Focusing on the effectiveness of a glocalization advertising strategy in China, findings suggest that the ethnicity of endorser moderates the effect of bilingual brand naming (use of both foreign and Chinese brand names) on perceptions of a brand’s luxury quality. Introduction Given a long debate between standardization and localization, many corporations, as a solution, prefer to use both (Featherstone 1990, Sklair, 1995; Friedman, 1999). The right balance of standardization and localization is viewed as the key to success of brands being implemented at a global level, especially in countries the cultural values of which completely differ from those of the brand’s country of origin. The degree of standardization or localization in advertising is determined by various advertising elements. Advertising transfers cultural meaning through signs such as language, aesthetics, endorsers, and so forth, with brands hoping that target audiences positively associate the cultural meanings with the advertised brand (Leclerc, Schmitt & Dubé, 1994; Schmitt, Pan & Tavassoli, 1994; Cheng & Schweitzer, 1996). A brand name and the ethnicity of an endorser, out of the advertising signs, have been recognized as significant cues for conveying a brand image to consumers. This suggests that, in such a place as China, a foreign brand name or a foreign endorser in advertising produces more positive advertising-related responses for a product with foreign characteristics, compared with a Chinese brand name or a Chinese endorser (Zhang & Zhang, 2010). However, when taking a combination of the two strategies or considering the extent of localization in China, little is known about the effectiveness of a glocalization strategy in global advertising in China, which is one of the most attractive international markets to global brands, in particular, luxury brands. In reality, consistent with the argument that the combination of standardization and localization is effective, a number of luxury brands (e.g., Chanel ‘香奈儿’, Dior ‘迪奥’, Bottega Veneta ‘葆蝶家’, Estée Lauder ‘雅诗兰黛’, etc.) create their Chinese brand names when entering the Chinese market while retaining their foreign brand names. This is because most foreign brand names are either too complicated or lengthy, making it difficult for Chinese consumers to remember them or pronounce them (Zheng, 2013). Therefore, the current study attempts to examine the effectiveness of bilingual brand names as a means of a glocalization strategy. Specifically, this study investigates how languages of brand name (presentation of brand name: foreign brand name only vs. Chinese brand name only vs. both of the foreign and Chinese brand names) and the ethnicity of an endorser (Western vs. Chinese) affect consumer perception of the brand’s luxuriousness and consequently influence purchase intention. Method A 3 (language of brand name: foreign brand name only vs. Chinese brand name only vs. both foreign and Chinese brand names) x 2 (ethnicity of celebrity endorser: Western vs. Chinese) between-subject experimental study was conducted to test proposed hypotheses. Six versions of a manipulated print advertisement represented the experimental conditions. For the experiment, data were collected from a sample of 150 undergraduate students in Mainland China through a snowballing sampling technique. To increase internal validity, undergraduate students were used as the sample in the current study as it is suggested that university students are relatively a homogeneous group to reduce individual differences. In addition, considering that most of consumers for luxury goods in China are under 45 years old (Atsmon & Dixit, 2009), and the younger generation (25-35 years old) has been growing into the core consumers for luxury goods in China (Bain & Company, 2014), undergraduates are the potential consumers of luxury brands as they will, in the near future, accumulate consumption power. All subjects logged onto the study’s website, where they were randomly assigned to one of the six experimental conditions. LONGINES, a Switzerland luxury watch brand, was selected as the representative of a luxury brand for subjects, as this particular brand embraces a high degree of localization, having both English and Chinese brand names and both foreign and Chinese celebrity endorsers. It also enjoys high awareness among Chinese consumers. To manipulate the language of the brand name, three variations were used: presentation of brand name in a foreign language [LONGINES], presentation of brand name in Chinese [ 浪琴], and presentation of both brand names in a print advertisement. In the history of its advertising, LONGINES has employed 15 celebrity endorsers, 4 being Chinese. To manipulate the ethnicity of the celebrity endorser, out of the 15 endorsers, Simon Baker and Kate Winslet were selected as Western endorsers while Aaron Kwok, and Lin Chi-ling were used as Chinese endorsers. To reduce confounding effects by using a real brand, brand familiarity and brand attitude were included as covariates in the study. Findings Luxurious Perception of the Brand While controlling brand familiarity (p < .05) and brand attitude (p < .001), the language of the brand name, F(2,142) = 5.254, p < .01, had a significant main effect on the perception of a brand’s luxury quality. More specifically, a follow-up post hoc test indicated that subjects who saw the ad presenting the foreign brand name in Latin showed a stronger perception of a brand’s luxury quality than did those exposed to the ads that presented the Chinese brand name or both of the foreign and Chinese brand names. However, we found no significant difference between the presentation of the Chinese brand name and the presentation of both foreign and Chinese brand names. On the other hand, the ethnicity of the endorser was not found to have a significant effect on the perception of a brand’s luxury quality (p > .05). The results further revealed a significant interaction between the language of the brand name and the ethnicity of the endorser on the perception of a brand’s luxury quality, F(2,142) = 5.647, p < .01. Specifically, Figure 1 shows that both brand names produced a weaker perception of a brand’s luxury quality than the foreign brand name only when the Western endorser is presented, however, both brand names produced an equal effect to the foreign brand name only when the Chinese endorser is presented. The language of brand name, while controlling brand familiarity (p < .05) and brand attitude (p < .001), exhibited a significant effect on purchase intention, F(2,142) = 3.472, p < .05. A follow-up post hoc test revealed that the presentation of the foreign brand name or both of the foreign and Chinese brand names in the ad generated higher purchase intention than the presentation of the Chinese brand name. However, there was no significant difference between the conditions of the foreign brand name and the both brand names. With respect to the main effect of the ethnicity of an endorser on purchase intention, the data did not exhibit a significant effect (p > .05). No significant interaction effect between the language of brand name and the ethnicity of an endorser emerged (p > .05). Mediating Role of Luxurious Perception of the Brand To confirm the moderated mediation of the perception of a brand’s luxury quality on purchase intention, the PROCESS macro model 8 was performed. The study found significant effects of the interaction on the perception of a brand’s luxury quality: βBrand name x Endorser = .54, SE = .17, p < .01. Then, when we examined the joint effects of the interaction effect and luxurious perception of the brand on purchase intention, no significant effect was found from the interaction; βBrand name x Endorser = -.02, SE = .24, p > .05, emerged on purchase intention. However, the effect of the perception of a brand’s luxury quality was still significant; βBrand name x Endorser = .33, SE = .12, p < .01. This implies that the interaction effect of the two independent variables had an indirect effect on purchase intention through the perception of a brand’s luxury quality (CI95, 1,000 bootstrapped samples [.0492, .4229]). Specifically, the perception of a brand’s luxury quality mediated the effect of the language of brand name on purchase intention only in the condition of a Western endorser (CI95: [-.3161, -.0429]), but not in the condition of a Chinese endorser (CI95: [-.0298, .1254]). Discussion The study supports the argument that a brand name is a strong cue for consumer judgment (Thakor & Lavack, 2003; De Mooij, 2010; Elena & Segev, 2012) by suggesting that when a brand uses a foreign brand name (Roman Alphabet), consumers are more likely to view the brand as luxurious; also consumers are more likely to be willing to purchase the brand than when it uses a Chinse brand name. Interestingly, bilingual brand naming has been found to be somewhat complicated. The study suggests that using both foreign and Chinese brand names is as ineffective as using a Chinese brand name only for luxurious perception of the brand. This may be because the use of a Chinese brand name along with a foreign brand name dilutes the cultural meanings (e.g., status, social distinction, etc.) that the foreign brand name on its own transfers to consumers. With respect to purchase intention, however, the use of bilingual brand naming produces an effect equal to the use of a foreign brand name only. This finding indicates that a brand name may be more associated with the perception of brand’s luxury quality than intention to purchase the brand. This further implies that the effectiveness of a glocalization strategy of the brand name by adding a Chinese brand name to an original foreign brand name should be considered with caution. In addition, the current study extends prior research on multi-cue models of country-of-origin effects by demonstrating the moderating role of the ethnicity of an endorser in the effectiveness of the language of a brand name. When a brand uses a Western celebrity endorser, the glocalization strategy of bilingual brand naming seems to be less effective; consumers have a weaker perception of a brand’s luxury quality, compared with a foreign brand name. However, bilingual brand naming is just as effective as foreign brand naming when it uses a Chinese celebrity as the endorser. Supporting previous findings about the synergistic effect of multiple foreign cues (Huang, Fan, & Zhou, 2008), this study implies while the foreign brand name still serves as a foreign cue in bilingual brand naming, the Chinese brand name attenuates the positive effect of the foreign brand name and weakens the synergistic effect from the foreign cues of the foreign brand name and the Western endorser. On the other hand, when a Chinese celebrity endorses the brand, there may not be a synergistic effect from the multiple foreign cues of the foreign brand name and the endorser. Therefore, adding a Chinese brand name to a foreign brand name may not significantly moderate the positive effect of the foreign brand name. Finally, this paper suggests that consumer perception of a product having luxury quality seems to be a strong driver in determining the purchase of a luxury brand, especially when a western celebrity endorsers the brand. Managerially, the study provides insights into the selection of an effective brand-naming strategy and an endorser for advertising when luxury brands do business in the Chinese market. Bilingual brand naming is becoming a common practice in China. Given such a trend in China, is the glocalization strategy on brand naming being deemed effective? If viewing advertising effectiveness from the perspective of enhancing luxurious brand image, the strategy of bilingual brand naming seems to work poorly in China compared with standardized foreign brand naming. It may not be that simple, though, because multiple cues are used to infer cultural meanings of luxury brands and, furthermore, the cues would interact with one another. Considering that many luxury brands use celebrities, especially Chinese celebrities in the Chinese market, foreign or bilingual brand naming is critical to the success of luxury brands, yielding equal effectiveness in luxury perception. This implies that if a brand uses a foreign brand name only, a Western endorser would be more desirable. If the brand adopts bilingual brand naming, then utilizing a Chinese endorser would seem advisable. The study further suggests that the localized strategy in brand name–the use of a Chinese brand name only–is not a good idea for luxury brands in China.

• Sojung Kim(Chinese University of Hong Kong, Hong Kong)
• Ka Yi Luk(Chinese University of Hong Kong, Hong Kong)
• Binfang Xia(Chinese University of Hong Kong, Hong Kong)
• Nan Xu(Chinese University of Hong Kong, Hong Kong)
• Xinzhu Yin(Chinese University of Hong Kong, Hong Kong)