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Country Of Origin Effect Essay

5626 words - 23 pages

A. INVESTIGATIVE ISSUE: COUNTRY-OF-ORIGIN EFFECT In the era of globalization and international commerce, the world is shifting towards one global market, which is leaving an impact on consumers= perception of products emanating from a particular country. The literature on country-of-origin (COO), is primarily concerned with determining the effects of consumers= perceptions of countries on their ratings of products= quality and their choice processes. Our discussion on COO, will begin with a quick review of the various constructs that relate to COO effects, followed by an overview of COO literature.The COO influences choices made by consumers, but country image also plays a major role in the consumers= perception of the products. Country image may be an asset when it is positive and a liability when it is negative. It has been established that the COO effect is both product category specific and country specific (Thorelli et al., 1989; Wall et al., 1991; Lim et al., 1994). For example, a >made in Japan= label may have a positive image when shown on high quality technical products, and a less positive image when associated to perfume and wine (product category specific). Also, Japanese-made technical products have a more positive image in the USA than in Europe (country specific) (Bilkey and Nes, 1982). The role of the country-of-origin effect on the consumers= evaluation of products will be discussed.From research it appears that increased knowledge and familiarity with a product category has a tendency to decrease the use of COO as an information cue by consumers: consumer experts base their evaluation on the strength of actual product attributes versus novices who rely more on the COO as a cue (Schaefer, 1997, p. 68). The issue of COO as an extrinsic cue, will be addressed in both single and multi-cue environments.We will also review the measures used for quality perception and COO, and the underlying theoretical processes involved in consumers= product evaluations. The COO should have a greater effect on consumers= absolute judgements in regards to the quality and/or overall merits of the product than on stated preferences, purchase intentions, and choice. A similar parallel can be taken from attitude literature (Fisbein), which argues that the impact of a communication will be smaller for those dependent variables involving higher levels of personal commitment and/or that are further removed from the explicit content of the message. To further investigate this issue, we will try to simulate an experiment based on the COO/perceived quality dimension.B. DEFINITION OF CONSTRUCTS With the ongoing globalization of markets, and the outsourcing of various aspects in the production process, it is important to make distinctions between COO, country-of-manufacture (COM), country-stereotyping effect (CSE), country-image (CI), and brand origin effects (BO) (Samiee, 1994): 1. COO: COO signifies the country with which a company is associated. Usually,...

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