Understanding Consumer Confusion on Brand Origin in a Globalizing World

ABSTRACT - In an era of global and local competition, the distinction between local and nonlocal origin of brands is becoming less clear, especially among consumers in emerging markets. This study attempts to understand consumer confusion in respect of brand origin by identifying the sources and the implications of the confusion. Global and local branding and marketing communication strategies are highlighted as potential causes of confusion. The perspective of Athink global, act local@ for international companies in emerging markets is cautioned in light of the confusion phenomenon. Marketing implications are highlighted.

Citation:

Lianxi Zhou (2005) ,"Understanding Consumer Confusion on Brand Origin in a Globalizing World", in AP - Asia Pacific Advances in Consumer Research Volume 6, eds. Yong-Uon Ha and Youjae Yi, Duluth, MN : Association for Consumer Research, Pages: 359-363.

Asia Pacific Advances in Consumer Research Volume 6, 2005      Pages 359-363

UNDERSTANDING CONSUMER CONFUSION ON BRAND ORIGIN IN A GLOBALIZING WORLD

Lianxi Zhou, Lingnan University, Hong Kong

ABSTRACT -

In an era of global and local competition, the distinction between local and nonlocal origin of brands is becoming less clear, especially among consumers in emerging markets. This study attempts to understand consumer confusion in respect of brand origin by identifying the sources and the implications of the confusion. Global and local branding and marketing communication strategies are highlighted as potential causes of confusion. The perspective of "think global, act local" for international companies in emerging markets is cautioned in light of the confusion phenomenon. Marketing implications are highlighted.

INTRODUCTION

In a globalizing world, the development of taste and the demand for local (domestic) versus nonlocal (global and foreign) brands has become far more complicated. While global consumption tendencies are becoming increasingly attractive to consumers around the world, particularly in developing or emerging markets (Friedman 1990; Hassan and Katsanis 1994; Quelch 2003), local culture still remains a central influence on local consumption (Ger, Belk and Lascu 1993; Ger and Belk 1996). Ger 1999) offers a conceptual framework in support of her argument in favor of the competitiveness of localness embedded in local brands and the significance of tradition for consumers in developing countries. Steenkamp, Batra and Alden (2003), on the other hand, emphasize global consumption tendencies and provide empirical evidence in favor of the competitive advantage of global brands. In reality, globalness and localness contend with each other in shaping consumption tendencies. This trend is even more pronounced in emerging markets where both international and domestic companies alike race to build brand appeal by connecting the consumer with global, foreign, or local sentiments (Keller and Moorthi 2003). In China, for example, the forces of globalization and localization are taking hold at a faster rate than anyone expected in the past, making both global and local brands part of the Chinese landscape.

Consumer confusion of brand origin is becoming more of a problem as international brands seek to dress themselves in the local style, while local brands seek to deck themselves out in global or foreign connection. We believe that consumers become confused by the increasing conflict between brand’s local and nonlocal images. As this confusion continues to rise, global and foreign brands become less competitive in emerging markets. The purpose of this study is to highlight the marketing determinants of consumer confusion of brand origin, and then draw managerial implications for internatiobnal brand managers. Notably, Keller and Moorthi (2003) recently emphasize some of the challenges faced by multinational corporations in building strong brands in emerging markets. They point out poor market assessment and improper communication as two major causes of "an inadequate grasp of the market". We attempt to add into the causes by highlighting the issue of consumer brand confusion arising from improper communication.

A BROADER VIEW OF CONSUMER CONFUSION

Consumer confusion has long been considered a central issue in trademark infringement cases (Kapferer 1995; Loken, Ross and Hinkle 1986; Miaoulis and d’Amato 1978). A broader perspective on consumer confusion can be gained from Mitchell and Papavassiliou’s (1999) study in which they highlighted consumer confusion as more than a trademark issue, claiming that the concept involves consumer misattributions in brand knowledge due to the massive increase in both consumer choices and complexity of product information available in the marketplace. According to Cohen (1999), there are generally three types of consumer confusion, labeled types M, B and D ("Misleading", "Bewildering", and "Discriminatory", respectively).

Type M confusion is related to misleading information in marketing communications such as advertising. Type B confusion arises from the nature of the product, where the product features are either too complex (as with digital cameras) or too abstract (as with milk features), causing bewilderment to consumers. Type D confusion is related to the nature and number of alternatives available in the market. Such confusion may arise because the consumer fails to distinguish between the products of one company and another ("horizontal mistaken identity"), or between products of superior specification ("vertical mistaken identity" as for example, private-label brands vs. premium brands, or four-star vs. five-star hotels). In both cases the confusion arises because consumers cannot discriminate between alternatives.

In our research focus, consumer confusion on the local and nonlocal origin of brands can be portrayed as Type D confusion, with both horizontal and vertical mistaken identity. However, such confusion seems to stem from both Type B ("Bewildering") and Type M ("Misleading") confusions. For example, consumers might mistake a brand’s origin because they are presented with misleading or inadequate country-of-origin (CO) information (Lim and O’Cass 2001; Saiee 1994), a form of misleading-type confusion (Type M). At the same time, consumers might also become confused as a result of "information overload" so that they cannot cope with all the similar product features offered by both nonlocal and local brands, a form of bewildering-type confusion (Type M).

More specifically, we focus on consumer confusion of brand origin arising from branding and marketing communications, and attempt to understand this from the perspective of "Type M" confusion. Amidst growing concern that the growth of multinational companies and the evaluation of hybrid products have in many cases blurred the accuracy of country-of-origin information (Samiee 1994), it is argued that brand origin will in future provide the key for understanding how consumers perceive and evaluate brands (Thakor and Kohli 1996). However, improper communication in building international brands in emerging markets (Keller and Moorthi 2003) appears to further mistake consumers’ perception of a brand’s origin.

RISING CONSUMER CONFUSION OF BRAND ORIGIN

Drawing on the visual aspects of semiotics (Mick 1986) and the meaning transfer theory (McCracken 1993), global and local symbols are transferred to the brand, sometimes creating misattributions of brand origin as particularly affiliated to a global, foreign, or local culture (Alden et al. 1999). Indeed, as highlighted in some recent studies, notably in an interpretive study of global and local advertising appeals in constructing cultural (Chinese) identities by Zhou and Belk (2003), significant misattributions are based on brand name in that people are not always accurate in detecting the country of origin of an advertised brand.

In one example used in their study, Federal Express was mistakenly perceived as a Chinese company because an ad for FedEx mentioned its Chinese name (Lian Bang) and showed a Chinese courier delivering packages to various foreign and Chinese destinations. Even an ad for M&M candies, using a Western-looking person, led to the brand being mistakenly identified as of domestic Chinese origin because the person spoke in Puthonghua (Zhou and Belk 2003). Reflecting on the attribution of localness to a foreign brand bearing Chinese characters, Zhou and Belk (2003, p.31) further note that "If a foreign brand name was rendered in Chinese with an attempt to create appropriate or auspicious meanings rather than an attempt to sound similar to the brand name in its original language or an attempt at a literal translation, the result was sometimes a perception that the brand was actually Chinese."

In fact, nowadays it is not uncommon to see such cases as that involving non-Dutch people’s misattribution of Philips as a local brand (Hiscock 2002), British people’s perception of Ford and Heinz (despite their American ownership) as British companies and brands (Mitchell 2000), unawareness of McDonald’s foreign origin by young people in Hong Kong (Watson 1997), or the misperception of Sprite as originating in China (Zhou and Belk 2003). As for the case of McDonald’s, Watson (1997) particularly mentioned that the confusion arises because conscious efforts are made by local McDonald’s franchises to support popular local events, to employ decor that reflects local sources of pride, and to serve locally developed menus.

SOURCES OF CONSUMER CONFUSION OF BRAND ORIGIN

We argue that among other factors, two conflicting forces, the use of a "global" branding and communication strategy by local firms and the practice of a localization strategy by foreign firms in emerging markets, confound the phenomenon of consumer confusion of brand origin. To a large extent, the two forces mislead consumers through brand images projected in the mixed use of marketing communications. This section characterizes the sources of consumer confusion as follows.

Local connection to global/foreign sentiment

The desirability of global brands has long been recognized (Aaker and Joachimsthaler 1999; Kapferer 1992; Quelch 1999). A number of authors assert that a global image gives a brand more power and value, and thus increased sales (Shocker, Srivastava and Ruekert 1994). Recently, the competitive advantage of global brands has been well supported (Steenkamp et al. 2003). In addition, there is also empirical evidence for the symbolic power of brands with nonlocal origin, especially among consumers in developing countries (Batra et al. 2000).

Given the potential power of global/foreign brands, most local firms are becoming interested in investing their brands with global status. In China, for example, an array of domestic firms are trying to be perceived as global playersBseeking to boost sales and profits by making their brand names and logos increasingly recognizable around the world (Khermouch, Einhorn and Roberts 2003; Saywell 1999). The global outreach of a handful of Chinese brands include Tsingtao (beer), Haier (home appliances), Wahaha (food and soft drinks), Konka (TVs), and Meidi (air-conditioners).

Although there is evidence that more and more Chinese firms are going global by targeting consumers in smaller countries and other developing markets who are looking for good quality at a competitive price, most Chinese global-outreach efforts in the more advanced world seem to be aimed primarily at impressing consumers back home, and providing home consumers with a sense of modernity and authenticity, while at the same time appealing to their desire for national/local pride and cultural identity. As a case in point, many Chinese are aware and proud that some Chinese brands like Haier appliances are marketed abroad as sophisticated goods with premium prices, and such a global presence acts as signs or surrogates for quality in the home market (Landler 2000).

In another case, determined to turn itself into a brand as coveted as its foreign counterparts such as Nike in the vast Chinese market, Li-Ning Sports Goods has begun sponsoring national sports teams, not just in China but also in France, Spain, Russia and elsewhere. Its global ambitions are illustrated by the fact that during the Spain vs. China game at the women’s basketball world championships in 2002, China’s team wore Nike uniforms, Spain’s team, however, wore Li-Ning’s signature logo, a stylized "L" resembling a wavy check markBthe rival of the swoosh (see Kahn 2003). The Chinese sneaker company also signed up European designers to further enhance its brand image and make it stand out in the fashion-conscious world. Li-Ning believes that the Chinese people need a sports brand of their own, but with global appeal. Likewise, cell-phone maker China Kejian has recently agreed to sponsor the English Premier League soccer team Everton in exchange for Kejian’s brand name appearing on the players’ jerseys when the team is contracted to play exhibition games in Kejian’s hometown of Shenzhen (see Khermouch, Einhorn and Roberts 2003). Jianlibao, a Chinese state-owned soft-drinks maker, though struggling to survive nowadays, used to be one of the most promising domestic brands in overseas markets. The brand’s early success in China seems to have been primarily a result of its global-outreach image (Saywell 1999).

It is increasingly common to see a foreign-sounding name or a Western celebrity endorsing a domestic Chinese company or brand. The symbolic association with foreignness is used and interpreted in ways that reinforce rather than overwhelm local cultural values (Zhou and Meng 1998). These and other cases highlight some of the common practices by local companies in the less affluent parts of the world seeking to make the connection between local brands and home consumers’ desire for both global quality and authenticity, and local cultural traditions and identities (Ger and Belk 1996; Zhou and Belk 2003). Such strategies clearly reflect Ger’s (1999) conceptual position that local brands should at least have some global presence or international association before their images can be improved at home.

We believe that the focus on global/foreign sentiment by local firms in emerging markets leads to consumer misattribution of a local brand as of foreign origin. The use of foreign-sounding names in local brands (such as the German-styled Ham manufactured by China Henan Shineway Group) serves as one of the many Chinese examples of the quest for global or foreign appeal. This phenomenon is echoed in the evidence which researchers are finding for the popularity of foreign-sounding brand names in the advanced market (Leclerc, Schmitt and Dube 1994). Within the Chinese context, we suggest that marketing communications that use foreign-sounding names, non-Chinese endorsers, advertising themes, foreign-look packaging and other nonlocal symbols and imitations are some of the main reasons for the misperception of local brand’s origins.

Targeting global sentiment by multinational corporations

The political, economic and technological forces shaping the race toward global consolidation have been well documented (Douglas and Wind 1987; Levitt 1983). Quelch (1999) echoes Levitt’s (1983) classic article "The Globalization of Markets" and highlights what has made the global brands matter more now than in the past, what distinguishes them from national (or local) brands, and the main strategies for building global brands. In his view, it is now possible to identify segments of global consumers across different country markets because of increased cross-border population mobility as well as the faster transfer of ideas and the signs of global cosmopolitanism and modernity stemming from the electronic facilities of cross-border television and the internet.

In one reflection of the growth of global consumer segments, Alden et al. (1999) analyze multinationals’ brand positioning through advertising, and identify the emergence of global consumer cultures as defined by shared sets of consumption-related symbols such as global brands. They note (p.77) that "by implication, advertising featuring the idea that consumers all over the world consume a particular brand or appealing to certain human universals might invest the brand with the cultural meaning of being a conduit to feeling at one with global consumer culture." The authors further emphasize that targeting global consumer culture with global brands should not be confused with globally standardized advertising since global brands may be communicated differently in each national market. Examples of brands that apparently have focused on the emergence of global consumer cultures include Sony’s positioning of one of its products as appropriate for young people around the world; Philips’ advertisements explicitly featuring people from different countries; Benetton’s slogan on the unity of humankind; and Nescafe’s advertisements projecting the image of a brand consumed globally (see Alden et al. 1999).

Although a whole series of major consumer goods companiesBsuch as Proctor & Gamble, Heinz, Kimberly Clark, Nestle, Unilever and Electrolux have reconsolidated their brand portfolios by selling brands which they believe do not have global potential, and buying others which they think do, most of their marketing effects are in fact directed toward the pursuit of global "blends" as opposed to global brands (Michell 2000)

Global "blends"blending the global with local sentiment

In recognition of the distinct nature of emerging markets (Arnold and Quelch 1998; Batra 1997), many foreign companies have attempted to integrate global value into local consumer culture (global "blends"). Such practice reflects the well-known perspective,"think global, act local". In reality, different forms of global "blends" can be observed.

Using a global platform with local adaptations. Rather than increasing control and cost savings, globalization may provoke more resistance and demands for localization (Aaker and Joachimsthaler 1999; Quelch 1999). However, one of modern marketing’s great skills is, "knowing when and where to ignore local differences in the quest for global synergies." (Mitchell 2000). That is why, among marketing scholars, there are numerous discussions as to how to reconcile global brand strategies with local cultural and market adaptations. A remarkable example can be seen in a study of McDonald’s in East Asia in which the author (Watson 1997) argues that the franchises in these countries are a very adaptive blend of the global and the local. Watson notes McDonald’s conscious attempts to combine the virtues of local culture and traditions with Western names and in-store displays in order to insinuate McDonald’s into the local culture.

In most other cases, however, the up-front quality of globalness risks alienating local consumers. In response to this potential disconnection with local consumers, many foreign companies that practice global brands take a "global platform" approach (Aaker and Joachimsthaler 1999). One of the most common ways of doing this is the use of a global platform bearing either the same core product technology such as "global cars" from General Motors being sold under different brand names in most other countries of the world, or the same global brand itself such as Coca-Cola being expressed in marketing communications in different ways according to local appeal (Mitchell 2000). Using a global brand as a platform with local adaptations also involves the customization of product ingredients to each market’s specifications, as in "localized MacDonaldization" (Watson 1997) or the very different forms of actual coffee under the same brand name of Nescafe in different countries (Mitchell 2000).

Another significant way of using a global brand as platform is co-branding between the global and the local through strategic alliances or global acquisition. The most flagrant example perhaps involves Danone, a French maker of yogurt, which in the less affluent parts of the world has leveraged its global name into a number of local brands across a wide range of product categories (including yogurt in South Africa, high-fiber crackers in Malaysia, and snakes in China). Leverage of global brand names by linking to relatively well-known local brands has become common and attractive. For example, Abratt and Motlana (2002) report two cases in which international companies (such as the French company Danone and the Canadian company McCain Foods) employed strategic brand alliances with well-known local brands to introduce new international brands into the South African market.

Making the local connection has also led some multinational corporations to develop a series of locally branded products. For example, Coca-Cola has now launched more than 20 different national (or local) brands of carbonated soft drinks (beverages) around the world, and these brands have become a significant part of the Coca-Cola portfolio (Quelch 1999). Some successful locally branded products by global companies have even been tested and transformed into the core elements of their global platform. Unilever’s Snuggles fabric conditioner, for instance, which originated in its German subsidiary, has attempted to establish itself in different countries by conveying a globally uniform message of "trust, softness, love, and security" but with the teddy bear identifiable as a typical "local" bear and products sold under different brand names such as Huggy in Australia and Coccolino in Italy (see Riesenbeck and Freeling 1991).

Global appropriation of the localness. In an effort to target local consumer culture and national sentiment favoring local traditions, some multinationals have even practiced the highest degree of global appropriation of the localBmaking global brands apper indigenous. They attempt to "in-localize" domestic offerings by "clothing their brands in local costumes" (Belk 2000, p.69). They craft locally by either disguising or down-playing their global aspiration to the use of local symbols, packaging and branding. Examples include Nescafe’s use of local people for its coffee in India; Coca-Cola’s localization of television commercials in China featuring everything from Chinese zodiac animals to Spring Festival couplets; and Danone’s piggybacking off the successes of local brands. In the latter case, for instance, France’s Danone, as a relative latecomer in China’s market, bought out a new bottled water business from Hangzhou Wahaha Group Co., a Chinese leading maker of enriched milk drinks targeted at domestic children and now a manufacturer of food and soft drink products. Danone embarked on a massive expansion for Wahaha but continues to sell their products under their Chinese own brands. Today, it is speculated that Danone aims to help Wahaha’s Future Cola, also known as "the Chinese people’s own cola", to take on Coke and Pepsi.

With the same belief that some well-known Chinese brands can withstand the competition from foreign rivals, Unilever took over the Beijing-based Jin Hua Tea Processing Factory, the largest jasmine tea producer in northern China, and retained the company’s original brand name to compete with other global brands in China such as Lipton (Schlevogt 2000). There are other similar cases in the Chinese market for home appliances. Examples include Whirlpool’s washing machines sold under the Chinese Kelon brand name and Maytag International’s products bearing its Chinese partner Rongshida’s brand name (Schlevogt 2000). Such global appropriation of localness does not seem to be unique in China. According to a global bi-annual consumer survey conducted by Research International Observer, global brands such as Danone, NestlT, Kraft, Dove and Kleenex are in fact perceived as local brands by consumers around the globe because of the extent of localization (Hiscock 2002). In these cases, global brands become "glocal" brands (Hiscock 2002). As such, the confusion of brand origin arises because consumers get confused with the mixed consumption symbols.

CONCLUSION AND MARKETING IMPLICATIONS

In an era of global and local competition, consumers can easily become confused with a brand’s origin or cultural identity. Consumer perception of a particular brand origin may differ from reality because of ignorance, lack of salience of origin information, or deliberate obfuscation by companies concerned about consumer reactions to an unfavorable origin (Thakor and Kohli 1996). This study describes insights into consumer confusion of brand origin, and highlights mixed branding and marketing communications as potential sources of brand confusion. Evidently, local consumption cultures in the less affluent parts of the world is of particular interest to international managers because it challenges them to capitalize on consumer sentiments by making the connection with locality (Riesenbeck and Freeling 1991). Adding to the challenge, many local firms emulate the branding and marketing communications of multinationals, expanding and endorsing the dominant trend in consumer icons and desires, that is, global appeal adapted to the locality.

Marketing implications

The phenomenon of consumer confusion of brand origin presents important implications for global marketers who are keen on localization strategies in emerging markets. Among other things, a foreign brand is more likely to be perceived as authentic and to stand for quality. While there are obvious benefits from adopting localization strategies, consumers’ preference for brands that symbolize the global or the foreign consumer culture in emerging markets should not be overlooked. Caution is needed in relation to the cost of giving away the advantage of being clearly perceived as global (or foreign) as compared to any potential benefits brought by localized positioning strategies in marketing foreign brands. Appropriate local adaptation, but without causing the problem of brand confusion, will allow global marketers to appeal to consumers’ taste for the exotic.

The challenge, however, is to seek the right balance. As Chan (1990) demonstrated in his analysis of foreign brand names translated into Chinese language, a non-translated brand name may convey status but may not be meaningful to most Chinese consumers. Thus, in one way or another, a brand’s nonlocal origin should be made salient or explicit even though the foreign brand is "dressed locally". Such a marketing practice is perhaps more advisable in developing countries than in developed economies. In general, we draw our major implication in line with the suggestion made by Batra et al. (2000, p.94) that "emphasizing foreign acceptance and origin may help rather than hurt the brand in developing countries where Western [or foreign] brands are held in high esteem".

Accordingly, any localization attempts of foreign firms should focus on effective global or foreign consumer culture positioning (Alden et al. 1999) in relation to desired product adaptation rather than on disguising the foreignness of products. Such a strategy appears to be characterized as a very adaptive blend of the foreign and the local. This strategy seems to be more desirable in the light of the backslash against foreign products because of their fading symbolic value in the eyes of Chinese consumers (Zhou and Hui 2003).

Given the increasingly conflicting roles of global and local brands in capitalizing on local consumer sentiments and sympathies in a globalizing world, especially in emerging markets, we have sought to ascertain whether consumer confusion of a brand’s origin affects perceived foreignness and globalness effects (Batra et al. 2000; Steenkamp et al. 2003). Future research could examine the extent of brand confusion in relation to the firm’s branding and marketing communication orientation (global, foreign, local, or a kind of combination). Another area for further research would be an investigation of the theoretical and empirical implications of consumer brand confusion. For example, there is a need for research examining how consumers react to a brand when they are confused about the brand’s local versus nonlocal origin.

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