The country-of-origin lie: impact of foreign branding on customers’ willingness to buy and willingness to pay when the product’s actual origin is disclosed

Abstract

If you think about the last television commercial for an Italian pasta \ud brand you have seen, are you sure it is really Italian? In many cases, \ud especially in the food sector, neither the company nor the product \ud originate from the advertised country, meaning that the company \ud is pursuing a foreign branding strategy and is trying to benefit from \ud positive stereotypes customers have about the specific foreign \ud country. By collecting both quantitative and qualitative data through \ud a point-of-sale intercept survey, this article assesses the impact of \ud alleged origins on customers’ willingness to buy (WTB) and willingness \ud to pay (WTP) if the actual origin is disclosed. The sample consisted \ud of 200 German customers who were asked to answer questions \ud related to one of two hedonic products they had just bought. It is \ud empirically shown that foreign branding has a positive impact on \ud the brand’s performance. However, as soon as customers find out \ud that they were misled with regard to the origin of the product, both \ud their WTB and their WTP decrease. This study contributes to the \ud knowledge on the role of products’ origins on customers’ WTB and \ud WTP. In contrast to the vast majority of the studies in this field, the \ud communicated origin of the product is based on a foreign branding \ud strategy and not on the product’s actual origin. Consequently, it was \ud possible to manipulate within-subject variables by disclosing the \ud actual origin of the product. The results of our study suggest that \ud foreign branding may be a successful strategy for companies to \ud increase their customers’ WTB and WTP. At the same time, our results \ud raise concerns about the suitability of foreign branding as a long-\ud term marketing strategy, unless a company can successfully maintain \ud its foreign image. Future research opportunities include the choice \ud of consumers with a different cultural background, of other hedonic \ud products or of utilitarian products

Country of origin as a food choice evaluation criterion

“…Su and Canavari (2018) supposed that the country of origin of food product represents its "nationality" and it is comparable to a "brand" that may be designed with a national flag. However, different studies supported that the country of origin (COO) affects consumers' food choices in different food sectors (Pedersen et al, 2018, Thøgersen et al, 2019, Aichner, 2016 and that customers evaluate food products quality according to their COO and that they are more willing to buy food products produced in some countries than in others (Thøgersen et al, 2019). Moreover, most of the consumers have a general belief that imported food brands have lower quality standards in comparison to domestic food brands, therefore, they prefer to choose local food brands and avoid as possible to buy imported food brands.…”

Why would anyone come to Corfu to have a Heineken?

“…Greek sounding names (Aichner et al, 2017;Hornikx and van Meurs, 2017). Yet they are keen to point out that "Mythos is not Greek, Alfa is not Greek, but they sell like they are Greek.…”

The Effect of Consumer Perceived Trust and Image Toward Food Brands on Consumers’ Willingness to Buy

“…Customers perception of a product country of origin (COO) is considered one of the factors that affecting customers product evaluation and their willingness to buy, especially when customers perceive a product to have a positive COO, since they rely on the product COO as a signal of quality (AICHNER, et al, 2016). Therefore, marketers can market their brands according to the country where the brand is manufactured or the brand's country of origin.…”