National Image & Competitive Advantage: The Theory and Practice of Place Branding, 2nd ed.

Citation

Carvalho, S. (2007), "National Image & Competitive Advantage: The Theory and Practice of Place Branding, 2nd ed.", International Marketing Review, Vol. 24 No. 2, pp. 239-242. https://doi.org/10.1108/02651330710741839

A popular stream of research in international marketing focuses on how the “Made in” label influences consumers' evaluations of foreign products as well as their buying intentions. This phenomenon is known as the country‐of‐origin effect (COO) or, as authors Jaffe and Nebenzahl prefer, country image effect (CIE). A number of studies have examined differences in country image perceptions across different nations and established that consumer bias based on a product's country image is widespread. These studies were carried out in Japan (Nagashima, 1970), France (Cattin et al., 1982), Ireland, Mexico (Roth and Romeo, 1992), Canada, Germany, The Netherlands (Okechuku, 1994), and the USA (Cattin et al., 1982; Nagashima, 1970; Okechuku, 1994; Roth and Romeo, 1992), among other places. As a result of increased globalization, few international brands are produced in the same country from which they originate. This situation has led researchers to conclude that the “Made in” label on products is no longer a good indicator of the CIE. Recognizing this new direction of the CIE phenomenon, researchers such as Nebenzahl et al. (1997), Ozsomer and Cavusgil (1991) and Samiee (1994) now analyze the CIE as a multifaceted construct comprising CIE of brand origin (e.g. Sony is a Japanese brand), CIE of design (e.g. designed in Japan), CIE of manufacture (e.g. made in Brazil), CIE of parts and components (e.g. parts supplied from China), and CIE of assembly (e.g. assembled in Mexico). More recently, research on the CIE has taken another turn. Instead of focusing only on the effect that a country image has on the evaluation of brands and products, researchers are focusing on the country as a brand in itself – a phenomenon defined as country branding. Lately, the concept of country branding has been broadened to include different places besides country, and the term has changed from country branding to place branding.

Given these developments, Eugene D. Jaffe and Israel D. Nebenzahl, two leading scholars in the study of the CIE, devoted a considerable amount of energy to developing an in‐depth analysis of this research stream. National Image & Competitive Advantage: The Theory and Practice of Place Branding is a comprehensive work that reviews the theories used to explain the CIE phenomenon and presents the most important findings registered in the vast literature on the CIE (both academic and managerial); in addition, it proposes a measure to be used in the study of the CIE and poses questions that can lead to further research on the CIE. From a managerial perspective, this work represents a set of guidelines to be used by managers who need to decide how and when they should or should not explore the country‐of‐origin information in their communications strategies.

The book is divided into seven chapters. Chapter 1 gives the reader an idea of what the authors mean by image in general, and in more specific contexts such as product, brand, and country image. This introductory chapter describes how image is formed as a result of a learning process that involves categorization, which itself is a result of two opposing processes: abstraction and generalization. The authors suggest that brand and country names are categories that convey characteristics to novel products and, in turn, evoke evaluative judgments from consumers. The authors also use the categorization theory to explain how compositioning of brands and country images work. They affirm that the strength of an image, resulting from the compositioning of brand and country images, is a function of the relative strength of both images. Therefore, the end image of a product can be improved by a country image that is relatively better than the brand image. However, the end image of the product can be damaged as a result of a country image that is weaker than the brand image. Thus, the authors set the ground for the discussion of the very important managerial implications of the interactive effects of product, brand, and country images on the performance of global brands. How should companies efficiently manage those compositions in order to gain or at least not lose brand equity? These managerial implications are discussed more in detail in the chapters that follow.

Chapter 2 is the most theoretically dense and difficult‐to‐follow chapter of Jaffe and Nebenzahl's book. In this chapter, the authors attempt to present a thorough theoretical explanation of the concepts of country image and CIE. They contend that there is a lot of confusion in the literature regarding the conceptualization of these two terms. They try to reconcile the different views on those two concepts by presenting a theoretical framework that aims not only to address the different concepts, but also to explain causal relationships. The chapter starts with a taxonomy that classifies the most important elements of country image and CIE. The next section suggests a scale that can be used to measure the CIE in many different contexts. The authors then discuss how familiarity with the product causes the CIE to shift from a halo to a summary effect. That is, in low familiarity situations country image causes a halo effect, while in high familiarity situations country image has a summary effect on the formation of attitude toward foreign brands. The authors also suggest that the CIE can be seen as a circular effect, in which country image affects perceptions of brands and products, which, in turn, affect country image.

Chapter 3 represents one of the main managerial contributions of the book. Most research conducted on the CIE focuses only on the influence of country image on consumers' perceptions of brands and products. Very few studies have attempted to evaluate the impact of the CIE on the performance of the firm. Jaffe and Nebenzahl try to fill this gap not only by suggesting that country image can be valued in monetary terms, but also by presenting guidelines on how to estimate the value of country image and its impact on brand image. These guidelines can help managers to answer such important questions as “Will the cost reduction compensate for the loss in revenues due to the negative CIE on brand image?”

In Chapter 4, the authors suggest that consumers vary in their response to country‐of‐origin information. They identify four different consumer segments related to the CIE. Patriots are consumers who prefer to buy domestic products even when those products are perceived as inferior to foreign ones. Hostiles are consumers who do not buy products from certain specific countries that they perceive to behave inappropriately in the international environment. Traitors are consumers who have a positive bias toward foreign products and prefer to buy those rather than domestic ones. Finally, cosmopolitans are consumers who are free of any bias regarding country of origin and who buy according to their assessment of the products' own merits.

The next three chapters deal with the strategic management of the CIE at the firm, industry, and government levels. In Chapter 5, the authors evaluate strategies related to interactions between a weak or strong country image and a weak or strong brand image. In Chapter 6, the authors analyze the effectiveness of real‐life promotional campaigns that exploited the country‐of‐origin information at the industry level using “Buy local” strategies, and at the government level using place branding strategies. The results of those strategies are mixed. The authors point out that the effectiveness of the “Buy local” strategies seems to be dependent on the existence of a large patriotic consumer base. As for the place branding strategies, the rate of success has been quite low. Because, place branding strategies have been so complex and involve so many different variables, no study has been able to find a single, universal cause for such a low rate of success. Chapter 7 focuses on the legal implications of the CIE. It evaluates regulations in various countries, as well as rulings of international organizations such as WTO on the issue of “Made in” labeling. In the epilogue, the authors present a brief discussion of the impact of e‐commerce on the CIE and pose some questions to be explored in future research.

This book is one of the most complete in‐depth analyses of the CIE. It is well grounded on solid theory and illustrated with real‐life examples. It is a must‐read for those who are interested in acquiring a vast understanding of the interactive effects of brand, product, and country image on the evaluations of brands and products. A disappointing aspect of this book is the absence of an assessment of the schema congruity theory (Mandler, 1982) as a potential explanation for the interactive effects of the many different elements of the CIE on consumers' evaluations of hybrid products. In the case of binational products, for instance, consumers may perceive the country where a brand is manufactured as being incongruous with the country from which the brand originates. It is also possible that the country‐related brand associations may be incongruous with the strength of the attributes of the product. Recent research has suggested that the way consumers process in (congruity) country‐of‐origin information influences their evaluations of products and brands (Chao, 2001; Haübl and Elrod, 1999; Hui and Zhao, 2003; Leclerc et al., 1994).