Country of ownership influence on brand equity and loyalty

Abstract

This study aims to investigate the impact of country of ownership on Norwegian consumers' brand attitudes, perceived quality, brand value, and loyalty. As companies increasingly internationalize, it becomes crucial to examine how this may influence brand equity and identify strategies to mitigate any potential negative effects. This knowledge would be beneficial for both national and international companies seeking to enter the Norwegian market. Despite the importance of this topic, there is limited research on the effects of country of ownership on brand equity and loyalty. Given the complexity of the subject and the scarcity of relevant literature, it was essential to incorporate a mediator and a moderator, namely pride and ethnocentrism, into our conceptual model to facilitate a comprehensive understanding of the study results. Our thesis statement is: "What effect does country of ownership have on brand equity and brand loyalty?" To test our conceptual model, we conducted a quantitative experiment using a 2x2 between- groups design, wherein each group was presented with a fictional news article. One article depicted the acquisition of the Norwegian company Tine by a foreign entity, while the other portrayed Tine maintaining its Norwegian ownership. This approach allowed us to explore different scenarios related to country of ownership. Our sample comprised 109 anonymous respondents, who were recruited through diverse social media platforms such as Facebook and LinkedIn. The data analysis was performed using the statistical program SPSS, along with Hayes PROCESS macro, enabling the simultaneous analysis of the entire conceptual model, including the direct and indirect effects of the moderator and mediator. The analysis consisted of exploratory factor analysis (EFA), probability analysis, linear regression analysis, and moderated mediation analysis, specifically Hayes' PROCESS Model 5. Our findings indicated that country of ownership did not exert a significant effect on brand equity or loyalty, leading to the rejection of all six of our hypotheses. Furthermore, ethnocentrism was not found to have a significant moderating effect on the relationship between country of ownership and brand equity or loyalty. The analysis also revealed that country of ownership did not impact the mediator, pride, while pride exhibited a slight positive mediating effect on the relationship between country of ownership and the dependent variable, brand equity, although this effect was not deemed significant. However, pride did exhibit a significant positive mediating effect on brand equity. Although our hypotheses were not supported by the data, our findings hold significance for the field of country of ownership and can guide future research on the subject. Notably, the discovery of pride's significant positive effect on brand equity presents a promising avenue for further investigation.