Country Of Origin Effect

Essay by PaperNerd ContributorUniversity, Master's October 2001

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A. INVESTIGATIVE ISSUE: COUNTRY-OF-ORIGIN EFFECT In the era of globalization and international commerce, the world is shifting towards one global market, which is leaving an impact on consumers= perception of products emanating from a particular country. The literature on country-of-origin (COO), is primarily concerned with determining the effects of consumers= perceptions of countries on their ratings of products= quality and their choice processes. Our discussion on COO, will begin with a quick review of the various constructs that relate to COO effects, followed by an overview of COO literature.

The COO influences choices made by consumers, but country image also plays a major role in the consumers= perception of the products. Country image may be an asset when it is positive and a liability when it is negative. It has been established that the COO effect is both product category specific and country specific (Thorelli et al., 1989; Wall et al.,

1991; Lim et al., 1994). For example, a >made in Japan= label may have a positive image when shown on high quality technical products, and a less positive image when associated to perfume and wine (product category specific). Also, Japanese-made technical products have a more positive image in the USA than in Europe (country specific) (Bilkey and Nes, 1982). The role of the country-of-origin effect on the consumers= evaluation of products will be discussed.

From research it appears that increased knowledge and familiarity with a product category has a tendency to decrease the use of COO as an information cue by consumers: consumer experts base their evaluation on the strength of actual product attributes versus novices who rely more on the COO as a cue (Schaefer, 1997, p. 68). The issue of COO as an extrinsic cue, will be addressed in both single and multi-cue environments.

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