Investigation of the Effect of Country of Origin Image on Brand Equity (Case Study: Iran khodro Diesel Company- Chorus Minibus)

Subject Areas : Jounal of Marketing Management

K. Heidarzadeh ¹ ()
M. Hashemi ² ()

Received: 2013-08-19 Accepted : 2013-08-19 Published : 2013-07-23

Keywords: Brand Equity, Country of origin, Brand distinctiveness, Brand Loyalty, brand awareness, Brand association,

Abstract :

Brand equity is considered a key indicator of the state of health of a brand, and its monitoring is believed to be an essential step in effective brand management. Country of origin is another important variable influencing customer perceptions of brands country of origin is defined as “the country in which the product is made”. Increasingly, and for a variety of reasons, brands from one country are being made available to consumers in other countries. In such instances, international marketers need to understand the sources of the equity of their brands. Some researchers have realized this and advocate extending the international consumer research scope to include brand equity. For example, measurement of brand equity across international boundaries is essential if brand managers are "to manage and control brand equity effectively". The purpose of this research is to explore the effects of brand’s country-of-origin image on the formation of brand equity. To accomplish this, effectiveness of Country of origin image on brand equity of minibus in the Iran market is examined. A conceptual framework of research in which country-of-origin image is postulated the dimensions of brand equity, which is made up of brand loyalty, brand awareness/associations, and brand distinctiveness. These dimensions, in turn, influence brand equity. The data for this study were gathered through questionnaires that were distributed to a cross section of Hyundai mini bus buyers. Using stratified sampling, 420 questionnaires delivered between referred to after sales service agencies of Iran khodro diesel. Among of them, answers of 392 questionnaires were acceptable. Structural Equation Models (SEMS) is used in this research. The Structural Equation Model results show that brand’s country-of-origin image positively and significantly influences dimensions of brand equity. The results also show that brand loyalty positively influences brand equity. Producers of commercial vehicle should put greater emphasis in creating brand loyalty for their products and also at the time of product choosing focus on the good image of brand’s original country.