Abstract
Purpose
This paper investigates the influence of firms' communication in terms of family firm identity and country-of-origin on consumer response.
Design/methodology/approach
A self-supplied online experiment in Chile and Spain is employed using as dependent variables brand trust and intention to buy. The experiment includes the following factors: family firm identity (family vs non-family), country of origin (national vs foreign) and as a manipulation check (type of product: hedonic vs utilitarian).
Findings
The results indicate that communicating the family firm identity increases brand trust and purchase intention. Consumers show higher scores on trust and purchase intention when exposed to national country of origin products. The effect of the variability on the dependent variables is greater when the family firm identity is communicated. Trust and purchase intention are different in Chilean and Spanish consumers when the family firm identity is combined with a national country of origin cue.
Originality/value
This article contributes to family business theory by exploring how to capitalize on the family firm identity component in brand communication. It also contributes to the theory of corporate brand identity by proposing a communication model oriented toward consumer behavior. It also examines firms' communication (family firm identity and country-of-origin) on consumer.
Keywords
Citation
Alonso Dos Santos, M., Llanos Contreras, O., Calabuig Moreno, F. and Augusto Felicio, J. (2022), "Should a family firm communicate their family identity and country of origin? A cross-cultural study from Chile and Spain", International Journal of Emerging Markets, Vol. 17 No. 3, pp. 725-746. https://doi.org/10.1108/IJOEM-01-2020-0027
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited
1. Introduction
Family firms are the most prevalent type of organization around the world, relevant as employment and economic growth generators (Basco, 2015; Bjuggren et al., 2011), and predominant among small, medium and large businesses (Llanos-Contreras et al., 2020). As other firms, family enterprises have to find tangible or intangible assets on which to build powerful brands with the intention of attracting consumers' attention and preferences (Li and Wu, 2018; Vredeveld and Coulter, 2019). Cross-cultural studies and marketing literature have acknowledged that the country of origin could be one of these particular assets (Hempel and Hamm, 2016a; Thøgersen et al., 2019). Also, research on family firm's reputation and branding suggest that the family firm identity can be another strategic resource for leveraging communicational advantages (Alonso-Dos-Santos et al., 2019; Lude and Prügl, 2018).
In both cases, FFI (family vs non-family firm) and COO (national vs foreign), there is evidence indicating the advantages of using these concepts as communicational cues. Research on COO for food products concluded that reputation of country and/or region is transmitted to the perceptions of quality and value of the products grown in a region (Aprile et al., 2012; Vabø et al., 2017), and also that domestic/national products have advantages against foreign products in terms of consumer perceptions (for example fresher/higher quality) (Roos Gun et al., 2016). It is in line with research reporting that COO influences trust and consumers' willingness to purchase, favoring purchase intention of national products against foreign ones (Dekhili et al., 2011; Pedersen et al., 2018). On the other hand, being promoted as a family firm has been found to engender higher levels of customer loyalty and positive association in relation to being trustworthy, customer-oriented and quality-oriented (Beck and Kenning, 2015; Blodgett et al., 2011; Sageder et al., 2015). Recently, empirical support has been found in relation to the positive influence of communicating the family identity on consumer trust and intention to purchase (Alonso-Dos-Santos et al., 2019; Beck and Prügl, 2018; Lude and Prügl, 2018).
Despite the aforementioned progress on the understanding of the influence of FFI and COO transmission on consumers' response, there are still controversies and limitations that need to be addressed. There is research warning of potential negative associations customers make when they are faced with the concept “family firm” (Botero et al., 2018). Family firms are also viewed as stagnant and limited in terms of selection and price (Carrigan and Buckley, 2008; Krappe et al., 2011). Research on COO has also informed that the country in the commercial communication and/or the market under study (developing vs developed) are important in the consumer response to this type of stimulus (Batra et al., 2000; Gürhan-Canli and Maheswaran, 2000a). Previous research on FFI transmission has been developed on the assumption of homogeneity in the way they communicate these cues (Botero et al., 2019). Finally, it has been recently acknowledged that most of the COO literature assumes that “all consumers will respond to COO cues and will do so in a homogeneous way” (Diamantopoulos et al., 2020, p. 487).
In order to close this gap, we examine the combined influence of family firm identity and country of origin as components of firm communication on consumer response in Chile and Spain (emerging vs developed market). To address this aim we carried out a self-supplied online experiment through the Qualtrics system with two dependent variables (brand trust and purchase intention) and three factors: country-of-origin (national vs foreign), type of firm (family vs non-family) and category of product (hedonic vs utilitarian) (manipulation check). The results indicated that communicating the family identity of the firm and the national (local) character of the product increased both brand trust and purchase intention. Also, being promoted as a national product in Spain and Chile increases the purchase intention, there being no significant differences according to the FFI. The differences between the two countries are more pronounced with respect to trust. In Chile, there is more trust in foreign products than in national ones.
The article is organized as follows: Section 2 discusses the theoretical framework and support for the hypotheses; Section 3 informs on the methods on which this research is based, Section 4 reports the results and findings, Section 5 presents the discussion and conclusions, Section 6 is on contributions to theory and practice and finally Section 7 acknowledges the research limitations and proposes lines for future research.
2. Theoretical framework and hypotheses
Family firms are defined in terms of the family involvement in a business normally through ownership and management, but also through the intention for transgenerational succession (Zellweger, 2017). Thus, what defines an organization as a family firm is not its size or its ownership structure (public vs private), but whether a controlling family has the ability to exercise power and transfer family experience and culture to the firm (Astrachan et al., 2002). It makes these organizations unique in terms of the bundle of resources they have available to deploy their business (Habbershon and Williams, 1999). Thus, identifying these resources and how to combine them for developing branding and communicational strategies is considered a central source of advantage to gain consumer preferences (Beck and Kenning, 2015; Binz et al., 2013).
The publication of the article by Berrone et al. (2010) states the idea that family businesses are particularly concerned in preserving their reputation as it is a driver of socioemotional wealth for the owners of these firms. This priority results in reputational advantages which are seen as a critical to explain these organizations' performance (Deephouse and Jaskiewicz, 2013). It has motivated the interest from scholars for learning how family firms can leverage such reputational advantage to gain the consumer preferences (e.g. Andreini et al., 2020; Sageder et al., 2018). One way is communicating their FFI as part of their branding strategy (Alonso-Dos-Santos et al., 2019).
According to Zellweger et al. (2010) FFI can be understood as organizational identity in the context of family enterprises. It has the ability to reflect the uniqueness of these organization as results of the interaction between family and business system (Chrisman et al., 2005). Thus, communicating the family identity as part of their branding strategies (informing they are a family firm) is a source of differentiation from non-family firms (Alonso-Dos-Santos and Llanos-Contreras, 2019). However, research informing on how family firms communicate their identity through web pages has found that many times these organizations hide or avoid providing information about their family identity (Botero et al., 2013; Micelotta and Raynard, 2011), causing doubts about the effectiveness of using this asset.
Little research has been done about the influence of communicating FFI on customers' trust and buying intention, and it is limited by the assumption of homogeneity in communicating the FFI (Botero et al., 2019). COO literature, on the other hand, is abundant (Diamantopoulos et al., 2020), and using this cue together with communicating FFI introduces heterogeneity to the communicational stimulus. In what follows, literature on family firm and country of origin is discussed to support our hypothesis. Table 1 summarizes relevant articles related to the influence of FFI and COO communication on consumers' response (trust and buying intention).
2.1 Family identity as a component of firm communication, brand trust and buying intention
Brand is considered to be an asset on which firms can build and transmit reputation, improve communications processes with customers and gain their trust (Aaker, 2004). A good management of the firm brand is seen to be critical in integrating the firm's identity to social processes that create meaning and give personality to the brand (Brodie et al., 2017). For this reason, a proper brand management is important to differentiate the firm and reduce the risk of being imitated (Alonso-Dos-Santos et al., 2019). It is also important for explaining what the attributes of the firms' products are, highlighting their advantages over competitors and reducing the risk of confusion among customers (Intihar and Pollack, 2012; Keller and Lehmann, 2006).
From a receiver standpoint, the literature on the advantages and disadvantages of communicating the family firm identity is still controversial (Botero et al., 2018; Sageder et al., 2018). However, early empirical research agrees on the positive influence of communicating the family component of a firm on the customers' brand trust. Beck and Prügl (2018) concluded that family firms' reputations positively influence brand trust. This research also indicated that the consumers' humanization of the firm led to higher levels of trust and benevolence. In the same line, Lude and Prügl (2018) assessed how communication of the family firm identity influences brand authenticity, brand trust and intention to buy. A recent study based on image transfer theory and the elaboration likelihood found that communicating the family firms' identity in corporate websites is positively aligned with the customers' attitude toward the website and their intention to buy (Alonso-Dos-Santos et al., 2019). Communicating the FFI also has a positive direct influence, and also an indirect influence through trustworthiness, on new product acceptance (Beck and Kenning, 2015).
The positive customer response to the communication of the FFI has been tested in product/industries such as milk, beverage, retail, hotel, jewelry and banks (Alonso-Dos-Santos et al., 2019; Beck and Kenning, 2015; Beck and Prügl, 2018; Lude and Prügl, 2018). But, it is not clear whether it would work in the same way for any type of product and industry, as many family firms prefer to hide their family identity (Botero et al., 2013; Micelotta and Raynard, 2011). As communicating using cues and signals is important in defining the customers' preferences (Basuroy et al., 2006), properly using the FFI cue would be of particular importance when products are hard to differentiate through intrinsic attributes such as smell, taste or looks (Magnusson et al., 2011).
The interaction between the family and the business provides a unique identity on which these firms can build a distinctive brand (Aldrich and Cliff, 2003; Miller et al., 2011; Miller and Le Breton-Miller, 2003). Family firms are acknowledged for developing strong social ties, being socially responsible and authentic (Binz et al., 2013; Presas et al., 2014; Sageder et al., 2015). They are also perceived as stable organizations, quality and customer oriented (Blodgett et al., 2011; Carrigan and Buckley, 2008; Micelotta and Raynard, 2011). This, in line with research informing family firms' reputational advantages (Deephouse and Jaskiewicz, 2013), would explain why communicating FFI provides positive response from customers in terms of trust and buying intention.
Overall, mentioning that a product came from a family firm serves as a cognitive shortcut that will make the decision process easier and faster for customers (Kardes et al., 2004; Magnusson and Westjohn, 2011). The empirical evidence discussed suggests that customers faced with “family firm” products would make positive interpretations about products which came from a family firm (Lude and Prügl, 2018). It leads us to state the following two hypotheses.
Trust in the brand is higher when the family firm identity is a component of firm communication.
Customer intention to buy is higher when the family firm identity is a component of firm communication.
2.2 Country of origin influence
Empirical and experimental research has examined the influence of the country of origin on consumer behavior and perception (Bilkey and Nes, 1982; Thøgersen et al., 2019). The influence of the country of origin has been approached from different points of view, whether from psychology (Gürhan-Canli and Maheswaran, 2000a), geography (Kotler and Gertner, 2002) or ethnography (Amine, 2008). The influence of the country of origin on the consumer's perception is well documented, however, the results are varied and depend largely on the country of origin that appears in the commercial communication (Gürhan-Canli and Maheswaran, 2000b).
The information provided in the commercial communication on the country of origin to which this article refers focuses on the phrase “Product from (name of country).” Another way to communicate the same may use the phrase “made in (name of country).” A different approach to leverage the country of origin is to distinguish the products as nationally (or locally) produced against foreign or imported products (Hempel and Hamm, 2016a; Thøgersen et al., 2019). In this way, country of origin directly influences consumers' evaluation about the quality, their attitude and buying intention toward a product (Verlegh and Steenkamp, 1999). Particularly in relation to food markets, previous research has reported that: (1) the reputation of a country and/or region is transferred to the products grown/produced in a region (Aprile et al., 2012; Vabø et al., 2017); (2) consumers show a better response to a domestic product compared to an imported/foreign product (Roos Gun et al., 2016).
In line with the aforementioned, Thøgersen et al. (2019) has informed on the strength of a local over an imported product, in terms of consumer preferences in a food product market. It has been found that being announced as a locally produced product is related to better taste, quality, freshness and environmental friendliness (Campbell et al., 2013). Recent research has informed that in countries such as Switzerland, Austria and Germany, above 80% of the consumers' state that they buy local food many times per month. Similarly, it has been found that people who are strongly tied to their region buy local products weekly (Hempel and Hamm, 2016a).
In relation to specific research assessing the influence of COO (national vs foreign) on trust and buying intention, recent research in Germany has confirmed consumers' preference for domestic organic products (Pedersen et al., 2018). This study indicates that it would be explained by the perception of a negative environmental impact (because of product transportation), country image and trust in the country. In the same line, a study of a vegetable supply chain in Australia concluded that local producers enjoy a higher level of trustworthiness in relation to producing safer vegetables, compared to the lower trust received by imported vegetables (Ariyawardana et al., 2017). In the same line, a study in the USA informed that consumers are willing to pay more for domestic products placing a higher level of trust in their government verification of product attributes (Ortega et al., 2014).
The research above (focused on developed countries) confirms the ethnocentric view of the COO influence on consumer response, but it is questioned for the case of less developed countries (Chen et al., 2019; Thøgersen et al., 2019). It would relate to the personality stereotypes of the product country (Magnusson et al., 2019). The characteristic capturing country personality stereotypes are those related to “the mental representation of a country in dimensions that typically capture an individual's personality” (D'Astous and Boujbel, 2007, p. 233). For example, for food market country personality stereotypes where people are serious in doing business, respectful of institutions and/or concerned for food safety would favor or at least not damage the product brand when it is related to its home country. But, it would not be the case (even for local products in local market) if it is country personality stereotype is not coherent to the standard expected for that product. Thus, a positive or negative image will also depend on specific characteristics capturing the country's personality (Rojas-Méndez et al., 2015). As in this research product are not incoherent in terms of personality stereotypes of the products country, it is expected:
Being promoted as a national country of origin product positively influences the customers' brand trust.
Being promoted as a national country of origin product positively influences the purchase intention of the product.
2.3 Interaction effect between FFI and COO across Chile and Spain
Despite the little available research on FFI transmission influences on consumer trust and buying intention, results confirm the positive influence of being branded as family firms in both developed and developing countries (Alonso-Dos-Santos et al., 2019; Lude and Prügl, 2018). However, it is not that clear in the case of national COO stimulus where the COO and the country under assessment matter (Jiménez and San Martín, 2014). Particularly in the case of food markets, research analyzing data from Germany, France, Denmark, China and Thailand found that while consumers from developed countries prefer local, it is not true for emerging markets (Thøgersen et al., 2019). This study added that for imported food, consumers preferred to buy products that came from developed instead of developing countries. In the same line, a study about fish and shellfish by Wang et al. (2013) found that USA consumers trust more in imported products from Canada than from Indonesia, Ecuador, Thailand, China and Vietnam. A study on tomatoes in China confirmed the above, as it found that an organic label from the European Union, followed by Hong Kong, Japan, and China get the highest willingness to pay by Chinese consumers.
Based on an ethnocentric view of choosing local instead of foreign products, consumers would set value to product quality (e.g. food safety and, environmental care), but also to social involvement which relates to supporting local jobs and producers (Vabø et al., 2017). Thus, reasons to explain strength/weaknesses of “local vs imported” or the choosing of a product from a “developed or developing” country could be explained by the consumers' assessment of the Vabø mentioned categories. Research above analyzing consumer food election in developed vs developing has explaining their results primarily based on the quality dimension identified by Vabø and colleagues (see findings by Ortega et al., 2014; Pedersen et al., 2018). At the same time, literature on family firms suggests that communicating FFI would provide an advantageous position in relation to the social involvement dimension (Botero et al., 2018). It has been said that family firms enjoy positive associations from customers such as socially responsible, strong local ties and employee friendly (Sageder et al., 2018). Thus, communicating FFI would enhance customers' response in both cases (developed and developing country), but the combined effect (integration effect) would not be the same in Chile and Spain (as the producers in position to the quality dimension in each country is asymmetric). It leads to the following hypothesis.
Brand trust and buying intention is different between Chilean and Spanish consumers when the family firm identity is combined with being a national country of origin producer as components of firm communication.
3. Method
3.1 Field data
To test our hypotheses, we conducted an international experiment across Spain and Chile. Chile and Spain are Spanish-speaking countries separated geographically by 11,000 kilometers. According to Hofstede's cultural dimensions on how perceptions of impact differ from country to country, there are not-so-distant cultural differences between these two countries (Hofstede, 2001; Minkov, 2018) (Table 2). Both countries are in different stages of economic development, but have economies based on small and medium family businesses. Previous research indicated that it is necessary to stimulate the research in family firms in Ibero-America (Parada et al., 2016). Both countries have the same score in the Uncertainty Avoidance dimension, occupying positions 7–9 of 40 countries (Schramm-Nielsen, 2000). The Uncertainty Avoidance dimension is related to the degree to which the individuals in a specific society feel comfortable with uncertainty and the unknown. The countries with a high score in this dimension are strict in their decision making, avoid unconventional ways of thinking and feel uncomfortable when faced with uncertainty. We argue that selecting similarly high levels of uncertainty avoidance dimension in both samples allows us to consolidate the effect of family firm identity and national vs foreign country of origin stimuli on selection in conditions of uncertainty and limited information. The subjects with high uncertainty will seek information on the stimuli that help them to make the decision.
3.2 Experimental design and sampling
Our experiment was carried out through an online experiment in January 2019 through social networks (20% of the sample) and Amazon Turk in Chile and Spain (80% of the sample). The experimental design partly replicated that of Lude and Prügl (2018). The experimental design is composed of three between-subject factors (2 × 2 × 2): the family firm family factor: business vs non-family business; the type of product factor: hedonic vs utilitarian; and the country of origin factor: national vs foreign. The variable type of product (hedonic vs utilitarian) will be employed as the variable of manipulation with the objective of increasing the external validity of the experiment. The design of the labels of both products was based on previous research (Laeng et al., 2016; Lude and Prügl, 2018). Hedonic products are consumed for luxury, pleasure or amusement; and utilitarian products are consumed for practical reasons or necessity (Chandon et al., 2000; Liao, 2006).
The participants were exposed to a random image (for example Figure 1) of a product for 10 s and then a self-supplied survey. The eight stimuli were programmed to be randomly displayed on the Qualtrics platform. As a result, both Spanish and Chilean subjects were exposed to both domestic and foreign products at random. The exposure time was determined based on prior studies (Alonso-Dos-Santos et al., 2019; Gülçay and Cangöz, 2016). A prior pilot study confirmed that all the participants (10) were able to comprehend and process the stimuli in the time indicated.
In terms of the selection of the type of product, the utilitarian product chosen was a 1 kg package of rice and wine was the product chosen from the category of hedonic products. Rice is typically recognized in literature as a utilitarian product (O'Curry and Strahilevitz, 2001) and wine as a hedonic product (Bruwer and Alant, 2009). These products were chosen for convenience considering that the perceived quality of both products in both countries are similar. In the same way, these products would not be incoherent with the personality stereotypes of the home country (Magnusson et al., 2019).
A total of 534 responses to eight stimuli were obtained (52% from Chile, 48% from Spain). The sample is composed of 42% women and 58% men; the average age is 37 years with a standard deviation of 9.8. Approximately 45% of the sample has, or is in the process of having, a university education. The average income of the respondents for Chile was US$1,793 and for Spain US$1,588.
3.3 Scales
All the participants in the experiment responded to a self-supplied online survey after exposure to each of the stimuli. In addition to socio-demographic data, the survey contained four Likert scales from 1 to 7 points (1: not at all, 7: very much).
The family firm identity (FFI) scale was adapted from Beck and Kenning (2015). Respondents indicated their level of agreement with the next sentence: “For me the company is a family business.” The purchase intention scale (IntBuy) is composed of a single item and was adapted from del Barrio-García and Luque-Martínez (2003), which was adapted from Belch (1981), Mitchell and Olson (1981), and Miniard et al. (1993): “Imagine that you are going to buy, and you see this product… Considering the product, the information in the ad and assuming its price is within your expectations. How likely are you to buy it?”. The brand trust scale comes from Kim et al. (2018), previously adapted from Napoli et al. (2014) (Table 3).
All scales were translated from English into Chilean Spanish in Chile and Spanish in Spain. The process consisted of ensuring the accuracy of the translation was as follows: first Chilean natives translated the scales into Spanish considering both linguistic and cultural validation. The scales were then translated into English by a group of native speakers and we compared the concept, meaning and equivalence in tone and expression. Finally, the Spanish scale was evaluated by a group of colleagues and students.
4. Results
4.1 Manipulation check
A manipulation check is a test used to determine the effectiveness of a manipulation in an experimental design. Our objective is to check that the participants effectively perceive the differences between the family and non-family firms between the types of products.
A variance analysis was performed to determine the differences in the perception of the family firm identity between family and non-family stimuli. The results indicate [F(1.273) = 121.3, p = 0.000] that family business stimuli have significantly higher scores (M = 6.2, SD = 1.43) than non-family stimuli (M = 4.1, SD = 1.71) with respect to the family firm identity construct. The second manipulation control examined differences in family firm identity between hedonic and utilitarian product categories. The results indicate [F(1,270) = 1.13, p = 0.288] that family business stimuli are perceived as family business regardless of the product category, whether hedonic (M = 5.03, SD = 1.96) or utilitarian (M = 5.2, SD = 1.86).
These results demonstrate that the subjects perceive the changes in the factors of the dependent variable that give way to the changes in the dependent variable, assuring in this way the internal validity of the experiment (Hauser et al., 2018).
4.2 Analysis of the variance
Two analyses of variance (ANOVA) of brand trust and intention to buy as dependent variables and the family variable, country development and place of origin as fixed factors (2 × 2 × 2) were performed. First, we checked the assumptions of the experiment: Shapiro Wilks' test shows that the distribution of the residual errors of the experiment are normally distributed, W(288) = 0.994; p = 0.283; W(288) = 0.994; p = 0.147. And second, the homogeneity of variance matrices was verified using Levene's test (7, 280) = 1.69, p = 0.111; (7, 280) = 0.622, p = 0.738.
According to the results of the ANOVA procedure (Table 4), the family firm identity factor has a significant effect on brand trust. Trust in the brand of a family business (M = 4.63, SD = 1.36) is greater than trust in the brand of a non-family business (M = 4.08, SD = 1.57), F(1, 280) = 9.01, p = 0.003; partial η2 = 0.031. And the intention to purchase products from the family business (M = 4.7, SD = 1.45) is higher compared to the intention to purchase products from a non-family business (M = 4.3, SD = 1.41), F(1, 280) = 4.72, p = 0.031; partial η2 = 0.017. These results support our first two hypotheses. In the analysis of variance, an effect size (eta square) of 0.01 is considered small and an effect size of 0.09 is considered medium (Cohen, 1988). Therefore, the analysis revealed significant differences between the groups for all variables, although the partial square eta suggests a relatively weak overall relationship in the strength of the association. These results can be interpreted as follows, 3.1% of brand trust and 1.7% of the purchase intention of the products shown is explained by the type of business (family-owned or not). Therefore, brand trust and purchase intention increase when the firm is identified as a family firm. However, even though the effect of the communication of the family identity on brand trust and purchase intention is significant, it can be considered weak.
Regarding hypothesis 3 and 4, trust in the brand of national country of origin firm (M = 4.54, SD = 1.35) is greater than trust in the brand of a foreign country of origin firm (M = 4.11, SD = 1.62), F(1, 280) = 7.077, p = 0.008; partial η2 = 0.025, and the intention to purchase products from a national country of origin firm (M = 4.6, SD = 1.41) is higher compared to the intention to purchase products from a foreign country of origin firm (M = 4.3, SD = 1.47), F(1, 280) = 4.19, p = 0.034; partial η2 = 0.016. Accordingly, hypothesis 3 and 4 are supported. The results indicate that 2.5% of the variance of brand trust, and 1.6% of the purchase intention of the products shown is explained by the place of origin of the firm. Thus, the estimated marginal means of brand trust and purchase intention increase when the product is national.
Comparing the results of the two ANOVA analyses, they show that the proportion of the explained variance is greater with the influence of the family firm identity factor on brand trust and purchase intention than the country of origin factor on these dependent variables. Therefore, the results indicate that communicating the family component of a firm generates a better result on the dependent variables than communicating the country of origin in a hypothetical situation where the firm must choose between the two communication strategies.
Regarding hypothesis 5, the interaction effect was not significant (family firm identity – country of origin – country development) both for the dependent variable brand trust F(1, 280) = 2.257, p = 0.134, and for intention to buy F(1, 280) = 0.927, p = 0.336. Hence, hypothesis 5 is not supported.
In detail, the interaction effect between family firm identity and national country of origin on brand trust and purchase intention is shown in Figure 2 and in Figure 3, brand trust and purchase intention increase when the stimuli are family firm identity and national country of origin. Communicating the family firm identity in combination with the national country of origin results in higher scores on both dependent variables, even though the effect is not statistically significant.
Tukey HSD tests were used to investigate specific differences in brand trust intention considering the three independent variables (Figures 4 and 5). The results show that there are no significant differences in trust between family and non-family national products in Spain, but there are significant differences towards the preference of national products regardless of their identity. The difference with the results derived from hypothesis 3 is that this analysis details the differences between the countries and not as a whole. With respect to Chile, there is no preference in terms of country of origin for any of the combinations, but there is a significant preference towards the company with family identity. In Chile, there is a significant preference for family products when the product is national. As regards the difference between countries, there is significantly more trust in Spain for both national and foreign products than in Chile. It should be noted that in Chile there is greater trust in foreign products regardless of their family or non-family identity. Both national and non-family foreign products receive significantly more trust in Spain than in Chile.
Regarding the dependent variable purchase intention, there is no significant difference for the interaction effects according to Tukey HSD tests. The variable purchase intention indicates a similar behavior to trust in Spain. National products are significantly preferred over foreign ones, but without significant differences in terms of family or non-family identity of the company. The response is different for the case of Chile. The intention to purchase familiar national products is higher than the intention to purchase foreign products only when the product is familiar.
5. Discussion and conclusions
This article makes progress in understanding the communicational potential of being recognized by consumers as a family-owned firm and national product. COO (national vs foreign) in food products has been widely studied for both products from developed and developing countries (Aprile et al., 2012; Roos Gun et al., 2016; Vabø et al., 2017). But, little research has been done on FFI transmission, and this research is limited by the homogeneous assessment of the family brand (Alonso-Dos-Santos et al., 2019; Botero et al., 2019). Combining both communication cues contributes in closing this gap and learning about the consumers' responses to these communicational cues in both developed and developing countries. Hence, the aim of our article was to examine the combined influence of family firm identity and country of origin as components of firm communication on consumer response in Chile and Spain.
Results based on an experimental design suggest that communicating the family firm identity positively influences the customer response in terms of brand trust and intention to buy. It would be because positive associations made by the customers (such as perception of quality, positive customer relations and tradition) overcome potential negative perceptions (such as less effective, less professional and/or less efficient) for the products and countries included in this experiment (Botero et al., 2018). The interaction between the family and the business make these organizations unique in term of identity, and it would be a source of differentiation from non-family competitors (Miller et al., 2011; Miller and Le Breton-Miller, 2003). Thus, our result informs on the potential of using family firm identity as an asset to gain consumer preferences, especially considering it is not used in its full potential as Botero et al. (2013) (based on a content analysis of 1,036 family firms) found that only 57% of these companies make some reference to being a family business on their website.
In relation to market a nationally vs foreign produced product, our experiment confirms the previous research indicating the positive association of being branded as a national product (Campbell et al., 2013; Hempel and Hamm, 2016b). It would be because we were especially careful in using products which were not incongruent with the personality stereotypes of both countries considered in the experiment (Magnusson et al., 2019). Thus, our results are in line with the ethnocentric view of choosing local instead of foreign products, as consumers would perceive quality from local, but they also are socially committed to support local jobs and producers (Vabø et al., 2017).
We also found interesting differences when comparing consumer response in Chile and Spain. We could not demonstrate that there were significant differences in the national country of origin-family business interaction with the dependent variables brand trust and intention to buy. We observe that communicating family identity improves response in consumers from both countries, despite the fact that that difference is not significant. This results are in line with previous research using data from multiple countries suggesting reputational advantages of being branded as family firms (Deephouse and Jaskiewicz, 2013). Our finding shows the advantage, in terms of consumer trust, of the Spanish products when they are offered in Spain, but also in Chile. It is in line with previous research on food product informing consumer preference for local products in developed countries, but not necessarily in emerging markets (Thøgersen et al., 2019). An unexpected finding was that Chilean consumers prefer to buy local products when produced by a family firm, despite the mentioned advantage the Spanish product had in terms of trust. It informs the high value FFI has as a source of differentiation for local firms from developing countries when they are faced with global competition in their local market. It is in line with previous empirical findings informing on the high potential of being branded as a family firm, particularly in a developing country (Alonso-Dos-Santos et al., 2019).
In conclusion our results inform on the high potential of using both FFI and COO cues for firms to differentiate from competitors particularly in their local market. Using both cues improves the consumers' response in terms of trust and buying intention. COO seems to be of particular value for Spanish firms, as it results in better consumer response in both markets (Chile and Spain), communicating FFI seems to be particularly useful in the case of a developing country (Chile) as it results in higher intention to buy from local consumers, despite the fact that they expressed more trust in Spanish products. Combining both cues introduces heterogeneity in the communication stimulus and provides particular results in each market that need to be considered when these firms design their branding strategy.
6. Contributions to theory and practice
Our article makes contribution to family firm theory, country of origin literature and management research in emerging countries (Latin America). We provide guidance on how to capitalize on the family identity and national country of origin components in these firms' communication. We provide guidance on the effect of introducing heterogeneity in the communication of the family identity as it is combined with a COO cue (Alonso-Dos-Santos et al., 2019; Botero et al., 2019). By comparing responses from Chilean and Spanish consumers we contribute to COO literature by observing important differences in the way consumers respond to the COO stimulus when it is combined with FFI (Diamantopoulos et al., 2020). Finally, this research also contributes to the little research on family businesses in Latin America, which has received far less attention, not only compared with North America and Europe, but also compared to Asia (Gomez-Mejia et al., 2020).
With respect to practical contributions, the results indicate that family business managers should include the family firm identity component in their business communications. They also can benefit from communicating the national country of origin. So far, many family businesses do not contemplate the development of a long-term marketing plan to guide the communication actions of the firm. We recommend incorporating an integrated marketing communication strategy focused on the family component as well as the national country of origin. The results show a coherent interaction effect (even when it is not significant) as both strategies are positive. The strategic decision to communicate both attributes could depend on the cost and the complexity of using two attributes instead of one in different countries. Our results enlighten managers by helping them decide whether to communicate both together (country of origin vs family firm identity) or separately, as well as to define which of these stimuli will provide them with better results. Furthermore, these results could help managers in deciding on marketing actions specific to developing countries or countries with a high level of ethnocentrism. Communicating the FFI could be particularly effective in these types of countries to the detriment of other marketing communications on the packaging.
7. Limitations and future lines of research
The results of this research should be taken with caution for a number of reasons. The sample is not representative of the Chilean or Spanish population; it was taken for convenience. The experimental design and stimuli do not fully capture the factors that influence the purchasing decision process. Future research should include the price factor, distribution system, other important attributes in the purchasing decision, and a control country of origin stimuli. It would be very interesting to evaluate the influence of the country of origin and family firm identity in different types and markets of products, for example in soft drinks, mobile telephones or banking products. Along the same lines, it would be necessary to replicate this study in countries with low levels of uncertainty avoidance to test whether family stimuli favor decision-making in all cases. It would be also interesting to test similar hypotheses with products presenting incongruence to the personality stereotypes of the home country (Magnusson et al., 2019). Also, we assume that the countries chosen are not necessarily representative of a developed and developing country, so it is necessary to advance in the study of other countries and level of development. Although the sample is real, the purchasing decision process is measured by intention. Purchasing intention is considered a valid indicator to predict purchasing behavior (Ajzen, 1981), but future research should measure actual purchasing behavior after exposure to stimuli.
Figures
Relevant literature on FFI and COO communication and consumers' response
| No. | Citation/journal | Research objective | Main findings | Countries in the sample | Type of product/industry |
|---|---|---|---|---|---|
| (a) Relevant research on FFI communication and consumers response | |||||
| 1 | Alonso-Dos-Santos et al. (2019)/P&M | Determine how consumers' product involvement (CPI) and family firms' identity (FFI) communication influences consumer responses through websites | FFI positively impacts attitude toward website (AW) and intention to buy (IB). AW influences the relationship between FFI and IB. CPI negatively impacts relationship FFI–IB | Chile | Websites (hotel, jewelry store, bank) |
| 2 | Lude and Prügl (2018)/JBR | Determine whether the strategy of using a family business brand influence consumers brand perceptions | Communicating firm's family nature results in higher brand trust and stronger purchase intentions. Brand authenticity is a mediating variable for FF trust. Brands communicating FFI are perceived more authentic, leading to brand trust | Germany, Austria and Switzerland | Drinks |
| 3 | Beck and Prügl (2018)/FBR | Determine whether trust advantage in family businesses persists with varying degrees of consumer brand familiarity | Advantage prevails for real and familiar brands. The consumers' perception of an organization as human being (humanization) explains higher levels of benevolence and trust attributed to family firms | Germany and Austria | Studies 1 and 2: variety of products. Study 3: milk |
| 4 | Beck and Kenning (2015)/IJR&DM | Analyze whether manufacturers achieve a strategic advantage regarding new product acceptance (NPA) when choosing retailers perceived as family firms | A strongly perceived family firm image (FFI) has a positive-direct influence and, also an indirect effect through perceived trustworthiness, on NPA. These relationships are moderated by the customers' perceived uncertainty about the product | Germany | Retail |
| 5 | Binz et al. (2013)/JFBS | Investigate perceptions of family firms, and preference/indifference towards the services/products offered by family/non-family businesses | Promoting a company as a family firm strengthens consumers' preference for their products-services. This mainly as consequence of the relational qualities consumers associate with these companies | Switzerland | NI |
| 6 | Botero et al. (2018)/JFBM | Explore associations that individuals make in relation to the term “family firm” | Seven general descriptor categories associated to “family firm.” (1) Tradition and continuity, (2) small and medium companies, (3) trustworthiness, (4) strong culture, (5) corporate citizenship, (6) professionalism, and (7) career opportunities | Switzerland | NI |
| (b) Relevant research on COO communication and consumer response in food markets/products | |||||
| 1 | Bryła (2019)/Sustainability | Assess predictors of regional ethnocentrism in the market of regional food products in sustainable consumption | Eight predictors of the regional ethnocentrism were identified: Important for our research are brand and retailer trust on the food market; quality signs in regional food purchases | Poland | NI |
| 2 | Chen et al. (2019)/BFJ | Assessing trust and preferences of consumers for tomatoes carrying different labels (organic – COO) | Highest WTP was expressed for organic label from EU, followed by Hong Kong, Japanese and, lastly, by the Chinese mainland organic label. Consumer trust positively relate to WTPs (for all labels) | China | Tomato |
| 3 | Thøgersen, Pedersen and Aschemann-Witzel (2019)/FQ&P | Investigate the joint effect of COO and organic on consumer choices | Organics and domestic are preferred over conventional and imported products. Exceptions in COO for emerging markets. For imported foods, customers prefer foods from developed over less developed countries. It is also true for two Asian countries in the sample | Germany, France, Denmark, China and Thailand | Milk and pork cutlets |
| 4 | Pedersen et al. (2018)/APPETITE | Investigate organic consumers' preferences for imported organic food products, and reason explaining that preferences | Preference for domestic/organic products. Also for geographically close countries in imported org. prod. Reasons: perceived environmental impact, trust in country, country image | Germany | Organic products |
| 5 | Ariyawardana et al. (2017)/Food Control | Understanding level of consumers' trust (vegetable supply chain) and how it influences consumers' behavioral responses | Trust in chain members varied across the chain. Domestic producers are more trustworthy (safer vegetables). The lowest trust is associated to imported vegetables. Trust and COO influence on WTP premium price for domestic vegetables | Australia | Vegetables |
| 6 | Ortega et al. (2014)/Agricultural Economics | Evaluate consumer WTP for enhanced food safety, use of antibiotics, and eco-friendly environmental practices | Consumers pay more for enhanced food safety, no antibiotics and environmentally friendly production. American consumers are WTP more for domestic products, trust more on US government verification of product attributes | USA | Shrimp and tilapia |
| 7 | Wang et al. (2013)/Food Control | Investigate US consumers' perception and purchase behavior of seafood. Assess factors affecting attitude toward COO and safety certification labeling | Consumers trust Canada more than Indonesia, Ecuador, Thailand, China and Vietnam. Quality certification labels improve trust in Indonesia and Ecuador, but few in other countries | USA | fish and shellfish |
Note(s): (a) A search was made on the Web of Science combining “family firms” with the keywords “trust”, “intention to buy” and “willing to buy.” The results obtained were reviewed, only taking into account those items that have a relationship with the effects on trust or intention to buy of the family firms' products
(b) A search was made on the Web of Science combining “country of origin” with the keywords “trust,” “intention to buy” and “willing to buy.” The results obtained were reviewed, the article included in the table refers only to those providing information on national vs foreign food products, particularly developed/developing countries
Scores on the cultural dimensions of Chile and Spain
| Power distance | Individualism | Masculinity | Uncertainty avoidance | Long term orientation | Indulgence | |
|---|---|---|---|---|---|---|
| Chile | 63 | 23 | 28 | 86 | 31 | 68 |
| Spain | 57 | 51 | 42 | 86 | 48 | 44 |
Reliability and validity indicators of the BrandTrust construct
| Construct/Item | Cronbach's alpha | rho_A | CR | AVE | Loadings | ||
|---|---|---|---|---|---|---|---|
| Brand trust | 0.951 | 0.957 | 0.964 | 0.872 | |||
| I think this mark is trustworthy | 0.951* | ||||||
| I believe this brand is competent | 0.938* | ||||||
| I think this brand is honest | 0.914* | ||||||
| I trust the quality of this brand's product | 0.931* | ||||||
Note(s): *p ≤ 0.001
Analysis of variance for family firm and country-of-origin on BrandTrust and IntBuy—between-subjects effects
| Factor | DV | df | F | p | Partial η2 |
|---|---|---|---|---|---|
| Family firm | BrandTrust | 1 | 9.01 | 0.003 | 0.031 |
| IntBuy | 1 | 4.72 | 0.031 | 0.017 | |
| Country-of-origin | BrandTrust | 1 | 7.07 | 0.008 | 0.025 |
| IntBuy | 1 | 4.19 | 0.034 | 0.016 |
Note(s): All nonsignificant findings (p > 0.05) were deleted from the table
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Acknowledgements
Funding: This study was funded by CONICYT/FONDECYT-REGULAR N˚ 1201112 (granted to Alonso Dos Santos).