Does effects of brand origin misperception jeopardize brand equity?

The purpose of this study is to examine the effects of brand origin (BO) misperception (hereafter BOM) or non-identification on brand equity. Besides, the current study investigates the moderating role of brand strength in the relationship between BOM and brand equity.

The current study adopted a 4 (BO identification: favorable BOM vs adverse BOM vs non-identification vs correct identification) × 2 (brand strength: strong vs weak) between-subjects design. A total number of 547 participants performed assessments on the automotive brand. The current study selected three strong brands and three weak brands for tests. In the experiment, respondents had to associate the brand with its country of origin. The assignment of BO conditions was based upon respondents' natural responses provided. ANOVA was used for data analysis.

The results indicate that as compared to correct BO identification, BOM (either adverse or favorable) or non-identification exerts a more negative impact on brand equity. Moreover, the study demonstrates that brand strength moderates the effect of perceived BO on brand equity.

This study provides empirical support to the notion that BOM is detrimental to brand equity. Specifically, when adverse BOM occurs, a strong brand suffers more from the negative consequences resulted than a weak brand does. Conversely, when consumers misattribute the BO to a country with a stronger image than its real origin (i.e. favorable BOM), the resulting negative effect is reversed. Moreover, the non-identification of BO hurts the brand equity of both strong and weak brands.