Feeling sad about Iraq?

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 recent issue of the Journal of Consumer Research, explores how our range of reactions to political events may affect purchasing. Notably, the scientists observed 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 observed that angry people try to punish a country by not buying its products, while people saddened by a countrys 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 reviewed 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 scientists introduced the concept of Nation Equity, a valuation of a product that reflects country of origin. The value has a performance component correlation to how well similar products from that country perform and also to how well the countrys 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".


Posted by: Edwin    Source