The influence of country image on luxury value perception and purchase intention
| Pages | 88-110 |
| DOI | https://doi.org/10.1108/JABS-08-2015-0142 |
| Date | 03 January 2017 |
| Published date | 03 January 2017 |
| Author | Ketsuree Vijaranakorn,Randall Shannon |
| Subject Matter | Strategy,International business |
The influence of country image on luxury
value perception and purchase intention
Ketsuree Vijaranakorn and Randall Shannon
Ketsuree Vijaranakorn
and Randall Shannon are
both based at Mahidol
University, Bangkok,
Thailand.
Abstract
Purpose –This study aims to develop a theoretical concept by examining the country image effects on
luxury value perception, a matter past studies have overlooked. Multiple facets of country image,
cognitive and affective dimensions, have been developed to evaluate perceived luxury value and
purchase intention. However, no prior studies have considered all the types of perceived luxury values:
utilitarian value, hedonic value, symbolic value and economic value, considered in relation to cognitive
and affective country image in an emerging country’s market. Accordingly, this study has attempted to
explore the ways Thai luxury consumers perceive the image of the country and the influence of the
perceived value of Thai luxury brands, to learn which country attributes strengthen the luxury brand’s
value and customers’ purchase intention.
Design/methodology/approach –A total of 407 Thai respondents, who were luxury-product
consumers who knew and previously had bought either Thai luxury brands or global luxury brands,
comprised the final sample examined. Structural Equation Modeling was employed in this research
to test the research hypotheses. The structural model proposed a causal relationship between two
endogenous constructs, cognitive and affective country images, and five exogenous constructs:
utilitarian value, hedonic value, symbolic value, economic value and purchase intention.
Findings –The findings confirmed that countries are like brands in that the perceived image of
each country’s aspects, cognitive and affective, influences the perceived value in each dimension
differently, and so affects purchase intention. This implies that the evaluation of perceived quality or
perceived value for money, as in past studies, cannot accurately demonstrate what particular
benefits consumers receive when they utilize the country-image cue. Country image has both
symbolic and emotional significances for consumers. The findings have provided a more precise
measure of the effects of country image as well as important information on country positioning the
in the world market.
Research limitations/implications –There are some limitations in this study. The reliance on Thai
samples from one city has limited the generalizability of the findings. Moreover, this study considered
only one country of brand origin, and only one product category has been chosen as the stimulus, which
together are the major limitations of this study. Future research could also consider further testing
country image effects on value perception with other extrinsic attributes, rather than using a single cue,
as this study did. Additionally, antecedent variables that may have an influence on country-image
effects should be considered in future studies.
Practical implications –The relation of country image and value perception could help both
governments and companies support their national brands more effectively, or to export products
in accordance with the image aspect that most strongly impacts consumers’ positive perception of
value. Moreover, it would be valuable for companies producing luxury products to know which
country attributes strengthen the brand’s value. Luxury-brand managers will have to take these
aspects into consideration when developing their communications strategies (Krupka et al., 2014).
Originality/value –There is a lack of research as regards the impact of a brand name’s perceived
origin on the luxury perception associated with that brand (Salciuviene et al., 2010). This research
is the first to investigate the theoretical framework of luxury value perception found in relation to
cognitive and affective country images. From an academic perspective, this study sought to
increase the theoretical research relating to the ambiguous conceptualization of the country-image
effect on consumers’ perception of value in luxury products. Additionally, the relation of country
image to luxury value perception could help both governments and companies support their
Received 30 August 2015
Revised 26 February 2016
29 April 2016
Accepted 29 April 2016
PAGE 88 JOURNAL OF ASIA BUSINESS STUDIES VOL. 11 NO. 1, 2017, pp. 88-110, © Emerald Publishing Limited, ISSN 1558-7894 DOI 10.1108/JABS-08-2015-0142
national luxury brands more effectively, or to export luxury products in accordance with the image
aspect that most strongly impacts consumers’ positive perception of value.
Keywords Structural equation modelling, Country image, Country of origin effects, Luxury brands,
Fashion products, Value perception
Paper type Research paper
Introduction
Country image is accepted as one of the extrinsic cues that affect consumers’ evaluation
of products. Most past studies have found that consumers have deemed products from
developed countries to be of higher quality than those from developing countries (Usunier,
2006;Khan and Bamber, 2007). O’Cass and Siahtiri (2013) recently found that Chinese
young adults have a preference for fashion clothing brands with Western origins over those
with Asian origins. Negative perceptions of certain Asian countries and the brand image of
products made in those countries may result from the region’s history, i.e. as in the past
having been perceived to engage in kinds of manufacturing that included low-cost
production, product imitation and low-quality goods (Small et al., 2007). These negative
past perceptions of certain Asian countries have become the major challenge for Asian
brands in the world market.
Country image has been used as a valuable differentiation strategy in international markets
(Beverland and Lindgreen, 2002). Many brands use strong and positive brand-origin cues
in their communication. This is highly prevalent in the case of luxury brands that highlight
their products’ country of origin in every communication (Shukla, 2011). Nia and Lynne
Zaichkowsky (2000) pointed out the characteristic of luxury products’ association with
country image as expressed in a country’s strongly positive reputation for excellence, e.g.
Swiss watches or Italian fashion products. The most profitable fashion luxury brands
originate from only a few countries in Europe (Krupka et al., 2014). This raises several
questions:
Q1. Does the positive image of European countries influence the success of luxury
products by creating additional benefits to customers?
Q2. Would it be possible for Asian countries whose images are associated with low
production costs to succeed in developing global luxury brands such as those
from Europe in the near future?
Q3. Additionally, how could governments improve these Asian countries’ images to
overcome a history of perception of poor product quality in consumers’ minds and
thereby enable Asian brands to gain benefits from their country image?
In assessing the success of a global luxury brand, country image remains an important
information cue that consumers use to evaluate the quality and value of products
(Papadopolous and Heslop, 1993). Country-image effects were found to be stronger in
luxury products than in other product types (Shukla, 2011). Country of origin, in terms of
both brand origin and country of production, is of great importance for luxury brands
(Krupka et al., 2014). However, past studies have not given attention to the effects of
country image on consumers’ perceptions of luxury with respect to their purchase
intentions (Shukla, 2011). An understanding of how the brand origin has impacted
customers’ sense of value is essential for the luxury fashion industry to succeed in this
business climate (Khan and Bamber, 2008). It would be valuable to know which country
attributes strengthen those countries’ domestic luxury brands’ value and which, if any,
country attributes have a negative impact on those countries’ brand images.
The realization that negative past perceptions of certain Asian countries influence the value
of those countries’ luxury brands presents a challenge, and an important issue to
overcome; the question is how this can be accomplished? Accordingly, the present study
aims to investigate the theoretical framework of luxury value perception on the impact of
VOL. 11 NO. 1 2017 JOURNAL OF ASIA BUSINESS STUDIES PAGE 89
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