Country of Origin & Impact on Product Category Marketing Vishnu Vallamkonda 0723177 Vikranth Reddy 0745094 Neelkamal Narang 0632406 Manchula Rasendran 0743911 Contents Country of Origin Definition Key Findings of COO Country of Origin Effects Product Categories Impacts of Country of Origin Strategies to cope with COO Benefits of Country of Origin Conclusion SMM 208 International Marketing 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) SMM 208 International Marketing Key Findings of COO 1. Country of Origin (COO) is an important driver of consumer’s product preferences depending on their originating factor. 2. COO label plays a great role in influencing consumer attitudes towards foreign products 3. Product’s national origin’s label- Identifier. 4. COO effects are not stable: perceptions change over time 5. COO effects depend on product category 6. The place of manufacturing is more important than where the company is located. Source: http://smib.vuw.ac.nz:8081/WWW/ANZMAC2002/papers/pdfs/p050_rahman.pdf SMM 208 International Marketing Country of Origin Bias and Country of origin Effects • Japan 54% • Iranian pistachios and rugs • China 38% • German Cars • Korea 32% • Columbian Coffee • English Tea • Hong Kong 29%, • Swiss Chocolate • Singapore and Malaysia 22% • French Perfume • Thailand 15% • Chinese Silk • Indonesia 11% • Italian Leather • India 8% • Japanese Electronics • Ethnocentrism in USA http://www.warc.com/LandingPages/Generic/Results.asp?Ref=302 SMM 208 International Marketing ROLE OF BRANDS: CULTURAL DIFFERENCES JAPAN USA EUROPE IMAGE RISK REDUCTION RECOGNITON/ENVY “FEEL GOOD” TIME SAVER ACHEIVEMENT “EMOTIONAL” PEER DOMINATION HIGH ASPIRATIONS “BELONGING” DISTINCT PEER RECOGNITION INDIVIDUAL (JOHNY K. JOHANSSON, 2000) SMM 208 International Marketing Country Of Origin as a cue Low Involvement Products High Involvement Products Intrinsic Cues Intrinsic Cues 1) Taste 1) Taste 2) Design 2) Design 3) Shape 3) Shape 4) Colour 4) Colour Extrinsic Cues Extrinsic Cues • Price • Price • Brand name • Brand name • Guarantees &Warranties • Guarantees &Warranties • Country of Origin • Country of Origin Low Impact High Impact Low Involvement Product Evaluation SMM 208 International Marketing Product Categories (High Involvement Products) • Wines • Cars • High-fashion clothes • Consumer electronics SMM 208 International Marketing COUNTRY OF ORIGIN IMPACT Impact of the Country of Origin is categorically studied under the three heads-: 1. Cognitive 2. Affective and 3. Normative Two Major Causes for Country of Origin Effect 1. Social Economic Differences 2. Consumers Cognitive Bias SMM 208 International Marketing How Does it Work? Analysis of COO impact on Apparels Country of Origin Impact Halo Effect Summary Construct Price, Quality, Style & Fit Stereotype Perceptions on Apparels • In USA Clothing “made in USA” was perceived as having the highest quality. Italy was perceived as second highest followed by China, Korea and Costa Rica. • Canadian consumers held high quality images of Canadian-, U.S.- and European-made clothing but were critical of products from low-wage countries. • Quality perception of designer brands was lowered when made in Korea, China, and Costa Rica. But association with Italian apparel neither significantly increased nor decreased the quality rating of the designer brand. •The Italy country image for designer apparel impacted on the evaluation of the products. SMM 208 International Marketing Impact of Country of Origin on Apparels in Australia Source: http://marketing-bulletin.massey.ac.nz/V2/MB_V2_A4_Patterson.pdf 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 Source: http://www.allbusiness.com/government/398545-1.html SMM 208 International Marketing Conclusion SMM 208 International Marketing • Products and Prejudice: Measuring Country-of-Origin Bias in U.S. Wine Imports ; http://papers.ssrn.com/sol3/papers.cfm?abstract_id=421800; Accessed on 12/12/2008. • Country-of-Origin As A Surrogate Indicator: Implications/Strategies; http://www.allbusiness.com/government/398545-1.html ; accessed on 12/12/2008. • Consumers' country-of-origin (COO) perceptions of imported products in a homogenous less-developed country; http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=6F02EC4AB7169297F5407E85ECFE7 9A8?contentType=Review&contentId=1433043 ; accessed on 11/12/2008 • The Effects of the Country of Origin on the Evaluation of products: A State of the Art Review and Research Propositions www.geocities.com/WallStreet/Market/4263/COO.pdf ; accessed on 12/12/2008. • Country of Origin; http://en.wikipedia.org/wiki/Country_of_origin ; accessed on 12/12/2008 • Domestic Country Bias, Country-of-Origin Effects, and Consumer Ethnocentrism; http://www.fearp.usp.br/marketing/artigos/Domestic%20Country%20Bias,%20Country-of- Origin%20Effects,%20and%20Consumer%20Ethnocentrism%20- %20A%20Multidimensional%20Unfolding%20Approach.pdf ; accessed on 12/12/2008 • Consumers' perceptions of the country-of-origin effect on purchasing intentions of (in)conspicuous products; http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Review&contentId=143 2166 ; accessed on 12/12/2008 SMM 208 International Marketing •Country-of-origin effect in apparel choices: A conjoint analysis; http://www3.interscience.wiley.com/journal/119982421/abstract ; accessed on 13/12/2008 • The Importance of Product Country of Origin:: A Conjoint Analysis of the United States, Canada, Germany and The Netherland; http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Article&contentId=853351 ; accessed on 15/12/2008. • Consumer knowledge and country of origin effects; http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Article&contentId=853481 ; accessed on 13/12/2008 • A dynamic approach to country-of-origin effect; http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Review&contentId=1261723 ; accessed on 12/12/2008. • Consumer ethnocentrism and attitudes toward domestic and foreign products; http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Article&hdAction=lnkpdf&contentId=853694 ; accessed on 14/12/2008 •Consumers' country-of-origin (COO) perceptions of imported products in a homogenous less-developed country; http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Review&contentId=1433043 ; accessed on 14/12/2008 • A less-developed country perspective of consumer ethnocentrism and “country of origin” effects: Indonesian evidence ; http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Article&contentId=1549863 ; accessed on 12/12/2008 • Country of origin effects: a literature review; http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Review&contentId=1426289; accessed on 14/12/2008 • The importance of country images in the formation of consumer product perceptions; http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Article&contentId=855415 ; accessed on 14/12/2008 • Integrating country of origin into global marketing strategy: A review of US marking statutes ; http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Article&contentId=855444 ; accessed on 14/12/2008. • Flexible model of consumer country-of-origin perceptions: A cross-cultural investigation; http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Article&hdAction=lnkhtml&contentId=8 55445 ; accessed on 13/12/2008 • Does country of origin matter for low-involvement products?; http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Article&hdAction=lnkhtml&contentId=8 55558 ; accessed on 13/12/2008. • Consumer Perceptions of Country of Origin in the Australian Apparel Industry; http://marketing- bulletin.massey.ac.nz/V2/MB_V2_A4_Patterson.pdf ; accessed on 14/12/2008. • THE IMPACT OF COUNTRY OF ORIGIN AND CONSUMER ETHNOCENTRISM ON CHINESE CONSUMER mature; http://www.protagonize.com/story/the-impact-of-country-of-origin-and-consumer-ethnocentrism-on-chinese- consumer ; accessed on 15/12/2008.