Academic journal article International Management Review

The Moderating Effect of Multicultural Competence in Brand-of-Origin Effect

Academic journal article International Management Review

The Moderating Effect of Multicultural Competence in Brand-of-Origin Effect

Article excerpt

[Abstract]

Research on country-of-origin effect has been extensive. It is believed that consumers' product evaluations and purchase intentions may be influenced by their country image stereotypes. We argue that with the progress of globalization, people may change their country image stereotypes and increase multicultural competences. The country-of-origin effect may be influenced by such changes. This study aims to examine the moderating effect of multicultural competence in brand-of-origin effect. Specifically, we developed a model to explicate the relationship between brand-of-origin image, product attributes, and perceived product quality, moderating by consumers' multicultural competence. We use need for cognitive closure as the indicator of multicultural competence. Using a 2X2 research design, we tested the hypotheses with a convenient sample of 201 university students. The results demonstrated that country brand was more influential to consumers with low multicultural competence when they made product quality evaluation: When domestic and foreign products are identical on other attributes, domestic products get more positive evaluation than foreign products, and favorable brand-of-origin leads to more positive evaluation than less favorable brand-of-origin. For consumers with high multicultural competence, other product attributes are more influential in quality evaluation, and such consumers will be less susceptible to the influence of brand-of-origin.

[Keywords] Brand-of-Origin effect; multicultural competence; need for cognitive closure; Chinese consumer

Introduction

Extensive research on country-of-origin (COO) effect has been reported in the international business, marketing, and consumer behavior literatures. Country of origin is the country of manufacture, production, or growth where an article or product comes from. It is believed that the country of origin has an impact on consumers' product evaluations and purchasing intentions to a brand (Kim & Pysarchik, 2000; Lee & Ganesh, 1999; Teas & Agarwal, 2000).

Researchers have identified two major causes of COO effect. One is the social-economic differences among countries, especially the differences in technology capability and product quality between developed and developing countries (Schooler, 1971). Another cause is consumer's cognitive bias. Studies have shown that consumers may tend to have a relative preference to products from their own country (ethnocentrism) or may tend to have a relative preference for or aversion to certain products that originate from certain countries due to their country image stereotypes (Nagashima, 1970). The globalization of economies and markets has been dramatically changing the two factors mentioned above. As Thomas Friedman (2005) argues in his best-selling book, globalization has changed core economical concepts and the world is "flat" in the sense that the competitive playing fields between industrial and emerging market countries are leveling. With the worldwide technology transfer and diffusion, the gap in product quality between developed and developing countries are becoming small. On the other hand, globalization has also facilitated intercultural communication and understanding. Through cross-cultural interaction, people may change their country image stereotypes and increase multicultural competences. Multicultural competence refers to the ability of people to recognize, understand, and respect cultural differences, utilize multicultural knowledge (Arthur et al., 2005). Chiu and Hong (2005) identified four major components of multicultural competence, namely, sensitivity to both inter- and intracultural variations in cultural meanings, use of context-appropriate cultural knowledge in intercultural interaction, flexibility in switching cultural frames for sense making, and use of cultural knowledge to foster creativity.

The term of multicultural competence is fairly recent but has become widely used in the fields of education, social work, and healthcare. …

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