The United States' involvement in Iraq has generated a lot of debate about the potential impact on American businesses abroad. Yet, very little systematic research has addressed the effect of geo-political conflicts on consumer decision-making. Now, a new study appearing in the December issue of the Journal of Consumer Research, explores how our range of reactions to political events may affect purchasing. Notably, the researchers found that not all negative feelings towards a country will lead to product evaluations based on country of origin.
While research has been done on how general mood affects purchases, Durairaj Maheswaran (New York University) and Cathy Yi Chen (Singapore School of Management) are the first to analyze specific emotions – in this case, frustration, anger, and sadness. They found that angry people try to punish a country by not buying its products, while people saddened by a country’s actions believe the event is beyond human control – and this emotion does not affect their purchasing.
"For example, American Express, by virtue of its brand name association to the United States, may be unfavorably evaluated if a segment of the current users in the Middle East attribute the conflict to the United States. Alternately, if the attribution were to be made to the situation, then American Express is not likely to be affected," explain Maheswaran and Chen.
Based on their findings, the researchers introduced the concept of Nation Equity, a valuation of a product that reflects country of origin. The value has a performance component related to how well similar products from that country perform and also to how well the country’s products perform in general. It also has an emotional component based on what negative associations consumers make about the country and its actions.
"Companies should anticipate and minimize the effect of incidental emotions that are induced by national events by designing strategies that mitigate such emotional influences," write the authors. "Future research should investigate the various dimensions of Nation Equity and identify emotions and the related cognitive appraisal dimensions that are likely to dilute or enhance Nation Equity."
Founded in 1974, the Journal of Consumer Research publishes scholarly research that describes and explains consumer behavior. Empirical, theoretical, and methodological articles spanning fields such as psychology, marketing, sociology, economics, and anthropology are featured in this interdisciplinary quarterly. The primary thrust of JCR is academic, rather than managerial, with topics ranging from micro-level processes (e.g., brand choice) to more macro-level issues (e.g., the development of materialistic values).
Durairaj Maheswaran and Cathy Yi Chen, "Nation Equity: Incidental Emotions in Country-of Origin Effects." Journal of Consumer Research: December 2006.
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Journal of Consumer Research