The effects of brand origin and country-of-manufacture on consumers' institutional perceptions and purchase decision-making

Abstract

Purpose

Industry-wide crises involving consumer products place consumers at risk. Consumers rely on institutions that constrain corporate practice and control product quality to reduce risk. As institutions vary by country, country-of-origin (COO) acts as a salient cue for consumers to identify institutional quality and thus evaluate risk when making purchase decisions. However, in the era of globalisation, identification of institutional quality becomes complex as global value chains involve different countries such as brand origin (BO) and country-of-manufacture (COM). Therefore, this research investigates how BO and COM individually and jointly affect consumers' institutional perceptions and subsequent purchase decision-making in the presence of systemic risk.

Design/methodology/approach

This research includes three studies (n = 764) employing surveys and choice modelling experiments with samples from China and the USA.

Findings

The results show that BO and COM relate to different institutional perceptions. BO evokes perceptions of legitimacy and the regulatory environment, while COM evokes perceptions of the normative and the regulatory environment. The combination of BO and COM determines how institutional quality is communicated and further affects consumers' legitimacy perceptions, preferences and willingness to pay a price premium.

Originality/value

This research contributes to understanding the effect of BO and COM in the context of complex value chains from an institutional perspective. It also provides implications for leveraging complex COO cues with BO and COM information to improve consumers' institutional perceptions.

Citation

Chen, S., Wright, M.J., Gao, H., Liu, H. and Mather, D. (2021), "The effects of brand origin and country-of-manufacture on consumers' institutional perceptions and purchase decision-making", International Marketing Review, Vol. 38 No. 2, pp. 343-366. https://doi.org/10.1108/IMR-08-2019-0205