A study of brand name and country of production congruity : A consumer study – assessed with the example of a Swedish luxury bed manufacturer

Abstract: As companies become ever more globalised, manufacture firms choose to outsource production to lower labour cost countries. However, as studies have shown, such a relocation of production may lead to undesirably decreased quality perceptions by consumers as the brand origin and country of production are de-coupled. This quality perception linked to congruity between brand origin and country of production has been studied for various products and product classes, but little has been written about how a luxury bed manufacturer may be affected by this phenomenon known as the country of origin effect. Thus in theory quality perceptions are higher if the brand origin and country of production are congruent and are further amplified if that country is already regarded highly in terms of production competence. In our study, we set out to verify this theory through a consumer-based questionnaire. Our results give strong evidence in support of this theory which is why we ultimately claim, from a theoretical standpoint, that the company we focus on should maintain its production location in Sweden.