Master thesis
Corporate branding and challenges of globalization.
The difference in brand evaluation: a comparative study of IKEA consumers in Bulgaia and The Netherlands.
Pelagiya Sotirova 10704299
University of Amsterdam Graduate school of communications
Communication Sciences: Corporate Communication Supervisor: Dr J. M. Slevin
2 Abstract
The present paper contributes to the academic field of Marketing, Globalization as well as in the field of Brand Communications and Corporate Communications with showing a
comparative study of IKEA consumers from Bulgaria and The Netherlands. To investigate whether there are differences and need of different brand strategies, a survey had been conducted. The theories used in order to help a communication professional understand how to deal with branding in multinational firms include: corporate branding, corporate name, corporate loyalty, corporate reputation, corporate image, globalization and country of origin.
Keywords: Corporate branding, brand evaluation, multinational firms, IKEA, Bulgarian consumers, Dutch consumers, globalization
3
Introduction
The paper aims to investigate how an international company can improve the
communication in each operating country and be successful in all geographical areas. When a company operates in different geographical regions very often a difference between the company performances in those regions is noticed. International companies often struggle to find the right brand strategies to operate in all the areas and to successfully communicate with their consumers in all of them. However, multinational companies attempt to justify the country differences such as economical situation, cultural differences, markets et cetera and therefore fail to perform equally successful in the different geographical areas. Glaister (1991) stated that “nations fail when companies do not receive the right signals, are not subject to the right pressures, and do not have the right capabilities” (p. 332). This is a problem which big international successful companies face because they are not sensitive to the local origins. Furthermore, when a company manages to distinguish itself from the domestic competitors, it does not automatically distinguish itself from foreign competitors. Organizations operating globally have challenges choosing the right brand strategies. They are struggling with the choise to either diversify their brand strategies acording to the specific geografical area and country or improve on a general strategy that can be executed globally and will be aplied for all the different geografical areas.
IKEA is a good example of an international company which faces some difficulties in foreign countries. Like every other multinational company, IKEA has to communicate with all of its consumers in the different geographical regions. The company has global presence, global identity and is facing difficulties making a choice to follow brand strategy specifically aligned with each operating region or to execute global strategy aligned in all regions.
Depending on the cultural differences between The Netherlands and Bulgaria, a multinational company like IKEA might be evaluated completely different. Name recognition, image,
4 reputation and brand loyalty have different influence on the consumer depending on the geographical region. Other than that, IKEA is successful company which has 70,000 employees and turnover of 11 billion euro for 2013 (Dahlvig, Kling and Goteman, 2003). IKEA has 11 stores in The Netherlands and 1 store in Bulgaria (IKEA-Reports, 2015). With a well selected communication strategy, the company could extend the number of stores
operating in Bulgaria and become as successful and popular brand as in The Netherlands. There are some visible differences between Bulgaria and The Netherlands in the way IKEA communicate with its stakeholders. One difference in the communication is the absence of option to download IKEA app for IOS and android in the Bulgarian version of the website. The existence of the option facilitates the process of purchasing or receiving information. As an international company, IKEA would be able to market its products in Bulgaria and The Netherlands more successfully after determining how brand evaluation differ in the two countries and which dimensions of brand evaluations are more influential on brand evaluation in each country.
A strong corporate brand can add value to the company`s policy which will result in better corporate products (Uehling, 2000). International companies need to choose whether to diversify the brand strategies according to the geographical area or country or to equalize one brand strategy which will be applicable for all countries in which the company operates. All the above mentioned lead to the following research questions:
1) Should an international company diversify its brand strategies for the operating countries or should improve on a general strategy that can be executed globally?
As sub-questions the following are presented:
2) Does customer evaluation of international companies differ between the countries Bulgaria and The Netherlands?
5 3) To what extent is the corporate branding effect perceived differently between customers from Bulgaria and The Netherlands?
4) How does customer`s evaluation of IKEA differ in the countries Bulgaria and The Netherlands?
The current research questions will be answered after investigation of theories regarding corporate branding, corporate image, reputation, loyalty, corporate name,
globalization, country of origin and use of quantitative research. The findings will help the communication professionals working at a multinational company, operating in both above mentioned countries to solving this problem, and therefore understand the brand strategies that are needed. The issue of globalization will be examined in order to understand how globalization affects countries in Western Europe and Eastern Europe. The paper will
contribute for the marketing operating system in multinational organizations, which will result in higher understanding of the customer needs in those particular countries. Moreover, the findings will be valuable for the work of communication professional when building step by step corporate branding of a multinational company. After reading the current study, the reader will be aware of the brand evaluation perceptions of the Bulgarian consumers and Dutch consumers. That knowledge would help the communication society to realize whether to pick global strategy executed in all operating regions or to create an individual according to the local market. If there is a difference to be found between the two groups of consumers of the brand IKEA, then the communication professional should consider creating an individual approach to the local consumers. To do so, a deeper research into the reasons behind that difference is needed. Then the communication professional would manage to create a good match between branding and the particular country. However, organizations seem to be struggling with effective and appropriate brand strategies specifically chosen for different countries. The cultural differences in Bulgaria and The Netherlands suggest different branding
6 approach towards each region, which might help for improving the match between the brand and the customer needs. On the other hand, an international company can struggle to diversify its brand strategy for each operating country when trying to apply already established and successful global branding strategy. Nonetheless, by understanding how corporate name, image, reputation and loyalty influence consumer`s evaluation in Bulgaria and The
Netherlands, communication professional should be able to address better those concepts in order to increase brand evaluation. The findings can be applied to international company which operates in those regions. The study contributes to a better understanding of the brand strategies that need to be applied in Bulgaria and The Netherlands. This paper is valuable for companies operating in different regions and contributes for more efficient corporate
7
Theoretical background
Corporate branding
Corporate branding stands for ownerships, image-building devices, symbols associated with key values, means by which toconstruct individual identities (Balmer and Gray, 2003). According to Knox and Bickerton (2003) “A corporate brand is the visual, verbal and
behavioural expressionof an organisation’s unique business model” (p. 1013). Corkindale and Belder (2009) differentiated clearly corporate branding and corporate reputation. They
explained that corporate branding focus on legitimacy with customers and the authority of the whole corporation towards the stakeholders. Hatch and Shultz (2001) noted that corporate branding affects not only the consumers but all stakeholders.
Dimensions of corporate branding
The current study examines the effect of corporate branding explained through the following dimensions: corporate name, image, reputation, loyalty (Souden, Kassim, Hong, 2006). It has been found those concepts influence corporate branding, therefore elaboration on them would help communication professionals to be aware how to deal with corporate
branding regarding multinational companies.
Corporate Reputation. Reputation is the result of the communication between the
stakeholder and the corporation which is seen overtime (Argenti and Druckenmiller, 2004). Abratt and Kleyn (2012) explained that the stakholders determine the number of reputations of an organization. According to Walker (2010, p. 370) “a relatively stable, issue specific aggregate perceptual representation of a company’s past actions and future prospects compared against some standard”. Moreover, this is the constituent`s overall estimation of the company (Fombrun, 1998). The author noted that reputation can be seen as an advantage which situates a company above the other companies (the competitors) on the market. Reputation focuses on relation building. Good reputation attracts positive stakeholders
8 (Fombrun, 1998). In addition to corporate image, corporate reputation have a huge influence on a customer’s loyalty towards an organization (Nguyen & Leblanc, 2001). Corporate reputation is streingthened when the promises of the corporate brand are accomplished
(Argenti and Druckenmiller, 2004). Reputation is important for the organization sustainability (Firestein, 2006). The strategies for achiving high reputation can be changed but once an organization`s reputation is hurt, it is very difficult to rebuilt the reputation again. Favourable reputation can enable the corporation to charge additional prices, attract investors and assure acces to new places (Fombrun and Shanley, 1990).
Corporate image. Image represents the organization`s thoughts about the stakeholder`s
opinion for the organization (Bronn and Heath, 2010). On the contrary, reputation,
characterizes what the stakeholders really think of the organization (Bronn & Heath, 2010). Corporate image is “not what the company believes it to be, but exists in the mind of the audiences” (Heding, Knudtzen, and Bjerre, 2009, p. 59). Image is linked to all the physical and behavior attitudes of the organization, such as business name, products, ideology (Nguyen and Leblanc, 2001). The concept of image is a reflection of stakeholders` opinion for the organization (Balmer, 1998). “Managing the corporate image is the key to security and public trust” (Shee and Abratt, 1989, p. 63).
Corporate name recognition. This concept measures how “widely known the brand is”
(Kowalczyk and Pawlish, 2002, p. 160). “Interaction or an experience with a corporate identity is what produces a corporate image in the minds of the public” (Westcott Alessandri, 2001; p. 177). According to Grey and Balmer (1998) corporate name and corporate image are highly related concepts. Corporate communications work in all dimension of corporate branding with the mission the brand to be recognizable. The aim is when a consumer sees the logo for example, associations for the organization immediately to appear in his/her mind.
9 That means immediate name recognition along with identification of the business area where the organization operates (Gray and Balmer, 1998). The aim of corporate name is similar.
Corporate name link the external stakeholders with the identity of the organization (Kalaignanam & Bahadir, 2013). This concept represent: “the physical characteristics, past performance, and several other characteristics of a brand in a succinct manner” in an organization (Kalaignanam & Bahadir, 2013, p. 457).
Brand loyalty. An important point in the branding process is reaching high level of brand
loyalty. Loyal customers are considered for much more valuable because they are less
expensive to keep than seeking for new customers (Heding, Knudtzen, & Bjerre, 2009). Many researches have pointed out the importance of brand loyalty (Plummer, 1985; Aaker, 1996, Kim, Dongchul and Seung‐bae, 2001). Some customer express preferences to certain products, and their choice may differ because of some temporary reasons. There are two resources contributing for product purchasing. The first one is based on brand loyalty. Brand loyalty follows the conscious decisions a customer makes and is rooted in the customer`s tendency to buy product of the same brand again and again (Huang and Yu, 1999;
Chintagunta & Honore, 1996). The other resource is rooted in inertia, where the customer just purchases the same brand product without putting thought in the process. Brand loyalty can be compared with having a relationship (Heding, Knudtzen, & Bjerre, 2009). The consumer feel emotionally attached to the brand.
Corporate branding in international companies
The brand is no longer oriented towards only the customer. Step by step it is turning the focus on the whole corporation (Olins, 2000). “Corporate branding is multidimensional construct” which measures brand recognition and the quality of corporate brand (Kowalczyk and Pawlish, 2002, p. 160). A corporate brand is instrument to express the company when not
10 using the products or services (Keller, 2000). The urgency of corporate branding can be explained by five categories, (Einwiller and Will, 2002):
1) “Growing importance of capital markets” (Einwiller and Will, 2002, p. 102). Global successful financial performance is highly dependent on a strong brand and high reputation. A strong brand corporate image directly influences the stock price. Furthermore, one factor for buying stocks from investors is corporate reputation. 2) “War for talent” (Einwiller and Will, 2002, p. 102). The authors explained that the
need of talents at senior level is a factor which triggers the corporate branding initiatives. The winners of the talent war are the companies with high reputation because this factor is crucial for attracting talented employees.
3) “Need to create synergy between brands” (Einwiller and Will, 2002; p. 102). The consumer becomes more and more demanding for company values. He/she wants to know if the company is trustworthy, ethical and consistent. All these factors are
indicators for a reliable company and they contribute for higher financial value. On the other hand, corporate brand can be also straightened through creating association with its product brand.
4) “Co-ordination and identity problems in multinational corporations” (Einwiller and Will, 2002, p. 102). The company should have common values and common structure which holds the body of the organization. A serious challenge is the alignment
between the representations of the company all around the world. There must be successful communication and identical idea.
5) “Growing demand for transparency” (Einwiller and Will, 2002, p. 103). The need of greater transparency can be explained on one hand by greater obligations towards corporate governance and on the other hand by financial disclosure. Furthermore, transparency is highly needed because of the many accessible resources in new media.
11 Internet opens a door of thousand possibilities for receiving information for a
particular company.
The need of corporate branding is even stronger when taking into consideration the process of globalization which influences all levels of business. International organizations need to choose strategy for all the operating companies and they need to make decision whether to stick with global strategy or diversify their brand strategy according to the
differences of each operating region. To make clear understanding of the problem, elaboration on globalization process is needed.
Globalization
Globalization indicates affection of any big international event on everyone in
different ways, turning it into an international issue (Nester, 2010). This process is the result of the modern world. Furthermore, Naim (2009; p. 1) noted globalization as a “widening, deepening and speeding up of worldwide interconnectedness in all aspects of contemporary social life". According to other resource globalization is “a global process of increasing economic, cultural, and political interdependence and integration, with deep historical roots” (Atkinson, 2011, para. 1). Barney (2004) explained that among all the theories about
globalization, what really this process means is that “national states are being challenged in their capacity to organize core elements of modern economic, political and social life” (p. 19). Giddens (2002) argue that looking at globalization in only economical dimensions is wrong. Actually, he suggested that besides economical globalization is technological, political and cultural. Giddens (2002), claims that globalization is a factor that influence intimate, private interactions in everyone`s personal life. Globalization influence not only local communities and nations but also local autonomies. Globalization also shapes new cultural zones and awakes local identities everywhere in the world (Giddens, 2002). Controversially, Hoogvelt (2006) claims globalization is not a global process and many
12 people continue to experience their world as modeled by the economical affliction of their locality. Furthermore, Appadurai (1996) suggest that globalization is not necessarily homogenization but surely is historical process. The author characterized globalization by mass migration and electronic mediation. In the article of Rodrik (1998), the problem of making globalization compatible with social and political stability is reviewed. The author calls globalization a critical line which separates the society into two groups. The first group is able to catch the essence of globalization and be influenced by this process. The other group is rather pessimistic toward the aspect of unregulated markets and would stick with social stability and already established cultural norms.
Globalization makes geographical areas less relevant to cultural and social adjustments (Waters, 2001). On the other hand, other theories disagree that places are disconnected of locals and situated in new time-space compositions (Giddens, 1990). It is a fact that due to the “economic growth and infrastructural development”, that are implied in globalization, there are changes in physical space (Askegaard and Kjeldgaard, 2007, p. 139).
Case study: IKEA customers from Bulgaria and the Netherlands
IKEA is multinational company that grew up greatly over the past six decades and expanded its business from the woods of southern Sweden to a company operating in 40 countries around the world (“IKEA-History”, 2012).
The company has 11 stores in The Netherlands and only 1 store in Bulgaria, in the capital of the country – Sofia (IKEA corporate website, 2015). However, the very little presence in Bulgaria, IKEA is well known brand but because of the existence of only one store and the high prices of the products, it is not that accessible for all the social groups of customers in the country. On the other hand, in the Netherlands the brand is also well known but accessible for more social groups comparing with Bulgaria, due to the economical
13 climate. If a comparison between the prices of the products of IKEA need to be done, then we can conclude they are wither the same or more expensive in The Netherlands. For example furniture for the living room, sofa, model EKOTORP costs 350,00 euro in The Netherlands and 549,00 leva which converted by the price of 17 June into euro come to 280,00 euro. It turns out that the sofa is cheaper to buy from the Netherlands. Despite this fact, what it must be taken into consideration is the prices of the competitor companies and also the economical climate in both countries. According to the official list of minimum wages in Europe the minimum salary per month for Bulgaria is 360 leva (184 euro) and for The Netherlands the salary is €1,501.80, both of them before taxes (“Minimum Wage Statistics”, 2015). When looking at the prices of the competitors in both countries cheaper and similar products can be found.
The corporate name of IKEA has not been changed since the company was born. The first two symbols (IK) come from the name of the owner of IKEA - Ingvar Kamprad, and the second two (EA) come from the name of the firm and the villige where he was raised up (IKEA corporate website, 2015). When looking at the logo of IKEA, it has not been changed since 1967, when the company was launched (“IKEA-History”, 2012). When comparing two national groups of customers, it has to be considered they also have cultural differences. One of the groups might want to purchase only branded products with the name of the firm, whereas the other group would not mind if the abscense of the corporate name on the
products. The cultural differences of the two nations should be deeply approached in order to be understood what kind of brand strategies would be liked in Bulgaria and in The
Netherlands.
H1. The corporate reputation of IKEA as a brand is higher in Bulgaria than in The Netherlands.
14 H2. The effect of corporate image of IKEA on consumers` product evaluation is greater for Bulgarians than for the customers from The Netherlands.
H3: Corporate reputation has direct positive effect on the corporate image for the Bulgarian customers but not for the customers from The Netherlands.
H4. The effect of corporate name/recognition on consumers’ product evaluation is greater for The Netherlands than for Bulgarians.
H5: Corporate name has direct positive effect on image for the Bulgarians but not for the Netherlands.
H6. The effect of corporate loyalty on consumers’ product evaluation is greater for The Netherlands than Bulgarian customers.
H7. Corporate loyalty has direct positive effect on image for the Bulgarian customers but not for the customers from The Netherlands.
H8: Corporate reputation has a direct positive effect on the corporate
commitment/loyalty for the Bulgarian customers but not for the customers from The Netherlands.
The first conceptual model shows the hypotheses based on country differences. It includes independent variable – country of origin of the participants and the dependent variables: corporate loyalty, corporate reputation, corporate image and corporate name. the second model includes also moderator – country of origin.
Conceptual model 1: Difference in the perception of loyalty, reputation, image and name based on country of origin of the participants
15 Conceptual model 2: Moderating effects of country
Methods
Selection of research units
To investigate the hypothesis we did a case study and compared brand evaluation of IKEA between Bulgarian consumers and Dutch consumers, participants from both countries were included in the study. To collect the data from Bulgaria and The Netherlands,
convenience sampling technique was used. The participants were contacted via email and social media (Facebook) and informed about the aim of the study, the university from which the thesis is being carried and who the supervisor of the master thesis is. They were also informed about the topic and field of the master thesis and the fact that the questionnaire is
16 anonyms. Afterwards, the participants were sent a link to the survey which was loaded in Qualtrics.
Characteristics of research units.
The age of the participants ranged between 18 and 56. The study is oriented towards the regular IKEA customer and having an income is relatively important fact. In total the number of people who participated in the study comes to 130 (N = 130). The number of participants from Bulgaria was 104 (N=104) and the Netherlands - 25 (N=25). Many participants started the survey but dropped it at different stage. The answers they gave are included in the statistical analyses and the answers they did not give because of quitting the questionnaire are included as missing values. The highest percentage of Bulgarian participants replied that they have bought approximately 1-3 products of IKEA in their life (N=44; 32%) whereas the most common answer for the Dutch participants was 12 products and more (N=12; 48 %). When looking at the participants interest in the quality of the products of IKEA, the Bulgarian participants strongly support the claim “The quality of a product is the leading factor when purchasing a product from IKEA” (54,2%) whereas the Dutch
participants disagree with that (32%). Furthermore, the participants from both countries supported equally the claim “The price of a product is the leading factor when purchasing a product from IKEA”. When comparing the level of education of the participants, master degree appears to be the highest indicated answer in both groups – Bulgarian participants (54,8%) and Dutch participants (72,7%).
Research design
A cross-sectional design was used for investigating the brand evaluation differences in Bulgaria and The Netherlands. The questionnaire was based on existing survey (Souden, Kassim and Hong, 2006). An additional part of questions regarding the reasons behind
17 purchasing IKEA products was added. The first part started with the overall effect of
corporate branding on brand evaluation. Then, part two focused on the corporate effect on the participants. In this part, the already exciting scales of corporate name, image, reputation and loyalty were used (Souden, Kassim and Hong, 2006). By using those four concepts, better understanding of brand evaluation impact will be provided. The third part included questions about the demographic characteristics of the participants such as age, educational level, nationality, material status, occupation and income. The survey consisted 36 items. All answer categories ranged on 4 point likert scale. This way the participants were not confused by use of too many different answer categories. Moreover, a scale that had been applied to all the questions in the survey saved time for completing the questionnaire. A mid-point was not included, following Souden, Kassim and Hong, 2006 example. The authors noted that by including mid-point, the chance for social desirability bias will rise (Garland, 1991). Initially the survey was written in English and then translated to Bulgarian. This way the Bulgarian participants received the questionnaire in Bulgarian language and the Dutch participants in English language.
Observed variables
Corporate name. The dependent variable which was used in the third and fifth
hypotheses was corporate name. The variable as measured through 5 items (N=5). The answers ranged among 4 categories. The participants indicated strongly disagree with 1 and strongly agree with 4. The first item investigated whether the company is well known in the country. The second one examined if the products of the company carry its name on them. The third one investigated whether the products carry both the company name and its generic name. The next item measured if the company has its name to all the products that produces. The last item checked whether the company uses different brand names for the different products its produces. Factor analyses and Chronbach’s alpha were conducted. Principal
18 components technique was used in combination with Varimax rotation for optimal results (Costelo and Osborne, 2005). There was only one component with an eigenvalue above 1 (eigenvalue 3.36) with 67,23 % variance explained. All factors correlated positively.
Cronbach’s alpha test was conducted to check internal consistency. It appears that the scale is reasonably reliable (α = .87). Therefore, the scale measures corporate name. Afterwards, a new variable was created “Corporate name” when computing the mean scores of the 5 items. This way, the variable can be used in SPSS for investigating the hypothesis.
Corporate image. This variable was used as dependent in hypothesis two and as
outcome variable for hypotheses six and eight. It consists 5 items (N=5). The answer
categories are the same as the above mentioned variable – they ranged between 4 categories. The first item measured whether innovative and pioneering. The second item investigated if the company is successful and self-confident. The third item measured if the company is persuasive and shrewd. The fourth item of corporate image concept examined if the company does business in an ethical way. The last item researched if the company is open and
responsive to consumers. Factor analyses was conducted following the above mentioned procedure. Only one component had eigenvalue above 1 (eigenvalue 4.10) with 82.04 % variance explained. After checking the internal consistency with Cronbach’s alpha, it
appeared that the scale is reliable (α = .94). For the purpose of using the variable in SPSS, the mean scores of the 5 items were computed and a new variable was created.
Corporate reputation. This variable was used as dependent in the first hypothesis
and predictor in hypotheses seven and eight. The variable was measured with 7 items (N=7). The first item measured if the company has emotional appeal to the consumer. The second item measured if the company undertakes some social responsibilities. The third item
investigates whether the company is known for producing high quality products and services. The fourth items examine whether the company is an industry leader in the field. The fifth is
19 about whether the company is industry leader. The sixth item investigates whether the
company has a good workplace environment. The seventh one asks whether IKEA fulfill its promises towards the customers. Factor analyses showed there is just one component with eigenvalue above 1 (eigenvalue 4,80) with 68,65 % variance explained. Cronbach’s alpha showed the scale is reliable (α = .92) and measures corporate reputation. To use the variable corporate reputation with all 4 items, a new variable was created by computing the mean scores of the items.
Corporate loyalty. The variable was used as dependent in the forth hypothesis, a
predictor variable in the sixth hypothesis and outcome variable in the seventh hypothesis. The variable was presented by 5 items. Factor analyses was conducted in the same procedure as for the previous variables. All items correlated positively. The results showed only one factor is with eigenvalue above 1 (eigenvalue 3,93) with 78,68 % variance explained. Chronbah`s alpha indicated the scale is reliable (α = .92). Afterwards, a new variable was created by computing the 5 items, in order to be used in the statistical analyses.
Country of origin of the participants. Country of origin was used in all the eight
hypotheses as independent variable or moderator. This is a binary variable which was recoded into a dummy variable with answer categories (0) Bulgaria and (1) The Netherlands.
Procedure
The items were checked for internal consistency and missing values. Factor analyses was conducted for all the variables but country of origin of the participants. In order to
investigate the hypotheses independent t-tests and regressions via PROCESS macro tool were used.
20
Results
An independent sample t-test was conducted to compare the Bulgarian consumers with the Dutch consumers of IKEA for the first hypothesis. It was predicted that the Bulgarian consumers indicated higher levels of reputation than the Dutch consumers. The independent variable is country of origin of the participants and the dependent one is corporate reputation. The results indicated not significant difference between the scores of Bulgarian (M= 2,14, SD= .67) and Dutch consumers (M= 2,12, SD= .48); t(115)= .131, p = .89, therefore the first hypothesis is to be rejected. There is no effect found of country on the consumers` perception of corporate reputation of IKEA. Bulgarian and Dutch consumers perceive the corporate communication of IKEA equally.
In the second hypothesis, effect of country on corporate image on the participants had been predicted. To test whether the prediction is correct, an independent t-test was conducted. The independent variable is country of origin of the participants and the dependent variable is corporate image. There was no significant difference found between the consumers of
Bulgaria (M= 1.87, SD= .83) and The Netherlands (M= 2.0, SD= .45). It was found that the participants do not differ in their perception about the corporate image of IKEA, based on their country of origin (t(116)= -.696, p = .33).
The third hypothesis investigates whether country of origin of the participants has an effect on the link between corporate reputation and corporate image. It was predicted that the corporate reputation has direct positive effect on the corporate image for the Bulgarian customers but not for the Dutch customers. To investigate the prediction, a multiple
regression analysis was conducted via the PROCESS-tool. The results indicated marginally significant moderation effect b = 1.24, t = - 1.86, p = .06, 95% CI [-.934, .028] of country on the link between the predictor variable and the outcome. The main interaction of country is significant b = .53, t = - .03, p = .03, 95% CI [.072, 2.177]. Furthermore, the main interaction
21 of corporate reputation is also significant b = .08, t = 10.59, p = .00, 95% CI [.705, 1.029]. Those results are treated with caution and based on the following significant results, where it was founded statistically significant moderation effect of country, the marginally significant result for the third hypothesis is to be accepted. Therefore, effect of corporate reputation on corporate image for the Bulgarian consumers is stronger than for the Dutch consumers. Table 1: PROCESS model: Moderation effect by country on corporate reputation and corporate image Interaction (Constant) 0 Sig. .06 F 38.99 R .71 R Square .50 Note. N = 117
The forth hypothesis investigated whether there is a difference between the Bulgarian and Dutch customers in the corporate name/recognition of IKEA. In order to investigate the prediction that the effect of corporate image of IKEA on consumers` product evaluation is greater for Bulgarians than Dutch consumers, an independent t-test was conducted. The results indicated no significant difference between the scores of Bulgarians (M= 2,09, SD= .73) and Dutch consumers (M= 2,15, SD= .63). The prediction was not correct and the
hypothesis is to be rejected (t(116)= -.406, p = .68). Bulgarian customers did not differ in their perception of corporate name/recognition from the Dutch customers.
In the fifth hypothesis investigated the prediction of moderating role of country of origin of the participants on the relationship between corporate name/recognition and
22 corporate image. A PROCESS-tool was conducted. The independent variable, known also as predictor variable is corporate name/recognition. The dependent variable, known as outcome variable is corporate image. The results showed the main interaction of country is significant b= .48, t = 2.44, p = .01, 95% CI [.222, 2.135]. The main interaction of Corporate name is also significant b = 0.08, t = 8.80, p = .00, 95% CI [-.57, .90]. The moderating effect on the relationship between corporate name and corporate image is significant b = .21, t = -2.37, p = .01, 95% CI [-,938, -.085]. Therefore, there is moderation effect found, and hypothesis 5 is to be accepted. The results indicated that effect of corporate name on corporate image for the Bulgarian customers is stronger comparing to Dutch customers. Those results suggest for careful consideration of the reason behind the diversification of the brand evaluation of those two geographical regions.
Table 2: PROCESS model: Moderation effect by country on corporate name/recognition and corporate image Interraction (Constant) 0 Sig. .01 F 5.64 R .64 R Square .41 Note. N = 118
In order to investigate the sixth hypothesis, an independent t-test was conducted. It was expected that he effect of corporate loyalty on consumers’ product evaluation is greater for The Netherlands than Bulgarian customers. The independent variable is country and the
23 dependent is corporate loyalty of IKEA. The results indicated no significant difference in the scores of Bulgarian consumers (M= 2.46, SD= .78) and Dutch consumers (M= 2.41, SD= .54); t(114)= .295, p = .71. Country does not have significant effect on the levels of corporate loyalty of IKEA. The sixth hypothesis is to be rejected. The levels of corporate loyalty do not differ between the Bulgarian and Dutch customers of IKEA.
The seventh hypothesis predicted a moderating effect of country on the link of corporate loyalty and corporate image. Again a regression analysis via the PROCESS-tool was conducted. The predictor variable is corporate loyalty. The outcome variable is corporate name/recognition. The moderator is country of origin of the participants. The results indicated significant main interaction of corporate loyalty and corporate name b = 0.09, t = 3.56, p = .00, 95% CI [.150, .527]. Furthermore, the main interaction of country is not significant b = 0.73, t = .46, p = .64, 95% CI [-1.120, 1.806]. The moderation effect of country is not
significant b = 0.29, t = -.23, p = .81, 95% CI [-.658, .517]. A link between the independent or predictor variable and the outcome variable was found. The results indicated that corporate loyalty influences corporate image/recognition but also there is no moderating effect of country. Thus, the effect of corporate loyalty on corporate image does not differentiate between the two groups of participants – the Bulgarian and the Dutch customers. Although the 6th hypothesis is to be rejected, the significant linkages here suggest for a gap between the two groups of customers.
24 Table 3: PROCESS model: Moderation effect by country on corporate loyalty and corporate image Interaction (Constant) 0 Sig. .81 F .05 R .33 R Square .11 Note. N = 116
In the eighth hypothesis, a moderation effect of country on the link between corporate reputation and corporate loyalty is predicted. To investigate the prediction a multiple
regression analysis was conducted via the PROCESS-tool. The predictor variable is corporate reputation and the outcome variable is corporate loyalty. The moderator is the same as the abovementioned – country of origin. The results indicated there is significant main interaction of corporate reputation b = 0.09, t = 6.96, p = .00, 95% CI [.476, .855]. There is also not significant result of the main interaction of country b = 0.62, t = .39, p = .69, 95% CI [-.985, 1.472]. Finally, there is not significant moderating effect of country on the link between the predictor and the outcome variable b = 0.28, t = -.46, p = .64, 95% CI [-694, .432]. Thus, there is a link found between corporate reputation and corporate loyalty but not moderating effect by country. Hypothesis 8th is to be rejected.
25 Table 4: PROCESS model: Moderation effect by country on corporate loyalty and corporate image Interaction (Constant) 0 Sig. ,64 F ,21 R ,56 R Square ,31 Note. N = 116 Conclusion
After investigating the research problem: Should an international company diversify its brand strategies for the operating countries or should improve on a general strategy that can be executed globally, the paper supported the idea of individual approach oriented towards the different regions. The study compared Bulgaria and The Netherlands and show that the same brand can be perceived differently according to the country of origin of the participants. To investigate the brand evaluation of the consumers from Bulgaria and the Netherlands, theories regarding corporate branding, corporate loyalty, corporate name, corporate reputation and image were gathered and discussed in the current paper.
The need of corporate branding was carefully reviewed and different reasons for building branding strategies were listed. The paper draw guidelines for multinational companies who wish to communicate successfully to their consumers in all operating geographical regions. The current research gives light on the topic of brand communication strategies at
26 multinational firms and globalization. Moreover, after examining the different theories of globalization, it was found that this concept left a mark in the branding process for
multinational companies. When observing the controversy theories of globalization, it can be concluded that they all are right and a communication professional should be aware of them when building a brand strategy.
By drawing comparison lines between the two groups of customers of IKEA, we are able to conclude the demand of individually selected brand strategies according to the region where the firm operates. The significant results suggested that there is a difference between the consumer`s perception of brand evaluation of IKEA, which supports the assumption that individually selected strategies are needed. The answer of the research question is the obvious need of carefully building the corporate brand strategies carefully considering the region`s features. Individual strategies are needed, to achieve successful brand positioning on the local markets. By being sensitive to the cultural differences between those two geographical
regions, multinational firms will avoid lower brand evaluation in some regions.
Main recommendation to the multinational companies and conclusion from the study is that all the operating regions of a multinational company should be treated carefully and the national, cultural differences should be never neglected. Nonetheless, if the communication professionals become more aware of the cultural differences of the regions where the
multinational company operates, they would be more apprehensive to the brand strategies. As a part of the conclusion, it is considered that cultural differences need to be carefully revised in order to understand where the differences of brand evaluation are rooted.
When a multinational company faces such a problem as differentiation in brand evaluation in two different geographical regions, first step to take is to try to understand and analyze the reasons behind it. When talking about international branding of multinational companies, it can be considered they usually choose global approach regarding
27 communication of the products and marketing. Among other factor influencing a company, branding strategies is the factor that makes a company global (Mueller, 2011). One
perspective of globalization suggest that the physical existance of the borders between countries become meaningless for multinational companies. Even if the borders are considered worthless, the differences between local markets exists. Those differences influence people`s perception for brands and products purchasing. The understanding of the local cultural values is crucial for using the branding and marketing tools nowadays (Aaker, 2000; De Mooij, 2000; Gurhan-Candi and Maheswaran, 2000). Communicational
professionals have to always take into consideration the national differences of the multinational brand operating regions. They have to be aware of the processes of
globalization and the existing contradictory theories. Thus, it is vital for the success of the company to be aware that even in such a globalized world, individual brand strategies are definitely needed for a multinational company. Once a communication professional is aware what drives people`s perception for the brand evaluation dimensions, a strategy that fit the needs of the market can be created.
The current study proved there is a gap between Bulgarian and Dutch customers and it is assumed that the reason behind that is a cultural difference. To investigate this assumption, a future study is encouraged. Finally, we came to the conclusion that each multinational company should invest time in investigating the region differences in order to make the company equally successful in all operating regions.
Discussion
Some of the findings were not in line with the expectations but the statistically supported findings indicated differences between the scores of Bulgarian and Dutch
customers which is a reason for building the corporate branding strategy differently for each country.
28 The results of hypotheses 1, 2, 4 and 6 that compared the Bulgarian and Dutch
customers of IKEA regarding the four dimensions of brand evaluation were not in line with the expectations. One limitation of the study and probable reason for the results is the spread of participants. The number of Bulgarian participants who actually finished the survey (N=92) is not equal to the participants from The Netherlands (N=22). Furthermore, the level of
education, social status, income of the participants from Bulgaria is not absolutely the same as the participants from the Netherlands. For that reason, truly comparison between the two groups might be difficult. Moreover, the number of participants who started the survey (N = 130) and who actually finished it (N = 114) suggests for many missing values at different questions. Many participants from both countries just dropped the survey at different stage of the questionnaire which is an indicator of lack of motivation to participate. The answers of the respondents who did not complete the whole survey were included in the statistical analyses in order not to lose too many respondents. For a future study different method than
convenience sampling is suggested. Moreover, a future study in this field is encouraged using in-depth interview method for collecting data. Survey design is suitable method to investigate brand evaluation and directly assess its dimensions, but in depth interviews would reveal more information about the differences in both countries. While the questionnaire has fixed scales of questions, the in-depth interviews might show information not mentioned in the survey by asking additional questions depending on the answer given of the interviewed person. Based on the results of this study, in depth-interview would be more suitable for a future research. For a next study it might be useful to include also a group of employees of the company and use the same scale of Souden, Kassim and Hong, 2006. The scale of corporate image, for example, is applicable also for employees of the company and when having internal stakeholders for investigating corporate branding, that would give a chance to the
29 study to compare groups not only based on two different countries but also internal – external stakeholder groups.
The results of hypothesis 8 revealed a link between corporate reputation and corporate loyalty but only when the moderator – country is included. Therefore, there is indeed
differentiation between the Dutch and Bulgarian customers when looking at the linkages between the dimensions of brand evaluation. The marginally significant moderation effect found in hypothesis 8, suggest that there is a link between corporate image and corporate reputation and also that the effect of corporate reputation for the Bulgarians is stronger than for the Dutch consumers. Those results, along with the significant moderating effect in hypothesis 5, supported the assumption that there is clear differentiation in brand evaluation of both countries. A multinational company operating in different regions of Europe as IKEA needs to take into consideration the economical standard, competitors market, number of actively operating stores in both regions, cultural differences between the regions in order to align the brand evaluation for both countries. The results indicate that for the Bulgarian consumers the effect of corporate name on corporate image is stronger than for the Dutch consumers. The reason for the findings might be rooted in the fact that IKEA as a brand in Bulgaria hold high prices on the local market comparing with its competitors. There is only one store of IKEA in Bulgaria, but the brand is very well known in the country. Whereas, IKEA in The Netherlands has 11 stores and the prices of the products are more accessible than in Bulgaria when comparing the economical climate of both countries. The multinational company is not treated as a luxury brand and perhaps that is why people do not look closely at the corporate reputation and corporate image.
Managing the different signals sent to the diverse stakeholders by a corporation is often iaffected by numerous factors such as: “historic turf wars between divisions, cultural and language differences, deficient management structures and unclear responsibilities, or
30 simply by spatial separation” (Einwiller and Will, 2002, p. 100). McGrew (2000) supports the idea that globalization influences places all over the world and goes beyond physical borders. The author stated that globalization is “a shrinking world – in which the sources of even very local developments, from unemployment to ethic conflict may be traced to distant conditions or actions” (McGrew, 2000, p. 3).
It would be interesting and useful for a future study on the topic of brand evaluation in Bulgaria and The Netherlands to draw a comparison line regarding their cultures, because understanding of the cultural dimensions, similarities and differences would help
multinational companies operating there. When trying to develope internationally succesful brands, specifically in “developeing countries with more traditional societies”, a first step to take is to observe the cultural differences (Woo Jun, and Lee, 2007, p. 474). Thus, the explanation of those cultural differences and invastigation of cultural dimensions, is vital for solving communication problems of a multinational company comming from luck of
knowledge. People`s persuation about a brand is highly influenced by cultural orientation (Aaker and Maheswaran, 1997; Triandis, 1989). Studying the components of culture in Bulgaria and The Netherlands will define the contarasts and affinities.
After examining the differences, IKEA can improve its corporate branding in order to reach higher brand evaluation in both countries and moreover to create the right brand strategies for a perfect match with the consumer`s needs in Bulgaria and The Netherlands.
31
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Appendix
I. Additional part with questions regarding the process of purchasing IKEA products. 1. Have you ever bought a product from IKEA? 1. Yes 2. No
Please answer the following statement when using four-point scale 1- strongly agree; 4-strongly disagree.
2. It is very important for me whether a product I purchased from IKEA has the corporate name on it.
3. It is very important for me what the corporate reputation of IKEA is.
4. The price of the products is the leading factor when purchasing a product from IKEA. 5. The quality of products is the leading factor when purchasing a product from IKEA. 6. How many products of IKEA have you bought approximately?
A. 1-3 B. 4-7 C. 8-11 D.12-16 and more
II. Measure of corporate name, image, reputation and loyalty
Items used to measure corporate name
Please answer the following statement when using four-point scale 1- strongly agree; 4-strongly disagree.
1. The name of the company (IKEA) is well known. 2. The products of IKEA carrie the name of the company.
37 3. The product carries both the company name and its generic name (e.g. IKEA MALM). 4. The company extends its name to all the products it produces.
5. IKEA uses different brand names for each product it produces.
Items used to measure corporate image
1. IKEA is innovative and pioneering. 2. IKEA is successful and self-confident. 3. IKEA is persuasive and shrewd. 4. IKEA does business in an ethical way. 5. IKEA is open and responsive to consumers.
Items used to measure corporate reputation
1. IKEA has an emotional appeal to me.
2. IKEA undertakes some social responsibilities. 3. IKEA is known for its high quality products and services.
4. IKEA is the industry leader.
5. IKEA has a good workplace environment. 6. IKEA has a good financial situation.
7. IKEA fulfills the promises that it makes to its customers.
Items used to measure corporate loyalty
1. The product/model I purchased is only offered by IKEA that I used to patronize. 2. IKEA which offers the product is overtaking its competitors.
3. I have an affection and emotional appeal to IKEA that produces the product. 4. I have a high regard to the company’s products.
5. I always use/purchase the company’s products. III. Demographic information about the participants
38 1. What is your age?...
2. What is your gender? 1. Male 2. Female 3. What is your maritalstatus?
4. What is your education level? High school, Bachelor, Matster, PhD 5. What is your occupation?... 6. What is your income?... 7. Where are you from? 8. Where do you live?
Factor Analysis I: Corporate Loyalty, combined variables from Bulgarian and English
Communalities Initial Extraction CorpLoyaltycombined1 1,000 ,592 CorpLoyaltycombined2 1,000 ,747 CorpLoyaltycombined3 1,000 ,905 CorpLoyaltycombined4 1,000 ,905 CorpLoyaltycombined5 1,000 ,784
Extraction Method: Principal Component Analysis.
Total Variance Explained
Compo nent
Initial Eigenvalues Extraction Sums of Squared Loadings
Total % of Variance Cumulative % Total % of Variance Cumulative %
1 3,934 78,689 78,689 3,934 78,689 78,689
2 ,588 11,755 90,444
3 ,261 5,227 95,672
4 ,216 4,328 100,000
5 -1,608E-16 -3,215E-15 100,000
39 Component Matrixa Component 1 CorpLoyaltycombined1 ,770 CorpLoyaltycombined2 ,865 CorpLoyaltycombined3 ,951 CorpLoyaltycombined4 ,951 CorpLoyaltycombined5 ,886
Undefined error #11401 - Cannot open text file "C:\Program
Files\SPSSInc\Statistics17\lang\en\spss.e a. 1 components extracted.
Rotated Component Matrixa
a. Only one component was extracted. The solution cannot be rotated.
40 Case Processing Summary
N %
Cases Valid 130 100,0
Excludeda 0 ,0
Total 130 100,0
a. Listwise deletion based on all variables in the procedure.
Reliability Statistics Cronbach's Alpha Cronbach's Alpha Based on Standardized Items N of Items ,931 ,931 5 Item Statistics Mean Std. Deviation N CorpLoyaltycombined1 2,1000 1,19981 130 CorpLoyaltycombined2 1,9692 1,07067 130 CorpLoyaltycombined3 2,4615 1,29491 130 CorpLoyaltycombined4 2,4615 1,29491 130 CorpLoyaltycombined5 2,4462 1,27018 130
Inter-Item Correlation Matrix
CorpLoyaltycom bined1 CorpLoyaltycom bined2 CorpLoyaltycom bined3 CorpLoyaltycom bined4 CorpLoyaltycom bined5 CorpLoyaltycombined1 1,000 ,708 ,609 ,609 ,550 CorpLoyaltycombined2 ,708 1,000 ,732 ,732 ,677 CorpLoyaltycombined3 ,609 ,732 1,000 1,000 ,835 CorpLoyaltycombined4 ,609 ,732 1,000 1,000 ,835 CorpLoyaltycombined5 ,550 ,677 ,835 ,835 1,000
41 Item-Total Statistics
Scale Statistics
Mean Variance Std. Deviation N of Items
42
43
44 Item Statistics Mean Std. Deviation N CorpREPutationcombined6 1,8154 ,93829 130 CorpREPutationcombined7 1,7462 ,95082 130 CorpREPutationcombined1 2,1000 1,19981 130 CorpREPutationcombined2 1,9692 1,07067 130 CorpREPutationcombined3 2,4615 1,29491 130 CorpREPutationcombined4 1,9923 1,09613 130 CorpREPutationcombined5 2,4462 1,27018 130
45
Factor Analysis III: Corporate image, combined items from Bulgarian and English
Component Matrixa Component 1 CorpIMAGEcombined1 ,892 CorpIMAGEcombined2 ,907 CorpIMAGEcombined3 ,903 CorpIMAGEcombined4 ,913 CorpIMAGEcombined5 ,913
Undefined error #11401 - Cannot open text file "C:\Program
Files\SPSSInc\Statistics17\lang\en\spss.e a. 1 components extracted.
Rotated Component Matrixa
46 Rotated Component
Matrixa
a. Only one component was extracted. The solution cannot be rotated.
47
49
50
H1: T-Test Interaction between reputation and country
Group Statistics
Country of origin N Mean Std. Deviation Std. Error Mean
Reputation Bulgaria 93 2,1444 ,67975 ,07049
The Netherlands 24 2,1250 ,48639 ,09928
H2: T-Test interaction between corporate image and country
Group Statistics
Country of origin N Mean Std. Deviation Std. Error Mean
IMAGE Bulgaria 94 1,8766 ,83530 ,08615
The Netherlands 24 2,0000 ,45683 ,09325
H3: PROCESS Hayes: Moderation effect of country on the interaction between
corporate reputation and corporate image
Run MATRIX procedure:
***************** PROCESS Procedure for SPSS Release 2.13 *************** Written by Andrew F. Hayes, Ph.D. www.afhayes.com
51 ************************************************************************** Model = 1 Y = IMAGE X = Repu M = Coutry Sample size 117 ************************************************************************** Outcome: IMAGE Model Summary R R-sq MSE F df1 df2 p ,7132 ,5087 ,2850 38,9929 3,0000 113,0000 ,0000 Model
coeff se t p LLCI ULCI constant -,0065 ,1841 -,0355 ,9718 -,3713 ,3582 Coutry 1,1250 ,5313 2,1176 ,0364 ,0725 2,1776 Repu ,8675 ,0819 10,5954 ,0000 ,7053 1,0297 int_1 -,4527 ,2431 -1,8625 ,0651 -,9342 ,0288 Interactions:
int_1 Repu X Coutry
R-square increase due to interaction(s):
R2-chng F df1 df2 p int_1 ,0151 3,4690 1,0000 113,0000 ,0651
************************************************************************* Conditional effect of X on Y at values of the moderator(s):
Coutry Effect se t p LLCI ULCI
,0000 ,8675 ,0819 10,5954 ,0000 ,7053 1,0297
1,0000 ,4148 ,2289 1,8126 ,0725 -,0386 ,8682
Values for quantitative moderators are the mean and plus/minus one SD from mean.
Values for dichotomous moderators are the two values of the moderator. ******************** ANALYSIS NOTES AND WARNINGS ************************* Level of confidence for all confidence intervals in output:
95,00
NOTE: Some cases were deleted due to missing data. The number of such cases was:
13
52
H4: T-Test Interaction between corporatename and country
Group Statistics
Country of origin N Mean Std. Deviation Std. Error Mean
corporatename Bulgaria 94 2,0915 ,73888 ,07621
The Netherlands 24 2,1583 ,63240 ,12909
H5: Process Hayes: Moderation effect of country on the interaction between corporate
name and corporate image
Run MATRIX procedure:
***************** PROCESS Procedure for SPSS Release 2.13 *************** Written by Andrew F. Hayes, Ph.D. www.afhayes.com
Documentation available in Hayes (2013). www.guilford.com/p/hayes3 ************************************************************************** Model = 1 Y = IMAGE X = CorpN M = Coutry Sample size 118 ************************************************************************** Outcome: IMAGE Model Summary R R-sq MSE F df1 df2 p ,6412 ,4112 ,3614 26,5364 3,0000 114,0000 ,0000 Model
coeff se t p LLCI ULCI constant ,3236 ,1870 1,7299 ,0863 -,0470 ,6941
