• by Adrienne W. Fawcett , June 1, 2007

Any American who bought a first home or decorated an apartment in the 1980s or '90s surely knows IKEA was born on foreign soil. Everything about the retailer was-and is---different from other furniture companies: its formula of high design at a low price; its all-caps name; its bright blue and yellow décor that's reminiscent of a certain country's flag; even the tangy scent of Swedish meatballs wafting through the aisles. Doesn't everyone know this is not your father's Wal-Mart?

Well, no. Meatballs or not, only 31.2% of college students correctly identify IKEA as a Swedish company; and nearly a quarter erroneously think it's American, according to a new study of American college students. And it's not just IKEA. U.S. college students may get an A-plus for trendiness, but they get an F for understanding where brands originate.

"It's surprising how little college students identify brands with their country of origin. There's a lot of confusion," says Tom Anderson, managing partner of Anderson Analytics LLC. The company conducted the online survey of 1,000 U.S. college students with its GenX2Z.com group.

Anderson pointed out that the misidentification includes even iconic brands like Motorola, which came out with the first cell phone and supplies communications equipment to the military. Only 38% of students correctly said it's from the U.S., while 42% of students think Motorola is Japanese.

"Maybe it's the name," surmises Anderson. "Moto could sound Japanese. It's the same with Nokia." Just 4.4% of college students know Nokia is based in Finland; 53.6% of respondents said it's from Japan.

In fact, college students give Japan, the U.S. and Germany a lot of undue credit for creating some of the biggest brands, while Finland, Denmark, the Netherlands, Korea and Sweden were the most misidentified countries.

In addition to Motorola and Nokia, most students think Hyundai and Samsung are Japanese. They think Land Rover, Adidas, Ericsson, LG and Lego are American; and they think Volvo and SAAB come from Germany. Anderson says studies of U.S. adults show they are as equally confused as students.

This raises the question of whether--in this age of globalization and connectedness-it even matters that consumers know where products originate. Do people need to know LEGO was created by a Danish teen? It's apparently not very important to LEGO; one has to scroll through several pages of its web site to find any reference to Denmark.

Anderson points out that SAAB no longer identifies the upscale auto brand's heritage in its commercials. "They've taken out the reference to Scandinavia and are now pushing that it's born from jets," he says. "They'll lose some things here-traditionally its most loyal customers have been drawn to SAAB because it's a luxury, foreign, exotic car."

The country of origin has a positive impact on brand equity when the country is associated with quality; according to the study, the countries most closely associated with quality are Japan, the U.S., Germany, Italy, the U.K. and France. It works the other way as well. For example, the study found that students who know LG is from Korea gave a higher product rating for Korea.

But, sometimes, confusion about a brand's origin can be a good thing, such as when students assume some Korean brands are from Japan. This is because 81.8% of people believe Japan makes quality products overall, vs. 39.7% for Korea.