India, as a population giant, is a major emerging market that is increasingly important in the era of the fourth industrial revolution. Additionally, the Korean government is trying to promote close cooperation with India by announcing the New Southern Policy, as strategic importance has increased as an alternative market to reduce dependence on China. Until the early 2000s, the Indian market was recognized that real purchasing power was insufficient as 60% of the population was poor. Therefore, the price factor was the top consideration for Indian consumers’ purchase intention. However, with India’s economic growth and the middle-class ratio and disposable income increasing, there have been changes in spending patterns. Recent studies show that various factors other than price such as national and brand images are affecting the purchase intention of the middle-class in India. On the other hand, compared to research on developed countries or Chinese markets, the impact of those factors in the Indian market are still insignificant both in quality and in quantity. Prior studies on the Indian market have mainly focused on market entry strategies including localization based on targeting the BOP market or Premium market.
Against this backdrop, this study aims to examine how national and brand images affect the purchase intention of middle-class consumers through quality perception in the Indian market. To examine this household electrical appliances market was selected among many of the industrial groups in India which is showing rapid growth along with the growth of the middle-class. It is suitable for comparing and analysing the national and brand images of Korea and Japan as their brands are competing for the top market share in the Indian household electrical appliance market. Specifically, two groups of corporations were investigated: Korean corporations, Samsung Electronics and LG Electronics, and Japanese corporations, Sony India and Panasonic India. In order to achieve the purpose of the study, the participants were selected from middle-class consumers in India on the basis of their experience of purchasing Korean or Japanese corporation’s electronics or their likelihood of buying these products. Participants were asked to respond using a 5-point Likert scale that was designed to confirm dependent and independent variables. Data management and analysis were performed using SPSS and AMOS that draw Structural Equation Modeling (SEM) to conduct path analysis of the two countries. The analysis revealed the national image of Korea and Japan and brand image of their corporations in the Indian market, quality perception and purchase intention.
The research findings of the present study were:
1) It was found that national image had a statistically significant effect on the quality perception of Indian consumers. In the case of the Korean model, economic/technical and social/cultural factors among others had a positive effect on product and service factors in quality perception respectively, adopting hypotheses 1-2 and 1-5. The political/relational factors were found to have a negative effect, so the hypothesis 1-4 was rejected. Meanwhile, only economic/technical factors among national images had a positive effect on the quality perception in the case of the Japanese research model adapting hypothesis 1-5.
2) Both the Korean and Japanese research models showed that symbolic and functional factors, which are factors of brand image, had a statistically significant effect on product factors of quality perception, and only functional factors are influential for the service factors of quality perception. Therefore, the hypotheses 2-1, 2-3, and 2-4 of the Korean model and the hypotheses 2-1, 2-3, and 2-4 of the Japanese model were adapted.
3) Both Korean and Japanese models showed that quality perception had a positive effect on purchase intention adapting hypotheses 3-1 and 3-2 respectively. In both models, the product factor coefficient value of quality perception was higher than that of service factor, indicating that product factors had a greater influence on purchase intention during quality perception.
The findings from this study make several contributions to the field. First, the findings in this study provide an understanding of a new tendency that middle-class consumers’ spending patterns have changed with their growth and spending has increased due to the influence of national and brand images and not just the price. The data suggests that national and brand images have an effect on purchase intention with perceived quality in India. Second, the findings of this investigation complement those of earlier studies. In particular, the present study provides an empirical investigation focusing on the Indian market, unlike other studies which group it with China, developing countries, and BRICS. Third, this new understanding, through comparing Japanese national and brand images of a representative electronic company, should help to develop marketing strategies for Korean companies that want to enter the Indian market. Lastly, the result of this research suggests that political/relational factors between Korea and India should be reinforced as the empirical analysis shows that political/relational factors of Korean national image have little influence. Korea’s current New Southern Policy has an unbalanced concentration on ASEAN, so the relationship between Korea and India needs to come to the fore in Korean policy to strengthen the relationship and promote substantial cooperation.
Although the current study has significant implications as stated previously, the generalisability of these results is subject to limitations. For instance, the study only includes consumers of a single industry from New Delhi and the National Capital Region so further research with a broader range of customers and industries such as motor car or cosmetics is needed. Furthermore, comparing the research outcome which explored Korean and Japanese brands to India’s local brands or other countries’ such as China and the U.S. would help to establish a greater degree of accuracy. Lastly, the study was limited to two nations’ macro image and brands’ symbolic and functional images. Further research needs to examine other key components of national and brand images to make the research finding more applicable. Continued academic efforts are needed for Korean companies in India to help develop better marketing strategies.