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Brand-naming lessons for domestic businesses in Indonesia: choosing between local- and foreign-based brand names (MBA Dissertation)
S. Yanirma 2016
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S. Yanirma 2016
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BRAND-NAMING LESSONS FOR DOMESTIC BUSINESSES
IN INDONESIA:
Choosing between local- and foreign-based brand names
SHINTA YANIRMA
An excerpt of a Master of Business Administration dissertation
Adam Smith Business School
University of Glasgow
September 2016
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ACKNOWLEDGEMENTS
I would like to thank the Indonesia Endowment Fund for Education (LPDP) and the
Indonesia government for their very generous sponsorship of the master’s degree; my
supervisor, Dr. Cleopatra Veloutsou, for her insightful comments, guidance, support
and patience during the dissertation project; my MBA classmates for going through this
intense yet incredible journey together–for those 9-to-5 days in the 305, late hours in the
library, trips around Scotland and pints at the bars; and the staff–especially Bob,
Victoria and David–for their wonderful work during the course.
I dedicate this degree to my parents, Agus and Lily, whom trust me with what I want to
achieve in life. I know it is not always easy in such a traditional collectivistic society
that we live in.
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ABSTRACT
BRAND-NAMING LESSONS FOR DOMESTIC BUSINESSES IN INDONESIA:
CHOOSING BETWEEN LOCAL- AND FOREIGN-BASED BRAND NAMES
Firms intentionally create foreign brand names to invite beneficial associations of some
foreign countries through languages implied by the brand names. However, the
consumers’ ability to comprehend the meaning of foreign brand names may partly
depend on their familiarity and attitude toward the associated foreign language, which is
out of the firms’ control. This research compares consumers’ perceptions about a local
language (LL), close foreign languages (CFL) and distant foreign languages (DFL), and
their associated brand names in order to gain a better understanding of brand-naming in
different language contexts. Data were analysed using multiple regression and paired-
samples t-tests. In a survey participated in by 350 Indonesian consumers, (1) there was a
clear distinction between perceived meaningfulness and likeability of brand names in
LL-CFL-DFL, and (2) selecting brand names in LL or CFL was more beneficial than
DFL. However, language familiarity and attitude were not enough to predict brand
name meaningfulness and likeability for LL-CFL-DFL. The applicability of this
research is limited by sample size, cultural context, and product category, particularly
since the demography of survey participants is skewed toward urban, middle-class
consumers.
KEYWORDS. Foreign branding, brand naming, country of origin, likeability,
meaningfulness, language attitude, language familiarity
Contact the Author:
www.linkedin.com/in/theyanirma
How to cite this dissertation:
Yanirma, S. (2016). Brand-naming lessons for domestic businesses in Indonesia:
choosing between local- and foreign-based brand names (Unpublished master
dissertation). University of Glasgow, Glasgow.
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TABLE OF CONTENTS
ABSTRACT	.........................................................................................................................	5	
CHAPTER 01. INTRODUCTION	.......................................................................................	8	
1.1. RESEARCH BACKGROUND	.................................................................................................	8	
1.2. GAP IN THE LITERATURE	.................................................................................................	10	
1.3. RESEARCH QUESTIONS	....................................................................................................	11	
1.4. RESEARCH AIM AND OBJECTIVES	....................................................................................	11	
1.5. RESEARCH CONTRIBUTION	..............................................................................................	11	
1.6. DISSERTATION STRUCTURE	.............................................................................................	12	
CHAPTER 02. BRAND NAMES FROM CONSUMERS’ POINT OF VIEW	..................	13	
2.1. INTRODUCTION	................................................................................................................	13	
2.2. DEFINITIONS AND FUNCTIONS OF BRAND NAMES	............................................................	13	
2.3. ASSESSMENTS OF STRONG BRAND NAMES	......................................................................	13	
2.3.1. Meaningfulness ........................................................................................................13	
2.3.2. Likeability .................................................................................................................13	
2.4. CONCLUSION	...................................................................................................................	13	
CHAPTER 03. THE ROLE OF BRAND NAMES IN CLASSIFYING COUNTRY-OF-
ORIGIN	.............................................................................................................................	13	
3.1. INTRODUCTION	................................................................................................................	13	
3.2. THE CONSTRUCT OF “ORIGIN”	.........................................................................................	13	
3.3. FOREIGN BRANDING	........................................................................................................	13	
3.4. THE MISCLASSIFICATION OF COO	...................................................................................	13	
3.5. CONCLUSION	...................................................................................................................	13	
CHAPTER 04. RESEARCH FOCUS	................................................................................	14	
CHAPTER 05. METHODOLOGY	....................................................................................	14	
5.1. METHODOLOGICAL APPROACH	.......................................................................................	14	
5.2. STUDY 1: PRELIMINARY RESEARCH	................................................................................	14	
5.2.1. Product categories....................................................................................................14	
5.3. THE CONTEXT OF INDONESIAN LANGUAGE	.....................................................................	14	
5.3.1. The language classification .....................................................................................14	
5.3.2. Indonesian-Arabic context.......................................................................................14	
5.3.3. Indonesian-Chinese context ....................................................................................14	
5.3.4. Indonesian-Dutch context........................................................................................14	
5.3.5. Indonesian-Russian context ....................................................................................14	
5.4. STUDY 2: QUESTIONNAIRE DEVELOPMENT	.....................................................................	14	
5.4.1. Stimuli design ...........................................................................................................14	
5.8. STUDY 2: DATA ANALYSIS	..............................................................................................	14	
5.9. CONCLUSION	...................................................................................................................	14	
CHAPTER 06. FINDINGS FROM STUDY 2	....................................................................	15	
6.1. SCALE RELIABILITY, MEANS AND STANDARD DEVIATIONS	.............................................	15	
6.1.1. Scale reliability .........................................................................................................15	
6.1.2. Means of variables ...................................................................................................15	
6.2. COMPARISON OF STUDY 1 AND STUDY 2 RESULTS	.........................................................	15	
6.3. OVERVIEW OF RESPONSES FOR LL, CFL AND DFL	.........................................................	15	
6.3.1. Frequencies of answers............................................................................................15	
6.3.2. Language recognition accuracy ..............................................................................15	
6.4. HYPOTHESIS TESTING WITH REGRESSION ANALYSIS	.......................................................	15	
6.4.1. Assumptions..............................................................................................................15	
6.4.2. Meaningfulness of brand names in CFL as a dependent variable ........................15	
6.4.3. Meaningfulness of brand names in DFL as a dependent variable ........................15
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6.4.4. Likeability of brand names in CFL as a dependent variable..................................15	
6.4.5. Likeability of brand names in DFL as a dependent variable .................................15	
6.4.6. General interpretation of the regression tests .........................................................15	
6.5. HYPOTHESIS TESTING WITH PAIRED-SAMPLES T-TEST	....................................................	15	
6.5.1. Brand name meaningfulness...................................................................................15	
6.5.2. Brand name likeability.............................................................................................15	
6.6. SUMMARY OF FINDINGS	..................................................................................................	15	
CHAPTER 07. DISCUSSION	............................................................................................	16	
7.1. INTERPRETATIONS OF FINDINGS	......................................................................................	16	
7.1.1. Expected results: brand name meaningfulness and likeability..............................16	
7.1.2. Unexpected result: brand name likeability..............................................................16	
7.1.3. Novel findings: language familiarity and attitude..................................................16	
7.2. IMPLICATIONS TO THEORIES	............................................................................................	16	
7.2.1. The local-foreign dichotomy....................................................................................16	
7.2.2. Brand name meaningfulness and likeability...........................................................16	
7.2.3. COO cues and recognition accuracy.......................................................................16	
CHAPTER 08. CONCLUSION	.........................................................................................	16	
8.1. MANAGERIAL IMPLICATIONS: WHICH LANGUAGE IS THE BEST FOR A BRAND NAME?	....	16	
8.2. RESEARCH LIMITATIONS	.................................................................................................	16	
8.3. DIRECTION FOR FUTURE RESEARCHES	............................................................................	16	
REFERENCES	..................................................................................................................	17
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CHAPTER 01. INTRODUCTION
1.1. Research background
The development of a new brand name requires a large investment in resources, and it
involves many internal and external parties (Schmitt and Zhang, 2012). The process
starts by specifying what the new brand name should accomplish, such as how it can
help the product positioning (Opatow, 1985). Brand names can comprise syllables with
no origin in the dictionary (e.g. Kodak) or word-based ones (e.g. Apple) (Lerman and
Garbarino, 2002). Although this research focuses on word-based brand names, all brand
names are created intending to communicate ideas (Heding et al., 2009).
As in any form of communication, languages are the medium. Even when firms do not
advertise the link between brand names and languages, consumers hold their own
perception regarding local-sounding or foreign-sounding brand names (Opatow, 1985).
Yet, more often than not, firms intentionally develop brand names that sound foreign to
invite beneficial associations (Thakor, 1996).
In Indonesia, Astor, Chitato, Marie Regal, Nu Green Tea, Okky Jelly Drink, Richeese,
Roma Marie, Silverqueen, Tango, and Ultra Milk are some of the most sought-after
snack products (www.topbrand-award.com, 2016). These brand names are recognised
by the majority of Indonesian consumers, as they are easy to find in school cafeterias or
minimarkets. However, these brand names are often mistaken as having foreign origin,
despite being developed by local firms. Such misperception is owing to creating brand
names from foreign words (Tjiptono et al., 2015). This misperception is usually
intentional (Melnyk et al., 2012; Son et al., 2013; Zhang, 2015). BrandZ’s (2015) list of
the top 50 most valuable brands in Indonesia contains 22 brand names in the Indonesian
language and 20 in foreign languages. It is difficult to determine which practice is more
common between brand names that sound local and foreign based on the above
examples, but both practices are seemingly prevalent in comparison.
Experimenting with foreign brand names has been trending since the rise of
globalisation (Xie et al., 2015). Nonetheless, when the meaning of brand names in a
local language must be relatively easy to understand by local consumers, foreign brand
names are less so by default. The consumers’ ability to comprehend the meaning of
foreign brand names would partly depend on their past exposure to the associated
foreign languages, which is out of the firms’ control (Schmitt and Zhang, 2012). There
is also an indication that consumers hold an attitude toward certain foreign languages,
which may cause bias in perceiving foreign brand names as more or less likeable than
usual (Leclerc et al., 1994; Alden et al., 1999; Giraldi et al., 2011; Melnyk et al., 2012).
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The branding literature suggests meaningfulness and likeability as the successful criteria
of brand naming (Keller, 2013). Since there is a doubt that consumers always apprehend
the meaning of foreign brand names, using foreign phrases in the brand may impact
upon perceived brand name meaningfulness and likeability.
Some reasons for firms to choose foreign brand names are to emulate the image of
prestigious foreign brands and to evoke foreign associations (Melnyk et al., 2012). It is
observed that the increasing use of foreign brand names is somewhat in line with the
increasing popularity of related foreign languages, such as the trend for English shop
signs in Tehran (Khosravizadeh and Sanjareh, 2011) or using French-sounding names
for South Korean cosmetic brands, e.g. Laneige and Mamonde (Melnyk et al., 2012). A
firm’s decision on foreign branding may also signal a herding behaviour in the
marketplace. In developing countries, many successful brands belong to multinational
companies. Not only are they successful, but these brands often become market leaders
in their category, such as Unilever’s or Procter & Gambler’s products in many countries
in which they operate (Keller, 2013). In a sense, it provides an incentive for local firms
to craft foreign brand names.
The motivation to pursue foreign branding is sometimes vague, but the effectiveness of
foreign branding is known to an even lesser extent. However, questionable effectiveness
is not an exclusive issue of foreign branding. Broadly speaking, it applies to the general
brand naming practice, as there is no formal, one-size-fits-all approach to brand naming.
Managers often follow their intuition, rather than following certain guidelines (Schmitt
and Zhang, 2012). Besides, existing guidelines on brand naming are not failure-proof.
So, the easiest route is to follow the pattern of successful brand names–usually, those of
competitors.
Another motivation for foreign branding is to mask the product’s country of
manufacture (COM), for instance, where targeted consumers may hold a stereotype
toward the COM (Magnusson et al., 2008; Zhang, 2015). It has led many foreign
branding studies to seek the opinions of consumers living in a country that is different
from the implied origin of the brand names, such as Krupka et al. (2014) who asked for
Croatian consumers’ reactions toward various COM (e.g. Bulgaria, China, Indonesia,
Mexico), to discern that Italian-sounding brand names were preferred among other
options. Yet, it is hard to find studies examining local consumers’ reactions toward
local firms that use foreign brand names. While Zhang (2015) observed that domestic
brands often pretend to be foreign, it is uncertain whether local consumers accept local
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firms’ efforts to appear foreign, when the products are made in a domestic
establishment.
1.2. Gap in the literature
The focus of this research combines several areas of knowledge: brand naming, foreign
branding, the country of origin, and the linguistics of the foreign language. The ideas of
brand naming research usually centre on consumers’ perceptions toward the varying
compositions of brand names. The notion of foreign branding research is mostly about
documenting and contrasting consumers’ reactions toward brand elements in
local/foreign identities (Apaolaza et al., 2014; De Meulenaer et al., 2015). This research
relies on the contexts of country-of-origin (COO) and country stereotype, because in
foreign branding, a product’s implied origin differs from its actual origin. This situation
gives rise to derivative theories, such as “COO congruence versus COO incongruence”
(Melnyk et al., 2012), “perceived brand localness versus perceived brand global-ness”
(Xie et al., 2015), and “COO cues versus COO information” (De Meulenaer et al.,
2015).
Consumers seem to prefer a specific COO for certain product categories, and firms
configure their branding elements to trigger associations with certain countries
(Magnusson et al., 2008). Consequently, it is suggested that country stereotype plays a
role in branding (Zhang, 2015), as hinted by COO literature that is over fifty years old
(Bowe et al., 2013).
Brand names are linguistic products by themselves. As mentioned, brand names are
often evaluated based on consumers’ perception of their meaningfulness and likeability.
Surprisingly, there are only a few foreign branding studies that examine meaningfulness
and likeability to the researcher’s knowledge. Even in studies documenting consumers’
attitude toward foreign brand names, the attitude is often anchored by purchase
intention (for example, see Pan et al., 2015) or willingness to pay (for example, see
Koschate-Fischer et al., 2012), without a separate measurement for brand name
evaluation, suggesting meaningfulness and likeability are skipped, because these are
implied in the purchase likelihood. Thus, further studies are needed to achieve balance
in the perspective.
Moreover, foreign branding studies are bound by cultural context, since what is
considered “foreign” largely varies from one region to another. The researcher believes
that the missing links, as laid out in section 1.1. and 1.2., are worth investigating.
Therefore, this research will help to bridge the gap between the aforementioned fields.
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1.3. Research questions
The research questions for this study are formulated as follows,
1. Which brand names generate a greater liking from Indonesian consumers, brand
names associated with a local language, close foreign languages, or distant
foreign languages?
2. Does familiarity toward a language increase perceived meaningfulness and
likeability of brand names associated with that language?
3. Does attitude toward a language increase perceived meaningfulness and
likeability of brand names associated with that language?
4. Regarding the perceived distance between a consumers’ native language and the
languages of the brand names, are brand names from languages with closer
distance being evaluated more favourably than brand names from languages
with further distance?
1.4. Research aim and objectives
This paper aims to assess consumers’ perceptions toward local and foreign languages to
seek possible links with consumers’ evaluations of brand names in local and foreign
languages.
The objectives of this paper are as follows,
• To assess the degree of consumers’ familiarity and attitude toward a local
language, close foreign languages, and distant foreign languages.
• To assess the magnitude of differences between perceived meaningfulness and
likeability of brand names in a local language, close foreign languages, and
distant foreign languages from a consumers’ point of view.
• To seek links between consumers’ perceptions toward local and foreign
languages and their evaluation of brand names in associated languages.
1.5. Research contribution
While many foreign branding research has been conducted in developed countries
(since the original intention was to reduce negative stereotypes held against products
associated with developing countries), only a few were carried out in the interest of the
emerging economies. It does not go unnoticed that researchers have been encouraging
future studies to pursue more understanding by further exploring “[…]the linguistic
nature of a brand name which presently receives little academic attention” (Harun et al.,
2011, p.286), notably, the acceptance toward foreign brand names by connecting them
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to “[…]language fluency in a different linguistic context” (Lee and Baack, 2014, p.533).
Lee and Baack (2014) advised that future studies look beyond the English language
context in order to expand the branding literature, particularly toward a deeper
understanding related to foreign brand names. This research is intended to find the
evidence in Indonesia, an emerging economy whose growing middle class holds
substantial purchasing power (KPMG, 2013; Pwc, 2015), but lacks research related to
branding. Previously, McDonald and Roberts (1990, p.7) warned marketers of the risk
of inappropriate brand-naming in the Asia Pacific region, because there is “a cultural
context where diversity creates inconsistencies of interpretation, association, and
perception.”
Last, this research is hoped to contribute in the following ways:
• For academic scholars: to enrich the variety of empirical findings in the foreign
branding literature.
• For researchers: to provide information on measuring the performance of foreign
branding as evaluated by consumers.
• For professionals: to serve as a reference during the brand naming and foreign
branding decision making process.
1.6. Dissertation structure
This dissertation consists of eight chapters as follows:
• Chapter 1 introduces the background of the dissertation by highlighting related
phenomenon and facts and setting the research direction.
• Chapters 2 and 3 lay the foundation of the research by reviewing literature.
Chapter 2 focuses on brand name literature, while Chapter 3 focuses on the
construct of origin.
• Chapter 4 lists the research variables, hypotheses, and comparison to their
counterparts in previous research.
• Chapter 5 describes the selection of research design and method.
• Chapter 6 discusses the empirical findings of the research.
• Chapter 7 interprets the implication of the findings to existing theories and
practices.
• Chapter 8 concludes the research and suggests improvements for future research.
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CHAPTER 02. BRAND NAMES FROM CONSUMERS’ POINT OF VIEW
2.1. Introduction
2.2. Definitions and functions of brand names
2.3. Assessments of strong brand names
2.3.1. Meaningfulness
2.3.2. Likeability
2.4. Conclusion
CHAPTER 03. THE ROLE OF BRAND NAMES IN CLASSIFYING COUNTRY-
OF-ORIGIN
3.1. Introduction
3.2. The construct of “origin”
3.3. Foreign branding
3.4. The misclassification of COO
3.5. Conclusion
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CHAPTER 04. RESEARCH FOCUS
CHAPTER 05. METHODOLOGY
5.1. Methodological approach
5.2. Study 1: Preliminary research
5.2.1. Product categories
5.3. The context of Indonesian language
5.3.1. The language classification
5.3.2. Indonesian-Arabic context
5.3.3. Indonesian-Chinese context
5.3.4. Indonesian-Dutch context
5.3.5. Indonesian-Russian context
5.4. Study 2: Questionnaire development
5.4.1. Stimuli design
5.8. Study 2: Data analysis
5.9. Conclusion
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CHAPTER 06. FINDINGS FROM STUDY 2
6.1. Scale reliability, means and standard deviations
6.1.1. Scale reliability
6.1.2. Means of variables
6.2. Comparison of Study 1 and Study 2 results
6.3. Overview of responses for LL, CFL and DFL
6.3.1. Frequencies of answers
6.3.2. Language recognition accuracy
6.4. Hypothesis testing with regression analysis
6.4.1. Assumptions
6.4.2. Meaningfulness of brand names in CFL as a dependent variable
6.4.3. Meaningfulness of brand names in DFL as a dependent variable
6.4.4. Likeability of brand names in CFL as a dependent variable
6.4.5. Likeability of brand names in DFL as a dependent variable
6.4.6. General interpretation of the regression tests
6.5. Hypothesis testing with paired-samples t-test
6.5.1. Brand name meaningfulness
6.5.1.1. LL and CFL
6.5.1.2. CFL and DFL
6.5.1.3. LL and DFL
6.5.2. Brand name likeability
6.5.2.1. LL and CFL
6.5.2.2. CFL and DFL
6.5.2.3. LL and DFL
6.6. Summary of findings
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CHAPTER 07. DISCUSSION
7.1. Interpretations of findings
7.1.1. Expected results: brand name meaningfulness and likeability
7.1.2. Unexpected result: brand name likeability
7.1.3. Novel findings: language familiarity and attitude
7.2. Implications to theories
7.2.1. The local-foreign dichotomy
7.2.2. Brand name meaningfulness and likeability
7.2.3. COO cues and recognition accuracy
CHAPTER 08. CONCLUSION
8.1. Managerial implications: Which language is the best for a brand name?
8.2. Research limitations
8.3. Direction for future researches
***
FULL WORD COUNT
Around 17,500 words (excluding abstract, list of contents, tables, references,
appendices)
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Brand-naming lessons for domestic businesses in Indonesia: choosing between local- and foreign-based brand names (MBA Dissertation)

  • 3. S. Yanirma 2016 3 BRAND-NAMING LESSONS FOR DOMESTIC BUSINESSES IN INDONESIA: Choosing between local- and foreign-based brand names SHINTA YANIRMA An excerpt of a Master of Business Administration dissertation Adam Smith Business School University of Glasgow September 2016
  • 4. S. Yanirma 2016 4 ACKNOWLEDGEMENTS I would like to thank the Indonesia Endowment Fund for Education (LPDP) and the Indonesia government for their very generous sponsorship of the master’s degree; my supervisor, Dr. Cleopatra Veloutsou, for her insightful comments, guidance, support and patience during the dissertation project; my MBA classmates for going through this intense yet incredible journey together–for those 9-to-5 days in the 305, late hours in the library, trips around Scotland and pints at the bars; and the staff–especially Bob, Victoria and David–for their wonderful work during the course. I dedicate this degree to my parents, Agus and Lily, whom trust me with what I want to achieve in life. I know it is not always easy in such a traditional collectivistic society that we live in.
  • 5. S. Yanirma 2016 5 ABSTRACT BRAND-NAMING LESSONS FOR DOMESTIC BUSINESSES IN INDONESIA: CHOOSING BETWEEN LOCAL- AND FOREIGN-BASED BRAND NAMES Firms intentionally create foreign brand names to invite beneficial associations of some foreign countries through languages implied by the brand names. However, the consumers’ ability to comprehend the meaning of foreign brand names may partly depend on their familiarity and attitude toward the associated foreign language, which is out of the firms’ control. This research compares consumers’ perceptions about a local language (LL), close foreign languages (CFL) and distant foreign languages (DFL), and their associated brand names in order to gain a better understanding of brand-naming in different language contexts. Data were analysed using multiple regression and paired- samples t-tests. In a survey participated in by 350 Indonesian consumers, (1) there was a clear distinction between perceived meaningfulness and likeability of brand names in LL-CFL-DFL, and (2) selecting brand names in LL or CFL was more beneficial than DFL. However, language familiarity and attitude were not enough to predict brand name meaningfulness and likeability for LL-CFL-DFL. The applicability of this research is limited by sample size, cultural context, and product category, particularly since the demography of survey participants is skewed toward urban, middle-class consumers. KEYWORDS. Foreign branding, brand naming, country of origin, likeability, meaningfulness, language attitude, language familiarity Contact the Author: www.linkedin.com/in/theyanirma How to cite this dissertation: Yanirma, S. (2016). Brand-naming lessons for domestic businesses in Indonesia: choosing between local- and foreign-based brand names (Unpublished master dissertation). University of Glasgow, Glasgow.
  • 6. S. Yanirma 2016 6 TABLE OF CONTENTS ABSTRACT ......................................................................................................................... 5 CHAPTER 01. INTRODUCTION ....................................................................................... 8 1.1. RESEARCH BACKGROUND ................................................................................................. 8 1.2. GAP IN THE LITERATURE ................................................................................................. 10 1.3. RESEARCH QUESTIONS .................................................................................................... 11 1.4. RESEARCH AIM AND OBJECTIVES .................................................................................... 11 1.5. RESEARCH CONTRIBUTION .............................................................................................. 11 1.6. DISSERTATION STRUCTURE ............................................................................................. 12 CHAPTER 02. BRAND NAMES FROM CONSUMERS’ POINT OF VIEW .................. 13 2.1. INTRODUCTION ................................................................................................................ 13 2.2. DEFINITIONS AND FUNCTIONS OF BRAND NAMES ............................................................ 13 2.3. ASSESSMENTS OF STRONG BRAND NAMES ...................................................................... 13 2.3.1. Meaningfulness ........................................................................................................13 2.3.2. Likeability .................................................................................................................13 2.4. CONCLUSION ................................................................................................................... 13 CHAPTER 03. THE ROLE OF BRAND NAMES IN CLASSIFYING COUNTRY-OF- ORIGIN ............................................................................................................................. 13 3.1. INTRODUCTION ................................................................................................................ 13 3.2. THE CONSTRUCT OF “ORIGIN” ......................................................................................... 13 3.3. FOREIGN BRANDING ........................................................................................................ 13 3.4. THE MISCLASSIFICATION OF COO ................................................................................... 13 3.5. CONCLUSION ................................................................................................................... 13 CHAPTER 04. RESEARCH FOCUS ................................................................................ 14 CHAPTER 05. METHODOLOGY .................................................................................... 14 5.1. METHODOLOGICAL APPROACH ....................................................................................... 14 5.2. STUDY 1: PRELIMINARY RESEARCH ................................................................................ 14 5.2.1. Product categories....................................................................................................14 5.3. THE CONTEXT OF INDONESIAN LANGUAGE ..................................................................... 14 5.3.1. The language classification .....................................................................................14 5.3.2. Indonesian-Arabic context.......................................................................................14 5.3.3. Indonesian-Chinese context ....................................................................................14 5.3.4. Indonesian-Dutch context........................................................................................14 5.3.5. Indonesian-Russian context ....................................................................................14 5.4. STUDY 2: QUESTIONNAIRE DEVELOPMENT ..................................................................... 14 5.4.1. Stimuli design ...........................................................................................................14 5.8. STUDY 2: DATA ANALYSIS .............................................................................................. 14 5.9. CONCLUSION ................................................................................................................... 14 CHAPTER 06. FINDINGS FROM STUDY 2 .................................................................... 15 6.1. SCALE RELIABILITY, MEANS AND STANDARD DEVIATIONS ............................................. 15 6.1.1. Scale reliability .........................................................................................................15 6.1.2. Means of variables ...................................................................................................15 6.2. COMPARISON OF STUDY 1 AND STUDY 2 RESULTS ......................................................... 15 6.3. OVERVIEW OF RESPONSES FOR LL, CFL AND DFL ......................................................... 15 6.3.1. Frequencies of answers............................................................................................15 6.3.2. Language recognition accuracy ..............................................................................15 6.4. HYPOTHESIS TESTING WITH REGRESSION ANALYSIS ....................................................... 15 6.4.1. Assumptions..............................................................................................................15 6.4.2. Meaningfulness of brand names in CFL as a dependent variable ........................15 6.4.3. Meaningfulness of brand names in DFL as a dependent variable ........................15
  • 7. S. Yanirma 2016 7 6.4.4. Likeability of brand names in CFL as a dependent variable..................................15 6.4.5. Likeability of brand names in DFL as a dependent variable .................................15 6.4.6. General interpretation of the regression tests .........................................................15 6.5. HYPOTHESIS TESTING WITH PAIRED-SAMPLES T-TEST .................................................... 15 6.5.1. Brand name meaningfulness...................................................................................15 6.5.2. Brand name likeability.............................................................................................15 6.6. SUMMARY OF FINDINGS .................................................................................................. 15 CHAPTER 07. DISCUSSION ............................................................................................ 16 7.1. INTERPRETATIONS OF FINDINGS ...................................................................................... 16 7.1.1. Expected results: brand name meaningfulness and likeability..............................16 7.1.2. Unexpected result: brand name likeability..............................................................16 7.1.3. Novel findings: language familiarity and attitude..................................................16 7.2. IMPLICATIONS TO THEORIES ............................................................................................ 16 7.2.1. The local-foreign dichotomy....................................................................................16 7.2.2. Brand name meaningfulness and likeability...........................................................16 7.2.3. COO cues and recognition accuracy.......................................................................16 CHAPTER 08. CONCLUSION ......................................................................................... 16 8.1. MANAGERIAL IMPLICATIONS: WHICH LANGUAGE IS THE BEST FOR A BRAND NAME? .... 16 8.2. RESEARCH LIMITATIONS ................................................................................................. 16 8.3. DIRECTION FOR FUTURE RESEARCHES ............................................................................ 16 REFERENCES .................................................................................................................. 17
  • 8. S. Yanirma 2016 8 CHAPTER 01. INTRODUCTION 1.1. Research background The development of a new brand name requires a large investment in resources, and it involves many internal and external parties (Schmitt and Zhang, 2012). The process starts by specifying what the new brand name should accomplish, such as how it can help the product positioning (Opatow, 1985). Brand names can comprise syllables with no origin in the dictionary (e.g. Kodak) or word-based ones (e.g. Apple) (Lerman and Garbarino, 2002). Although this research focuses on word-based brand names, all brand names are created intending to communicate ideas (Heding et al., 2009). As in any form of communication, languages are the medium. Even when firms do not advertise the link between brand names and languages, consumers hold their own perception regarding local-sounding or foreign-sounding brand names (Opatow, 1985). Yet, more often than not, firms intentionally develop brand names that sound foreign to invite beneficial associations (Thakor, 1996). In Indonesia, Astor, Chitato, Marie Regal, Nu Green Tea, Okky Jelly Drink, Richeese, Roma Marie, Silverqueen, Tango, and Ultra Milk are some of the most sought-after snack products (www.topbrand-award.com, 2016). These brand names are recognised by the majority of Indonesian consumers, as they are easy to find in school cafeterias or minimarkets. However, these brand names are often mistaken as having foreign origin, despite being developed by local firms. Such misperception is owing to creating brand names from foreign words (Tjiptono et al., 2015). This misperception is usually intentional (Melnyk et al., 2012; Son et al., 2013; Zhang, 2015). BrandZ’s (2015) list of the top 50 most valuable brands in Indonesia contains 22 brand names in the Indonesian language and 20 in foreign languages. It is difficult to determine which practice is more common between brand names that sound local and foreign based on the above examples, but both practices are seemingly prevalent in comparison. Experimenting with foreign brand names has been trending since the rise of globalisation (Xie et al., 2015). Nonetheless, when the meaning of brand names in a local language must be relatively easy to understand by local consumers, foreign brand names are less so by default. The consumers’ ability to comprehend the meaning of foreign brand names would partly depend on their past exposure to the associated foreign languages, which is out of the firms’ control (Schmitt and Zhang, 2012). There is also an indication that consumers hold an attitude toward certain foreign languages, which may cause bias in perceiving foreign brand names as more or less likeable than usual (Leclerc et al., 1994; Alden et al., 1999; Giraldi et al., 2011; Melnyk et al., 2012).
  • 9. S. Yanirma 2016 9 The branding literature suggests meaningfulness and likeability as the successful criteria of brand naming (Keller, 2013). Since there is a doubt that consumers always apprehend the meaning of foreign brand names, using foreign phrases in the brand may impact upon perceived brand name meaningfulness and likeability. Some reasons for firms to choose foreign brand names are to emulate the image of prestigious foreign brands and to evoke foreign associations (Melnyk et al., 2012). It is observed that the increasing use of foreign brand names is somewhat in line with the increasing popularity of related foreign languages, such as the trend for English shop signs in Tehran (Khosravizadeh and Sanjareh, 2011) or using French-sounding names for South Korean cosmetic brands, e.g. Laneige and Mamonde (Melnyk et al., 2012). A firm’s decision on foreign branding may also signal a herding behaviour in the marketplace. In developing countries, many successful brands belong to multinational companies. Not only are they successful, but these brands often become market leaders in their category, such as Unilever’s or Procter & Gambler’s products in many countries in which they operate (Keller, 2013). In a sense, it provides an incentive for local firms to craft foreign brand names. The motivation to pursue foreign branding is sometimes vague, but the effectiveness of foreign branding is known to an even lesser extent. However, questionable effectiveness is not an exclusive issue of foreign branding. Broadly speaking, it applies to the general brand naming practice, as there is no formal, one-size-fits-all approach to brand naming. Managers often follow their intuition, rather than following certain guidelines (Schmitt and Zhang, 2012). Besides, existing guidelines on brand naming are not failure-proof. So, the easiest route is to follow the pattern of successful brand names–usually, those of competitors. Another motivation for foreign branding is to mask the product’s country of manufacture (COM), for instance, where targeted consumers may hold a stereotype toward the COM (Magnusson et al., 2008; Zhang, 2015). It has led many foreign branding studies to seek the opinions of consumers living in a country that is different from the implied origin of the brand names, such as Krupka et al. (2014) who asked for Croatian consumers’ reactions toward various COM (e.g. Bulgaria, China, Indonesia, Mexico), to discern that Italian-sounding brand names were preferred among other options. Yet, it is hard to find studies examining local consumers’ reactions toward local firms that use foreign brand names. While Zhang (2015) observed that domestic brands often pretend to be foreign, it is uncertain whether local consumers accept local
  • 10. S. Yanirma 2016 10 firms’ efforts to appear foreign, when the products are made in a domestic establishment. 1.2. Gap in the literature The focus of this research combines several areas of knowledge: brand naming, foreign branding, the country of origin, and the linguistics of the foreign language. The ideas of brand naming research usually centre on consumers’ perceptions toward the varying compositions of brand names. The notion of foreign branding research is mostly about documenting and contrasting consumers’ reactions toward brand elements in local/foreign identities (Apaolaza et al., 2014; De Meulenaer et al., 2015). This research relies on the contexts of country-of-origin (COO) and country stereotype, because in foreign branding, a product’s implied origin differs from its actual origin. This situation gives rise to derivative theories, such as “COO congruence versus COO incongruence” (Melnyk et al., 2012), “perceived brand localness versus perceived brand global-ness” (Xie et al., 2015), and “COO cues versus COO information” (De Meulenaer et al., 2015). Consumers seem to prefer a specific COO for certain product categories, and firms configure their branding elements to trigger associations with certain countries (Magnusson et al., 2008). Consequently, it is suggested that country stereotype plays a role in branding (Zhang, 2015), as hinted by COO literature that is over fifty years old (Bowe et al., 2013). Brand names are linguistic products by themselves. As mentioned, brand names are often evaluated based on consumers’ perception of their meaningfulness and likeability. Surprisingly, there are only a few foreign branding studies that examine meaningfulness and likeability to the researcher’s knowledge. Even in studies documenting consumers’ attitude toward foreign brand names, the attitude is often anchored by purchase intention (for example, see Pan et al., 2015) or willingness to pay (for example, see Koschate-Fischer et al., 2012), without a separate measurement for brand name evaluation, suggesting meaningfulness and likeability are skipped, because these are implied in the purchase likelihood. Thus, further studies are needed to achieve balance in the perspective. Moreover, foreign branding studies are bound by cultural context, since what is considered “foreign” largely varies from one region to another. The researcher believes that the missing links, as laid out in section 1.1. and 1.2., are worth investigating. Therefore, this research will help to bridge the gap between the aforementioned fields.
  • 11. S. Yanirma 2016 11 1.3. Research questions The research questions for this study are formulated as follows, 1. Which brand names generate a greater liking from Indonesian consumers, brand names associated with a local language, close foreign languages, or distant foreign languages? 2. Does familiarity toward a language increase perceived meaningfulness and likeability of brand names associated with that language? 3. Does attitude toward a language increase perceived meaningfulness and likeability of brand names associated with that language? 4. Regarding the perceived distance between a consumers’ native language and the languages of the brand names, are brand names from languages with closer distance being evaluated more favourably than brand names from languages with further distance? 1.4. Research aim and objectives This paper aims to assess consumers’ perceptions toward local and foreign languages to seek possible links with consumers’ evaluations of brand names in local and foreign languages. The objectives of this paper are as follows, • To assess the degree of consumers’ familiarity and attitude toward a local language, close foreign languages, and distant foreign languages. • To assess the magnitude of differences between perceived meaningfulness and likeability of brand names in a local language, close foreign languages, and distant foreign languages from a consumers’ point of view. • To seek links between consumers’ perceptions toward local and foreign languages and their evaluation of brand names in associated languages. 1.5. Research contribution While many foreign branding research has been conducted in developed countries (since the original intention was to reduce negative stereotypes held against products associated with developing countries), only a few were carried out in the interest of the emerging economies. It does not go unnoticed that researchers have been encouraging future studies to pursue more understanding by further exploring “[…]the linguistic nature of a brand name which presently receives little academic attention” (Harun et al., 2011, p.286), notably, the acceptance toward foreign brand names by connecting them
  • 12. S. Yanirma 2016 12 to “[…]language fluency in a different linguistic context” (Lee and Baack, 2014, p.533). Lee and Baack (2014) advised that future studies look beyond the English language context in order to expand the branding literature, particularly toward a deeper understanding related to foreign brand names. This research is intended to find the evidence in Indonesia, an emerging economy whose growing middle class holds substantial purchasing power (KPMG, 2013; Pwc, 2015), but lacks research related to branding. Previously, McDonald and Roberts (1990, p.7) warned marketers of the risk of inappropriate brand-naming in the Asia Pacific region, because there is “a cultural context where diversity creates inconsistencies of interpretation, association, and perception.” Last, this research is hoped to contribute in the following ways: • For academic scholars: to enrich the variety of empirical findings in the foreign branding literature. • For researchers: to provide information on measuring the performance of foreign branding as evaluated by consumers. • For professionals: to serve as a reference during the brand naming and foreign branding decision making process. 1.6. Dissertation structure This dissertation consists of eight chapters as follows: • Chapter 1 introduces the background of the dissertation by highlighting related phenomenon and facts and setting the research direction. • Chapters 2 and 3 lay the foundation of the research by reviewing literature. Chapter 2 focuses on brand name literature, while Chapter 3 focuses on the construct of origin. • Chapter 4 lists the research variables, hypotheses, and comparison to their counterparts in previous research. • Chapter 5 describes the selection of research design and method. • Chapter 6 discusses the empirical findings of the research. • Chapter 7 interprets the implication of the findings to existing theories and practices. • Chapter 8 concludes the research and suggests improvements for future research.
  • 13. S. Yanirma 2016 13 CHAPTER 02. BRAND NAMES FROM CONSUMERS’ POINT OF VIEW 2.1. Introduction 2.2. Definitions and functions of brand names 2.3. Assessments of strong brand names 2.3.1. Meaningfulness 2.3.2. Likeability 2.4. Conclusion CHAPTER 03. THE ROLE OF BRAND NAMES IN CLASSIFYING COUNTRY- OF-ORIGIN 3.1. Introduction 3.2. The construct of “origin” 3.3. Foreign branding 3.4. The misclassification of COO 3.5. Conclusion
  • 14. S. Yanirma 2016 14 CHAPTER 04. RESEARCH FOCUS CHAPTER 05. METHODOLOGY 5.1. Methodological approach 5.2. Study 1: Preliminary research 5.2.1. Product categories 5.3. The context of Indonesian language 5.3.1. The language classification 5.3.2. Indonesian-Arabic context 5.3.3. Indonesian-Chinese context 5.3.4. Indonesian-Dutch context 5.3.5. Indonesian-Russian context 5.4. Study 2: Questionnaire development 5.4.1. Stimuli design 5.8. Study 2: Data analysis 5.9. Conclusion
  • 15. S. Yanirma 2016 15 CHAPTER 06. FINDINGS FROM STUDY 2 6.1. Scale reliability, means and standard deviations 6.1.1. Scale reliability 6.1.2. Means of variables 6.2. Comparison of Study 1 and Study 2 results 6.3. Overview of responses for LL, CFL and DFL 6.3.1. Frequencies of answers 6.3.2. Language recognition accuracy 6.4. Hypothesis testing with regression analysis 6.4.1. Assumptions 6.4.2. Meaningfulness of brand names in CFL as a dependent variable 6.4.3. Meaningfulness of brand names in DFL as a dependent variable 6.4.4. Likeability of brand names in CFL as a dependent variable 6.4.5. Likeability of brand names in DFL as a dependent variable 6.4.6. General interpretation of the regression tests 6.5. Hypothesis testing with paired-samples t-test 6.5.1. Brand name meaningfulness 6.5.1.1. LL and CFL 6.5.1.2. CFL and DFL 6.5.1.3. LL and DFL 6.5.2. Brand name likeability 6.5.2.1. LL and CFL 6.5.2.2. CFL and DFL 6.5.2.3. LL and DFL 6.6. Summary of findings
  • 16. S. Yanirma 2016 16 CHAPTER 07. DISCUSSION 7.1. Interpretations of findings 7.1.1. Expected results: brand name meaningfulness and likeability 7.1.2. Unexpected result: brand name likeability 7.1.3. Novel findings: language familiarity and attitude 7.2. Implications to theories 7.2.1. The local-foreign dichotomy 7.2.2. Brand name meaningfulness and likeability 7.2.3. COO cues and recognition accuracy CHAPTER 08. CONCLUSION 8.1. Managerial implications: Which language is the best for a brand name? 8.2. Research limitations 8.3. Direction for future researches *** FULL WORD COUNT Around 17,500 words (excluding abstract, list of contents, tables, references, appendices)
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