Utilizing country image and well-known products for less-known products

Introduction

The product images of American branded jeans, German automobiles, and Japanese electronics in the global market are proven and prevalent (Nagashima, 1970). However, what are the current images of recently developed countries and their “less-known” products, such as South Korea and Korean apparel, in the American market? Many countries in the Far East, except for Japan, have yet to develop a clear image and position in the western market. Although they have recently gained sufficient industrial capabilities and infrastructure for internationalization through national economic development, it is still unclear what would be an effective way for them to introduce their “unknown” products to western consumers and where to start.

This study suggests utilizing the two levels of halo constructs – the country’s general image among consumers and a well-known product category from the country – in marketing a less-known product category from a recently developed country, and examines whether utilizing those two levels is effective through empirical testing. For the first level of halo effect, utilizing the halo effect of country image in product marketing is not a new notion. Over the past 50 years, country image researchers have found that early-developed countries’ well-known products (e.g. American jeans and German automobiles aforementioned) were significantly benefited by their competitive country images (Erickson et al., 1984; Johansson et al., 1985; Nagashima, 1970). For these countries, expansion of foreign market entries is not as challenging as their first foreign market entry as most global consumers already have positive prior experiences, knowledge, and favoritism toward their products, thus readily welcoming their new products. However, what about the case of recently developed and emerging countries that have no competitive country images among consumers? Is it also beneficial for them to leverage their new products with their yet-to-be-developed country images? Departing from the past research that predominantly focused on the contexts of developed countries’ well-known products, this study focuses on utilizing halo effect of general country image in the context of a recently developed country’s less-known product that currently has a low competitive image among foreign consumers, such as Korean apparel among American consumers.

Further, this study examines if those recently developed countries can utilize the image of their relatively more known product category in improving consumer expectations toward their new product category, through another level of halo effect. For instance, in the light of halo theory’s original assumption that consumers assess an unknown trait of an object based on the images of the known traits of the object, this study examines whether consumers having a positive image toward Korean cell phones (well-known product category) can also have a positive estimated image toward Korean apparel (less-known product category), even though they have yet to experience Korean apparel directly. Past researchers have shown that it is possible that the image of one particular well-known product category can influence consumers’ expectations toward the other similar product categories from the same country (Agarwal and Sikri, 1996). However, it is not yet unveiled if such halo effect across product categories also exists between two completely heterogeneous product categories, such as cell phones and apparel, although that examination could be an interesting evidence of a stronger halo effect than the one between similar product categories. The findings of these two levels of halo effect will reveal if a recently developed country with low country image can effectively utilize general country image and its well-known products in entering the global market with a new product category. Eventually, such findings will provide significant implications to many recently developed and emerging countries in and around Asia, where most countries are yet to build either a strong country image or a competitive product image among the American and other western markets.

In the following sections, first, the literature of halo theory and country image will be reviewed to identify the research gaps related to the context of recently developed country’s unknown products, and to provide theoretical bases for utilizing country image and well-known products in marketing those countries’ unknown products. Based on this, hypothesis statements will be developed to examine whether there are significant relationships between a recently developed country’s general country image, well-known products, and less-known products, followed by research methodology for testing those hypotheses. Subsequently, the findings of research will be presented with discussion, implications, and limitations of those findings.

Literature review and hypotheses

Country image

Country image is one of the most heavily studied topics in the international marketing research with over 400 research papers published on the topic during the past 50 years (Papadopoulos, 2007). In the early period of research, country image was often used to simply indicate the consumers’ biases toward the products from a particular country (e.g. Nagashima, 1970). With this conceptualization, country image was measured only by consumers’ “product images” that are made by a particular country (Nagashima, 1970). However, as researchers found that those products images are not the only underlying factor that shapes the general image of a country, the concept of country image has been extended to a multi-dimensional construct that measures the overall, comprehensive image consumers hold toward one country, which includes their beliefs toward the country’s various aspects of economy, industrial and technological advancement, people, and products (Laroche et al., 2005). Researchers have explained that such advanced version of the country image concept should be distinguished from the simple “product images” of a particular country as it incorporates consumers’ images toward other aspects of the country (e.g. economy, technology, people, etc.) (Josiassen et al., 2013; Pappu et al., 2007). In other words, this means the image of America and the image of American automobiles are not the same constructs.

Nonetheless, the term “country image” is still often confused with a country’s product image in many studies without sufficient clarification of its conceptual difference. Following the previous researchers who strived to differentiate those two, this study distinguishes country image from consumers’ beliefs toward the country’s particular products which provides a conceptual justification for the halo effect being transferred from country image to two differing types of products’ images. Moreover, extending the previous studies further, this study examines the halo effect of country image on not only the country’s well-known products but also the country’s less-known products that have seldom been discussed in the literature. This research gap will be explained more in the next sections.

Theories of halo effect

The halo effect is one of the widely known “classic” theories in psychology. The term “halo” was first used by Thorndike (1920) in describing how people’s overall impression about others influences their evaluations of the others’ specific traits and abilities. This perspective is based on the cognitive consistency theory, which assumes that consumers tend to prefer maintaining a consistent set of beliefs and attitudes toward an object, thus trying to apply the current perception about the object in evaluating the new part of the object (Leuthesser et al., 1995).

In the marketing literature, the concept of halo has been applied in explaining how consumers’ perception toward “known” traits of a marketing stimuli impacts on their evaluations of the object’s other “unknown” traits serving as reference. For example, previous marketing researchers have studied how consumers’ pre-perceived value of a brand is extended to their value perception of the brand’s new product category through halo effect (Pitta and Katsanis, 1995). Also, previous researchers have investigated how consumers’ pre-built image toward a model endorsing the brand influences the brand’s product image in advertising (Erdogan, 1999), or how consumers’ prior attitudes toward a brand share their biases toward the other brand attributes thus building brand equity collectively (Leuthesser et al., 1995). In summary, the essence of halo effect that is consistent across the past research is that consumers’ existing knowledge and perception of the known traits of an object influences their perceptions of the unknown traits of the object.

The halo effect of country image and research gaps

In relation to country image, the halo theory has provided a rigid theoretical base in explaining how country image influences consumers’ beliefs toward products from that country. From an early period of research, researchers have viewed country image as a halo construct that influences the images of the country’s variety of products (see Table I). Those assumptions were modeled by Han (1989) as “the halo model,” which theorizes that consumers’ existing perception of country image directly affects their beliefs toward the products from the country, such as consumers applying the image of USA on American products. Since Han’s (1989) proposal, the halo model of country image has been adopted as one of the most popular theoretical frameworks in studying the role of country image on consumers’ product choice. Researchers have continuously attempted to verify and advance the model through empirical research (e.g. Agarwal and Sikri, 1996; Hui and Zhou, 2003; Iversen and Hem, 2011; Lee and Lockshin, 2011; Lin and Chen, 2006) and provided revised and extended version of the original halo model (e.g. Josiassen et al., 2013; Knight and Calantone, 2000). Selected country image literature is summarized in Table I, including the studies that directly applied the halo model.

However, Table I presents an existing gap in the past country image research in terms of the research contexts. Despite the heavy volume of extant literature, most studies are predominantly focused on the contexts of early-developed countries (e.g. USA, Japan, Germany, etc. – mostly western developed countries, with Japan being an exception) and their well-known products, such as American cars, German cars, and Japanese televisions (see Table I). In other words, research from the perspective of a recently developed country’s less-known/new products has been scarce in the literature. Filling this gap is important mainly in two ways: first, although those early-developed western countries along with Japan were the major exporters in the global market, which could explain the past research focus on those countries, today the positions of many recently developed and emerging countries (e.g. South Korea, China, Brazil, etc.) in the global market have substantially changed. As these countries rise as the major exporters in today’s market, and are striving to enter foreign markets, it is worthwhile to examine their re-positioned images among foreign consumers and explore ways to market their less-known products. Second, the importance of exploring the role of halo effect on less-known products has already been proposed by Han’s (1989) original halo model. One of his critical propositions was that the halo effect of country image can be especially greater for a country’s less-known/new product category because consumers have little access to the product information other than their images toward the origin country (e.g. their usage experiences, word-of-mouth from others, quality ratings, etc.), thus tending to rely more on country image in assessing the products (Han, 1989). However, despite this proposition being made in 1989, there still have been very little attempts to empirically test such a proposition to reveal if halo effect is actually critical in the context of less-known products of a country.

Furthermore, the existing research could not provide a clear answer if a country’s well-known product category, such as Korean cell phones, can make any impact on foreign consumers’ expectations toward the country’s less-known/new products. Examining the possibility of such a level of halo effect could be very useful since recently developed and emerging countries often face difficulties in introducing their new products, as they are lack of existing resources that can be utilized/leveraged to position their new products (e.g. their well-known products). Noticing the promise of such an approach, a few researchers have attempted to examine the halo effect of countries’ well-known products on their less-know/new products. Agarwal and Sikri (1996) selected Japanese and German automobiles as the countries’ well-known product categories, and examined whether the competitive images of those can be transferred to the two countries’ related less-known product categories, such as trucks and bicycles. Through empirical testing, they found that consumers with positive images toward Japanese and German automobiles were more likely to have positive expectations toward the countries’ trucks and bicycles, which indicates that a country’s well-known product category can actually have a halo effect on the country’s less-known product categories (Agarwal and Sikri, 1996). In addition, by focusing on brand origin images, Iversen and Hem (2011) also found that consumers with positive image toward the brand’s origin country tend to have positive attitudes toward the brand’s potential extension to other product categories.

Though these pioneering studies have provided theoretical support to the role of well-known products’ images in developing the image of a less-known/new product, the studies still remain limited in that, they examine such halo effect only between similar product categories (e.g. cars and trucks; Agarwal and Sikri, 1996). The transfer of product image across those similar product categories was not too difficult to expect as those similar products might share common product attributes. A halo effect found between heterogeneous product categories, such as cell phones and apparel, could provide stronger implications that a positive image of well-known products could be utilized in improving the image of a less-known/new product, with almost no limits in terms of the similarity and proximity between product categories. Therefore, extending further from those previous studies, this study examines the second level of halo effect between well-known and less-known products using two heterogeneous product categories, namely, cell phones and apparel. This will be further discussed in the methodology section.

Research hypotheses

Given the existing gaps identified through literature review, this study examines the two levels of halo effect, the halo effect of general country image and the country’s well-known product, on a less-known product category from a recently developed country to unveil if these two halo constructs could be utilized in improving consumers’ expectations toward the less-known product category. Following the original halo model, the subsequent influence of those two levels of halo effects on consumers’ purchase intention is also examined. Figure 1 displays the research framework for this study with hypothesized relationships.

Country image as halo

For the first level of halo effect, this study posits that country image serves as halo thereby influencing not only the well-known product from the country, but also a less-known product category from the country. As discussed earlier, the halo theory proposed that consumers’ previous knowledge toward the known traits of an object influences their perceptions toward the unknown traits of the object (Thorndike, 1920). Following this assumption, previous researchers have found that the general country image consumers previously had influences their perception toward the well-known products from the country (e.g. Han, 1989; Josiassen et al., 2013; Laroche et al., 2005). Departing from this prevalent notion and existing approaches in the literature, this study further proposes that such halo effect will also be applied to a less-known product category from the country, based on the same assumption of the halo theory. In fact, Han (1989) proposed earlier that the influence of general country image on a less-known product could be greater than on a well-known product. Thus, H1 and H2 were developed as: H1.

Country image positively influences a consumer’s beliefs toward a well-known product category from the country.

H2.

Country image positively influences a consumer’s beliefs toward a less-known product category from the country.

Well-known product category as halo

For another level of halo effect, this study examines whether consumers’ perception toward a well-known product category can also influence their perception toward a less-known product category from the same country. The core assumption of the original halo model is that consumers tend to categorize different products under the same umbrella of the origin country, thus, when consumers evaluate a country’s less-known product category they can estimate the unknown traits of the less-known product based on what they know about the country’s well-known product (Han, 1989). Supporting this proposition, some of the past researchers have found that the pre-existing positive image of a well-known product category can actually drive positive expectations toward the country’s less-known product category among consumers, in the context of related product categories (Agarwal and Sikri, 1996). Extending this approach further, this study examines another level of halo effect from a well-known product category to a less-known product category between more heterogeneous product categories. Thus, H3 is developed as: H3.

A consumer’s beliefs toward a well-known product category positively influence his/her beliefs toward a less-known product category from the same country.

As an outcome of these halo effects, following the original halo model’s sequential relationship between country image, consumers’ product beliefs, and purchase intention of those products (Han, 1989; Nebenzahl et al., 1997), this study examines whether the halo effect of country image on each of the well-known and less-known products subsequently influences consumers’ purchase intentions of those two products. Although the past research only examined such relationship in the context of a country’s well-known products, this study tests the relationship in both cases of the well-known and less-known products: H4.

A consumer’s beliefs toward a well-known product category positively influence purchase intention.

H5.

A consumer’s beliefs toward a less-known product category positively influence purchase intention.

Methodology

Data collection

Upon IRB approval, a total of 319 responses were collected via online survey from US consumers who are aged 18 years and above. The respondents were recruited by distributing the URL of the Qualtrics survey on social network sites, and asking the respondents to share the link with their social network by using the snowball sampling technique. Among 319 responses, 253 responses were entered for data analyses after excluding incomplete responses and/or the responses that did not pass the screening questions confirming the respondents’ knowledge with two selected product categories. Details for the selected country and product categories are explained below with the measurements.

Selected country and product categories

In order to test the hypotheses, a sample country is selected, i.e., South Korea. There were two reasons for selecting South Korea. First, South Korea has different levels of reputation across product categories, therefore, was deemed to be appropriate to test the hypotheses built on both well-known and less-known product categories. For example, the country highly relies on the exports of electronics and manufactures (e.g. Samsung) (Emmott, 2010), while the other product categories, such as Korean apparel, are yet to be recognized by international consumers. Second, South Korea has grown to be the seventh largest exporter in the world (World Trade Organization, 2015) actively exporting products, such as electronics, computer parts, and automobiles. However, the country has yet to receive enough attention from the literature compared to the other top exporting countries that were industrialized earlier than South Korea, such as the USA, Germany, and Japan (see Table I). Past research that discussed South Korea only treated the country as an emerging country and used the country as a comparison variable to the other developed countries, like the USA and Japan (e.g. Han, 1989). Following the lapse in the country image literature, the position of South Korea and Korean products in the global economy has dramatically changed from the time of these studies from 1980 to 1990 (Emmott, 2010), thereby creating a need for new assessment of the country. Marketing practitioners also pointed out that a cohesive, clear country image of South Korea among international consumers is currently not sufficiently known (Emmott, 2010). For these reasons, South Korea is selected as a sample country in this study.

For the sample product categories, Korean cell phones (e.g. Samsung Galaxy) are selected as a well-known product category and Korean apparel is selected as a less-known product category. Korean cell phones are the major merchandise of Korea’s exports and they occupied about the one-third of the US cell phone market share (Beckerman, 2014). On the contrary, although the apparel industry has been one of the main forces of Korea’s economic development, the apparel sector has yet to be distinctively internationalized beyond the Asian continent (Jin et al., 2013). In the survey, three screening questions were asked at the beginning to assure the different levels of consumers’ knowledge toward these two selected product categories: “Please choose the best option that describes your knowledge of Korean cell phones (e.g. Samsung Galaxy) (I have purchased it by myself=5; I have never heard of it=1); Do you know which country Samsung Galaxy cell phone is from? If so, please write the country in the blank; Please choose the best option that describes your knowledge of Korean apparel (I have purchased it by myself=5; I have never heard of it=1). Only the respondents who were knowledgeable with Korean cell phones (e.g. Samsung Galaxy), not knowledgeable with Korean apparel, and wrote “South Korea” correctly for the country where Samsung cell phones are from were allowed to continue answering the rest of the questions in the survey.

Measurements

The survey included a total of five sections: screening questions, South Korea’s country image, product beliefs toward Korean cell phones and apparel, purchase intention of Korean cell phones and apparel, and demographic variables (see Table II). Following the suggestion in literature (e.g. Pappu et al., 2007), 13 items of country image measures were developed from three studies (i.e. Laroche et al., 2005; Lee and Ganesh, 1999; Roth and Romeo, 1992) to capture a comprehensive country image toward South Korea’s economy, technology, people, products, and desired interaction with South Korea. For example, the questions include “when you think about South Korea, the country (e.g. technologically not advanced=1; technologically advanced=7).” The product beliefs toward cell phones and apparel also followed previous studies (i.e. Abraham-Murali and Littrell, 1995; Nebenzahl and Jaffe, 1996), asking whether the respondents agree or disagree that the products have positive design, performance, expressive value, price, etc. (six items per product category, strongly disagree=1; strongly agree=7). As Table II shows, the same number and format of questions were used for each category, but some of the wordings were rephrased to sufficiently capture the characteristic attributes of each product category (e.g. “innovative technology” for cell phones; “latest fashion” for apparel). Because the respondents were screened to be knowledgeable with Korean cell phones but not with Korean apparel, the perceived product beliefs toward Korean cell phones and the “expected” product beliefs toward Korean apparel were measured, as done by the past researchers (Agarwal and Sikri, 1996). Purchase intentions of two product categories are also measured following the previous research (Han, 1990) (three items per product category, strongly disagree=1; strongly agree=7). At the end of the survey, demographic questions captured the respondents’ age and gender. Reliability tests were performed on the measurements and all of the measurements revealed acceptable reliabilities (Cronbach α=0.86-0.93).

Findings

The demographics of the 253 final respondents were aged between 18 and 67 years (mean=22) and consist mostly female (87 percent). A series of regression analyses were conducted to test hypotheses. As Table III presents, all five hypotheses were supported. Country image significantly increased the respondents’ beliefs toward both Korean cell phones (well-known product category; β=0.51, t=7.60, p<0.001) and Korean apparel (less-known product category; β=0.59, t=10.66, p<0.001), supporting H1 and H2. Specifically, the halo effect of overall country image was greater for the less-known product category, apparel, than for the well-known product category, cell phones (β=0.59 (apparel) vs β=0.51 (cell phones)).

Further, the respondents’ beliefs toward Korean cell phones positively influenced their beliefs toward Korean apparel (β=0.50, t=9.08, p<0.001), supporting H3. Overall, the respondents evaluated Korean cell phones positively (mean=5.3) and answered innovative technology (mean=5.6) as most positive. Such positive beliefs increased their beliefs toward Korean apparel. Finally, those beliefs toward both well-known and less-known product categories further increased purchase intentions (cell phones: β=0.82, t=11.62, p<0.001; apparel: β=0.75, t=12.87, p<0.001), supporting H4 and H5. In summary, the results of the five hypotheses testing revealed conceptual relationships between the variables, as shown in Figure 2.

Discussion and conclusions

This study aimed at examining the two levels of halo effect on consumers’ beliefs toward a less-known product category from a country (i.e. country image as halo and a well-known product category of the country as halo), and those beliefs’ subsequent influence on purchase intention. The results of analyzing the data of 235 respondents found support for all five hypotheses. First, as H1 and H2 predicted, the respondents’ general, positive images toward South Korea increased their beliefs toward both Korean cell phones that are well-known and Korean apparel that are lesser known. This supports the literature that posited the halo effect of the overall country image on the country’s products (e.g. Han, 1989; Josiassen et al., 2013; Laroche et al., 2005). Beyond the existing literature, this study found that such halo effect of country image is also significant in the case of a less-known product category of a recently developed country (i.e. Korean apparel).

Moreover, this study found empirical evidence of one of the key assumptions of the original halo model that was unclear in the past research. That is, the role of general country image could be especially more important to the country’s less-known product category than to the country’s well-known product category (the predicting power of country image toward the Korean apparel (β=0.59) was greater than toward the Korean cell phones (β=0.51)). While further statistical validation is needed to empirically test this statement, such result implies the evidence of greater influence of country image on the less-known product category than on the well-known product category, which was suggested by the original halo model (Han, 1989).

In addition, as H3 assumed, the respondents’ positive beliefs toward Korean cell phones increased their beliefs toward Korean apparel. This implies that although the respondents were not highly aware of Korean apparel, their positive beliefs toward the better-known product category, Korean cell phones, could significantly increase their expectations and estimated product beliefs toward Korean apparel. This finding adds support to Agarwal and Sikri (1996), who found a similar halo effect across related product categories. However, our finding goes further from their study such that our study has found such halo effect between two highly heterogeneous product categories, cell phones and apparel, which are hard to expect transfer of product images across the product categories.

Further, as H4 and H5 posited, the respondents’ positive beliefs toward Korean cell phones and apparel subsequently increased their purchase intentions of those two products. This supports the sequential relationship theorized by the Han’s (1989) original halo model (i.e. country image⇒product beliefs⇒purchase intention; Nebenzahl et al., 1997). Extending this original model further, our study found such relationship to be valid not only in the context of a country’s well-known product (i.e. cell phones) but also in the context of a less-known product (i.e. apparel). Specifically, the predictive power of product beliefs toward purchase intention was little greater in the case of cell phones (β=0.82) than in the case of apparel (β=0.75). For possible explanation, in the case of well-known product category (i.e. cell phones), the respondents might have clearer ideas about the product attributes, thereby increasing purchase intention more strongly. On the other hand, for the less-known product category (i.e. apparel), although the respondents had expected product beliefs from country image, those beliefs were still more abstract and have yet to be confirmed as compared to the well-known product category, thereby exerting lesser influence on purchase intention.

In conclusion, this study confirmed the two levels of halo effect (i.e. country image as halo and a well-known product category of the country as halo) in the context of Korean cell phones and apparel. The implications of this conclusion are discussed in the next section.

Implications and limitations

The findings of this study provide theoretical and managerial implications. First, theoretically, this study provided not only another empirical evidence of the original halo model but also contributed to the literature of halo effect by adding three new insights. First, in extension to the original halo model, this study further found that overall country image also influences consumers’ expected beliefs toward a less-known product from the country through halo effect, and such halo effect was greater for the less-known product than for the well-known product as the original model suggested and the current study empirically supported. Second, this study found such expected beliefs toward the less-known product were also increased by their existing positive beliefs toward the well-known product from the country, as another halo relationship. Finally, this study additionally found that the sequential relationship between country image, product beliefs, and purchase intention was not only applied to a well-known product from the country but also to a less-known product from the country as this study reveals.

Furthermore, the findings of the current study suggest managerial implications, especially for recently developed and emerging countries that seek an effective way to introduce their less-known products to the foreign consumers. As proposed at the beginning, this study found two possible halo constructs that those countries can utilize in marketing their less-known products in foreign markets. First, our findings revealed that general country image is an influential halo construct not only for a well-known product category from the country but also for a less-known/new product category from the country, and such a role of overall country image is even greater in the case of less-known products than in the case of well-known products. This suggests that investigating foreign consumers’ underlying impressions and pre-existing image toward the country is very important to the recently developed and emerging countries’ less-known products as such country image substantially shapes the initial image of the less-known products under the condition where consumers have little access to product information other than the origin country’s image.

Also, for the second level of halo effect, this study revealed that the existing image of a well-known product category of the country can also play a useful role in introducing the country’s new product category. Our findings presented that even though the respondents did not have any direct experiences with Korean apparel (plus, apparel and cell phones are completely differing product categories), they can have more positive estimated image toward Korean apparel based on their positive perception of Korean cell phones. This implies that the halo effect of country image could be even more powerful than past researchers proposed, to the extent that it can be transferred across the product categories that are completely heterogeneous. In addition, this finding with the case of South Korea gives a promising implication to the other recently developed and emerging countries who seek globalization. As those countries still possess limited capabilities compared to early-developed countries, they often concentrate on one or few “targeted” product categories during their early period of globalization (e.g. South Korea focused on cell phones and electronics). In that case, our finding of another level of halo effect (i.e. halo effect from well-known product category to less-known product category) implies that these countries can potentially utilize the images of their “known” products effectively in introducing their less-known/new products later, through product image leveraging, and expand their footprints in the global market.

Despite these theoretical and managerial contributions, limitations of the study still exist. First, although selecting particular countries as the context is inevitable in country image studies, this study only examined South Korea and used the two selected product categories (i.e. cell phones and apparel) as samples for the study. This may hinder generalization of the findings and, thus, empirical testing of the hypotheses in the other contexts is necessary for further generalization of our findings. In addition, the respondents were mostly female (87 percent) thus might affect the product beliefs toward cell phones and apparel that could have more interest from one of the genders than from the others. Moreover, although this study limited its focus to consumers’ “general” beliefs toward a country’s apparel product category (i.e. Korean apparel) following previous studies (e.g. Han, 1989; Laroche et al., 2005; Nagashima, 1970), future studies may segment apparel products more specifically, and examine whether the halo effect of country image differs by particular sub-categories of apparel product (e.g. Korean contemporary apparel vs Korean classic apparel) and/or price tiers (e.g. high-involvement/priced items vs low-involvement/priced items). Future studies could also examine some alternative conceptual approaches in examining the relationships between country image, well-known products, and less-known products. For instance, the moderating role of the second level of halo effect (e.g. well-known product category), between country image and the purchase intention of a less-known product, could be examined to see if the image of a well-known product dilutes or enhances consumers’ purchase intention of the less-known product.

Figure 1

The proposed research framework of the two levels of halo effect

[Figure omitted. See PDF]

Figure 2

The two levels of halo effect model: the case of South Korea

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Table I

Selected literature of country image and the research contexts

Author(s) (year)	Country	Product category
Nagashima (1970)	USA, Japan, Germany, England, France, Italy	Cars, electronics, textiles, cosmetics, foods, pharmaceutical products
Erickson et al. (1984)	Germany, Japan	Not specified
Johansson et al. (1985)	USA, Japan	Cars
Han (1989)a	USA, Japan, Korea	TV, cars
Papadopoulos et al. (1990)	USA, Japan, Canada, Sweden	Not specified
Roth and Romeo (1992)	Germany, USA, UK, Japan, Spain, Hungary, Ireland, Korea, Mexico	Beer, cars, leather shoes, crystal, bicycles, and watches
Martin and Eroglu (1993)	Germany, India	Not specified
Shimp et al. (1993)	USA, Germany, UK, France, Japan, India, Iran, Korea, Russia, Switzerland, Yugoslavia	Not specified
Parameswaran and Pisharodi (1994)	Germany, Korea	Cars, blenders
Agarwal and Sikri (1996)a	Japan, Germany	Cars, bicycles, trucks, tennis rackets
Lee and Ganesh (1999)	USA, Japan, Canada, Mexico	TV, VCR
Knight and Calantone (2000)a	Germany	Cars
Hui and Zhou (2003)a	Japan, Mexico	Electronics
Laroche et al. (2005)	Japan, Sweden	Cars, home goods
Lin and Chen (2006)a	USA, China, Taiwan	Insurance, catering service
Iversen and Hem (2011)a	USA, Germany	Skis, DVDs
Lee and Lockshin (2011)a	Australia	Wine
Josiassen et al. (2013)a	Not specified	Not specified

Note: ^aThese studies have applied the halo approach more directly than the other studies

Table II

Measurements and reliabilities

Variable	Items		Scale	Source	Cronbach’s α
Country image	Overall country Poor – Rich Technologically not advanced – Advanced Low level of education – High level of education People Not trustworthy people – Trustworthy people Not hardworking people – Hardworking people Not likeable people – Likeable people Products Not innovative products – Innovative products Old-fashioned products – Trendy products Non-prestige products – Prestige products Products with low workmanship – high workmanship Desired interaction We should not have close tie with South Korea – We should have close tie with South Korea Not ideal country – Ideal country		Seven-point semantic differential	Laroche et al. (2005) Lee and Ganesh (1999) Roth and Romeo (1992)	0.91
Product beliefs	Cell phones Attractive design Innovative technology High-quality performance High expressive value Good service Good price value	Apparel Attractive design Latest fashion High-quality workmanship High expressive value Good comfort Good price value	Seven-point Likert	Abraham-Murali and Littrell (1995), Nebenzahl and Jaffe (1996)	0.93, 0.91
Purchase intention	I am willing to buy __________ I would definitely intend to buy __________ The likelihood that I would buy __________ is high		Seven-point Likert	Han (1990)	0.93, 0.91

Table III

Hypotheses testing: results of regression analyses

Hypotheses	R2	β	Std. β	F	t-value
H1. Country image⇒Well-known product category	0.21	0.51	0.45	57.78	7.60***
H2. Country image⇒Less-known product category	0.33	0.59	0.58	113.60	10.66***
H3. Well-known⇒Less-known product category	0.26	0.50	0.51	82.38	9.08***
H4. Well-known product category⇒Purchase intention	0.36	0.82	0.60	135.07	11.62***
H5. Less-known product category⇒Purchase intention	0.41	0.75	0.64	165.67	12.87***

Notes: n=235. ***p<0.001