Country of Origin Effect

Topics: Marketing, Brand, Research Pages: 19 (6400 words) Published: March 27, 2011
Effects of Individual and Product-specific Variables on Utilising Country of Origin as a Product Quality Cue by

Effects of Individual and Product-specific Variables
27
Received November 1987 Revised March 1988

Sevgin A. Eroglu
Georgia State University, and

Karen A. Machleit
University of Cincinnati To date, considerable research effort has been made to determine whether country of origin affects consumers' product evaluations. Previous studies in industrial (for example White, 1977; White and Cundiff, 1978) and consumer buying (see for example, Andersen and Cunningham, 1972; Lillis and Narayana, 1974; Gaedeke, 1973; Han and Terpstra, 1988) have shown the country of origin to be a salient cue in buyers' evaluations of product quality. However, due to other conflicting findings, some questions have been raised about the theory and methodology of the research (Bilkey and Nes, 1982; Jaffe and Nebenzahl, 1984) as well as whether the country of origin effect even exists (Johansson et al.; Schellinck, 1986). The conflicting findings in the literature have been attributed, in part, to the methodological limitations of past studies (Bilkey and Nes, 1982). One of the major limitations Bilkey and Nes point out about this research stream concerns the number of product cues considered. Most studies used a single cue, country of origin, as the only information on which respondents based their evaluations. This not only created internal and external validity problems, but also prohibited the assessment of how much influence the country of origin cue has in the presence of other product cues. Second, the authors contend that respondents were typically asked to base their product evaluations on only verbal references to products. The use of an actual, as opposed to an imaginary product, might have produced completely different results. A third major limitation concerns the general lack of attention to reliability and validity issues. The inadequate or non-existent reliability assessment and the ability of subjects to guess the purpose of the research might have resulted in overstated, understated, or spurious results. Recently Han and Terpstra (1988) and Johansson et al. (1985) addressed some of the above limitations pointed out by Bilkey and Nes (1982). Both studies adopted a multicue approach to alleviate the problem of using country of origin as a single cue. Han and Terpstra, for example, included seller's brand name among

International Marketing Review 6,6 28

the evaluative cues and found the salience of country of origin cue in consumers' product evaluations. Johansson et al., included some other factors such as respondent demographics and product familiarity in their analysis. Their findings indicated less significant country of origin effects than have been found in previous studies. The authors, however, provided insights about appropriate research methodology before making premature conclusions against country of origin influences. The purpose of this article is to address some of the aforementioned theoretical and methodological issues about the country of origin research. In particular, it attempts to: (1) use the cue paradigm as a conceptual framework for determining the relative perceived predictive value of country of origin as a quality indicator when other salient product cues are present; (2) investigate the extent to which this influence depends on selected individual and product variables that prior research has suggested to be important in cue utilisation and, (3) eliminate some of the methodological limitations noted by Bilkey and Nes (1982) when testing the posited relationships. These relationships are examined in a causal framework to simultaneously consider a larger number of influences than have been previously addressed. Background This research integrates previous findings on country of origin impact in an information-theoretical perspective which focuses on cue characteristics and cue...

References: Andersen, W. and Cunningham, W.H. (1972), "Gauging Foreign Product Promotion", Journal of Advertising, Vol. 12 No. 1, pp. 29-34. Anderson, J.C. and Gerbing, D.W. (1982), "Some Methods for Respecifying Measurement Models to Obtain Unidimensional Construct Measurement", Journal of Marketing Research, Vol. 19, November, pp. 453-460. Assael, H. (1985), Consumer Behavior and Marketing Action, Kent Publishing Co., Bellmont, CA. Bagozzi, R.P. (1980), Causal Models in Marketing, John Wiley and Sons, New York, NY. Bettman, J.R. (1979), An Information Processing Theory of Consumer Choice, Addison-Wesley Publishing Co., Reading, MA. Biehal, G.J. (1983), "Consumers ' Prior Experiences and Perceptions in Auto Repair Choice", Journal of Marketing, Vol. 47, Summer, pp. 82-91. Bilkey, W.T. and Nes, E. (1982), "Country-of-Origin Effects on Product Evaluations", Journal of International Business Studies, Spring/Summer, pp. 89-99. Burt, R.S. (1976), "Interpretational Confounding of Unobserved Variables in Structural Equation Models", Sociological Methods and Research, Vol. 5, August, pp. 3-52. Cox, D.F. (1962), Risk Taking and Information Handling in Consumer Behavior, Harvard Press, Cambridge, MA. Danes, J.E. and Mann, O.C. (1983), "Unidimensional Measurement and Structural Equation Models with Latent Variables", in W.R. Darden, K.B. Monroe, and W.R. Dillon (Eds.), Research Methods and Causal Modelling in Marketing, Proceedings AMA Winter Educators, American Marketing Association, Chicago, IL, pp. 98-101. Gaedeke, R. (1973), "Consumer Attitudes Towards Products Made in Developing Countries", Journal of Retailing, Vol. 49, pp. 13-24. Gerstner, E. (1985), "Do Higher Prices Signal Higher Quality?", Journal of Marketing Research, Vol. 12, May, pp. 209-15. Han, Min and Terpstra, V. (1988), "Country of Origin Effects for Uni-National and Bi-National Products", Journal of International Business Studies, Vol. 19 No. 2, pp. 235-56. Hansen, F. (1972), Consumer Choice Behavior: A Cognitive Theory, Free Press, New York, NY. Heslin, R., Blake, B. and Rotton, J. (1972), "Information Search as a Function of Stimulus Uncertainty and the Importance of the Response", Journal of Personality and Social Psychology. Howard, J.A. and Sheth, J. (1969), The Theory of Buyer Behavior, John Wiley and Sons, New York, NY. Hunter, J.E. and Gerbing, D.W. (1982), "Unidimensional Measurement, Second Order Factor Analysis, and Causal Models", in Research in Organizational Behavior, Vol. 4, B.M. Staw and L.L. Cummings, Eds., JAI Press, Inc., Greenwich, CT, pp. 267-320.
Hunter, J.E. and Gerbing, D.W., Coehn, S.H. and Nicol, T.S. (1980), "PACKAGE 1980: A System of FORTRAN Routines for the Analysis of Correlational Data", prepared with the support of Academic Computing Services, Baylor University, Waco, TX. Jacoby, J., Chestnut, R.W. and Fisher, W.A. (1978), "A Behavioral Process Approach to Information Acquisition in Non-durable Purchasing", Journal of Marketing Research, Vol. 15, November, pp. 532-44. Jacoby, J., Szybillo, G. and Busato Schach, J. (1977), "Information Acquisition Behavior in Brand Choice Situations", Journal of Consumer Research, Vol. 21, 3 March, pp. 209-16. Jaffee, E. and Nebenzahl, I.D. (1984), "Alternative Questionnaire Formats for Country Image Studies", Journal of Marketing Research, Vol. 21, November, pp. 463-71. Johansson, J.K., Douglas, S. and Nonaka, I. (1985), "Assessing the Impact of Country of Origin on Product Evaluations: A New Methodological Perspective", Journal of Marketing Research, Vol. 22, November, pp. 388-96. Johnson, E. and Russo, E. (1981), "Product Familiarity and Learning New Information", in Advances in Consumer Research, Vol. 8, Association for Consumer Research, Ann Arbor, MI. Joreskog, K.G. and Sorbom, D.G. (1981), LISREL V: Analysis of Linear Structural Relationships by Maximum Likelihood and Least Squares Methods, National Education Resources, Chicago, II. Klein, B. and Leffler, K.B. (1981), "The Role of Market Forces in Assuring Contractural Performance", Journal of Political Economy, Vol. 89 No. 4, pp. 615-41. Lillis, C.M. and Narayana, C. (1974), "Analysis of Made in Product Images — An Exploratory Study", Journal of International Business Studies, Vol. 5 No. 1, pp. 119-27. Mills, J. (1972), ' 'The Effect of Certainty on Exposure to Information Prior to Commitment ' ', Journal of Experimental Social Psychology. Olson, J. (1972), Cue Utilization in Quality Perception, unpublished dissertation, Purdue University. Olson, J. and Jacoby, J. (1972), "Cue Utilization in the Quality Perception Process: in Advances in Consumer Research, Association for Consumer Research, Ann Arbor, MI, pp. 167-79. Schellinck, D.A. (1983), "Cue Choice as a Function of Time Pressure and Perceived Risk", in Advances in Consumer Research, Vol. 10, Association for Consumer Research, Ann Arbor, MI., pp. 470-5. Schellinck, D.A. (1986), "An Exploratory Study into the Impact of Country of Origin as a Cue in Product Choice", paper presented at the ASAC 1986 Conference, Whistler, British Columbia. Schooler, R.D. (1971), "Bias Phenomena Attendant to the Marketing of Foreign Goods in the US", Journal of International Business Studies, Spring, pp. 71-80. Shimp, T.A. and Sharma, S. (1987), "Consumer Ethnocentrism: Construction and Validation of the CETSCALE", Journal of Marketing Research, Vol. 26, August, pp. 280-9. White, P. (1977), "Attitude of US Purchasing Managers Toward Industrial Products Manufactured in Selected W. European Nations ' ', a paper presented at the National Meeting of the AIB, Orlando, FL. White, P. and Cundiff, E. (1978), "Assessing the Quality of Industrial Products", Journal of Marketing, Vol. 42, pp. 80-5. Wright, P.L. (1975), "Consumer Choice Strategies: Simplifying vs. Optimizing", Journal of Marketing Research, Vol. 11, February, pp. 60-70. Zaichkowsky, J.L. (1985), "Measuring the Involvement Construct", Journal of Consumer Research, Vol. 12, December, pp. 341-52.
Effects of Individual and Product-specific Variables 41
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Brand Equity and Country of Origin Relationship Essay
  • Country of Origin Essay
  • Country of Origin Effect on Buying Behaviour Essay
  • Country of Origin Essay
  • Ethnocentrism And Country Of Origin Essay
  • Essay about Country of Origin
  • Economic Effects on V4 Countries Essay
  • Effect of Terrorism on a Country Essay

Become a StudyMode Member

Sign Up - It's Free