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When entering foreign markets, sellers face quotas, tariffs, and nontariff barriers. In addition, they may face an intangible barrier in the form of consumer bias on the basis of product origin. Since 1965 several articles have appeared dealing with bias phenomena and with the efficacy of marketing strategies designed to avoid, accommodate, or circumvent consumers' negative predispositions.The first study reported dealt with product bias and predilection in the Central American Common Market (CACM).1 Guatemalans examined and evaluated identical products labeled to reflect different origins. They rated the products of the control country, Mexico, equal to their own, but rated the products of other CACM member countries inferior to their own. It was concluded that the regional jealousies, suspicions, and fears which have long frustrated political cooperation in Central America are operative in economic matters as well.A study of American consumer bias against products of foreign origin was reported in the Fall 1966 issue of the Journal of Retailing. Respondents didn't examine actual products but evaluated them as abstract concepts. Bias was demonstrated against goods of foreign origin, against particular classes of goods (fashion, mechanical) of designated origins, and against specific goods of particular origin. Concurrent studies at the University of Missouri produced essentially the same findings and suggested that bias was particularly strong against the manufactured goods of developing countries.3Several studies designed to test countervailing marketing strategies followed; one of the first dealt with regional labeling.4 It was noted that consumers had responded to goods labeled nationally, "Made in Japan," "Hecho en Mexico." It was reasoned that since images are in-

This article establishes the concept and measure of the elasticity of product bias. It demonstrates that, for most consumers, the effect of product bias on the selection decision between similar, alternative domestic and foreign goods can be offset by manipulation of the price differential.

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