In the study, published in the Journal of Marketing Research, the authors demonstrate that consumers’ preference for factory originals is not due to inferences about product quality based on the manufacturing location, but to a belief in contagion. Contagion is a form of magical thinking in which people believe that the special aura or essence of a source—the essence of the brand in this case—can be transferred to an object through physical contact.
“Products manufactured in the original factory acquire the essence of the brand through a contagion-like process,” says study co-author George Newman, assistant professor of organizational behavior at Yale SOM. “Consumers believe that products made in the original factory possess the essence of the brand more so than products made elsewhere, which in turn causes them to be perceived as more authentic and desirable.”
In a series of experiments, the authors manipulated the manufacturing location of products including Levi’s jeans, gourmet chocolates, and luxury bags, and surveyed participants about their willingness to pay for the products and their perceptions about their value and authenticity. Participants were willing to pay significantly more for products made in the original factory than those produced in either a newer factory located in the same city as the original or in a foreign factory. Participants also placed a higher retail value on factory originals, and viewed them as embodying the essence of the brand more than products manufactured elsewhere.
The study also revealed that consumers who are more sensitive to the concept of contagion are more likely to have a stronger preference for products manufactured in the original factory, and that priming consumers to think about contagion by having them read vignettes about the spread of laughter or poison ivy among people enhanced their preference for products made in the original factory.
Brands like New Balance, Hershey’s, and Fuller’s Brewery of London that prominently promote the fact that their products are made in the original factory may capitalize on emphasizing that physical connection. However, the authors note, consumers won’t always prefer products from the original factory. For companies with a negative reputation, contact with the original factory may turn off consumers.
The authors say that the study has important implications for firms that are considering moving their manufacturing operations. “Firms should pay particular attention to how changes in manufacturing location may affect perceptions of brand authenticity. For products in which authenticity is a factor, a change in manufacturing location may have a substantial impact on how consumers value the product,” says study co-author Ravi Dhar, the George Rogers Clark Professor Management and Marketing and director of the Center for Customer Insights at Yale SOM.
“Authenticity is Contagious: Brand Essence and the Original Source of Production” is published in the June 2014 issue of the Journal of Marketing Research.