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A cross-national inves tigationof the effects of country of

origin and brand name on theevaluation of a new car

Gerald HublFaculty of Business, University of Alberta, Edmonton, Alberta, Canada

Country-of-origin effectsThe impact of products country of origin on consumers purchase decisions hasbeen an issue of increasing importance to marketing and consumer behaviourresearchers, as well as to marketing managers. As more companies based inindustrialized countries move the production of their goods to foreign locations,the way their brands are perceived by consumers changes (see e.g. Cordell,1993; Tse and Gorn, 1993). Lower costs of labour, the reduction oftransportation costs, and the achievement of global presence of the companyhave been the main reasons for such decisions. However, manufacturers havebeen paying litt le attention to the effects of a products new country of origin onconsumers perception of its quality.

Most published s tudies on country-of-origin effects found that countrystereotypes do exist and that they have some impact on product evaluationsand purchase decisions. Country-of-origin effects have been found to exist forproducts in general (Darling and Wood, 1990; Howard, 1989), for certain productcategories (Cordell, 1992; Hong and Wyer, 1989, 1990; Roth and Romeo, 1992),and for specific brands (Chao, 1993; Han and Terpstra, 1988; Tse and Gorn,1993; Witt, 1990). Country stereotypes have an impact on the purchasingbehaviour both of individual consumers (see e.g. Lin and Sternquist , 1994) andorganizations (see e.g. Chang and Kim, 1995).

There have been a number of empirical studies on issues such as the effectsof country of origin on products perceived quality (Hong and Wyer, 1989, 1990;Johansson and Thorelli, 1985) and on consumers propensity to use a products

Made in label (Han and Terpstra, 1988; Johansson et al., 1985; Tse and Gorn,1993). However, most of the work in this area has been descriptive rather thanexplanatory in nature (Obermiller and Spangenberg, 1989, p. 454). The vastmajority of the empirical findings on country-of-origin effects indicate whichcountries, product categories, or consumer groups exhibit or possess which

International Marketing Review,

Vol. 13 No. 5, 1996, pp. 76-97.

MCB University Press , 0265-1335

The author is indebted to the Austrian Federal Research Fund (FWF) and Mercedes-BenzCorporation for supporting this research. He also wishes to express his thanks to GnterSchweiger and Rick Bagozzi for their helpful comments on an earlier draft of this article, as wellas to two anonymous IMRreviewers for their valuable suggestions.


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stereotypical effects, while only a few studies have considered the antecedentsof these effects.

As a consequence of the globalization of business activities, there are anincreasing number of products for which the country of origin is different fromthe initial home country of the brand. Such products may be referred to as bi-national or hybrid products (Chao, 1993; Ettenson and Gaeth, 1991). The studyof consumers perception and evaluation of hybrid products is of keyimportance with respect to the advancement of our understanding of country-of-origin effects (Johansson, 1989, p. 56; Kochunny et al., 1993, p. 23).

In spite of the vast number of empirical country-of-origin studies, little isknown about the psychological structure of the effects of a products country of

origin and brand name on the evaluation of and the purchase intention towardsa product. In the present study, a str uctural equation modelling approach isused to test a hypothetical model containing relationships among psychologicalconstructs including country image, brand image, the evaluation of theproducts functional characteristics and appearance, the attitude towards theproduct, and the behavioural intention with regard to the product. Thestr uctural equation modelling approach is in line with the suggestions forfurther country-of-origin research expressed by Han and Terpstra (1988,p. 252), Thorelli et al. (1989, p. 44), and Tse and Gorn (1993, p. 73).

In order to study the structure of country-of-origin effects, a product had tobe chosen in connection with which the occurrence of significant Made ineffects could be expected. The findings of a number of empirical studies suggest

that the country of origin generally has a significant impact on the evaluation ofaut omobiles (see e.g. Han, 1989; Han and Terpst ra , 1988; Johans son andNebenzahl, 1987). Therefore, subcompact cars were chosen to be the productcategory used in this study.

Cross-national theory te stingMost consumer behaviour constructs and theories have been developed andtested exclusively in a single country, typically the USA. As a consequence, theextent to which theories, models, constructs, measures, and relationshipsamong constructs are culturally bound is unknown in many cases (Durvasulaet al., 1993). While the importance of examining the applicability of theories andmodels across countries and cultures has been expressed by many researchers(Hui and Triandis, 1985; Lee and Green, 1991), very few studies have actuallyaddressed this issue. By contrast, a large number of researchers have assumedthat models developed and tested in one country apply in other countrieswithout actually validating model constructs and/or relationships amongconstructs (Durvasula et al., 1993, p. 626). This assumption can result in grosslyinvalid cross-national inferences.

In order to be able to draw any conclusions regarding the cross-nationalgeneralizability of a theory or model, both the equivalence of the measurementof constructs and the equivalence of structural relationships must beestablished. The assessment of measurement equivalence includes an


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examination of the psychometric properties of a constructs measures, such asinternal consistency reliability, and of the invariance of the factor str uctureacross countries (Mullen, 1995; Singh, 1995). Once the equivalence of themeasurement of constructs across countries has been established, the cross-national invariance of the patt erns and s trengths of relationships amongconstructs may be assessed (Hui and Triandis, 1985). If a model turns out to beinvariant across a number of countries, the hypothesis of the models cross-national generalizability is supported.

The focus of the present study is on testing the cross-national applicability ofa model of the effects of country of origin and brand name on consumersevaluations of a product. Specifically, the structure of country-of-origin and

brand effects on the evaluation of a new automobile by German and French carowners is investigated. The proposed model is tested for invariance across thetwo countries in order to assess its cross-national applicability and, thus, itsgeneralizability to other countries.

Hypothetical modelConstructs of the modelTo study the psychological process by which the country of origin and thebrand name of a new automobile are integrated in the formation of attitude andrelated behavioural intention, a hypothetical structural model was developed.The model contains nine theoretical constructs. These constructs areconsidered to be latent psychological variables which cannot be measured

directly and without error. Instead, each of them has to be measured indirectlythrough multiple indicators. The nine constructs of the hypothetical model maybe grouped into the following three categories:

evaluation of the country of origin;

evaluation of the brand; and

evaluation of the product.

Recent research findings suggest that country of origin is a multidimensionalconstruct (Parameswaran and Pisharodi, 1994; Pisharodi and Parameswaran,1992). Studies on country-of-origin effects should incorporate not only theproduct-specific evaluation of but also the general attitude towards a particularcountry (Kochunny et al., 1993, p. 23; Martin and Eroglu, 1993, p. 192). General

country att itude is considered to consist of two dimensions: affective andcognitive evaluation of the country (Han, 1988, p. 31; Papadopoulos et al., 1990,p. 46). With regard to the product-specific evaluation of a country, one candistinguish between the countrys general Made in image and the evaluat ionof products manufactu red in that country (Etzel and Walker, 1974, p. 44;Halfhill, 1980, p. 28). In the hypothetical model the automobiles country oforigin is represented by the following four constructs:

(1) the affective evaluation of the country (feelings, emotions);

(2) the cognitive evaluation of the country (fact based);


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(3) the evaluation of the countrys automobile industry (production process);and

(4) the evaluation of automobiles made in the country in general (productionoutput, product).

While the former two reflect the general perception of a country, the latter tworefer to the evaluation of a country with regard to the specific product categoryunder study.

To study country-of-origin effects on consumers product evaluations andpurchase decisions in a context which closely resembles real-world decision-making situations, respondents should be asked to evaluate products for which

information on a number of salient attributes is available (Ettenson, 1993; Linand Sternquist, 1994; Tse and Gorn, 1993). The importance of such multi-cuestudies in the area of country-of-origin effects, especially of studies whichincorporate a products brand name, has been pointed out by Witt and Rao(1992, pp. 123-4). In the hypothetical model, brand name information enters themodel through a single construct, the image of the manufacturers brand.

Four distinct aspects of the evaluation of the product are represented in themodel. At the level of attribute beliefs, the evaluation of the overall appearance(design) of a car and the summary evaluation of its featu res (other thanappearance) were incorporated as two separate constructs. In addition, theatt itude towards the automobile, i.e. consumers overall evaluation of the modelas well as their behavioural intention with regard to the automobile (furtherinformation acquisition, intended showroom visit, etc.) are represented as latentconstructs in the model.

Hypothetical structural relationshipsThe hypothetical model (Figure 1) consists of the n ine latent constr uctsdescribed above and the expected relationships among them. Based on thetheory of consumer information processing (Bettman, 1979; Ozanne et al., 1992;Stayman et al., 1992; Wright, 1975), attitude theory (Ajzen and Fishbein, 1980;Bagozzi, 1989a; Eagly and Chaiken, 1993), and recent findings in the area ofcountry -of-orig in research (Han, 1989, 1990; Hong and Wyer, 1989, 1990;Kochunny et al., 1993; Maheswaran, 1994), 17 hypothesized relationshipsamong the constructs were determined. The graphical representat ion of themodel contains both the 17 hypothesized structural relationships among the

nine constructs and the measurement models for these latent variables. In orderto avoid cluttering, the arrows for errors in equations, as well as formeasurement errors are not shown. The 17 structural paths of the model aredepicted as a rrows labelled 1 5 and 1 12 in Figure 1. Each of thehypothesized structural relationships is supported by the findings of publishedempirical research. Table I lists the references that were used in selecting eachof the 17 paths which, as a whole, form the hypothetical model.

Two of the nine constructs of the model, the affective evaluation of thecountry (1) and the image of the manufacturers brand (2), are exogenous


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variables. All other latent variables are endogenous. The seven endogenousconstructs are denoted 1 7 Figure 1. Each construct is connected to twoobservable indicators which serve as measures of the former. Measurementissues, such as the selection of indicators and t heir treatment within themeasurement models, are discussed in more detail in the method and resultssections.

Path References

1 Han, 1988; Jaffe and Nebenzahl, 19932 Cohen and Basu, 1987; Kochunny et al., 1993; Ozanne et al., 1992; Stayman et al., 19923 Jacoby et al., 1971; Wright, 1975; Monroe, 1986; Jacoby et al., 1993

4 Jacoby et al., 1971; Wright, 1975; Monroe, 1976; Jacoby et al., 1977; Jan and Qualls, 19855 Jacoby et al., 1971; Wright, 1975; Monroe, 1976; Jacoby et al., 1977; Jan and Qualls, 19851 Etzel and Walker, 1974; Halfhill, 1980; Pisharodi and Parameswaran, 19922 Papadopoulos et al., 1988; Pisharodi and Parameswaran, 1992; Jaffe and

Nebenzahl, 19933 Hong and Wyer, 1989; Hong and Wyer, 19904 Erickson et al., 1984; Johansson et al., 1985; Hong and Wyer, 1989; Hong and Wyer,

1990; Maheswaram, 19945 Hong and Wyer, 1989; Yi, 1991, Hong and Yi, 1992; Lee et al., 1992; Maheswaran, 19946 Han, 1989; Han, 1990; Yi, 1991; Lee et al., 1992; Kochunny et al., 1993;

Maheswaran, 19947 Scott and English, 19898 Bagozzi, 1989a9 Johansson and Nebenzahl, 198710 Bagozzi, 1989a

11 Johansson and Nebenzahl, 198712 Johansson and Nebenzahl, 1987; Bagozzi, 1989b; Han, 1990; Yi, 1991

Table I.References used inselecting the

hypothesizedrelationships

Figure 1 .Hypothetical model

Quality

Safet

y

Perfe

ction

Reliability

x1 x3+ x2 x4+

Nice

Pleasant

Frien

dly

1

Affectiveevaluation of

country

1(x)

2(x)

Peac

eful

Successful

y1 y3+ y2 y4+

Comp

etent

State

-of-th

e-art

Reliable

1

Cognitiveevaluation of

country

1(y)

2(y)

y14

y13

y15+

Sleek

4

Evaluation ofthe modelsappearance

7(y)

8(y)

Appealing

Attra

ctive

2

1

1

3

4

3

2

Brandimage

5

8

3(x)

4(x)

4

7

10

x5

x7+ x6 x8+

Motiv

ation

y5 y7+ y6 y8+

State

-of-th

e-art

technolgo

y

Well-train

edworkfo

rce

High

quality

standards

2

Evaluation ofcountrys car

industry

3(y)

4(y)

2

Superb

quality

y9 y10+ y11 y12+

Reliability

Workm

anship

Infreq

uentrep

airs

3

Evaluation ofcars made inthe country

5(y)

6(y)

y16 y18+ y17 y19+

5

Evaluation ofthe models

features

9(y)

10(y)

Pleasing

Desirable

Favoura

ble

Excelle

nt

11

12

9

6

5

y20

y22+ y21 y23+

6

Attitudetowards the

model

11(y)

12(y)

Superb

quality

Reliability

Infreq

uentrepairs

Work

manship

y24

y26+ y25 y27+

7

Behaviouralintention

13(y)

14(y)

Wise

purch

ase

Furth

erinfor

matio

n

Testdri

ve

Deale

rship

visit


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Based on the assumption that the more general constructs affect the morespecific, product-related ones[1], the direction of the hypothesized effects amongthe country-of-origin variables is from the affective evaluation of the country tothe cognitive evaluat ion of the country, from that to the evaluat ion of thecountrys automobile industry, and from that to the evaluation of automobilesmade in the country in general. In terms of the relationships between the fourconstructs representing the evaluation of the product, the evaluation of theautomobiles appearance was expected to have an influence on the evaluation ofits features[2]. Based on the belief attitude behavioural intention model ofattitude (see e.g. Bagozzi, 1989a), both of these latent variables werehypothesized to affect the attitude towards the car.

MethodDesign of the studyA subcompact automobile developed by German car manufacturer Mercedes-Benz was used in the study. The concept of the new model named Mercedes-Benz Vision A was introduced to the public at the Frankfurt Motor Show inAugust 1993, short ly before the study was car ried out. At that time, themanufacturer announced that the new automobile would be for sale in 1997.The company did not, however, comment on where, i.e. in which country, itplanned to manufacture the Vision A.

In order to test the hypothetical model of the effects of a new automobilescountry of origin and brand name on consumers relevant attitudes in

connection with the vehicle, a cross-nat ional study based on face-to-faceinterviews was conducted in Germany and France. Germany, the home countryof Mercedes-Benz, represents t he single most impor tan t ma rket for t hecompany. France was chosen as the country of comparison because it is one ofthe largest foreign markets for Mercedes-Benz. For the purpose of the study, theCzech Republic was selected as the country of production of the Vision A. Whenthe interviews were conducted, Mercedes was seriously considering to locatethe plant for the new car in the Czech Republic. Respondents both in Germanyand in France were led to believe that the company had recently decided tomanufacture the new car in the Czech Republic. At the time of the study, thewages of Czech skilled workers amounted to less than 10 per cent of those oftheir German counterparts. Since the Czech Republic borders with Germany, italso represents an attractive manufacturing location for German companiesfrom a logistics perspective.

In the course of the face-to-face interview, each subject was presented with aone-page description of the automobile. This stimulus consisted of aphotograph of a Vision A prototype, as well as a verbal description of the keyfeatures of the model[3]. The selection of key attributes was based on the resultsof a joint focus-group session of automotive market research specialists fromboth Germany and France, as well as on pilot st udies conducted in bothcountries aimed at determining attribute importance with respect tosubcompact automobiles. The following features of the car were included: fuel


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mileage, built-in safety equipment, i.e. air bags and anti-lock brakes,horsepower, and high speed. The true attribute levels which the Vision A willactually have when introduced to the market were provided both in Germanyand France.

To ensure that the brand name (Mercedes-Benz) and the country-of-origininformation (Czech Republic) were noticed by respondents, each was presentedas an item of information embedded among the product attributes and as aninsert in the photograph of the automobile. In addition, 1997 was stated to bethe year in which the manufacturer planned the introduction of the new car tothe market.

Finally, a side-view silhouette of the Vision A was printed next to those of

three popular European automobiles, in order to provide some information onthe approximate length and height of the concept car. Both in the German andthe French product description, silhouettes of the VW Golf, the RenaultTwingo, and the Mercedes E series were included next to that of the Vision A.At the time of the study, the German-made VW Golf and the French-madeRenault Twingo were the subcompact cars with the highest market share inGermany and France, respectively (see VDA, 1994). Thus, it was reasonable toassume that the majority of respondents in either country were familiar withat least one of these vehicles. The silhouette of the Mercedes E was includedto provide the size of the most popular Mercedes model as a reference. Thesilhouettes were labelled Mercedes Vision A; VW Golf, Renault Twingo,and Mercedes E series. No other information about these three cars was

provided.

SampleFace-to-face interviews were conducted with 309 car owners in Germany and313 car owners in France[4]. In order to qualify, an individual had to be theowner of a passenger automobile at the time of the interview[5]. Car ownerstypically have at least moderately high product familiarity with respect toautomobiles. Quotas were established for the selection of the subjects.Interviews were conducted with car owners in different age, income, and gendergroups, as well as in all major regions of both Germany and France.

For the purpose of performing cross-national comparisons of the resultsobtained in the two countries, it was necessary that the German and the Frenchsample should be of similar size and equal demographic structure. The samequotas for the selection of respondents were used in Germany and in France.They were established on the following criteria, which roughly reflect theimportance of different market segments for the car used in the study: Age (20per cent under 30 years of age, 30 per cent from 31 to 35 years of age, 25 per centfrom 36 to 40 years of age, 25 per cent over 40 years of age), gender (70 per centmale, 30 per cent female), and car ownership (30 per cent Mercedes-Benz, 70 percent other brands[6]). These criteria were based on the profiles of subcompactcar buyers in the two countries (EAS, 1994). The only exception to this is the 30per cent s hare of Mercedes owners in the sample, which overst ates t he


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importance of this group in terms of past sales. This was necessary, however, inorder to obtain a sufficient number of responses from current Mercedes owners,a prime target group for the Vision A with respect to second-vehicle purchases.One additional criterion used for the selection of subjects was their place ofresidence. Interviews were conducted in all main regions of Germany andFrance in proportion to the number of cars registered in each of them.

Table II provides an overview of the quotas used in selecting the respondents.In addition, it shows the actual structure of the two samples. For both samples,all quotas were met with only insignificant deviations. None of the differencesbetween the German and the French sample with respect to age, gender, or carownership are statistically significant at the 0.05 level. This indicates that the

two samples are equal in demographic structure to the extent that this wascontrolled by the quotas.

MeasuresThe questionnaire contained multiple measures of all nine latent variables ofthe model. The selection of these indicators was based on an extensive literaturereview. All measures used in the present study had already been by used andfound to be valid and reliable indicators of the corresponding constructs in oneor more previous studies. The main sources used in this selection process wereParameswaran and Yaprak (1987) and Martin and Eroglu (1993) for items

measuring the general evaluation of the country of origin, Pisharodi andParameswaran (1992) and Jaffe and Nebenzahl (1993) for the evaluation ofcountries in connection with automobiles, McGee and Spiro (1991) and Guptaand Ratchford (1992) for brand image, and Scott and English (1989), Bayus(1991), Gupta and Ratchford (1992), and Chaiken and Maheswaram (1994) forthe evaluation of the vehicle.

Three measures were obtained for the evaluation of the appearance of thenew automobile, while four questionnaire items were used to measure each ofthe other eight constructs of the model. The evaluation of cars made in the

Sample

Germany France

Criterion Quotas (%) (%)

Age 20 per cent under 30 19.4 22.3

30 per cent 31 to 35 29.4 29.4

25 per cent 36 to 40 25.2 27.5

25 per cent over 40 26.0 20.8

Gender 70 per cent male 68.8 69.0

30 per cent female 31.2 31.0

Car ownership 30 per cent Mercedes 30.2 31.0

70 per cent other brands 69.8 69.0

Table II.Structure of the German

and French sample


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country in general and the overall evaluation of the vehicle used in the studywere measured on the same four attr ibutes. For all of these directly observedvariables, rat ings were obtained on a six-point scale ranging from 1 = does notapply at all to 6 = fully applies. A list of the indicators used to measure thenine constructs is provided in the Appendix.

For the estimation of the models, pairs of observed measures were combinedadditively within constructs to form indices which, in turn, were treated as theindicators of the latent variables in the model. Within each constr uct, themeasures were grouped into pairs at random. For each of the eight constructsrepresented by four questionnaire items, pairs of these observed variables werecombined additively to form two new indicators. Since only three measures

were obtained for the construct 4(evaluation of the cars appearance), one ofthese items (y14) was not combined with any other measure and remained anindicator of its own. The other two observed variables were summed to form thesecond indicator for that construct. The same pattern of aggregation was usedfor the German and the French sample. The strategy of summing subsets of theobserved measures of a construct called partial disaggregation has been foundto improve the fit of multiple-indicator measurement models (Bagozzi andHeatherton, 1994; Hull et al., 1991) and should, therefore, increase the reliabilityof the estimates of structural parameters between constructs. Combining itemsinto indices tends to smooth out random error to the degree that the aggregatedmeasures share common variance (Bagozzi and Heatherton, 1994, p. 39).

Model estimationA structural equation modelling approach (Bagozzi, 1994; Bentler andDudgeon, 1996; Bollen, 1989) was used to test the hypothetical structural modelagainst the data collected from the samples of German and French car owners.Specifically, single-group and multi-group analyses using the data from bothsamples simultaneously were performed in LISREL 8 (Jreskog and Srbom,1993). Covariance mat rices of the observed va riables were used as dat amatrices. The maximum-likelihood (ML) method was selected as the method ofmodel estimation.

Analysis and resultsNational-level analysisThe proposed model was first estimated independently for the German and theFrench sample. Since the analysis of the relationships among latent variablesrequires adequate measurement of these constructs, the psychometricproperties of the measures of the nine latent variables of the model were firstexamined via maximum-likelihood confirmatory factor analysis. The results ofthe estimation of these models indicate that the constructs were measuredadequately through their indicators in both countries. All factor loadings arehighly significant (p< 0.001). Their standardized estimates range from 0.86 to0.987 in Germany and from 0.74 to 0.981 in France. The values of thecomparative fit index (CFI, see Bentler, 1990) and of the Tucker and Lewis


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(1973) index (TLI)[7] for the confirmatory factor analysis models are,respectively, 0.99 and 0.989 for the German and 0.975 and 0.972 for the Frenchsample, indicating a very good fit of the measurement models. Also, the internalconsistency reliability (Carmines and Zeller, 1979) of the measures of the latentconstructs ranges from 0.821 to 0.977, which is more than satisfactory (Bagozziand Yi, 1988, p. 82) and provides further evidence of the fact that the modelsconstructs were measured with little error.

Tests of the discriminant validity of the nine constructs were also performedvia confirmatory factor analysis. Specifically, models representing differentfactor structures (fewer latent constructs) were estimated. For both Germanyand France, the fit of all of these alternative models was clearly inferior to thatof the nine-factor model which corresponds to the proposed factor structure.This indicates that the nine latent variables of the model do represent distinctconstructs. Finally, discriminant validity was also supported by the fact thatthe confidence intervals (p< 0.05) around the estimates of the interfactorcorrelations do not contain a value of 1 (Anderson and Gerbing, 1988).

Once the sat isfactory quality of measurement with respect to the modelslatent variables had been determined, the full structural model containing boththe measurement models and the hypothesized structural relationships wasestimated separately for each of the samples. The overall fit of the hypotheticalmodel was good. For the data collected in Germany, a chi-square (2) value of133.868 (d= 117, p= 0.136) was obtained[8]. The models 2 value inconnection with the French sample is 202.388 (d= 117, p= 0.000002)[9]. CFIvalues of 0.997 and 0.978 were obtained for the German and the French data,respectively. The TLI values are 0.996 (Germany) and 0.972 (France). Thesemeasures indicate a good fit of the model[10].

The unstandardized estimates of the structural parameters resulting fromthe separate estimation of the model for Germany and France are provided inTable III along with their tvalues. The tvalue is equal to the ratio between aparameter estimate and its standard error (Jreskog and Srbom, 1993). If the tvalue exceeds 1.96, the corresponding parameter is significant at the 0.05 level.The majority of path coefficients are statistically significant (p< 0.05) for bothsamples. Four parameter estimates are not significant in either country (2, 3,5, and 6). In addit ion, the estimate of12, pertaining to the pat h fromconsumers overall evaluation of the car to their behavioural intention with

respect to the vehicle, is insignificant in Germany.For each str uctural path, the parameter estimates obtained from the German

and the French data are very similar (see Table III). In addition, the pattern ofsignificant and insignificant structural parameters is identical in the twosamples with the exception of12. This indicates that the psychologicalprocesses underlying the effects of country of origin and brand name onconsumers evaluations of an automobile might not be nationally bound. Inorder to determine whether the empirical data support the hypothesis that themodel is truly invariant across the two countries, a series of formal tests


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involving the simultaneous analysis of the German and French data had to be

performed.

Multi-group analysisThe nat ional-level analysis assessed whether the measures of the modelsconstructs were psychometrically sound and whether the hypothesizedrelationships among the constructs applied in each country separately. A morestringent test of the model is now offered by assessing the invariance of themeasurement and structural model relationships across countries. For thispurpose, a number of LISREL multi-group analyses (see Jreskog and Srbom,1993, pp. 51-84) with parameters of interest either constrained to be equal acrossgroups or free to vary across groups were performed.

In order to examine the invariance of the measurement models in Germanyand France, two multi-group confirmatory factor analysis models wereestimated. In the first one, all measurement parameters (factor loadings) wereconstrained to be equal in both groups. For this model a2 value of 242.558 (d= 204, p= 0.0334), a CFI of 0.996, and a TLI of 0.994 were obtained. In thesecond model, the factor loadings were allowed to vary between groups. Thisless constrained model has a2 value of 226.778 (df= 195, p= 0.0591), a CFI of0.996, and a TLI of 0.994. A chi-square difference test may be used to assesswhether the improvement in model fit due to relaxing between-groups equalityconstraints of certain parameters is statistically significant. The 2 differencebetween the two multi-group confirmatory factor analysis models of 15.78

Sample

Germany France

Parameter Estimate t- value Estimate t- value

1 0.694 10.299 0.727 9.5482 0.093* 1.470 0.128* 1.8733 0.103* 1.782 0.061* 1.0764 0.328 6.133 0.276 4.7175 0.164 2.858 0.190 3.1731 0.657 9.962 0.729 9.4712 0.838 11.568 0.824 10.0773 0.250 3.800 0.168 2.505

4 0.358 6.480 0.227 4.0335 0.098* 0.907 0.054* 0.4936 0.058* 0.561 0.006* 0.0517 0.324 6.045 0.469 7.4818 0.238 4.104 0.124 2.0659 0.454 7.457 0.270 4.31210 0.397 5.313 0.405 4.98111 0.286 4.551 0.166 2.09712 0.100* 1.730 0.230 3.440

Note: * Parameter estimates not significant at the 0.05 level

Table III.National-level structuralparameter estimates forthe German and Frenchsample


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(dfdiff= 9) is not significant at the 0.05 level. Since allowing the measurementparameters to vary across groups does not improve the fit of the model, thefactor str ucture can be considered invariant across the two countries. Thecommon measurement parameter estimates (unstandardized) for the Germanand the French sample are provided in Table IV. Since the scale of the latentvariables was determined by fixing one of their measurement relationships to avalue of one, only one measurement parameter was estimated per construct.

For examining the invariance of the relationships among the latent variables, onemodel with all structural parameters constrained to be equal in both groups andanother model in which these parameters were allowed to vary across sampleswere estimated via the maximum-likelihood method. Since we had establishedthe invariance of the factor st ructu re across countries, the measurementparameters were constrained to be equal across groups in both of these models.The estimation of the model in which all structural paths were constrained to be

equal in both groups resulted in a 2 value of 351.276 (d= 257, p= 0.00008), aCFI of 0.989, and a TLI of 0.987. The model in which the structural parameterswere allowed to vary between groups yielded a2 value of 326.19 (df= 240, p =0.0002), a CFI of 0.99, and a TLI of 0.988. The 2 difference between the twomulti-group models of 25.086 (dfdiff= 17) is not significant at the 0.05 level.Allowing the structural parameters to vary across groups does not improve thefit of the model. This indicates that the model relationships are invariant acrosscountries. The common structural parameter estimates (unstandardized) for theGerman and French sample are provided in Table V.

Parameter Estimate t-value

1(x)

1.000 2

(x) 0.843 25.230

3(x) 1.000

4(x) 0.933 14.998

1(y) 1.000

2(y) 1.008 28.798

3(y) 1.000

4(y) 1.009 38.786

5(y) 1.000

6(y) 0.964 34.905

7(y) 1.000

8(y) 2.051 35.208

9(y) 1.000

10(y) 1.013 28.544

11(y) 1.000 12

(y) 1.155 24.696

13(y) 1.000

14(y) 1.010 23.900

Table IV.Common measurement

parameter estimates forthe German and French

sample


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Since both the factor structure and the structural model relationships werefound t o be invariant across countries, the discussion of the substan tivefindings of the study should focus on the common parameter estimates,specifically the common estimates of the structural relationships (see Table V).The expected sequence of effects among the four constructs representing thecars country of origin, i.e. from the affective to the cognitive evaluation of thecountry, from that to the evaluation of the countrys automobile industry, andfrom that to the evaluation of cars made in the country in general (1 = 0.645,1 = 0.702, and 2= 0.826, respectively), was found to be strong and highlysignificant. The country of origin turned out to affect the evaluation of theautomobile in various ways. The affective evaluation of the country has animpact on the perception of the vehicles appearance (2 = 0.076). The evaluationof the countrys automobile industry affects the evaluation both of the models

appearance (3 = 0.133) and of its features (4 = 0.239).The image of the manufacturers brand was found to have a strong impact on

the evaluation of the automobiles features (4 = 0.361) and on the attitudetowards the vehicle (5 = 0.253), as well as a somewhat weaker impact on theevaluation of the new models appearance (3 = 0.087).

The hypothetical str uctura l path from the perception of the new carsappearance to the evaluation of its other features was found to be very strong(7 = 0.497). The evaluation of the cars appearance also turned out to have animpact both on the attitude towards the new model (8 = 0.266) and on the

Parameter Estimate t-value

1 0.645 17.560

2 0.076 2.679

3 0.087 2.115

4 0.361 7.240

5 0.253 4.241

1 0.702 17.985

2 0.826 25.960

3 0.133 4.336

4 0.239 7.7715 0.037* 0.505

6 0.037* 0.518

7 0.497 10.530

8 0.266 4.434

9 0.695 8.797

10 0.456 7.606

11 0.343 4.772

12 0.213 3.754

Note: * Parameter estimates not significant at the 0.05 level

Table V.Common structuralparameter estimates forthe German andFrench sample


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behavioural intention with regard to the vehicle (9 = 0.695). It is interesting tonote tha t t he direct effect of the p erception of the cars appear ance onbehavioura l intention (9) is more than twice as strong as its effect on theattitude towards the vehicle (8). The evaluation of the models features affectsboth the attitude towards the car (10 = 0.456) and the behavioural intention(11 = 0.343) to a large extent. Finally, the attitude towards the vehicle affectsbehavioural intention (12= 0.213). Our findings provide support for the belief attitude behavioural intention hypothesis (Bagozzi, 1989a). At the sametime, we find evidence for a direct belief behavioural intention link asindicated by the significant estimates for parameters 9 and 11.

Overall, the results of the study indicate that consumers att itudes and

behavioural int entions with r espect to a new automobile are influencedsignificantly both by the brand name and the country of origin. The effect ofbrand name on the attitude towards the vehicle is composed of a direct and twoindirect routes. Of the latter, the indirect effect mediated by the evaluation of theautomobiles features tur ned out to be stronger than the one mediated by theperception of its appearance. The effect of the country of origin on the attitudetowards the car is predominantly indirect. It is mediated by the evaluation ofboth the vehicles appearance and its other features.

The behavioural intention with regard to the new automobile is affectedsignificantly by the evaluation of both its appearance and its other features, aswell as by the attitude towards the vehicle. Interestingly, the att itude towardsthe car turned out not to be the main antecedent of behavioural intention.

Instead, the direct effect of the perception of the cars appearance on intention isstronger than that of the attitude towards th e vehicle. This finding hasprofound implications for the development of new automobiles which will bediscussed among other things in the following section.

DiscussionThe purpose of the present study was to examine the cross-nationalapplicability of a model of the psychological structure of the effects of countryof origin and brand name on consumers evaluations of a new automobile. Amodel that describes the process by which these two pieces of productinformat ion are incorporated in the formation of attitude and behaviouralintention with respect to a car was proposed. In order to test whether the

hypothetical model applies in different countries, data were collected in face-to-face interviews of 309 German and 313 French car owners. Mercedes-Benzsconcept car Vision A was used in the study. The Czech Republic was presentedas the vehicles country of production.

The results of the national-level analysis indicate that the hypothetical modelclosely resembles the mental process by which the country-of-origin and brandname information influence consumers evaluation of a new automobile inGerma ny as well as in France. Both the psychometric properties of themeasures of the models constructs and the str uctural relationships among theconstructs were found to be highly similar across the two countries. The cross-


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national applicability of the model was tested by means of multi-group analysis.Both the measurement of the constructs and the structural relationships in themodel turned out to be invariant across the two countries. This finding providessupport for the hypothesis of the models cross-national generalizability. As aresult of the invariance of the measurement relationships and the str ucturalpaths, the substantive findings of the study were discussed at the cross-nationalrather than at the national level.

Both the brand name and the country of origin were found to have asignificant impact on consumers attitudes towards the new automobile. Whilethe effect of brand name on the at titude towards the car tur ned out to becomposed of a direct route, as well as two indirect routes, the country-of-origin

effect was found to be predominantly indirect. The impact of the country oforigin on the overall evaluat ion of the aut omobile was mediated by theevaluation of the cars appearance and that of its other features to a large extent.This indicates that the Made in information typically affects beliefs about acars product attributes, which in turn affect the attitude and the behaviouralintention with respect to the vehicle. Thus, foreign production of automobiles islikely to have an impact not only on car buyers overall evaluation of a vehicle,but also on their perception of specific product attributes, e.g. various technicalfeatures or the appearance of the car.

One of the most fundamental concerns of marketers in many industries is theuncertainty about the future adoption of new products by consumers. Withrespect to the actual product, what can be done at the development stage inorder to induce the trial and adoption of a new product? What characteristics of

the new product determine its success in the marketplace? One finding of thisstudy should have profound implications for the development of new products,in particular, new automobiles. The behavioural intention construct of ourmodel represents mental states including customers motivation to acquirefurther information about the automobile, to look at the vehicle at a dealersshowroom, and to test-drive the new car. It had been expected that, according tothe belief attitude behavioural intention model of attitude, most of theantecedents effects on the behavioural intention with respect to the car wouldbe channelled through the att itude constr uct. By contrast , the behaviouralintention with regard to the new automobile was found to be affected directly bythe evaluation of the vehicles appearance to a large extent. This direct effect ofconsumers perception of the cars app earance on intention bypasses the

attitude construct. Thus, while the appearance of a new product may not affectthe attitude towards the product to a large extent, it can have a strong directimpact on the new products adopt ion by consumers. This finding hasimplications not only for the actual development of new products, but also fornew-product market research, product concept testing, and premarketforecasting. Studies aimed at predicting the adoption and future success of newproducts should include evaluative measures as closely related to the actualbehaviour (information acquisition, intended showroom visit, t rial, etc.) aspossible in order to capture effects such as the direct influence of a carsappearance on behavioural intention found in this study.


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As more car manufacturers based in industrialized nations consider movingthe production of their vehicles to low-wage countries which typically haverather unfavourable Made in images, the finding that an automobiles countryof origin has a significant impact on consumers perception of the variousfeatures of an automobile and on their evaluation of the car as a whole even inconnection with a very strong brand name should encourage companies toinvestigate thoroughly consumers perceptions of the relevant countries andtheir car industr ies, as well as consumers evaluation of the manufacturersmodels when associated with the potential countries of origin before making adecision on the location of a production facility.

The generalizability of this studys findings may be limited owing to the fact

that only one automobile by a German manufacturer was used. Also, only onecountry of origin, the Czech Republic, was used. Future research could extendthis work by testing the proposed model in connection with othermanufacturers cars and other countries of origin. This would also provide anopportunity to test for brand by country interaction effects. A longer-termextension of this area of research would be to test the model for other high-involvement product categories.

Notes

1. This does not take into account the possibility of reverse effects from the more specific tothe more general constr ucts (e.g. the impact of automobiles on the image of the carscountry of origin). However, the magnitude of such reciprocal effects can be expected to beinsignificant compared with that of the proposed relationships.

2. A rat ionale similar t o that d iscussed in Note 1 applies here. While reciprocal effectsbetween the two constructs are quite plausible, we hypothesize that, for a totally newautomobile, the influence of the cars appearance on the perception of its other featu resdominates the reverse effect.

3. Of course, both the product descriptions and t he questionnaires were in German andFrench for the respondents in Germany and France, respectively. To ensure theequivalence of the survey instruments, a standard procedure of back-translation (Brislin,1970; Harpaz, 1996) was used. The product description and questionnaire had beentranslated from English into German as well as French and subsequently translated backinto English from both other languages by independent professional translators.

4. All face-to-face interviews were conducted by native German and French interviewers whowere recruited and co-ordinated by a multinational market research firm. The latter wasalso responsible for the selection of subjects based on the quotas specified by the author.The interviewers called the selected individuals to set up an appointment for the interview.

All interviews were conducted at respondents homes.5. It would have been desirable to draw samples consisting exclusively of individuals who

were in the market for a new subcompact car at the time of the interview. However, thiswould have been ext remely difficult, especially if one wished to maintain the sa mestanda rds of demographic composition, have matching samples in two countries, andcollect data from individuals in all major regions of the two countries.

6. Ownership of one of the 12 automobile models with the largest market shares in Germanyand France, respectively, was used as the criterion for the selection of 70 per cent of thesubjects. The number of owners of each of the 12 models was proportionate to marketshare.

7. The TLI is equivalent to Bentler and Bonetts (1980) non-normed fit index (NNFI).


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8. An insignificant chi-square value indicates that an observed covariance matrix deviatesonly insignificantly from the covariance matrix implied by the model.

9. An insignificant 2 clearly provides the strongest sup port for a model in a LISRELanalysis. However, it has been pointed out in the literature that, if the sample size is largeenough, the chi-square test statistics excessive power results in a rejection of almost anymodel, even if the discrepancy between the estimated model and the empirical data is very

small (see e.g. Hu and Bentler, 1995, p. 81). As a result, other fit indices, such as CFI andTLI, have been developed which represent measu res of the degree of correspondencebetween model and data rather than a significance test and which are independent ofsample size. The2, CFI, and TLI are used jointly to evaluate model fit in this study. HighCFI and TLI values (> 0.95) in combination with a significant 2 are considered to indicatethat a model, while not perfect, fits the data well.

10. In addition to the hypothetical model, a number of competing models were estimated. Someof these alternative models were more constrained than the hypothetical model (e.g. thenull model), others were less constrained (e.g. the full model). A series of chi-square

difference tests were conducted in order to assess the fit of these models relative to eachother. The hypothetical model turned out to be the best-fitting model for both the Germanand the French data.

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Appendix: measuresAffective evaluation of the Czech RepublicTo what degree do you associate each of the following attributes with theCzech Republ ic?

Not at all Completelyx1 Nice 1 2 3 4 5 6x2 Friendly 1 2 3 4 5 6x3 Pleasant 1 2 3 4 5 6x4 Peaceful 1 2 3 4 5 6

Cognitive evaluation of the Czech RepublicTo what degree do you associate each of the following attributes with the Czech Republic

Not at all Completelyy1 Competent 1 2 3 4 5 6

y2 Reliable 1 2 3 4 5 6y3 State-of-the-art 1 2 3 4 5 6y4 Successful 1 2 3 4 5 6

Evaluation of the Czech Republics automobile industryTo what degree do you associate each of the following statements with the Czech Republicsautomobile industry?

Not at all Completelyy

5State-of-the-art technology 1 2 3 4 5 6

y6 High quality standards and control 1 2 3 4 5 6y7 Well-trained workforce 1 2 3 4 5 6y8 Highly motivated workers 1 2 3 4 5 6

Evaluation of automobiles made in the Czech Republic in generalTo what degree do you associate each of the following statements with automobiles manufacturedin the Czech Republic in general?

Not at all Completelyy9 High reliability 1 2 3 4 5 6y10 Perfect workmanship 1 2 3 4 5 6y11 Infrequent repairs 1 2 3 4 5 6y12 Superb quality 1 2 3 4 5 6

Image of manufacturers brandTo what degree do you associate each of the following expressions with Mercedes-Benz?

Not at all Completelyx5 Passenger safety 1 2 3 4 5 6x6 Reliability 1 2 3 4 5 6x7 Perfection 1 2 3 4 5 6x8 Quality 1 2 3 4 5 6

Evaluation of the appearance of the new modelIn your opinion, to what degree does each of the following attributes applyto the appearance of the new automobileshown in this photograph?

Not at all Completelyy13 Appealing 1 2 3 4 5 6y14 Attractive 1 2 3 4 5 6y15 Sleek 1 2 3 4 5 6


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Evaluation of the models featuresIn your opinion, to what degree does each of the following attributes apply to the other featuresof the new automobiledescribed here?

Not at all Completelyy16 Desirable 1 2 3 4 5 6y17 Excellent 1 2 3 4 5 6y18 Favourable 1 2 3 4 5 6y19 Pleasing 1 2 3 4 5 6

Attitude towards the modelTo what degree do you associate each of the following statements with this new automobile?

Not at all Completelyy20 High reliability 1 2 3 4 5 6

y21 Perfect workmanship 1 2 3 4 5 6y22 Infrequent repairs 1 2 3 4 5 6y23 Superb quality 1 2 3 4 5 6

Behavioural intention in connection with the new automobileImagine you are about to buy a new car of about the size of the Vision A. To what degree wouldeach of the following statements about the new model apply to yourself?

Not at all Completelyy

24I will request further informationon the new model 1 2 3 4 5 6

y25 I would like to take a look at thecar at a Mercedes dealer 1 2 3 4 5 6

y26 I would like to test-drive thenew model 1 2 3 4 5 6

y27

The purchase of the new car would

be a wise decision 1 2 3 4 5 6

Documents

A Cross-national Investigation