Lit Up or Dimmed Down? Why, When, and How Regret Anticipation Affects Consumers’ Use of the Global Brand Halo

Abstract

Research has long established the existence of a global brand halo that benefits global brands by triggering “global equals better” inferences by consumers. Nevertheless, little is known about the conditions under which this halo may or may not be used or about whether and, if so, how it can situationally fade. Drawing from regret theory, the authors posit that anticipating regret can conditionally both attenuate and accentuate consumers’ use of the global brand halo and develop a serial conditional process model to explain the mechanism underlying regret’s influence. The results of two experimental studies show that anticipated regret affects global brand halo use—and subsequently relative preference for global or local brands—by increasing consumers’ need to justify their purchase decision. Whether and how consumers will use the global brand halo depends on consumers’ product category schema, while the intensity of the halo’s use depends on consumers’ maximization tendency. The findings offer a decision-theory perspective on the competition between global and local brands and empirically based advice on managerial interventions that can influence global or local brand market shares.