Acta Polytechnica Hungarica

Vol. 11, No. 3, 2014

Impact of Perceived Brand Name Origin on
Fashion Brand’s Perceived Luxury
Zoran Krupka, Durdana Ozretic-Dosen, Jozo Previsic
Faculty of Economics and Business, University of Zagreb
J. F. Kennedy Square 6, 10000 Zagreb, Croatia
E-mail: zkrupka@efzg.hr, dozretic@efzg.hr, jprevisic@efzg.hr

Abstract: The aim of this paper is to investigate the impact of perceived brand name origin and perceived country of origin (COO) on fashion brand’s perceived luxury. Results of exploratory research indicate that perceived brand name origin has a strong impact on perceived luxury, and subsequent willingness to pay a price premium, regardless whether the brand is fictional and only sounds as if originated from a certain country (e.g. “Italian sounding brand”) or is a real brand. Results also indicate that by naming fashion brands to have a desirable (e.g. Italian) tone, potential negative impacts of real COO and even a country of manufacture (COM) could be mitigated.
Keywords: Brand Name Origin; Luxury Fashion Brands; Country of Origin; Fashion
Marketing

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Introduction

Luxury brand management has been a topic of interest to many scientists and practitioners during the last decade. That is not surprising because luxury sector has grown from a value of $ 20 billion in 1985 [27] to its current over € 200
(estimated $ 260) billion worth and it is expected to grow 2-4 percents annually for the next two years [3]. Factors like growing globalization, development of digital and communication media, opportunities for easy money earning, countries like China and Russia opening for foreign brands, and cultural homogenization [8] have led to global success of numerous luxury brands, especially luxury fashion brands. But not all countries have a pedigree for developing luxury brands. That is even more obvious in fashion where over 80 percent of all luxury brands originate from only a few countries [27]. Because of that, it is very important from which country the brand is perceived to originate. That leads us to another, very important factor in developing luxury fashion brands - Country-of-Origin construct (COO).

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Z. Krupka et al.

Impact of Perceived Brand Name Origin on Fashion Brand’s Perceived Luxury

Although, COO has been present in literature for over five decades, it is still topic of many current studies (e.g. [35], [5], [28]).
COO effect is one of several extrinsic attributes that potentially influence consumer attitudes towards a product [9]. Approximately one-quater of consumers make purchase decisions on the basis of COO information [23]. Another extrinsic attribute that influence consumers perception of product is definitely brand name.
It has been suggested that the brand name cue evokes not only beliefs about the brand itself but also triggers recall of the country associated with it as its COO
[19] and that both have broad and specific effects on consumer behavior [31].
Topics like country of origin and luxury brand management, lately even fashion marketing, are well studied, but there is still lack of research in the area of impact of brand name’s perceived origin on perceived brand luxury. Although, there were some research that were pointed in that direction [2] [23], need for further understanding of this important issue still exists. In addition, most research was done in developed countries [6], thus omitting the understanding of developing countries which are opening up for luxury brands and thus becoming increasingly of interest to luxury brand marketers.
The question that this research aims to answer is whether it is possible, by selecting a brand name that is associated with desirable COO, to affect the perceived brand’s luxuriousness and to mitigate potentially negative impact of true
COO and even a Country-of-Manufacture (COM).

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2.1

Literature Review
Luxury Fashion Brands

Generally speaking, brand is a promise of performance to be delivered in return for the