Introduction

Late twentieth century is characterized by globalization; worldwide interconnectedness among nations and economies reflected in every aspect of our lives. With increasing global interactions in the transfer of knowledge, goods, services, processes, capital and people, a borderless global marketplace has developed. In this highly connected world, does culture matter? In this chapter, we elaborate on how the changing landscape of culture influences branding.

Although there have been different ways to distinguish among different cultural orientations (i.e. the extent to which individuals differ in their norms and values), two of the major ones are the cultural orientations proposed by Hofstede (2001) and Schwartz (1992). According to Hofstede (2001), cultures might differ based on power distance, uncertainty avoidance, masculinity/femininity, long-term orientation, and individualism/collectivism. While most of the prior research in consumer behavior has focused on the distinction between individualist and collectivist cultures, Maheswaran and Shavitt (2000) have called attention on the distinction between societies that are horizontal (i.e. valuing equality, Sweden, Norway, Australia) and those that are vertical (i.e. emphasizing hierarchy, the USA, France). They have further suggested that what has been investigated until 2000s mostly reflected the vertical forms, neglecting the horizontal cultures.

The debate regarding the dimensions of culture has continued for a long time and some researchers have also used the dimensions proposed by Schwartz (1992). According to Schwartz, cultures might be distinguished based on embeddedness versus autonomy , mastery versus harmony , and hierarchy versus egalitarianism . However, until now, there has been no agreement on the dimensions of culture as culture is dynamic and, with globalization, it is more difficult to identify certain dimensions that would fit into specific cultures. Based on these well-established cultural frameworks that are proposed to help us understand the interactions between culture and the self, in our review of the literature on culture and its effects on branding, we bear in mind that cultural boundaries are becoming blurred.

The blurring of cultural boundaries has led to a reorganization of social living and has impacted brand management practices. For example, while China has been among the fastest growing markets for several global brands like Ikea, Starbucks, and Apple, it now owns many valuable global brands, such as the world’s largest online retailer Alibaba. By similar means, global and local cultural symbols often co-exist in global brands’ local market offerings such as Starbucks’ Matcha Green Tea Frappuccino served in Japan or Chinese coffee moon cakes. Development of globally shared meanings gave rise to the emergence of concepts like global consumer segments (Dawar & Parker, 1994) and global consumer culture positioning (Alden, Steenkamp, & Batra, 1999). Hence, it is important to understand how brand meaning and consumer–brand relationships are changing in the increasingly globalized and multicultural marketing environment.

Our goal in this chapter is to provide an extensive review of academic research on the culture and branding interface. We present a structured analysis of the major findings on how the changing landscape of culture influences how brands are perceived, provide managerial insights, discuss conflicting issues in the literature, and highlight some directions for future research. Specifically, we elaborate on how the cultural context and culturally sensitive consumer segments affect branding practices, and how consumer–brand relationships are shaped by culturally relevant values.

Global and Multi-cultural Consumers

According to UN statistics, 244 million people live in a country other than where they were born, and this rate is increasing (United Nations, 2015). Marketplaces comprise culturally more diverse consumer groups, with individuals speaking multiple languages and keeping multinational ties. It’s essential to be aware of the opportunities and challenges that are brought along with the changing consumer demographics in the marketplace.

Recognition of a global consumer culture occurred in 1990s. Alden et al. (1999) emphasized the growth of global consumer segments and proposed a measure of global consumer culture positioning (GCCP) . GCCP is based on the global consumer culture theory (GCCT) , which argues that a global consumption culture is emerging due to the expanding interrelations of multiple cultures. Alden et al.’s (1999) analyses of 1267 advertisements from seven countries revealed that several brands use GCCP as their positioning strategy, rather than basing their positioning on a local or a specific foreign consumer culture. Arguably, GCCP can be used as a positioning tool to attract consumers who value brand globalness and use global brands to associate their identities with global consumer segments.

Previously referring to individuals being a part of two different cultures, such as minority groups (Berry, 1997), bicultural identity has come to indicate a broader meaning with globalization. It refers to the coexistence of one local identity rooted in an individual’s local culture, and another identity linked to the global culture (Arnett, 2002). How bicultural identities affect product and brand evaluations has attracted much research attention. For example, Zhang and Khare (2009) demonstrated that consumers with an accessible global identity have higher preference for global (vs. local) products, whereas consumers with an accessible local identity have higher preference for local (vs. global) products. The way that bicultural consumers integrate their host and home identity is defined as bicultural identity integration (BII) and has been an important topic of research (Haritatos & Benet-Martı́nez, 2002). At high BII levels, bicultural consumers integrate their two identities more easily, while at low levels of BII they perceive two identities as more distinct and difficult to integrate.

Biculturalism has direct consequences for the persuasiveness of advertising appeals. A growing body of research focuses on the success factors of bilingual advertising effectiveness . Luna and Peracchio (2001) showed that marketing messages received in one’s first language result in superior memory than messages received in the second language, and picture-text congruity may help enhance the processing of second language messages. They also showed that because a bilingual’s native culture may value some concepts more highly (e.g. family), related words may lead to a higher emotional attachment when presented in the first (vs. second) language messages (Luna & Peracchio, 2002, 2005). Noriega and Blair (2008) further argued that not only the words used in a message, but each of a bilingual individual’s two languages may cue different types of thoughts for the same message, leading to different levels of persuasiveness. Focusing on bicultural consumers’ brand preferences, Kubat and Swaminathan (2015) showed that for brands low in cultural symbolism , a bilingual message leads to an increase in bicultural identity integration resulting in higher preference for a bilingual ad than an English ad. On the contrary, because brands that are high in cultural symbolism are strongly linked to a specific identity, consumers may perceive bilingual ads as having a lower perceived fit with their existing set of brand associations. From a more managerial perspective, Krishna and Ahluwalia (2008) explored the differential effects of language choice between multinational versus local companies . Their results showed that the choice of advertising language influences advertising effectiveness for multinational companies, such that they can benefit from the favourable associations of both languages, but not for local corporations. Their study also revealed that different languages may vary in their advertising effectiveness for luxury versus necessity products.

Another important research stream concentrates on the bicultural exposure effects . Empirical evidence shows that simultaneous exposure to symbols of two dissimilar cultures (e.g. Batman toys with a made-in China label) draws the perceivers’ attention to the defining characteristics of the two cultures (Torelli, Chiu, Tam, Au, & Keh, 2011) and increases the perceived differences as well as the incongruence between them (Chiu, Mallorie, Keh, & Law, 2009).

Global environment, increasing immigration, and the growing multiculturism necessitate special emphasis on diversity . As consumers become more diverse in a marketplace, it becomes difficult to market offers with communication programmes that target homogenous consumer groups. It is vital for managers to understand how to create integrated marketing communications in multicultural consumer segments. Hence, marketing strategies should be well suited to the needs of consumers that are influenced by multiple cultures. Further research may investigate language-based effects across different types of media other than print ads that is dominantly explored in literature (Krishna & Ahluwalia, 2008), such as broadcasts or internet ads. Research could also examine the interaction between the language-based effects and the brand personality of an advertised product to understand whether the choice of language has an effect on consumers’ attitudes toward different brand types.

The Effects of Culture on Brand Perceptions and Evaluations

Brand meanings are drawn out of the culturally constituted world and transfer to brands through several mechanisms such as advertising, the fashion system, and reference groups (McCracken, 1986), influencing the nature of consumer–brand relationships. Hence, culture impacts branding practices and the meaning of brands. We specifically examine how iconic brands, global and local brand meanings, brand personality, consumer attitudes toward counterfeits, and brand extensions are influenced by culturally relevant values.

Cultural Icons

Brands are often used for self-expressive purposes (Levy, 1959). The notion that a brand can act as a tool to communicate or strengthen one’s reference group identity (Escalas & Bettman, 2005) has been applied to an extensive body of cross-cultural research. Iconic brands are rich in cultural symbolism; they symbolize the shared needs, values, and aspirations of individuals in a cultural group (Torelli, Chiu, Keh, & Amaral, 2009). They are highly valued by consumers for what they represent and can be used to signal one’s individual or group identity (Holt, 2002). As a result, iconic brands may carry the advantage of being preferred among members of a cultural group.

Brands can highlight culturally relevant values. Han and Shavitt (1994) showed that advertisements which emphasize individual benefits, preferences, and independence are more persuasive in the more individualistic US culture , whereas advertisements which highlight family, ingroup benefits, and harmony are more persuasive in the more collectivistic Korean culture. Morling and Lamoreaux’s (2008) meta-analyses of cross-cultural studies on the individualism-collectivism dimension of cultural products (e.g. advertisements) also revealed that cultural products which came from Western cultures were more individualistic (vs. collectivistic) than the products that came from the Eastern cultures.

Just like exposure to cultural symbols can activate culturally relevant values (e.g. American flag activating freedom and individualism; Hong, Morris, Chiu, & Benet-Martinez, 2000), iconic brands can act as cultural reminders (e.g. Marlboro bringing to mind ruggedness and individualism in American culture; Torelli, Keh, & Chiu, 2009). Relatedly, exposure to iconic global brands can activate associated cultural values and attract local consumers who share similar values. For example, Starbucks can remind American cultural values to the consumers outside of the USA (Torelli, Keh, et al., 2009). Torelli, Chiu, et al.’s (2009) brand iconicity scale that measures the symbolic value of brands further validates how cultural meanings associated with a group transfer to brands , and how brands can be used to express individuals’ social identity.

A seemingly related, but conceptually distinct concept from brand iconicity is a brand’s country-of-origin association. Consumers often rely on the place of manufacture in evaluating a product (Gürhan-Canli & Maheswaran, 2000; Maheswaran, 1994), with more favourable country-of-origin perceptions often leading to more favourable evaluations. Brand iconicity has a broader and a more abstract signalling value than that is indicated by country-of-origin associations (Torelli, Chiu, et al., 2009). Country-of-origin knowledge does not necessarily activate culturally relevant values of the manufacture location, unless the brand is rich in cultural symbolism.

Managers need to be aware of the consumer groups that are sensitive to cultural icons, and should strategically manage brands that are rich in cultural symbolism. For example, a debate among culturally sensitive consumers in China resulted in a Starbucks store closing down and being replaced by a local coffee shop in the Forbidden City in 2007. The arguments centred around the idea that Starbucks is a symbol of American culture, and its presence in the Forbidden City is a threat to Chinese culture. Another challenge in managing iconic brands lies in how to preserve their attractiveness as the world is becoming an increasingly interconnected marketplace. Zhang and Shavitt’s (2003) content analyses of 463 Chinese ads revealed that modernity and individualism became highly predominant values, reflecting the changing values among the X-generation . This is a good example of how marketers should be cognizant of the shifting values in a society to position their offers and marketing communications and to cater to consumers’ wants.

Global and Local Brands

Many multi-brand firms like Unilever, Procter & Gamble, and Nestle have been focusing their marketing efforts on developing global brands (Schuiling & Kapferer, 2004). On the other hand, several local brands enjoy increasing market share over global competitors in developing countries like India, China, Russia, and Brazil (Guo, 2013). Whether increasing globalization is leading to homogenization of local cultures has been a focus of attention in cross-cultural research (e.g. Fu & Chiu, 2007).

Local brands are marketed in a specific country or a geographic region, whereas global brands serve different geographical regions with the same brand name and marketing strategy. Extant literature shows that consumer attitudes toward local versus global brands may diverge due to varying reasons. One stream of research reveals that consumers may have a tendency to favour global products over local ones. In emerging markets , this is shown to be higher among consumers who admire the lifestyles in economically developed countries, especially for products with high levels of social signalling value (Batra, Ramaswamy, Alden, Steenkamp, & Ramachander, 2000). Global brands may be preferred over local alternatives due to higher quality and prestige associations leading to increased purchase likelihood (Steenkamp, Batra, & Alden, 2003). Moreover, consumers may perceive global brands as a means to enhance their status (Friedman, 1990), participate in a global consumer culture (Alden et al., 1999), become a global citizen (Strizhakova, Coulter, & Price, 2008), or to involve in a shared conversation with other consumers from around the world (Holt, Quelch, & Taylor, 2004). As a result, brand globalness may act as a source of competitive advantage . To face this global challenge, domestic brands can undertake coordination activities and form alliances with global or other domestic competitors (Shocker, Srivastava, & Ruekert, 1994).

Another stream of research demonstrates that some consumers favour local brands over global ones. The reasons may vary from quality perceptions, feeling of animosity toward certain countries (to which we turn in a later section) to patriotic reasons . Local iconness may be associated with local brand prestige and quality perceptions in emerging markets (Özsomer, 2012). Also, ethnocentric consumers tend to view their group as superior to others. As a result, they prefer domestic over foreign products to reinforce their patriotic identity (Shimp & Sharma, 1987). For example, consumers high on the CETSCALE , which is used to measure consumer ethnocentrism, were shown to favour domestically produced goods and feel aversion toward and less willingness to purchase imports (Sharma, Shimp, & Shin, 1995; Shimp & Sharma, 1987). Consumers high in ethnocentrism were also more likely to evaluate the quality of foreign products lower than the domestic alternatives (Netemeyer, Durvasula, & Lichtenstein’s, 1991). This scale may be used as a managerial tool to identify consumer groups varying in level of ethnocentrism and may help decide on brand entry strategies in both local and international markets.

Besides the tendency to prefer global or local brands, consumers increasingly develop bicultural identities; a co-presence of a local identity linked to the local culture and a global identity linked to the global culture (Arnett, 2002). Relatedly, many modern consumers are glocal; they hold positive attitudes toward both global and local products, hence prefer to consume both products at the same time (Kjeldgaard & Askegaard, 2006). On the contrary, many consumers have difficulty in finding meaning in either local or global cultures and may reject both global and local brands (Arnett, 2002).

Steenkamp and De Jong (2010) have come up with a framework where they have discussed four different types of consumer attitudes toward global and local products. Their analyses of these varying attitudes on an integrated value-based structure revealed that consumer attitudes toward global and local products are not polar opposites; they are distinct but related constructs and are generalizable across product categories.

With increased globalization, there seems to be a shift in consumer preferences toward global brands. Thus, local brands face increased competition from their global counterparts. Yet, at the same time, developing countries are creating many successful global brands, such as HTC of Taiwan or Alibaba of China. Many local brands attempt to build global perceptions by indicating their global availability or success in other geographical areas (Özsomer, 2012). Overall, these findings suggest that it is important to create market offers according to the values dominant in specific consumer segments. A market with a negative orientation toward global consumption may be more likely to welcome local brands, whereas a market with a positive global consumption orientation may provide more opportunities for global brands (Alden, Steenkamp, & Batra, 2006). Therefore, a feasible marketing strategy may be to offer portfolio of brands according to specific market structures rather than putting too much emphasis on global brands (Steenkamp & De Jong, 2010). Moreover, global brands may emphasize locally important values and provide benefits for the local consumers in its area of operations. As a successful example, Unilever expands into new markets with its existing brands but promotes growth, sustainability, and inclusive business in the local markets, which results in increased value for both the company and the consumers in the local country.

Both for domestic and international companies , it is crucial to understand the drivers behind consumers’ local versus global brand preferences. A growing body of research sheds light on the impact of globalization on local versus global brand practices, and yet many other factors wait to be uncovered in today’s highly dynamic market environment. For example, further research is needed to understand how individual-level variables interact with national-level cultural variables in influencing consumers’ brand preferences (Steenkamp & De Jong, 2010). Also, as exemplified in our discussion, developing countries (e.g. China and Taiwan) are rapidly introducing global brands. Do these brands differ in their globalness perceptions compared to the global brands introduced by the developed countries? Globalness versus localness perceptions of brands coming from developed versus developing countries is another area for future work.

Brand Personality

Consumers tend to evaluate brands, products, and firms on their human-like characteristics (Aaker, Vohs, & Mogilner, 2010). Brand personality refers to the human characteristics that are applicable to brands and involves five basic traits dimensions: sincerity, excitement, competence, sophistication, and ruggedness (Aaker, 1997). Brand personality is an important tool used in building brand equity and influences consumers’ brand preferences (van Rekom, Jacobs, & Verlegh, 2006).

Empirical evidence shows that these five dimensions lack generalizability in brand meanings across cultures, and different dimensions can exist specific to cultures. For example, Aaker, Benet-Martinez, and Garolera’s (2001) exploratory analyses of trait dimensions across cultures revealed peacefulness as a culture-specific dimension in Japan, peacefulness and passion in Spain; both compatible with these cultures’ harmony-oriented values (Schwartz, 1994). On the other hand, ruggedness was specific to American culture, but sincerity, excitement, and sophistication dimensions conveyed similar meanings across American, Spanish, and Japanese cultures (Aaker et al., 2001). Sung and Tinkham (2005) further showed that associated with the Confucian values (Schwartz, 1994) passive likeableness and ascendancy were meanings particularly important to Korean culture. These cross-cultural distinctions further resulted in the development of country-specific brand personality scales, such as the German scale (Bosnjak, Bochmann, & Hufschmidt, 2007) and the Croatian scale (Milas & Mlačić, 2007).

These findings suggest that brand meanings can convey both distinct and similar meanings in different cultures. Derived meanings do not necessarily generalize across “Eastern” or “Western” cultures, but can be country or culture specific as depicted by the above examples. Understanding the culture-specific values that are represented and institutionalized in brand meanings across diverse cultures provides managerial guidance for companies operating in those countries. Brands can reflect either the specific values of a culture, or the more universal values in their positioning or communications strategies.

To address the cross-cultural generalizability issue, other novel brand personality scales have been developed that proved validity across different cultures. For example, Geuens, Weijters, and De Wulf (2009) developed a scale consistent of five factors (i.e. activity, responsibility, aggressiveness , simplicity, and emotionality). Tested in the USA and nine European countries, their scale proved reliability not only across cultures, but also across a wider set of brands and product categories than the existent scales.

Moreover, Torelli, Özsomer, Carvalho, Keh, and Maehle (2012) developed a scale to measure abstract brand concepts in terms of its human value representations based on Schwartz’s (1992) structure of human values (i.e. power, achievement, hedonism, stimulation, self-direction, universalism, benevolence, tradition, conformity, and security). Their scale helps to understand the cultural orientation of consumers in a market by showing the extent to which a brand is associated with different values that resonate with consumers in different cultures.

A related issue worth exploring is whether and how brand personality meanings change as individuals in a culture become exposed to different cultural environments, especially in today’s highly mobile social environment (Sung & Tinkham, 2005). Not only individuals get more exposed to multiple cultures, but markets become culturally more diverse as well (Torelli et al., 2012). Further research is needed to understand how to communicate brand personality meanings in culturally diverse markets.

Counterfeits

Counterfeiting, or imitation of goods, is a worldwide problem, especially in the high-end luxury segment (Phau & Teah, 2009). Projected value of global trade in counterfeit and pirated goods reached $1.77 trillion in 2015 and is expected to increase further (IACC, 2015). Low manufacturing costs, high demand for branded goods, and the high quality of production make counterfeiting of luxury goods a particularly profitable business (Gentry, Putrevu, & Shultz, 2006). While it was acknowledged to be an industry dominantly existent in Eastern countries like China, Taiwan, Pakistan, and Indonesia (Penz, Schlegelmilch, & Stöttinger, 2008), counterfeiting has become much more widespread.

Significant amount of research on counterfeiting focused on China (Hung, 2003; Phau & Teah, 2009). The luxury consumption, as well as the manufacture and sales of counterfeit products have been rapidly increasing in China (Wang & Song, 2013). The estimated value of counterfeiting equalled $16 billion worth of business annually, creating financial threat for foreign brands (Bian & Veloutsou, 2007). From a cross-cultural perspective, some evidence reveals that collectivistic Asian cultures (e.g. China and Singapore) hold less negative attitudes toward counterfeiting and piracy due to having more positive perceptions of sharing and social harmony in society over individual ownership (Marron & Steel, 2000; Swinyard, Rinne, & Kau, 1990). Individualistic cultures, and also more developed countries, tend to protect individual ownership and property rights to a higher extent (Marron & Steel, 2000). These studies imply that collectivistic cultures may be less inclined to comply with legislative actions toward counterfeiting problems. They also suggest that differential actions can be undertaken against counterfeiting in collectivistic cultures, such as emphasizing in ad campaigns overall well-being rather than individual rights (Husted, 2000).

Some other studies did not find an effect of culture on attitudes toward counterfeiting and piracy (Phau & Teah, 2009). On the one hand, Eastern cultures’ higher consciousness of their favourable social self-image may promote using luxury counterfeits. On the other hand, this may prevent them from using counterfeits because of the social risk of losing face if others know about one’s use of counterfeits (Sharma & Chan, 2011). Therefore, the literature remains inconclusive regarding the association of culture and consumer attitudes toward counterfeits. Further investigation is needed to understand how cultural orientation (e.g. individualism vs. collectivism) influences the perceptions and likelihood of purchasing counterfeit products. Also, most extant research examines luxury products, with no clear knowledge on the generalizability of findings across other product categories; an issue worth further investigation.

Although counterfeit goods may decrease the equity and the luxury perception of the original brand (Zhou & Hui, 2003), some evidence argues the contrary, that counterfeits do not harm the original products (Nia & Lynne Zaichkowsky, 2000). Either way, from a cross-cultural perspective, counterfeiting of well-known established brands is a severe threat to an original brand’s growth and expansion in local markets. International trade, technological advances, and the increasing number of goods that can be counterfeited are all signals that counterfeiting will be a lingering problem despite the present combating efforts (Phau & Teah, 2009). It is a challenge across nations and requires global collaborative actions.

Brand Extensions

Brand extension refers to the use of an existing brand name in other product categories, a strategy used to capitalize on the brand’s favourable associations (Aaker & Keller, 1990). With the increasing difficulty in introducing new brands, brand extension practice has been a crucial topic for both marketing scholars and practitioners. Below, we review key empirical findings identified in brand extensions literature in relation to cross-cultural research.

Consumers in different cultures may put varying emphasis on factors that influence brand extension evaluations and differ in their extension judgments (Bottomley & Holden, 2001). Parent brand category-extension fit is identified as the most influential factor in brand extension evaluations (Aaker & Keller, 1990; Boush & Loken, 1991). When perceived fit is high, parent brand associations and quality assessments are more likely to transfer to the extensions. Fit judgments are shown to vary across cultures. For example, Han and Schmitt (1997) showed that Western consumers perceive the categorical fit between a parent brand and the extension category as highly important, whereas Eastern consumers put more emphasis on company reputation when evaluating an extension. Accordingly, Eastern consumers consider company size an indicator of quality and tend to evaluate extensions of larger firms more positively regardless of the perceived parent brand extension fit.

Another moderating factor that influences extension fit judgments is the cultural symbolism of brands. Torelli and Ahluwalia (2012) showed that when a brand and the extended product category cue the same cultural schema (e.g. Corona tequila cuing the Mexican origin), an automatic activation of cultural schema may override the effect of fit judgments, and lead to enhanced extension evaluations. This effect is induced by individuals’ engagement in a more fluent processing when evaluating culturally congruent (e.g. Corona tequila) versus culturally incongruent (e.g. Budweiser tequila) or culturally neutral (e.g. Coors tequila) extensions. Their finding suggests that using culturally symbolic (vs. non-symbolic) brands may be more advantageous when extending into culturally congruent categories.

Spiggle, Nguyen, and Caravella (2012) indicated extension authenticity as a complementary concept to perceived fit in evaluating extensions. Brand extension authenticity is the extent that an extension carries the originality, uniqueness, heritage, and values of its parent brand (Spiggle et al., 2012). Authentic (vs. inauthentic) extensions are shown to increase consumers’ evaluations and likelihood of purchasing and recommending a brand to others. For example, when Godiva’s core luxury association was emphasized in its brand extension description (e.g. “New Luxurious Fragrance”), Godiva perfume induced more favourable evaluations as opposed to an inauthentic description (“New Seductive Fragrance”).

Another stream of research points to the cultural differences in thinking styles. Individuals in Eastern cultures are determined to be more holistic thinkers , who focus on the context as a whole. On the contrary, individuals in Western cultures are characterized by analytic thinking, and focus on the attributes of an object by detaching it from the larger context (Nisbett, Peng, Choi, & Norenzayan, 2001). Relatedly, Monga and John (2010) showed that Eastern (vs. Western) consumers tend to evaluate extensions more favourably due to linking an extension with the parent brand more easily, hence perceiving a higher level of extension fit in their evaluations . This was attributed mainly to Eastern consumers’ holistic (vs. Western consumers’ analytic) thinking styles.

Self-construal is another culture-related individual difference that influences extension evaluations (Ahluwalia, 2008). Individuals with an independent self-construal view themselves as separate from other people, whereas individuals with an interdependent self-construal view themselves as connected with others. Due to a higher relational processing ability, high interdependents are expected to perceive higher fit judgments, resulting in more favourable brand extension evaluations. Also, motivating these consumers’ relational processing , such as through advertisement, enhances their evaluations. Low interdependents, however, have higher difficulty in perceiving parent brand extension links leading to relatively have poorer extension evaluations.

Lastly, extension failures may have differential effects across cultures (Ng, 2010). Due to paying higher attention to diagnostic information (Aaker & Maheswaran, 1997), Eastern consumers are shown to exhibit higher dilution effects when a typical extension fails, under the condition that their motivation is high. On the contrary, under high motivation, Western consumers are likely to pay attention to the whole of the information provided, rather than focusing narrowly on the diagnostic negative information. This finding suggests that high-involvement products should be handled with more caution when extending into new categories in Eastern countries because of the potential negative feedback effects.

While extant research conveys significant findings about the effects of cultural differences on extension judgments, further research can explore additional cultural variables such as the effects of country of origin associations or brand symbolism on extension evaluations. Whether such associations transfer to the brand extensions will provide valuable theoretical and managerial insights. Moreover, despite the prevalence of brand extension practice in marketplace, how global versus local brand extensions differ in their evaluations remains unexplored.

Brand Relationships and Culture

Culture can further influence how consumers identify themselves with other consumer groups that have shared admiration around a brand, and how consumers react to brand wrong-doings. Next, we discuss how brand communities and consumer reactions toward brand transgressions may be impacted by culture.

Brand Community

Consumers are likely to build stronger relationships with brands that have compatible values and associations with their self-concepts (Sirgy, 1982). Since Fournier’s influential article that indicated brands as relational partners (Fournier, 1998), understanding how consumers form relationships with brands has become a fundamental topic in marketing. Moving ahead from the dyadic consumer–brand relationship, Muniz and O’Guinn (2001) argued that brands are socially constructed and consumers establish social relationships among each other forming brand communities. A brand community consists of groups of individuals with shared admiration around a branded good or a service (Muniz & O’Guinn, 2001). As much as they are valuable for a brand, brand communities may be troublesome in cases where the members of a brand community may oppose marketing efforts of the brand. Especially in the digital environment where information is disseminated easily, managers need to be aware of and form strategic relationships with influential brand communities.

Importantly, brand communities are defined as geographically unbound; they include geographically and culturally dispersed consumer groups . Members of a group feel socially connected although they do not know each other (Muniz & Schau, 2005). Other evidence points to the existence of geographically bound consumer groups such as the Mediterranean consumer (Cova, 1997), or the Asian brand imagery (Cayla & Eckhardt, 2008). Identifying these geographically bound versus unbound consumer groups, understanding their characteristics and interrelations is a topic of further investigation. Understanding whether and how consumer attitudes are influenced by co-memberships both to a brand community and a geographical group may be helpful in developing communication strategies when targeting the members of a brand community.

Further research can explore brand community structure from a cross-cultural perspective. Most notable brand community examples mentioned in the literature are well-established global brands, such as Harley Davidson, Apple, and Jeep (Schouten & McAlexander, 1995). Whether consumer attitudes differ toward geographically concentrated brand communities in different cultures, and how culturally construed trait variables , such as individualism versus collectivism, influence consumers’ affiliation with the brand and with others in the brand community are interesting research questions. For example, Escalas and Bettman (2005) investigated the differential effects of independent versus interdependent self-construals on self-brand connections. They showed that negative out-group brand associations lead to stronger effects on independent versus interdependent consumers. Relying on ethno-cultural differences in testing their hypotheses, they compared Asian and Hispanic Americans to white Americans. Use of broader cross-cultural differences in related studies will provide more generalizable results among cultures.

Reactions to Brand Transgressions

Product-harm crisis and brand failures are prevalent in marketplace. They can lead to market share and revenue losses, lower stock prices, damage brand equity and quality perceptions, and hurt a company’s reputation (Chen, Ganesan, & Liu, 2009; van Heerde, Harald, & Dekimpe, 2007). They may also result in consumers’ feelings of irritation, annoyance, and anger (Smith & Ruth, 2002). Relatedly, consumer reactions to negative brand information has been a widely researched topic in marketing (Ahluwalia, Burnkrant, & Unnava, 2000; Dawar & Pillutla, 2000). Managing such crises effectively is a significant issue for firms and necessitates further research attention in the cross-cultural domain as generalizable knowledge across cultures is still limited.

Previous research revealed that committed consumers to a brand are more likely to counterargue, and are less influenced by negative information about the brand (Ahluwalia et al., 2000). Swaminathan, Page, and Gürhan-Canli (2007) extended prior findings by adding the group identity (country-of-origin association) component to the individual-identity component. They showed that a brand’s country-of-origin association can result in consumers’ higher tolerance toward negative information about a brand, especially for individuals with interdependent self-construals. Therefore, drawing consumers’ attention to a brand’s country-of-origin association may weaken the unfavourable outcomes of receiving negative brand information.

Asian consumers are generally easier to satisfy and more tolerant than Western consumers in service settings (Zhang, Beatty, & Walsh, 2008). Building on this premise, Chan, Wan, and Sin (2009) showed that Asian (vs. Western) consumers’ greater tolerance pertains to non-social failures. Asian consumers tend to be less dissatisfied with non-social failures, but more dissatisfied with social failures. Because of Asian culture’s higher concern for face (i.e. positive image of the self in social context), they are more likely to feel offended in situations of social failure that occur in the presence of others. Asian and Western consumers are further determined to differ in their brand switching intentions in cases of brand failures. Ng, Kim, and Rao (2015) showed that Western consumers are more likely to experience regret leading to brand switching intentions when they are not able to prevent a product failure. On the contrary, Eastern consumers are more likely to experience regret and switch brands when their group (as opposed to themselves) is not able to prevent a product failure. Consequently, regret has differential effects on brand switching intentions of consumers from different cultures.

Brand and product transgressions are not unique to brand failure or crisis situations. Successful global brands may become targets of antibrand activism without any specific wrong-doings. In their analyses, Thompson and Arsel (2004) demonstrated that while Starbucks gives the concept of coffee house a new meaning, it also receives severe opposition from various consumer groups around the world . Such strong brands may be perceived as destroying local competition, and globalizing capitalism with their mass-marketed and standardized offerings, which are considered to serve large corporations (Thompson & Arsel, 2004). As a result, they can attract severe public aggression.

A related research stream to brand transgressions is brand animosity. Research findings on animosity suggest that regardless of product judgments, consumers may feel hostility, or antipathy, toward specific brands due to the perceptions of the country of manufacturing. Animosity is a country-specific concept and may stem from varying reasons, such as political, economic, or military anger, unfair trading practices , or personal hostility (Klein, Ettenson, & Morris, 1998). Importantly, consumers may hold animosity toward a country independent of the quality of goods produced by that country. They may not buy the country’s products despite thinking that the products are of high quality. Therefore, animosity may result in consumers’ lower purchase behaviour above and beyond product judgments (Klein et al., 1998). Notably, animosity and ethnocentrism are distinct and opposing concepts in valence. Animosity refers to negative perceptions toward the goods of specific nations, whereas ethnocentrism refers to favouring local goods over the foreign alternatives (Klein, 2002). Ethnocentric consumers are inclined to consider the quality of locally produced goods as better, and find it inappropriate to purchase foreign alternatives. Which one dominates consumers’ purchase intentions across cultures remains to be investigated (Klein, 2002).

Brand transgressions, failures, or animosity creates barriers to marketing practices. It is important for marketing managers to understand consumer attitudes and buying behaviour toward brand wrong-doings when targeting different geographical segments. Yet, limited research exists in the cross-cultural context. Analysing the existing findings on a larger sample of cultures is needed to uncover the differential effects of brand transgressions across cultures. Also, the interaction of brand transgressions with a broader set of cultural dimensions (other than individualism vs. collectivism) remains to be researched.

Conclusion

In this chapter, we have reviewed academic research conducted in the last 30 years at the interface of culture and branding. We have also identified important managerial insights and addressed unexplored topics in the literature. The rich array of findings discussed in our chapter has identified several important areas for future research. Increasing rate of global investments, international mobility, immigration, internet, diffusion of ideas, goods, information, and capital across borders highlight the growing importance of cross-cultural branding research for both marketing researchers and practitioners.

When managing global brands, it has long been a challenge to convey consistent brand images across cultures while adapting to expectations of local consumers. The growth of multiculturalism in the marketplace, and the emergence of a global culture, brings new challenges for brand management. Culture still does matter and the changing landscape of culture influences branding practices in several ways. As discussed in this chapter, it is vital for managers to recognize the cultural meaning and symbolism of brands for multicultural consumers and to develop branding strategies that are suitable in local and global markets.

Importantly, while the majority of the world’s population live in emerging countries, most of the marketing research outlined in this chapter has been conducted in the USA or in other Western countries (Steenkamp, 2005). With globalization, it is increasingly important to generalize the applicability of past research findings across cultures, and particularly so in less developed parts of the world.