COMM 4841 Thesis EFFECTS OF A BRAND’S … OF A BRAND’S COUNTRY OF ORIGIN ON CONSUMER BEHAVIOR IN...
Transcript of COMM 4841 Thesis EFFECTS OF A BRAND’S … OF A BRAND’S COUNTRY OF ORIGIN ON CONSUMER BEHAVIOR IN...
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COMM 4841 Thesis
EFFECTS OF A BRAND’S COUNTRY OF ORIGIN ON CONSUMER BEHAVIOR IN
BRAZIL
Aline Avigdor Altschul April. 24th, 2015
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INTRODUCTION
Consumers in developing countries often face the challenge of choosing between local and
nonlocal, foreign products. The motives and implications of this choice-making process are worth
researching, because companies can use such information to more effectively market their products.
In particular, the marketing literature has considered how a brand’s country of origin (CO), or the
country with which a brand is associated, influences consumers’ perceptions of a brand’s quality, and
of their own social status or identity. Most of the primary research in the area of country of origin
“sought to understand risk-reducing biases used by Western consumers when evaluating products
from, among others, less developed, and therefore, “risky” countries or regions” (Batra et al., 2000:
84). Much of the existing research focuses on quality, examining CO as a “halo” construct that
influences consumers’ believes about a product’s quality (Han, 1989). However, recent research
found that CO influences other aspects of consumers’ product evaluations, and that this relationship
is affected by consumers’ level of national identification and ethnocentrism (Verlegh, 2007).
More specifically, it is important to study the country of origin effect in developing
countries. While some country of origin effects may be the same as in Western countries, others may
be unique to the developing countries context. Unlike Western consumers, consumers in developing
countries often look up to American and Western Europe consumption practices and lifestyles,
trying to emulate those practices by purchasing brands they see on movies, TV, or on their trips
overseas (Batra et al., 2000). Therefore, it is essential to understand consumer behavior in
developing countries due to increasing exposure to local brands, and the increased importance of
these emerging markets in the world economy. This thesis expands on the research of country of
origin by analyzing the impact of CO on the perceptions of Brazilian consumers. Brazil is a
developing country that lacks research on this topic. Specifically, I advance hypotheses regarding
the influence of national identity and admiration for foreign lifestyles on consumers’ purchase
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intentions and perceptions of quality. I also hypothesize the moderating effects of publicly
consumed products and a product category that closely relates to national identity on both effects.
CO studies of developing countries have focused on the implications of quality, status, and
identity on consumer behavior, primarily in Turkey and India. These countries have similarities in
terms of inequality, economic growth in the past decades, and emergence of the middle class.
Turkey, for example, went through a shift from scarcity to market abundance in the 1990s, and the
experience of Turkish consumers can offer a perspective on how the same shift may affect
consumers in other developing countries (Belk 1988). On the other hand, India has a history of
colonization, the last being by the British. As a result, many people argue that Indians still have an
“inferiority complex” and wish to reproduce foreigners’ behaviors and purchase nonlocal products
(Batra et al., 2000). Overall, studies in both India and Turkey exemplify the developing country
context and provide a perspective on how country of origin research can be extended into emerging
markets that currently lack research on this topic, such as Brazil.
In this study, I tested four different hypotheses regarding the effects of country of origin on
consumer behavior in Brazil. I suggest that, as their level of national identity increases, Brazilian
consumers will be more likely to purchase domestic brands and perceive those brands as having
better quality than foreign brands. I suggest that the opposite will happen as the level of admiration
for foreign lifestyle increases. I also examined the extent to which the effects of admiration for
foreign lifestyles and national identity are moderated by whether a product is privately or publicly
consumed, and by whether the given product category is identified with Brazil. I tested these
hypotheses using three different product categories—toothpaste, athletic shoes, and coffee.
Consumer surveys were administered online through Amazon Mechanical Turk and facebook.com.
Overall, while some results were not statistically insignificant because of the limitations discussed
later in this study, I was able to find very interesting results. I expected to find that both willingness
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to purchase and perceived quality of the domestic product increases over the foreign product as the
level of national identity increases. However, I was unable to find any statistically significant results
to draw a conclusion. The same happened to the proposed effect of admiration for foreign lifestyles.
However, I found that, as a product is publicly consumed and consumers show low admiration for
foreign lifestyles, they are more likely to perceive the domestic brand to have better quality than the
foreign brand, which is consistent with the hypothesis. Additionally, if the product category is
identified with Brazil and the consumer has low national identity, perceived quality of the domestic
product over the foreign product is higher. Also, when a product category is identified with Brazil
and national identity is high, perceived quality of the domestic over the foreign product is lower.
These findings are, interestingly, not consistent with the hypothesis. Lastly, I found that if the
product is closely identified with Brazil and admiration for foreign lifestyles is low, willingness to
purchase the domestic brand over the foreign brand is lower. However, if the product is closely
identified with Brazil and admiration for foreign lifestyles is high, willingness to purchase the
domestic brand over the foreign brand increases. These findings are also, interestingly, inconsistent
with the proposed hypotheses.
LITERATURE REVIEW AND HYPOTHESIS
Marketing scholars argue that “a brand’s CO serves as an extrinsic cue (along with price and
brand name) that supplements the use of intrinsic cues (perceptions of design, performance, etc.)”
(Batra et al., 2000: 84). In other words, consumers may use a brand’s country of origin when drawing
inferences about a product’s quality. Additionally, consumers may use CO to draw conclusions
about others’ social status and national identity. The research below has extended the discussion on
CO and how it affects purchase decisions in both developed and developing countries.
In developed countries, a stream of literature suggests that country image serves as a halo to
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consumers’ product evaluations (Han, 1989). When evaluating unknown products, consumers may
be unable to detect their true quality, therefore using country image to reach a conclusion (Huber
and McCann, 1982). However, when consumers are familiar with a certain product, they use country
image as a construct (Han, 1989). In other words, they use CO as a product characteristic that
summarizes their beliefs about the product’s attributes. Another stream of literature suggests that, in
developed countries such as the United States and the Netherlands, consumers tend to indicate high
levels of consumer ethnocentrism. The latter is defined as the consumer desire to protect the
domestic economy, as they view the purchase of foreign, or imported goods, as wrong because it
hurts the economy (Verlegh, 2007). Therefore, those consumers tend to rate domestic products
positively and foreign ones negatively as a way to protect their country’s economy (Verlegh, 2007).
Overall, consumers in developed countries tend to use country of origin to infer quality and
as a way to protect their economies through domestic consumption. However, results may change
when one tests country of origin effects in developing countries, given differences in culture, history,
and institutions. Research has shown that consumers in those countries also use CO to infer quality,
but may also use it for status enhancing purposes and as a result of high levels of admiration of
foreign lifestyles (Batra, et al., 2000).
Prior country of origin research in developing countries shows that there is a positive
relationship between perceived quality and purchase intention of nonlocal brands. Kumar et al.
(2008) study of “Indian consumers’ purchase intention toward a United States versus a local brand”
found that, in India, there is a positive relationship between perceived quality and purchase intention
of American products, such as with the Levi’s brand. Additionally, Indian consumers that have more
positive attitudes toward American products tend to believe that local brands have inferior quality.
These findings are in line with previous studies that show that, in terms of quality, consumers in
developing countries have the tendency to evaluate foreign or U.S. products more positively when
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compared to local products. That is because developed countries tend to have higher expertise in
product development and lead innovations, more often than developing countries. That can be
particularly true in the electronics product category with companies such as Apple and Microsoft.
Additionally, another study conducted by Kinra in India suggests that, contrary to studies in
developed countries, high levels of consumer ethnocentrism and national identification does not
indicate preference for local brands. In fact, those consumers evaluate nonlocal products higher than
local ones in aspects such as technology, quality, status, esteem, and higher credibility (Kinra, 2006).
The reason that different results are found in developing countries is because even though
consumers in those countries may hold the same ideals as consumers in developed countries (e.g., a
high level of ethnocentrism), additional factors influence their preferences for local and nonlocal
brands.
Lastly, a stream of literature suggests that consumers in developing countries believe a
brand’s country of origin has implications for one’s social status, and these beliefs may also affect
their decisions when choosing between local and nonlocal brands. If they purchase a foreign brand
product, for example, that may signal higher social status to other members of the society in which
one lives. As mentioned above, consumers in emerging markets often praise consumer lifestyle in
developed countries (Batra et al., 2000), whereas consumers in the latter often purchase local brands
due to high levels of ethnocentrism (Verlegh, 2007). For consumers who have a greater admiration
for lifestyles in developed countries, country of origin has a greater effect on the decision to
purchase nonlocal brands. The same result was found for product categories that have high levels of
social signaling value (Batra et al., 2000). In Turkey and Romania, consumers prominently favor
foreign, mainly Western European products, as a way to enhance their social status since
interpersonal relations are extremely important: “In Turkey, interest in consumption is obvious not
only in wants but also in the prominent display of, and talk about, products – specially the status
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brands” (Ger et al., 1993: 105). In conclusion, results show that interest in consumption comes from
the desire to display and talk about products, mainly those from foreign brands that signal high
social status (Ger et al., 1993). Overall, the effects of country of origin in consumer behavior in
Turkey, Romania, and India may be an example of purchase behavior in other developing
economies (Belk, 1988), making it important to study country of origin effects in other emerging
markets such as Brazil.
THE BRAZILIAN SITUATION
Overall, prior research shows that a brand’s country of origin affects attributions made about
quality and social status. National identity has also been documented to affect purchase behavior.
This research has focused on the implications of those factors in developed countries such as the
U.S, Netherlands (Verlegh, 2007), and developing countries such as Turkey, Romania (Ger et al.,
1993), and India (Kinra, 2006); Kumar et al., 2008). However, this study proposes that similar
factors will also affect consumer behavior in Latin America. More specifically, it is crucial to
understand the consumer base in Brazil because of its large size and importance, given that lower
social classes have rapidly moved socially and gained purchasing power in the past decade.
Additionally, Brazil is the world’s 7th largest economy, what makes it important to study the effects
of country of origin in Brazil.
Like other countries in Latin America, Brazil has an export-oriented economy since
colonization in 1500. During the period of industrial expansion between 1880 and 1930 in Europe
and in the United States, different forms of production of raw materials expanded throughout Latin
America, leading to a shift in class structure and political reorganization (Orlove, 1997).
Consequently, “this export-based growth allowed the wealthy to import many luxuries and the
masses to replace local crafts such as textiles and pottery with cheap manufactured items form
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Europe and North America” (Orlove, 1997: 2). After the Great Depression in 1929, demand for
Latin America products dropped significantly, causing countries like Brazil to manufacture the
products previously imported from developed regions, but not with the same knowledge, capacity
and quality. The period thereafter was marked by strong state participation in the economy and
leftist dictatorships that gave importance to the growing working class (Orlove, 1997).
Throughout the twentieth century, Latin America faced increased wealth and income
inequalities. The elite in those countries, be it in the capital of Argentina, Brazil, Peru, or Chile,
“imported grand pianos, European wines and liquors,” traveled abroad, and sent their children to
European schools – and believed that in doing so, they were “sharing the same activities and
attitudes of the international gentry” (Orlove, 1997: 5, Beezley 1987: 14). In other words, the elite
had access to imported goods and consumption, looking up to foreign practices, and differentiating
themselves from and leaving the masses with little accessibility to those products. In ‘The Allure of
the Foreign,” Orlove argues that it is important to understand the social and cultural implications of
export-oriented economies that emphasize affordability of imports. In other words, “foreignness is
an attribute of the imported goods that merits consideration, like their affordability and cost.”
(Orlove, 1997: 7)
The notions of modernity in Latin America that persist today provide context to the study of
country of origin effects in consumer behavior in the region, such as in Brazil. It is “a break from
the traditions of the past, a valuation of the present, an openness toward experimentation in seeking
to construct a future different from both. Modernity appears almost always as an international
movement, but Latin American participation in it was problematic, since the centers of modernity
lay in Europe and the United States.” (Orlove, 1987: 8).
Lastly, it is important to study the effects of a brand’s country of origin in Brazil because of
the history of cultural influence and because of the country’s significant participation in the global
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economy. With the increase of the middle class in the past decade, Brazilians have, more than ever,
access to foreign products and trips abroad. With the current exposure to international tourists
through large sporting events, to the English language and the influential role of the TV, Brazilians
are more susceptible to foreign lifestyle influence. The results of such study will provide valuable
information to both local and nonlocal brands that currently sell in the country, and to those that
wish to enter Brazil.
NATIONAL IDENTITY AND PURCHASE BEHAVIOR OF BRAZILIAN
CONSUMERS
Given Brazil’s history of cultural influence, I aimed to understand whether national identity
is powerful enough to drive purchase intention of local brands. National identification is “rooted in
consumers’ need to enhance group and self-esteem, and based on a desire for positive social
identity” (Verlegh, 2007). More specifically, nationality is part of a consumer’s identity, and can be
expressed in the purchase of domestic products, since they have important social and cultural
connotations (Askegaard and Ger, 1998). This concept can be confounded with consumer
ethnocentrism, which “reflects the desire of consumers to protect domestic economy, […] viewing
the purchase of imported products as wrong, because it hurts the domestic economy” (Verlegh,
2007). Since both concepts of national identity and consumer ethnocentrism can overleap, I
measured both in the data collection so that I did not confound them. However, given that social
influence tightly relates to national identity, I focused on analyzing the latter in the hypotheses.
Furthermore, the same effect also pertains to national identification and perceived quality.
The stream of literature in national identity also argues that this factor influences consumer’s
perception of a product’s quality according to whether the product is local or nonlocal. The higher
the level of national identity, the more favorable consumers are to domestic products and more
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likely they are to perceive them to have better quality than foreign goods. Therefore, I hypothesize:
H1a: As a consumer’s level of national identity increases, their willingness to purchase
domestic brands over foreign brands increases.
H1b: As a consumer’s level of national identity increases, their perception of quality of
domestic brands over foreign brands increases.
Brazil has a history of admiration for foreign lifestyles. As previously mentioned, wealthy
and middle class individuals now purchase foreign goods for several reasons: export oriented
economy, willingness to consume the same modern and high quality brands as Western Europeans
and Americans, and the desire to emulate their lifestyles. As discussed, previous research has also
found that in developing countries such as India, Turkey and Romania, consumers exhibit high
levels of admiration of foreign lifestyles. They are also more likely to perceive a foreign brand to
have better quality and are more willing to purchase the foreign brand (Batra et al., 2000; Ger et al.,
1993). Thus, CO effects should be stronger when consumers have high levels of admirations of
foreign lifestyles. Therefore, I tested the following in Brazil:
H2a: As a consumer’s level of admiration of economically developed countries’ lifestyles
increases, their willingness to purchase foreign brands over domestic brands increases.
H2b: As a consumer’s level of admiration of economically developed countries’ lifestyles
increases, the perceived quality of foreign over domestic brands increases.
Additionally, the reason many consumers prefer non-local brands is because they believe
those products have a reference group appeal (Batra et al., 2000). In other words, a consumer in a
developing country thinks that nonlocal brands appeal to certain social groups and will influence his
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or her social status in the eyes of those groups. However, these effects should be dependent on
whether products are publicly consumed, given that only products that one observes another
consumer use can influence his or her evaluations. Thus, in order to measure how attitude varies
according to social status and admiration of foreign lifestyles, it is important to understand
behavioral changes when a product or brand is publicly consumed compared to when a product is
privately consumed. This hypothesis has not yet been tested in other studies of developing
countries. Therefore, this study will contribute to the overall country of origin literature and more
specifically about the latter in Brazil. I therefore hypothesized:
H3: The effects proposed in hypothesis 1 and hypothesis 2 will be moderated by whether or
not the product is publicly or privately consumed, such that the effects are stronger when a
product is publicly consumed.
Lastly, it is interesting to study how the effects of national identification and admiration of
foreign lifestyles might differ for a product category that is strongly associated with Brazil versus a
category that does not have this association. When a product category is associated with Brazil, one
would expect to see stronger effects of national identification and weaker effects of admiration of
foreign lifestyle on the consumers’ perceptions of quality and purchase intention of local brands. As
previously mentioned, national identity can be expressed through the purchase of domestic
products, as they may have important social and cultural connotations (Askegaard and Ger, 1998).
Therefore, it is expected that, the more consumers identify themselves with the country, the more
likely they will be to consume a product that falls into a category that is identified with their country.
Similarly, one would expect a weaker effect on high levels of admiration of foreign lifestyles, given
that consumers would choose not to purchase a brand if that is highly associated with their own
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country. Therefore, I hypothesized:
H4a: The effects proposed in hypothesis 1 will be moderated by the extent to which
consumers perceive the product category to be identified with Brazil. The effects will be
stronger the more the product category is identified with Brazil.
H4b: The effects proposed in hypothesis 2 will be moderated by the extent to which
consumers perceive the product category to be identified with Brazil. The effects will be
weaker the more the product category is identified with Brazil.
METHODOLOGY In this research, I collected data through two studies. The first study tested the proposed
relationships between national identity (hypotheses 1a & 1b) and admiration of foreign lifestyles
(hypotheses 2a & 2b), and their effects on purchase intention and perceived quality. It also tested the
moderating effect of private vs. public consumption (hypothesis 3). The second study also tested
hypotheses 1a, 1b, 2a & 2b, as well as the moderating effect of the national identity of the product
category (hypothesis 4a & 4b). I planned to collect data by conducting online surveys with Brazilian
consumers through Amazon Mechanical Turk (MTurk). The latter is a crowdsourcing marketplace
that serves as an information gathering pool. Originally, I intended to use this system because it has
proven to be a valuable tool for data collection when the surveys considered the domain of
consumption and include screening questions that measure attention and language comprehension
(Goodman et al., 2012). Across the two studies, four hundred Brazilian respondents were expected
to complete a short online survey in exchange for 51 cents. A Portuguese version of the
questionnaire (translated from the English version shown on Exhibit 1) was used given that most
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Brazilians are not fluent in the English language. There was also no age or gender restriction in
either of the studies.
STUDY 1
DESIGN AND PROCEDURE
Study 1 focused on testing the proposed relationships between national identity (hypotheses
1a & 1b) and admiration of foreign lifestyles (hypotheses 2a & 2b), and their effects on purchase
intention and perceived quality. It also tested the moderating effects of public versus private
consumption proposed in hypothesis 3. Thus, study 1 utilized national identity (continuous),
admiration of foreign lifestyles (continuous), product category (binary; publicly vs. privately
consumed), and product origin (binary; Brazilian vs. American) as the factors of interest.
Two hundred Brazilian respondents were expected to participate in this study. First, they
were randomly shown one of four advertisements (please refer to exhibits 3-6 for the English
version of the ads used in study 1). The ads varied in whether or not they utilized a fictitious
American or Brazilian brand name, and whether the product category presented was publicly or
privately consumed – athletic shoes (publicly consumed) or toothpaste (privately consumed).
Respondents were then asked questions about perceived brand quality, perceived brand origin, and
intent to purchase the advertised product. Please refer to exhibit 1 for a chart that indicates the
survey questions. Respondents were then asked to answer items relating to national identity,
consumer ethnocentrism, admiration of lifestyles in economically developed countries, and
demographics. As previously mentioned, national identity and consumer ethnocentrism were both
included to ensure that these factors were not confounded.
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The inclusion of two different product categories (toothpaste and athletic shoes) allowed me
to test how consumer behavior is influenced by reference group appeal and social status (hypothesis
3). Evaluations of athletic shoes (publicly consumed) were compared to evaluations of toothpaste
(privately consumed) to test hypothesis 3. Originally, within each of these product categories, fifty
respondents were expected to answer questions about a
fictitious Brazilian brand, and the other fifty about a
fictitious American brand. The table on the right shows
how study participants were supposed to be divided
between conditions.
STUDY 2
DESIGN AND PROCEDURE
Similar to study 1, study 2 tested the levels of national identity (hypotheses 1a & 1b), levels
admiration to foreign lifestyles (hypotheses 2a & 2b), and their effects on purchase intention and
perceived quality. Thus, study 2 utilized a similar design and procedure to study 1 with one notable
exception. Rather than examining the moderating role of public vs. private consumption, study 2
tested whether purchase intention and perceived quality changed when presented with a product
category that closely relates to national identity (hypotheses 4a & 4b). To test these hypotheses, this
study used two privately consumed product categories.
As with study 1, respondents were asked to view one of four advertisements that varied on
brand name (fictitious American vs. Brazilian brand) and product category (strongly vs. weakly
linked to national identity). Please refer to exhibits 7-10 for the English version of the ads used in
study 2. Respondents were then asked questions about perceived brand quality, perceived brand
origin, and intent to purchase the advertised product. Following the ad questions, respondents
Total respondents: 200
Number of respondents per survey
US Brand Brazilian Brand
Athletic Shoes 50 50
Toothpaste 50 50
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answered questions on national identity, consumer ethnocentrism, admiration of lifestyles in
economically developed countries, and demographics. The product categories used for this study
were home-brewed coffee (strongly linked to national identity) and toothpaste (weakly linked to
national identity). By dividing the survey into two different product categories, I was able to measure
how respondents reacted to privately consumed products with different degrees of identification
with Brazil, removing any reference group or social status effects. One category represents an
everyday product (toothpaste), and the other category, coffee, is strongly linked to the
Brazilian national identity. In the 19th and 20th century, the Southeast region of Brazil specialized in
coffee production and its exportation, which made this product known for its high quality
worldwide. No previous study of country of origin in
developing countries has tested this kind of hypothesis,
which makes it interesting to test this product category
influence in Brazil. Lastly, similarly to Study 1, within each of these product categories, fifty
respondents were expected to answer questions about a fictitious Brazilian brand, and the other fifty
about a fictitious American brand.
After setting up the survey on qualtrics.com (survey software tool) and publishing both
studies on Amazon MTurk, I encountered unexpected difficulties. I was only able to get five
respondents within a one-week period, since the fact that studies were set up to target only Brazilian
consumers brought limitations to the response rate. After looking into other publishing tools, I
decided to use the social media website facebook.com to reach a broader Brazilian audience.
According to Statista, Brazil is the world’s third largest facebook.com country user, with
approximately 70.5 million active users. In order to reach as wide of an audience as possible, I
posted the survey link on my Facebook profile wall, messaged
Total respondents: 200
Number of respondents per survey
US Brand Brazilian Brand
Coffee 50 50
Toothpaste 50 50
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friends individually asking them to fill out the survey, and
had friends post on their wall about the survey. I also
published the link on several Brazilian facebook.com
groups, such as the BRASA
(Brazilian Student Association) and ‘Conferência ENE’
groups. After another week, I was able to get 137 responses.
67 people responded Study 1, and 70 people responded
Study 2, as shown on the tables above.
Because of time constraints regarding the nature of this academic project, I was unable to
look into other options to reach the ideal 400 respondents. If time permitted, I would have travelled
to Brazil and surveyed respondents personally in shopping malls in the city of São Paulo, SP –
Brazil, as this has proven to be an effective data collection method in previous studies, such as
Verlegh (2007). Alternative collective methods would also allow me to collect a more representative
sample of Brazilian consumers, since the technique I used is more likely to yield a sample with
higher income and education levels. This is represented by the high mean of education level (μ =
3.66) and job status (μ = 3.29) in the sample.
MEASURES
The items used in my scales were drawn from scales previously validated in studies of the
country of origin literature. The dependent variables used were perceived quality and willingness to
purchase the brand. The independent variables in the study were national identity (Verlegh, 2007),
admiration of foreign lifestyles (Batra et al., 2000), brand origin (Batra et al., 2000), and consumer
ethnocentrism (Shimp & Sharma, 1987). Please refer to Exhibit 1 for survey questions.
Study 1
Total respondents: 67
Number of respondents per survey
US Brand Brazilian Brand
Athletic Shoes 18 12
Toothpaste 20 17
Study 2
Total respondents: 70
Number of respondents per survey
US Brand Brazilian Brand
Coffee 17 16
Toothpaste 20 17
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To test willingness to purchase, respondents answered a single item scale, “I intent to buy
this product.” To test perceived quality, there was a two-item scale, “This brand is of inferior
quality,” and “This brand is better than average.”
As for perceived brand origin, respondents answered the degree to which “I consider this
brand to be a Brazilian brand.” Admiration of foreign lifestyles was measured in a single item scale,
“To what extent do you yourself admire the lifestyles of people who live in the United States?” As
for national identity, consumers rated the degree to which they strongly agree or strongly disagree
(7-point scale) with the following statements: “Being Brazilian means a lot to me,” “I am proud to
be Brazilian,” and “I don’t feel any ties with Brazil.” Consumer ethnocentrism was also measured in
the studies to avoid confounding. As a five-item scale, consumers rated the degree to which, “It’s
not right to purchase foreign-made products,” “Brazilians should not buy foreign-made products,
because this hurts Brazilian businesses and causes unemployment,” “A real Brazilian should always
buy Brazilian-made products,” “I always prefer Brazilian products over foreign, American
products,” and “I prefer buying American products than Brazilian products.”
Finally, most items used a continuous scale from 1 to 7 (1=strongly agree – 7 = strongly
agree), unless otherwise stated on Exhibit 1. Consumer demographics questions varied from open-
ended (age) to four level (marital status and income), five level (education level), and seven level
scales (job status). The means and standard deviation of the independent variables of interest are
also shown on Exhibit 1. The variables brand origin, public/private good, and national identity of
product categories were all manipulated in the study. They were coded binomially based on the ad
shown to the respondent. Lastly, some of the scales required reverse coding to facilitate the analysis
in terms of the direction of the effects described in the hypotheses.
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RESULTS
The hypotheses in the study concerned the effects of a brand’s country of origin on
consumer behavior, such as willingness to purchase and perceived quality, moderated by whether the
product is privately or publicly consumed, and whether the product category closely relates to
national identity, such as coffee. On both studies, I conducted regression analyses and performed
spotlight analyses to further understand the observed effects. To test this type of directional
hypotheses, it is optimal to see if the sign of the estimated coefficient is in the hypothesized
direction and is statistically significant by looking at its p-value (Batra et al., 2000). Hypotheses about
moderating effects can be tested via the statistical significance of the appropriate interaction term
(cf. Baron & Kenny, 1986).
I started the analysis by running a manipulation check on brand country of origin to
determine whether indicating in the ads that the brand was Brazilian vs. American did indeed result
in differences in the extent to which respondents believed the brand to be more or less Brazilian. I
ran a t-test that compared the means of Brazilian Brand Origin (BBO) between the experimental
conditions that presented consumers with an ad describing a “Brazilian product” and those that
presented an ad which referenced an “American product.” To measure perceived BBO, respondents
were asked to rate on a scale (1 = strongly disagree, 7 = strongly agree) whether they agreed that the
product shown in the ad was Brazilian. Based on the number of people that responded to the
survey, the manipulation check was statistically significant (t = -4.976, p < .05). Consistent with
expectations, respondents that read the Brazilian ad believed that the brand was more Brazilian (M =
4.0) than respondents that saw the American ad (M = 2.6). Even though the manipulation check was
statistically significant, it did not produce as large of an effect as I expected. Across the Brazilian
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conditions, BBO only averaged a 4.0 on a 7.0-point scale, indicating that consumers still perceived
the advertised brand to be as much American as Brazilian.
Moving forward, in order to test hypotheses 1 & 2, I conducted linear regression analyses.
More specifically, for hypotheses 1a & 2a, I conducted a regression of consumer’s willingness to
purchase the brand as a function of (a) the level of national identity (hypothesis 1a) or the level of
admiration of foreign lifestyles (hypothesis 2a), (b) Brazilian brand (BB; 1=Brazilian ad; 0=American
ad), and (c) their interaction. To test hypotheses 1b and 2b, I conducted a similar regression, expect
I substituted the dependent variable to be perceived quality. In evaluating the results, I looked at the
significance and direction of the coefficient of the interaction terms.
Values and direction of the estimated regression coefficients are shown in Exhibit 2. Model
1 indicates the results for the regression analyses used to test hypothesis 1. Model 2 indicates the
results for regression analyses used to test hypothesis 2.
After running the regressions for both hypotheses 1&2 with data from both Study 1 and
Study 2, I found in model 1 that none of the interaction coefficients were statistically significant (all
p-values > 0.345). The limitations of the model, such as small sample size, discrepancy between the
brand’s intended origin and respondents’ perceptions of brand origin, and limited research time
period, may be reasons for such outcome. If the coefficients for the interaction terms were positive
and significant, it would support hypotheses H1a & H1b in that as a consumer’s level of national
identity (BNI) increases, both their willingness to purchase (WTP) and perception of quality (PQ) of
domestic brands over foreign brands increases, respectively. However, contrary to our expectations
in hypotheses H1a, the coefficient of the interaction term is negative (B = -0.029, t = -0.11, p =
0.91). If significant, this would indicate that at higher levels of national identity, respondents are less
willing to purchase when they are told that the advertised product is Brazilian vs. American.
Furthermore, as in hypothesis 1a, the interaction between national identity and brand origin in
20
hypothesis 1b is negative (B = -0.207, t = -0.95, p = 0.345), suggesting that at higher levels of
national identity, respondents perceive that quality of the advertised product is lower when they are
told it is Brazilian vs. American. Even though neither of the interaction terms’ coefficients is
significant, model 1 showed other interesting findings. The more a respondent identifies high levels
of Brazilian national identity, the more he/she is willing to purchase the product, since the
coefficient of the main effect is 0.093, though this result is not significant. The coefficient for the
main effect of national identity that tested H1b was also positive (B = .017), consistent with our
expected pattern. If significant, this finding would suggest that respondents with a higher national
identity perceive the quality of the advertised product to be higher.
To test hypotheses 2a & 2b, we ran the aforementioned regression analyses, but substituting
the national identity variable for admiration for economic developed countries (AEDC), The
coefficient for the interaction term was not significant in either model (both p-values > 0.697). In
hypothesis 2a, if the coefficient of the interaction term was significant, it would show that as a
consumer’s level of admiration of economically developed countries’ lifestyles increases, their
willingness to purchase domestic over foreign brands increases, since the coefficient is positive (B =
0.070, t = 0.39, p = 0.697). This is inconsistent with the hypothesized effect, which could be due to
the limitations of this study. Furthermore, the coefficient for the interaction term in H2b was
negative (B = -0.031, t = -0.20, p = 0.843). Therefore, if significant, it would be consistent with the
predicted hypothesis; as a consumer’s level of admiration of economically developed countries’
lifestyles increases, they perceive that the quality of the American brand is higher than that of the
Brazilian brand. However, there are other interesting results in model 2. The main effect of AEDC
had a positive coefficient in both WTP (B = .135) and PQ (B = 0.177), although only the latter was
marginally significant. This would indicate that the higher AEDC, the higher the WTP and the PQ
of the product.
21
Moving forward, study 1 tested hypothesis 3, which, despite the limitations of the model,
had some statistically significant results. Hypothesis 3 tested whether the effects proposed on
hypotheses 1&2 were moderated by whether or not the product was publicly or privately consumed
(0 = private, 1 = public), such that the effects are stronger when a product is publicly consumed.
This would entail a significant three-way interaction. However, neither of the three-way terms was
significant. Model 3 indicates results for hypothesis 3 for the effects proposed in hypothesis 1, and
model 4 indicates results for the same hypothesis, but for the effects proposed in hypothesis 2. Yet,
if the limitations of the models were smaller, there would be a statistically significant interaction on
the moderating effect of publicly vs. privately consumed product category on admiration for foreign
lifestyles and brand origin regarding perceived quality (hypothesis 2b). The interaction coefficient
was negative (B = -0.064, t = -1.424, p = 0.157),
which indicates that when a product is publicly
consumed (tennis shoes) and consumers show
low admiration for foreign lifestyles, they are
more likely to perceive the domestic brand to
have better quality than the foreign brand. This is
consistent with our hypothesis given that all the variables in the study were constructed in a way that
higher values indicate higher PQ and WTP of domestic Brazilian brands. Please refer to the graph
above for an illustration of the interaction.
Even though the latter was the only marginally significant three-way interaction in
hypothesis 3, models 3 and 4 revealed other interesting two-way interactions. In terms of the results
in model 3, the interaction between brand national identity and publicly consumed products were
not statistically significant (p-value: 0.189). However, if the sample size were larger, this interaction
would likely have a significant effect on willingness to purchase (B = -0.441) and perceived quality
22
(B = -0.573), since the current p-values of the interactions are less than 0.2. This finding would
suggest that as BNI increases, WTP and PQ for the publicly consumed product over the privately
consumed product decreases. Also, willingness to purchase (B = 1.483) and perceived quality (B =
2.998) are higher for the publicly consumed product than the privately-consumed product, although
only the latter main effect is marginally significant. Finally, as BNI increases, WTP (B = 0.192) and
PQ (B = 0.265) towards the advertised product increase, although only the latter main effect is
marginally significant. As for the moderating effect of publicly consumed products on model 4, the
interaction between BB and PCP was marginally significant in both willingness to purchase (B =
3.826) and perceived quality (B = 3.202), suggesting that when a product is Brazilian (e.g. Brazilian
tennis shoes), both willingness to purchase and perceived quality of the publicly consumed product
over the privately consumed product increases. Additionally, the interaction between admiration for
foreign lifestyle and publicly consumed product on perceived quality is statistically significant with a
positive coefficient (B = 0.689, t = 2.405, p = 0.018). This entails that as admiration for foreign
lifestyles increases, the perceived quality of a publicly consumed product over the privately
consumed product increases. Lastly, the main effect of publicly consumed product category was
marginally significant in WTP (B = -2.761, t = 1.819, p = 0.071) and statistically significant in PQ (B
= -3.297, t = -2.498, p = 0.014). With a publicly consumed vs. privately consumed product, WTP
decreases by 2.761 and PQ by 3.297.
Moreover, study 2 tested hypothesis 4, which had some statistically significant results despite
the limitations of the model. Hypothesis 4 tested the following: (a) the effects proposed in
hypothesis 1 will be moderated by the extent to which consumers perceive the product category to
be identified with Brazil. The effects will be stronger the more the product category is identified
with Brazil, and (b) the effects proposed in hypothesis 2 will be moderated by the extent to which
consumers perceive the product category to be identified with Brazil. The effects will be weaker the
23
more the product category is identified with Brazil. Model 5 indicates results for hypothesis 4 for the
effects proposed in hypothesis 1, and model 6 indicates results for the same hypothesis, but for the
effect proposed in hypothesis 2.
Hypothesis 4a had statistically significant results in relation to the perceived quality of a
product (B = -1.411, t = -2.37, p = 0.0193), although in the opposite direction of the proposed
hypothesis. If the product category is Brazilian
(coffee) and the consumer has low national
identity, PQ of the domestic product over the
foreign product is higher. However, when a
product is Brazilian (coffee) and BNI is high, PQ
of the domestic over the foreign product is lower.
Please refer to the graph for the illustration of the proposed relationships. The regression of the
same analysis on non-coffee product category and willingness to purchase was neither statistically
nor marginally significant.
Hypothesis 4b also had statistically significant results in relation to the three-way interaction
of willingness to purchase on a product category that is closely related to Brazil (coffee), brand
origin, and admiration for foreign lifestyles. The coefficient of the interaction is positive (B = 1.126,
t = 2.37, p = 0.019). If the product is Brazilian (coffee) and AEDC is low, WTP the domestic brand
over the foreign brand is lower. However, if the
product is Brazilian (coffee) and AEDC is high,
WTP of the domestic brand over the foreign
brand increases. Please refer to the graph for the
illustration of the relationships proposed. The
results are not in line with the proposed
24
hypothesis. The regression for the non-coffee product category was not significant, neither was the
regression of the same analysis on perceived quality.
Just like hypothesis 3, this study revealed interesting results in the two-way interactions of
models 5 and 6. In model 5, there is a statistically significant interaction between brand origin and
the identity of the product category to which it belongs (B = 8.219, t = 2.415, p = 0.017). All else
equal, a Brazilian brand will be perceived as higher quality when the product category it belongs to is
also closely identified with Brazil (e.g. coffee). Additionally, Brazilian Product category (BP) would
have a marginally significant effect on perceived quality if the sample size were larger. Since it has a
negative coefficient (B = -3.323), it would entail that as the product category is coffee, perceived
quality of the product decreases. The same effect was found regarding WTP (B = -0.273), but this
variable is not statistically significant.
As for model 6, the same interaction between BB and BP was significant, but with regards to
willingness to purchase and the effects were in the opposite direction. As a product is Brazilian,
willingness to purchase the product when the category is Brazilian (coffee) decreases over the
product of which category is non-Brazilian. Additionally, if the sample size were larger, the
interaction between AEDC and BP would be marginally significant (B = -0.418), and would entail
that, as AEDC increases, the consumer is less willing to purchase the Brazilian (coffee) product over
the non-Brazilian product category. Lastly, admiration for economically developed countries has a
significant and positive effect on perceived quality (B = 0.249), and marginally significant positive
effect on WTP (B = 0.218), indicating that as admiration for foreign lifestyles increases, so does
perceived quality and willingness to purchase the product.
25
ADDITIONAL ANALYSES
As mentioned in the methodology section, this study had some limitations brought about the
small sample size of 137 respondents instead of the desired 400 respondents. In the analysis section,
I discussed a few regression analyses that would be statistically significant if the sample increased,
assuming that a p-value of less than 0.20 would be marginally significant with a larger sample size. I
decided not to use the p-value of less than 0.30 (since the sample size would be approximately three
times the achieved sample) because there would be a bigger margin for approximation errors.
Another limitation to the model comes from the manipulation check, in which I found that,
although the regression between BB - Brazilian Brand (the original brand of the product) and BBO –
Brazilian Brand Origin (whether the perceived brand origin was Brazilian) was statistically significant
at t = -4.976), there was still some discrepancy between perceived brand origin and intended brand
origin. This is demonstrated by the fact that, on average, respondents rated perceived Brazilian
brand origin as 4.0, out of a 7.0-point scale, indicating that they still perceived the advertised brand
to be as much American as Brazilian. A possible explanation for this discrepancy is the names given
to each brand, mainly to the toothpaste and coffee brands. ‘Roots’ and ‘Shiny White’ are too
American, English names that cannot be easily pronounced or related to the Portuguese language, at
least not as easily as the tennis shoes brand ‘Mile’. In future research, I would manipulate the names
of the brands more closely and create names that are similar amongst both languages. This way, I
would avoid misinterpretations and make the effects stronger.
Because of the limitations described above, I performed an additional analysis on H1 and
H2 since neither variable had consistent results with the study design. Instead of running regressions
with the binary BB (Brazilian Brand) variable, I used the continuous BBO (Brazilian Brand Origin)
variable, as the latter measures the perceived brand origin of respondents. In terms of hypothesis 1a,
the results would be marginally significant if the sample size were larger (B = 0.098, t = 1.454, p =
26
0.148). If significant, this would indicate
that at higher levels of national identity,
respondents would be more willing to
purchase when they are told the product is
Brazilian vs. American, which is in line
with the hypothesis. However, this shows
a different effect than the one found in the regression with the binary BB variable. More specifically,
as a product is perceived to be American (low BBO), consumers with low BNI are more willing to
purchase the product as those with high Brazilian national identity. However, as the product is
perceived to be Brazilian, consumers with high national identity were more willing to purchase the
product as those with low national identity. Please refer to the graph for an illustration of the effects.
In terms of the effect of national identity on perceived quality, the interaction would also be
marginally significant if the sample size was larger (B = 0.091, t = 1.543, p = 0.125). The results,
illustrated by the graph, would entail that at higher levels of national identity, respondents perceive
the quality of the domestic product to be better than the foreign product. More specifically, foreign
brands are perceived to have better quality than domestic brand by consumers with low national
identity. However, domestic brands are perceived to have better quality over foreign brands when
consumers have high national identity.
These results are in the same direction as
expected in hypothesis 1b. With regards
to hypothesis 2a & 2b, the results were
neither statistically not marginally
significant (p-values > 0.531).
4
4.5
5
5.5
6
6.5
7
Low BBO High BBO
WTP
Hypothesis 1(a) effect
Low BNI
High BNI
27
DISCUSSION AND FUTURE STEPS
This study aimed at understanding a brand’s country of origin effect in consumer behavior in
Brazil, a developing country that lacks research on this topic. I expected to see that, as the level of
national identity increases, both willingness to purchase and perceived quality of domestic brands
increases over foreign brands. Although not significant, I found results consistent with the
hypothesized effect when running the regression with the BBO variable instead of the BB variable.
When I used BB, I did not find any statistically significant results. Additionally, I expected to see that
as a consumer’s admiration for economically developed countries’ lifestyles increases, both the
willingness to purchase and perceived quality of foreign brands increase over domestic brands.
However, I was unable to make any conclusions regarding hypothesis 2 because none of the
coefficients were statically significant.
Moving forward, I expected to find that both hypotheses of national identity and admiration
for economically developed countries would have a stronger effect if the product were publicly vs.
privately consumed. I found that, as a product is publicly consumed (tennis shoes) and consumers
show low admiration for foreign lifestyles, they are more likely to perceive the domestic brand to
have better quality than the foreign brand. This is consistent with the hypothesis. Furthermore, I
also expected to find that the effects on national identity would be stronger if the product category
was identified with Brazil, such as coffee. The opposite was expected to be true regarding the effects
on admiration for foreign lifestyles. Interestingly, I found the opposite effects. If the product
category is identified with Brazil (coffee) and the consumer has low national identity, PQ of the
domestic product over the foreign product is higher. However, when a product is identified with
Brazil (coffee) and BNI is high, PQ of the domestic over the foreign product is lower. Another
interesting finding was that, if the product is Brazilian (coffee) and AEDC is low, WTP the domestic
brand over the foreign brand is lower. However, if the product is Brazilian (coffee) and AEDC is
28
high, WTP of the domestic brand over the foreign brand increases. These results are also not in line
with the hypothesis proposed. These findings could be due to the fact that consumers in Brazil do
not identify coffee as closely related to their national identity. Brazil used to be one of the world
leaders in coffee exports during the 19th and 20th centuries. However, it could be that consumers in
Brazil do not see coffee as an aspect that closely defines their national identity anymore, such as
soccer. It may be that, on the other hand, foreigners identify coffee with the Brazilian identity, but
not as much as native consumers.
FUTURE STEPS
To carry on this research and find more significant results, I would start by adjusting the
survey. I would change the brand names of the toothpaste and coffee product categories to ones
that can be interchangeable in both the English and the Portuguese languages. I would closely
monitor and analyze the perceived brand origin variable through manipulation tests and change the
brand name accordingly if the averages are still deviant from the intended brand origin. Additionally,
it would be interesting to see the results and direction of hypothesis 4 if the product category would
be one that is more closely related to the Brazilian national identity than coffee. Moving forward, I
would carry this research on shopping malls or universities in the city of São Paulo, the most
populated city of Brazil. I would personally carry the survey to respondents, as in-person survey
distribution methods have proven to be effective in previous research of brand country of origin
(Verlegh, 2007, Batra et al., 2000).
29
Exhibit 1: Survey questions
Constructs Item Dependent Variables
Willingness to purchase the brand (µ=4.82, σ= 1.59)
I intend to buy this brand (1-7)
Perceived Quality This brand is of superior quality (Prof. Montgomery) (1-7) (µ=4.16, σ= 1.37) This brand is better than average (Prof. Montgomery) (1-7) Independent Variables
National Identity Being Brazilian means a lot to me (Verlegh) (1=strongly disagree - 7= strongly agree) (µ=5.85, σ= 1.12) I am proud to be Brazilian (Verlegh) (1-7) I don't feel any ties with Brazil (Verlegh) (1-7) Consumer It’s not right to purchase foreign-made products (Batra et al.) (1-7)
Ethnocentrism Brazilians should not buy foreign products, because this hurts Brazilian businesses and causes unemployment (Batra et al.) (1-7)
(µ=2.70, σ= 0.89) A real Brazilian should always buy Brazilian-made products (Batra et al.) (1-7)
I always prefer Brazilian products over foreign, American products (Verlegh) (1-7)
I prefer buying American products than Brazilian products (Kumar, et al.) (1-7) Level of admiration to economically developed countries lifestyles
To what extend do you yourself admire the lifestyle of people who live in the United States? (Batra et al.) (1 = Strongly criticize - 7 = strongly admire)
(µ=4.53, σ= 1.51) Susceptibility to social influence
If I want to be like someone, I often try to buy the same brands they buy (Batra et al.) (1-7)
(µ=3.65, σ=1.16) When buying products, I generally purchase those brands that I think others will approve of (Batra, et al.) (1-7)
To be sure I buy the right product or brand, I often observe what others are buying and using (Batra, et al.) (1-7)
Perceived Brand Origin (µ=3.24, σ= 1.76)
I consider this brand to be a Brazilian brand (Batra et al.) (1-7)
Consumer Age (Verlegh) (µ=31, σ= 13.40) Demographics Education level (4 levels) (Verlegh) (µ=3.66, σ= 0.88) Gender (Male/Female) (Verlegh) (58.59% Female, 41.61% Male) Marital Status (Verlegh) (µ=1.74, σ= 0.61) Job Status (5 levels) (Verlegh) (µ=3.29, σ= 1.73)
31
Exhibit 3: Study 1 - Brazilian Shoes ad
Looking for powerful running shoes?
Mile Shoes are the perfect quality shoes for a happy and healthy run. These Brazilian shoes have soft heels, solid forefoot and good arch support. They are made to be run on every surface -‐ may it be on the treadmill at the gym, at the park, on the streets or at the beach. Mile Shoes are your ideal choice: they come in a variety of colors and styles that fit perfectly with your preferences and personality.
Mile shoes
32
Exhibit 4: Study 1 - American Shoes ad
Looking for powerful running shoes?
Mile Shoes are the perfect quality shoes for a confortable and healthy run. These American shoes have soft heels, solid forefoot and good arch support. They are perfect to be run on every surface -‐ may it be on the treadmill at the gym, at the park, on the streets or at the beach. Mile Shoes are your ideal choice: they come in a variety of colors and styles that fit perfectly with your preferences and personality.
Mile shoes
33
Exhibit 5: Study 1 - Brazilian Toothpaste ad
Looking for powerful and long-‐lasting toothpaste?
Shiny White is the perfect solution for you that are looking for toothpastes that last more than your morning run. Most other toothpastes only protect your teeth and prevent bad breath for a short period of time, right after eating or drinking. However, this Brazilian toothpaste has a unique formula that protects you from bacteria for a long period of time, providing a pleasant breath that lasts for just as long. Next time you won’t have to worry about your teeth right after your morning run!
Shiny White
34
Exhibit 6: Study 1 – American Toothpaste ad
Looking for powerful and long-‐lasting toothpaste?
Shiny White is the perfect solution for you that are looking for toothpastes that last more than your morning run. Most other toothpastes only protect your teeth and prevent bad breath for a short period of time, right after eating or drinking. However, this American toothpaste has a unique formula that protects you from bacteria for a long period of time, providing a pleasant breath that lasts for just as long. Next time, you won’t have to worry about your teeth right after your morning run!
Shiny White
35
Exhibit 7: Study 2 – Brazilian Coffee ad
Looking for tasteful, homemade coffee?
Root Coffee will give you the taste you are looking for. Easily found in markets and supermarket chains, this Brazilian coffee is perfect for every occasion: breakfast, coffee breaks and following a delicious meal at home. The coffee beans are carefully roosted to provide our customers with tasteful, fresh, and high quality coffee. You can easily pour the beans into the coffee machine, and with the addition of water, your homemade Root coffee will be quickly ready to taste.
Root Coffee
36
Exhibit 8: Study 2 – American Coffee ad
Looking for tasteful, homemade coffee?
Root Coffee will give you the taste you are looking for. Easily found in markets and supermarket chains, this American coffee is perfect for every occasion: breakfast, coffee breaks and post a delicious meal at home. The coffee beans are carefully roosted, stocked, and shipped to Brazil to provide our customers with tasteful, fresh, and high quality coffee. You can easily pour the beans into the coffee machine, and with the addition of water, your homemade Root coffee will be quickly ready to taste.
Root Coffee
37
Exhibit 9: Study 2 - Brazilian Toothpaste ad
Looking for powerful and long-‐lasting toothpaste?
Shiny White is the perfect solution for you that are looking for toothpastes that protect your teeth after drinking your favorite coffee. Most other toothpastes only protect your teeth and prevent bad breath for a short period of time, right after eating or drinking. However, this Brazilian toothpaste and has a unique formula that protects you from bacteria for a long period of time, providing a pleasant breath that lasts for just as long. Next time you won’t have to worry about your teeth right after drinking your coffee!
Shiny White
38
Exhibit 10: Study 2 – American Toothpaste Ad
Looking for powerful and long-‐lasting toothpaste?
Shiny White is the perfect solution for you that are looking for toothpastes that protect your teeth after drinking your favorite coffee. Most other toothpastes only protect your teeth and prevent bad breath for a short period of time, right after eating or drinking. However, this American toothpaste has a unique formula that protects you from bacteria for a long period of time, providing a pleasant breath that lasts for just as long. Next time you won’t have to worry about your teeth right after drinking your coffee!
Shiny White
39
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Accessed on April 7th, 2015