Country of Origin Effects

1
Country of Origin Effects

• Image of made in label

2
COUNTRY OF ORIGIN

• WHERE A PRODUCT OR BRAND COMES FROM OFTEN
  INFLUENCES A CONSUMER PRECEPTION OF THE PRODUCT
• COUNTRY-OF-ORIGIN EFFECT DEALS WITH QUALITY
  PERCEPTIONS OF PRODUCTS. THIS EFFECT DIFFERS BY
  PRODUCT CATEGORY AND QUALITY LEVEL OF THE COUNTRY
  OF PRODUCTION (JOHNY K. JOHANSSON, 2000)
• country-of-design, country-of-production
• COUNTRY-OF-ORIGIN BIAS CUSTOMERS TEND TO
  OVERSTATE THE POSITIVE AND NEGATIVE OF PRODUCT
  ATTRIBUTES AND THIS CAN CAUSE A BIAS TOWARDS
  PRODUCTS FROM A GIVEN COUNTRY (JOHNY K.
  JOHANSSON, 2000)

3
Global Branding

• Country of Origin
• Country with which good/service is associated
• Country of Manufacture
• Country where the product is manufactured (for
  products)
• Country where the headquarters are located (for
  services)
• In the absence of other product information,
  country of origin impacts consumers product
  evaluations

4
ROLE OF BRANDS CULTURAL DIFFERENCES (JOHNY K.
JOHANSSON, 2000) JAPAN US EUROPE IMAGE R
ISK REDUCTION RECOGNITION/ENVY FEEL
GOOD TIME SAVER ACHIEVEMENT EMOTIONAL PEER
DOMINATION HIGH ASPIRATIONS BELONGING DIST
INCT PEER RECOGNITION INDIVIDUAL _____________
____________ ________________________
______________________________ VALUE ADDED
AFFECT CONVENIENT AND SURE CALCULATED SOCIAL
VALUE __________________________ __________
______________ _____________________________
DEFINES THE GROUP IDENTIFIES THE
INDIVIDUAL HIGH-LOW STATUS
5
Stereotypes

• Product-country stereotypes
• Service stereotypes

6
Country of Origin (COO) Stereotypes
There is ample evidence that shows that for many
products, the Made in label matters a great
deal to consumers. Key findings a) COO
effects are not stable perceptions change over
time b) In general, consumers prefer domestic
products over imports c) The critical factor
appears to be the place of manufacture rather
than the location of the companys
headquarters d) Demographics makes a
difference e) COO effects depend on the product
category
7
Strategies to Cope with COO Stereotypes Country
image stereotypes can either benefit or hurt a
companys product a) Product Policy Select a
brand name that disguises the country-of-origin
or even invokes a favorable COO b) Pricing low
or high price c) Distribution companies could
influence consumer attitudes by using highly
respected distribution channels d) Communication
8
Country of Origin, Price, and Brand, as
Evaluative Criteria

• Country of origin is used to signal product
  quality
• Use of price as criterion varies across product
  categories
• Acceptable price range is determined by past
  purchases perception of benefits vs. costs
  indicates value and the buying situation.
• Brand reputation
• Brand may be viewed as an indicator of quality
  and/or consistency of satisfaction - lessening
  risk.

9
Ethnocentrism

• The belief that purchasing foreign products hurts
  the local economy by causing loss of jobs, and
  that it is morally wrong and unpatriotic
• Leads to the rejection of foreign products
• Example US people tend to buy US products

BUY AMERICAN!
10
Attitudes Toward Foreign Products

• High ethnocentric consumers purchasing imported
  products is wrong because it hurts the domestic
  economy, causes loss of jobs, and is plainly
  unpatriotic.
• Low ethnocentric consumers foreign products
  should be evaluated on their own merit, without
  regard for country-of-origin.

11
Attitude towards the Country of Origin

• Stereotyped attitudes toward foreign products
  services can favor or hinder marketing efforts
• If the quality is perceived to be low
• Foreign origin of the product can be disguised
• Foreign identification of the product can be
  continued consumer attitudes towards the
  product can be changed
• In some market segments foreign products have a
  substantial advantage because they are foreign