Global vs local brands: how home country bias and price differences impact brand evaluations

Abstract

Purpose

The purpose of this paper is to re-conceptualize the distinction between global and local brands, providing a more comprehensive framework, which considers both geographical distribution and ownership. It examines main and interactive effects of consumers’ perceptions of these factors, and studies how ethnocentrism (CET) and price affect brand evaluations, considering a range of price difference thresholds.

Design/methodology/approach

A preliminary study (n=243) examined main and interaction effects of brand globalness and ownership on consumers’ brand quality attitudes and purchase intentions in four different product categories. The main study (n=558) further explored brand ownership effects by examining the interaction of CET and price differences.

Findings

The preliminary study confirmed the distinctiveness of brand globalness and ownership. Consumers evaluated global (vs non-global) brands more positively, regardless of brand ownership (local vs foreign). The main study found that effects of price and CET varied considerably across product categories.

Research limitations/implications

Limitations include the use of student samples from a single country (Thailand), and of scenarios instead of real life purchase decisions.

Practical implications

The findings suggest that perceived brand globalness positively impacts brand evaluations. Companies may cultivate a global brand image by emphasizing global cues. Local origin allows (global) brands to command a price premium, although this varies across product categories. An emphasis on globalness seems valuable, especially for local brands.

Originality/value

This research offers a refined conceptualization of brand globalness, a key construct in international marketing. Additional value is provided by studying price effects, which have received limited attention in international marketing, and substantial data collection (total N>800) in an understudied yet important economy (Thailand).

Citation

Winit, W., Gregory, G., Cleveland, M. and Verlegh, P. (2014), "Global vs local brands: how home country bias and price differences impact brand evaluations", International Marketing Review, Vol. 31 No. 2, pp. 102-128. https://doi.org/10.1108/IMR-01-2012-0001