Country-of-Origin Effects on Product Evaluations

Abstract

Abstract. This article reviews the literature regarding the effect of country of origin on buyer evaluations of products. The issue is important for countries (especially resource-poor, developing countries) that need to increase manufactured exports and for firms that source products in countries different fromwhere sold. Marketing inferences are drawn, and implications for future research are developed.* The international product life-cycle model incorporates only supply-side variables-such as, product competition, complexity of production, and relative production costs. Demand-side variables-such as, the effect of country sourcing on the demand for that product -are not considered. Ifthe latter is important, the usefulness of the international product life-cycle model as a guide for product sourcing would be limited. The significance of the location of production on demand can be approached as an information cue question. That is, from an information theoretic perspective, products may be conceived as consisting of an array of information cues, both intrinsic (taste, design, fit) and extrinsic (price, brand name, warranties). Each cue provides customers with a basis for evaluating the product. The study of informational cues has generated much basic research in marketing-including the impact of various cues on perceived risk, on perceived quality, and on purchasing behavior, and also on how cues are processed by customers. Much applied research by industry centers around the impacts of intrinsic and extrinsic cues regarding products. The informational cue on which this article focuses is the country of origin of a product. Usually this is communicated by the phrase, "Made in (name of country)." Both empirical observations and experiments indicate that country of origin has a considerable influence on the quality perceptions of a product. One such example is the West German firm, Battenfeld Mashinenfabriken, which established production of its standard injection molding machines to the U.S. to serve both the North American and Latin American markets (Business Week, 1979). Although Battenfeld Mashinenfabriken has a Brazilian subsidiary with access to that country's lush export subsidies, the company's sales director stated that many customers "won't buy a machine made in Brazil. U.S.-made products, by contrast, find ready acceptance abroad."Another example encountered several years ago by one of the authors was a Puerto Rican shoe manufacturerwho shipped his entire production to New York City and back and advertised those shoes as being from New York. Experience had convinced himthat Puerto Ricans would buy his shoes more readily when they were perceived as made in New York ratherthan in Puerto Rico. Similar anecdotes are widespread in developing countries. Experimental research on the country-of-origin informational cue is reviewed next.

The effects of brand origin country and made-in country on consumers’ product evaluations and purchase intention

“…Table 6 indicates that made-in country has significant influence on consumer's product quality evaluation, which is consistent with most studies in the literature. In traditional country of origin studies, most researchers focused on the effect of country of origin on consumer's product quality evaluation (Bilkey and Nes, 1982); and little research was conducted on the effect on consumer's purchase intention (Loureiro and Umberger, 2003). This research fills this gap.…”

“…Many researchers replicated the results in different cultural contexts (Erickson et al, 1984;Ettenson, 1993;Liefeld et al, 1996). Although consensus on the effect of country of origin emerged (Bilkey and Nes, 1982;Peterson and Jolibert, 1995), the underlying mechanisms of how consumers process country of origin information are somewhat controversial. Some researchers contended that country of origin is used by consumers as the signal of product quality (Han, 1989;Johansson, 1989); some argued that country of origin influences consumers by being used as product attribute (Hong and Wyer, 1989); others insisted that country of origin affects consumers' product evaluation through ethnocentrism or animosity (Klain and Ettenson, 1999).…”

Effects of Country Variables on Brand Strength: Moderating by Brand Life Cycle and Cultural Identification

“…An overview of the conceptual framework is displayed in Figure 1. Bilkey and Nes (1982) describe the country of origin product cue as a product's sourcing country and state that it was usually communicated by the phrase, "Made in (name of country)." Han (1988Han ( , 1990 indicates that the rational or cognitive factor of COO is the perceived quality of foreign product which tends to be evaluated according to technical, advancement, prestige, workmanship, economy, and service [17].…”

“…In addition, COO effects seem to be particularly strong in developing countries, particularly toward products from more highly-developed countries [17] [7]. Other studies in the past have hypothesized that COO effects may differ across countries, depending on consumer's perceived similarities with the source country's value system.…”

“…Evidence has built up over several decades that country variables (such as country-of-origin (COO), country image, or country stereotype) may have substantial effects on consumers' brand choice and purchase decisions [4]- [7]. Martin and Eroglu (1993) define COO as the total of all descriptive, inferential and informational beliefs one has about a particular country.…”