How Perceived Brand Globalness Drives Value in Emerging Markets : An Examination from China

The purpose of this study is to explore the influence of consumers’ perceived brand globalness (PBG) on their brand attitudes in the emerging market that has experienced rapid growth and transition. We also examine the moderating effect of the age difference on the relationship between PBG and brand attitude. Building from prior research in global branding, we develop a framework to illustrate how motivating factors drive consumers’ desire for global brands in the emerging market of China. A scale is developed and tested on a national sample of Chinese consumers using structural equation modeling. The results indicate that perceived globalness of brands affects consumers’ attitude indirectly through three factors, namely, perceived brand quality (PBQ), perceived social prestige (PSP), and perceived association of consumption trend (PACT) associated with owning or consuming a global brand in emerging market. PACT is the strongest pathway, which suggests that Chinese consumers are more interested in keeping up with the world fashion and being modern whereas the influence of quality and social prestige is decreasing. In addition, various effects of these factors are examined in different generations of consumers.


Introduce the Problem
Globalization is among the most important challenges facing companies today, whether operations are global or conducted in a single country.Practically, there is general agreement that emerging markets will account for most of economic growth in this century.Given the importance of emerging market for globalization, it is not surprising that global brand managers are frequently turning their attention to it.The emerging markets have a huge population and a growing number of middle class consumers that have high purchasing power, as many western consumer markets have matured and there has been little or no growth.Theoretically, emerging markets present significant socioeconomic, cultural, and regulative departures from the institutional assumptions of Western countries.An understanding of the requirements for success in emerging markets will be a make-or-break issue for most companies around the world.

Importance of the Research Problem
The emerging markets provide real world learning laboratories for the development of true contingency theories.As the movement of branding shifts from the developed economies to the emerging economies, the branding question changes considerably (Roth, 1995).Due to the unique characteristics associated with emerging markets, there is a need to obtain fresh insights to help further our understanding of brand management in such markets (Steenkamp and de Jong 2010;Sheth 2011;Burgess and Steenkamp, 2006).In this study we focus on the influence of consumers' perceived brand globalness (PBG) on their brand attitudes in the emerging market that has experienced rapid growth and transition.As the global brand managers deal with the challenge of designing positioning strategies for their brands in the ever changing global market place.Studies from developing countries have found that perception of global brand is positively related to both perceived brand quality and prestige and, through them, to purchase likelihood.The effect through perceived quality is strongest (Steenkamp, Batra, and Alden 2003).However, other researchers have suggested capitalizing on local appeal as an alternative route to success in building strong brands as the "novelty" of global appeal wears off (Chan, Cui and Zhou 2009).Meanwhile, some local brands, which consumers are familiar with, are also trying to become global while trying to capitalize the status of being local when competing with global brands from other countries (Cayla and Eckhardt 2007).We believe that rapid, continuous changes may have had substantial impacts on consumers' perception of perceived brand globalness (PBG) and its influence on their preference for global brands.
Specifically, the Chinese market has experienced drastic changes in the last few decades: the economy has transitioned from planned to marketing economy; the country has turned from the world's manufacturing base to a major affluent market with tremendous purchasing power.Some Chinese companies, such as Huawei, Lenovo, etc., are striving to become global; the Chinese marketplace started with very few brands but is now filled with numerous national and global brands.Some highly admirable global brands from developed countries have lost their "high-end" status and "novelty" (Dong andTian 2009, Chan, Cui andZhou 2009).The transitions of the economic system and consumer purchasing power, the entrance of global brands as well as the emergence of local brands into the market place make the Chinese market a very unique context that warrants more attention from researchers and practitioners.
In the current study, we intend to investigate whether and how the perceived brand globalness (PBG) leads to consumers' desire for global brands.A global brand is defined as the extent to which the brand is perceived as global and marketed not only locally but also in some foreign markets (Ozsomer and Altaras, 2008).Perceived brand globalness is a construct in which global brand defined from the consumer perceptions perspective.Specifically, as a number of leading global brands have for decades been operational in many emerging markets, have consumer perceptions and attitudes toward such brands changed over these years?If so, how consumer use of global brand signals such as high quality and brand image may differ in emerging markets compared with developed countries?How symbolic meanings associated with global brands can be changed?We examine the impact of perceived brand globalness on consumers' brand attitude and the pathways of this impact.Moreover, we tap into individual differences in consumer ratings on the pathways from PBG to brand attitude.Particularly, we compare two consumer groups: group1 composed of consumers 36 years or younger, born after the economic reform (1978) hence more modern, and group2, composed of consumers 37 years or older, born before the economic reform hence more conservative.We examine the moderating effect of the age difference on the relationship between PBG and brand attitude.
Our study contributes to extant global branding literature in two ways.First, in a global environment, our findings help multinational marketers understand Chinese consumers' attitudes toward global brands, and provide practical implications in seeking the most appropriate positioning strategies for their global brands.Second, we analyze differences between two consumer groups that represented different generations whose value systems and lifestyle bear strong marks of influence of the drastic social-economic transitioning.The unique situation of China's reform over the last three decades offers us a rare opportunity to study the effects of social-economic transitioning on consumers' value system and consumption behavior.

How Perceive Brand Globalness Drives Value
In this era of global marketing, the term "global brand" has been used extensively by researchers and practitioners.A global brand is defined as the extent to which the brand is perceived as global and marketed not only locally but also in some foreign markets (Ozsomer and Altaras, 2008).Perceived brand globalness is a construct in which global brand defined from the consumer perceptions perspective.As the perceived multimarket reach of a brand increases, the perceived brand globalness increases as well (Steenkamp, Batra, and Alden 2003;Ozsomer and Altaras, 2008).
Going global seems to be the dominant theme of modern marketing as researchers have found that many consumers prefer global brands over local competitors because global brands are associated with superior quality, worldly knowledge on consumption trends, and higher social prestige (Batra et al 2000;Steenkamp, Batra, and Alden 2003;Pitta and Franzak 2008;Siu and Chan 1997;Wang and Chen 2004;Zhou and Hui 2003).Steenkamp, Batra, and Alden(2003) suggest two pathways, namely, the perceived brand qualiuty and brand prestige, through which PBG affects consumers' purchase likelihood.The first pathway indicates a positive relationship between PBG and perceived brand quality, which further affects brand purchase likelihood.The second pathway indicates a positive relationship between PBG and brand prestige which further affects brand purchase likelihood.Their study found the influence of perceived brand quality to be stronger on consumers' purchase likelihood.
Since the 1980s, many multinational corporations have made substantial investment into emerging market and hope to capture the growth potential using their global brand power and marketing expertise (Prahalad and Lieberthal, 1998).As the emerging economies experience globalization, growing exposure to foreign cultures and products may have increased consumers' awareness of the world's consumption trend, which in turn has significant impacts on their consumption behavior (Nijssen and Douglas 2008).Consumers from emerging markets ca access a wide rage of products periously unavailable to them.They increasingly desire the nicetis symbilozed by the global brand.Consumers from emerging countries tend to use the ownership and/or consumption of global brands to enhance their social status and strengthen self identity of being a worldly consumer (Batra, Alden, and Steenkamp 2000).Global brands have higher prestige bacause of their relative scarity and higher price, and allows conumers to be associatd with global events and celebritis.Consumers may attribute higher quality to a global brand because its' globa acceptance (Steenkamp, Batra, and Alden 2003).Perceived social prestige (PSP) refers the ability of the brand to signify a trendy image and social status for the consumer.Perceived brand quality (PBQ) refers to the consumers' evaluation of the brand's quality.To test the likelihood in emerging market, we offer the following hypothesis: H1a: Consumers' perceived brand globaliness (PBG) is positively related to consumer perceptions of brand quality (PBQ).
H1b: Consumers' perceived brand quality (PBQ) is positively related to consumers' brand attitude.
H2a: Consumers' PBG is positively related to consumer perceived social prestige (PSP).
H2b: Consumer perceived social prestige (PSP) is positively related to consumers' brand attitude.
In addition to perceived brand quality and social prestige, other researcher have found additional factors that influence consumers' brand attitude.For example, in the recent study on consumers' susceptibility to global consumer culture, Zhou, Teng, and Poon(2008) suggest that quality perception, social prestige, and conformity to consumption trend all have significant impact on consumer's desire or tendency for the acquisition and use of global brands.In addition to the established factors of brand quality and social prestige, the awareness of consumption trend also affects consumer' attitude towards global brands.Perceived association of consumption trend (PACT) is defined as the brand's ability to give the consumer a sense of belonging and association with the global contemporary trend (Zhou, Teng, and Poon 2008).Therefore, we offer the following hypothesis: H3a: PBG is positively related to consumers' perceived association with consumption trend (PACT).
H3b: Consumer perceived association with consumption trend (PACT) is positively related to consumers brand attitude.Steenkamp, Batra, and Alden (2003) demonstrated the importance of controlling for quality and prestige to obtain accurate estimates of the direct PBG effect on purchase likelihood.Consumption of global brands offers consumers vicarious way to participate in global consumption culture.To test this likelihood, we offer the following hypothesis: H4: After controlling for brand quality, consumption and prestige, PBG is positively associated with consumers' brand attitude.
Overall, we hypothesize four pathways through which PBG affects consumers' brand attitude.Three of these pathways are posited to occur indirectly through the quality, prestige and consumption trend associations of PBG.The fourth pathway involves the direct effect of PBG on brand attitude.We use consumer's purchase intention and their feelings towards the brand as our measure of brand attitude, which is also called value or utility by some researchers (Aaker, 1991).See figure 1 for the framework of this study.2011) has identified five dimensions on which emerging markets are distinctly different from mature markets.The important one is market heterogeneity.He pointed that heterogeneity of emerging markets should be used for understanding demand diversity.The life experiences of different generation cohort could give rise to affect the demand diversity.The age group differences are a fundamental characteristic in the transitional economies, in which the environment is by definition volatile, must be acute.Take China as an example, it has undergone considerable changes during the past 50 years.Researcher identified the Cultural Revolution (including the Sent-Down Movement) (1966-1979), the Economic Reform (1980-1991), and the globalization of China (1992-) as major events that have given birth to recent generation cohorts in China (Hung, Gu, Yim, 2007).They categorized persons into three cohorts on the basis of the specific event they experienced during their coming-of-age years: red guards (1966)(1967)(1968)(1969)(1970)(1971)(1972)(1973)(1974)(1975)(1976)(1977), modern realists (1980)(1981)(1982)(1983)(1984)(1985)(1986)(1987)(1988)(1989)(1990)(1991), and global materialists (came of age in 1992 or thereafter).
We focus two generation cohorts according our research topic.Generation 1 refers the consumers who were born after 1978 (China opens up) and grew up in a society hose economy was transforming from a centrally planned system that stressed egalitarianism to a market system that stressed competition, and individual accomplishment.Generation 2 refers the consumers who were born before 1978.This cohort may be less open to change.The social ideologies during their coming-of-age years probably continued to condition their attitudes and consumption behavior, even after China entered the open economy era.They will be will be pessimistic in their outlook, and remain frugal and conservative in their consumption attitude and behavior.(Hung, Gu, Yim, 2007).Lots of generation 1, who came of age during the globalization of China (1992), are the most novelty seeking and materialistic and have the highest propensity to buy novelty products, especially global and foreign value-expressive products.Comparing to generation 1, lots of generation 2, who came of age before opening or in the very earlier of opening era, are pessimistic and frugal, consider shopping a burden, and are less likely to by novelty products or foreign brands (Hung, Gu, & Yim, 2007).It is obvious that life experiences during their critical coming-of-age years continued to shape their consumption values and behavior, including their attitude to global brands.Then we offer the following hypothesis: H5: Age moderates the effect of PBG on the attitude of consumers toward a brand.

Sample
The present paper focuses on the structural relationships between perceived brand globalness (PBG), perceived brand quality (PBQ), perceived social prestige (PSP), perceived association with consumption trend (PACT), and consumers' brand attitude.Four actual brands were chosen for this study, based on results from a pilot study (n=20).Nike (American brand) and Lining (Chinese brand) were selected to represent nondurables; and Dell (American brand) and Lenovo (Chinese brand) were selected to represent the Hi-tech durables.Those brands were chosen on the criteria that they were 1) reputable, 2) different on perceived brand globalness, 3) one native brand and one foreign brand in each product category.For each brand, 140 participants (age 18 to 50 years old， representing the main purchasing power in China) from Beijing and Tianjin (two big cities in China) were selected.Forty-four incomplete or improper responses are eliminated from the data.That leaves us with 516 responses for analysis (54% female and 46% male, with 50.8% between 18-36 years of age and 49.2% between 37-50 years of age).

Measures
Measures for most of the constructs we are examining were available in the literature.The "perceived brand globalness", "perceived brand quality", and "perceived social prestige" are generated based on studies by Dodds, Monroe and Grewal (1991), Keller and Aaker (1992), Steenkamp, Batra and Alden (2003)."Perceived association with consumption trend" is adapted from the scale developed by Zhou, Teng and Poon(2007).Brand attitude is measured by two items: purchase intention and "I like this brand."Demographic information of participants is collected at the end of survey.
All scales were translated and back-translated from English into Chinese by bilingual translators.Then fifteen consumers are consulted as to the scale's content validity and wording appropriateness of each item.The scale is then revised based inputs from the participants.All scales yielded Cronbach's alpha values above .8(see Table 1).

Items Source Alpha
Perceived Brand

Globalness (PBG)
This brand is a global brand.
(new item, built from Steenkamp, et al., 2003) .849 I think consumers in developed countries like to buy this brand.
I think consumers in developing countries like to buy this brand.
This brand is sold all over the world.

Quality (PBQ)
This brand has good value.
This brand has a very high level of reliability.
This brand is easy to use.
This brand has good style.

Perceived Association with
Consumption Trend (PACT) It makes one feel good in his/her social group.(Zhou, et al., 2007) .932 It makes one have the sense of global belonging.
It makes one have a good impression of others.
It makes one feel closer to contemporary lifestyle.
It makes one feel to be part of the global trend.
It symbolizes one's social image.
It tells something about one's social status.
It is associated with wealth.
Brand Attitude (BA) I would buy it, assuming it was available.
(new item, built from Steenkamp, et al., 2003) .812 I like this brand.
The standardized structural coefficients are reported in Table 3.For all three groups of analysis, H1a、 H1b、 H2a、 H3a are supported; H4 is not supported.The effects of pathways are found to be different for different groups.
For group1 (younger group), H2b is not supported; for group2 (older group), H3b is not supported.Note: * significant at the 0.05 level; ** significant at the 0.01 level; *** significant at the 0.001 level.

Moderating Effect of Age Difference
We use an invariance-testing strategy to test for the replicability of structural paths across two age groups.Group 2 (age 37-50) was used as the calibration group, and group 1 (age 18-36) as the validation group.We begin by first establishing a multi-group baseline model (Model 1) against which we can compare subsequent models that include equality constraints.Then we did nested models for each of the paths which we found to differ.The multiple group tests on age difference are reported in Table 4. Thus, we concluded that there are path differences on two age groups.H5 is supported.

Discussions
This study expands our understanding of consumer preference for global brands in the emerging market.Four pathways through which PBG influences consumers' brand attitude were hypothesized.Results suggest that perceived brand globalness affects consumers' brand attitude indirectly, which through perceived brand quality, perceived social prestige, and perceived association with consumption trend.The strength of influence of the three pathways are PACT(0.24),PBQ(0.15) and PSP(0.11), with the perceived association with consumption trend being the highest.
These findings support both the quality and prestige arguments for global branding, that have been previously tested in developed countries, such as the United States and Korea (Steenkamp, Batra, and Alden 2003).However, there are two differences between consumers of developed countries and emerging markets.The first difference is, there is a new pathway in the emerging market, perceived association with consumption trend.
PACT is reflected by the consumer's attempt to comply with the convergence of consumption at the global level.It means that consumers in emerging markets (such as China) use global brands as a representation of social acceptance and modernity.The other difference is the strength of the influence of the pathways.The previous research found that the perceived quality was the biggest influence of PBG on purchase likelihood for the U.S.A. and Korea (Steenkamp, Batra, and Alden 2003).We find in this study that the perceived association with consumption trend being the highest influence.This suggests that Chinese consumers are more interested in keeping up with the world fashion and being modern while the influence of quality and social prestige is decreasing.This finding can be explained by the fact that Chinese local brands have improved their product quality hence the novelty of being foreign or western can gradually wear off (Chan, Cui and Zhou 2009).This also explains the lack of direct relationship between perceived brand globalness and brand attitude (indicated in H4).In other words, consumers will not intend to purchase a product simply because it's global.
Moreover, comparing the two groups of different generation, we find the moderating effect of generation on the effects of pathways.Consumers in group 1 were born after the economic reform, and they are more interested in the social prestige represented by global brands through which they intend to build self identity.On the other hand, the more traditionally oriented consumers from group 2 are interested in associating with the modern consumption trend in the world.The different results of PACT and PSP indicate that PACT associates with consumption trend and has a group effect whereas PSP associates more with personal identity and has effect on individual level.Social identity theory (Tajfel and Turner 1985) posits that identity includes two elements: personal (i.e., related to a person's individual sense of self) and social (i.e., related to groups to which a person belongs or is affiliated with).Therefore it's reasonable to see two levels of effects from our analysis, with group1 on the personal level and group 2 on the social level.

Managerial Implications
Some researchers pointed that PBG may provide a significant source of competitive advantage (Steenkamp, Batra, & Alden 2003).From our study among Chinese consumers, the pathway through which PBG affects brand attitude is changing in the emerging market.Perceived brand quality is no longer the main driving force for purchase intention or brand attitude.Perceived brand quality also has different impacts on consumers with different social influences from different times.Global brand marketers should thus consider this change and consider additional positioning strategies on top of quality.Specifically, social prestige and association with consumption trends of the world should be highlighted as part of the benefits of global brands.Characteristics of target market is another important factor to consider when positioning global brands.To market to the more traditional consumers in China, the global brand's identity enhancing benefits on group level should be emphasized; the brand's identity building effects on an individual level should be highlighted to the younger and more modern group.

Limitations and Future Research
We acknowledge the existence of several limitations in this research, which can also lead to future research issues.First, the number of stimuli brands being tested in the study is limited.More brands can be included in future research to include more levels of perceived brand globalness.Secondly, country-of-origin effect might have a mediating effect between perceived brand globalness and brand attitude (Van Ittersum and Wong, 2010;Riefler 2012).Future studies may test the different attitudes towards global brands originated from the native country and a foreign country.Thirdly, we examined the age difference in the analysis in the current study.Future research might be more thorough by analyzing the influence of other factors such as education level, and level of exposure to various brands.Lastly, the proposed model is tested in the Chinese culture only.Future research should test the pathways of PBG on global brand value in other emerging market, such as Brazil, India, and Turkey, to increase the generalizability of our results.

Figure
Figure 1 Hypothesized Model

Table 2 .
Means (standard deviations) of key constructs

Table 3 .
Paths Analysis and Hypotheses Testing (standard errors are in parenthesis)

Table 4
Multiple Groups Tests on Age Difference