the brand with, such as innovativeness,
distinctiveness, dynamism and prestige are also considered as
Method
brand associations. The combination of tangible and
intangible attributes creates a brand identity, that is “a Data collection
unique set of brand associations that the brand strategist The data for this study were gathered through mail
aspires to create or maintain,” which drives brand associations questionnaires that were distributed to a cross section of
(Aaker, 1996). Therefore, the identity of the specific brand organizations located in the Klang Valley, in the state of
may impact brand associations and ultimately brand equity. Selangor, Malaysia, which include public and private sectors.
The questionnaires were to be responded by the employees of
Brand’s country-of-origin image and brand equity the organizations irrespective of their positions. The
respondents were real consumers who reported their
Information-processing theory posits that consumers use consumption experience with one of the three different
product cues to form beliefs and evaluations about a product, product categories: television, refrigerator and
which in turn influence their purchase behaviors. Generally, air-conditioner. The reason for choosing the household
the country-of-origin is considered as an extrinsic product cue appliances is that major electrical appliances are generally
(Bilkey and Nes, 1982; Cordell, 1992; Erickson et al., 1984; expensive items that have a certain amount of risk associated
Han and Terpstra, 1988; Hong and Wyer, 1989, 1990; with them. Therefore, it is reasonable to expect that
Thorelli et al., 1989). Consumers are known to develop consumers must have acquired some brand knowledge and
stereotypical beliefs about products from particular countries develop choice criteria before making a purchase decision.
and the attributes of those products. Therefore the country- Besides, consumers are familiar with these product categories
of-origin image has the power to arouse importers’ and and the brands that they are using are relevant to the research
consumers’ belief about product attributes, and to influence subjects resulting in high knowledge and experience.
evaluations of products and brands (Srikatanyoo and Gnoth, Relevance with the product categories and brands of their
2002). The country of origin denotes the home country for a choice enables the respondents to provide more reliable and
company or the country that consumers infer from brand valid responses to the questionnaire. Respondents were
name (Han and Terpstra, 1988). One of the first assigned to one product and were asked which brands they
conceptualizations of the country-of-origin phenomenon was used. Thus they answer questions pertaining to the brand that

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 Does image of country-of-origin matter to brand equity? Journal of Product & Brand Management
Norjaya Mohd Yasin, Mohd Nasser Noor and Osman Mohamad Volume 16 · Number 1 · 2007 · 38 –48

they mentioned. To obtain reliable answers, the sample unit Table I Description of respondents
was composed of those individuals that were active decision
makers of the brand that they used. Item Description Frequency Percentage
The sample size for this study was determined using the Gender Male 222 44.3
table for determining the sample size from a given population Female 279 55.7
with the desired accuracy as suggested by Reeves (1992). The
samples in this study are restricted to adults of age 18 and Ethnicity Malay 344 68.7
above and employed. Two-stage probability cluster sampling Chinese 77 15.4
was employed, where groups of heterogeneous members of Indian 61 12.2
the population were identified. To choose the sample for this Others 19 3.8
study, probability random sampling was used. Since the
Education SPM/MCE 158 31.5
respondents were captured at their workplaces, the
STP/HSC 44 8.8
organizations were randomly chosen from the telephone
Diploma 116 23.2
directory of business clients for the state of Selangor and
Bachelor’s degree 143 28.5
Federal Territory issued by Telekom Malaysia. The study
sample was then drawn from the selected organizations based Masters/PhD 33 6.6
on the listing of employees of the organization concerned. Others 7 1.4
The data collection instrument is a structured questionnaire Job Professional 19 3.8
which contains three parts: Part I consists of statement items position Top management 12 2.4
to measure variable country-of-origin image. Part II consists Middle management 240 47.9
of items measuring dimensions of brand equity: brand loyalty, Lower management 68 13.6
brand awareness, perceived quality and brand associations Administrative and technical 152 30.3
and dependent variable brand equity, and Part III includes support
some questions on demographic and socio-economic
Others 10 2.0
characteristics of the subjects. There are three versions of
questionnaires which differ in only the product category being Household 1,000 and below 26 5.2
tested – television, refrigerator and air-conditioner. A income 1,001 to 3,000 178 35.5
respondent completes one questionnaire only. (RM) 3,001 to 5,000 154 30.7
5,001 to 7,000 79 15.8
Profile of respondents 7,001 to 9,000 31 6.2
9,001 to 11,000 18 3.6
The profile of respondents is shown in Table I. As mentioned 11,001 and above 15 3.0
earlier, the total respondents for this study are 501. The study
sample comprises respondents who vary on such Marital Never married 136 27.1
characteristics as gender, age, marital status, education level, status Married 365 72.9
job position, household income ethnicity and living area. Such Age 18 to 22 years 27 5.4
a difference is a natural reflection of the true consumer 23 to 27 years 101 20.2
population of Malaysia as shown in the “Population and 28 to 32 years 104 20.8
Housing Census of Malaysia, 2000” issued by the
33 to 37 years 89 17.8
Department of Statistics. Moreover, the samples were
38 to 42 years 86 17.2
selected through cluster sampling method, a kind of
43 and above 94 18.8
probability sampling, where the whole elements in
representative organizations were randomly selected.
The respondents comprise of working male and female
adults. In terms of gender, the sample indicates a somewhat originating country of the brand that they are now using. This
balance between the males and females. Majority of them variable is measured using seven items developed for this study.
(53.85) are above the age of 32 and married (72.9 percent)
With respect to ethnic groups, majority are Malays, followed by Brand equity dimensions
Chinese and Indians. A total of 3.8 percent belong to other Brand equity dimensions consist of four dimensions as
races which include Eurasian, Singhalese, the “bumiputras” of suggested by Aaker (1991) that is, brand loyalty, brand
Malaysia such as Kadazan, Bajau, Bidayuh and Melanau. The awareness, perceived quality, and brand associations. To
breakdown of the study sample in terms of ethnic groups could measure brand loyalty, two items were adopted from Yoo et al.
be considered representative of the population of Malaysia (2000), two items from Chaudhuri (1995) and three items
since most of the ethnic groups are represented in the sample. were developed for this study based on the conceptualization
of brand loyalty as proposed by Aaker (1991). The brand
awareness can be measured in two ways; brand recognition
Measures
and brand recall. However, in this study, the scale was
Country-of-origin image designed to measure simple brand awareness, in particular,
This study utilizes multiple measures for each construct in the brand recognition, rather than brand recall. Four items were
conceptual model in Figure 1. The country-of-origin scale adopted from Yoo et al. (2000), which were based on previous
measures the consumer’s perception of the image of the research by Alba and Hutchinson (1987) and Nedungadi
country where the brand originates. To measure this construct (1990). Three more items to measure brand awareness were
the consumers are assumed that they have an idea of the developed for this study. The perceived quality of brand scale

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 Does image of country-of-origin matter to brand equity? Journal of Product & Brand Management
Norjaya Mohd Yasin, Mohd Nasser Noor and Osman Mohamad Volume 16 · Number 1 · 2007 · 38 –48

measures consumers’ subjective judgment about a brand’s relationship with brand equity through the mediating
functionality and reliability. Three items were borrowed from effects of (a) brand distinctiveness (b) brand loyalty,
Yoo et al. (2000), which were based on the works of Dodds and (c) brand awareness/associations.
et al. (1991) and one item was developed for this study.
Favorable associations are measured in terms of “consumers’
belief that the brand has attributes and benefits that satisfy
Hypothesis testing
their needs and wants such that overall brand attitude is
The regression analysis was employed to test the relationships
formed” (Keller, 1993). Seven items were developed to
measure favorable associations. Two items to measure posited in the model. Based on the conceptual model, the
strength of association were adopted from Yoo et al. (2000). brand equity dimensions, which are treated as intervening
variables in the model, are posited to influence brand equity.
Brand equity The dependent variable brand equity was regressed on all these
Yoo et al. (2000) have developed the Overall Brand Equity variables – brand distinctiveness, brand loyalty and brand
Scale and four items from this scale were adopted to measure awareness/associations. The results are shown in Table III.
the consumer-based brand equity. Three more items were The model is significant at pð0:01 indicating 99 percent
developed for this study. This consumer-based method for confidence in explaining the dependent variable. All the three
measuring brand equity facilitates the definition of brand variables – brand distinctiveness, brand loyalty and brand
equity from the consumer perspective by comparing the awareness/associations are found to have a significant and
brand that the consumer is now using with the other brands in positive influence on brand equity at a significant level of
the same product category. 0.000. The R square of 0.713 indicates that 71.3 percent of
the variance in brand equity was explained by the variations in
Results brand distinctiveness, brand loyalty and brand awareness/
associations. The standardized beta weights are in the
Exploratory factor analysis hypothesized direction. These findings substantively support
Exploratory factor analysis was conducted separately on each H1(a), H1(b) and H1(c). Looking at the beta coefficients of
of the three constructs, country-of-origin image (seven items), the dimensions of brand equity on brand equity, brand loyalty
dimensions of brand equity (26 items) and the brand equity has the highest contribution towards brand equity, followed
(seven items). The items for each variable were grouped by brand distinctiveness and brand awareness/associations.
separately and principal component factor analysis was In testing the relationship between country-of-origin image
carried out on each of this grouping. The KMO index for
and each of the dimensions of brand equity, results of the
all the variables are found to be greater than 0.80, which
regression is shown on Table IV.
indicates the presence of sufficient intercorrelations in the
The significant F value for the three regressions is , 0.01,
data matrix and appropriateness of factor analysis. The
which indicates that the three regression models have 99
communalities or the estimates of the shared variance among
percent confidence in the ability to explain the dependent
seven items for country-of-origin reputation, 18 items for
brand equity dimensions, and seven items for brand equity are variables. From Table IV it is evident country-of-origin image,
shown to be greater than 0.5 (see Table II). has a positive and significant influence on brand
The factor analyses for the variables country-of-origin distinctiveness, brand loyalty and brand awareness at a
image produced only one factor with an Eigen value of 4.9 significant level of p , 0:01. Therefore, H2(a), H2(b), and
and contributed 70.02 percent to item variance. No items H2(c) are supported. Based on the R2 values, country-of-
were deleted during the process. The factor analysis for the origin image contributed 54.2 percent of the total variance in
variable dimensions of brand equity produced four factors brand distinctiveness, 19.6 percent in brand loyalty, and 29.9
with Eigen values greater than 1 contributing 70.01 percent to percent in brand awareness/associations.
item variance. Eight items were deleted during the process In testing the mediating effects of the dimensions of brand
due to the existence of cross-loadings with values greater than equity in the country-of-origin image image – brand equity
0.35. This is consistent with the works of past researchers linkage, Baron and Kenny (1986) is consulted. They suggest
such as Igbaria et al. (1995). The factors are labeled as brand that three requirements must be fulfilled:
distinctiveness, brand loyalty, brand awareness/associations, 1 significant relationship between the independent and
and brand attitude/perception respectively. Since the mediating variable;
reliability coefficient for brand attitude/perception is below 2 significant relationship between the independent and
the acceptable level as suggested by Nunnally (1978), the dependent variable; and
variable is dropped from further analysis. The factor analysis 3 significant relationship between the independent and
for the brand equity construct produced only one factor with dependent variable in the presence of the mediator.
an Eigen value more than 1. This factor contributed 77.44
percent to total variance explained. Based on the results of the To demonstrate mediation, Baron and Kenny (1986) further
factor analyses the hypotheses were stated as follows: suggest that the effect of the independent variable on the
H1. (a) Brand distinctiveness (b) Brand loyalty (c) Brand dependent variable is reduced or even disappears in the case
awareness/associations will have a positive relationship of full mediation.
with brand equity. The first requirement is fulfilled by the results shown in
H2. Brand’s country-of-origin image will have a positive Table IV. To fulfill the second requirement of the test of
relationship with (a) brand distinctiveness (b) brand mediation, the relationship between country-of-origin image
loyalty, and (c) brand awareness/associations. and brand equity is analyzed and the regression result proves
H3. Brand country-of-origin image will have a positive to be significant and positive as shown in Table V.

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 Does image of country-of-origin matter to brand equity? Journal of Product & Brand Management
Norjaya Mohd Yasin, Mohd Nasser Noor and Osman Mohamad Volume 16 · Number 1 · 2007 · 38 –48

Table II Exploratory factor analysis and scale reliability

Items Loading TVE MSA Signif. Reliability
Country-of-origin image
The country from which brand X originates is a country that is innovative in manufacturing 0.89
The country from which brand X originates is a country that has high level of technological advance 0.88
The country from which brand X originates is a country that is good in designing 0.87
The country from which brand X originates is a country that is creative in its workmanship 0.87
The country from which brand X originates is a country that has high quality in its workmanship 0.86
The country from which brand X originates is a country that is prestigious 0.79
X originates from a country that has an image of advanced country 0.68 70.02 0.90 0.00 0.93
Brand distinctiveness
I associate X with dynamism 0.83
I associate X with high technology 0.83
I associate X with innovativeness 0.82
I associate X with sophistication 0.81
I associate X with distinctiveness 0.81
I associate X with excellence 0.76
I associate X with prestige 0.75 0.95
Brand loyalty
If I am going to buy other electrical goods other than air-conditioner/refrigerator/television (either
one), I will choose brand X 0.78
Compared to other brands that have similar features, I am willing to pay a premium (higher) price for X 0.77
I will not buy other brands if X is available at the store 0.76
I will think twice to buy another brand if it is almost the same with X 0.69
I make my purchase selection of air-conditioner (or refrigerator or television) according to my favorite
brand name, regardless of price 0.69 0.86
Brand awareness/associations
I know how the symbol of brand X looks like 0.78
I have no difficulties in imagining X in my mind 0.76
I can quickly recall the symbol or logo of X 0.75
I have an opinion about this brand 0.58 70.01 0.94 0.00 0.82
Brand equity
Even if another brand has same features as X, I would prefer to buy X 0.92
If I have to choose among brands of air-conditioner/refrigerator/television, X is definitely my choice 0.90
If I have to buy an/a air-conditioner/refrigerator/television I plan to buy X even though there other
brands as good as X 0.89
Even if another brand has the same price as X, I would still buy X 0.89
If there is another brand as good as X, I prefer to buy X 0.88
If another brand is not different from X in any way, it seems smarter to purchase X 0.87
It makes sense to buy X instead of any other brands, even if they are the same 0.80 77.44 0.93 0.00 0.95
Notes: TVE ¼ Total variance explained; MSA ¼ Measure of sampling adequacy

Table III The effect of dimensions of brand equity on brand equity and brand awareness/associations on the country-of-origin
image – brand equity linkage. The results are shown in
Independent variables Standardized beta T Sig. ( p-value) Table VI. Model 1 shows the relationship between country-of-
Brand distinctiveness 0.234 6.728 0.000 origin image and brand equity. Model 2 is the mediated
Brand loyalty 0.525 16.638 0.000 regression that shows the relationship between country-of-
Brand awareness/associations 0.212 6.260 0.000 origin image and brand equity with the inclusion of the
mediating variable (either brand distinctiveness, brand loyalty
Notes: R2 ¼ 0:713, Sig. F ¼ 0:000
or brand awareness/associations). For mediating effect to
exist, the beta coefficients in Model 2 should be less than in
Model 1
Mediating effects of brand distinctiveness, brand loyalty From the results shown above, country-of-origin image is
and brand awareness/association found to be significant in the regressions mediated by brand
Three regression analyses were conducted separately to test loyalty and brand awareness/associations, with a decrease in
the mediating effects of brand distinctiveness, brand loyalty the beta coefficients. This indicates that brand loyalty and

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 Does image of country-of-origin matter to brand equity? Journal of Product & Brand Management
Norjaya Mohd Yasin, Mohd Nasser Noor and Osman Mohamad Volume 16 · Number 1 · 2007 · 38 –48

Table IV The effect of country-of-origin image on brand distinctiveness, brand loyalty and brand awareness/associations
Dependent variable Standardized beta t-value Significance R2 Sign. F
Brand distinctiveness 0.736 24.091 0.000 0.542 0.000
Brand loyalty 0.443 11.014 0.000 0.196 0.000
Brand awareness/associations 0.547 14.550 0.000 0.299 0.000

of-origin image is found to influence brand distinctiveness

Table V The effect of country-of-origin image on brand equity
positively and significantly. Country-of-origin image plays an
Independent variables Standardized beta T Sig. ( p-value) important role in consumer purchase decision, particularly for
electrical goods. Consumers develop their interest and
Country-of-origin image 0.523 13.626 0.000
preference for a brand on the basis of their perception of
2
Notes: R ¼ 0:274, Sig. F ¼ 0:000 the country-of-origin and the available information pertaining
to the brand. As such, favorable information about the
country helps creates positive attitude toward the brand,
brand awareness/associations have partial mediating effects on which leads to favorable image of the brand. Jacoby et al.
the linkages between country-of-origin image and brand (1971) suggested that brand image has a strong effect upon
equity. In the regression mediated by brand distinctiveness, quality perception. Since brand distinctiveness in this study
country-of-origin image is insignificant which indicates that refers to favorable and positive aspects that are associated to
brand distinctiveness fully mediates the relationship between the brand, such as quality, this suggests that favorable country
country-of-origin image and brand equity. image leads to favorable brand image, which in turn
influences brand distinctiveness. This explains the positive
and significant relationship between country image and brand
Discussion distinctiveness.
This study examines the effects of country-of-origin image on The test of relationship between country image and brand
the development of brand equity of household electrical loyalty supports the hypothesis that there is a positive
appliances particularly television, refrigerator and air- relationship. This implies that good image of the country-of-
conditioner. It is found that the brand equity of electrical origin leads to a high degree of customer loyalty. A plausible
appliances is made up of three dimensions, namely brand explanation for this expected relationship is that Malaysian
distinctiveness, brand loyalty and brand awareness/ consumers perceive countries with good image as
associations. These three dimensions have a significant technologically advanced countries and brands that originate
impact on brand equity as hypothesized. This indicates that from these countries are reliable and high quality. Although
the three dimensions of brand equity actually form the brand consumers are faced with many alternative brands in the
assets in which the evaluation of the brand’s added value or market, which they perceive as equally good in terms of
equity is based upon. The formation of brand equity, product attributes and functionality, information about the
therefore, is rooted in these dimensions. In other words, the country is an added advantage. Consumers’ perception
extent of awareness and consumer loyalty as well as the towards country-of-origin is often transferred to the brands
distinctiveness of the brands of household electrical originate from that country due to carry-over effect. These
appliances indicates the existence of brand equity. Since the consumers feel that brands from countries with good image
relationships of the three dimensions of brand equity to brand are more reliable than brands produced by countries with less
equity are positive, we can say that, the more distinctive the favorable image. As a result, these brands are preferred and
brand is, the higher the brand equity. Similarly, a high degree often chosen during purchase decision-making. If repeat
of brand loyalty and brand awareness leads to a high level of purchases occurs, eventually consumers may develop loyalty
brand equity. In terms of the effect size, brand loyalty seems towards these brands. This explains why country image is
to contribute the most (beta ¼ 0:525) to the formation of related to brand loyalty.
brand equity. This is in line with the works of Yoo et al. (2000) Country image is also found to have a significant effect on
that found brand loyalty as the key construct in explaining brand awareness/associations. A possible explanation for this
brand equity. relationship is that in the purchase of electrical goods,
The effects of country-of-origin image on each of the consumers often associate the quality of a brand with the
dimensions of brand equity are also analyzed. First, country- image of the origin country. Since consumers today are mostly

Table VI Relationship between country-of-origin image and brand equity mediated by dimensions of brand equity
Model 1 (IV and DV) Model 2 (IV and DV with MV)
Independent variable Mediating variable (dimensions of brand equity) Std. beta Std. beta
Country-of-origin image Brand distinctiveness 0.523 * 0.056
Country-of-origin image Brand loyalty 0.523 * 0.181 *
Country-of-origin image Brand awareness/associations 0.523 * 0.180 *
Note: * p , 0:001

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 Does image of country-of-origin matter to brand equity? Journal of Product & Brand Management
Norjaya Mohd Yasin, Mohd Nasser Noor and Osman Mohamad Volume 16 · Number 1 · 2007 · 38 –48

well educated, as indicated by the education level of the study in creating brand loyalty for their products. To ensure loyal
sample (98.6 percent), it can be expected that they are well customers, producers and retailers need to build long-term
informed about the original country of their selected brands. relationship with their customers, offer and maintain high
Countries with good image are often familiar to the quality products, and provide good services, including
consumers and often perceived as producers of quality delivery and installation as well as after sales services such
brands. As such relationship exists between country image as maintenance and repair.
and brand awareness/associations. Apart from that, producers of household electrical
As mentioned earlier, the focus of this study is to examine appliances should always try to enhance and promote the
the relationship between country-of-origin image and brand good image of their brand’s original country in order to
equity, which is mediated by the brand equity dimensions. enhance the overall image of the brand in all their marketing
From the previous section, it is found that relationships exist practices particularly advertising and personal selling. Brands
between country-of-origin image and the dimensions of brand from well-established or good image countries generally are
equity. This study also found that country-of-origin image has easier to sell than brands from countries with unfavorable
a positive and significant impact on brand equity. However, image. Producers of brands from countries with favorable
the results suggest that country-of-origin image has both image can also capitalize the good image in their brand-
direct and indirect relationship with brand equity. Indirect naming strategy. Besides, marketers who want to benefit from
relationship here indicates that country-of-origin image is favorable country image should highlight the brands of
related to brand equity through the mediators. In the country- superior quality that originate from the same country. This
of-origin image – brand equity linkage, brand distinctiveness emphasis may help consumers to generalize product
fully mediates the relationship while brand loyalty and brand information over the country’s brands. For example, Sharp
awareness/associations act as partial mediators. Figure 2 could emphasize that its television sets are “as good as
illustrates these relationships. Sony’s.” Although different manufacturers produce these two
brands, the brand originates from the same country, that is,
Japan.
Conclusion and implications
The image of a country that consumers perceive is one of the
Suggestions for future research
factors that consumers consider in making their purchase
decision particularly in the purchase of consumer durables The antecedents of brand equity of the non-marketing mix
such as household electrical appliances. As such, country-of- nature in this study only consider one variables i.e. brand’s
origin image would have an impact on the equity of such country-of-origin image. Many other factors exist as
goods. This study investigates the relationships between suggested by the literature, such as order of entry (Simon
country-of-origin image and brand equity of electrical and Sullivan, 1993), brand alliance (Shocker et al., 1994) that
appliances, which includes televisions, refrigerators and contributes to brand equity. Future research should attempt
air-conditioners. Viewing the results of the study, the to examine the influence of such factors on brand equity. In
findings suggest two things. First, country-of-origin image addition, the conceptual framework of the present study does
has a significant impact on brand equity dimensions and not take into considerations factors that moderate the
brand equity. Secondly, the brand equity dimensions namely influence of antecedent of brand equity on brand equity.
brand distinctiveness, brand loyalty and brand awareness/ Thus, future research should expand the present model by
associations have significant influence on the formation of incorporating moderating factors such as culture and
brand equity of electrical appliances. Among these three consumer demographics, which may have significant
dimensions brand loyalty has the greatest contribution to the influence on consumers’ perception.
development of brand equity. This implies that producers of Since this study investigates brand equity of durable goods
household electrical appliances should put greater emphasis of three product categories namely television, refrigerator and

Figure 2 Mediating effects of dimensions of brand equity on brand’s country-of-origin image – brand equity relationship

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 Does image of country-of-origin matter to brand equity? Journal of Product & Brand Management
Norjaya Mohd Yasin, Mohd Nasser Noor and Osman Mohamad Volume 16 · Number 1 · 2007 · 38 –48

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 Does image of country-of-origin matter to brand equity? Journal of Product & Brand Management
Norjaya Mohd Yasin, Mohd Nasser Noor and Osman Mohamad Volume 16 · Number 1 · 2007 · 38 –48

Rust, R.T., Lemon, K.N. and Zeithalm, V.A. (2001), Driving Among them, the impact of country-of-origin should not be
Customer Equity: Linking Customer Lifetime Value to Strategic ignored. As consumers we have mental images of “cars”, but
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Srikatanyoo, N. and Gnoth, J. (2002), “Country image and
international tertiary education”, Journal of Brand Brand equity considerations
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Thorelli, H.B., Lim, J. and Ye, J.S. (1989), “Relative in the morning, and keeps them awake at night. It is what
importance of country of origin, warranty and store image represents the product in the minds of consumers. It may be a
on product evaluations”, International Marketing Review, fantasy, but it is more than a virtual reality. Understanding
Vol. 6 No. 1, pp. 35-46. customers’ preferences, intentions to purchase and brand
Yoo, B., Donthu, N. and Lee, S. (2000), “An examination of choices provides the basis for success, and positive responses
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long-term market health.
pp. 195-211.
Brand awareness, brand loyalty, perceived quality and
brand associations are the dimensions of brand equity. Often
Further reading brand equity is primarily related to brand loyalty and having
regular customers, and loyalty is particularly powerful when
Porter, M. (1985), Competitive Advantage: Creating and
customers stay with a brand even when competitor products
Sustaining Superior Performance, The Free Press, New York,
have superior product features. Raising brand awareness
NY.
increases the chance of the brand being considered for
purchase by customers and potential customers. Their
About the authors propensity to purchase will also be affected by perceptions
Norjaya Mohd Yasin is currently a Lecturer of Marketing at of quality, the differentiators that separate one from the other.
the School of Business Management, Universiti Kebangsaan And the intangible, often complex, qualities of brand
Malaysia, Bangi, Selangor, Malaysia. Norjaya Mohd Yasin is associations are key, contributing to a specific brand image.
the corresponding author and can be contacted at: When it comes to linking brand equity with the country-of-
[email protected] or [email protected] origin people look for cues and clues, and often take national
Mohd Nasser Noor is currently a Lecturer of Marketing at stereotypes into consideration however unfashionable it would
the School of Management, Universiti Sains Malaysia, be to publicly admit it. Such stereotypes can greatly influence
Penang, Malaysia. how products are assessed. These can relate to images and
Osman Mohamad is currently the Deputy Dean of impressions of how industrialized a country is and how high
Graduate School as well as a Lecturer of Marketing at the are its quality standards. This then feeds into their brand
School of Management, Universiti Sains Malaysia, Penang, preference, intention to purchase, and brand choice. In short,
Malaysia. it cannot be ignored.

Executive summary and implications for A relationship you can rely on

Research into customer attitudes in this area was via
managers and executives questionnaire to a sample population based in the Klang
This summary has been provided to allow managers a rapid Valley within the Selangor state in Malaysia. It focused on the
appreciation of the content of the article. Those with a particular brand equity of household electrical appliances (particularly
interest in the topic covered may then read the article in toto to take televisions, refrigerators and air-conditioner units) and its
advantage of the more comprehensive description of the research relationship with the country-of-origin of the products.
undertaken and its results to get the full benefit of the material The survey confirmed that the creation of brand equity is
present. squarely reliant on the three dimensions of brand
distinctiveness, loyalty and awareness/associations. And the
Country-of-origin matters: build brand loyalty, but be more distinctive is the brand then the higher is the brand
aware of your roots equity. Of the dimensions identified, brand loyalty contributes
The case for brand building is an overwhelming one. Readers the most.
of this journal may be a self-selecting sample, but finding When it comes to country-of-origin, the following findings
consensus among them on the benefits of investing in the were reported:
brand would not be the hardest task ever set. In building .
it influences brand identity positively and distinctively;
brands a number of variables are at play and need to be .
for electrical goods it plays an important role in
considered. purchasing decisions by consumers;

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 Does image of country-of-origin matter to brand equity? Journal of Product & Brand Management
Norjaya Mohd Yasin, Mohd Nasser Noor and Osman Mohamad Volume 16 · Number 1 · 2007 · 38 –48

.
customer interest and brand preferences are based on relationships are constantly under pressure, here is one that
country-of-origin and other available information; and can be relied upon. Even if marketers wish to, it is not
. there is a positive relationship between country image and something that can be ignored. It is not something that can be
brand distinctiveness. controlled, but it is something that can be harnessed. At the
Where customers have a good impression of a country this very least it is an alarm call to wake up. At best it is a lever for
can lead to higher levels of customer loyalty. In Malaysia the market savvy.
goods from technologically advanced countries are No one chooses where they come from, but they do have
considered to be both reliable and of high quality. Country the capability to make the most of accidents of birth. It may
image also has a big contribution to make to brand not be fair, it may seem outmoded by the rapid technology
perceptions. transfer of the global market place, but whatever our
In brief, the survey sought to probe the relationship customers are thinking concerns us, every waking hour.
between the image of the country-of-origin and brand equity,
mediated by the brand dimensions identified. The result – the (A précis of the article “Does image of country-of-origin matter to
relationship is a strong one. In an uncertain world, where brand equity?”. Supplied by Marketing Consultants for Emerald.)

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