Mediation of product design and moderating effects of reference groups in the context of country-of-origin effect of a luxury Brand

Abstract

Purpose

The purpose of this paper is to examine the symbolic representations of non-users compared to the life experiences of users related to a luxury brand. In particular, the study examines whether product design mediates the relationship between antecedent factors of country-of-origin effect and product experience, and it also investigates the moderating effects of reference groups (non-users vs users) on the relationship between antecedent factors of country-of-origin effect and product design related to a luxury brand, namely, the Mercedes-Benz C-Class or E-Series.

Design/methodology/approach

A sample of convenience of 272 persons classified as non-users and users is investigated. An online questionnaire was used and 28 statements are included in the analysis based on a seven-point Likert scale.

Findings

The study reveals that the country-of-origin effect for the model of non-users and users has a very good fit with current data and is statistically significant. It also reveals that all relationships are significant except for price consciousness to product design and for brand familiarity to price consciousness. There is also partial mediation of product design between antecedent factors and product experience. Furthermore, the moderating effect of reference groups appears to play an important role, as it impacts the relationship between antecedent factors of the country-of-origin effect and product design/product experience.

Originality/value

This study indicates that the non-users’ group based on the hypothetical purchases of a luxury brand with a strong country image has a different country-of-origin effect to the users’ group of the same luxury brand. Moreover, the study concludes that there are statistically significant differences between the non-users’ group versus users’ group of a luxury brand (Mercedes-Benz), and these differences are concerned with the constructs of brand familiarity, brand commitment, product design and product experience. Finally, the study reveals that “price consciousness” is not relevant for luxury brands. Managerial implications, limitations of the study and future research directions are discussed.

Citation

Coudounaris, D.N. (2018), "Mediation of product design and moderating effects of reference groups in the context of country-of-origin effect of a luxury Brand", Review of International Business and Strategy, Vol. 28 No. 2, pp. 169-205. https://doi.org/10.1108/RIBS-05-2017-0044