The objective of this paper is to propose a dynamic model of country-of-origin (CO) effect. While there is no consensus definition of CO (Sauer et al., 1991), it is generally understood to stand for the impact which generalizations and perceptions about a country have on a person's evaluations of the country's products and/or brands. Thus, it is posited that the image a person has about a country and its product offerings influence buying intention. Therefore, measurement of the CO construct is necessary so that marketing strategy and production sourcing can be determined. In the sections that follow, we introduce the concept of product image life cycle and a dynamic model of country image.A brief literature review of CO Some authors consider CO as an overall perception of a country (Nagashima, 1977;Wall and Heslop, 1986) without reference to product line. There is evidence, however, that CO is contingent on a specific product line (Cattin et al., 1982;Eroglu and Machleit, 1988;Gaedeke, 1973;Han and Terpstra, 1988; Helsop et al., 1987;Wang, 1978) or that there is linkage between specific product categories and country image dimensions (Roth and Romeo, 1992). Other studies have found that CO is moderated by familiarity with a product (Heimbach et al., 1989), product brand (Han and Terpstra, 1988;Seaton and Vogel, 1985;Tse and Gorn, 1992;Witt and Rao, 1992) and use of product information (Han and Terpstra, 1988;Hong and Wyer, 1989;Hong and Toner, 1989; Kieker and Duhan, 1992;Obermiller and Spangenberg, 1989).While more recent CO research tends to be multi-variate, measuring the effect of CO on consumer perception along with other marketing variables such as price (Johannson and Nebenzahl, 1986;Seaton and Vogel, 1985) and promotion (Ettenson et al., 1988;Head, 1988), most studies are univariate and static. None of the existing research considers CO as a dynamic process, i.e. how CO changes over time. The few longitudinal studies that measured changes in CO over two or more time periods, e.g. Wood and Darling (1992), failed to provide a theoretical explanation for the changes observed.
The effect of product image on perceptionOur CO construct is based on an assumption that there are brand and country images over and above the perceived attributes of products associated with a country or being sold under a specific brand name. We further propose that there