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) JAPANUSEUROPE IMAGERISK REDUCTIONRECOGNITION/ENVY “FEEL GOOD”TIME SAVERACHIEVEMENT EMOTIONALPEER DOMINATIONHIGH ASPIRATIONS “BELONGING”DISTINCT PEER RECOGNITIONINDIVIDUAL _________________________________________________ ______________________________ “VALUE ADDED” AFFECTCONVENIENT AND SURE CALCULATED SOCIAL VALUE __________________________________________________ _____________________________ DEFINES THE GROUPIDENTIFIES THE INDIVIDUALHIGH-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