The effect of corporate branding dimensions on consumers’ product evaluation A cross-cultural analysis

The effect of corporate brandingdimensions on consumers’

product evaluationA cross-cultural analysis

Nizar SouidenFaculty of Business Administration, Laval University, Quebec, Canada

Norizan M. KassimDepartment of Management and Marketing,

College of Business and Economics, University of Qatar, Doha, Qatar, and

Heung-Ja HongFaculty of Sociology, Kansai University, Osaka, Japan

Abstract

Purpose – The paper aims to investigate both Western and Eastern corporate branding thoughtsand examine the interrelation among four corporate branding dimensions (i.e. corporate name, image,reputation and loyalty) and their joint impact on consumers’ product evaluation.

Design/methodology/approach – Building on extensive literature, a model of consumers’ productevaluation that includes the major determinants of corporate branding is proposed. Based on a sampleof 218 Japanese and American consumers, structural equation modeling and general linear modelanalyses are used to test hypotheses.

Findings – The research reveals that Japanese and American consumers have different perceptionswith respect to the effect of corporate image and corporate loyalty. The corporate name was found tohave a significant impact on corporate image and corporate reputation was found to have a significantaffect on corporate loyalty. The corporate reputation is also found to be a mediator of the corporateimage’s effect on consumers’ product evaluation.

Practical implications – The paper suggests that marketers should carefully consider thecorporate name when designing their branding strategies. Marketers are also called on to adapt theircorporate branding approaches to fit each marketing environment and enhance corporate loyalty toreduce the switching behavior of consumers.

Originality/value – The paper clarifies the interrelation among the four corporate brandingdimensions and shows that consumers of different cultures do not perceive in the same way the impactof corporate branding determinants.

Keywords Corporate branding, Brand names, Brand image, Customer loyalty

Paper type Research paper

IntroductionIt is reported that a corporate brand can add value to the company’s product policy andlinking corporate and product brands will be beneficial to both the corporate and its

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0309-0566.htm

The authors are indebted to two anonymous EJM reviewers and the Guest Editors for theirvaluable suggestions and helpful comments.

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Received October 2004Revised September 2005

Accepted January 2006

European Journal of MarketingVol. 40 No. 7/8, 2006

pp. 825-845q Emerald Group Publishing Limited

0309-0566DOI 10.1108/03090560610670016

individual products. Several multinationals have become aware of the importance oftheir names and are trying to establish and create a strong link between their corporatebrand and product brand (Uehling, 2000). However, although there are many theoriesthat have been advanced explaining how customers evaluate and select a particularproduct (Bettman, 1970; de Chernatony and Dall’Olmo Riley, 1998; Jamal and Goode,2001; Kim and Chung, 1997; Lee and Ganesh, 1999; Low and Lamb, 2000; Mitchell andOlson, 1981; Muthukrishnan and Kardes, 2001; Woodside and Clokey, 1974), most ofthese attempts have only partially examined the impact of corporate branding onconsumers’ product evaluation. Additionally, no known research has combined therelevant corporate branding dimensions in the same study or measured theinterrelations among these dimensions or identified the extent of their impact onconsumers’ perception and evaluation. Furthermore, most of previous research havebeen confined to the Western’s corporate branding theories and Western consumers’perception of the corporate brand effect. No attempts were made to explore the view ofthe Eastern scholars and consumers on the topic. Therefore, the objectives of thispresent study are to:

. highlight the difference between Eastern and Western scholars’ view on thecorporate branding effect;

. compare the Eastern and Western consumers’ perception of the corporatebranding impact; and

. delineate the major corporate branding dimensions and examine theirinterrelations.

Particularly, we intend to answer the following questions:. To what extent are the Western and Eastern corporate branding theories

divergent?. To what extent is the corporate branding effect perceived differently by

consumers from the West and those from the East?. What are the relevant dimensions of the corporate branding and how are they

interrelated?. What impact might each corporate dimension have on consumer product

evaluation?

Although other factors (such as country of origin and product brand name) arereported to have some effect on consumers’ product evaluation, the scope of the currentresearch is confined to the examination of corporate branding. The remainder of thepaper is composed of four major sections. The second section deals with a brief reviewof corporate branding research. In addition to the Western views on the topic, weequally explore the Japanese literature on it. There are two main justifications for theinclusion of the Japanese literature. First, the existing corporate branding theories,which are mainly form the West, need to be extended to include the views of scholarsfrom the East (i.e. Japan). This would help us to explore whether there is an importantgap between Eastern and Western thoughts on the issue. Second, since Japanesecompanies are known for the use of corporate branding, its success or failure might bereflected in the Japanese corporate branding literature. The third section of the paperproposes a conceptual framework that helps understand the relationship between the

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different corporate branding dimensions and analyze the interplay between corporatebrand familiarity, image, reputation, and loyalty/commitment. The fourth section isdesigned to empirically test the proposed hypotheses. Theoretical and managerialimplications of the study are reported in the next section. Finally, we conclude with abrief summary of the study’s limitations and some recommendations for futureresearch.

Literature reviewDivergence in corporate branding theories between the East and the WestConventional marketing wisdom states that corporate branding will boost consumerawareness of both the corporation and its products. However, though some consumersperceive what is called the “corporate charisma”, others might be indifferent. Thisexplains the divergence in scholars’ as well as practitioners’ opinions about the impactof corporate branding on consumers’ product evaluation. Scholars as well aspractitioners from the West and the East seem to have different opinions on the topic.The main reasons behind this divergence in the theory and practices of the West andthe East can be summarized in the following points.

First, several scholars such as Tanaka (1993) argue that the differences between theUSA and Japan with respect to their history, culture, social, economic situations,products, distribution, consumers, and competitive environment, naturally lead to thecontrast between both countries’ brand systems. Second, the difference between theJapanese and American branding approaches is to a large extent linked to thedifferences between the Japanese and US companies’ goals and objectives (Tanaka,1991). For instance, Japanese companies, which tend to be more market share-oriented,believe that by launching new products within a short time period they will be able todefend their market share against competitors (Aoki et al., 1996). American companies,however, tend to be more profit oriented. Thus, they tend to increase the longevity oftheir brands, since they believe that long-life brands can generate profits for a longerperiod than short-life brands. Third, other scholars argue that the difference betweenJapanese and Western consumers’ behavior might be at the origin of the differencesbetween Japanese and Western corporate branding approaches. For instance, Tanakaand Iwamura (1996) and Ikeo (1997 in Aoki et al., 1997) state that Japanese consumersusually avoid the purchase of unfamiliar brands and they easily accept andacknowledge products under the corporate brand umbrella. Fourth, scholars such asShimaguchi and Ishii (1989) and Tanaka (1993) report that because many Japanesecompanies change their product models more frequently than Westerners (e.g. theautomobile product), it is more beneficial for the Japanese companies to display theirnames. This will help them to avoid brand confusion at the consumer level, cope withthe tough competitive and changing business environment of their local markets, andtake advantage of their known corporate brand names to boost and launch new andfrequently modified products. Fifth, several scholars attribute the difference betweenthe US and Japanese branding approaches to their managerial styles. Indeed, there is astrong notion among Japanese that the American managerial framework cannot bedirectly adopted by or fitted to the Japanese managerial style (Tanaka and Iwamura,1996). Thus, it is unlikely to transfer the brand management concept directly from theUSA to Japan or vice versa. Supporting this view, some scholars report that there aretwo distinct branding approaches: one characterizes the Japanese branding practices

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and the other characterizes the US branding practices. For instance, Kito (1994) andKoogawa (1997) posit that the Japanese corporate brand management can be classifiedas an “A” type strategy (i.e. pyramidal shape), where the corporate brand subsumes allrelated product brands that are considered subordinates of the corporate brand. The“A” type brand management fits more with businesses that are characterized by a“keiretsu channel system”[1]. Furthermore, in an “A” type brand management style,individual brands are not completely independent of the corporate brand andmanagers usually consider the overall state of both the company’s and itssubordinates’ brands. In contrast, Western companies’ brand management style canbe classified as an “O” type, where independent brands orbit the corporate brand buteach brand is to some extent independent of the corporate brand and has its own“identity” (e.g. case of General Motors). The “O” type brand management can beapplied to businesses that are characterized by an open distribution system and wherethe merging of companies is much easier.

It is important to note, however, that there is no general consensus among Japanesescholars about the way Japanese corporations manage their branding systems.Contrary to the widely held belief, that the corporate brand concept is usually practicedby Japanese companies, Tanaka and Iwamura (1996) investigated 78 companies andfound that only 19 percent of Japanese companies use their corporate brand (i.e. theproduct brand is the corporate brand) and that 46 percent use independent brand (i.e.the product brand is completely different from the corporate brand). They reveal thatseveral Japanese companies use a mixed brand system. Among the Japanesecompanies they studied, 32 percent use corporate brand, 41 percent use family brand,and 60 percent use independent brand. More recently, it is reported that Japanesecompanies frequently use a combined brand strategy (Forbes, 2000): corporate brandand independent brand (e.g. Asahi Super dry, Kao Attack). However, the fact that mostJapanese broadcast advertisements carry corporate trademark logos and areaccompanied by corporate messages (Tanaka, 1991) gives the impression thatJapanese do believe that the corporate name may affect consumer perception andselection of a product. Tanaka and Iwamura (1996) find that 84 percent of Japanesepromotion, commercials and PR emphasize corporate brand when communicating toconsumers. Supporting this evidence, Yamaki (1990) notes that most Japanese andKorean television advertisements tend to display corporate identity logos morefrequently than the US and West German companies. In contrast to the practice ofmany companies in Western markets where corporations rarely use their name toendorse their brands (e.g. Procter and Gamble), in Eastern markets, many products’advertisements are crowned with the corporate name (e.g. Ajinomoto, Kirin, Suntory,Kao). Based on the above review, one can assume that the effect of corporate brandingis greater on Eastern consumers than Western consumers.

Importance of corporate branding to multinational companiesWith the increase in global business, the use of corporate branding is becoming animportant hurdle that multinationals have to address. For instance, the increase inglobal corporate mergers and other global alliances and the desire of companies to keeptheir names have resulted in complex and clumsy names (e.g. SonyEricsson MobileCommunications, DaimlerChrysler Benz, PricewaterhouseCoopers). This phenomenoncreates some challenges for consumers in remembering companies’ names. This also

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creates confusion about companies’ identities and erodes brand equity (Wah, 1998). Onthe other hand, co-branding and mergers can boost sales, transfer the positiveassociations of the partner brands to a newly formed co-brand, and consequentlyenhance brand equity. This can be realized particularly when both parties in themerger are high-profile companies with strong brands. Confirming this view, Ueltschyand Laroche (2004) report that the co-branding of two high-equity brands is mutuallybeneficial; however, the co-branding of high-equity and low-equity brands can bepotentially dangerous for the high equity partner.

The impact of a corporate brand on consumer evaluation has received a ratherlimited attention from researchers. However, given that multinationals are increasinglymoving from the branding of products towards corporate branding (Kowalczyk andPawlish, 2002), researchers are gradually paying more attention to the effect ofcorporate branding (Olins, 2000). Different approaches and explanations have beenproposed by a few scholars, who have attempted to enlighten us on the effects of acorporate brand on consumer perception. Most of such studies have, however, focusedon the way companies set their branding strategies. Olins (1989) proposes threeapproaches to structuring corporate identities: the monolithic (i.e. use one name and avisual style), the endorsed (i.e. the corporate identity is used in association with thename of subsidiaries whose visual styles can be different), and the branded (i.e. thecorporation’s products are under different brand names and appearances). Laforet andSaunders (1994) criticize Olins for not including in his proposed system some of thecomplexities of brand structure, such as the predominance of nested branding (Aaker,1991). Murphy (1987), in an earlier work, identified four-level system of corporateidentities, namely, corporate-dominant systems, brand-dominant systems, balancedsystems, and mixed systems. Laforet and Saunders (1994) in their analysis,acknowledge the existence of different brand types, some of which they dub thecorporate brand name (i.e. where corporations make their names synonymous with aproduct class (e.g. Kellogg cornflakes, Heinz tomato ketchup) and they are often usedwhen a company conducts its business in a very defined market), the house brandname (i.e. where companies use the names of divisions [houses] to promote products indifferent markets or segments (e.g. Coca Cola with Fanta)), the family brand name (i.e.name that is used to cover a family of products (e.g. Mars, Snickers)), and mono brandname (e.g. Procter and Gamble (Ariel)). Laforet and Saunders (1994) show that morethan 50 percent of the companies they studied were mixed brands using a combinationof mono, house, and a family brand and that 32 percent of the products used abrand-dominant approach. They conclude that house names tend to appear more oftenthan the corporate identities.

Corporate brand dimensions and research hypothesesThis research study proposes to overcome some of the identified drawbacks ofprevious studies on corporate branding strategy. Recall that many of these studiesignored or did not thoroughly examine the effect of corporate brand on consumerevaluation (e.g. d’Astous and Ahmed, 1999; Lee and Ganesh, 1999). We will addressthis issue and find out to what extent corporate branding affects consumer productevaluation. The current study proposes to decompose the corporate branding factorinto sub-factors and try to ascertain the most pertinent ones. Indeed, these differentsub-constructs might have different degrees of influence on consumer product

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evaluations. Importantly, our analysis will not be confined to consumers of one culture.Instead, we will emphasize a cross-national analysis as to allow us determine theimpact of corporate branding on consumers belonging to different culture settings. Forall the above-mentioned slants of inquiry, we propose the use of corporate brandingmodel that include most relevant branding factors.

Based on previous research, the effect of corporate branding on consumers can bedelineated by identifying and determining the effects of the corporate name recognition(CON), the corporate image (CIM), the corporate reputation (CRE) and the corporateloyalty/commitment (CLO). These four variables are expected to offer a betterunderstanding of corporate branding impact on consumers’ product evaluation.

Corporate name recognition/familiarityThe first sub-construct, the corporate name (brand) recognition/familiarity (Kowalczykand Pawlish, 2002), measures how widely known the corporate brand is and to whatextent this familiarity affects consumer product evaluation. The corporate brand canadd value to its product and the association of the corporate and product brands will bebeneficial to both the corporate and the brand and would, in turn, enhance consumerawareness of both the corporation and its products. Kowalczyk and Pawlish (2002)note that in the current competitive environment, a firm’s corporate brand is becomingincreasingly important as a resource to be exploited in attaining sustainablecompetitive advantage. The display of the corporate name on the company’s productsmay involve the products’ image and consequently have certain influences onconsumer evaluation. This view is supported by Aaker (1991) and Keller and Aaker(1997), who argue that corporate brand influences consumers’ evaluation of the brandin a way that is different from products’ brands. Also, it is important to mention thatthe corporate name strongly affects the corporate image (Gregory and Wiechmann,1999). Several companies have changed their names to redefine their images.Confirming this view, Gregory and Wiechmann(1999) stipulate that when a companyneeds to break from the past or be established in a particular market or adopt a newlook after an acquisition; a change in the corporate name may help in changing thecorporate image. On the basis of previous discussions, we propose the followinghypotheses:

H1. Corporate name has a direct positive effect on consumers’ product evaluation.

H2. Corporate name has a direct positive effect on the corporate image.

H3. Corporate image is a mediator of the corporate name’s effect on consumers’product evaluation.

H4. The effect of corporate name on consumers’ product evaluation is greater forJapanese than for Americans.

Corporate imageThe second sub-construct that is related to the corporate paradigm is the corporateimage, which is described as the overall impression made on the minds of the publicabout a firm (Barich and Kotler, 1991; Ditchter, 1985). It is the immediate mentalpicture that audiences have of an organization. It is important to note that thoughcorporate image is often interchangeable with corporate identity (Hsieh et al., 2004),

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some scholars strongly argue that corporate identity and corporate image are twodifferent concepts (Balmer, 1998; Christensen and Askegaard, 2001). The former refersto the reality or facts concerning the company while the latter refers to the perceptionheld by stakeholders of the company. Since the current study analyzes consumers’perception of the corporation, our concern will be confined to corporate image. Despitethe lack of empirical evidence, there is some agreement that a good corporate imagecan positively affect a firm’s sales and market share (Shapiro, 1982) and theestablishment and maintenance of a loyal relationship with customers (Andreassenand Lindestad, 1998; Nguyen and Leblanc, 2001). As reported by Keller and Aaker(1997), a strong corporate image can be used to increase communication efficiency.Hsieh et al. (2004) conclude that corporate image can affect consumer behavior.Likewise, Andreassen and Lindestad (1998) report that corporate image serves as animportant factor influencing the perception of quality, consumers’ evaluation ofsatisfaction and customer loyalty. Supporting this view, de Ruyter and Wetzels (2000)state that the corporate image is an information cue that consumers use to judgematters such as credibility, perceived quality and purchase intentions. Additionally,some researchers affirm that a corporate image builds the reputation of the companyand that a favorable corporate image leads to a positive corporate reputation in theminds of the public (Alessandri, 2001). In other words, the corporate reputation isformed over time by repeated impressions of the corporate image (Gray and Balmer,1998). The importance of the corporate image is also reported in the study ofBhattacharya and Sen (2003) who claim that a good corporate image helps in makingthe consumers more attached to the company (i.e. corporate commitment). Thepreceding discussion leads us to the following hypotheses:

H5. Corporate image has a direct positive effect on consumers’ product evaluation.

H6. Corporate image has a direct positive effect on the corporate reputation.

H7. Corporate reputation is a mediator of the corporate image’s effect onconsumers’ product evaluation.

H8. Corporate image has a direct positive effect on the corporatecommitment/loyalty.

H9. Corporate commitment/loyalty is a mediator of the corporate image’s effect onconsumers’ product evaluation.

H10. The effect of corporate image on consumers’ product evaluation is greater forJapanese than for Americans.

Corporate reputationThe third sub-construct is the corporate reputation, which refers to the perception of anorganization’s key attributes and “which focuses on what it does and how it behaves”(Balmer, 1998, p. 971). It is also defined as the degree of trust (or distrust) in a firm’sability to meet customers’ expectations on a given attribute (Nguyen and Leblanc,2001). Fombrun (1996) adds that the corporate reputation is the overall standard inwhich a company is held by its constituents. Marketers believe that one of the majorfactors that strongly affect consumer purchase decisions is consumer perception of afirm’s role in society and how it treats its stakeholders (Kowalczyk and Pawlish, 2002).

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Consumers want to know more not only about the company’s products, but also aboutthe company itself. Gray and Balmer (1998) argue that the corporation’s reputation caninfluence the willingness of consumers to either provide or withhold support from thecompany and its products. Furthermore, it is reported that a favorable corporatereputation helps in building consumers’ commitment to the company (Bhattacharyaand Sen, 2003). On the basis of previous discussion, we propose the followinghypotheses:

H11. Corporate reputation has a direct positive effect on consumers’ productevaluation.

H12. Corporate reputation has a direct positive effect on the corporatecommitment/loyalty.

H13. Corporate commitment/loyalty is a mediator of the corporate reputation’seffect on consumers’ product evaluation.

H14. The effect of corporate reputation on consumers’ product evaluation is greaterfor Japanese than for Americans.

Corporate loyalty/commitmentThe fourth sub-construct that may affect consumer evaluations concerns the extent towhich consumers are loyal to certain companies/stores. First, there should be adistinction between corporate commitment/loyalty and brand loyalty. Corporatecommitment/loyalty can lead to consumer loyalty for all the products of the company(Bhattacharya and Sen, 2003). The opposite case is not always true. Commitment isdefined as a “psychological state generated by an individual’s perceptions, beliefs andemotions which provoke the willingness or the intention of developing andmaintaining a stable and durable relationship” (Iniesta, 2000, p. 179). The impact ofcommitment on companies’ business activities are reported in many studies. Rust et al.(1995) show that an increase in customers’ satisfaction leads to an increase in theirloyalty to the firm and that this loyalty leads to an increase in their purchases from thecompany. Thus, there is a strong relationship between consumer commitment to acompany and the share of purchase from the company. Supporting this opinion, Iniestaand Sanchez (2002) report that commitment has become a major objective for manycorporations since it can be used as a key strategic factor, such as in marketsegmentation. The knowledge of the customer profiles for each level of commitmentwould enable the firm to design differentiated marketing programs that aim to eithermaintain and increase commitment or obtain the commitment of those who are not yetcommitted to the firm (Iniesta and Sanchez, 2002). More recently, Kassim and Souiden(2004) posit that both satisfaction and image may have a strong impact on customerretention (i.e. consumer commitment to the company) which in turn may affect thecompany’s revenues and profits. In line with view, Bhattacharya and Sen (2003) arguethat corporate commitment is dependent on the corporate image and reputation and theconsumers’ perceptions and beliefs about relevant company characteristics (e.g.culture, skills, values, competitive position). Based on this review, we advance thefollowing hypotheses:

H15. Corporate commitment has a direct positive effect on consumers’ productevaluation.

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H16. The effect of corporate loyalty on consumers’ product evaluation is greater forJapanese than for Americans.

Research methodologyTo test the derived hypotheses stated above, a survey of 700 consumers wasconducted. The nature of the sample, survey procedures, and method of analysis arediscussed below.

SampleConvenience sampling technique was used to collect the data from the USA and Japan.These countries were selected for the purpose to compare the impact of corporatebranding on consumers belonging to different cultures. To distribute and collect thequestionnaire successfully, we called for the assistance of graduate and MBA studentsoriginating from the above-mentioned countries. From a total of 700 consumers, 218responded, yielding a response rate of 31.4 percent. The final composition of the samplecomprises 52 percent of Americans and 48 percent of Japanese. Respondents between21 and 30 years represent 26 percent of the sample, those between 31 and 40 yearsrepresent 32 percent and those between 41 and 50 years represent 23 percent. About 51percent of respondents are married with 55 percent being female. Of the sample, 75percent have at least a bachelor degree and 65 percent have a profession (in public orprivate sector). Finally, 18 percent of respondents have a monthly salary less thanUS$1,000. About 45 percent of the respondents have a monthly salary betweenUS$1,500 and US$3,000 and 24 percent of them have a monthly salary above US$3,000. It should be noticed, however, that owing to the fact that we have a conveniencesample, we could not get a matched profile of respondents from the two countries. TheANOVA test (Table I) showed a significant difference among the two groups ofrespondents in terms of age (dem2), gender (dem3), marital status (dem4) and incomelevel (dem7). To correct for the difference in the demographic variables between thetwo groups, we included these demographic factors in the final model.

The questionnaire designThe questionnaire was originally written in English then translated into Japaneselanguage. The questionnaire was then back-translated into English to ensure accuracy(Douglas and Craig, 1983). Respondents had to state their opinion about the effect ofcorporate branding dimensions when purchasing/evaluating an automobile. Afour-point Likert interval scale (ranging from strongly agree to strongly disagree) wasused. Such rating scales (i.e. scales without a mid-point) are widely used in market

F Sig.

Age 18.94 0.000Gender 3.39 0.067Marital status 4.362 0.038Education level 2.136 0.145Occupation 0.015 0.903Monthly income 3.934 0.049

Table I.ANOVA test

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research because they minimize social desirability bias arising from respondents’desires to please the interviewer or appear helpful (Garland, 1991). Thus, the mid-point,“is not important” (Armstrong, 1985, p. 105). The questionnaire was divided into threeparts. It began with the measurement of perceptions of the overall effect of companybranding on consumer’s evaluation. Part two dealt with corporate effect. On the basisof previous research (e.g. Fombrun et al., 2000; Laforet and Saunders, 1994; Olins, 2000;Sabate and Puente, 2003; Spector, 1961), 22 corporate-related items were identified (seethe Appendix) and rated on a four-point Likert interval scale. Part three dealt withsome demographic variables of respondents such as nationality, age, gender, maritalstatus, education level, occupation, and income.

MeasurementTo establish the validity of our model and its hypotheses, we propose to empiricallytest our research. Data were analyzed primarily through structural equation modelusing AMOS 4.0 and SPSS 11.0.

For each factor (i.e. name, image, reputation and loyalty), we calculated the mean ofresponses (Table II). Then, we computed the correlation of the independent variables.The correlation matrix pointed to a positive and significant (p , 0:01) correlationamong the four factors (Table III).

The next step consisted of determining the dimensions of each factor by usingconfirmatory factor analysis (CFA). Originally, corporate name, image, reputation andloyalty/commitment were respectively composed of five, five, seven and five items.Only items with factor loadings greater than 0.5 were retained (Kline, 1998;Tabachnick and Fidell, 2001). Additionally, each multi-item scale was examined forreliability using Cronbach’s coefficient alpha as the indicator. As shown in Table IV,the coefficient was generally high, ranging from 0.72 to 0.81.

ResultsThe small sample size (n ¼ 218) resulted in less than ideal fit between data and model(GFI ¼ 0:80, CFI ¼ 0:76). As argued by Lee and Ganesh (1999), since the purpose of

Items Mean Std

CON 1.81 0.59CIM 1.87 0.58CRE 1.89 0.57CLO 2.17 0.62

Table II.Descriptive statistics ofthe variables

CIM CRE CLO

CON 0.531 * 0.479 * 0.320 *

CIM 0.688 * 0.430 *

CRE 0.377 *

Note: * Correlation is significant at the 0.01 level (two-tailed)

Table III.Pearson correlationbetween the variables

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the present study is testing the proposed theoretical model with the given data, ratherthan finding a model fit to the data, the estimation results were directly used forhypotheses tests. The model is depicted in Figure 1 and the estimated results aresummarized in Table V.

First, we tested the direct effect of corporate name, image, reputation and loyaltyon consumers’ product evaluation. Table V shows that the beta coefficient betweenCON and CPE (b ¼ 0:640, t ¼ 4:991), CIM and CPE (b ¼ 0:485, t ¼ 4:503), CRE andCPE (b ¼ 0:536, t ¼ 5:052) and CLO and CPE (b ¼ 0:214, t ¼ 1:892) were all positiveand significant. Thus, the four corporate brand dimensions significantly affectconsumers’ product evaluation. H1, H5, H11 and H15 are substantiated. It shouldbe noted, however, that when examining the joint effect of the four corporate

Figure 1.The joint effect of

corporate brandingdimensions on CPE

Construct No. of original items No. of retained items Alpha

CON 5 4 0.74CIM 5 5 0.81CRE 7 6 0.81CLO 5 4 0.72

Table IV.Constructs’ reliability

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branding dimensions on consumers’ product evaluation, only CON and to a lesserextent CRE appear to have a positive and significant impact on consumers(b ¼ 0:462, t ¼ 2:789; b ¼ 0:425, t ¼ 1:716). Thus, while CIM and CLO were foundto significantly affect CPE, their effects were marginalized in the presence of CONand CRE.

Second, we examined hypotheses H2, H6, H8 and H12 that deal with therelationship between each pair of the corporate brand dimensions. H2 deals with therelationship between corporate name and corporate image. The beta coefficientbetween CON and CIM is positive and significant (b ¼ 0:690, t ¼ 5:840). This indicatesthat the more positive the perception of the corporate name, the more positive theimage of the company. H2 is substantiated. H6 is tested by examining the link betweenthe corporate image and the corporate reputation. The result shows that CIM has asignificant positive relationship with CRE (b ¼ 0:928, t ¼ 6:886). The better thecorporate image, the more positive is its reputation. H6 is accepted. H8 suggests apositive relationship between CIM and CLO. A significant and positive beta wasobserved between the two variables (b ¼ 0:582, t ¼ 5:054). Hence, if the corporateimage increases, the corporate loyalty increases. H8 is supported. H12 deals with therelationship between corporate reputation and corporate loyalty. Beta coefficientbetween the two variables was also positive and significant (b ¼ 0:513, t ¼ 4:654).Consequently, a positive corporate reputation increases the corporate loyalty. H12 isretained.

Third, we examined the role of the mediator variables. H3, H7 H9 and H13 proposethat corporate name, corporate image, and corporate reputation have an indirectpositive effect on consumers’ product evaluation. H3 is tested by examining the role ofCIM as a pure mediator between CON and CPE. To establish mediation, the following

Hypothesis IV DV Estimate t p Results

H1 CON CPE 0.640 4.991 0.000 AcceptedH2 CON CIM 0.690 5.840 0.000 AcceptedH3 CON CPE 0.490 2.995 0.003 RejectedH4 CON *CULT CPE 20.008 20.568 0.571 RejectedH5 CIM CPE 0.485 4.503 0.000 AcceptedH6 CIM CRE 0.928 6.886 0.000 AcceptedH7 CIM CPE 0.070 0.268 0.789 AcceptedH8 CIM CLO 0.582 5.054 0.000 AcceptedH9 CIM CPE 0.477 3.582 0.000 RejectedH10 CIM *CULT CPE 20.317 22.099 0.037 AcceptedH11 CRE CPE 0.536 5.052 0.000 AcceptedH12 CRE CLO 0.513 4.654 0.000 AcceptedH13 CRE CPE 0.520 4.263 0.000 RejectedH14 CRE *CULT CPE 20.200 20.1.333 0.184 RejectedH15 CLO CPE 0.214 1.892 0.058 AcceptedH16 CLO *CULT CPE 20.298 21.908 0.058 AcceptedFit indices Statistics d.f. pChi-Square 647.027 245 0.000RMR 0.095GFI 0.80CFI 0.76

Table V.Structural modelestimation and generallinear model analysisresults

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four conditions should be fulfilled (Baron and Kenny, 1986; Lee and Ganesh, 1999;Venkatraman et al., 1990):

(1) CON should be related to CIM;

(2) CON should be related to CPE;

(3) CIM should cause CPE; and

(4) CON’s effect on CPE should disappear when CIM is controlled.

All the first three conditions were met but the results show that when controllingCIM, CON’s effect on CPE continue to be positive and significant (b ¼ 0:490,t ¼ 2:995). Thus, the corporate image is not a mediator of the corporate name’s effecton consumers’ product evaluation. H3 is rejected. H7 is about the role of corporatereputation as a pure mediator between CIM and CPE. All the four conditions ofmediation were met. Effect of CIM on CPE disappeared when CRE was controlled(b ¼ 0:070, t ¼ 0:268). Therefore, CRE is a pure mediator between CIM and CPE. H7is substantiated. H9 stipulates that the corporate loyalty is a mediation of thecorporate image’s effect on consumers’ product evaluation. Results show that whencontrolling CLO, the effect of CIM on CPE is positive and significant (b ¼ 0:477,t ¼ 3:582). Therefore, the corporate loyalty is not a mediator between CIM and CPE.H9 is not retained. With respect to H13, this latter is tested by examining the role ofthe corporate loyalty as a pure mediator between CRE and CPE. Results show thatwhen controlling CLO, CRE’s effect on CPE is positive and significant (b ¼ 0:520,t ¼ 4:263). Thus, the corporate loyalty is not a pure mediator between CRE and CPE.H13 is not accepted.

Fourth, we tested H4, H10, H14 and H16, which compare the effect of thecorporate branding dimensions between the two cultures (i.e. Japanese andAmerican). With AMOS, we were unable to measure the effect of the interactionterms between culture (CULT) on one hand and CON, CIM, CRE and CLO on theother hand. Therefore, we used general linear model analysis (SPSS 11.0). H4stipulates that the impact of CON on CPE is greater for Japanese than American.The results indicate that the interaction between CON and culture (CULT) isinsignificant in determining CPE (b ¼ 20:081, t ¼ 20:568). Therefore, the effect ofthe corporate name on both Japanese and American consumers is the same. H4 isrejected. As for H10, results show that a significant difference exists betweenJapanese and American consumers’ perception of the impact of the corporate image(b ¼ 20:317, t ¼ 22:099). The impact of the corporate image on CPE is greater forJapanese consumers than American consumers. Consequently, H10 is accepted.With respect to the effect of corporate reputation, results show that this latter has asimilar impact on both Japanese and American consumers (b ¼ -0.200, t ¼ 21:333).Thus, no difference is reported between Japanese and American consumers withrespect to the impact of corporate reputation on CPE. Therefore, H14 is rejected.H16 proposes that the impact of corporate loyalty on CPE is greater for Japanesethan American consumers. The beta coefficient shows that American consumers aresignificantly less influenced by the corporate image than Japanese (b ¼ 20:298,t ¼ 21:908). H16 is substantiated.

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Theoretical and managerial implicationsTheoretical implicationsThis study examines and identifies the pertinent corporate branding factors affectingconsumers’ product evaluation. More precisely, the relationships between CPE, on onehand, and CON, CIM, CRE and CLO, on the other hand, were clarified. Additionally, thecurrent research elucidates the interrelation among the four corporate brandingdimensions. The corporate name was found to have a direct, positive and significanteffect on consumers’ product evaluations and there was no mediating variable betweenCON and CPE. This finding further supports the view of Kowalczyk and Pawlish(2002) who stipulate that the corporate name has a certain influence on consumers andcan add value to the company’s product. The corporate name was also found to have apositive and significant impact on the corporate image. This supports the view ofGregory and Wiechmann (1999) who claim that a positive corporate name lead to apositive corporate image. This finding implies that since the corporate name was foundto have a positive and significant impact on the corporate image and because thecompany has no control over “what the public perceives it to be” (i.e. image)(Alessandri, 2001, Topalian, 1984), it is advisable to boost the corporate image bytaking advantage of its name (which is under the complete control of the firm). Withrespect to corporate image, the current study demonstrated that it has a significant andpositive impact on consumers’ product evaluation. The study also revealed that thecorporate image not only helps in building the corporate reputation, but has an indirectimpact on consumers through the corporate reputation. Though several studies (e.g.Hsieh et al., 2004); de Ruyter and Wetzels, 2000) claim that the corporate image affectsconsumers’ behavior and their perceptions of the company’s product quality andcredibility, previous research did not clearly mention whether the corporate image hasa direct or indirect influence on consumers. The present study shows that the corporateimage can directly and indirectly (via corporate reputation) affect consumers’ productevaluation. As for corporate reputation, the current research supports the view of Grayand Balmer (1998) who argue that corporate reputation influences consumers’ attitudetowards the company’s products. Indeed, corporate reputation was found to be highlyconsidered by consumers when evaluating products such as automobiles.Additionally, the corporate reputation was found to be a mediator of the corporateimage’s effect on consumers’ product evaluation. It was also found that corporatereputation significantly affects corporate loyalty, yet this latter was not reported to bea mediator between CRE and CPE. Thus, corporate reputation has only a direct impacton consumers. With respect to corporate loyalty, the results indicate that thisdimension has a significant impact on consumers’ evaluation. The finding of thepresent study supports the opinion of Iniesta and Sanchez (2002) who claim thatcorporate commitment has become an important objective for many corporationswhishing to improve their market position. It should be noticed, however, that theimpact of the corporate loyalty as well as the corporate image is marginalized in thepresence of the corporate name and corporate reputation. Thus, when considering thefour factors together, consumers give much more weight to CON and CRE than to CIMand CLO. This implies that much more importance should be attributed to bothcorporate name and reputation.

The current research could also shed more light on the differences between theWestern and Eastern views with respect to the corporate branding impact on

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consumers. Japanese and American corporate branding approaches were reporteddifferent owing to the fact that the two countries (i.e. Japan and the USA) have theirparticular marketing environment (e.g. culture, consumer behavior, competition, etc.).Consequently and in order to cope with the local market conditions, Japanese andAmerican companies have set different goals and objectives and applied differentcorporate branding strategies. When examining the effect of corporate branding acrosscultures, the current research found that the corporate name and reputation have thesame impact on Japanese and American consumers. However, the effects of corporateimage and loyalty were reported to vary across the two cultures. This finding concurswith the view that consumers of different cultures might have different perceptions ofthe effect of corporate branding (e.g. Tanaka, 1993). Indeed, the corporate image wasfound to have a higher influence on Japanese than American consumers. In fact, it is achallenging task for global companies to maintain the same image across differentcultures and national boundaries. The effect of the corporate image on consumersmight vary from one country to another. With respect to corporate loyalty, this latterwas, as expected, found to have a greater influence on Japanese than Americanconsumers. This result confirms the widely held belief that the Japanese tend to bemore loyal consumers.

Managerial implicationsOur findings also generate insights for marketing managers. First, with the increase inglobal business as well as the increase in global corporate mergers and alliances,marketers should carefully consider the corporate name when designing theirbranding strategies. The present study showed, indeed, that the corporate name factormight not only shape and affect consumers’ perception of the company’s products butalso build up the company’s image. It is recommended, therefore, that globalcorporations and new mergers should carefully select their names and use thecorporate name to endorse and promote their products as well as their image. Second,the research reports that consumers of different cultures might react differently tocertain corporate branding factors. Marketers are called on to tailor their corporatebranding strategies to fit each marketing environment. For example, marketers shouldfurther stress corporate image or loyalty in markets where these factors are highlyconsidered. Finally, since the corporate loyalty was found to have a direct and positiveeffect on consumers, managers should attribute an increasing importance to corporateloyalty factor. It is definitely a challenging task for a marketer to keep customers loyalto one company than to some products of the company. However, with the increase inthe number of competing companies that produce almost the same products with thesame quality at the same price and with the same after sales services; consumersbecome more and more leaning to purchase from any supplier that satisfies their needsand wants. Hence, enhancing corporate loyalty might significantly reduce theswitching behavior of consumers.

Research limitationsThere are a few limitations of the current research that should be considered wheninterpreting the results and implications. First, since we used a convenience samplingtechnique, we were not able to obtain a fully matched profile of respondents from Japanand the USA. Though certain demographic variables were included in the model to

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correct for difference, we believe that a selection of a sample where respondents fromthe two countries have a matched profile might lead to better results. Second, the scopeof the current study is confined to the analysis of the corporate effect on consumers’product evaluation. The corporate branding effect is isolated from other variables suchas product brand name and country of origin. Interpretation of the results might bedifferent if such variables are considered. Third, in order to further examine the effectof corporate branding on consumers, it is perhaps fruitful to replicate this study inother culture settings, such as the Europe, South Asia, and the emerging markets (e.g.China and India). Finally, it might be productive to further apply the research to certainproduct and services categories such as the banking and health insurance services.Future research in this area should be designed such that these limitations areeliminated.

Given the importance of corporate branding for managers, particularly those ofglobal companies, studies in the area of corporate branding should be attributed moreattention to show how important is the corporate branding for foreign or localcompanies to market their products/services.

ConclusionThis current study highlights the importance of corporate branding in shapingconsumers’ product evaluation. All the four corporate branding dimensions areidentified to have a significant impact on consumers. Also, the relationships among thefour corporate branding dimensions are clarified. Finally, the research shows thatconsumers of different cultures do not perceive in the same way the impact of corporateimage and corporate loyalty.

Note

1. Vitale and Giglierano (2002, pp. 403-404) defined the keiretsu channel as “a very flat channelpattern, with few, if any, vertical layers. Each supplier has a direct relationship with thecustomer. Ancillary providers in the pattern are also members of the keiretsu, such thatshipping, financing, and other services are available to members at favorable terms. Thefavorable consideration is part of the relationship; members recognize that what is good forother members will be good for the entire group, strengthening the keiretsu for all. Operatingwithout centralized control, the composition of the keiretsu is dependent on membersrecognizing the value of long-term cooperative relationships and win-win attitudes”.

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Appendix. Measure of corporate name, image, reputation and loyaltyItems used to measure corporate name

1. The name of the company producing the product is well known.

2. The product carries the name of the company.

3. The product carries both the company name and its generic name (e.g. Toyota Corolla).

4. The company extends its name to all the products it produces.

5. The company uses different brand names for each product it produces.

Items used to measure corporate image

1. The company is innovative and pioneering.

2. The company is successful and self-confident.

3. The company is persuasive and shrewd.

4. The company does business in an ethical way.

5. The company is open and responsive to consumers.

Items used to measure corporate reputation

1. The company which produces the product has an emotional appeal to me.

2. The company which produces the product undertakes some social responsibilities.

3. The company which produces the product is known for its high quality products andservices.

4. The company which produces the product is the industry leader.

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5. The company which produces the product is a good workplace environment (i.e. regardedas a decent company to work for).

6. The company which produces the product has a good financial situation.

7. If the company which produces the product fulfills the promises that it makes to itscustomers.

Items used to measure corporate loyalty

1. The product/model is only offered by the company that I used to patronize.

2. The company which offers the product is overtaking its competitors.

3. I have an affection and emotional appeal to the company that produces the product.

4. I have a high regard to the company’s products.

5. I always use/purchase the company’s products.

Item used to measure overall corporate effectThe automaker greatly affects my evaluation of the automobile.

About the authorsNizar Souiden is an Assistant Professor of Marketing at the Faculty of Business Administrationof Universite Laval at Quebec, Canada. He received his PhD from Kyoto University, Japan. Hisresearch interests include global marketing strategies of multinational firms, marketsegmentation and services marketing. His articles have appeared in International MarketingReview, Journal of International Marketing and Marketing Research and Journal of FinancialServices Marketing. Nizar Souiden is the corresponding author and can be contacted at:[email protected]

Norizan M. Kassim is an Assistant Professor of Marketing at the Department of Managementand Marketing, College of Business and Economics at the University of Qatar. She received herPhD from Southern Cross University, Australia. Her research interests include servicesmarketing, service innovations and innovativeness of organizations. Her articles have appearedin Journal of Business Research, Singapore Management Review (Asia-Pacific Journal ofManagement Theory and Practice), and Journal of American Academy of Business.

Heung-Ja Hong received her PhD from Kansai University, Japan. Her main research interestsinclude small business management and industrial structure. Her main work has appeared inThe Journal of Taiwan Studies.

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