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Country Of Origins Effects Commerce Essay

HASSAN and SAMLI (1994, site 99. ) define the effect of country of source as the effect that the manufacturer country is wearing the positive or negative consumer judgment. Probably one of the most famous books of the matter is JAFFE'S and NEBENZAHL's work (2001). It starts the introductory section with the following provocative question: "Please, fill out the following sentence: A luxury car made in Greece is

The question shows the substance of country of origin effect very well. Regarding to ROTH and ROMEO (1992) the COO result is how consumers consider a product coming from a given a country.

Empirical studies show that when a person becomes alert to the united states of source of something his/her image about the product is affected either favorably or negatively corresponding to his perceptions.

Consumers tend to have a stereotype about product and countries which have been developed by experience, hearsay, myth. These stereotypes are usually broad and obscure according to that they judge a specific country or a particular product to be the best : French Perfumes, Italian Leather, Chinese language Silk and Japanese Technology are all types of such stereotypes.

Therefore the country, the type of product, and the image of the company all its brand play a crucial rule in deciding whether the country of origins will engender a positive or a negative reaction.

Country Image : Precursors to Country of Origins Effects

Country image can be defined as "the total of information in the consumers' brain in regards to a nation/country". In this respect, SULLIVAN MORT and HAN (2000) said, the less information we've in regards to a given country the greater risks the sales of its products will come across.

It has been a long known simple fact that "Made In" label is merely as powerful and just as valuable as a "Made By" label. German executive, Japanese miniaturization, Italian flair, Swedish design, British isles class, Swiss accuracy - those are brand worth which rub off onto all the merchandise that come from those countries

Country Image is the reason why, in the first 1990s, People in america bought Toyota Corollas (that have been quite expensive) somewhat than Geo Prizms (that have been quite cheap), even though these were a similar car, manufactured in the same manufacturer. It is because the American consumers assumed that Japanese automobiles offered better value than American cars.

Countries thus try hard to keep their images and hence generate an optimistic reputation because of their products in international market. Country image (as advised in Henry Stewart Magazines 1744-0696 (2005) Vol. 1, 2, 164-172 Place Branding) is propagated through stations that can be identified in a Hexagonal Style of communication :

Each of the components has an enormous effect on the image that country assignments :

  • The loudest branding work comes from country's tourism campaign, and people's connection with visiting the country as travellers or business travelers.

 

  • The country's exports with a plainly marked "Manufactured in" label are powerful ambassadors of the country's image internationally.

 

 

  • The coverage decisions manufactured from the country's authorities. Policy makers are nowadays much closer to the international multimedia than they ever before used to be.

 

 

  • From just how company get the investment, foreign talent and overseas companies to work with it.

 

 

  • The country's ethnic activities and cultural exports: a world tour by the national opera company, the works of any famous creator, the national athletics team.

 

 

  • The folks of the united states themselves: the hospitality they provide to the visitors coming from in foreign countries and the way they react when in another country.

 

In this respect an under the realms associated with an experiment asked young people to freely associate the five words they think (adjectives, product categories, foods, beliefs, etc. ) are the most constant with the countries under evaluation (this part were encouraged by the contributions of Kayanak, Kucukemiroglu 1992; Usunier 1993; Usunier, Lee 2005). The results show that the consumers clearly labeled each country with a few product types, this is the stereotype (or the consumer belief) that plays a part in country of origin effects while assessing the available product. The salient consequence as detected is tabulated below :

CountryAssociationCountryAssociation

Italy Art Record culture China Plagiarism
design fashion Cheap
Food and Wine beverages(psta, Pizza, Vino Communism
Elegance Style Economic and inhabitants growth
Quality Food and Rice
France Fashion Luxury Japan Innovation New Tech
Elegance Precission Quality
Quality Food(Sushi)
Culture Population
Food and Wine(Cheese, Baguette, Champagne) Tokyo
Germany Cars USA Innovation
Beer Freedom
Industry Technology Leader ower superiority arrogance
Engineering Food (Fast Food)
Discipline Organization Multiculturalism
Strongness solidity  

Associated Principles to Country of Origin

From a conceptual viewpoint it is particularly important to underline that the notion of "Country of origin" is by no means simple and univocal.

Initially, the idea of Country of Source (COO) was regarded as the "Made in" Country (see the review by Nebenzahl et al. , 1997), or the Country of Manufacture (COM) (see the review by Samiee 1994). This is the united states which came out on the 'made in' label, which would generally be the united states where final set up of the nice took place.

For example creator product labels from Gucci, Versace loose their sheen when they include "Manufactured in China" label because area of the manufacturing tool place there.

In modern world though other ideas have progressively emerged in the COO literature, such as Country of Design (COD) in the review by Nebenzahl et al. , 1997; Jaffe, Nebenzahl 2001), discussing the country where in fact the product was designed and developed.

For example the latest "Audi TT" luxury car model was designed in Germany but has been produced from Hungary, but with Germany's known reputation in executive field the model is marketed by the name of country it was created at.

Moreover, global companies nowadays are manipulating brand names to suggest particular origins (country of brand (COB) results). Thus COO is progressively more considered as that country which consumers typically connect with something or brand, regardless of where it is actually manufactured.

For example, even though Nike Apparels are manufactured in low priced destinations like India, China etc. the brand reputation of Nike overcomes the country of manufacturing impact and the products are believed to be North american.

Manifestations of Country Of Source Effect

The country of source effect can be realized in a variety of different forms one of the consumers. The major manifestations are :

 

  • Individualist / Collectivists

 

    Where Individualist favor country of origin bases to ascertain the superior characteristics of the merchandise, the collectivists prefer home country of origins products on the overseas ones.

 

  • On Basis of Industrialization

 

    Countries are categorized on the degrees of industrialization they may have achieved. Consumers in such instances are reduced product specific. They believe the products from industrialized nations are superior in quality and so the products from developing nations suffer from bias.

 

  • Ethnocentrism

 

    Under the feeling of national satisfaction, consumers like to purchase the products of home country. For instance, the "buy American effect", Honda accepted it and specifically described how many element were manufacture in America when releasing its models there.
    One might generalize that to get more technical product, there's a less positive understanding towards product of developing nations. In the same way, less developed nations have a tendency to favor products from developed countries.

Strategies for Usage of COO Result in International Marketing

In modern day world, companies attended to realize the importance of coutry of origin effect and also have started to give it scheduled importance while strategizing their international marketing strategies.

Nowadays, a company's marketing strategy is dependent not only on the effectiveness of its brand image but the country image as well. Matching to Jaffe and Nebenzahl (2001), four possible strategies can be used. First scenario considers companies having both, a solid country and brand image. Second scenario considers companies with a weakened country image but a solid brand image. Third Scenario talks about companies with a vulnerable brand image, but a solid country image, and fourth scenario looks at companies having both a vulnerable country and a poor brand image.

1. Strong Country - Strong Brand Image

    This is the better position for a company when both product and the country have strong brand images. In this case, strategically, both the brand and the "made in" country should be emphasized, particularly if it is a global one. Some major types of this are: Buick (made in US), Sony (made in Japan) and Zeiss (made in Germany).

2. Weak Country - Strong Brand Image

    The scenario of an weakened country image but a solid brand image generally identifies products whose production or set up has been outsourced to expanding/emerging economies. In this condition, the emphasis should be put on the brand name, while the country of origins must be de emphasizing as much as possible. BT provides an excellent case of neutralizing the country of origin. A few years ago British Telecom researched the aptness of their brand in overseas markets. The results exhibited that that they had problems with the company's name in Japan where "British" was synonymous "of days gone by", "colonial" rather than for innovation or continue. Then they decided to become "BT"

3. Strong Country - Weak Brand Image

    This category has products that are identified to be of lower quality vis   vis the rivals from same country. Strategically, these brands should make an effort to piggyback on strong country image by emphasizing their "made in" attribute. This strategy works very well for brands/products with bad image or without any image. Some examples include Japanese brands like Suzuki or Miranda Surveillance cameras and/or Daihatsu cars.

4. Weak Country - Weak Brand Image

    This category has products that contain vulnerable country image as well as a poor brand image. In cases like this one potential strategy is tactical piggybacking on some strong local brand. For example, Samsung, the Southern Korean products producer, gained entry into the US in microwave ovens portion distributing them through Standard Electric under the "GE" label. Similar strategy was accompanied by Mitsubishi in its entrance into the USA using the Chrysler circulation network.

Country or Origin Effect : Critical Results

When the affect of country of origins impact and brand understanding was examined for convenience, shopping and specialty goods, empirical results (from the newspaper "Luxury brand and country of source effect: results of a global empirical study", Prof. Gaetano Aiello, Dr. Raffaele Donvito, Prof. Bruno Godey and Prof. Daniele Pederzoli) disclosed :

  1. Brand Notion and Country of source have medium and medium high effect on perceptual analysis of shopping goods and a medium high and high impact on luxury goods.

 

  • Brand and Country of source decrease their impact on purchasing decisions; THE UNITED STATES of origins has a medium impact only in the purchasing decisions of luxury goods, while the brand sustains its impact also on shopping goods.

 

 

  • Country of source do not have an effect on evaluation and purchase of convenience goods.

 

 

  • Brand affects evaluation and buy decisions a lot more than Country of origins in shopping and specialty goods

 

The study also reveals the most notable most requirements in evaluation and buy of convenience goods is Price, and Design for specialty goods. Brand Perceptions rates second in this hierarchy Country of origin is instead across the last of within the items considered.

References

Astous A. , Ahmed S. A. , (1999), "The importance of country images in the formation of consumer product perceptions" International marketing review, vol. 16, n. 2.

Bilkey W. J. , Nes E. , (1982), "Country of origin effects on product evaluations", Journal of International Business Studies, 13, pp. 89-99.

Nebenzahl I. D. , Jaffe E. D. , Lampert S. I. , (1997), "Towards a theory of country image effect on product evaluation", Management International Review, 37, pp. 27-49.

Roth M. S. , Romeo G. B. (1992), "Matching product categoriey and Country Image Perceptions: A platform for controlling Country of Source Effects", Journal of International Studies, Winter.

Jagdish Agrawal, Wagner A. kamakura, "Country of origin: A competitive gain" International Journal of Research in Marketing Vol. 16, No. 4 December (1999) P. 255 267

"International Marketing", Thirteenth Edition, Philip R Cateora, John L Graham and Prashant Salwan

SULLIVAN MORT, Gillian Maree - HAN, C. Min 2000: Multifaceted country image effect on purchase intensions for goods: a report in the asia pacific financial meeting region. (www. digital. re. kr/hanlab/private/discussant. PDF)

A Chapter extracted from the reserve 'Brand America: The mom of All Brands' by Simon Anholt and Jememy Hildreth, shared by Cyan Catalogs, 2004.

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