Impact of Brand Origin Country Perception on Brand Equity among Sports Products Consumers

Introduction

Creating a strong brand identity is essential for any organization in today's world, as it offers numerous benefits. These include the ability to identify with the market, reduce vulnerability in competitive situations, increase profit margins, foster support and collaboration, and provide opportunities for brand growth (Aaker & Equity, 1991). Strong brands offer a wealth of financial and other resources to service companies, such as increased customer loyalty, improved operational flexibility in the face of environmental crises, increased profit margins, and brand development opportunities (Kafashpour, 2009). For the past half-century, global corporations have been striving to plan, execute and coordinate their operations around the world. These corporations are active in the global market and distribute their products to various countries. Brands such as Nike, Adidas and Coca-Cola, as well as Nestlé, Benz and McDonald's, Toyota and Sony, Gillette and BMW, are well-known to consumers worldwide. The majority of consumers around the world know and remember the Brand Country of Origin of these brands. This raises the question of the growing significance of country of origin and consumers' mental image of the product from the country of origin. According to Augustine et al. (2019) the origin of a product assists customers in a more comprehensive evaluation of the products (Augusta et al, 2019). Since the introduction of "made in" term (1962) by Ernst Dichter, research on the alteration of the 'country of origin effect' has been one of the most sought-after areas of research in international marketing. Furthermore, the stereotyping of countries of origin and its impact on consumer behavior and purchase intent have attracted the attention of researchers (Bloemer et al, 2009; Josiassen & Assaf, 2010; Russell & Russell, 2006). Furthermore, El Soliti and Baker suggest that country of origin is an important factor in consumer behavior (Al‐Sulaiti & Baker, 1998).

The concept of the “Brand Origin Country” encompasses the customer's perception and assessment of the country from which a brand originates. This concept has become increasingly important in recent years. Studies have demonstrated that the "country of origin" and the "country of production" of a brand have a considerable influence on the consumer's decision-making process, purchase intent, brand preference, and overall consumer behavior. In short, a country may have a particular image or reputation in the consumer's memory. For instance, a brand may be known for producing wristwatches in Switzerland, such as a Tissot or Rolex, or sports shoes, such as Adidas, or a tennis racket, such as a Wilson, which is manufactured in the United State. At this stage of the purchasing process, consumers are not only focused on the quality and cost of the product, but also on other elements, such as the brand's image of its country of origin. In fact, many consumers use the country of origin image to assess products. For instance, it is believed that Japanese electronic products are more dependable. Similarly, German automobiles are superior; and Italian pizzas are renowned for their quality. In other words, the country of origin is the home of the company or company that consumers refer to by their brand name. Manufacturers from countries with a generally positive reputation tend to find that their branded products are more readily accepted than those from countries with a less positive reputation. Products bearing foreign names are often linked to the origin country brand. Numerous companies have leveraged relationships with their country of origin to generate substantial profits in the commodity markets. Furthermore, origin country image typically has an impact as consumers from developing or less developed nations tend to perceive goods from developed countries as more aesthetically pleasing or of higher quality (Šapić et al., 2018).

In contrast, to facilitate their decision-making process, consumers use clues to identify products, focus more on the origin country brand or product, and make decisions based on the mental image created by the name. They then complete the purchase process. This phenomenon is referred to in the literature as the country-of-origin effect (Hagigi, 2011), and consumers typically have stereotyped thoughts about a specific country, which influences their overall assessment of products and their perception of the products of that country (Bilkey & Nes, 1982). Additionally, consumers consciously form a stereotyped image of certain countries' products and the characteristics associated with them. Consumers tend to associate brands with the country of origin and not with the country where the products are produced (Jin et al., 2006), and the image of the country has the power to encourage importers and consumers’ beliefs about product attributes and influence their assessment of products and brands (Srikatanyoo & Gnoth, 2002). Research has also shown that country of origin influences the customer’s perception of a particular product or brand (O’Cass & Lim, 2002), as well as has a significant influence on the brand’s image (Koubaa, 2008).

The country of origin can be used as a proxy for other characteristics of the product, such as product quality, product performance, and the credibility of the product, which cannot be directly measured (Kameli, 2015). In addition, The Brand origin country product is also taken into account as an external indicator (Bilkey & Nes, 1982; Cordell, 1992; Erickson et al., 1984; Han & Terpstra, 1988; Hong & Wyer Jr, 1989). The Brand origin country is also one of the most influential influencing factors in the consumer's decision-making process (Khachaturian & Morganosky, 1990; Knight, 1999; Piron, 2000). Previous studies have also shown that country of origin information plays an important role in the consumer’s perception of the product (Johansson, 1989), encouraging the consumer to buy the product (Hong & Wyer Jr, 1989), and the brand origin country plays a more significant role in the customer’s assessment of the product’s quality, risk, value and likelihood of purchase than price and brand awareness (Wall et al., 1991). However, the fact that the consumer knows the brand, knows the brand’s experience and has some information about the brand doesn’t diminish the importance of country of origin for the evaluation of the product (Schaefer, 1997). Brands from countries with a good brand image tend to find that their brand is adopted by consumers in a shorter period of time compared to brands from countries with a poor brand image (Mohd Yasin et al., 2007).

One of the primary objectives of brand management is to create a positive mental image of the brand. In order to do this, it is necessary to understand the perception of consumers about the brand (Amirshahi & Abbasian, 2016). Consumers’ perception of a brand also influences their mentality towards it. The perception of a brand can influence the future of a product. The more a brand creates a positive effect on the consumer and makes them feel good about the product, the more loyal they will be and the more likely they will keep buying the product. On the other hand, the more a brand fails to present itself in a positive light, the less likely it will succeed. The way a product is presented to the consumer and the behavior of the consumer depend heavily on the presentation of the product and the characteristics of the product (Mohammadpoori et al., 2014).  

Consumers use a country of origin image as a criterion for determining the quality of a group of products (Moradi & Zarei, 2011). The country-of-origin image has the power to influence importers’ and consumers’ perceptions of product characteristics, as well as the assessment of products and brands (Srikatanyoo & Gnoth, 2002). The country-of-origin image is a sign that influences the perception of quality, both directly and indirectly (via the brand) (Thakor & Katsanis, 1997). The image of a country has a direct and indirect impact on the perceived quality of a product (Thakor & Katsanis, 1997). Over the course of over 40 years of research, it has been observed that the perception of a country has an impact on the purchase intent and evaluation of a product by consumers (Roth & Diamantopoulos, 2009); this is due to the fact that the image of a country is an external indication for the product (Zamantili Nayir & Durmusoglu, 2008), particularly when the consumer is unfamiliar with foreign brands (Hamzaoui-Essoussi et al., 2011). The country of origin plays a significant role in shaping consumers' perception of a brand, and this effect is distinct from that of more well-known brands and less well-known brands. It can be argued that the influence of the country of origin on consumers' perception of the brand is substantial and may outweigh the influence of well-established brands in forming the brand's image in the consumer's consciousness (Koubaa, 2008). In addition, research shows that the country-of-origin association in the consumer’s mind can influence the country-level dimensions of customer based brand equity. For instance, consumers may think differently about France and Spain when it comes to the dependability and shelf life of their products/brands (Pappu et al., 2007). Other research shows that image of country of origin directly and positively impacts the country level dimensions of brand equity (Azadi et al., 2015; Jalkanen, 2012; Koubaa, 2008; Mohd Yasin et al., 2007; Moradi, 2010; Norouzi & Hosienabadi, 2011; Saydan, 2013; Vaishnavee & Nandagopal, 2018; Bartikowski et al., 2019; Lin & Kao, 2004; Nath Sanyal & Datta, 2011; Pappu et al., 2007; Shafiee, 2019). The findings of Heydarzadeh and Khairi (Heydarzadeh, 2009) suggest that there is a strong and direct correlation between Brand origin country awareness and the mental state of the country of production. Furthermore, Ranjbarian and et al. found that the country of origin information was influential in the purchasing decisions of students at Isfahan University, and the information was more effective in buying expensive items (Ranjbarian & Barari, 2009). Furthermore, they demonstrated that the perception of quality of products is directly linked to the level of development of their respective country of origin. The country of origin element has a direct impact on customer purchase intent, as evidenced by the findings of Mortazavi et al., (2012). Similarly, the results of the research conducted by (Nasr Esfahani, 2013) revealed a positive and substantial impact of a very high degree of brand loyalty among Iranian football fans. In accordance with the findings of the study conducted by (Nazari, 2020), the pricing potential of products is affected by their country of origin. Iranian consumers are more likely to pay 20 to 40% more for goods produced in Germany than those produced in Iran, and they are more likely to spend 20 to 40% less for goods produced in China than they are for those produced in Iran. Azizi et al., (2021) found that the respondent’s attitude toward the vacuum cleaner product is directly related to the country of design and the country of the product’s parts-source country (Azizi et al., 2021). In the case of South Korea, the respondents’ attitude towards the product is more positive than in the case of Iran.The country of design also plays a direct role in the perceived price of a vacuum cleaner product. According to the analysis, two variables (country of design and parts-source country) have a direct impact on the perceived price simultaneously. Konjkavmonfared et al., (2023) found that the product dimension affects all dimensions of the brand equity and also that promotion has a significant impact on perceived quality as well as brand awareness (Konjkavmonfared, 2023). Since most of the research conducted by researchers in other fields and industries, and considering the growth and development of the sports industry in the last decade and the investment of countries and companies in the field of branding and brand creation of sports brand products, while there is a vacuum Knowledge in this scientific field, the necessity of conducting and paying attention to the variables and components of this research is twofold and it is important for managers and marketers to pay attention to the results of this research and use them in their goals and plans.

It has been observed that consumers' perception of sports products from their country of origin can vary from place to place and can have an impact on brand equity. There are a variety of sports products available in the Iranian market, both domestically and internationally, from countries such as German, English, Vietnamese, American, Indonesian, Iranian, and Chinese brands. These brands offer a wide range of products in the Isfahan city sports products market. Therefore, it is essential to gain an understanding of what consumers perceive of their countries of origin, as this can be a factor in their choice. According to the researchers, if the producers of Iranian sports products intend to compete in the competitive market of these types of products and be able to have the loyalty and satisfaction of their customers in addition to earning more income and profit, they should understand in a special way. One of the ways and paths of this process is to create and develop a product (brand of the country of origin) suitable and desirable from the image of the country made and to focus on scientific research and its results. So this research seeks to address the question of whether sports product consumers' perception of their country of origin affects the brand equity of a customer-based brand.

Research Methods

This correlation-causal study was carried out as a survey. The statistical population of the study was all consumers of sport products (clothing and sports equipment) living in Isfahan, Iran in 2022. Since the exact size of the population was unknown, the distribution of questionnaires to the statistical population was increased by 10% (n=423 using Krejcie and Morgan Table to estimate the statistical sample size). A stratified random sample selection process was conducted based on geographical regions. Initially, eight sports product stores from Isfahan City were chosen based on their geographical region (North, South, Center, East and West). Subsequently, consumers from these selected stores were randomly selected and survey responses were administered and collected accordingly. In the end, 423 questionnaires were distributed to the consumers of selected stores, resulting in 384 questionnaires being used. It is important to note that, as some stores sell sports products online, questionnaires for this group of consumers were distributed online and via product sales platforms. For other consumers, the questionnaires were distributed in-store and collected in-person. The measurement tools used were the standard questionnaire Consumer-Based Brand Equity (Roth & Romeo, 1992) and the standard questionnaire on customer-based brand equity (Aaker & Equity, 1991), both of which have been confirmed and validated by researchers. They were assigned a Likert scale score ranging from 1 to 5. The initial part of the questionnaire included questions related to the demographic characteristics of respondents; the standard questionnaire for consumer perception of the Brand origin country included 13 questions (For example, When buying sports products, I will look for the label "Made in..." on the product?;  When I buy a new product, the country of origin is the first information I pay attention to?; The country of origin determines the quality of a product?; etc), while the standard questionnaire for customer based brand equity encompassed 25 questions (For example, I like the company that produces the products of my favorite brand?; I can distinguish my favorite brand among other competing brands?; My favorite brand is very famous?; ect). In order to determine the face validity, first, the questionnaires were reviewed by 10 experts in business management and sports management and their opinions were applied in the preliminary questionnaire. Then, through confirmatory factor analysis, it was determined that the factor loadings of all questions are more than 0.4 and are confirmed. To assess the reliability of these questionnaires, they were firstly distributed and collected from a sample of thirty consumers of the respective sports product stores, the next step was to calculate the internal consistency or reliability coefficient of the questionnaires based on the data obtained. This was done by applying Cronbach's alpha, which was calculated as 0.76 for consumer perception of Brand origin country and 0.78 for the customer-based brand equity. The statistical analysis of the research data was conducted using descriptive statistics, as well as inferential statistics, such as the Kolmogorov–Smirnov tests, and the structural equation model. The statistical software’s used for the analysis of the data were SPSS 23 and Lisrel 3.

Findings

Table 1 indicates that the sample consists of 237 male participants and 147 female participants. The majority of the samples (262) are unmarried individuals, while the majority (122) is married individuals. The most frequent age group (under 20 years of age) is associated with 160 individuals, while the least frequent age group (41 years of age or older) is associated with 21 individuals. The majority (186) of the sample have a diploma or less, while the minority (45) have a master's degree or higher.

Table 1- Frequency distribution of the sample group based on demographic characteristics

The results of Table 2, which outlines the popularity of sports brands among consumers in sports products stores in Isfahan City, indicate that the majority of the sample (149) chose and purchased Adidas, while the least (6) chose and purchased Kappa.

Table 2- Frequency distribution of sample group based on favorite and purchased brand

In addition, Table 3 shows that the significance of the test was higher than 0.05 for the consumer perception of Brand origin country and the customer based brand equity, so the overall distribution is normal.

Table 3- Normality of the distribution of research variables

Structural equation modeling is a statistical approach to the analysis of the relationship between observed variables and latent variables. The structural equation model illustrates the relationship between intrinsic and extrinsic latent variables and allows for the determination of the direction and magnitude of the causal relationships between those variables. Consequently, using measurement models, it is possible to identify which observed variables accounts for certain latent variables, and to determine which independent variables influence specific dependent variable using structural models. In order to assess a structural equation model, various tests are conducted with different indices, commonly referred to as fit indices. The following indices are used in this study: Relative Chi-square (χ2/df): This is one of the most common indices used to calculate the free parameters in the calculation of the fit index. It is a straightforward division of the Chi-square value, and is calculated on the basis of the model's degree of freedom, with an acceptable value between 1 and 3. RMSEA is a measure of the estimation of an error of approximation, expressed as a decimal point. It can be calculated for various confidence intervals, and acceptable models have values below 0.1. Models with values above 0.1 are estimated to have poor fit. The comparative fit index (CFI) evaluates the degree of improvement of a model by comparing it to an independent model, where there is no correlation between the variables and the model proposed. According to researchers, the acceptable value of this index should exceed 0.9. The goodness of fit index (GFI) is calculated by dividing the estimated matrix's sum of squares by the model's total sum of squares. Its range of changes is between 0 and 1. The acceptable value of GFI should exceed 0. Normal fit index (NFI) is an indicator of the relationship between variables in a model, with high correlations resulting in a high comparative fit index value. It should be set to a value greater than 0.9. Root mean square residual (RMR) is another measure of the average residuals in a model. Generally speaking, when the residuals are within the range of 0 to 0, the model is considered to be a good fit (Hooman, 2018). Based on the results obtained and shown in Table 4 and Fig. 1, RMSEA equals 0.064. Since RMSEA is below 0.1, the mean square error (MQE) of the model is acceptable and the conceptual model for the research variables has a goodness of fit.The chi-square value ([305 / 33] / 118) is between 1 to 3. The GFI and CFI indices are above 0.9, indicating that the model for the measurement of the research variables is fit.

Figure 1. Structural model of the research (path coefficients of the research hypothesis model)

Figure 2. T-test results of the second research model

Table 4- Model fit indices

The t-test results are also supported by the research model. The factor loadings on the items associated with the main variables in the study have become statistically significant at 99% confidence and play an important role in the measurement of constructs themselves.Figures 1 and 2 and Table 5 show that the correlation coefficient between the path between consumer perception of the Brand origin country and the customer based brand equity is 0.61 which is a positive value; Also, the t statistic is 9.75 (more than 1.96), so one can state (with 95% confidence) that path coefficient is statistically significant at error level 0.05 and there is a significant and positive impact of consumer perception of Brand origin country on customer based brand equity.

Table 5- Estimated estimation coefficients (path coefficient) of the impact of consumer perception of Brand origin country on customer-based brand equity

Discussion

Creating a strong brand identity is of paramount importance for many organizations in the present day, as it offers numerous benefits. Many consumers rely on Brand origin country images to evaluate products. Furthermore, consumer perception of sports products from their country of origin may vary across locations and time periods, resulting in distinct value for the brand. In summary, the purpose of this study was to analyze the impact of sports product perception of consumers from the country of brand origin on customer based brand equity of Isfahan through structural equation modeling methodology. Given the growing significance of consumer perception and brand equity in consumers' minds, it has become an essential and critical concern for sports organizations, producers and marketers. Strengthening brand equity is a proposed business strategy that seeks to maximize profitability and revenue for the organization, while simultaneously increasing customer satisfaction and loyalty.

The Structural Equation model test results indicate that the correlation between the path between consumer perception of brand origin country and brand equity is positive at a coefficient of 0.61. Furthermore, the value of the t statistic is higher than the value of 1.96, with a value of 9.75. Therefore, it is concluded with 95% confidence that consumer perception of country of origin has a considerable positive impact on brand equity, as demonstrated by (Saydan, 2013) study of the relationship between Brand origin country with the brand equity of English stores across Turkey. This research was conducted in the household appliance sector, and the findings concur with those of the Saydan study. The Saydan study revealed that the country of origin of a brand has an effect on the way in which consumers evaluate and select a brand from a variety of perspectives. Furthermore, the findings of this study are in line with those of Azadi and Yousefi (Azadi et al., 2015). Azadi and Yousefi examined the impact of the country of origin on the development of brand equity in sportswear, and their findings indicated that the image of the brand origin had a positive and significant correlation to dimensions of brand equity (brand loyalty, perceived quality, brand awareness and association). Furthermore, there was a significant and positive correlation between the dimensions of Brand Equity and Brand Equity.

As stated earlier the image of the origin country has the potential to influence importers' and consumers' perceptions of product features and evaluate products and brands  (Srikatanyoo & Gnoth, 2002). This is due to the fact that prior research has also demonstrated the influence of country of origin on customer perception of a particular product or brand (O’Cass & Lim, 2002). Furthermore, the image of a country has a significant influence on the image of a brand (Koubaa, 2008); brands from countries with a positive image are more likely to be adopted by consumers in a shorter period of time than those from countries with a negative image (Mohd Yasin et al., 2007). The impact of the origin country brand on a brand and its equity can thus be attributed to the fact that consumers are not only focused on factors such as quality and price when making a purchase, but also on factors such as origin country brand. Furthermore, research has demonstrated that consumers tend to have higher purchase intent when purchasing from brands they are already familiar with and prefer (Chi et al., 2009) The origin country image can have a significant impact on the purchase intention, brand preference, and brand image of a brand. Furthermore, a brand with a high degree of brand equity can influence consumer preference and increase the intention to purchase in consumers. Consequently, manufacturers should maintain ongoing initiatives to cultivate and enhance the country's image in order to bolster their own image. This is because favorable information about a country can lead to a positive perception of a brand, which is the image that is desired by brands.

Examining the models derived from this research, it was observed that the subcategories of customer based brand equity encompass include perception of quality, brand perception, brand loyalty and brand association with consumer perception of brand origin country. Furthermore, the origin of the brand had a positive and significant impact. In short, if the consumer is aware of the brand identity of the product manufactured in the target country that the consumer prefers, there is a potential for product brand loyalty, otherwise, the consumer will be frustrated with the consumption and re-consumption of the product, resulting in a lack of brand loyalty.

In conclusion, the findings of this study demonstrate a strong correlation between the components of brand equity and consumer perception of the Brand origin country. This implies that consumer perception of a Brand origin country has a significant impact on the Brand Equity components, such as perceived quality, Brand Loyalty, Brand Awareness and Brand Association, with Brand Loyalty having the highest effect (0.82%) and Brand Association having the lowest effect (0.39%) the consumer perceptions of Brand origin country.

It is evident from the above findings that the analysis of the various dimensions that generate consumer perception of Brand origin country and brand equity is of paramount importance to sports companies and organizations, as each of these dimensions has a distinct impact on management reactions. The results suggest that it is essential to pay close attention to brand equity and, in particular, its subcategories, and the effects they receive from consumer perception. Consumer perception of the brand origin country is not homogeneous and linear, as it may evolve over time or be affected by other moderating factors, resulting in a change in consumer consumption habits which ultimately results in a consumer's loss. Consequently, the cost of attracting such a consumer is much higher than that of retaining an existing and loyal customer. The proper understanding of the consumer's perception of a brand and the monitoring of the factors influencing that perception can be of great benefit in understanding the consumer's interests, purchasing patterns, awareness of a brand, perception of the quality and image of a brand, consumer attraction to a brand, and brand loyalty in the consumer's consciousness. Furthermore, as demonstrated by research conducted by (Koo Kim, 1995), a country with a favorable and appropriate image leads to an increase in the brand's popularity and reputation. As a result, consumer loyalty to a brand is one of the outcomes of the brand's reputation and popularity. Consumers may develop a strong affinity for certain countries, which may result in ongoing purchases of brands associated with those countries, according to Ahmed & d'Astous (Ahmed & d'Astous, 1996). Consequently, companies and their management should strive to enhance and cultivate a positive image of their respective countries in order to strengthen the reputation and appeal of their respective brands and subsequently foster consumer loyalty.

For better and more effective management, it is therefore essential to understand how consumer perception affects each of the elements of brand equity. Furthermore, as consumer perception has a greater effect on the element of brand loyalty, it is demanding to understand its importance, as a correct comprehension of the brand of the origin country can lead to brand loyalty for the consumer. It is essential for the organization, sports product manufacturers, marketers, and distributors to be aware of the elements of the brand's equity, and to be cognizant of the intrinsic and emotional needs of the consumer. Consequently, they may be able to create the appropriate conditions to attract, retain, and satisfy the consumer. Consumers' perception of the origin country brand is influenced by the brand association component, which is considered to be the least influential. This should be taken into consideration by the management of the company, manufacturer and marketer, who should create the necessary conditions for creating a favorable image and association in the consumer's mind. Therefore, the more positive the consumer perception of the brand, the more likely it is to have a positive impact on the elements of the brand equity. For example, a positive consumer perception of the country producing the product of the brand will lead to increased brand loyalty, a higher perceived quality, greater awareness and a stronger brand association in the consumer. Conversely, a negative consumer perception of the producer of the branded product will lead to a negative tendency towards the brand equity and its elements. Sports companies are suggested to devise programs to promote and enhance consumers' perception of their origin country brand, as this will lead to an improvement in the quality of their products. Furthermore, they should continuously improve the quality of their goods through a thorough quality management program. Furthermore, they can increase the brand's awareness among customers by creating an image of the brand's origin country. In addition, it is suggested to the managers and marketers of the companies to continuously improve their quality from the point of view of re-branding, and by creating a unique quality, they benefit from the differentiation strategy in the market while retaining their current customers and attracting potential customers. By creating strong marketing campaigns and activities in the target countries, managers and marketers of such companies can foster positive associations with their consumers. This will result in an increase in the brand equity originating from these countries.

Conclusion

Therefore, considering that today, the more positive the consumer has towards the brand's country of origin, the more it will have a positive effect on the special value of the brand; And as a result, consumer attitudes towards the brand of the country of origin are improved, and brand loyalty and product quality are increased, and associations and a better image of the country's brand are created. Therefore, the managers and marketers of commercial companies in the field of sports should pay attention to this important category in marketing and branding and develop programs to promote and improve consumers' perception of the brand's country of origin. Also, in this regard, focus on the results and suggestions of this research and other researches in the field.

Acknowledgments

The authors would like to express their appreciation to the Faculty of Physical Education and Sport Sciences, Isfahan Branch, Islamic Azad University.

Conflicts of Interest

The authors declare that there is no conflict of interest.

Funding

This research did not receive any specific grant from funding agencies in the public, commercial, or not-for profit sectors.