Executive summary of “Global nation product equity depending on a level of cultural diffusion”

Citation

(2015), "Executive summary of “Global nation product equity depending on a level of cultural diffusion”", Journal of Product & Brand Management, Vol. 24 No. 3. https://doi.org/10.1108/JPBM-05-2015-851

Executive summary of “Global nation product equity depending on a level of cultural diffusion”

Article Type: Executive summary and implications for managers and executives From: Journal of Product & Brand Management, Volume 24, Issue 3

This summary has been provided to allow managers and executives a rapid appreciation of the content of the article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present.

Economic prosperity can be significantly increased through a nation’s cultural products. Recent decades have seen Korea positioned to exploit such opportunities. Since the 1990s, demand for movies, soap operas, pop music and other Korean entertainment products has grown throughout Asia following their initial export to Chinese audiences. That a Korean pop-concert attracted 70,000 Japanese fans to a Tokyo arena in 2013 illustrates just how popular such offerings have become.

Labeled “Hallyu” or “Korean Wave”, these cultural products have attracted growing attention from various countries first in Europe, and then in North America. These patterns of cultural diffusion have reversed the usual trend whereby such products are transferred from developed nations to their developing counterparts. That the adoption is occurring the other way round has been attributed to the Internet and especially to the global proliferation in the popularity of social media platforms like YouTube, Facebook and Twitter.

Various commentators believe that culture-related products hold the key for longer-term economic development in Korea. Hallyu is regarded as being especially important in this respect. In the view of Kim et al., Korea should therefore aim to develop cultural products or “Culdcuts” that showcase the distinctive cultural elements and attributes the country has to offer. Incorporating aspects that other nations would find difficult to replicate is viewed as equally important.

In addition to the sizeable economic boost, Hallyu has quickly enhanced Korea’s country image. A significant effect of this positive image is increased consumer belief in the credibility of firms and brands in Korea. Overseas demand has consequently grown for a variety of Korean products such as electronics, games, food and tourism as well as those related to Hallyu.

Certain analysts have expressed some skepticism though. They do concede that Hallyu has helped improved country image, but question its direct impact on sales. Furthermore, they argue that country image in relation to the product category concerned has a greater impact on consumer purchase decisions than does Hallyu. This is regarded as being particularly the case for products deemed to incorporate high financial risks. The limited life-span of culture-related offerings is another concern. Maintaining sales levels of Hallyu thus increases the pressure on Korea to regularly create entertainment products of superior quality. Others point to the lack of systematic control of Hallyu products which leaves them exposed to imitation by foreign competitors and seriously threatens their exclusivity.

The authors aim to measure the equity of certain Korean Culdcuts the present study suggests should be developed. For this purpose, a framework to ascertain global nation product equity (GNPE) is proposed. It is developed from the concept of global brand equity (GBE), the premise of which is that brand value is subject to vary across different countries due to differences in consumer and market contexts. Through GNPE, the GBE concept is extended to include “non-branded products” such as cultural offerings.

The GBE model was developed in response to convictions that widely deployed frameworks to measure brand equity (BE) had limitations. It was found difficult to generalize such models across different product categories, consumer segments, nations and cultures. Brand recognition, brand associations, brand value and purchase intention are the dimensions of GBE and are comparable to the components used in BE models.

Different factors are created to help measure GNPE in the present study. It is proposed that the equity of a country’s culture is important. Nation cultural equity (NCE) is therefore incorporated, as the aim is to evaluate Culdcuts. Also relating to country image is the equity of a specific product category of a particular country, which is measured by global nation product equity of a product category (GNPEPC) in the model. Equity of general rather than specific products and brands of a nation is also considered and reflected in the GNPE-general dimension.

A key aim of Kim et al. is to ascertain whether level of cultural diffusion shapes consumer GNPE of Korean products. To this end, the study measured awareness, association, perceived quality and loyalty in relation to Korean products and brands in general, Korean clothing and textile product category and brands and Korean Culdcut samples. The use of fashion-related Culdcuts was driven by the knowledge of Korea’s favorable reputation within the fashion sector.

It was felt that incorporating Hallyu into the design of a conventional Korean Culdcut offers a way to overcome challenges to such as the uniqueness and lifespan referred to previously. The authors believe that such distinctiveness and the generally low financial risk associated with Culdcuts can positively influence consumer purchase intention, regardless of quality and price. The two bag samples created for the study were a Korean traditional Culdcut and a modernized design incorporating a popular Hallyu entertainment group.

A total of 351 questionnaires were completed by subjects in China, USA, UK and France. These countries were chosen for the survey to represent varying degrees of Hallyu adoption. Different analyses were conducted and revealed evidence that level of cultural diffusion will result in:

• nations reflecting significant differences in respect of NCE, GNPE, GNPEPC and GNPE-general; and

• relationships between the four equities existing in different directions.

From this, the authors conclude that consumer perceptions and purchase intentions toward traditional Culdcuts in China can be raised through generally improving awareness and association pertaining to Korean products and brands. In The USA, it is recommended to focus on promoting Culdcuts in a category that is already viewed favorably there. Improving the equity of products and brands, in general, and at category level is essential to enhance GNPE. Strategies for the European markets should be based around improving GNPEPC.

The results prompt different suggestions for the modernized Culdcut which features Hallyu. Kim et al. believe that high Hallyu diffusion in China should guarantee sales without needing to emphasize Korea’s reputation at product category level. Ensuring that Hallyu constantly remain high quality will help further. Improving GNPE-general and GNPEPC is advised for the USA to boost perception of new or unfamiliar offerings. In European markets, a greater focus is needed on raising product-related equity relative to culture-related equity. The authors also recommend improving awareness of Culdcuts in nations where Hallyu diffusion is low. This can be achieved through educating consumers about Korean culture and products.

It would generally help to increase GNPE more quickly if Culdcuts are created in categories where Korea already boasts a solid reputation. Co-branding with global brands such as Samsung and Hyundai or a Korean celebrity are viable options. Such a strategy can increase Hallyu awareness and reduce costs of promotion and distribution. Partnerships with global Korean brands are particularly attractive to Chinese audiences, who also indicate a preference to buy online. Souvenir shops are the most favored outlet for those in the UK, France and the USA where promotion is most effective when conventional print and TV channels are used.

Testing of the GNPE framework in other countries is an option for future research which might additionally conduct longitudinal studies to measure the impact of changing Hallyu levels.

To read the full article enter 10.1108/JPBM-04-2014-0560 into your search engine.

(A précis of the article “Global nation product equity depending on a level of cultural diffusion”. Supplied by Marketing Consultants for Emerald.)