Country of Origin Effects
Image of “made in” label
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)
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
ROLE OF BRANDS: CULTURAL DIFFERENCES
(JOHNY K. JOHANSSON, 2000)
JAPAN
US
EUROPE
IMAGE
RISK REDUCTION
RECOGNITION/ENVY
“FEEL GOOD”
TIME SAVER
ACHIEVEMENT
EMOTIONAL
PEER DOMINATION
HIGH ASPIRATIONS
“BELONGING”
DISTINCT
PEER RECOGNITION
INDIVIDUAL
_________________________ ________________________
“VALUE ADDED” AFFECT
VALUE
CONVENIENT AND SURE
__________________________ ________________________
DEFINES THE GROUP
IDENTIFIES THE INDIVIDUAL
______________________________
CALCULATED SOCIAL
_____________________________
HIGH-LOW STATUS
Stereotypes
• Product-country
stereotypes
• Service stereotypes
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 company’s headquarters
d) Demographics makes a difference
e) COO effects depend on the product category
Strategies to Cope with COO
Stereotypes
Country image stereotypes can either benefit
or hurt a company’s 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
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.
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!
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.
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