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Abstract
In today's multinational marketplace, it is increasingly important to understand why some consumers prefer global brands to local brands. We delineate three pathways through which perceived brand globalness (PBG) influences the likelihood of brand purchase. Using consumer data from the U.S.A. and Korea, we find that PBG is positively related to both perceived brand quality and prestige and, through them, to purchase likelihood. The effect through perceived quality is strongest. PBG effects are weaker for more ethnocentric consumers.
Journal of International Business Studies (2003) 34, 53-65. doi:10.1057/ palgrave.jibs.8400002
Introduction
Frito-Lay recently changed its leading potato chip brand in the Netherlands from Smiths to Lay's in order to `capture the affinity that an international brand generates' (Anonymous, 2001a, 72). This case is not unique. Many multinational corporations today are altering their brand portfolios in favor of global brands. For example, both Procter & Gamble (P&G) and Unilever have greatly pruned the number of brands they market around the world, often disposing of those with limited global potential (Pitcher, 1999). The telecom giant Vodafone is replacing local brand names by the global Vodafone name (Anonymous, 2001b). Although there is a dearth of formal definitions of global brand in the literature, it is commonly agreed that they are brands that consumers can find under the same name in multiple countries with generally similar and centrally coordinated marketing strategies (Yip, 1995; Branch, 2001).
Several reasons are offered for moves toward global brands. First, globalization can yield economies of scale and scope in R&D, manufacturing, and marketing (Yip, 1995). Second, its strategic appeal increases as meaningful segments of consumers around the world develop similar needs and tastes (Hassan and Katsanis, 1994). Third, globalization speeds up a brand's time to market by reducing time-consuming local modifications (Neff, 1999). Such arguments have been present in the literature for many years and are now widely accepted.
Recently, consumer preference for brands with 'global image' over local competitors, even when quality and value are not 'objectively' superior, has been proposed as a fourth reason for companies to move toward global brands (Shocker et al., 1994; Kapferer, 1997). Research indicates that corporations take advantage of such image-enhancing effects by positioning brands as 'global' in their communications, using message elements such as brand name,...