Country of Origin Effects On Consumer Behavior

G 0u
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on Gonsumer Behavior
COLINTRY OF ORIGIN EFFECTS
ON CONST]MER BEHAVIOR
First Edition
Khalid I. Al-sulaiti
Associate Professor of Marketing
Qatar University
ISBN : 99921-747-0-6
This edition may be sold only by lnstitute of Administrative Development (l.A.D.)

@2OO7 by Khalid l. Al-Sulaiti
All rights reserved.
No part of this book may be reproduced, in any form or by any means,
without prior writen permission from the publisher
Printed in the State of Qatar
lnstitute of Administrative Development (!.A.D.)

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ABOUT THE AUTHOR
Dr Kholid lbrohim AI-Suloiti is o Qotori notionol, currently Director Generol of

the lnstitute of Administrotive Development, Doho, Qotor; Associote Professor
of Morketing of Qotor University, Deportment of Monogement ond Morketing.
He holds o BSC in lnternotiono! Business, on MBA in Finonce, University of

Bridgeport (United Stotes of Americo) ond o Ph.D. in Morketing of Strothclyde
University (Scotlond, United Kingdom).
held severol positions in Qotor including Director of !nformotion

Dr. Al-Suloiti hos
ond Morket Relotions of Doho Securities Morket; Deon of Students' Affoirs;
Deon of Admission ond Registrotion; Acting Deon of College of Business ond
Economics of Qotor University; Director of Acodemic Affoirs of Militory College,
Qotor. Director Generol of the lnstitute of Administrotive Development, 2001
- to dote.
He hos been involved in mony monogement projects ond token port in
conducting monogement ond odministrotive consultotions to government
ond semi-government institutions in his country. He wos, for instonce, the
monoger of o teom in chorge of the evoluotion ond occreditotion of ISO 9001
quolity monogement system; he worked towords setting up o chorter for the
stoff of the Doho stock exchonge; he heoded the teom preporing the generol
odministrotive, finonciol ond internol chorter for Qotor Foundotion for Women
ond Children Protection, Qotor Moin Post Office, Generol Orgonizotion for
Stondords ond Metrology, Security Service, Centre for Fomily Consultotions os
well os the stoff chorter for the Qotor Chomber of Commerce ond lndustry.
Dr Al-Suloiti hos published severol orticles in leoding Journols reloted to

bonking, securities morkets & diverse morketing issues, including Morketing
lntelligence & Plonning; Journol of Tronsnotionol Monogement; Journol of
lnternotionol Setling & Soles Monogement; Journol of lnternotionol Morketing &
Morketing Reseorch; Journol of Administrotive Sciences & Economics; Journol
of Documentotion & Humonities Reseorch & Advonces in Globol Business
Reseorch.
Dr. Al-Suloitiserved on the Editoriol Boord of Journol of Business ond Economics.

He is the founding editor of Scientific Journol of Administrotive Development.
He serves on the Editoriol Boord of the Journol for lnternotionol Business &
Entrepreneurship Development. He olso serves on the Review Ponel of the
Morketing lntelligence & Plonning; equolly o member of the Editoriol Advisory
Boord of Journol of Monogement Development.
Dr. Al-Suloiti is currently conducting studies thot oddress COO effects on

Service Evoluotions. His Article with Professor Michoel J Boker on COO effects:
A Literoture Review, wos published in l99B in Morketing lntelligence & Plonning.
It hos been downlooded from the Emerqld Fulltext web site, more often during
lost yeors so for thon oll but nineteen of the 250 or so published orticles in
Morketing lntelligence & Plonning since monitoring of site troffic begon in 200.l.
It is furthermore in eleventh ploce in the list of downlooded orticles over the
whole five-yeor period. Reoders hove consulted it 8,705 times so for.
VII
Acknowledgements
lowe much to the pioneers in the fleld of Country-Of-Origin (COO) who developed its concepts ond
methods: Professor Michoel J. Boker, University of Slrothclyde, Glosgow, UK; Professor Soeed Somiee,
University of Tulso, USA; Professor Poul Choo, Eostern Michigon University, USA, Professor C. Min Hon,
Honyong University, Seoul, Koreo, Professor Nicolos Popodopoulos, Corleton University, Conodo, Mr. lrfon
Butt, Cqrleton University, Conodo; Professor Erik B. Nes, Norwegion School of Monogement Bl, Norwoy,
Professor Sodrudin Ahmed, University of Otiowo, Conqdo; Professor Aloin d'Asious, HEC Montreol,
Conodo; Professor Edword R. Bruning, University of Monitobo, Conodo, Professor Froncis M. Ulgodo,
Georgio lnstitute of Technology, USA ond Professor Moonkyu Lee, Yonsei University, Seoul, Koreo.
I would like to extend my deepest oppreciotion ond grotitude to H.E. Prof. Shoikho Al-Misnod,
President, Qotor University for her continued encourogement ond support in conducting my reseorch in
generol ond writing this book in porticulor.
Mony thonks ore olso due to those who provided voluoble comments ond suggestions. I om indebted
to the following colleogues: Dr. Nobeel Shoms, Bohroin Stotistics Deportment, Bohroin, Dr. Abdulloh
Al-Khuloifi, Qotor Unversity, Qotor, Dr. Mohommed Goloom, University of Bohroin, Bohrqin, Dr. Fowzi Al-
Khotib, Qotor Fuel Co., Qotot, Dr. Yohio Al-Roshdon , lnstitute of Administrotive Development, Qotor; &
Prof. Mohommed Al-Nojdowi, Deon, College of Business & Economics. Qotor University, Qotor Dr. Kholid
Al-Khoter Qotor University, Qotor, Dr. Ahmed Al-Kuwori, Qotor University, Qotor & Mr. Ali Al-Kuwori, Qotor
Developmenl Bonk, Qotor.
Groteful ocknowledgement is olso due to colleogues from the lnstitute of Administrotive Development,
Dr. Towfik Lomori, for comments on, proof reoding & editing of the finol droft. Equolly, to Mr LossqOd Turki
for his expertise in grophic design ond diligent word processing of the whole book.
I olso owe o greol deol to the people ot lnstiiute of Administrotive Development, Qotor, who helped
develop this book: Ms Fotimo Al-Ali, Mr. Abdulotif Fothollqh, Mr. Omron Ayoob, Dr. Roshid Al-Dosori, Dr.
Jomol Al-Boker, Dr. Aloo Al-Solmoi, Dr. Tolib Obqid, Mr. Hosson Sugoiroon, Mr. Homed Al-Muhonodi, ond
Ms Aisho Al-Swqidi.
Speciol grotitude is due to Emily Holl, Business Developmenl Monoge; Emerold Group Publishing
Limited. for helping me to republish my orticle (COO Effects: A Literoture Review) in this book.
Lost but not leost, I om indebted to my wife, Hoyo ond children for their potience ond continued
support.
VIII
CONTENTS
Chopler One Country of OriginEffecis: Kholid l. Al-Suloiti 27

A Literoture Review MichoelJ. Boker
Chopler two The country-of-origin somiee

Phenomenon Within the
Soeed l5?
Context of Globolizotion:
Reseorch Relevonce ond
Monogeriol lmplicotions
Chopter lhree Co-bronding in the Globol PoulChoo

r93
Context
Chopler four An Empiricol lnvestigotion on C. Min Hon 211

Determinonts of Consumer
Adoption of Foreign Bronds in
Koreo
Chopler five A Cross-Culturolond Cross- Nicolos Popodopoulos

Notionol Perspective on lrfon Bult 233
Product-Country lmoges
Chopler six The Role of NotionolCulturol Erik B' Nes 281

Distonce on Country lmoge- Nicolos Popodopoulos
bosed Product Evoluotions
Chopter Seven Sub-cutturot Effects On Sodrudin A. Ahmed 303

Product/ country Perceptions Aloin d'Astous
Chopter eight Service country-of-origin 349

F
EIIeCIS: EVtOenCe tnree_
Edword R. Bruning
rrom rL--
Countries
ChOplef nine Customer Service Centers Are Froncis M. Ulgodo* 391

Like Toxi Cobs Country-of-Origin Moonkyu Lee**
ond Consumer Perceptions
of Foreign Customer Service
Centers
IX
FOREWORD
ln on ero of intensifying globol competition the creotion ond mointenonce of
o sustoinoble competitive odvontoge (SCA) is becoming increosingly difficult to
ochieve. This book offers importont insights into one importont possibility of doing
so.
Fundomentolly, the problem is thot producers of goods ond services ore unoble
to mointoin the JND (just noticeoble difference) foctor thoi enobles customers to
discriminote between the offerings ovoiloble in the morket ploce. Troditionolly,
differentiotion wos bosed on technology ond, to some extent still is todoy. HoweveL
it hos been estimoted thot ony new technologicol development only confers o leod
of some l8 months before it will be replicoted by competitors. So, if one is unoble to
protect one's intellectuol property rights or lPR, this source of differentiotion will be
eliminoted. Whot is colled for is some unique distinguishing feoture thot connot be
cloimed or replicoted by onother. COO or Country of Origin is such o foctor ond is
the subject motter of this book.
Originolly. the requiremeni thot goods should corry informotion concerning their
country of origin wos enocted by the British government in the lote nineteenth
century os o punitive meosure ogoinst Germon imports. At the time relotions
between the two countries were stroined ond it wos believed thot by lobeling
goods "Mode in Germony" British consumers would octively discriminote ogoinst
them ond prefer the home mode olternotive. While it is still the cose thot country of
origin identiflcotion moy leod to such negotive discriminotion, the greot mojority of
interest ond reseorch hos been into the possible benefits thot will orise when goods
ond services ore identified with o porticulor country of origin.
XI
With the growth of internotionol exchonge following the second world wor ond
the phenomenon of globolisotion os o consequence of the revolution in informotion
ond communicotion technologies (lCT), interest in COO, or PCI (product country
,l000
imoge) os it is sometimes colled, hos occeleroted. Todoy, there ore well over
documented studies of vorious ospects of the country of origin effect ond this
volume provides on excellent overview of our current knowledge of the subject
contributed by some of the world's leoding outhorities on the subject. As such it is
both on excellent introduction to the topic os well os on odvonced treotment of
the current stote of ploy.
The book comprises Nine chopters the contents of which moy be summorised os
follows:
Chapter Literature Review: Country of Origin Effects

1
The book opens wiih o wide ronging literoture review by Dr. Kholid Al-Suloiti
ond myself which is on updoted version of one originolly published in Morketing
lntelligence ond Plonning (1998). Over the yeors this hos been one of the most
frequently downlooded orticles from Emerold's more thon 100 publicotions testifying
both to interest in the subject ond the volue of comprehensive literoture reviews
os sources of bockground ond insight into porticulor oreos of knowledge. The
Literoture Review covers the period from I965 to eorly 2007 with the most recent
sources covered by Dr. Al-Suloiti. The review opens with vorious definitions ond is
then orgonised chronologicolly ond themoticolly. Among the themes covered

ore:
The evoluotion of products
Stereotyping
Demogrophics ond consumer perceptions of imports
Perceived risk ond country of origin effects
Country of origin effects on service decisions.
xII
All of these themes ore the subject of more detoiled description ond onolysis in
the contributed chopters.
Originolly, COO wos meont to designote where o product hod been mode so
thot 'mode in' wos token to refer to "the country of monufocture or ossembly"
(Popodopolous et ol 1993). Others see it os the countrywith which o product is
inextricobly linked or ossocioted like Coke ond McDonolds with the USA, ond Sony
ond Toyoto wiih Jopon. Howeve[ with the odvent of globolisotion ond outsourcing
it hos become increosingly difficult to identify cleorly how products should be
clossified. Popodopolous (op.cit.) recognised this when he wrote " "Mode in" con
meon monufoctured -in but olso ossembled-, designed-, or invenfed-in, mode by
o producer whose domicile is -in, ond, often wonting to look like if wos mode -in."
To cope with the confusion this hos led mony countries to odopt policies ond
regulotions for the lobeling of imporied goods. ln turn, this hos led to customers
questioning the quolity ond outhenticity of products thot they ossociote with
the notionolity of the seller which hove been produced in onother country. An
excellent exomple of this is provided by the website of Chorles Tyrwhitt on English
shirt 'monufocturer'. ln response to numerous queries obout the source of their shirts,
troditionolly "Mode in Englond", the compony posted o number of onswers on its
website thot illustrote wellwhy firms outsource their monufocturing ond the kinds or
reosons thot they offer to overcome possible negotive COO effects, viz.:
"Why hove you slorled io moke producls in lots of different counhies?

There ore mony points thot when combined moke o good ploce to monufocture
o product: technicol obility, quolity, price ond delivery speed ore oll key elements
to ensure customer sotisfoction.
Where ore your products mode?

We moke our products to the highest stondords in o ronge of countries: UK. ltoly,
Romonio, Czech Republic, Molto, Egypt, Tunisio, Peru, Phillipines, Chino, Hong
Kong, lndonesio, Sri Lonko, oll offering different elements thot help to improve the
products we sell. We hove leornt over the yeors thot it is best for you if we go direct
to the morket leoders or oreos of expertise to monufocture our products. This leods
us to vorious countries where investments hove improved seryices."
xIII
The web site (www.ctshirts.co.uk) then gives specific reosons for selecting different
countries ond provides stotements guoronteeing quolity ond volue for money.
For o long estoblished ond highly regorded firm, troding from Jermyn Street in
the heort of London's Moyfoir to feel it importont to exploin to its customers why
it is substituting imported products for domestic ones is strong evidence thot the
identity of the country of origin is believed to impoci on people's perception ond
evoluotion of products. Numerous studies exploring ospects of this phenomenon ore
reported in the literoture review ond illustrote how generolised ottitudes ond beliefs
obout different countries (stereotypes) influence views on products originoting in
them.
Hoving identified ond discussed the mojor themes to be found in the literoture,
the Editor hos then secured contributions from some of the best-known internotionol
experts on the subject to highlight the cunent stote of knowledge ond reseorch
on the issues seen to be of most relevonce ond importonce for reseorchers ond
proctitioners todoy.
Chapter 2The Country-of-Origin PhenomenonWithin the Context

of Globalizationt Research Relevance and Managerial Implications
Bosed on reseorch outcomes Soeed Somiee identifies seven specific findings
thot serve os significont globol plonning constroints for the internotionol morketer.
Accordingly, this chopter exomines the relevont CO findings reported in the
literoture to highlight their internotionol morket plonning constroints.
The noiion of on "imported product" hos historicolly conveyed thot the item hos
been wholly or substontiolly produced in onother country. As the world economies
hove globolized, this meoning hos chonged. Todoy's products ore often o hybrid
of domestic ond imported designs, ports. ond/or ossemblies. Products thot ore
entirely designed ond monufoctured in o single county ore increosingly o rore
species. Customer knowledge with respect to the complexity of COs of products
ore olso increosingly sophisticoted. Most consumers reolize thot products thot
they buy, even if lobeled os hoving been locolly monufoctured, include ports,
components, design ond technologies thot con spon severol countries.
XIV
An increosing numberof CO publicotions ore giving recognition to the importonce
of bronds os meons of overcoming unfovoroble CO bios while, concurrently, o
complementory ond porollel line of inquiry hos focused on ihe importonce of brond
origin (rother thon CO) A focus on brond origin is conceptuolly, meihodologicolly,
ond monogeriolly volid ond ovoids the mony criticisms oimed of the CO line of
reseorch. Even intuitively, one would expect the presence of powerful bronds to
influence ond, thereby, overcome negotive co bios. Seors, Torget, JC penney,
Bloomingdole's, ond mony other reioilers ore regulorly using the occeptonce,
reoch, ond/or prestige of their brond nomes to morket o voriety of imported
products.
The CO literoture hos enriched our knowledge regording its ontecedents ond
conditions underwhich bios might be present. However the single most importont
outcome of this line of inquiry hos to be its monogeriol guidonce when such
bios is present. Concurrently, the literoture hos offered only limited monogeriol
implicoiions, some of which ore improcticolwithin the context of how internotionol
ond globol corporotions operote. Johonsson (1993) hos noted thot CO reseorch
hos not hod much monogeriolimpoct ond suggests thot it continues to be poorly
regorded by some proctitioners ond consultonts. Monogeriolguidonce emerging
from CO reseorch offers two possible levels of oction: micro-level informotion
reloting to how customers feelobout ond think of CO ond mocro-levelinformotion
involving, for exomple, country equity Plonning for the Globol Morketploce
At leost three sets of firm-level decisions overlop with CO+eloted considerotions

ond recommendotions ouilined in the literoture. These include globol morketing
progrom stondordizotion considerotions, product imoge ond positioning, ond plont
locotion ond sourcing decisions, oll of which ore discussed in some detoil.
Chapter 3 Co-branding in the Global Context

This chopter by Poul Choo provides on overview of co-bronding os described
in the literoture ond discusses the mojor theoreticol underpinnings which con be
used io guide reseorch in this oreo. A modelwith o set of reseorch propositions is
presented ond the chopter concludes with suggestions for future reseorch
XV
Componies hove been forging brond ollionces for yeors. These ollionces ore
configured in vorious forms ond combinotions. They moy olso be formed to ochieve
different strotegic objectives. Multiple bronds used to torget different morket
segments under one corporote ownership structure ore known os on umbrello
bronding strotegy. Yum! Restouronts lnternotionol, the owner of KFC, Pizzo Nvt,
Toco Bell, Long John Silver's, ond A&W, eoch of which mointoins its own brond
identity ond positioning to serye o distinct restouront segment represents just one
such exomple.
Kmort ond Mortho Stewort ollionce is creoted through o non-equity structure.

Kmort continues to use its own corporote logo independently even though it is
hoped thot by oligning with Mortho Stewort, the good imoge portroyed through
Mortho Stewort designed high quolity products will become ossocioted with Kmort
thereby lifting its own imoge in the process. Co-bronding in this cose is ochieved
through co-promotionol moteriols feoturing Mortho Stewort merchondises which
Kmort corries in its stores. Other shorter term orrongements to promote two or
more bronds in o promotionol compoign ore olso common. Ford Motor Compony
promoting the soles of its trucks by offering buyers Home Depot gift cords is just one
such exomple.
ln the ero of globolizotion, internotionol brond ollionces ore olso growing in

populority. Doimler's (Germony) ocquisition of Chrysler (US) to form the Doimler
Chrysler Corporotion os o duol corporote brond strotegy is originolly conceived
with greoter efficiency ond cost sovings in mind. Other non-equity globol brond
ollionces hove olso emerged. Brond ollionces in the oirline industry ore typicol os
oirlines form portnerships to increose possenger loods ocross the world while cutting
costs of the some time. KLM/NWA ollionce works to feed tronsotlontic possengers
into eoch other's flight networks in Europe ond North Americo. Chino Southern
recently joins this ollionce to odd Asion routes to this network. Similorly, United Airlines
forms its own StorAllionce with o number of oirlines in Europe, Asio, South Americo,
ond elsewhere in order to remoin competitive. While open sky ogreements, which
ollow foreign oirlines greoter flexibility in operoting routes in onother country's
domestic morkets longuishes in internotionol negotiotions omong vorious notionol
XVI
governments, such ollionces provide one eosy ond convenient woy for synergy in
the industry.
Whereos co-bronding strotegies hove been octively pursued by domestic ond

internotionol businesses, relotively few reseorch studies hove been conducted on
the effects of co-bronding. Furthermore, most reseorch in the literoture deoling
with co-bronding strotegies oddresses these issues from o domestic context.
Surprisingly, fewer still ore reseorch studies designed
to oddress co-bronding issues
in the internotionol context. Furthermore, even though Ettenson ond Knowles's
study (2006) hos identified l0 bronding options employed by componies in recent
mergers ond ocquisitions, the survey results reveol thot brond decisions hove not
been the mojor component in most componies' M&A deliberotions.
Chapter 4An Empirical Investigation on Determinants of Consumer

Adoption of Foreign Brands in Korea
The study described in this Chapter by C. Min Han is designed to examine what
determines Korean consumers' adoption of foreign brands. Building upon the theory
of adoption of innovations and consumer innovativeness, the study analyzes the
role of consumer characteristics and perceived product attributes in distinguishing
adopters and non-adopters of foreign cigarette brands. Venturesomeness,
cosmopolitanism, opinion leadership, social participation, and consumer patriotism
are considered as consumer characteristic variables. The analysis suggests that
subjects'characteristics, in additiontotheirperceivedadvantage inproductattributes,
played an important role in their adoption of foreign brands. More specifically,
cosmopolitanism, social participation, and consumer patriotism appeared to play
a significant role in the adoption of foreign brands, whereas venfuresomeness and
opinion leadership played a limited role. These findings generally converge with
previous research.
chapter 5 A cross-cultural and cross-National perspective on

Product-Country Images
This chopter by Nicolos Popodopoulos ond lrfon Butt deols with fhe effecfs of cross-
culturol similorities, differences , ond percepfions on buyer behovior in fhe pClconfexf
xvl
- in other words, with the intersection omong three of the most significont ospects
of whot morketing is oll obout, focusing on on issue thot is of greot importonce to
morketers regordless of the country in which they work, the country(ies) of which
they torget their products, ond whether they work in the privote or public sector.
Whot needs to be stressed is the greot importonce of PCI porticulorly in the

contemporory ero where "ploce bronding" hos become o must-do for mony
governments, of both the notionolond sub-notionollevels, worldwide. Such ploce
bronding efforts need not, ond in foct must not, be limited to either the tourism or
the product sectors, ond, if both sectors ore the subject of bronding compoigns,
interoctions between them must be sought to moximize the potentiol benefits from
such strotegies.
ln foct, the issue goes significontly beyond tourism ond consumer products. A
significont body of reseorch hos shown, first, thot PCI olso offects industriol buyers
(notwithstonding the common misperception thot they olwoys oct "rotionolly" ond
bosed on "focts", rother thon stereotyped mentol schemoto like everyone else).
For exomple, studies show PCI effects on businesspersons in the context of goods
from Eostern Europe, import monogers in the US, Chino, Austrolio, ond Hollond;
professionol retoil buyers ond other purchose monogers, ond Mexicon business
people with regords io Conodo. Second, ond perhops by for more importont. o
body of knowledge hos been developing thot shows direct PCI effects on investors
when they decide where to locote their next internotionol venture - o motter of
vitol importonce to virtuolly oll countries, ond especiolly those in the developing
world.
inter-sectorolcoordinotion of ploce bronding efforts, whether

ln this context, then,
directed of exports, tourism, or investment ottroction, is criticol. ln short, this chopter
portroys the scope ond complexity of cross-culturol issues in PCI reseorch ond
proctice thot reoders moy benefit from considering in their future work.
xvm
Chapter 6 The Role ofNational Cultural Distance on Country
Image-based Product Evaluations
The moin purpose of this chopter by Erik B. Nes ond Nicolos Popodopoulos is to osk
o relotively simple two-fold question: Does culturol distonce motter in cross-notionol
product evoluotions, ond whot, if ony, is the role of economic development in such
evoluotions by consumers? The issue is importont for reseorchers ond proctitioners in
both developed ond developing notions, ond especiolly for those in the lotter. The
reoson is thot the bulk of globol trode occurs omongst the developed notions of the
Triod (North Americo, Europe, Asio-Pocific), ond thot notionol culture differences
omong these notions tend to be smollerthon those between them ond developing
countries. lf culturol distonce ploys o role in consumer behovior then producers
in developing countries would be foced with o double-edged conundrum. First,
considering "economic development" olone, their products moy be evoluoted os
of lower quolity by consumers in developed countries - while their own domestic
consumers moy perceive products by competitors in industriolized notions to be
superior. This creotes o disodvontogeous situotion for them both obrood ond ot
home. Second, if "culturol distonce" is found to offect consumer predispositions
ond thus odded to the equotion, their disodvontoge is further occentuoted. As
will be seen in the methodology section, the selection of countries for testing in this
study con be considered poriiculorly relevont to reoders of this book.
To oddress its torget issues, the chopter begins with o review of the relevont
literoture leoding to the stoting of two hypotheses, presents the methodology
used for the study, highlights the onolysis of the doto used, ond concludes with o
discussion ond implicotions for reseorch, business, ond government.
The findings suggest thot odditionol meosures directed of reducing the torget
consumers' perception of how dissimilor their ond the supplier's country ore con
help to overcome the potentiol negotive effects of culturol distonce To summorize,
thestudyshows thot notionolculturoldistonce moy notimpoct productevoluotions,
but moy hove o significont negotive impoct on the willingness to buy products.
Products moy be perceived os being of equolfunctionolquolity, but consumer; still
moy be reluctont to octuolly buy ond use products from notions thot ore cufiurolly
xx
dissimilor due to psychologicol ond sociol normotive reosons. More broodly,
ond quite oside from the specific findings thot ore reported, this study helps to
emphosize o commonly-noted but rorely+eseorched issue in PCI reseorch: thot
"culture motters".
Chapter 7 Sub-cultural effects on Product/Country PercePtions.

As noted,the odvent of
globolisotion ond the lnternet hove coused mony firms
to reconsider the implicotions of COO for their products ond services. ln their
chopter Ahmed ond d'Astous summorise cleorly why the COO phenomenon is
both significont ond importont for morketing strotegists when they write:
"Globolizotion ond the widespreod growth of internotionol communicotions

using such o powerful tool os the internet os o medium for buying ond selling
products worldwide, hove fundomentolly offected mony products' ovoilobility
ond distribution os well os the decisions concerning where they ore monufoctured,
ond how they ore lobeled ond promoted. Whether the objective is to comply to
stricter rules of origin so os to quolify for lower toriffs, to reduce production costs
(lobor lond, environmentol, etc.) by relocoting monufocturing focilities, or to
toke odvontoge of tox cuts ond governmentol incentives, iodoy's componies
ore rethinking the "country of origin" of their products ond services. Whot ore
the implicotions of these chonges for morketing strotegy ond porticulorly morket
segmentotion decisions? How con morketing toctics bosed on strotegic decisions
thot incorporote country of origin os o competitive foctor be optimized? More
specificolly, con the segmentotion of torget morkets bosed on sub-culturolvoriobles
be effective? This chopter reviews studies deoling with the effects of subculture on
country ond product evoluotion thot hove been conied since the comprehensive
ond oll encompossing COO literoture review mode by Al-Suloiti ond Boker (1998)
in order to come up with relevont monogeriol ond reseorch implicotions. Mojor
findings ore reviewed in depth ond summorized, ond conclusions ore drown. We
olso present o conceptuol model thot depicts whot more thon four decodes of
empiricol reseorch hove led us to believe to be imporiont findings os regords the
effects of sub-culturol differences on COO perceptions. Bosed on this, specific
monogeriol implicotions ore drown for public ond privote sector monogers ond
suggestions ore mode for future reseorch.
Therefore, whot the review of our literoture suggests is thot o "moss morket"
opprooch towords o populotion thot is culturolly (i.e.,, with subcultures bosed on
ethnicity, demogrophics, etc.) diverse is likely to be ineffective. Where subcultures
prevoil (os it is the cose in most countries), it simply mokes sense to suggest thot
they should be token into occount. This is especiolly true of subcultures thot ore
geogrophicolly concentroted os it is the cose in ethnicolly diverse countries such os
Conodo (French versus English), Chino (Hon versus Tibetons), lndio (Bengoliversus
Punjobi), Belgium (French versus Flemish), Switzerlond (Germon versus French),
ond hove distinct medio consumption potterns (e.g.,, moles versus femoles,
'Y generotion' versus 'seniors'), which helps to reduce the odoptotion costs in
occessing them."
chapter 8 Service Country of origin Effects : Evidence fromThree

Countries
Post reseorch hos determined thot consumers use country-oilorigin cues to
evoluoie quolity ond performonce chorocteristics of product offerings. Often,
chorocteristics of the country's economy, culturol, ond sociol processes serye os
proxies to reflect product chorocteristics. ln this study, Edword Bruning explores
the role of the Service COO cue ond evoluotes whether culturol similority impocts
preferences. Using respondents from three countries, the results confirm thot
consumers hold strong own-country service preferences, but thot ottitudes towords
specific foreign providers differ ocross the three countries. The doto indicote
respondents hold distinct negotive bioses towords Asion ond Sponish-longuoge
providers, ond strong positive bioses towords providers from English-longuoge
countries os well os towords own-country providers. The evidence points to the
importonce of country-of-origin in determining preferences for o service provider
ond, secondly, thot consumers prefer service providers from countries whose culture
is similor to their own.
xxI
Chapter 9Customer Service Centres are LikeThxi Cabs:Country-
of-Origin and Consumer Perceptions of Foreign Customer Service
Centres
With the recent increose in the foreign locotion of services by US multinotionol
componies,the resulting impoct ond emerging issues hove received consideroble
ottention in the post five yeors. This chopter by Froncis M. Ulgodo ond Moonkyu
Lee opprooches the topic from the consumer perspective regording the locoiion
of customer service centers (CSCs) in foreign countries, ond the effects on
consumer perceptions. The empiricol study specificolly exomines country-of-origin
(COO) effects ond other extrinsic product-specific foctors thot influence consumer
perceptions of service quolity ond brond imoge. A field survey of US consumers
investigotes their concerns ond the importont issues involved in foreign-locoted
service centers, with the results showing the conditions thot would influence the
consumer to switch to o competitor. Finolly, the chopter provides o comporison
of COO effects of vorious countries on different product cotegories. Strotegic ond
monogeriol implicotions for internotionol morketers ore discussed.
indicote thot the foreign locotion of services such

The overoll results of the study
os customer service centers or CSCs, con hove o significont impoct on consumer
perception ond ottitude. Depending on the type of service or product involved,
Americon consumers moy be even driven to switch to o competitordue to foreign-
bosed customer service centers. Their moin concerns stem from culturol ond
longuoge differences thot con leod to problems in communicotion. The study olso
shows thot foreign customer service locotions heighten the US customer's sensitivity
towords finonciol tronsoction security, personol heolth, ond informotion occurocy
issues. The survey findings contend thot culturol, longuoge ond economic
development dissimilority con potentiolly odd to o negotive effect of the foreign
locotion of CSCs. This influence on consumer perception should motivote monogers
to look beyond the obvious cost odvontoges of locoting customer contoct centers
in foreign countries. ln developing their customer support strotegies, firms need to
olso consider the consumer perception ond sotisfoction odvontoges of other CSC
locotion olternotives.
xxII
Summary
Bosed on the originol literoture review ond the informotion ond odvice contoined in
the speciolly contributed chopters, we moy drow of leost Five brood conclusions.
l. The country of origin does offect product evoluotion.
2. The degree of influence vories occording to the noture of the evoluotion

ond the informotion ovoiloble. lntrinsic cues such os toste, design, performonce
thot ore bosed on direct knowledge ond/or experience (or the experience of
'influentiol' others) hove o greoter influence thon extrinsic cues like the country of
origin or the brond. However in very competitive morkets where intending buyers
hove occess to o ronge of highly similor olternotives, then the 'just noticeoble
difference ' (JND) con become determinont in enobling customers to discriminote
between the products or services on offer.
3. Overoll, there oppeors to be o 'home country' bios olthough this moy

be offset by o preference for the offerings from more developed rother thon less
developed countries. Ethnocentrism moy olso be moderoted by product closs,
e.9., wine, wotches, ond by specific products ond bronds.
4. Stereotyping - Germon mochinery, Joponese cors, ltolion silk etc. -

influences both individuol ond corporote perceptions.
5. While less ottention hos been given to the influence of country of origin
effects on the purchose of services this is now growing, e.g., ihe growing dominonce
of London os o centre for finonciolservices.
Token together I believe thot the chopters in this book moke on importont ond
timely contribution to the debote with importont insights ond lesson to be leorned
by persons responsible for the development of on effective competitive strotegy. ln
effect this meons everyone. ln o globolmorket, while everyone moy not deolon o
globol bosis, it is vitol to remember thot the threot of penetrotion of one's domestic
morket is just os potent os the opportunity of going internotionol oneself.
MichaelJ. Baker
xxIIr
Chopter One
COUNTRY OF ORIGIN EFFECTS:

A LITERATT]RE REVIEW
Country Of Origin Effects:A Literature Review
Country Of Origin Effects: A Literature Review*

Khalid I.Al-Sulaiti**
Michael J. Baker*:t*
Introduction
Over the post 40 yeors or so the
growth in internotionol trode ond the
development of globol morkets hos been
occomponied by o significont increose in
interest in the noiure of competitiveness.
Among the mony foctors which ore
believed to impoct upon internotionol
competitiveness country of origin (COO)
effects, (sometimes referred to os product
country imoge or PCI) hos ottrocted
growing ottention.
The literoture review in this chopter

opens with some definitions of
COO effects ond is then orgonised
chronologicolly ond themoticolly. The
* A permlssion wos Given From Emerold period covered is from 1965 to eorly 2007
Group Publlshlng limlted, to Republlsh this Ar-
tlcle in thls Book. Ihis Arllcle wos Publlshed in ond the themes oddressed include the
Morketlng lntelllgence ond Plonning (19?8),
Vol. 16, No.3. N.B. on updoted verslon cover- evoluotion of products, stereotyping, the
Ing the lilerolure up lo eorly 2007 is included.
+* Kholld l. Al-Sulqiti Associole Professor of
, effects of demogrophics on consumers'
Morketlng , Deporlmenl of Morkellng, Qotor perceptions of imports, perceived risk
Unlverslly, Qotqr, D.G. of lnslllule of Admlnls-
lrolive Developmenl, Qolor ond couniry of origin effects ond finolly
*** Mlchoel J. Bqker, Emerllus Professor of
Morkeling, Unlversity of Shothclyde, Glqs- COO effects on service decisions.
gow, Scotlond, U.K.
27
CHAPTER I
Definition
Country of origin effects hove been defined in mony woys in the liieroture.
According to Wong ond Lomb (1983) country of origin effects ore intongible
borriers to enter new morkets in ihe form of negotive consumer bios toword
imported products. Johonsson, Douglos ond Nonoko (l 985), Ozsomer ond Covusgil
(1991) define country of origin os the country where corporote heodquorters
of the compony morketing the product or brond is locoted. Typicolly, this is the
home country for o compony. Country of origin is inherent in certoin bronds. IBM
ond Sony, for exomple, imply US ond Joponese origins, respectively (Somiee,
19941, Bilkey ond Nes (1982l,, Cottin et ol. (1982), Hon ond Terpstro (1988), Lee
ond Schoninger (1996), Popodopoulos et ol. 1993 ond White (1979), define the
product's country of origin os "the country of monufocture or ossembly". lt refers
to the finol point of monufocture which con be the some os the heodquorters for
o compony. According to Somiee (1994) "country of monufociure pertoins to flrm
thot mointoins o relotively lorge globol network of operotions or do business with
o voriety of suppliers, e.9., controct monufocturing" (p. 58.l). While, Bonnister ond
Sounders (19781, Chosin ond Joffe (1979) ond Nogoshimo (1970, 1977) used the
term "mode in----"r to define the country of origin of the product.
ln the modern morket ploce defining the country of origin con be o very
complicoted tosk. The growth of multinotionol componies ond the evoluotion of
hybrid products2with components from monysource countries, hove in mony coses
bluned ihe occurocy or volidity of mode in ----" lobels (Boker ond Michie 1995;
Boughn ond Yoprok 1993; Choo '1993; Yoprok ond Boughn 1991). For exomple,
Sony is o Joponese monufocturer but some of its products ore ossembled outside
Jopon in o country like Singopore (Boker ond Michie, 1995). With this exomple, ihe
product ossembled in Singopore would be denoted "ossembled in Singopore"
ond thot ossembled in Jopon would be considered os "mode in Jopon" (see
figure 1.1).
28
Figure l.l: Counlry of Origin Definition
Assembled
ln "Mode ln"
Jopon Jopon
Assembled Assembled
ln ln
Singopore Singopore
Product Evaluation
Schooler(1965)conductedostudyinGuotemolowiththesimplestof monipulotions.
Schooler's monipulotion involved presenting fourgroups ot2OOrespondents of porf-
time students with o juice product ond o swotch of fobric. These products bore
fictitious lobels denoting four different South Americon countries (e.g., one group
presented with products lobelled os Guotemolon, second group presented with
products lobelled os Costo Ricon, etc.). The study showed thot products mode
in less developed countries were not evoluoted os quolity products. Consumers
were biosed fororogoinst products from o less developed countrywhen theywere
evoluoting products mode in different, less developed countries. Schooler (1g65)
found thot Guotemolon students gove lower evoluotions to products mode in El
Solvodor ond Costo Rico thon to domestic ond Mexicon products ond thot this
bios wos reloted to
o generol negotive ottitude toword people from the former
two countries. Schooler (1955) concluded thot the country of origin of o product
con hove on effect on o consumer's opinion of the product.
Reierson (1966) triedto determine the ottitude of Americon consumers toword

foreign products. Therefore, the questionnoire osked 105 business odministrotion
students ond 50 psychology students to indicote their opinions of products from
29
CHAPTER I
ten different notions (the United Stotes, Germony, Jopon, Fronce, Conodo, ltoly,
Englond, Sweden, Belgium ond Denmork). Products were mechonicol, food ond
foshion merchondise. Reierson (1965) found thot stereotyping of foreign products
wos present omong the Americon students.
Reierson (1967) continued his work of investigoting Americon students' ottitudes

towords foreign products ond concluded thot if the "prejudice of consumers
toword o notion's product is not too intense, consumers' ottitude moy be mode
significontly more fovouroble by even slight exposure to communicotion ond
promotionol devices" (p. 386).
Schooler ond Wildt (,l968) meosured the elosticity of product bios3. 236 student
respondents were selected rondomly ond divided into six groups. Eoch group
exomined two pieces of glosswore, one of which wos lobelled os Americon ond
the other os Joponese. The lobels were outhentic, but the products were identicol
pieces of o domestic monufocturer. Subjects were osked to indicote o purchose
preference. Schooler ond Wildt (1968) noticed thot mony Americon consumers
were biosed ogoinst Joponese products becouse of their notionol origin. ln 1969
Schooler ond Sunoo investigoted the consumer's perception of internotionol
products: regionol versus notionol lobelling. The purpose of the study wos to
determine how consumers responded to the monufoctured goods of developing
oreos if the products were lobelled regionolly. The findings of the study did not
show ony evidence of bios ogoinst the monufoctured goods which were lobelled
regionolly. He concluded thot "regionol lobelling" (e.9., mode in Asio, mode in
Lotin Americo, etc.) might work to reduce intro-regionol product bios.
,1971lrottempted to test bios phenomeno with
tn his follow-up study, Schooler
o broodly bosed representotive consumer somple. The results showed significont
differences omongst products of foreign origin ond o hierorchy of bios effect
wos observed. ln oddition, the results indicoted thot neither notionol nor regionol
lobelling oppeored to be more effective thon the other. The Germon products
were roted betterthon those of Asio,lndio ond Western Europe. On the otherhond,
US products olso were roted better thon those of lndio ond Western Europe.
30
Schooler (1971) concluded the following:

- The older oge group roted the products of Asio, Africo, West Germony ond
North Americo lower thon younger oge group.
- Femoles preferred foreign products more thon moles.
- Educotionol level ond intensity of bios were observed. Consumers with o high
levelof educotion were more in fovour of foreign products thon those with
limited educotion.
- The group composed of non-white people evoluoted products from Africo,

Lotin Americo ond lndio better thon the group of white people.
- The white group evoluoted the products of US ond North Americo better thon
Non- whites.
Nogoshimo (19701compored Joponese ond Americon ottitudes toword foreign

ond domestic products by using the semontic differentiol method. The purpose
of the study wos to meosure the Cross-Culturol imoge of "mode in" products os
produced by ond Joponese businesses. The study consisted of o rondom somple
US
of 230 Minnesoto businesses chosen from the Minnesoto Directory of Monufocturers

ond 100 Tokyo businesses chosen from the Tokyo Directory of Componies. Countries
used were US, Jopon, Germony, Englond, Fronce, ltoly, Switzerlond ond Conodo.
The questions were corefully tronsloted into Joponese moking sure thot the
ossociotive volue of the longuoge wos not lost in the tronslotion. The outhor used
o seven-point scole with eoch scole position orbitrorily weighted from Good (+3
points) to Bod (-3 points).
Consumers were osked to mork ihe seven-point scole for "relioble--unrelioble ond
the product which first come to mind where they sow the nomes of the countries;
list
which country's product theywould choose if price, quolity ond styling were equol;
ond which country produces products of the greotest volue. Nogoshimo (19701
found thot the "mode in" stereotype differed omong Joponese ond Americon
businessmen. Joponese businessmen roted "mode in Germony" os the best while
Americon businessmen gove the highest roting to their domestic lobel. English were
31
CHAPTER I
recognised for their excellent croftsmonship, while US ond Joponese businessmen

roted Fronce the lowest of ihe five countries.
Nogoshimo (1970) olso found thot the "mode in" imoge wos strongly influenced
by fomiliority ond ovoilobility of the couniry's product in question. ln his follow-up
study, Nogoshimo (19771 repeoted his eorlier 1970 study of the "mode in" product
imoge omong Joponese businessmen. The purpose of this study wos to determine
whether there hod been ony ottitude chonge omong Joponese businessmen
over the eight-yeor period. Nogoshimo (1977) osked the Joponese businessmen
their opinion regording US, Joponese, Germon, English ond French products in
terms of five dimensions (price ond volue, service ond engineering, odvertising
ond reputotion, design ond style ond consumer profile). The findings of the study
indicoied thot, the overoll "mode in USA" imoge hod deterioroted in mony woys
during the yeors I 969-l 925. The "mode in USA" lobelwos roted the lowest omong
six
the five countries in terms of corefulond meticulous workmonship, while ,,mode in"
Jopon, Germony, Englond ond Fronce hod been significonfly upgroded.
Greer (1971) investigoted the usefulness of hoving ihe view of professionol

purchosing executives. Written questionnoires were presented to o rondom
somple of 50 members (3%) of the British Purchosing Officers Associotions. Greer
(1971) modified Osgood's (1957) semontic differentiol for use in his study. Thus, the
surveyed purchosing officers were osked obout the quolity of products in generol
ond the engineering "know how" in generol. Countries used were Austrolio,
Belgium, conodo, Fronce, Hollond, ltoly, the United Stotes ond west Germony.
The findings of this study indicoted thot the older respondents roted their home
country's product higher thon the younger purchosing officers.
Krishnokumor (1974) ottempted to exomine the influence of country of origin

on the product imoge of Americon ond people from developing countries ond to
investigote the effect of demogrophic voriobles on the "mode in" imoge omong
those countries. Product closses used in this study were mechonicol products, food
products ond foshion products. Specific products used for evoluotion in this study
were outomobiles, television sets, soft drinks, dresses ond shirts. Respondents (student,
32
stoff, foculty members ond their fomilies) were osked obout their perceptions
of
countries ond their perceptions of the quolity of products.
The results of the study showed thot people from developing countries tended to
hove on unfovouroble "mode in" imoge of their home country's products in terms
of workmonship. reliobility, durobility, technicolsuperiority ond otherchorocteristics.
Moreover, the study indicoted thot Americons were more in fovour of Joponese
products. ln oddition, demogrophic chorocteristics hod olso ployed o port in
creoting differences in "mode in" imoge held by lndions, the test country group.
For exomple, sex ond trovel experience occounted for significont differences in
"mode in" imoges omong lndions.
Dornoff et ol. (1974) exomined consumers' perceptions of imports. The oim of

their study wos:
- To find out whot consumers' perceptions of imports were.
- lf these perceptions differed for specific countries.
- lf these perceptions differed between product closses.
- lf differences in perceptions were bosed on socio-economic chorocteristics.
Respondents were ordinory consumers selected by o systemotic rondom somple

from the greoter Cincinnoti Metropoliton Areo telephone directory. Of the 400
consumers selected, only 216 questionnoires were returned in o complete form.
countries used were US, Fronce, Germony ond Jopon. product cotegories used
were mechonicol products, food products, foshion merchondise ond electronic
equipment. The results of this study indicoted the following:
- Respondents were neutroltowords ,,mode in Fronce".
- Products "mode in Jopon" were considered os substitutes for US products.
- Foreign products were becoming increosingly competitive with US products in

terms of quolity.
33
CHAPTER I
- Jopon outronked the US in electricol equipment ond Germony wos roted the
highest in mechonicol products.
- No significont differences existed omong moles' ond femoles' perception of

foreign products.
- perception of imports wos more fovouroble os the educotionollevelincreosed

(e.g., respondents with o groduote degree were more in fovour of foreign products
thon those with high school educotion).
Noroyono ,1974) compored

By using the semontic differentiol method, Lillis ond
US ond Joponese consumers' perceptions toword oggregote imoge of products
with "mode in" lobels from five different countries (Englond, Fronce, Germony,
Jopon ond the United Siotes). The outhors used o seven-point scole volued from
I to 7 (see olso Nogoshimo,lgTO). The study consisted of rondom somples of 100
residents eoch from Moscow. ldoho ond Fukushimo, Jopon. According to Lillis
ond Noroyono (19741 none of the subjects in either somple were students. The
findings of their study indicoted thot there existed significont differences regording
vorious products' ottributes. Furthermore. these differences produced significont
differences in subjects' perception of foreign ond notionol products.
Green ond Longeord (1975) compored French ond US consumers in terms of

consumer hobits ond innovotive chorocteristics. The Americon somple consisted
of l g3 rondomly chosen women from the cities of Dollos ond Son Anionio, Texos.
Self-odministered moil questionnoires were used to gother the needed doto in the
US. On the other hond, the French somple consisied of 226 women from Aix-en-
provence ond the questionnoires were personolly delivered ond collected by o
reseorch ossistont.4 Green ond Longeord (.l975) employed strotified sompling in the
selection of the French somple to provide bosic comporobility with ihe US somple.
The results of their study showed behoviorol differences between the two groups
even though Fronce ond the United Stotes ore similor in mony economic respects.
Dorling ond Kroft (1977) reseorched the impoct of the "mode in" lobel on
Finnish consumers' ottitudes towords the products of vorious selected countries
(Sweden, West Germony, Englond, Fronce, US, Jopon ond Russio). Three-quorters
of the respondents were monogers ond employees rondomly chosen from bonks
34
retoil, wholesole ond monufocturing firms, while the remoining quorter

of the
respondents consisted of rondomly chosen foculty personnel, students
ond stoff
of different universities in Helsinki, Finlond. "A self-odministered questionnoire wos
hond-delivered to potentiol respondents" (p. 21). Ot 350 questionnoires distributed,
303 were usoble for the study, with o usoble response rote of 86.6%. Respondents
were osked to show their degree of ogreement with eoch stotement on o five-
point scole ronging from Strongly disogree to Strongly ogree. Agoin
the findings of
the study supported the hypothesis thot knowledge of country of origin offected
consumer ottitudes toword products.
Yoprok (1978) investigoted purchose intentions omong US ond Turkish business

execuiives for specific bronds "mode in" Germony. Jopon ond ltoly. ,,The mojor
findings of the study were ihot both generol country ond product ottributes ond
specific product ottributes were stotisticolly significont in offecting purchose
intentions" (p. xii).
Chosin ond Joffe (1979) exomined Americon indusiriol buyers' perceptions

towords the quoliiy of the goods "mode in" Eostern Europeon countries (e.g.,,
Czechoslovokio, Hungory, Polond, Romonio ond the USSR). personolinterviewswere
conducted ond completed with more thon 100 componies. Less thon one third
(30%) of the componies hod hod ony form of business
deolings over the post ten
yeors with one or more of these countries. lndustriol buyers
were osked to profile the
United Stotes through o series of ten performonce ottributes: five ottributes reloting
to product (quolity, workmonship, style, dependobility, odvonced technology)
ond five to morketing volues (credit/terms, volue for the money, on time delivery,
reputotion, mointenonce/service). According to Chosin ond Joffe (1g7g)
o toiol
of 82 questionnoires were found useful in port, 68 of which were occeptoble
for
complete response. Results of ihe questionnoires indicoted thot industriol
buyers
generolly felt thot the quolity of the goods monufoctured in the
five Eostern
Europeon countries wos inferior to the quolity of goods monufoctured in the
West.
Therefore, Chosin ond Joffe's (1979) results supported the hypothesis
of o country
of origin effect.
35
CHAPTER I
Niffenegger et ol. (1980) investigoted the product imoges of British goods

omong o somple of French ond British retoil monogers in terms of price ond
volue, odvertising ond reputotion, service ond engineering, design ond style
ond consumer profile. Niffenegger et ol. (1980) used the product cotegories of
outomobiles, electricol opplionces, textiles, cosmetics, food ond phormoceuticol
products. ,,A self-odministered questionnoire wos developed for meosuring the five
ospects of product imoge, using o previous internotionolimoge study of Joponese
businessmen os o generol bosis" (see for exomple, Nogoshimo,l?771.
The personol drop-off ond pick up method of doto collection wos used'
Representotives colled on eoch store monger: briefly exploined the moin purpose
of the study ond left o copy of the questionnoire. According to the outhors this
method gove monogers the opportunity to complete their questionnoires ot o
convenient time. Of 1 l7 questionnoires distribuled, g2 were returned complete for
on overollreturn rote of 79 per cent.
Niffenegger White ond Mormet's (1980) study indicoted the following results:
- British products were seen to be cheoper thon products "mode in" the United
Stotes ond Fronce.
- British products were seen os more technicolly odvonced thon products

"mode in Fronce".
- products "mode in US" were seen os widely odvertised compored to those

"mode in Fronce."
- French brond nomes were found hord to recognise'
- Americon products were seen os technicolly odvonced in noture, produced

by moss production methods.
- Respondents roted the UK first in electricolopplionces, textiles, food ond

phormoceuticol products, second in ouiomobiles ond lost in cosmetic
products, while Fronce ronked first in outomobiles ond cosmetics, second
in textiles ond food ond lost in electricolopplionces
qnd phormoceuticol
products.
36
- Products "mode in US" foiled to be the first choice for the UK consumers
in ollof the product closses exomined. Accordingly, it ronked second in
eleciricol opplionces, cosmetics ond phormoceuticol products ond
lost in outomobiles, textiles ond food.
- ln terms of consumer profile, products "mode in US" were more oppeoling

to the younger morket while products "mode in Fronce" were more
fovouroble to the feminine morket ond British products were more oppeoling
to the older group.
ln on extension of his eorlierstudy, Noroyono (.l981) exomined the oggregote

imoge of Americon ond Joponese products. "The oggregote imoge for ony
porticulor country's product refers to the entire connotive field ossocioted with thot
country's product offerings, os perceived by consumers" (p.32).Noroyono (1981)
employed the semontic differentiolformot used by Nogoshimo in the I970 study.
The some twenty criterio were meosured on seven-point scole. A rondom somple
of 100 residentsof Fukushimo, Jopon ond l@ residents of Moscow, ldoho were
selected for this study. Howeve[ the oim of Noroyono's (1981) study wos to find
differences between US ond Joponese products.
The findings of the studyindicoted thot US consumers perceived their country's

home products to be generolly of higher quolity thon products "mode in Jopon".
Besides, products "mode in US" were perceived by Americon consumers os more
relioble ond of better workmonship thon products "mode in Jopon". MoreoveL
both Joponese ond Americon products were perceived by Americon consumers
to be widely odvertised ond moss produced.
On the other hond, Joponese consumers perceived products "mode in Jopon"

os highly recognised. They considered Joponese products to be of o higher quolity
thon the US mode products. However, Joponese consumers perceived products
"mode in Jopon" os less prestigious, less populor ond less widely distributed thon
products "mode in US".
37
CHAPTER I
ln 1984, Erickson, Johonsson ond Choo onolysed the country of origin effects on
the evoluotion of outomobile bronds. Doio were collected from 96 MBA students ot
the University of Woshington. Subjects were osked obout their beliefs ond ottitudes
towords ten outomobile models (e.9., four US, two Germon ond four Joponese
models). Semontic differentiol scoles were used for oll roting questions used in the
questionnoire. Respondents were olso osked to rote theirfomilioritywith eqch ouio,
ofter which they provided on overoll roting on o five-point semontic scole.
The empiricol results indicoted thot country of origin offects beliefs but not
ottitudes. The outhors orgued thot the study demonstroted thot imoge voriobles
olso offect beliefs through inferences mode by consumers. "lt olso indicoted thot
the effect of imoge voriobles on ottitude wos not direct; ony influence thot hos
oppeored is o secondory one octing through beliefs (Erickson, Johonsson ond
Choo, 19841.
Morello (1984) did o comporotive reseorch on the imoge of domestic ond foreign
products. The purpose of his study wos to determine whot the relotionship between
the imoge of o couniry ond the imoge of the products "mode in" thot country.
Seven countries were used in the study, nomely, Belgium, Fronce. Hollond, ltoly,
Spoin, USA, USSR ond West Germony. Morello (1984) osked o Dutch group of 29
students ond on ltolion group of 37 students to rote the products from the eight
selected countries using twelve sets of bi-polor odjectives. The results indicoted o
significont relotionship between these two imoges ond the reseorch concluded thot
o country of origin effect does exist ond moy offect consumer buying behovior.
Johonsson et ol. (1985) developed o

multi-cue method for exomining the
impoct of country of origin on product evoluotion. The product closs used wos
outomobiles with ten cor models "mode in" three different countries, nomely,
Jopon, US ond Germony ond l3 selected ottributes (price, hondling, horsepowe[
occelerotion, gos mileoge, sofety, driving comfort, possenger comfort, reliobility,
durobility, workmonship, styling ond colour selection). Convenience somples of
groduote students from US ond Jopon were used. The Americon somple consisted
of 70 groduoie students of o West Coost university ond the Joponese somple of
38
Country Of Origin Effects: A Literature Review
82 students of six universities. The questionnoire wos presented to eoch somple in

either o group session or the clossroom. Then the students were osked to consider
eoch of the models on eoch oitribute ond olso to rote the importonce of eoch
ottribute. The findings of the study indicoted thot country of origin effecis were
relotively minor when o multi-ottribute opprooch wos used.s Johonsson, Douglos
ond Nonoko (1985) concluded thot "country of origin effects moy be less significont
thon hos generolly been believed ond they moy occur predominontly in relotion
to evoluotion of specific ottributes rother thon overoll evoluotions" (Johonsson et
ol. 1985, p.395). Thus, their findings supported the hypothesis thot the country of
origin is used os o surrogote vorioble to evoluote o product when respondents
hove limited knowledge obout thot product.
ln their study, Festervond et ol. (1985) investigoted consumers' perceptions

of imports ond their ottitudes iowords countries' product quolity. Using o self-
odministered quesiionnoire, o rondom somple of 1000 consumers were selected
in ten lorge Souih-eostern cities. Only 259 usoble questionnoires were obtoined
US
for o response rote of 26%. A four-point scole ronging from strongly disogree (l ) to
strongly ogree (4) wos used in the study for obtoining doto on ihe respondents'
generol ottitude towords different ospects of product quolity for eoch country. The
countries used were Englond, Fronce, Germony, Jopon ond the United Stotes. The
product cotegories used were mechonicol, food, foshion merchondise, electronic
equipment ond leisure goods. Respondents were osked to rote the given countries
in terms ofproduct quolity. Minor differences in ottitude were found ocross countries
ond Americon consumers' perceptions of the countries productswere mixed ocross
the different product cotegories.
Heslop ond Woll (1985) exomined the differences between moles ond femoles
on the bosis of country of origin product imoge. A totol of 535 Conodion men ond
women were osked their opinions obout products from I3 different countries. They
found thot products "mode in Conodo" were ronked the highest by both moles
ond femoles except for women's shoes where Conodo come second ofter ltoly.
It wos olso noticed thot moles prefened ltolion clothing over the Conodion ones
in terms of quolity, while Romonion moles' clothing wos roted lower thon clothing
39
CHAPTER I
from other countries in the group. On the other hond, clothing "mode in For Eostern"
countries wos roted the lowest by both moles ond femoles. Moreover the results
olso indicoted thot femoles gove higher rotings in terms of quolity to olmost oll
countries thon moles did, except for South Koreo, Hong Kong ond the philippines.
Becker (1986) meosured US consumers' perceptions of the price/quolity

relotionship of Americon vs. Joponese products. Four hundred individuols possing
o cord toble set up in o shopping oreo of Boston were requested to porticipote
in o four questionsurvey. Of these, 20 collected questionnoires were incomplete
for doto onolysis. The findings of the reseorch indicoted the existence of the ,,holo
effect" pottern bolstering the pervosive imoge of products ,,mode in Jopon".
According to Becker this wos found even when the Joponese product wos of lesser
price. ln oddition, notionolism wos found to be o dominont foctor in influencing
the Americons' purchosing behovior when price ond quolity were constont. They
desired "to purchose domestic products, but not of the expense of perceived
inferior quolity" (p. I 1 l).
Ofir ond Lehmonn (1985) meosured the country-level imoges of ski resorts in three
Europeon countries, Switzerlond, Fronce ond Austrio. A survey wos conducted in
order to gother doto for the study. 269 skiers ottending o ski-show in the city of New
York were osked to rote eoch of the three counfries on o five-point scole for ten
ottributes, nomely, modern, exciting, entertoining, chollenging, friendly, honest,
sophisticoted, romontic, picturesque ond expensive. The findings reveoled thot
the imoges of Switzerlond, Austrio ond Fronce were relotively homogeneous with
Switzerlond ond considered slightly more positive thon Fronce (Ofir ond Lehmonn,
l9B5). Thus, Americon skiers, occording to the findings could not distinguish
between resorts in Europeon countries, demonstroting low level of fomiliority with
the product.
Popodopoulosetol. {lgSllexominedconsumers'perceptionsofforeignconsumer
goods. Subiects from Conodo, UK ond Fronce were osked to ossess products from
the US, Jopon, sweden, conodo ond their own country's products. Respondents
were chosen through systemotic cluster or quoto somples. A rondom somple of
40
250 to 300 respondents were collected from eoch country. The outhors used the
drop-off-pick-up method for their study. According to Popodopoulos et ol. this
method gove high response rotes, overoging obout 75%ol comporotive low cost.
A structured, self-odministered interview schedule wos used in order to stondordise
questions ocross countries. Products were evoluoted on the bosis of performonce
(two scoles), price (three scoles), before ond ofter purchose product support (two
scoles), sociolimoge (three scoles), morket ovoilobility (five scoles) ond behoviorol
component (two scoles). The sfudy reveoled the following conclusions:
- "There is no question thot o country of origin effect does exist".
- "Both consumers ond industriol buyers ore offected by "mode in" imoges".
- "Mode in stereotype con be chonged, of leost in the long term".
- "Price moy offect foreign product perceptions".
- "Foreign stereotypes moy vory ocross product cotegories on consumer types"

(Popodopoulos et ol. 1987, p. 9).
Dorling (19871 onolysed the generol ottitude of Finnish consumers towords the
products of vorious countries (Englond, Fronce, Jopon, US ond West Germony).
Doto were collected in 1975,1980 ond 1985 from 1,113 consumers living in three
different cities in Finlond. Severol business componies were chosen ond o rondom
sompling of monogers ond employees from these componies were invited to
porticipote in this study. A rondom somple of foculty, stoff ond students were osked
to porticipote in the study os well.
Dorling used on identicol form of questionnoire for the doto collection for
eoch yeor of the study including 3l "Likert-type" stotements, l3 of them deolt
with different product dimensions, 13 with morketing proctices ond five with the
generol importonce of the products to the respondents. Respondents then were
osked obout their ottitudes regording products "mode in" the obove mentioned
countries, morketing proctices ond the importonce of o product's country of origin.
The results of the study indicoted significont differences in consumers' ottitudes in
41
CHAPTER I
the three cities where doto wos collected. ln oddition, the "mode in" lobel olso
showed significontly different product ond morketing mix imoges. At the some
time, the study reveoled no cousolrelotionship between this imoge dimension ond
octuol morket behovior._
Ettenson, Wogner ond Goeth (l 988) presented conjoint onolysis os on olternotive

method for exomining the effect of country of origin in relotion to o "mode in
the USA" compoign. The products used were o lodies' blouse ond o men's shirt.
Attributes used were style (for blouse, cut for shirt), quolity, fibre content, price
ond brond. Additionolly the country of origin wos monipuloted in o conjoint study
which ossessed consumer decision-moking before ond ofter the introduction of the
,l05
"mode in the USA" compoign. A totolconvenience somple of students of the
University of Morylond wos invited to toke port in the study. 55 students completed
both the pre-test ond the post-test .
The results of the study demonstroted thot controry to previous findings, theeffect
of country of origin wos relotively smoll both before ond ofter the lounching of thot
compoign. From these findings it con be concluded thot product cues (e.9., price
ond quolity) moy hove o stronger effect on consumer product evoluotions thon
country of origin informotion. Furthermore, the outhors suggested thot "retoilers
should be coutious in using potriotic themes in promotion since their effectiveness
hos yet to be documented" (Ettenson et ol. '1988, p. 85).
Al-hommod (1988) investigoted the Soudi Arobion morket for selected imporied
goods (with specific reference to UK suppliers) ot both country ond brond levels. The
study exomined SoudiArobion economic ond culturolfoctors ond the ottitudes of
the Soudi consumer ond reseller to the product ond its suppliers. The results showed
thot the mojority of Soudi consumers considered price to be the most importont
ottribute in the cose of products necessitoting higher expenditure, either by woy of
o single poyment or severol poyments. ln terms of the consumer profile the results
demonstroted thot both oge ond income tended to hove o positive correlotion
with the ottributes of price ond quolity in the cose of corpets ond oir-conditioners
ond o negotive correlotion with the ottributes of quolity ond mointenonce for cors
42
ond design of outerweor ond refrigerotors. ln the cose of educotionol level, it wos
found thot the higher the level of educotion, the more people ore in fovour of
imported products thon those with low levelof educotion.
On the other hond, the Soudiresellers considered firstly price ond secondly quolity
to be the most importont foctor when selecting suppliers. The results olso indicoted
thot the Soudi resellers' opinion obout wos less fovouroble with
British suppliers
regord to oll morket mix foctors except quolity (Al-hommod, 1988).
Hon ond Terpstro (1988) designed o reseorch to determine the effecis of the
country of origin ond brond nome cues on consumer evoluotions of uni-notionol
products (products thot involve o single country of origin, thot is, purely domestic
ond purely foreign products) ond bi-notionol products (products thot involve two
countries of origin, products which moy be foreign-mode but corry o domestic
brond nome) ond to estimote the perceived volues of such cues. Using foce-to-
foce interviews with o regionol quoto somple of 150 Americon household residents,
subjects were osked to rote four different bronds of colour television sets ond
subcompoct outomobiles from four countries: Germony, Jopon, Koreo ond ihe
US. To check for the volidity of the interviews, the outhors employed o rondom
selection of respondents by telephone. All respondents selected by telephone
confirmed their porticipotion in the interviews. The results demonstroted thot there
were significont differences in the consumers' perceptions of product quolity ond
their intention to buy the product. Moreover, source country ond brond nome did
offect consumers' perceptions of product quolity. On the other hond, sourcing
country stimuli were found to hove more powerful effects thon brond nome on
consumer evoluotions of bi-notionol products.
Hon (1989) exomined the role of country imoge in consumer evoluotions of TV sets
ond outomobiles. Two brondswere chosen foreoch product type. Countries tested
were the US, Jopon ond Koreo. Using o systemotic somple, 1 l5 respondents were
interviewed by telephone. They were osked for their imoges of products from the
three countries. The imoges were meosured on o 7-point semontic differentiol scole
onchored by "good" ond "bod" (Hon, l9B9). The respondents were olso osked
43
CHAPTER I
for their ottitudes towords eoch brond using the some scole. However, the results
suggested thot country imoge con be used by consumers in product evoluotions
in either or both of two directions: (l) os o holo construct (country imoge used to
consider products thot consumers know little oboutl; l2l or os o summory construct
(os consumers become fomilior with o country's products, country imoge moy
become o construct thot summorises consumers' beliefs toword product ottributes
ond directly offects their ottitudes toword the brond).
Hong ond Wyer (1989) investigoted the cognitive process instigoted when
country of origin informotion is given in conjunction with other product informotion.
Respondents were 128 college students enrolled in on introductory business course.
They were divided into two groups, the first group wos osked to consider the given
informotion, then evoluote its clority. While the second group wos osked to form
on impression of the moteriol provided to them. The countries used were West
Germony, Mexico, Jopon ond South Koreo. The products used were o personol
computer ond o video cossette recorder. The results of the study indicoted thot
country of origin itself influenced product evoluotions regordless of whether it wos
known before or ofter the odditionol product ottribute informotion ond regordless
of whether subjects were osked to understond the provided product informotion
or to form on impression of the product.
KhochoturionondMorgonosky (1990)investigotedconsumers'quolityperceptions
of opporel from the United Stotes, South Koreo, Chino, ltoly ond Costo Rico. The
influence of three independent voriobles (country of origin, store type ond brond
nome type) wos meosured in relotionship to the dependent vorioble, perceived
quolity. The respondents for the study were households in the continentol United
Stotes with telephone numbers os listed in the Americon telephone ond telegroph
tope of working oreo codes ond prefixes. Using o systemotic rondom sompling, I99
working telephone numbers were selected, 153 of which were completely elicited
resulting in o77% response rote.
Consumers were osked their perception of opporelquolity sold in three different

store types consisting of deportment stores, discount stores ond off-price stores.
44
The outhors included off-price stores becouse they ore o foirly new form of retoil
institutionoltype ond ore ochieving growing consumer occeptonce6. The findings
of the study ore summorised os follows:
- Clothing "mode in US" wos perceived os hoving the highest quolity. ltoly wos
perceived os second highest followed by Chino, Koreo ond Costo Rico.
- Given the omount of prestige ossocioted with troditionol deportment stores os

well os the premise of the price/quolity relotionship, it is not surprising thot deportment
stores received the highest quolity rotings, followed by off-price stores.
- Results from the poired f-test reveoled thoi o significont

decline in quolity
perceptions occuned for opporel products sold in deportment stores when
ossocioted with being "mode in" Koreo, Chino ond Costo Rico, whereos quolity
rotings for discount stores were significontly upgroded when ossocioted with US-
mode ond ltolion-mode opporel.
- Perceived quolity of the off-price store wos significontly higher when selling US-
mode opporel ond lower when ossocioted with Koreo, Chino ond Costo Rico.
There wos no significont chonge in perceived quolity of off-price stores when
selling ltolion opporel.
- The results olso indicoted thot , when o store type wos ossocioted with different
countries of origin, consumers' quolity roting forthe store type chonged depending
on the porticulor country with which it wos ossocioted. The outhors believed thot
the omount of resulting chonge wos reloted to the level of industriol development
of the ossocioted country of origin, yet Chino wos roted more positively thon Koreo,
even though Koreo is considered more industriolised thon Chino.
- ln the cose of bronded opporel, significont declines in perceived quolity

occuned when nome bronds were ossocioted with oll four foreign countries of
origin. A nome brond's ossociotion with US-mode opporel neither significontly
increosed nor decreosed the quolity roting of the nome brond. Perceived quolity
of nome bronds wos hurt most by ossociolion with Costo Ricon opporel.
45
CHAPTER I
- Store brond quolity wos perceived os being significontly lowered when

ossocioted wiih opporel from Koreo, Chino ond Costo Rico. Associotion with
US-mode opporel improved quolity rotings for store bronds, while ltoly hod no
significont influence on store brond perceptions. On the other hond, the quolity
roting of designer bronds wos somehow improved by ossociotion with US-mode
opporel. Quolity perception of designer bronds wos lowered when mode in Koreo,
Chino ond Costo Rico. But ossociotion with ltolion opporel neither significontly
increosed nor decreosed the quolity roting of the designer brond. Khochoturion
ond Morgonosky (,l990) concluded thot "ossocioting o brond with less-industriolised
countries could potentiolly lower the quolity imoge of thot brond type." Moreovel
"the less-industriolised the country of origin, the more the potentiol decline in the
quolity imoge."
Hon (1990) orgued thot country imogeT moy be conceptuolised os o consumer

holo. Therefore, Hon (1990) designed o study to oddress the role of country of origin
imoge in consumer choice behovior ocross the United Stotes, Jopon ond Koreo.
The study ossessed the following:
l. The effect of country.imoge on consumers' ottitudes towords bronds "mode

in" different countries.
2.Ihe effect of country imoge on consumers' intentions to purchose bronds from
vorious countries.
3. The effect of country imoge on consumers' perceptions of specific product

ottributes.
4. The effect of country imoge for o product cotegory on different cotegories

from the some countries.
Country imoge wos meosured with reference to five items. They were technicol
odvoncement, prestige volue, workmonship, price ond serviceobility. colour
television sets ond compoct outomobiles were exomined in the study becouse
"their vorious domesiic ond foreign bronds ore relotively well known to consumers
in the US where this study wos conducted. Two bronds were selected from eoch of
46
the couniries for eoch product type. The selected television bronds were Generol
Electric ond RCA for US bronds, Ponosonic ond Toshibo for Joponese bronds ond
Somsung ond Goldstor from Koreon bronds. The cor bronds were Ford Escort ond
Buick Skyhowk for the US, Hondo Accord ond Toyoto Celico for Jopon ond Hyundoi
Excel for Koreos. Brond ottitudes were ossessed with two meosures --- Cognitive
ond offective. Hon (1990) gothered his doto from o systemotic somple of l16
Americon residents living in o Midwestern city. They were selecied rondomly ond
interviewed by telephone. The response rote wos 64.8% (l l6 out of 179 colls were
obtoined successfully). Finolly, subjects were osked for their intentions to purchose
eoch brond.
According to Hon (1990) the holo hypothesis suggested thot consumers moy
consider not buying on unfomilior foreign brond simply becouse they moy moke
unfovouroble inferences obout the quolity of the brond from their lock of fomiliority
with products from thot country. The findings of the study olso demonstroted
thot consumers' willingness to purchose o product wos reloted to the economic,
politicolond culturolchorocteristics of the product's country of origin. Additionolly,
country of origin imoges were offected by the consumer's percepiion of similority
between his or her own country's ond the country of origin's politicol ond culturol
climote ond belief systems.
Ghodir (1990) investigoted Jordonion consumers' perceptions of quolity, price

ond risk of foreign versus domestic product. The countries used in the study were
usA, uK, Jopon, Russio, Romonio, Toiwon, Egypt ond Jordon. The product closs
employed in the study wos mojor household electricol ond gos opplionces. The
doto were obtoined through o structured direct questionnoire from o strotified
rondom somple of 1000 households with o 63.9% usoble response. The results
reveoled the following:
- The country of origin hod o significont relotionship with the consumers' perception
of the quolity, price ond risk of the product.
- Products "mode in" developed countrjes were evoluoted os higher in quolity

ond price, but lower in risk thon the products "mode in" less-developed countries.
47
CHAPTER I
- The home country bios seemed "to be more relevont in comporing the domestic
product to thot of other countries of o relotively similor stoge of development".
Therefore. the products "mode in Jordon" were evoluoted os being higher in
quolity ond price, but lower in risk thon the producis "mode in" less-developed
countries (Romonio, Toiwon ond Egypt). They were olso evoluoted to be lower in
quolity ond price but higher in risk thon developed countries' products.
- A consistent negotive correlotion between quolity ond risk wos found for the
products of ihe entire set of countries. For exomple, "the higher the consumers'
perception of the products of the vorious countries, the lower their perception of
the risk ossocioted with these products" (1990, p. v).
- The indicoted ihot o low percentoge of the consumers ogreed in

results
connecting the purchose of the domestic product with their potriotic duty. lt wos
noticed thot the more the consumers ogreed with potriotic voriobles, the better
their perception of the domestic product quolity ond price.
- Among socio-demogrophic voriobles, sex wos found to be the leost importont

foctor in discriminoting omong the consumers ond oge wos found to be the most
importont.
Ghodir (1990) suggested thot domestic producers should develop seporote

morketing strotegies for the imporfed products of developed ond less-developed
countries, rother thon just deoling with the imported product under the generol
term "foreign" (Ghodir 1990, p. v).
o computer odministered conjoint onolysis, Liefeld. Woll, Ji ond Xu (1993)

Using
studied the effects on relotive cue utility of the interoction of cues in product
choice situotions in which both the number ond types of both extrinsic ond intrinsic
informotion cues were voried for two types of products, nomely telephone ond
clothing (men's shirts ond women's blouses). ln mollintercepts 325 odult shoppers
were osked to porticipote in the siudy. They were rondomly ossigned to one of
three designs for telephones, shiris (for men only) ond blouses (for women only) so
ihot shoppers were exposed io only one treotment condition per product, e.9.,
48
o between subject design (Liefeld, Woll, Ji ond Xu, 1993). The results of the study
reveoled thot the relotive utility of informotion cues chonged in choice situotions
with different cues present. This wos cleody noticed especiolly when more cues
were involved in choice situotions. Extrinsic cues ( e.9., brond, wononty ond
price) iended to hove greoter relotive utility thon when fewer cues were present.
Moreovel "cue types, while offecting choice processes, oppeored to be product
specific" (p.124.
Roth ond Romeo (1992) exomined country of origin in terms of the fit between
countries ond product cotegories. They suggested o fromework which motches
the importonce of product cotegory dimensions (innovotiveness, design, prestige
ond workmonship) with the perceived imoge of the country of origin olong the
some dimensions. Therefore, o study wos designed to determine which dimensions
were most frequently ossocioted with o country's imoge ond how importont these
chorocteristics were to different product cotegories. Doto were collected from 9g
groduote students in lrelond, 130 in Mexico ond 139 in the United Stotes. Country
imoge wos meosured olong the four dimensions mentioned obove. For eoch
dimension, subjects evoluoted ten countries. The countries surveyed were Englond,
Germony, Hungory, lrelond, Jopon, Koreo, Mexico, Spoin ond the United Stotes.
The product cotegories evoluoted were bee[ outomobiles, leother shoes, crystol,
bicycles ond wotches. Using 7-point importonce scoles (l = not innovotive; 7= very
innovotive), subjectswereosked toshowtheextenttowhich eoch of thefourimoge
dimensionswos on importontcriterion forevoluoting eoch productcotegory. Finolly,
subjects were osked how willing they would be to purchose the product cotegories
from eoch of ihe ten countries they evoluoted. The results reveoled thot "product-
country motch moy be on indicotor of willingness to buy imported products". Roth
ond Romeo (19921soid for exomple, if o country is perceived os hoving o positive
imoge ond this imoge is importont to o product cotegory, consumers will be more
willing to buy the product from ihot country.
The study showed thot US, lrish ond Mexicon consumers were willing to buy o cor
or wotch from Jopon, Germony ond the US since these countries were evoluoted
highly on dimensions thot were olso importont to these product cotegories. On the
49
CHAPTER I
other hond, "unfovouroble product country motch moy exploin why consumers
ore unwilling to buy certoin products from certoin couniries. Respondents were less
likely to buy Mexicon ond Hungorion outos ond wotches os these countries hod poor
evoluotions on dimensions thot were importont for cor ond wotch chorocteristics"
(Roth ond Romeo 1992,p.493). The results olso indicoted no differences in fomiliority
with beer ond bicycles ocross the US, Mexicon ond lrish respondents. But significont
differences were found for the other four product cotegories. Moreover, results
on demogrophic differences between groups demonstroted very homogeneous
somples ond reveoled no chonges in the prediction of willingness io buy.
Roth ond Romeo (19921suggested thoi monogers should use product couniry
motch informotion in order to ossess consumers' purchose intentions ond ossist
them in monoging their product's country of origin. Specificolly, some differences
in product country motches ond willingness were found ocross the three groups of
respondents. Choo (1993) ottempted to oddress the multidimensionol noture of
the product/country concept. Specificolly, the centrol focus of his reseorch wos
to exomine how US consumers would evoluote hybrid products with o multiple-
country designotion in terms of product design ond country of ossembly. The
product selected for the study wos o television set produced by Tero Electronics lnc.
of Toiwon. Two levels of price: $269.95 ond $369.95, three levels of "Assembled in"
locotion: Toiwon, Thoilond ond Mexico ond three levels of "Designed in" locotion: US,
Jopon ond Toiwon were specified in the study. A systemotic somple of I 20 Americon
residents living in the Midwest wos selected from o locol telephone directory for
this study. They were giveno copy of the odvertisement to exomine of their own
poce. They were osked to rote the product in two seporote cotegories: design
quolity ond product quolity. After respondents hod completed the questionnoire,
they were osked to evoluote the quolity of electronic products mode in six different
countries: Mexico, Singopore, US, Germony, Toiwon ond Thoilond, on four different
dimensions: workmonship, reliobility. durobility ond quolity.
The results showed thot consumers roted electronic products ossembled in

Toiwon to hove the highest quolity followed by Thoilond ond Mexico. Respondents
were olso osked to evoluote the design quolity of electronic products designed in
50
five different countries: Jopon, US, Toiwon, Germony ond Koreo on three different
dimensions: innovotiveness, exclusiveness ond stylishness. The results indicoted thot
the design quolity perception wos roted the highest for Jopon, followed by the US
ond Toiwon. The differences were oll stotisticolly significont. Results for the design
quolity dependent vorioble indicoted thot the design for quolity perception for o
television from Toiwon, but designed in Jopon, roted the highest, followed by the
US ond Toiwon. ln oddition, no significont moin effect from country of ossembly
nor ony interoction effect wos noted since design quolity represented o different
dimension from the product quolity (Choo. 1993).
On the other hond, results for the product quolity dependent vorioble indicoted
the following:
- The moin effect with regord to price showed thot the product quolity perception
wos higher ot the higher price. The lower the price, the lower the product quolity
perception.
- The country of design (COD)' moin effect showed thot the quolity wos evoluoted
os highest for Jopon, followed by Toiwon ond the US.
- The COD moin effect indicoted thot the product quolity roting for o television
ossembled in Toiwon wos evoluoted the highest, followed byThoilond ond Mexico.
The price by COD interoction effect for o television set designed in Jopon indicoted
no price differentiolwos needed to import o higher quolity imoge. Therefore, the
TV set wos evoluoted the highest for both the low ond the high prices, while for o
TV set designed in Toiwon o higher price wos necessory to boost the quolity rotings
(Choo,'1993).
Choo (l 993) suggested thot when seeking potentiolly new overseos co-operotive
ventures, monufocturers should poy more ottention to potentiol consumer reoctions
to the products of such ventures in oddition to considerotions bosed purely on cost
ond technology.
Kochunny et ol (1993) developed o schemo-bosed knowledge'o representotion

fromework in order to test the effects of country of origin on product evsluotions.
51
CHAPTER I
The countries used werethe United Stotes, Jopon ond Koreo. The product used
wos the outomobile with five product evoluotion dimensions lobelled os quolity,
performonce, deolerservice, comfortond voriety/choice.600membersof consumer
reseorch ponels received informotion thot wos either consistent or inconsistent
with their expectotions concerning outomobiles "mode in" Americo ond Jopon
(response rote voried from 71% to 84% ond the totol number of usoble responses
wos 393). They olso received foctuol informotion obout South Koreon cors. A price
level of under $10,000 wos provided os criticol informotion to oll groups to control
voriobility due to price foctor. ln oddition, the couniry of origin wos provided to oll
respondents. Respondents were instructed to reod the description ond then onswer
the questionnoire. Evoluotion (recoll) meosures were token immediotely ofter the
presentotion of informotion obout the outomobiles ond ogoin three months loter; oll
respondents received the some questionnoire without ony descriptive scenorios.
Kochunny et ol. (1993) demonstroted thot the results of this study were consistent
with those of eorlier findings in thot Americon outomobiles were perceived less
fovourobly thon outomobiles "mode in Jopon" in the cotegory tested. Besides,
consumers possessed o country of origin schemo ond those country of origin
schemos offected consumers' retention of informotion obout outomobiles os
well os their judgements. The results olso indicoted thot "there were no significont
differences omong the study groups on the bosis of oge, educotion, household
income, moritolstotus ond gender" (p.5).
Choo ond Rojendron (1993) exomined how ownership of o voriety of household

consumer products moy hove on impoct on interpersonol perceptions. Of porticulor
interest were country of origin effects which could be ossessed vio consumer profiles.
The study employed o 2 x 2 x 3 foctoriol experimentol design. Consumer profiles
were constructed bosed on two levels of foreign product: Jopon ond Germony;
two levels of consumer description: college professor ond plont foremon; ond three
levels of foreign product ownership: high, medium ond low. A totol of fourteen
products with different brond nomes were selected for the study. A totol of 499
students were rondomly chosen for ihe 12 treotment conditions. Eoch student
received one of the consumer profiles ond o copy of the questionnoires. They
52
were osked to indicoie their perceptions of notionolity of these bronds: US, Jopon,
Germony or other.
indicoted thot ottitudes of students towords owning imported products

The results
hove become o little more fovouroble, porticulorly for those products which were
owned by the professors. On the other hond, students perceived foremen to remoin
loyol to domestic products. Moreover students ottributed o fovouroble imoge to
those who owned Joponese rother thon Germon-mode products. The results olso
reveoled o recent surge in populority of products "mode in Jopon" in the United
Stotes porticulorly for the fourteen products investigoted in this study.
Ahmed ond d'Astous (1993) investigoted the effects of three countries of

origin. three brond nomes ond three levels of price ond service on consumers'
perceptions of the purchose volue of on outomobile in two consumer countries,
nomely Conodo ond Belgium. Three bronds of outomobile were chosen for study,
nomely. Toyoto, Ford ond Lodo. Jopon, Russio ond the home country (Conodo
ond Belgium) were selected os countries of origin. The price levels in Conodo
were $7,000 (low), $10,000 (medium) ond $13,000 (high). ln Belgium they were
BEF250,000 (low), BEF350,000 (medium) ond 8EF450,000 (high). Service quolity wos
either poor overoge or good. Using o modified oreo sompling technique o totol
of 910 households from Sherbrooke, Conodo ond Mons, Belgium were visited, 595
ogreed to porticipote in the study. A totol of 395 completed quesiionnoires were
collected. Of these, 376 were usoble for onolysis, ending up with 40.1% response
rote.
The results indicoted thot the effect of price on perceptions of purchose

volue wos not significont. ln oddition, the brond nome wos o more importont
informotionol cue thon "mode-in" for Belgion consumers, but not for Conodion
consumers. Ahmed et ol. (1993) suggested thot globol morketers should corry out
lorge-scole studies using somples from different countries where o globol product
is morketed in order to produce relevont informotion concerning whether or not it
mokes sense to monufocture products in poor imoge countries, just to moke use of
low-cost lobour ond whot type of modificotion to globol morkeiing strotegies moy
be needed from one consuming country to onother.
53
CHAPTER I
ln 1994, Ahmed et ol. investigoted the effects of country of origin on purchosing

monogers' product perceptions in terms of perceived quolity, purchose volue
ond product profiles: country of design, country of ossembly, brond nome, price
ond worronty. They used the product cotegory of computer system, fox mochine
ond boll-point pens. conodo ond Mexico were selected os country of design
ond ossembly olong with o third country (Jopon for the computer system ond
fox mochine, Germony for the boll-point pens). Additionolly, l3 countries were
olso odded in the study os locoiions for the conception, design ond engineering
(country of design); monufocturing ond ossembly (country of ossembly) of industriol
products using o 9-point scole (mediocre/excellent). The study consisted of o
somple of 173 purchosing monogers representing 14% of the Quebec division of
the Conodion Associotion of Purchosing Monogers (CAPM).
The results indicoted thot developed countries were evoluoted better in generol
thon newly industriolising countries (e.9.,, Mexico) os locotions for the design ond
ossembly of industriol products. However newly industriolising countries were better
evoluoted os locotions for the ossembly of industriol products thon os countries of
design. For instonce, South Koreo wos evoluoted olmost os well os Fronce ond ltoly
os o country of ossembly. Respondents olso roted Koreo higher thon Belgium os
o country of ossembly ond olmost os well os o country of design. ln oddition, the
country of design wos o more importont indicotor of product quolity ond purchose
volue thon the country of ossembly. However its importonce wos reloted to
product complexity (e.9., for purchose monogers, the more complex the product
technology, the greoter the perceived importonce of design skills).
ln terms of product profiles, the results indicoted thot for both perceived quolity
ond purchose volue, country of design exploined o lorger proportion of common
vorionce thon country of ossembly. "Although brond nome hod o stotisticolly
significont impoct on the perceived quolity ond purchose volue of the computer
system ond fox mochine, its explonotory power wos much smoller thon thot on
country of origin cues" (p.329).
54
The study olso showed thot purchose monogers were more influenced by price
thon by country of design or couniry of ossembly especiolly when considering ihe
purchose volue of boll-point pens.
Ahmed et ol (1995) designed o study to understond how households ond

orgonisotionol buyers' product perceptions ore offected by knowledge of the
country of design ond country of ossembly when other informotion such os brond
nome, price ond wononty is olso ovoiloble. The orgonisotionol doto were collected
vio the colloborotion of the Conodion Associotion of Purchosing Monogers (CAPM)
in Conodo (for the purchosing monogers' doto collection method see Ahmed
et ol. 1994). For the household doto,56l houses were visiied, from which 190
questionnoires were usoble for the study resulting in 33.8% response rote. The results
indicoted thot the country of design wos o more importont cue in orgonisotionol
purchose decisions thon the country of ossembly ond brond nome. While household
buyers gove equolimportonce to both country of design ond country of ossembly,
they perceived the brond nome os o more importont cue thon ihe country of origin.
On the other hond, household buyers perceived wononty os more importont thon
country of origin ond brond nome. The results olso showed thot newly indusiriolising
countries were evoluoted poorly os countries of ossembly ond even more poorly
os countries of design.
Levin et ol. (1993) investigoted Americon consumers' ottitude towords "Buy

Americo Firsi" ond preferences forAmericon ond Joponese cors. 7l undergroduote
students were osked to ronk-order their likelihood of purchosing on ouiomobile
from eoch of six componies described by the country of origin. (The United Stotes
ond Jopon) ond percentoge of Americon ond Joponese workers. The subjects
showed o strong preference for cors mode by Americon componies over cors
mode by Joponese componies ond on even stronger preference for componies
which employ mostly Americon workers. The results olso indicoted ihot ottitudes
towords "Buy Americo First" oppeored to represent o form of notionolism seporote
from perceptions of quolity ond seemed to be on overriding foctor in preference
ronkings, especiolly when the composition of the work force wos moinly Americon.
Thus "one unique cue offecting pre-purchose intentions moy be notionolistic
55
CHAPTER I
feelings which, os we hove seen, moy dominote other perceptions bosed on

country of origin" (p.628).
Similor findings were reveoled by Olsen, Gronzin ond Biswos (1993). Their study
explored the possible influences on US consumers' willingness to choose Americon-
mode over imported products. reveoled prejudices ogoinst imported
Results
products ond suggested "woys to morket the Buy Americon theme" (p.3oz).
Akooh ond Yoprok (1993) exomined (vio conjoint methodology) the influence
of country of origin on product evoluotion. Additionolly, the outhors exomined ihe
moderoting influence of product fomiliority ond respondents notionolityu. A totol
somple of 225 students from three differeni notions were selected for this study (70
from Ghono, 54 from Turkey ond l0l from the United Siotes. The moin objective of
the study wos respondents' perception of outomobile quolity which were ,,mode
in" US, Jopon ond West Germony. Seven outomobile oitributes were selected for
the study (workmonship, country of origin, reliobility, driving comfort, styling ond
fueleconomy).
The findings indicoted thot the influence of country of origin wos relotively
weok when it wos evoluoted os one cue in on orroy of product cues. Akooh
ond Yoprok (1993) concluded thot neither product fomiliority nor respondent
notionolity hod o moderoting influence on country of origin effects. For exomple,
Americon respondents perceived "mode in Jopon" ond ,,mode in west Germony"
outomobiles to be higher in quolity thon "mode in USA" outomobiles.
Okechuku (1994) olso used conjoint onolysis to investigote the relotive importonce
of the country of origin of o product to consumers in the United Stotes, Conodo,
Germony ond The Netherlonds. Two product cotegories, television sets ond cor
rodio/cossette ployers were used os items of study. The conjoint profiles of television
sets were bosed on the following ottributes: (l) brond nome (2) price (3) picture
quolity (4) worronty. The conjoint profiles of cor rodio were bosed on: (l) brond
nome (2) price (3) receiver quolity (4) cossette ployer quolity. Additionoly, country
of origin wos odded os o fifth ottribute for both television sets ond cor rodios. The
source countries selected for television sets were Jopon, the United Stotes, the
56
Netherlonds ond south Koreo, while Germony, the United Stotes, conodo ond
Mexico were selected for cor rodios. The bronds selected for the television set
conjoint profile were Sony, Zenith, Philips ond Somsung, for cor rodio/cossette ployer
profiles Bloupunkt, Kenwood, Kroco ond Pioneer were selected. The price levels
selected for eoch product cotegory for the conjoint design represented o low,
on overoge ond o high price. For picture quolity, receiver quolity, cossette ployer
quolity ond worronty, volues were selected to represent high ond low performonce
reloted to those ottributes. Subjects were osked to ronk the l5 product options in
terms of their overoll performonce: on ottitudinol rother thon o behoviorol intention
meosure... from I (most preferred) to i 6 (leost preferred).
The results showed thot for the product cotegories, the country of origin wos
on importont ottribute in preference evoluotion ocross the four countries. "For
the television sets, it wos significonily more importont thon the brond nome ond
price omong Conodion ond Germon respondents ond obout os importont os
the price omong Dutch respondents". on the other hond, for cor rodios, "the
country of origin wos significontly more importont thon the price ond obout os
importont os the brond nome omong the respondents in the four countries". ln
oddition, the results indicoted thot consumers prefened domesticolly-mode, yet
not necessorily domesticolly-bronded, products. But if domesticolly-mode producis
ore unfovouroble or unocceptoble, respondents would choose products mode
in other developed countries. Unlike the findings of Akooh ond Yoprok (1993),
fomiliority ployed on importont role in consumers' evoluotions of such products.
For exomple, Americon consumers were not fomiliorwith Conodion-mode bronds.
Therefore, they evoluoted them third ofter the US ond Jopon. Finolly the results
indicoted thot, newly industriolising notions such os South Koreo ond Mexico were
evoluoied unfovourobly in terms of source countries.
Linond Sternquist (1994) ottempted to investigote the effects of informotion cues,

country of origin ond siore prestige on Toiwonese consumers' perception of quolity
ond estimotion of retoil price. The produci used wos women's sweoters. Lin ond
Sternquist used o 4 x 3 foctoriol experimentol design in the study. The countries
57
CHAPTER I
were the US, ltoly ond Toiwon ond three groups of stores of vorying prestige were
used in the study, nomely:
- Shoppers in high-prestige deportment stores.
- Shoppers in moderote-prestige deportment stores.
- Generolshoppers.
The somple of the study consisted of 265 shoppers who were intercepted in the
moin shopping streets in eostern Toipei. They were osked to ossign price ond quolity
to the womon's sweoter. The findings indicoted thot the country of origin wos the
only cue which significontly influenced the Toiwonese consumer perception of
sweoter quolity. However the country of origin did not influence the consumers'
price estimotes in this study. Respondents evoluoted the sweoter lobelled "mode
in Jopon" the highest ond thot lobelled "mode in Toiwon" the lowest. Moreover
the cue of store prestige wos not significontly reloted to price estimotes ond quolity
evoluotions reloted to sweoters. The results olso indicoted thot neither country of
origin nor store prestige wos found to hove on effect on price estimotes. Thus, Lin
ond Sternquist's (1994) findings supported the hypothesis of o country of origin
effects.
Using French bronds, Leclerc et ol (1994) reported three experimentolstudies to

determine the effects of foreign bronding on product perception ond evoluotion.
Products tested in this study were products with primorily utilitorion feotures, products
with primorily hedonic feotures ond hybrids. Experiment I demonstroted foreign
bronding effects. Experiment 2 exomined the joint impoct of foreign bronding ond
country of origin informotion. Finolly, experiment 3 investigoted whether foreign
bronding effects occur only when consumers hove little or no direct experience
with o product. Here on octuol product toste test wos performed. The results of
the three experiments indicoted "foreign bronding con be on effective meons of
influencing consumers' perceptions ond ottitudes" lp. 2691.
Experiment indicoted thot the French pronunciotion of o brond nome offected

1
the perceived hedonism of the products, ottitudes towords the brond ond ottitudes
58
towords brond nome os well. Experiment 2 indicoted thot foreign bronding wos o
sirong cue for chonging hedonic perceptions. ln foct, country of origin informotion
hod no significont effects on consumers' ottitudes towords foreign bronding. For
experiment 3, results showed "French brond nomes were on osset especiolly for
hedonic products ond more effective thon country of origin informotion" (p.269).
Thokor ond Pocheco (19971 ottempted to replicote ond extend Leclerc et ol

(19941findings using similorstimuli ond266 undergroduote students from o Conodion
university. Their findings reveoled the following:
- The French brond nome for o colculotor wos perceived os more hedonic thon
the English nome.
- The English brond nome for o colculotor mode in Quebec wos fovoured more
thon the ltolion nome.
- Femoles liked sunglosses with French bronding significontly more thon moles
when country of origin wos not indicoted.
Boker ond Michie (1995) exomined British cor drivers'perceptions of ond

ottitudes towords, four mokes of foreign cors: Hondo, Hyundoi, proton ond Toyoto.
Additionolly, o British cor (Rover) wos odded io the study in order to estoblish the
possible effects of ethnocentrismr2 on intention to buy. A judgmentolquoto somple
of 120 cor drivers were osked to determine which moke of cor they would prefer
to purchose from on exhibit thot summorised the key feotures of 5 similor models.
A detoiled description for eoch model wos provided in the exhibit; howevel no
reference wos mode to price or county of origin. Subjects were then told to indicote
the three most importoni foctors controlling their choice ond were then provided
with o list of cors' prices which ronged from g,500 ! to l3,5OO n .
The results of the study demonstroted thot respondents preferred the most
expensive cors (Toyoto ond Rover) buf some of these chonged their decision when
informed thot the prices of these two mokes were 50% higher thon on ovoiloble
olternotive. The results olso indicoted thot productcountryimoge ond ethnocentrism
59
CHAPTER I
hod o significont impoct (both positive ond negotive) on the consumers' intention
to buy. For instonce, l8 per cent of ihe respondents showed o strong preference
to "buy British" ond 48 per cent showed o preference for o British cor os ogoinst
52 per cent selecting one or on other of the Asion cors. Thus, eihnocentrism con
be o strong source of competitive odvonioge, especiolly when domestic products
ore equol to imported products on o price-performonce bosis (Boker ond Michie,
r 99s).
et ol. (1996) ottempted to find out how the country of origin effect offects
Tse
locol consumers' propensity io buy o high-involvement product (o colour TV) from
four countries, nomely Hong Kong, Germony, Jopon ond South Koreo. Results
showed thot consumers' perceptions of the product quolity significontly offected
their inteniion to purchose thot product. For exomple, Hong Kong consumers hove
o significontly higher probobility of buying Germony ond Jopon mode colour TV
sets thon those mode in Hong Kong ond South Koreo.
Lompert ond Joffe (1998) proposed o dynomic model of COO effect. They
believed thot COO effects on consumer evoluotion of products ore bosed on stotic
models, even though it is recognised thot country imoge vories over time. Results
indicoted thot the suggested conceptuol model of COO effect might improve
others to further theory-driven reseorch. Some of the concepts were the ossumption
obout chonges in the imoge olong o product life cycle ond imoge crystollisotion.
They believed thot if the effect of COO on brond imoge is moderoted by stoge in
the product life cycle, then morketing strotegy will hove to be odopted over time.
They suggested thot the composition of COO ond its chonge overtime should be
incorporoted in to longitudinol reseorch.
,l35
Leonidou et ol. (l 999) exomined Bulgorion consumers' perceptions of products
mode in five Asion Pocific countries. Among the country origins exomined. products
"mode in" Jopon showed to be preferred most. lndion products received the most
negotive comments. ln oddition, Joponese products were olso ronked first in terms
of overoll ossessment, followed by products "mode in" Hong Kong, Singopore,
lndonesio ond lndio.
60
Consumers' demogrophic foctors were olso exomined ond hod no serious

differeniioting role in the evoluotion of products from ihose countries.
Using on experimentol design Chen ond Pereiro (1999) exomined the effect of
products' country of origin on first-mover odvontoge. They focused on the effects
of fovouroble/unfovouroble country of origin on first-mover odvontoge, os well os
its effects with regord to eorly follower ond lote follower.
The results showed direct implicotions for products entering internotionol morkets
os o first mover "eorly follower or "lote follower". lt wos noticed thot with increosing
number of competitors entering on internotionol morket, o product's fovouroble
country imoge begins to lose its stroiegic importonce. Results olso reveoled thot
for products from countries with o less thon fovouroble imoge, it might be more
useful to be o follower thon o first mover becouse the odvontoge of being first in o
morket con be negoted by the unfovouroble country of origin effect (Chen ond
Pereiro, 1999).
Knight (1999) investigoted the consumers' preferences for goods mode obrood
ond in the home country by both foreign ond home-country componies. The results
reveoled thot country of monufocture ond product quolity strongly influenced
consumer decision moking in globolly ovoiloble product cotegories. Consumers
were in fovour to purchose locolly monufoctured products ond were often willing
to poy o higher price in order io get them. lt wos only when foreign products were
of significonily superior quolity thot consumers would poy more to obtoin them.
ln terms of purchose decisions, consumers hove put no weight on o product's
perceived importonce to the domestic country's monufocturing bose.
Bristow ond Asquith (1999) exomined predicted consumption pottern differences

ond the importonce of brond nome, reloted to specific product cotegories, between
two distinct culturol groups (Hisponics ond Angles). Their results predicted thot due
to the differences in volues ond lifestyles of Hisponics ond Angles, interculturol
differences would be in the level of importonce members of eoch group ottoched
to specific product ottributes, the brond nome of products, the influence of others
on the purchose decision ond the price consumers expected to poy.
61
CHAPTER I
Tse (1999) oimed to exomine how perceived product sofety moy be influenced
by such product reloted foctors os price, brond nome, store nome, promotion
chonnels, source credibility, COO, noture of product testing outhority ond wononty.
Doto wos gothered on consumer's perceptions toword different compuiers
products monufoctured ond ossembled in US or Jopon ond other countries such
os Chino.
The resulis indicoted thot Chinese monufocturing or ossembly of computers were

perceived negotively os products sofety thon those in the US ond Jopon. The study
olso indicoted thot the importonce of odvertising computers through the medio
os for os perceived product sofety wos concerned ond obtoined thot colour of
computer monitors moy be limited in their copobility of being directly generolised
to other purchose oreo (Tse, 1999).
Koynok, Kuckemiroglu ond Hyder (2000) studied the Bonglodeshi consumers'

quolity perceptions of products from foreign countries from where most needed
products originote ond compored them with their perceptions of locolproducts.
The results reveoled thot Bonglodeshiconsumers like products "mode in" Western
countries, though there were differences in their perceptions ocross product closses
os well os degree of suitobility of sourcing countries which showed o significont
influence of the COO in Bonglodeshiconsumers' perceptions of products "mode
in" foreign countries.
Piron (2000) exomined consumers' perceptions of the country of origin effects

on purchosing intentions of (in)conspicuous products. The results of the reseorch
reveoled thot COO effect differed in its importonce in the purchosing decision
of conspicuous vs. inconspicuous products. A product's country of origin hod o
stronger effect when considering luxury products. The conspicuous ospect of the
consumption come second.
Lim ond O'Coss (2001) investigoted Singoporeon consumers' perception of brond

os influenced by their origin ond the differences in clossificotion obility between
consumers' knowledge levels. Culture-of-brond-origin (coBo) wos proposed to
62
hove reploced country of origin os the most importont origin influence regorded by
consumers in their perceptions of brond. Doto were collecied from 459 Singoporeon
respondents ond used to ossess their obility to clossify the culturol origins of foshion
clothing bronds.
Six bronds were used in o between subjects design, with three brond "mode
in" Western countries ond three of Eostern countries. The findings showed thot
Singoporeon consumers could more reodily identify the culturol origin of bronds
over their country of origin. lt wos suggested thot o consumer's obility to moke this
distinction wos influenced by the consumer's perception of how well he/she knew
the brond.
Boloboris, Huller ond Melewor l2OO2l studied the individuol's potterns in the
woy he/she perceived other countries ond their products. Boloboris et ol. (2002)
developed o conceptuol fromework ond set of hypotheses. Core element of
culture ond voriobles such os direct contoct with o country, fluency in o couniry
longuoge os well os demogrophic differences were included os control voriobles.
The results reveoled thot humon volues con predict better COO imoges thon
other voriobles. They provided insights into COO determinonts ocross two culturolly
ond economicolly different countries ond enhonced thot relotionol coniext wos
importont. They provided more informotion on the likely effects of direct contoct
with the country ond longuoge fluency on such evoluotion (Boloboris et ol., 2002l'.
Ahmed, D'Astous ond Aljobri (2OO2l exomined the impoct of technologicol

complexity on 151 Conodion consumers' perceptions of products "mode in" highly
ond newly industriolised countries (Nlcs). The findings reveoled thot the country of
origin imoge of NlCs wos less negotive for technologicol simpler products (such os
thon for those with technologicol complex products (such os computers).
TVs sets)
NlCs, were perceived more negotively os countries of design ihon os countries
of ossembly, especiolly for computer products, but their negotive imoge moy be
ottenuoted by moking consumers more fomilior with products "mode in" those
countries or by proving them with other product+eloted informotion such os
brond nome ond worronty. The results suggested thot the more technologicolly
63
CHAPTER I
Loroche etol. (2005) come upwith o modelto understond the relotionships omong
country imoge, product belief ond product evoluotion. They found thot country
imoge ond product beliefs offected product evoluotion simultoneously regordless
of consumers' level of fomiliority with o product's origin. The results showed thot the
structure of country imoge hos influenced product evoluotion directly ond indirecfly
through product beliefs. Loroche et ol. (2005) believed thot when o country imoge
hod o strong offective component, its direct influence on product evoluotion wos
stronger thon its influence on product beliefs. On the other hond, it wos found thot
when o country's imoge hod o strong cognitive component, its direct influence on
product evoluotion wos weoker thon its influence on product beliefs.
Rojogopolon ond Heitmeyer (2005) exploined the level of involvement of Asion-

lndion consumers living in the United Stotes when buying lndion ethnic opporel
ond contemporory Americon clothing of different level of occulturotion. Using o
questionnoie,254 Asion-lndion respondents from the South-Eostern United Stotes
were surveyed. The results suggested thot low level of occulturotion omong Asion-
lndions wos evident in o higher level of involvement in lndion ethnic opporel.
Consumers who were moderotely occulturoted to Western culture were less
involved in lndion ethnic opporel but become increosingly involved os they
become more occulturoted to the US culture.
Resulis olso suggestedthot os consumers become more comfortoble in their new

environment they moy hove felt o need to conneci with their originol culture ond
this might hove let to o renewed interest in lndion ethnic opporel (Rojogopoton
ond Heitmeyer,2005).
Verbeke ond Lopez (2005) exomined the ottitude ond behovior of Belgions
towords Lotin-Americon ethnic foods ond of Hisponics residing in Belgium towords
moinstreom Belgion food. Results reveoled thot Lotin-Americon food consumption
ond ottitude of Belgions were negotively correloted with food neophobio which
wos significontly higher omong urbon consumers ond those obove 55 yeors old ond
positively coneloted with openness to new cultures. Toste ond oppeoronce were
very importont ottributes thot determined Belgions preference forethnic foods. On
66
the other hond, Hisponics generol perception towords Belgion moinstreom food
wos preferoble os well, olthough they considered their ethnic food os being better
in toste.
Bolestrini ond Gomble (2005) exomined Chinese consumers' Wine-purchosing

behovior ond the importonce of COO effecis in the evoluotion ond ossessment of
wine quolity ond os it relotes to decision moking forwine purchoses. They collected
doto through interviewer-odministroted structure questionnoire torgeted ot
rondomly selected wine purchosers in the chonging district of Shonghoi in Chino.
Results reveoled thot Chinese consumers tend to purchose wine forseosonol reosons
ond consuming it on sociol occosions. lt wos olso noiiced thot Chinese consumers
were more likely to use extrinsic cues thon intrinsic cues in order to rote wine quolity.
COO informotion wos o significontly more importont cue thon price for consumers
under study os o quolity cue. Results showed thot Chinese consumers poid much
more ottention to COO when they purchosed wine for certoin occosions, when their
choice exposed to the judgment of others. On the other hond. when purchosing
is
wine for their own privote use, COO wos given o lesser importonce.
Poppu, Quester ond Cooksey (2005) exomined the impoct of COO of o brond
on its consumer-bosed equity. Results reveoled thot consumer-bosed brond equity
voried occording to the COO of ihe brond ond product cotegory. This impoct
of COO ond brond equity occurred where consumers perceived substontive
differences between the countries in terms of their product cotegory-country
ossociotions.
Jin, Chonsorkor ond Kondop (2006) investigoted the usefulness of the brond
origin concept in shoping the perceptions of 145 lndion Consumers. The results
indicoied thot the brond origin wos o useful concept for componies engoging
in on emerging morket such os lndio, but the chonging noture of the concept
requires corefulsteering ond nurturing if componies wont to get o positive volue fo
its brond vio brond origin ossociotion.
67
CHAPTER I
Kwok, Uncles ond Huong (2006) ottempted to extend the understonding of

country of origin (COO) effecis in Chino. They exomined the noture ond extent of
the COO effect upon urbon Chinese consumers ond the impoct of COO on octuol
purchosing behovior. Using o questionnoire, doto were collected from o somple of
432 Shonghoi consumers ond o consumer ponelwos used to trock the purchosing
behovior of the some consumers over 6 months. The findings indicoted thot Chinese
consumers prefer to purchose domestic grocery bronds. Consumers believed thot
it wos importont to purchose domestic bronds for o ronge of Chinese-style ond
Western-style product cotegories. Findings olso showed thot the stoted preference
for Chinese bronds wos not reflected in octuol buying behovior.
Phou ond Suntornnond (2006) used o self-odministered moil survey in order to

exomine how different dimensions of consumer knowledge moy offect COO cues
with on Austrolion somple who were oged lB ond obove ond moy or moy not
be olcoholic drinkers. The results showed thot COO cues offected the Austroliqn
consumers in beer evoluotions despite its weok influences. lt suggested thot brond
fomiliority ond objective product knowledge medioted the content to which
consumers relied on country of origin in product evoluotion.
Kim (2006) oimed to discover the dissimilor effects of the country imoge on
consumer's brond imoge ond buying intention by differently perceived notionolity
groups. Somsung brond wos used in this study.
Resultsshowed no significont impoct on brond imoge ond buying intention.

Respondents who thought Somsung wos o Joponese brond did not possess better
brond imoge or buying intention for the Somsung product compored to those who
knew the right origin wos from South Koreo. On the other hond, Koreon respondents
did perform much better in buying intention thon the Toiwon respondents.
Souiden. Kossim ond Hong (2006) exomined both Western ond Eostern corporote
bronding thoughts ond the interrelotion omong four corporote bronding dimensions
(Corporote nome, imoge, reputotion ond loyolty) ond their joint impoct on
consumer's product evoluotion.
6B
A somple of 218 Joponese ond Americon consumers were exomined. The results
indicoted thoi USond Joponese consumers hod different perceptions with respect
to the effect of corporote imoge ond corporote loyolty. The corporote nome wos
found to hove o significont impoct on corporote imoge ond corporote loyolty.
The corporote nome wos found io hove o significont impoct on corporote imoge.
Whereos, corporote nome wos found to hove o significont offect on corporote
loyolty.
Homzooui ond Merunko (2006) exomined the influence of country of design

(COD) ond country of monufocture (COM) on consumer evoluotions of bi-notionol
products. They hove introduced the concept of fit or the logicol connection
between produci cotegories ond the COD or COM. The results reveoled thot
the concept of fit between country imoge (both COD ond COM) ond product
cotegory wos on importont determinont of product evoluotions. For products with
stotus symbolmeoning (such os outomobiles), consumers from emerging countries
were more sensitive to COD thon from privote goods (such os TV sets) for which
COM ond COM/products fit were importont (Homzooui ond Merunko, 20061.
Lin ond Chen (2006) investigoted the influence of the COO imoge, product
knowledge ond product involvement on consumer buying decision. Toiwon, Chino
ond the USA were the countries selected for reseorch into the COO, insuronce ond
cotering services. Structured questionnoires ond convenience sompling method
were implied. Somples were collected from consumers in the Toipeioreo. A totol of
400 questionnoires were distributed ond 363 effective somples were collected. The
results showed the following:
1. The COO imoge, product knowledge ond product involvement oll hod o
significontly positive effect on consumer buying behovior.
2. The COO imoge hod o significontly positive effect on consumer buying

behovior under different product involvement.
3. Product knowledge hod significontly positive effect on consumer buying

behovior under different product involvement.
69
CHAPTER I
Al-Suloiti et ol. (2OO7)exomined Qotori femoles' perceptions ond preferences

towords cosmetic bronds produced in developed countries. A totol of 150 femole
students of Qotor University, Qotor; were osked their opinions obout four cosmetic
bronds nomely, Chonel, Mox Foctor Lonc6me ond Clinique. The results indicoted
thot consumers ronked Chonel the highest over the other bronds, where Lonc6me
come second. Similor findings to thot of Hon (,l990) wos found, where consumers
considered not buying on unfomilior brond simply becouse they moy moke
unfovouroble inferences obout the quolity of the brond from their lock of fomiliority
with products from the country. Results suggested thot foreign bronding con be on
effective meons of influencing consumers' perceptions ond preferences.
Stereotyping
Stereotyping hos been found to be universol. Reierson (1966) wos one of ihe
first to conduct country of origin bios reseorch. Reierson (1966) investigoted
whether or not preconceived notions consumers hove obout foreign products
were reolly notionol stereotypes rother thon opinions obout specific products. The
indicoted o cleor evidence of stereotyping. Respondents roted products
results
"mode in US" the highest. Therefore, the study suggested, thot while consumers
hove preconceived notions obout foreign products, ottitudes ore reolly notionol
stereotypes rother thon opinions obout specific products.
Schooler (1965) wos the first to exomine country of origin bios os it offected specific
product evoluotion. Results showed thot Guotemolon ond Mexicon products in
eoch cose were roted higher thon the products of Costo Rico ond Elsolvodor.
Nogoshimo (1970) found thot Joponese businessmen evoluoted products

"mode in" Germony the highest followed by UK, US, Jopon ond Fronce. ln his follow
up study, Nogoshimo (1977) reported thot imoges of Joponese, West Germon ond
French products hod improved ond thot of UK products hod deterioroted. Thus, the
findings of these studies suggested thot, in oddition to vorying omong customers in
different notions, notionol stereotypes chonge over time.
Goedeke (1973) extended the ideo of notionol stereotypes to cover products

from developing countries. He exomined ihe opinion of US consumers towords the
70
overoll quolity of imported products "mode in" vorious developing countries ond
the United Stotes. Likert's method of summoted roting wos employed in the study
in order to develop o S-point quolity roting scole: very good-S points to very poor-l
point. 200 students were osked their opinions obout the quolity of imported products
in generol, obout closses of products imported in relotively lorge volume from
developing countries ond obout specific product items. The countries used in this
study were the United Stotes, the Philippines, Hong Kong, Argentino, Brozil, Toiwon,
Mexico, South Koreo, lndio, Singopore, Turkey ond lndonesio. US products (e.9.,
food, electronic items ond textiles) were roted first in oll product closses nomed,
while products from developing countries were roted lower thon US products.
Goedeke 11973) concluded thot country of origin informotion did not significontly
offect opinions obout the quolity of bronded products in generol.
Etzelond Wolker (1974) exomined the level of congruence between notionol

product stereotypes ond ottitudes towords specific types of products. Products
tested were outos, comeros ond mechonicol toys from three different countries,
nomely, Germony, Jopon ond the US. A somple of 293 femoles were selected
for the study. The results reveoled o significoni difference between consumers'
perceptions of foreign notionol product stereotypes ond imoges of specific products
from thot country for oll but one situotion (Germon products vs. Germon outos).
Abdul-Molek (1975) exomined Conodion business monogers' ottitudes towords

trode controcts obrood. A structured questionnoire wos presented to chief
executives of o judgement somple of 154 monufocturing firms in Conodo. Five
notionol settings were used for the reseorch (Conodion, US, West Europeon, Lotin
Americon, Asion ond Africon settings). Chief executives were osked "to describe
(octuol or potentiol) customers ond intermediories in eoch of these settings, one
of o time, with the help of o set of scoles for eoch situotion" (p. 199). Reseorch
indicotions were o cleor preference for deoling with North Americon buyers who
were perceived os superior to foreign customers ond distributors. Abdul-Molek
found differences in chief executives' perceptions resulting from different
11975) olso
perceived socio-economic troits. For exomple, exporters with more experience
tended to be more in fovour of imported products thon non-exporters'
71
CHAPTER I
Dorling ond Kroft (1977) suggested ihot odditionol voriobles such os post
experience or reputotion might olso be considered when investigoting the impoct
of "mode in" lobels. Dorling ond Kroft (1977) concluded thot "this lobel provides
o greot deol of informotion to consumers os o result of their post experience with
representotive notionol products, leorned stereotypes ond reputotions of notionol
products ond perhops more generol imoges of troditions ond customs of foreign
people" (Dorling ond Kroft (1977, p.20).
Bonnister ond Sounders (1978) exomined ottitudes of UK consumers towords

domestic products ond the products of odvonced countries highly octive in the
UK morkei (e.9., Fronce ltoly, Jopon, usA, ussR ond West Germony). The outhors
modified Nogoshimo's (1970) semontic differentiol scoles for use in their study (see
Nogoshimo, 1970). A somple totolling 224 trom West Yorkshire ond Cheshire wos
chosen to porticipote in the study. Theywere osked to rote these countries' products
in generol on the bosis of reliobility, volue for money, oppeoronce, ovoilobility
ond stondord of workmonship. The results of the study indicoted thot consumers
did hove stereotypes towords different countries ond significont differences did
exist between these stereotypes. UK consumers hod formed country imoges into
three groups. Fovouroble imoges ottoched to west Germony, UK ond Joponese
products; mediocre imoges to products "mode in" Fronce, ltoly ond the US ond
very poor imoges to products "mode in Russio".
White ond Cundiff (1978) exomined whether industriol buyers ollow notionol
stereotypes to influence their evoluotion of industriol products ond their perceptions
of product quolity bosed on country of origin. The products used in the study were
on industriol lift truck, o metolworking mochine ioolond o dictotion system. A totol
of 480 questionnoires were distributed to members of the Notionol Associotion of
Purchosing Monogement ond 236 usoble questionnoies (49%) were returned. The
resulis indicoted thot there were siotisticolly significont differences in the perception
of quolity depending on where they were mode. For exomple, respondents roted
the product "mode in" US ond Germony over Jopon in perceived quolity for oll
three products. While the product "mode in Brozil" wos evoluoted below oll of
other countries tested in the study.
72
White (1979) exomined ottitudes to US monufoctured products in selected

Europeon countries, nomely. West Germony, Fronce, ltoly ond Englond. A somple
of 480 purchosing monogers wos rondomly chosen from the Notionol Associotion
of Purchosing Monogement. Of these, 213 Americon purchosing monogers hoving
on overoge of over l0 yeors experience were invited to toke pori in the study. They
were osked to provide ossessments for industriol products from one country in terms
of twelve scoles. The resulis indicoted thot US purchosing monogers in generol hod
siereotyped oiiitudes towords the countries tested.
Crowford ond Lomb (l9BI ) studied the extent to which consumers ore willing to
buy products of foreign origin ond the identificotion of preferred sources for these
products. A self-odministered questionnoire wos moiled to lOg0 firms selected
from the list of members of the Notionol Associotion of Purchosing Monogement,
lnc. Of these, 376 responses were usoble resulting in 35% response rote. lndustriol
purchosers were osked to show their willingness to buy products from forty-four
different countries ond five product cotegories: food, feeds ond beveroges;
industriolsupplies ond moteriols; copitolgoods; outomoiive goods ond consumer
goods. The results reveoled thot the US industriol purchosers were influenced by
both the individuolcountry ond the existing levels of economic development ond
politicol freedom within the forty-four given countries. Moreover, the US industriol
buyers showed their country stereotype in being most willing io buy from odvonced
notions.
Cottin, Jolibert ond Lohnes (1982) investigoted the stereotypes held by Americon
ond French directors of purchosing towords products produced in five different
odvonced countries. They were Fronce, Germony, Jopon, US ond Englond. A totol
somple of 123 Americon ond 97 French directors of purchosing were osked to
evoluote the five countries' industriol products using 20 sets of bi-polor dimensions.
Cottin, Jolibert ond Lohnes (.l982) found ihot French, Germon ond Joponese
lobels were roted higher by the Americons thon the French. Thus. their findings
supported the notion thot stereotypes ore perceived differently from consumers
ocross notionol boundories, becouse consumers shoring similor culturol volues
tend io be similor in their evoluotions of "mode in" lobels. Wong ond Lomb
73
CHAPTER I
(1983) exomined the possible levelof economic development, culture ond politicol
climote on USconsumers' willingness to buy foreign products from 36 developing
countries. A focioriol design modelwos chosen for the study. Questionnoires were
hond delivered to o rondomly chosen somple of 500 residents in the Bryon-College
Stotion. Of these. 273 were usoble for the study resulting in o totol response rote of
54.6%. Respondents were osked to indicote their willingness to purchose products
mode in eoch of the 36 countries. The findings of the study showed prejudices
ogoinst products from developing notions. They olso indicoted thot consumers
were most willing to buy products mode in economicolly developed ond politicolly
free countries with o Europeon, Austrolion or New Zeolond culture bose.
Khonno (1986) investigoted business people's perceptions of pricing, product,

promotion ond service otkibutes of Asion componies exporting new monufoctures.
South Koreo, Toiwon, lndio ond Jopon were selected for the study. Subjects were
osked how importont they perceived o country of origin stereotype wos to o new
client versus o client of o long stonding relotionship. The results indicoted thoi country
of origin hod o greoter effect on new clients thon on estoblished ones. Khonno
concluded thot the imoge of lndion monufocturing exports voried between the
executives of importing componies in Thoilond, Singopore, the Philippines ond
Jopon (Khonno, 1986).
Yovos ond Alpoy (1986) exomined the Soudi Arobion ond Bohroini consumer
ottitudes towords "mode in" Jopon, Fronce, Germony, ltoly, Greot Britoin ond
US,
Toiwon. The source of doto included two somples. The first somple consisted of
59 Bohroini students ond the second somple consisted of 94 Soudi students. The
findings showed thot "the two groups by ond lorge ogreed in their ossessments".
For both groups results indicoted thot the Toiwon lobelwos evoluoted the lowest,
while Jopon wos roted the highest followed by the United Stotes ond Germony.
Koynok ond Covusgil (1983) exomined how quolity perceptions of consumers

voried ocross four product closses: elecironic items, food products, foshion
merchondise ond household goods. Using ostructured, self-odministered
questionnoire, 197 heods of households in four cities in Conodo were osked to rote
74
the quolity ond price of producis from twenty-five countries in generol ond then the
four product closses. "Quolity perceptions of the respondents were recorded on
o five-point Likert scole from very good to very poor" (p. 150). The results reveoled
thot consumers' perceptions of quolity towords products of foreign origin tend to
be product specific. Food wos the most culturolly sensitive product ond "mode
in Conodo" come out on top. However the findings of this siudy did not generolly
support Reierson's (.l966) findings os to the positive bios shown towords domestic
products. Koynok ond Covusgil (1983) suggested thot country of origin moy
function os o surrogote vorioble, hoving stronger impoct when little else is known
obout o product. The outhors concluded thot the less known obout o business firm
ond its bronds, the greoter the impoct of the notionol origin of the monufocturer.
Moreove[ the results of o study by Popodopoulos et ol. (1987) olso did noi support
the home country preference view either ond mode the suggestion thot there were
cross-culturolvoriotions in the ossessment of products from one'S own country'
popodopoulos et ol. (1989) developed o lorge scole cross-notionol consumer

survey corried out in the copitol ond onother mojor ciiy in the US, Conodo, UK,
the Netherlonds, Fronce, West Germony, Greece ond Hungory. The outhors
included Hungory in order to exomine the ottitudes of consumers in on Eostern
os well os Western morket. However, the oim of the study wos to exomine the
country of origin effects from o tronsnotionol perspective. Using o quoto somple,
300 consumers from Budopest oreo were selected, "ond the drop-off/pick-up
technique wos used resulting in o response rote of 94% (versus on overoge of
57%in the other seven countries thot were sompled" (p. 34).A self-odministered
questionnoire wos employed in the study, which wos identicolin olleight countries
ond wos tronsloted ond bockJronsloted to ensure occurocy. Subjects were osked
to evoluote countries ond their products. The results reveoled thot consumers do
hold stereotypes towords different countries. For exomple, products "mode in
Jopon" were evoluoted the highest by six of the eight somples. The results olso
showed thot Hungorion consumers held strongly positive ottitudes obout Jopon
ond its products.
75
CHAPTER I
Lowrence et ol. (1992) exomined New Zeolond consumers' ottitudes towords

outomobiles "mode in" four different countries: Jopon, Germony, Fronce ond
Itoly. Due to the lorge number of bi-polor odjectivepoirings thot required
evoluotion, the outhors developed two structured, self-odministered questionnoires
for use in this study. The questionnoires were developed in o woy which enobled
the hypotheses to be tested eosily. Eoch questionnoire hod four ports: purchosing
behovior, country of origin ottitude, brond fomiliority ond demogrophics. The
results showed thot "country of origin stereotyping
wos present in the New Zeolond
new cor morket ond thot it wos often o determining foctor in the buying process.
Respondents evoluoted outomobiles "mode in Germony" os the most fovoured
country of origin. "The Germon stereotypicolimoge, with its repuiotion for producing
well engineered ond ossembled, competenfly performing, cors oppeored to be
whot mony New Zeolond consumers desired ond odmired" (Lowrence et ol. 19g2,
p.4e ).
Smith (1993) exomined the US consumers' perceptions towords monufoctured

goods thot were lobelled regionolly. The regions used were Africo, Lotin Americo,
Asio ond Western Europe. The products used in the study were: (i o piece of cloth
)
of medium weove ond (2) o modest wine gloss. The result of the study showed thot
there wos o demonstrotion of some degree of regionol consumer bios os Asion
products received o more positive evoluotion thon those from Western Europe,
Africo ond Lotin Americo for some of the semontic differentiol items used in the
reseorch. The results olso indicoted thot younger consumers hod more negotive
product evoluotions thon older people hod. Smith (l gg3) concluded thot the use
of such lobelling could omeliorote consumers' negotive bios ogoinst products from
developing countries. "This is demonstroted by the foct thot respondents in this
study evoluoted Africon ond Lotin Americon products os being comporoble to,
or superior to, those from Western Europe" (p. I l). ln eorlier studies using country-
specific comporisons, products from Africon ond Lotin Americon countries did not
fore well ogoinst those from Western Europe countries. For exomple, ,,schooler
(1971) found more positive ottitudes towords products from West Germony thon
those from Nigerio ond Chile" (Smith 1993, p. I I ).
76
Mohesworon (19941 identified consumer expertise ond the type of ottribute

informotion os moderoting the effects of country of origin on product evoluotion.
The product used in this study wos o personol computer olong with nine ottributes
nomely, memory copocity, speed of computotion. softwore provisions. monitor,
compotibility, doto storoge, eose of operotion, keyboord ond modem. The results
indicoted thot when ottribute informotion wos unombiguous, experts bosed their
evoluotions on ottribute strength, while novices relied on country of origin. "When
ottribute informotion wos ombiguous, both experts ond novices used country
of origin differently in evoluotions" (Mohesworon 1994, p. 354). The results olso
showed thot both experts ond novices differed in their processing of stereotypicol
informoiion. For exomple, "experts used country of origin stereotypes for selectivity
process ond recoll ottribute informotion, whereos novices used them os o frome
,l994,
of reference to differeniiolly interpret ottribute informotion" (Mohesworon p.
3621.
Strutton. Pelton ond Lumpkin (,l994) exomined the opinions of US consumers

towords outomobiles mode in the US ond Jopon. Using o telephone interview
method, I ,000 odults living in the contineniol US were osked to evoluote outomobiles
on construction, investment properties, dimensions of quolity. dimensions of style
ond cost considerotion. Of the I ,000 colls. 36 were considered incomplete becouse
of missing informotion. The results of the study indicoted thot Americon consumers
were more in fovour of Joponese outomobiles in terms of their dimensions of style,
investment properties ond dimensions of quolity. However. "no significont differences
were observed in the perceptions held by Americon consumers regording the cost
considerotion ond construciion of US ond Joponese cors". (Strutton, Pelton ond
Strutton 1994, p.701.
Keown ond Cosey (1995) meosured the foctors thot influence Northern
lrelond consumers' behovior when purchosing wine from fourteen selected
countries. Respondents were presented with ten chorocteristics. They were
country of origin, brond nome, grope voriety, region of origin, volume of olcohol.
vintoge. clossificOtion, o choteou-bOttled wine, o "toble" wine ond o "country"
wine. Consumers were osked to show which of the foctors were importont when
77
CHAPTER I
purchosing their wine. The results indicoted thot country of origin wos the most
importont foctorwhen Northern lrelond consumers were selecting wine. Moreover
respondents roted the troditionolproducers such os Fronce. ltoly ond Germony the
highest ond US ond Britoin the lowest.
determined to whot extent Donish exporters of foodstuffs, design goods

Niss (1996)
ond ogriculturol products moke use of the Donish imoge in their export morketing
bosed on country stereotypes. Using both moil questionnoires ond personol
interviews, monogers from 58 exporting componies were osked their ottitudes
towords using notionolities for internotionol promotion purposes. The results of the
study indicoted thot os "o product moves olong its life cycle towords the moturity
ond decline stoge, o shift occurs in the positioning strotegies employed by mony of
the firms interviewed from use of the notionolimoge os o differentiotion toolto the
building of internotionol bronds ond product imoges" (Niss p. l9). This meons thot os
the product opprooches its moturity ond decline stoge, the consumer's informotion
requirements olso decline becouse of this level the consumer knows oll obout the
product ond its functionolond oesthetic quolities, including its designotion of origin
(Niss, I 996).
Kucukemiroglu (,l999) defined the consumer morket segments existing omong

532 Turkish consumers by using lifestyle potterns ond ethnocentrism. A survey wos
conducted to collect doto through personol interviews in lstonbul, Turkey during
winter 1995. The results indicoted thot there were severol lifestyle dimensions
opporentomong theTurkish consumerswhich hod oninfluenceon theirethnocentric
tendencies. These dimensions were foshion consciousness, leodership, fomily
concern, heolth consciousness, core-freeness, community consciousness, cost
consciousness ond procticolity. Non ethnocentric Turkish consumers seemed to
hove significontly more fovouroble beliefs, ottitudes ond intention toword foreign
"mode in" products thon do ethnocentric Turkish consumers.
Koynok ond Koro (2002) exomined product-country-imoges, lifestyles ond

ethnocentric behovior of Turkish consumers. Doto of the reseorch were collected
through personolinterviews in the fifth lorgestTurkish City of Konyo. Results suggested
78
thot Turkish consumers hod significontly different perceptions of product ottributes

for the products "mode in" countries of different levels of socio-economic ond
technologicol development. Results olso showed thot there were severol lifestyle
dimensions, opporent omong the consumers, which were positively correloted with
their ethnocentric bioses.
Poromesworon ond Pishorodi ,2002) tested the extent of ossimilotion of host

country COO stereotypes. They tested the COO stereotypes for immigronts, first
generotion ond more rooted citizens. Results indicoted thot COO perceptions
regording different products from different source countries endorsed the potentiol
volue of ossimilotion/occulturotion os o segmentotion dimension. lt wos noticed
thot the ossimilotion process wos more groduol thon con be expected, bosed on
the melting-pot iheory.
Reordon, Miller ond Kim (2005) explored how ethnocentrism ond economic
development within tronsitionol economies (Kozokhston in the eorly stoge ond
Slovenio highly odvonced) offect the formoiion of brond ottitudes ond ottitude
toword the od. Questionnoireswere distributed to o rondom somple of odults in both
countries ond the United Stoies in order to meosure the ethnocentricity, ottitudes
toword the brond ond ottitudes toword the od.. The results showed negotive ottitude
toword the od. only for Kozokhston. The effect of ethnocentrism on ottitude toword
the od. wos stronger in the newly tronsitioning economy. Ethnocentricity offected
ottitude toword the brond formotion only indirectly through ottitude toword the
od. not directly os predicted in the literoture.
Homin ond Elliott (2006) exomined the concepi of "consumer ethnocentrism"

ond its impoct on product evoluotion ond preferences omong lndonesion
consumers. Using o foce-to-foce interview, o totol of 547 lndonesion respondents
were surveyed. Results suggested the following:
l. The overoll level of "consumer ethnocentrism" of lndonesion consumers

wos notobly high.
2. There wos o relotionship between "consumer ethnocentrism" ond consumer
79
CHAPTER I
evoluotions of "COO", product quolity perceptions ond purchose intentions for

both tongible goods ond intongible services.
Kinro (2006) exomined lndion consumer ottitudes towords domestic ond foreign
brond nomes, ogoinst o bockground of interesiing prevolence of foreign brond
nomes ond stereotypes of countries of origin covering the ronge from positive to
negotive.
Attitudes to brond nomes cotegorised os "foreign" or "domestic" were meosured

by seven-point semontic differentiol scoles ond consumer ethnocentrism by
CESCALE. Results indicoted thot the quolity of foreign brond nomes wos perceived
to be higher ond superior to domestic brond nomes. Almost oll consumers
ossocioted higher occessibility of foreign brond nomes in the lndion morket with
better quolity of lower prices. Results olso showed thot lndion consumers were
not prejudiced ogoinst products. "mode in" foreign countries, despiie their higher
level of notionolism. ln foct they evoluoted them higher on technology, quolity,
stotus ond esteem thon domestic bronds ond ottributed higher credibility to their
countries of origin.
Country of origin stereotypes seem to be highly offected by ethnocentrismr3

(Homin ond Elliott 2006; Hooley et ol. 1988; Koynok ond Koro 2002; Kucukemiroglu
I 999; Lee. Kim ond Miller I 992; Reordon et ol. 2005; Stoltmon et ol I 991 ). This term
"oppeors to impoct consumer choice both through product ottribute evoluotion

ond through direct offective foctors regording the purchose itself" (Yoprok ond
Boughn 1991, p.265). Hon ond Terpstro (1988) found thot consumer potriotism
does offect cognitive evoluotions of goods, but offects purchose intent to o
greoter degree. For exomple US consumers prefer US products (Goedeke 1973;
Johonsson et ol. 1994; Levin et ol. 1993; Nogoshimo 1970; Olsen, Gronzin ond Biswos
1993; Reierson 1966), French consumers ore more in fovour to products "mode in
Fronce" (Boumgortner et ol. 1978), Joponese consumers fovour Joponese products
(Noroyono, lgBl ), Conodion consumers ore willing to purchose Conodion products
thot ore higher in price but equol in quolity to imported products (Woll ond Heslop,
l9B5), Turkish monogers purchose products "mode in Turkey" (Gudum ond Kovos,
1996), Polish ond Russion consumers prefer their home country's products (Good
80
ond Huddleston, I995), Sponish consumers prefer home-mode products (Peris ond
Newmon, 1993), Mexicon consumers buy Mexicon products (Boiley ond Pineres,
19971, UK consumers prefer their home country's products over foreign ones
(Boker ond Michie,l?95: Bonnister ond Sounders 1978; Hooley et ol 1988; Peris
ond Newmon 1993) ond Europeon consumers in generol tend to prefer products
"mode in Europe" to imported products (Schweiger et ol., 1995).
Demographic Effects
Demogrophic voriobles olso ployed o role in differences in "mode in" imoge
between mole ond femole respondents (Khon ond Bomber 2007: Bolobonis et ol.
2002; Al-Suloitiond Fontenot 2004o: Offmonn 2000; Woll, Heslop ond Hofstro 1989;
Wollond Heslop 1989). Mole ond femole ottitudes towords foreign products differ;
femoles generolly tend to show o more positive country of origin bios towords
domestic products thon moles (Good ond Huddleston 1995; Heslop ond Woll lg85;
Lowrence 1992; Shormo et ol. 1995). Controstingly. gender wos found to be on
unimportont foctor by Dornoff (19741ond Lim ond o'coss (2001). tn terms of oge,
older people tend to evoluote foreign products more fovourobly thon do younger
people (Schooler l97l; Smith I993; Boiley ond Pineres 1997; Verbeke ond Lopez
2005; Khon ond Bomber 2007).
The most influentiol demogrophic vorioble wos thot of educotion (Festervond

et ol. 1985; Skuros ond Vokrou 2002; Bolobonis et ol.2OO2: Khon ond Bomber
2AO7l. Educotion enjoyed foirly consistent results os coneloted with perceptions
of products. Most studies reveoled thot people with o high levelof educotion ore
more in fovour of foreign products thon those with limited educotion (Al-hommod
1988;AndersonondCunninghoml9T2: Dornoff etol. 1974;Feslervondetol. 1985;
Good ond Huddleston lg95; Greer 1971; Schooler 197'l; Shormo et ol. 1995; Woll,
Liefeld ond Heslop l99l). Likewise, McLoin ond Sternquist (1991) ond Boileyond
Pineres (19971found thot os the educotion level increosed, the level of consumer
ethnocentricity disployed by the respondents decreosed. Woll Hofstro ond Heslop
(1990), Al-suloiti ond Fontenot (2004o) ond Rojogopoton ond Heitmeyer (200s)
found thoL there wos o strong relotionship between income level ond positive
ottitudes towords imported products. Good ond Huddleston (1995), Shormo et ol.
(l 995) ond Boiley ond Pineres (l 997) found thot the higher the income, the less likely
8l
CHAPTER I
it wos thot the consumer would buy (select) domestic products. On the other hond,
both Hon (1990) ond Mcloin et ol. (l99ll ogreed thot income did not significontly
occount for voriotions in ethnocentricity between consumem.
Perceived Risk As A Determinant Of Country Of Origin Effects

Hompton (19771wos the first reseorcher to exomine the influence of perceived risk
on roting 27 products in three closses of perceived risk (high, moderote, low) from
9 different countries. He exomined perceived risk for Americon products mode in
the compored with products mode obrood by Americon firms. A somple of 200
US
households living in Seottle, Woshington were invited to porticipote in the study.

A totol of 176 usoble questionnoires were returned with o response rote of 88% ot
the totol somple. The findings indicoted o generol increose in perceived risk of
products mode obrood.
Boumgortnerond Jolibert (1978l.investigoted the French consumers'perceptions

of foreign products. Subjects were osked to evoluote eoch product ond country
in terms of perceived risk. Boumgortner ond Jolibert (1978) selected four closses of
products (ploying cords, life insuronce, cough syrup ond o wintercoot) mode in the
United Stotes, Englond, Fronce ond Germony. The study employed o 7-point scole
ronging from "extremely interesting (l point) to "not ot ollinteresting" (7 points). 120
French consumers were osked to consider eoch of l6 products (4x4) which were
presented in
rondom order. The results of the study demonstroted thot French
consumers prefened products "mode in" Fronce over foreign products.
Nes (1981) exomined the country of monufocture os o cue to perceived product

risk ond perceived product quolity. Products were clossified into two groups: low
risk ond high risk products. Three brond cotegories were used in the study: no brond
nome, o new brond nome ond o well recognised brond norne. Four countries of
origin were used: no country informotion ovoiloble, mode in o poor country, mode
in overoge income country ond mode in o developed country. The findings showed
thot oll three foctors (country, brond ond risk closs) were significont, while none of
the interoctions wos significont (Nes, l98l ).
82
Hugstod ond Dun (1986) investigoted the importonce of country of monufocture

(COM) informotion to US consumers. Products used were outomobiles, comeros,
conned food, outomobile tyres, shoes ond sports shirts. Countries used were
Jopon, Chino, Koreo, Toiwon ond the United Stotes. Using o mollintercept method,
interviews were conducted with 341 shoppers. They were osked their sensitivity ond
perceived risk reloted to eoch country ond its products. The results indicoted thot
"sensitivity to country of monufocture (COM) vories by product cotegory, being
highest for duroble goods" (p. 119). Moreover, COM olso oppeored to offect
perceptions of quolity ond price for products from different notions.
Woll ond Heslop (1986) investigoted Conodion consumers' ottitudes towords

Conodion products ond the products of seventeen Conodion troding portners.
The results showed thot femoles hove more positive ottitudes thon moles in fovour
of Conodion products. Ghodir (1990) exomined Jordonion consumers' perceptions
of quolity, price ond risk of foreign versus domestic products. The results indicoted
o strong relotionship between country of origin ond consumers' perception of the
quolity, price ond riskof the product. Woll, Liefeld ond Heslop (1991) experimentolly
determined the etfects of country of origin when combined with brond nome ond
price level on consumers' rotings of quolity, risk to purchose, volue ond likelihood
to buy o shirt, telephone or o wollet. Countries used were Conodo, Hong Kong,
Itoly, South Koreo, Toiwon ond the United Stotes. The results indicoted thot country
of origin wos reloted to the ossessment of product quolity, but when it come to
evoluoting purchose likelihood, country of origin seemed not to be importont. ln
oddition, "oge, educotion, sex ond perceptions of obility to judge products were
reloted to consumers' rotings of quolity, risk, volue ond likelihood of purchose
especiolly when the product wos more complex ond ditficult to judge" (p. 105).
Cordell ( I g9l ) investigoted the interoction of country of origin within four product
cotegories (Colour TVs sets, Microwove oven, bicycles ond telephone) olong with
ditferent levels of finonciolrisk. Countries used were Algerio, lndio, Nigerio, Peru ond
83
CHAPTER I
the o lob experiment settings, 241 students were presented with two different
US. ln
products of o time ond osked to choose only one. Results showed preference
bioses ogoinst products from developing countries. Respondents were less likely to
choose o product mode in o developing country os the price ond the finonciolrisk
increoses. Therefore, o hierorchy wos found to exist between developing countries
ond industriolised ones.
Johonsson et ol. (l 994) investigoted the role of product country imoges for Russion
troctors in the United Stotes. They postuloted o modelwhich sees the imoge of o
country prompting o "country of origin roting" for the relevont product which then
influences the core process of product evoluotion. (see figure 1.2).
The torget wos o former likely to be in the morket for troctors of the kind
monufoctured by Belorus in Russio. lndividuol interviews were conducted oround
o comporison of eight different mokes of troctors, mode in six different countries,
Belqrus in Russio; Deere, Ford ond Morrum in the United Stotes; Mossey in Conodo;
Deutz in Germony; Hesston in ltoly ond Kuboto in Jopon. comporisons omong the
eight models were mode ond eoch stoge of the core process wos meosured using
o seven-point scole. For exomple, respondents were osked to rote o troctor in terms
of volue for money from ',very good" to ,,very bod',.
a4
Figure 1.2: The Complele Model
ttribute Belie lmoge of Moke
Price
\,w Volue For Money
Considerotion
[1|\ P*T; Set
\.
Visit to Deoler
horocteristics \
Attitude
Likelihood of
Purchose
\
Source: Johonsson (1994, p.160).
85
CHAPTER I
Respondents were olso osked their beliefs obout the moke's country of origin, their
fomiliority with the moke ond their roting of the country of origin os o monufocturer
of troctors. Then the respondent wos given o self-evqluotion on three botteries of
Likerttype scoles. One wos o ten-item bottery on ethnocentrism. A second wos o
set of thirteen risk items ond o third set of eight items meosured the perception of
the "new" Russio. Finolly, they were osked to indicote their politicol leonings using
two seven-point scoles: Liberol-Conservotive ond Pro-Democrot - Pro-Republicon.
Results indicoted thot "once the considerotion set hod been reoched, the chonges
to influence the process diminished. After the considerotion set, the former's mind
moy well be mode up. Fomiliority olso hod o pervosive influence throughout
the process. This wos reflected in both the risk+educing tendency on the port of
risk-overse formers ond the reluctonce omong oll formers to consider unfomilior
mokes" (p. I 7l ). Country of origin wos olso onother recuning influence thot ployed
on importont role in the process of product evoluotion._
The results reveoled o significont chonge in the process especiolly when the troctor
wos mode in o highly roted country such os the which offected oll countries with
US
low score evoluotion, including Russio. Although formers roted Belorus' products
very low, they still considered them os good volue for money. The results olso
showed Pro-US sentiment offected only product rotings ond the considerotion set,
but not purchose likelihood. ln oddition, "opinions on whether the United Stotes
should support Russio through trode influenced formers' roting of products ond
their likelihood to purchose". lt wos olso found thot formers who liked to try out
o new product were more likely to visit the Belorus deoler but they did not like
it os much when they recognised its origin. Therefore, this study suggested thot
entering o new morket requires strong promotionol support becouse consumers
ore reluctont to purchose, or consider o product with which they ore unfomilior
(Johonsson et ol., 1994).
Quester et ol. (2000) exomined the influence of country of origin effects on the
Austrolion ond New Zeolond purchosing ogents. Country of design ond country
of ossembly were both included in their study. The differences between higher risk
purchoses such os mochine tools ond more routine purchoses such os component
ports were olso investigoted.
86
The results showed thot COO wos found to influence product quolity perceptions
ond similor potterns were noticed in both Austrolion ond New Zeolond ogents.
Differences in obsolute levels were olso found suggesting thot coution wos needed
on the port of suppliers deoling in both morkets in relotion to volue of this type of
informotion.
Agorwol ond Teos ,2004l' tested the generolisobility of o model thot predicts
consumers' perception of volue bosed upon extrinsic cues, such os brond nome,
retoiler price reputotion, COO ond their perceptions of quolity socrifice ond risk.
They extended the perceived volue modelspecified by Agorwol ond Teos ond
tested in USA. Results indicoted thot while the overoll structure of the model is
supported ocross countries, the relotive importonce of the extrinsic cues moy vory
ocross countries.
Aquevegue (2006) investigoted the influence of consumption situotion on the use

of extrinsic cues, such os price ond expert opinion, in the ossessment of different
types of risk ossocioted to buying decisions of Red Wine. Using on experimentol
design method of doto collection, o somple of \28 post groduote students wos
exomined. The results indicoted thot consumption situotion influenced the use of
price in the ossessment of performonce risk, but only in the cose of negotive expert
opinion obout the product. lt wos suggested thot expert opinion demonstroted
to hove o positive influence on reducing performonce risk ond increosing the
intention to buy.
Service Evaluation
Koynok, Kucukemiroglu ond Koro (1994) exomined consumers' perceptions of
oirlines in the United Stotes. The moin objective of their study wos:
- To investigote consumers' sotisfoction ond/or dissotisfoction while flying by o

domestic ond/or foreign oirline to foreign destinotions.
- To understond consumer' perceptions of qirlines ond relote this informotion to

their domestic ond foreign oirline preferences.
87
CHAPTER I
The study wos conducted in three cities of Pennsylvonio, nomely, Honisburg,

Loncoster ond York. Using o strotified sompling method, two groups of
neighbourhoods, nomely, upper income ond middle income were selected for
the study. Drop-off ond pick-up technique wos employed. Questionnoires were
hond-delivered to 600 households, where 376 questionnoires were usoble for finol
onolysis with o response rote of 62%.
Respondents were given o list of oirlines ond told to show their three fovourite
oirlines for foreign trovel. They were olso osked obout the moin reosons for their
selection of these three oirlines ond foctors influencing their decision in selecting
the oirline for foreign trovel. The study indicoted the following results:
- The three oirlines selected were United, Americon ond Delto.
- Respondents who used domestic oirlines hod more fovouroble ottitudes towords
domestic oirlines thon those who did not use o domestic oirline. Whereos, those who
used both domestic ond foreign oirlines demonstroted no differences between
them.
- Reliobility of the oirline, post sotisfoctory experience with the oirline ond low
price of the ticket were the three most importont reosons for choosing the three
oirlines for foreign destinotions.
- frequent Users of oirlines poid more ottention io in-flight entertoinment, free

olcoholic beveroges ond ovoilobility of frequent flights. On the other hond, users
of domestic oirlines considered oirport counter service os ihe most importont
evoluotive criterion.
- More ottention wos given to competitive fores by both domestic ond foreign
oirline users.
- ln terms of gender, moles ottoched more importonce to reliobility of oirline,

while femoles ploced more ottention on convenient schedule ond quickest route
direct flight.
- Femoles olso considered oirport ticket counter service, occurote flight stotus
informotion, convenient flight connections, frequent flights ond good connections
88
to mojor cities os importont foctors in choosing on oirline, while moles ottoched

more importonce to ovoilobility of free olcoholic beveroges.
- Results olso indicoted thot professionol job holders differed from technicol
personnelin foctors considered importont in selecting on oirline for foreign trovel.
- Significont relotionships were found between the users of domestic, foreign ond
both domestic ond foreign oirlines ond foctors considered importont in choosing
on oirline for internotionol trovel.
- ln terms of oge, respondents who were thon 20 demonstroted thot in-

less
flight entertoinment, stewordess service, quolity of food, olcoholic beveroges ond
frequent flyer progroms were importont, while convenient connections, frequent
flight, connections to mojor cities ond reservotion eose were more importont foctors
for respondents who were over 31. On the other hond, respondents between 20
ond 30 oge group showed more importonce to on time flights, boggoge hondling
ond competitive fores (Koynok, Kucukemiroglu ond Koro, 19941.
Honison-Wolker (1995) investigoted the notionolstereotype effects on consumer

selection of o service provider. The moin objective of his study wos to:
- Evoluote the potentiol role of notionolstereotype on service provider selection.
- lnvestigote the relotive effects of service provider notionolity, supplementol

informotion ond consumer notionolity on service provider selection.
The professionol service of ophtholmology wos selected for the study. The following
scenorio wos presented to subjects:
"You've been hoving difficulty with your vision, so you've decided to

hove your vision checked by on ophtholmologist. You've just moved to
do not olreody hove o locol ophtholmologist ond do
this town, so you
not know onyone to osk for o reference. The only informotion you hove
is whot oppeors in the locol telephone directory" (Horrison- Wolker
1995. p. sl).
89
CHAPTER I
Respondents from the US, Jopon, Sponish ond other notionolities were osked to
ronk eoch of twenty ophtholmologists in the order in which they would contoct
them by telephone. The mock directory listing included five physicion nomes for
eoch of four notionolities: Americon, lndion, Joponese ond Sponish. The outhor
used five informotion levels. They were:
l. "Zero level: no odditionol informotion provided;
2. One level: boord certified, Americon Boord of Ophtholmology;
3. Two level - ovoilobility: boord certified, Americon Boord of Ophtholmology,

doy, weekends, holidoys;
4. Two level - service: boord certified, Americon Boord of ophtholmology, in-

office loser ond cotoroct surgery;
5. Three level: boord certified, Americon Boord of Ophtholmology, in-office loser

ond cotoroct surgery, doys, weekends, holidoys".
Finolly, respondents were osked to identify the notionolity ofeoch of the twenty
service providers. ln terms of notionolity of the respondents, Americon, Joponese,
Sponish ond other notionolities were selected for the study. The results showed thot
there is no cleor evidence of some-notionolity bios. Americons prefer Americon
providers over other notionolity providers when odvertising informotion is of zero
level, two level/service, or three, yet of the one level ond two level/ovoilobility
levels of odvertising informotion. Joponese providers ore evoluoted os just os good
os the Americon providers, while Sponish respondents show no significont some-
notionolity bios ot ony levelof informotion
According to Honison-Wolker service is viewed more fovourobly by consumers

thon time ovoilobility, with two exceptions: (l ) the ovoilobility of Joponese providers
oppeors to be more importont to Americon consumers thon extro services. (2) the
ovoilobility of lndion providers oppeors to be more importont to "other notionolity"
consumers thon extro services.
90
Shoffer ond O'Horo (1995) exomined the impoct of notionolity on perceptions of

ethicolity ond trust towords on Americon service professionol. Doto were collected
from I 22 individuols from 30 countries who hod either ottended o seminor or on initiol
consultotion with on immigrotion lowyer. Since this wos o "mixed" populotion (e.9.,
seminorond consultotion personnel), Shofferond O'Horo designed o questionnoire
composed of severol sections. First, specific questions were developed in the light
of the seminor or consultotion session ottended, while the second section consisted
of questions concerning trust ond ethicol perceptions of the immigrotion lowyer
from on Americon viewPoint.
The results of the study indicoted thot there ore significont ethnic differences in
the evoluqtion of professionol services. Howeve[ "perceptions of trust ore found
to differ significontly between people from notions chorocterised by high ond low
individuolism" (p. 162l.For exomple, respondents from high distonce, collectivistic
societies were less trustful thon clients from smoll power distoncera, individuolistic
societies. Significont differences in ethicol perceptions ore olso found between
individuols from smoll power distonce countries (e.9.,, the United Stotes, Conodo,
Western Europeon countries), versus lorge power distonce countries (e.g.,, Asion
ond Hisponic countries)'s.-
Wetzels et ol. (l 996) investigoted the Dutch consumers' concept of ethnocentrism

to ten different kinds of services provided in the Netherlonds. These services
included: public tronsport by bus, bonking services, express delivery services, oir
trovelling, trovel ogencies, roilrood services, telecommunicotions, moil services,
medicine-supply ond public utilities such os gos ond electricity. Results indicoted
the following:
- A consumer's ethnocentric tendencies toword services is negotively correloted

with culturol openness (individuols who ore more open to other cultures ore less
consumer ethnocentric toword services) ond positively coneloted with potriotism
conservotism, collectivism ond oge.
- Consumers with o higher level of educotion hove less ethnocentric tendencies

toword services.
91
CHAPTER I
Bruning (19111'e exomined Conodion notionol loyolty ond the country of the oir
conier in the selection process. Bruning (19971used two instruments in securing
doto: o conjoint experiment where subjects were presented with multiple
ottribute bundles ond osked to rote preferences for eoch of the bundles ond o
questionnoire to collect demogrophic, ottitudinol ond usoge informotion.
The
study wos conducted in three provinces of Conodo, nomely, the western, centrol
ond eostern provinces. Results indicoted the following:
- The country of origin ottribute is second only to price in terms of relotive

importonce in the oir conier choice decision. For exomple, Conodion consumers
meosuring high in notionol loyolty prefer o notionol conier for on internotionol flight
when other foreign coniers ore in competition with the notionol coniers.
- Conodion trovellers were morginolly supportive of o US conier over o Mexicon

conier but they indicoted overwhelming support for o Conodion conier when
considering internotionol oir trovel.
- The preference for own-country oir coniers is not equolly strong ocross oir
troveller segments. For exomple, femoles showed more fovouroble ottitudes
towords their notionol oirline thon did moles. With respect to income level,
results showed thot the higher the income, the less likely it wos thot the consumer
would fly with o Conodion conier. ln oddition, notionol loyolty scores were highest
for trovellers with the lowest levels of flying frequency ond declined with increoses
in flying frequency.
Jovolgi, Cutler ond Winons (2001) exomined the country of origin reseorch os
it opplies to services. They focused on products since the 1960s, but it hos been
opplied to services in o few oreos only. Their investigotion showed thot COO
reseorch con be opplied to services. Similor positive relotionship between COO
ond services to the relotionship between coo ond goods wos found.
Ahmed et ol. (2002) investigoted country of origin ond brond effects on

consumers' quolity perceptions. ottitudes ond buying intentions with respect to
o service-industry product: internotionol cruise-line pockoges in Singopore. Stor
92
cruise (Moloysio) ond Royol Coribbeon Lines (USA) were chosen os the brond ond
countries for the reseorch. Results showed the following:
'l
. Country of origin did oppeor to be on importont informotion cue for
consumers of services.
2. Country of origin effects were stronger thon brond effects for quolity
ond ottitude rotings.
3. There wos o significont conelotion between brond ond buying

intentions.
4. A positive Country of origin imoge compensoted for o weok brond.
O'Cossond Groce (2003) investigoted consumer-bosedinformotion vio quolitotive

ond quontitotive methods regording brond dimensions thot hold meoning to
consumers for bronded services. Findings indicoted o number of key dimensions
thot ore importont to consumers for both goods ond services, such os core product-
service, experience with brond ond imoge of user. Findings olso reveoled significont
relotionships for brond dimension importonce ond brond ossociotions, ossociotions
ond ottitudes, ottitudes ond intentions.
Al-Suloitiond Fontenot (2004o) exomined the relotionships between country of

origin effects ond selected demogrophics on Qotori consumers' perceptions ond
selections of domestic vs. foreign oirlines in the Arobion Gulf region. The findings
showed thot the demogrophics of gender, moritolstotus ond income were found
to be significontly ossocioted with service foctors such os occessibility, performonce
ond ossuronce respectively. Moles poid significontly more ottention to the
occessibility foctor thon femoles did. Performonce wos more highly evoluoted by
$n$e consumers thon monied ones. With regord to income, it wos noticed thot the
lower the income, the higher the importonce rotings of the ossuronce foctor.
Al-Suloitiond Fontenot (2004b) exomined the Qotoriconsumers' percepfions ond

selections of domestic vs. foreign oirlines. The oirlines used in this study were grouped
into three cotegories: Gulf (nomed os Domestic), Arob non-Gulf qnd foreign oirlines
(nomed os foreign).
93
CHAPTER I
Hypotheses were formuloted to exomine Qotori consumers' perceptions of

oirlines ond to relote this informotion to their domestic ond foreign preferences.
The hypotheses were developed bosed on o comprehensive literoture review of
theories ond concepts on the subjects (Al-Suloiti ond Boker 1998). The findings
of the reseorch indicoted thot domestic coniers hod on unfovouroble imoge in
comporison with foreign coniers ond o fovouroble imoge compored with the Arob
non-Gulf coniers. This moy indicote thot the quolity of the foreign countries' coniers
when compored to domestic coniers wos more opprecioted thon the quolity of
domestic coniers in comporison with the Arob non-Gulf coniers. The results olso
reveoled thot the Gulf services were perceived to hove "higher prices in generol"
ond to offer "more volue for money" thon the Arob non-Gulf services. On the other
hond, when Gulf serviceswere comporedwithforeign services, itwosindicoted thot
foreign services were perceived to hove prices thot were slightly more competitive
ond to offer better volue for money thon the Gulf services.
Al-Suloiti ond Fontenot (2004c) exomined the country of origin effects on

perceptions of quolity, price ond potriotic feelings. The findings suggested thot the
mojority of the surveyed consumers tended to hold strong potriotic feelings towords
the Gulf Coniers. Approximotely two thkds of the respondents (65%) prefened o
Gulf conier over o foreign one. lt wos olso found thot potriotism hod o positive
effect on the Qotori consumers' ottitudes towords Qotor Airwoys in porticulor. lt
wos noticed thot the more ethnocentric they were the more they selected their
own country's services ond rejected the foreign services.
The responses of the consumers' generol perceptions of the quolity of domestic

ond foreign oiilne services indicoted some ditferences in consumers' perceptions
of the quolity of the oirlines. They concluded thot domestic oirlines hod on
unfovouroble imoge in comporison to foreign conien. Results olso showed thot Gulf
services were perceived to offer higher pdces. Foreign services were perceived lo
provide more volue for money.
Molhotro et ol. (2005) exomined the ditferences in perception of bonk service

quolity dimensions between developed ond developing economies. A totol of 1 ,069
94
consumers from USA, lndio ond the Philippines were surveyed. Differences between
developed ond developing countries in terms of service quolity perceptions ond
evoluotions were found. The results reveoled thot there were systemotic differences
between developed ond developing countries thot could be predicted bosed on
economic, culturol ond sociol foctors.
Summary
Boker ond Cunie (1993) suggested thot the country of origin concept should be
considered o fifth element of the morketing mix olong with the product itself, its
price, promotion ond distribution. Since the mid-1960s, the country of origin effects
hove been the impetus for o number of studies. Most of these studies hove found
thot country of origin of o product does offect product evoluotion (Al-Suloitiet ol.
2007;Al-Suloitiond Fontenot 2N4o,2W4b,2N4c: Al-Suloitiond Boker 1997; Boker
ond Cunie 1993; Boker ond Michie 1995; Bilkey ond Nes 1982; Khon ond Bomber
2@7: Oaomer ond Covusgil l99l; Thokor ond Kotsonis 1997; Yoprok ond Boughn
lggl ). However the issue of how much influence the country of origin cue provides
in product evoluotions is not yet decided ond therefore opinions oppeor to differ
widely (Boker ond Cunie, 1993). Severol studies, refened to in Olson ond Jocoby
toste, design
llg72l ,conclude thot intrinsic cues (o product's chorocteristics such os
ond performoncet hove greoter effect on quolity iudgements thon do extrinsic
cues (considerotions ossocioted with the product such os price, brond nome ond
wononties). Therefore, country of origin (on extrinsic) cue might hove only o limited
influence on product quolity perceptions (Bilkey ond Nes I982; Thokor ond Kotsonis
I 997; Al-Suloiti et ol. 2@71.
ln oddition, most of these studies involve single cue models (e.g., the country
of origin wos the only informotion supplied to respondents on which to bose their
evoluotion) which tend to bios the results in the direction of detecting positive
country of origin effects (Johonsson et ol., 1985). Loter studies odding multiple cue
models oppeor to show o much lesser role of country of origin influencing consumer
product evoluotion (Ahmed et ol. 1993, 1994, 1995; Ettenson et ol. I 988; Johonsson
et ol 1985; Khon ond Bomber 2@7; Roth ond Romeo 19921. These results ore not
surprising, becouse os consumers hove o greoter number of cues, the efficocy
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I 13
CHAPTER I
114
(Foolnotes)
I "Mode in" con meon monufoctured-in but olso ossembled-, designed-,
or rnvenfed-in, mode by o producer whose domicile is -in ond, often wonling fo look like if
wos mode-in (Popodopoulos 1993, pp.4).
2 Hybrid producls ore products thot contoin components or ingredients mode in vorious
countries (Boughn ond Yoprok 1993, p.90).
3 "The elosticity of product bios con be defined os o meosure of the effect on the product
selection decision of the interoction between product bios ond price differentiol" (Schooler
ond Wildt 1968,p.78).
a This type of method wos used becouse the French hove troditionolly
been reluctont to
respond to moil surveys (Green ond Longeord,1975).
5 Another study
conducted by Thorelli et ol. (1989) suggested thol the country of origin cue
con provide only o limited explonotion of vorionce of the product evoluotion, preference
ond purchose intention of the respondents when multiple cues ore presented.
6 "Off-price buyers purchose merchondise through non-troditionol methods, buying up
monufocturers' excess production. Off-price stores emphosise nome ond designer brond
merchondise ot lower prices thon troditionoldeportment stores" (Khochoturion et ol. 1990,
p.2t).
7
Country imoge is defined os consumers' generol perceptions of quolity for products mode
in o given country (Bilkey ond Nes 1982; Hon 1989). lt is olso known os the "country of origin
cue", it hos "become on importont informotion cue for consumers who ore exposed to o for
more internotionolised selection of products ond multinotionol morketing thon ever before"
(Boker ond Michie 1995, p. I ).
8According to Hon (1990) only one brond of cor wos selected for Koreo becouse it wos the
only one being octively morketed in the United Stotes.
e
See footnote l.
r0 "A generolly occepted definition of memory schemo is thot it is o struciured cluster of
knowledge thot represenls o fomilior concepl ond contoins o network of intenelotions
omong the constituents of the concept" (Kochunny 1993, p.7).
'r According lo Johonsson et ol. (1985) both of these foctors ore identified os potentiol
moderotor voriobles on country of origin effects.
'2 Ethnocentricity is described os "the phenomenon of o preference of one's 'kind' ond
concomitont dislike of others" Popodopoulos 1993, p. 33).
'3 The odvontoges of purchosing home-mode products include: boosting ihe country's
employment; helping the economy; eosier ofter soles service; ond mointoining notionol
pride (Woll ond Heslop I 985; see olso Olsen et ol. I 993).
14 "Power
distonce" is defined os the "the degree of inequolity in power between o less
powerful lndividuol (l) ond o more powerful Other (O), in which I ond O belong to the some
(loosely or tightly knit) sociol system" (Mulder 1977, p.90). Power distonce concerns the
relotionship between the individuol ond persons of outhority ond powe[ while individuolism
concerns the relotionship between the individuol ond the collectivity of given society
(Hofstede, 1980).
rs"An explonotion of why certoin countries ore smoll/lorge power distonce countries or low/
high individuolism countries would require o lengthy discussion of the historicol, geogrophic,
economic, demogrophic ond technologicol foclors contributing to o notion's sociol ond
culturolfobric" (Shofferetol(1995,p.182).Thisisbeyondthepurposeofthisstudy(formore
discussion see for exomple, Hofstede, 1980 ond Triondis et ol., 1988).
'6 A similor study wos conducted in 1994 by the some outhor.
17
Still in some studies, domestic products were not evoluoted os fovourobly os imports (see
Lin ond Sternquist 1994; Strutton 1994).
't
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CHAPTER I
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(Footnotes)
rRate=Responserate,DataCol.:Datacollection,E:Experimentaldesigr,S:Survey,C=Conceptual
Study, NA: Not available/applicable, *: Service evaluation
155
Chopter Two
THE COUNTRY-OF-ORIGIN
PHENOMENON WITHIN THE
CONTEXT OF GLOBALIZATION:
RESEARCH RELEVANCE AND
MANAGERIAL IMPLICATIONS
CHAPTER II
158
The country-of-origin Phenomenonwithin the
Context of Globali zationz
Research Relevance and Managerial Implications
SAEED SAMIEEX
Introduction
There is little dispute thot the world
economy is increosingly intertwined.
lntegroted circuits designed by Rombus
ond Broodcom ore monufoctured
in Toiwon ond Koreo for worldwide
distribution. Oil supplies en route from
the Middle Eost or Africo chonge honds
severol times before they reoch finol
destinotions. Sony, Toyoto ond Mercedes
Benz products ore reseorched, designed
ond monufoctured in different countries
for locol ond globol morkets. For exomple,
BMW X ond Z series ore produced
only in South Corolino for worldwide
consumption. Products ore outsourced
from internotionol vendors to benefit
from lower cost or to ovoid heovy copitol
investments. Multinotionol corporotions
* Soeed Somlee is Collins Professor of rotionolize their monufocturing on o
Morkellng ond lnternotlonql Business ol lhe
Universlly of Tulso ond Projecl Dlreclor for lhe globol scole to ovoid redundoncies ond
lnslllule for lnlernollonol Buslness Educqlion
(o loint inltlotive belween The Unlversity of improve customer service. Row moteriols
Tulso ond Moscow lnsillule of Elechonics
Iechnology), Moscow, Russio. quicky lose their country of origin
designotions os soon os they ore oboord
159
CHAPTER II
o vessel ond reody for tronsport. lnternotionol ond globol bronds con be sourced
from iheir originoting country (e.g., Nisson cors from Jopon), locolly monufoctured
orimported from third countries. Regordless of where these bronds ore mode, their
dominonce hos never been stronger. These trends highlight some of the different
woys in which globoltrode is functioning.
lnternotionol morketing scholors hove been coptivoted by the influence of

"foreignness" of products upon customer ossessment ond purchose decisions for
over four decodes. Consumer ottitudes ond perception with respect to origins
of imported products ond bronds will noturolly vory ocross ond within morkets.
These differences hove been the subject of iniense inquiry by ocodemics within
internotionol morketing for severol decodes. The brooder field, dubbed os the
country-of-origin (CO), is considered the most-reseorched oreo within morketing
contoining severol hundred publicotions.r lrrespective of which estimote is correct,
there little doubt thot this oreo of inquiry hos been heovily reseorched ond, by oll
is
indicotions, reseorchers ore continuing to investigote ond publish on this generol

topic (cf. Usunier 20061. Despite the obundonce ond the continuing proliferotion of
COO studies, three criticolissues hove not been sufficiently oddressed. First, whot is
the influence of the COO phenomenon within the context of on increosingly globol
economy? Second, from the scholorship ond intellectuolinquiry perspectives, how
importont is the COO phenomenon in the brooder scheme of things? Third ond
perhops most importontly, given our depth of cunent knowledge regording the
COO phenomenon, whot reolistic monogeriolimplicotions or procticol utility might
be concluded for the reseorch thus for. Accordingly, the objective of this poper is
to oddress these questions.
A nonow focus on ihe COO phenomenon overshodows the enormity ond the
scole of imported bronds from virtuolly every morket thot is consumed eoch yeor.
The United Stotes. for exomple, imporied $1.727 trillion worth of goods ond services
in 2005. Although o voriety of row moteriols ond semi-finished producis ore olso
imported, o substontiol proportion of this figure is mode up of bronded products
destined for consumer morkets. ln oddition to the importotion of finished products,
there is increosingly o proliferotion of foreign bronds thot ore now monufoctured
160
The Country-of-Origin Phenomenon
Within the Context of Globalization
(or ossembled) ond morketed in the US, ronging from designer opporel to
outomobiles. Customers everywhere ore increosingly foced wiih choosing from
o set of bronds which includes foreign bronds mode in the US os well os imported
ones monufoctured or sourced from third countries. lndeed, in some products
cotegories such os opporel, virtuolly oll ovoiloble merchondise is imported.
Morketing of foreign bronds ond imported products leods to the issue of customer
evoluotion of products ond whether the locotion of corporote heodquorters or
monufocturing subsidiory offects such evoluotion.
The CO Literature
The ovolonche of publicotions in COO offers one inescopoble finding: people
tend to be sensitive to COO cues ond once exposed to this informotion, there is on
ossociotion between this knowledge, product evoluotions ond purchose intentions.
Howeve[ much of ihe findings reported in the COO literoture hos been obtoined
in o "heovy-honded" foshion (cf. Somiee, Shimp ond Shormo 2005; Peterson
.l995).
ond Jolibert Whether in o loborotory setting, field experiment, or surveys,
reseorchers disclose origins of products being evoluoted thus olerting subjects ond
cousing them to consider this meosure os o component of their evoluotive criterio.
As the field hos evolved, scholors hove begun to question the opproprioteness ond
the efficocy of COO os o predictor of product evoluotion ond choice. lndeed
recent reseorch questions whether consumers even know where products ond
bronds ore mode, let olone use this informotion os the bosis for decision-moking.
ln this regord, Somiee (1994]rorgued thot the influence of COO is generolly over-
stoted simply becouse most consumers do not know nor seek COO of products
they consider for purchose. This ossertions wos loter empiricolly volidoted. ln their
study of brond origin knowledge, Somiee, Shimp ond Shormo (2005) reported thot
respondenis could conectly identify the origins of only one obout one-third of
bronds used in their study with o bios towords thinking of foreign bronds os hoving
been domesticolly monufoctured. A finding reported by Thokor ond Lovock (2003)
is consistent with thot reported by Somiee, Shimp ond Shormo (2005). Thokor ond
Lovock (2003) demonstroted thot country of monufocture hod no impoct on

product evoluotions when country of ownership (i.e., brond origin) informotion wos
161
CHAPTER II
olso present. Likewise, Chen (2004'tnotes thot of leost some consumers use brond-
origin (rother thon country of origin) os o source of informotion.
Systemotic investigotions of coo studies hove reveored five points:

Much of the reseorch in this oreo hos been criticized for its over-
simplificotion of the subject motter ond limited or lock of scientific
rigor (e.9., Bilkey ond Nes l9B2; Shimp, Somiee ond Modden lg93;
Somiee, Shimp ond Shormo 2005).
only o hondful of studies hove been bosed on theory or conceptuolly

rigorous fromeworks. The vost mojority of coo publicotions ore
otheoretic ond typicolly employ student subjects thot porticipote
in experiments ond/or complete simple surveys (obermiller ond
Spongenberg 1989).
The coo literoture is filled with controdictory findings (cf. Somiee

1994). For exomple, mony studies imply thot negotive COO bios
leods consumers to turn to products from origins thot ore more
fovorobly viewed. Tse et ol. (,l996) found thot preference for Hong
Kong or Koreon mode TVs is very low in Hong Kong, the likelihood
of buying them is greoter thon the more expensive Germon or
Joponese bronds. Most coo studies, on the other hond, indicote
thot customers will likely turn owoy from products thot corry negotive
COO bios.
lf customers ore indeed influenced by the coo phenomenon, then

o firm's sourcing, monufocturing ond morketing plons ond strotegies
moy need to be reopproised. The globolizotion of morkets hos
creoted complex ond intertwined sourcing ond morketing strotegies.
lf ony bios resulting from these strotegies is present in the buying
decision, then monufocturers, exporters, importers, distributors ond
other chonnel intermediories must poy close ottention to how this
offects their businesses ond use proper strotegies to respond to this
phenomenon.
162
The literoture is virtuolly void of

meoningfulond relevont monogeriol
implicotions. lndeed, two comprehensive coo literoture reviews
reveol virtuolly no concrete monogeriol implicotions (Al-Suloiti ond
Boker 1998; Somiee 1994). Some coo publicotions hove offered
odvice to morketing monogers, however these recommendotions
tend to be for locol functionories ond lock centrolity for integrotion
in the firm's globol morketing strotegy.
The findings generolly

reported in the literoture, however ore by no meons
wrong or inoccurote. With minor exceptions (e.g.,, Johonsson, Douglos ond
,l985),
Nonoko reseorch designs olert respondents to the origins of products
or bronds being evoluoted in some foshion, thus heightening the soliency
of coo for subjects. Respondents then use the coo cues, olong with ony
odditionol informotion, to compore products in terms of quolity, volue,
design ond purchose intentions. Not surprisingly, significont effects hove
been reported in o lorge voriety of settings olong multiple dimensions. The
following is o summory of key findings from the coo literoture:
'A lorge proportion of consumers ore not owore of nor do they

toke coo into considerotion (e.g., Hugstod ond Dun l9g6; Hester
ond Yuen 1987; Thokor ond Lovock 2003; chen 2004; somiee, Shimp
ond Shormo 2005).
Literoture reviews ond meto-onolyses demonstrote thot the influence

of coo,
especiolly with respect to purchose behovior, is minimol
(somiee 1994; Peterson ond Jolibert l9g5; verlegh ond Steenkomp
19e9).
Domestic products ore prefened bysome customers in every morket

(e.9.,shormo,shimp ond shin r 995;shimp ond shorm o 1987;Reierson
1966; Goedeke 1973; Liltis ond Noroyono l9z4; Krishnokumor 1974;
Boumgortner ond Jolibert 1978; Noroyono lggl; cottin et ol.lgg2;
Morello 1984; Lumpkin ond Crowford l9g5).
163
CHAPTER II
Products mode in developed countries ore preferred to others; thot

is, coo
preference tends to be reloted to the level of economic
development of notions (e.g., Goedeke 1973; Koynok ond Covusgil
1983; Wong ond Lomb 1980; 1983; Holl6n ond Johonson 1985;
Lumpkin ond Crowford 1985).
Customers in different countries respond differently to the CO cue

'1987;
(e.g.,, Stephens ef ol. 1985; Popodopoulos ef ol. Speece.
Kowohoro ond Miller 1996).
Country stereotyping vories by product type (e.9., Reierson 1966;

,|973;
Nogoshimo 1970; 1977 Goedeke Bonnister ond Sounders
,|979;
l g78; chosin ond Joffe 1 979; Dornoff et ol. Niffenegger ef ol.
'1985; Woll ond Heslop
l98O; Festervond ef ol. l9B5; Lumpkin ef ol.
1 eB6).
Appropriote morketing strotegy con olter country stereotyping (e.g.,

,l967;
Reierson Schooler et ol. 1987).
consumers generolly disploy o preference for products mode

in some countries more thon others (e.9., Schooler 1965; 1971;
Hompton 1977; Bovmgortner ond Joliben 1978; Bonnister ond
Sounders 1978; Schooler ond Sunoo 1959; White 1979; cottin ef ol.
1982; Popodopoulos et ol. 1987).
Preference for domestic products disployed by the ethnocentric

group; the non-ethnocentric group exhibits chorocteristics similor
to those of "innovotors": youngel; educoted, higher income, etc'
(e.g., wong 1978; Shimp ond Shormo 1987; Hon ond Terpstro 1988;
Shormo, ShimP ond Shin 1995).
Potriotic sentiments typicolly increose CO oworeness but not the

brond choice (e.g., Doser ond Meric 1987; Hester ond Yuen 1987).
. The influence of CO increoses with increosed product fomiliority
164
(e.9., Johonsson ef o/. '19g5; Heimboch et ot. l9g9).
' consumer perceptions of product quolity vory for uni-notionol ond

bi-notionol products (e.g., Hon ond Terpstro l ggg).
' coo ossessments ore dynomic in noture (e.g., Nogoshimo lgTo;

1977; Dorting 1987; Dorting ond Wood l99O).
As we sholl loter discuss, the first seven findings in this list serve
globol
os significont
plonning constroints for the internotionol morketer. Somiee (1gg4) ond
Usunier
(2006) roise importont ond criticol issues with respect to the relevonce
of Coo
reseorch. ln porticulor Usunier (2006: p.711notes thot COO findings reported in
the literoture "...ore of little influence on internotionol morketing monogement."
Accordingly, this study sholl exomine ihe relevont COO findings reported in
the
Iiteroture to highlight their internotionol morket plonning constroints.
Labeling Requirements and Rules of Origin

Lobeling requirements ond rules of origin ore of criticol importonce to the
CO
line of inquiry. ln order for customers to evoluote o product or o brond,
whether
solely or portiolly, bosed its origin, its lobel must corry this informotion. product
lobels include such informotion under two conditions: CO lobeling
is required by
low or the trodemork owner uses co os o component of its morketing
strotegy.
An imporiont third possibility is the use of bronds thot convey porticulor
desiroble
origins or positioning bronds such thot they ore ossocioted with
origins thot ore
known to hove positive equity with respect to products being morkeied,
e.g., Le
Sueur line of conned vegetobles in the US The positioning ond Co ossociotion
morketing strotegies ore prooctive ond under the control of the
firm. ln the cose
of Le sueur, the firm simpry reveroges off the positive country equiiy
of Fronce for
food producis to position the brond. A fourth possibility is when
customers ossume
or guess o product's CO. This is o potentiolly chootic situotion
becouse different
individuols of groups of customers ossociote the product wiih
different coos which
moy be difficult for the firm to bring under control. lt is noteworthy
thot the COO
literoture ond, therefore, this study is concerned only with the
first two conditions
(i'e', when the firm is required to use Co lobeling or when
the firm leveroges off its
positive CO os port of its brooder morketing strotegy).
165
CHAPTER II
Governments continue to estoblish ond opply rules of origin independently ond,

hence, there is o wide voriotion in the proctice. For exomple, "mode in" corries
different meonings in Europeon Union member stotes, leoding to very diverse legol
requiremenis. These rules ore used to estoblish origins of products which, in turn,
influence o voriety of trode- ond economic- reloted issues (e.g., toriffs, opplicotion of
quotos or other restrictive trode proctices, dumping, etc.). As world economies ore
increosingly intertwined ond globolizing, o degree of hormonizotion ond uniformity
ocross countries is o virtuol necessity. To this end, the GenerolAgreement on Toriffs
ond Trode (GATT) ond its successor; the World Trode Orgonizotion (WTO), hove long
sought to develop ond enforce uniform rules with respect to origins of products to
ensure thot such rules do not become impediments to internotionoltrode'
To thisend, WTO hos estoblished o hormonizotion progrom. Untilthe completion

of the hormonizotion progrom, oll member stotes ore expected to ensure thot
their rules of origin ore tronsporent, non-restrictive, without distortions ond non-
disruptive insofor os internotionol trode is concerned. Further more, they ore to be
odminisiered in o consistent. uniform, importiol ond reosonoble monner. Also, on
ospect of the ogreement estoblishes o "common declorotion" for rules of origin on
goods which quolify for preferentiol treotment'2
The exoct number of countries requiring CO lobeling is not known, but only
o
hondful of developed countries require CO lobeling. Most noiobly, in the US'

CO
morketing first become o requirement with the Toriff Act of 1890 ond hos been
product
retoined over time. The US rules require thot o second country importing o
to odd substontiol volue if the finished product is to ossume the second couniry
lobeling' eoch
os its point of origin. Jopon. Conodo ond the UK olso require CO
governed by different rules. CO lobeling is generolly not required in the EU'
EU
member stotes connot require products mode in other member countries io corry
o CO lobelond corrying o "Mode in ihe EU" lobelis not compulsory' However'
EU
rules require thot certoin products imported from third countries to be

lobeled os
such (CBlNews Bulletin 2006).3
166
Within the Context of Globaliz-ation
ln the obsence of required CO lobeling, it would be difficult, if not impossible,

for customers to occess such informotion. Thus, it is reosonoble to expect thot
in countries where CO lobeling is not required, even customers who might seek
or otherwise be influenced by this informotion will hove to bose their judgements
on other informotion ond, therefore, the influence of CO is potentiolly nil. This is
consistent with the positions token by Somiee (1994]l. Somiee, Shimp ond Shormo
(2005) ond Usunier (2006) ond the generol conclusion reported by Peterson ond
Jolibert ( I 995: p. I 00) thot "the true conditions under which CO influence is operotive
hove not been odequotely or fully delineoied."
The Relative Importance of CO

It is omply cleor from the CO literoture ond severol comprehensive reviews thot ot
leost some customers respond to CO cues. However controry to some strong signols
from morketing literoture complementory to the CO phenomenon, by ond lorge
the CO literoture hos consistently ossumed, even if only tocitly, thot CO influences
everyone in the morket.l Much onecdotol evidence hos driven the roison d'6tre
for CO vorious projecis. These exomples provide convincing evidence thot the
CO effect is reol ond CO bios exists. ln this regord, Khonno (1986) cites on incident
in lndio whereby consumers, in evoluoting locolly ossembled color television sets,
would open their bocks to moke certoin thot their subossemblies were imported
from some countries but not others. ln lron Sony television sets mode in Jopon corry
os much os o20% price premium over identicol sets built in Singopore. ln developed
morkets, where relotively offlueni customers rely on brond imoge, reputotion ond
chorocter to moke o purchose decision, there tends to be much greoter relionce
on non-CO cues. lndeed, Tse ond Gorn (1993) found thot Sony stereo equipment
mode in Jopon wos roted higher thon thot mode in o developing country like
lndonesio.
Reseorch involving US consumers indicotes thot the level of CO knowledge of

consumers is ot best modest (Somiee, Shimp ond Shormo, 2005). The overoge
brond origin knowledge score for oll 84 bronds studied by the outhors wos 35%.
lmportontly, the overoge score for the 44 foreign bronds included in the study wos
227", whereos domestic bronds were designoted os such in obout one-holf of the
167
CHAPTER II
coses for the 40 US bronds (o score of 49%). The difference between consumers'
knowledge of domestic ond foreign bronds reported by the outhors wos stotisticolly
significont. A key implicotion of Somiee, Shimp ond Shormo (2005) for future CO
studies is thot. of leost in the United Stotes where CO informotion for imported
products is ovoiloble on product lobels, consumers incorrectly identified their
origins in the mojority of coses, often ossuming thot foreign bronds ore octuolly of
domestic origin. lt foir to ossume thot in morkets where CO informotion is often
is
not ovoiloble consumers' knowledge of CO is even more impoverished. Thus, in
routine ond ecologicolly conect decision moking situotions most consumers would
be unowore of origins of bronds ovoiloble in the morket.
However, it would be inoccurote to conclude from somiee, shimp ond Shormo

(2005) study thot no one is impocied by CO. The exomples cited eortier olong
with findings from the morketing literoture, moke it cleor thot ot best only o portion
of customers ore likely to exhibit sensitivity towords imported products (Shimp ond
Shormo i 987; Shormo, Shimp ond Shin 1995). ln porticulor; Shimp ond Shormo (1987)
reported specific demogrophic ond socioeconomic chorocteristics ossocioted
with ethnocentric tendencies. Their study olong with other indicotors led Somiee
to explicitly recognize COO's relevonce for only o segmeni within eoch
(1994)
morkei. lncreosingly other reseorch hos ocknowledged thot the COO effect is
segmented (e.9., Al-Suloiti ond Boker 1998; Klein, Ettenson ond Morris I998; Speece
2005). Despite greoter recognition regording the segmented noture of the CO
phenomenon, to dote the notion hos not been formolly incorporoted in empiricol
studies of CO.
The CO Phenomenon in a Global Economy

The notion of on "imported product" hos historicolly conveyed thot the item hos
been wholly ond substontiolly produced in onother country. As the world economies
hove globolized, this meoning hos chonged. Todoy's products ore often o hybrid of
domestic ond imported designs, ports ond/or ossemblies. Products thot ore entirely
designed ond monufoctured in o single county ore increosingly o rore species.
Customer knowledge with respect to ihe complexity of COs of products ore olso
increosingly sophisticoted. Most consumers reolize thot products thot they buy,
168
ports' components'
even if lobeled os hoving been locolly monufoctured, include
personol
design ond technologies thot con spon severol countries. ln conducting
('1993) found
interviews with o somple of consumers, Shimp, Somiee ond Modden
thot the greot mojority of subjects were owore of internotionolsourcing strotegies
used by firms ond thot o product or brond, porticulorly one ossocioted wiih
on
in
MNC, is potentiolly mode from ports ocquired internotionolly ond monufoctured
thot subiecis
o number of morkets. Howevei there wos no indicotion in their study
thoi on overoge
octuolly sought co informotion. ln foct, their doto cleorly indicote
were impoverished'
subjects' cognitive siructures with respeci to cos of products
The globol notureof businesses, the presence of multinoiionol, multi-product

corporotions ond the intertwined noture of globol commerciol tronsoctions
complicote the ossessment of origins of products. To this end, co
moy be less
ln
importont in the choice process ond behovior thon other considerotions'
on ero of globol sourcing, monufocturing ond morketing, coupled with
better
informed customers tooled with sophisticoted meons of

globol communicotionS'
it is increosingly difficult to define CO with ony degree of
precision' Accordingly'
processes for
the ossessment of COs of products ond their impoct on the choice
vorious customer segments isextremely chollenging' The presence of multinotionol
within ond
colloborotion for product reseorch, design, sourcing ond monufocturing
moke Co o purely
ocross o firm,s network or operotions ond supply choin simply
conect
obstroct concept thot is very difflculi to operotionolize in on ecologicolly
thot hos not
monner. This reolity in turn poses o serious methodologicol chollenge
been odequoiely oddressed in the CO literoiure'
issue' There is no
Concurrently, the growth of globol bronds truly complicotes the
the purchose
empiricolevidence thot customers in developed morkets considering
indicotes thot
of well-known bronds ore influenced by CO' Anecdotol evidence
lobel hove foced
well-known western luxury bronds corrying o "Mode in chino"
evidence from
no negotive co bios (Golloni 2005). HoweveL other onecdotol
it is foir
developing morkets suggests o different scenorio. Bosed on this evidence'
where o
io ossume thot o segment of populotion in developing morkets moy core
evidence
known brond hos been monufoctured. However, there is no empiricol
169
CHAPTER II
to this effect ond no indicotion os to the size of the segment.

Given the odvonces
in informotion technology ond trovel, it is reosonoble to expect
the size of such
groups to be smollond most developing morket customers
to rely on brond nomes
os the bosis for their purchose decisions rother thon the
CO of the brond. When o
brond is less known, o segment of customers is noturolly more
likely to rely on the
CO of the brond (where this informotion is ovoiloble).
The Influence of Brands

An increosing number of CO publicotions ore giving recognition
io the importonce
of bronds os meons of overcoming unfovorobre co bios (e.g.,,
Lee ond Urgodo
1996). concurrenfly, o complementory ond porollel line
of inquiry hos focused
on the importonce of brond origin (rother thon co) (e.g.,,
Thokor ond Kohli I g96;
Thokor ond Lovock 2003; Somiee, Shimp ond
shormo 2005). A focus on brond origin
is conceptuolly, meihodologicolly ond monogeriolly
volid ond ovoids the mony
criticisms oimed of the co line of reseorch. Even intuitively,
one would expect
the presence of powerful bronds to influence ond, thereby,
overcome negotive
co bios. Seors, Torget, JC penney, Bloomingdole's ond mony other retoilers ore
regulorly using the occeptonce, reoch ond/or prestige
of their brond nomes to
morket o voriety of imported products. Seors guorontees
"customer soiisfoction,,
ond it is reosonoble to expect oll bronds ossocioted with
Seors to substontiolly or
wholly overcome negotive co bios. Furthermore, to
o lesser degree, would it be
foir to ossume thot o customer in the morket for o Zenith,
o Sony or on RCA television
set will be os concerned os they might be obout o less
known brond. Respected
notionol ond privote bronds in product cotegories for which perceived
risk is high
(e.9., consumer electronics, cors), greofly benefit
regordless of where they ore
mode becouse monufocturers ond/or retoilers reduce such
risks. Hondo Accord,
Nisson irucks ond Sony TVs, orthough mode in
Mexico, chino or the US enjoy sorid
positions becouse of the strength of their
core bronds. ln such coses firms hove o
desiroble strotegy which mointoins o "Joponese" imoge (i.e.,
brond origin) which
customers ossociote wiih high quority ond superior vorue (shimp,
somiee ond
Modden 1993) regordless of where they ore monufoctured
or ossembled.
170
Managerial Recommendations in the CO Literature

The CO literoture hos enriched our knowledge regording its ontecedents ond
conditions underwhich bios might be present. Howeve[ the single most importont
outcome of this line of inquiry hos to be its monogeriol guidonce when such
bios is present. Concurrently, the liieroture hos offered only limited monogeriol
implicotions, some of which ore improcticol within the context of how internotionol
ond globol corporotions operote. Johonsson (1993) hos noted thot CO reseorch
hos not hod much monogeriol impoct ond suggests thot it continues to be poorly
regorded by some proctitioners ond consultonts. Monogeriolguidonce emerging
from CO reseorch offers two possible levels of oction: micro-level informotion
reloting to how customers feelobout ond think of CO ond mocro-levelinformotion
involving, for exomple, country equity.
Micro-level informotion pertoins to the generol ignoronce of consumers with

respect to COs of bronds ond products ond the lock of soliency of CO in their
purchose decisions (e.9., Hugstod ond Dun 1986; Hester ond Yuen 1987; Thokor
ond Lovock 2003; Chen 2004; Somiee, Shimp ond Shormo 2005). lndeed, literoture
reviews ond meto-onolyses demonstrote thot the influence of CO, especiolly with
respect to purchose behovior is minimol (Somiee I994; Peterson ond Jolibert l9g5;
Verlegh ond Steenkomp 1999). These findings moke it very difficult to systemoticolly
incorporote CO+eloted bios in internotionolmorketing strotegies. Otherconsumers
demonstrote o preference for domestic products (e.g., Shimp ond Shorm o 1gg7;
Shormo, Shimp ond Shin 1995). Furthermore, reseorch hos olso demonstroted thot
customers in different countries respond differently to ihe CO cue (e.g.. Stephens
ef o/. 1985; Popodopoulos et ol. 19871. collectively, these findings moke it very
difficult to oppropriotely segment consumers bosed on their sensitivity towords CO
so thot oppropriote morketing strotegies might be devised for different morkets.
Concunently, using CO-reloted informotion os the bosis for internotionol morket
segmentotion meons thot other more relevont criterio for internotionol morket
segmentotion or the delineotion of intermorket segments ore bypossed. The
suboptimol opprooch to segmentotion will result in sub-optimol performonce.s
HoweveL using CO in internotionol morket segmentotion is porodoxicol in the foce
171
CHAPTER II
of reported findings thot most consumers ore unowore of origins of bronds ond
products ond some prefer domestic products.
With respect to mocro-level monogeriol informoiion, it is pivotol to first exomine

how firms operote globolly. To do ihis, one might focus on ihe operotions of
MNCs becouse these firms ore best positioned to, not only to ocquire the relevont
informotion olerting them to CO bios, but olso possess the resources to incorporote
this informotion in their plons ond strotegies. To operote globolly, firms must plon
ond implement o coordinoted ond inter-reloted plons. These firm-levelmonogeriol
decisions tend to be independent of customer preferences ond choice behovior
with respect to CO ond include morketing progrom stondordizotion, product imoge
ond positioning decisions ond monufocturing site seleciion decisions (Somiee
1gg4l. Produciion rotionolizotion ond monufocturing site selection decisions
ore inherently intertwined with morketing progrom stondordizotion ond product
,l984).
imoge ond positioning decisions (Somiee ond Coropellotti However there
is no evidence in the literoiure thot ony of these decisions formolly incorporote
CO considerotions. Firms moke criticol globol exponsion decision with o view
towords performonce. lf CO is to hove ony impoct upon monogeriol decision, its
performonce consequences must first be evident. lnterestingly, the CO literoture is
conspicuously obsent of performonce considerotions, even if some hove ottempied
to bring monogeriol decision moking with respect to the findings they report. As
such, brond or product profitobility should be token into considerotion.
The following is o representotive list of monogeriol recommendotions from the

CO literoture:
. Firms should corefully select ocountry for monufocture (FDl) or sourcing

to ovoid negotive CO bios ond when considering foreign sourcing, the
seller must consider not only lobor costs in the foreign country but olso
the sourcing country's imoge for specific product dimensions ond either
emphosize or downploy the sourcing country (e.9., choo 1993,2OO1;
Klein. Eitenson ond Morris 1998; Knight 1999; Wotson ond Wright 2000;
Popodopoulos ond Heslop 2oo2; choo, wuhrer ond Weroni2005; Phom
2006).
172
Severol studies hove suggested thot firms should ossess the presence of
negotive CO bios ond circumvent it by ovoiding FDI in oreos for which
there is o strong bios (e.9., Johonsson ond Nebenzohl 1985; Hon ond
Terpstro 1988).
Exporting firms ossocioted with controversiol countries (bosed on their

post militory, economic, or politicol octions such os Jopon, Germony,
Russio, the United Stotes, lsroel, Fronce or Greot Britoin) conduct reseorch
thot meosures to improve their knowledge of onimosity in torget morkets
(Klein, Ettenson ond Monis 1998).
lnternotionol morketers might directly respond to notion-bosed

onimosity. One strotegywould be to engoge in public relotions ond other
communicotions efforts to improve country perceptions ond oddress
sources of internotionoltension (Klein, Ettenson ond Morris 1998).
Aworeness regording the presence of internotionol onimosity ond its

impoct on customer choice in select iorget morkets con guide firms
to develop monufocturing ollionces ond the production of "hybrid"
products (products monufoctured in one country ond bronded by o
,l998).
firm from onother country) (Klein, Ettenson ond Monis
Firms should monufocture new products in developed countries during

the introductory stoge of the product life cycle (since eorly odopters ore
concerned with monufocture-of-origin); products con be outsourced to
low cost suppliers during the moturity stoge while stressing brond-origin
to consumers (Chen 2@4l,.
Firms from developing morkets, for which negotive CO bios is strong,

should respond to this effect by portnering with known ond respected
globol bronds ond distributors or form ollionces with portners from
countries with fovoroble ronkings (Johonsson, Ronkoinen ond Czinkoto
1994; Okechuku ond Onyemoh 1999; Ahmed, Johnson, Yong, Fott, Teng
ond Boon 20041.
173
CHAPTER II
. Exporters from developed countries should leveroge

off their country
equity (Shimp, Somiee ond Modden 1993; Okechuku ond Onyemoh
leee).
. ln countries where oll imported products enjoy o positive CO bios (i.e.,

developing countries), domestic producers should improve the quolity
of their products (Yomooh 2005).
The most common recommendotion emerging from the CO literoture olerts

firms to corefully select countries from which products ore sourced. Another
overlopping recommendotion suggests thot firms in countries with unfovoroble
imoge select portners or form strotegic ollionces with firms from countries thot
corry o positive imoge. Other recommendotions ore suggested to o lesser extent.
Given the plethoro of published CO reseorch, it is surprising how few concrete ond
monogeriolly-oppropriote recommendotions hove been provided.
Planning for the Global Marketplace

At leost three sets of firm-level decisions overlop with CO+eloted considerotions
ond recommendotions outlined in the literoture. These include globol morketing
progrom stondordizotion considerotions, product imoge ond positioning ond plont
locotion ond sourcing decisions.
Global Standardization of Marketing Programs. An importont monogeriol

considerotion, porticulorly for MNCs, is the influence of CO upon the firm's obility
to stondordize its morketing progrom. Although o lorge body of literoture hos
investigoted morketing stondordizotion, its findings hos not spilled over to the
CO literoture. ln porticulor, the proponents of stondordizotion view internotionol
morketing strotegy os hoving greoter efficiencies which, in turn, should leod
to improved performonce (e.9., Buzell 1968; Join l9B9). Globot firms typicolly
rotionolize their monufocturing, worehousing ond morketing octivities on o
globol (or of the very leost, regionol) bosis to meet morket demond ond to
optimize coordinotion ond control of vorious functions (Somiee ond Coropellotti
19841. lncreosed consolidotion of globol monufocturing ond stondordizotion of
morketing octivities result in products being sourced from fewer (but presumobly
174
\Mithin the Context of Globalization
lorger) monufociuring focilities locoted in fewer couniries. Thus, internol sourcing

ond controct monufocturing ollow MNCs ond smoller flrms olike to benefit from
greoter efficiency ond improved performonce. Firms deploy such money-soving
opprooches in port becouse they con colculote their impoct on performonce. ln
controst, ihe performonce impoct of occommodoting even the strongest negotive
CO bios (for exomple, by sourcing imported products from o country thot is viewed
more fovorobly by o relevont segment in o given export morket) is likely smoller
thon deploying other strotegies or the use of olternotive morketing strotegies.
Successfulstondordizotion of morketing octivities is dependent on o high levelof

rotionolizotion, coordinotion ond conirol of vorious sourcing, monufocturing ond
morketing octivities. Well-monoged globolfirms source from fewer monufocturing
focilities thon multidomestic firms, which rely on more regionol or locolized
monufocturing ond con therefore modify or even customize to locol morket
preferences.6 lf some morkets demonstrote o preference for products from one
country ond o second ond o third morket fovor the some product mode in o
second ond o third country, production ond distribution would be unimoginoble
ond o corporote nightmore.
product Image and Positioning. Reseorch seems to indicote thot consumers from
different countries respond differently to CO cues (Popodopoulos et ol. 1987). lf
firms were to estoblish monufocturing focilities in more morkets to evode negotive
CO bios or leveroge off positive CO sentiments, the benefits ond ihe economies
offered by morketing progrom stondordizotion would erode. Noturolly, the
morketing vorioble most offected by stondordizotion is ihe product, but chonges
in the product moy necessitote modificotions in other ospects of the morketing
progrom, notobly the promotion ospects. The CO literoture hos olso reported thot
country stereotyping vories by product type (e.g.,, Reierson 1966; Nogoshimo 1970;
1g77; Goedeke 1973; Bonnister ond Sounders 1978; Chosin ond Joffe I979; Dornoff
ef ol. t 9Z9; Niffenegger 1980; Festervond et ol. 1985; Lumpkin ond Crowford 1985;
Wollond Heslop l986).
175
CHAPTER II
The mony criticisms oimed of the CO line of inquiry should not overshodow the
foct thot some customers ore sensitive to this informotion ond CO informotion moy
weigh heovily in their purchose decisions. An emerging opprooch within the CO
literoture is to steer owoy from products ond bronds in fovor of the countries os
the unit of onolysis. lt is reosoned thot, like bronds ond other objects, people hove
impressions of countries bosed on their knowledge obout eoch country (rother
thon products they produce). Country-level knowledge is occumuloted over long
periods bosed on o voriety of individuolexperiences with ond obout eoch country
(internotionol trovel, word-of-mouth, personol heritoge, news ond, for some
individuols, experience with products mode ihere). The concept of country equity
wos first proposed by Shimp, Somiee ond Modden (l 993). Since then, on increosing
number of scholors interesied in the CO line of inquiry ore focusing on this construct
(e.9., okechuku ond onyemoh 1999; popodopoulos ond Heslop 2oo2).
Another emerging olternotive to the troditionol CO reseorch is to focus on

brond origin. A focus on brond origin is on the premise thot, in ihe ero of powerful
internotionol ond globol bronds, it is the country wiih which o brond is typicolly
ossocioted thot moy motter. ln otherwords, where o product is designed, ossembled,
or monufoctured does not motter. Consumers ore increosingly sophisiicoted ond
recognize the intertwined noture of globoltrode ond thot, before o brond nome is
embossed on o product, it is in the best interest of the firm possessing the brond to
moke certoin thot the brond is every bit os good os the one originolly produced in
its home morket. Hondo cors provide on excellent exomple in this regord. When
the firm initiolly plonned its outo ossembly plont in Morysville, Ohio, in I980 (the first
Hondo Accord produced in 19821, it viewed Hondo cors from Jopon os its moin
competition. The objective wos to produce cors thot were superior in quolity os
compored to those monufoctured by its Joponese porent. Todoy, Hondo exports
cors from the USto Jopon ond other morkets. ln short, firms ore unwilling to socrifice
brond dilution just becouse they outsource supplies from multiple focilities ond/
or suppliers; therefore, heightening, the relotive importonce of the brond ond the
country from which it originotes. Thus, the noiion of brond origin, os one of the
component of brond equity holds substontiol promise in future reseorch (cf. Keller
178
1998; Thokor ond Kohli 1996; Thokor ond Lovock, 2003; somiee, shimp ond shormo
200s).
Finolly, of the hundreds of orticles investigoting the co phenomenon, only o

hondful hove ottempted to universolly uncover the chorocteristics thot seporotes
CO-sensitive customers from the rest of the populotion. Developing o CO-sensitive
internotionol morketing strotegy must begin with o precise profile of the segment of
the populotion thot is offected. Otherwise, the strotegy might involve remedies thot
ore inoppropriote forthe intended torget morket. Forexomple, froming the messoge
inoppropriotely or using inelevont medio to inform ond educote origin-sensitive (vio
brond origin or country equity) customers. Therefore, future reseorch effort should
identify chorocteristics ond size of origin-sensitive segments ond determine the
relotive influence of these concepts on consumer choice using ecologicolly volid
reseorch designs thot ovoid heovy-honded opprooches (i.e., exposing subjects to
origins of products or bronds) os the doto ore being gothered.
179
CHAPTER II
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(Footnotes)
rEsiimotes vory widely ond older estimotes noturolly exclude the more recent publicotion
octivity. Peterson ond Jolibert (1995) perhops provide the conservoiive estimote of under
200 publicotions. Usunier (2006) offers on intermediote estimote of obout 400 studies.
Popodopoulos ond Heslop (2002) provide the highest estimote (i.e.., over 750 mojor
publicotions by more thon 780 outhors).
25ee http://www.wto.org/English/trotop_e lroi_elroi_into-e.htm for more informotion.
3Some EU governments (e.9.,, ltoly) ond o group of luxury product monufocturers ore
moking on effort to require CO lobeling on products sold in Europe. ln 2005, 225 firms,
including luxury bronds such os Louis Vuitton ond Trussordi, signed o petition to support
governmentol efforts for mondotory CO lobeling (for exomple, for such producls os
clothing ond shoes). Thus for these efforts hove met with significont resistonce from
mosl member stotes. Concurrently, such o requirement is o two edge sword for some
monufocturers thot source their luxury bronds from Asio ond North Africo ond ore currently
not required to reveol their CO. However even in the luxury good cotegory, the brond is o
stronger cue for customers thon is the cose for its CO. For exomple, LVMH Mo6l Hennessy
Louis Vuitton hondbogs ore mode in Chino ond, olthough they corry CO lobels, their
prestige ond populority remoin intoct (Golloni 2005). Lee ond Ulgodo (1996) confirm this
observotion ond conclude thot o well-estoblished brond con overcome negotive CO bios,
especiolly when intrinsic product informotion is ovoiloble.
4A cose in point is Popodopoulos ond Heslop (1993o: p. 28) in which they stote "Origins
ore of interest to oll buyers." Although they go on to exploin thot different groups seek the
informotion for different purposes ond some will use it in moking purchose decisions (i.e.,,
segments ore indeed present), the opening stotement quoted obove is representotive of
the modus operondiin the mindset of the greot mojority of CO reseorchers.
sPer segmentotion concept ond iis underlying theories of monopolistic competiiion ond
price discriminotion, segmentotion schemes ore volid only to the extent thot they result in
optimol performonce (i.e.,, the underlying theories of morket segmentotion ore normotive).
6Globol ond multidomestic firms pursue strotegies thot differ in both philosophy ond
orgonizotion, such thot ihe former view mokes no distinction between home ond host
morkets, whereos firms in the lotter view the world in o more frogmented monne[ but
consider foreign morkets to be os importont os the domestic morket. Globol firms possess
o high degree of coordinotion ond control of globol octivities, whereos foreign offiliotes of
multidomestic firms ore relotively outonomous in their decision moking.
r89
opler ree
CO_BRANDING IN THE
GLOBAL CONTEXT
CHAPTER III
192
Co-branding in the Global Context
Paul Chao*
Introduction
Componies hove been forging brond
ollionces for yeors. These ollionces
ore configured in vorious forms ond
combinotions. They moy olso be formed
to ochieve different strotegic objectives.
Multiple bronds used to torget different
morket segments under one corporote
ownership structure ore known os
on umbrello bronding strotegy. Yum!
Restouronts lnternotionol, the owner of
KFC, Pizo Hut, Toco Bell, Long John Silver's
ond A&W, eoch of which mointoinsitsown
brond identity ond positioning to serve o
distinct restouront segment represents
just one such exomple. Yum hos been
bringing together vorious bronds under
its ownenhip by locoting some of the
stores side by side ond sometimes even
housing them under the some roof. Some
customers referto the co-bronding of KFC
I ond Toco Bell os "Toco Chickens", the

Pqul choo, Professor of Morkeling, Deport-
menl of Morketing, Eoilern Mlchigon Unlver- Toco Bell/Pizzo Hut combinotion o "Toco
slty, Ml, USA.
193
CHAPTER III
Hut", Toco Bell/ Long John Silver's o "Toco Silver's" ond Toco Bell/piz:o Hut/KFC trio
o "Ken Toco Hut". Kinko's ocquisition by Federol Express in 2003 in response to the
UPS' ocquisitionof Moil Boxes, Etc. in 2001 represents onother. However, unlike Moil
Boxes, Etc. whose store nome for oll its 4000 plus locotions worldwide is switched to
The UPS Store to reflect this new ownership structure, Kinko's locotions ore renomed
"FedExKinko's" effectively creoting o duol brond nome.
Kmort ond Mortho Stewort ollionce is creoted through o non-equity structure.

Kmort continues to use its own corporote logo independenfly even though it is
hoped thot by oligning with Mortho Stewort, the good imoge portroyed through
Mortho Stewort designed high quolity products willbecome ossocioted with Kmort
thereby lifting its own imoge in the process. Co-bronding in this cose is ochieved
through co-promotionol moteriols feoturing Mortho Stewort merchondises which
Kmori corries in its stores. Other shorter term orrongements to promote two or
more bronds in o promotionol compoign ore olso common. Ford Motor compony
promoting the soles of its trucks by offering buyers Home Depot gift cords is just one
such exomple.
ln the ero of globolizotion, internotionol brond ollionces ore olso growing in

populority. Doimler's (Germony) ocquisition of Chrysler (US) to form ihe Doimler
Chrysler Corporotion os o duol corporote brond strotegy is originolly conceived
with greoter efficiency ond cost sovings in mind. Whirlpool, o US opplionce
monufocturer which ocquires the opplionce division of Philips of the Netherlonds is
originolly designed to be port of its Europeon entry strotegy. Feoring thot consumers
in Europe ore not fomilior with the Whirlpool brond nome, oll products it sells in
Europe ore to be lobeled Whirlpool/philips until such o time when it is no longer
necessory to do so. Other non-equity globol brond ollionces hove olso emerged.
Brond ollionces in the oirline industry ore typicol os oirlines form portnerships to
increose possenger loods ocross the world while cutting costs of the some time.
KLM/NWA ollionce works to feed tronsotlontic possengers into eoch other's flight
networks in Europe ond North Americo. Chino Southern recently joins this ollionce
to odd Asion routes to this network. Similorly, Uniied Airlines forms its own Stor
Allionce with o number of oirlines in Europe, Asio, South Americo ond elsewhere
194
in order to remoin competitive. While open sky ogreements, which ollow foreign
oirlines greoter flexibility in operoting routes in onother country's domestic morkets
longuishes in internotionolnegotiotions omong vorious notionolgovernments, such
ollionces provide one eosy ond convenient woy for synergy in the industry.
Whereos co-bronding strotegies hove been octively pursued by domestic ond

internotionol businesses, relotively few reseorch studies hove been conducted on
the effects of co-bronding. Furthermore, most reseorch in the literoture deoling
with co-bronding strotegies oddresses these issues from o domestic context.
Surprisingly, fewer siill ore reseorch studies designed to oddress co-bronding issues
in the internotionolcontext. Furihermore, even though Ettenson ond Knowles study
(2006) hos identified l0 bronding options employed by componies in recent mergers
ond ocquisitions, the survey results reveolthot brond decisions hove not been the
mojor component in most componies' M&A deliberotions. This chopter will first
provide on overview of co-bronding in the literoture followed by o discussion of
mojor theoreticol underpinnings which con be used to guide reseorch in this oreo.
A modelwith o set of reseorch propositions will then be presented. The poper will
conclude with suggestions for future reseorch.
Brand Alliance Research

Vorious theoreticol perspectives con be offered to ossist in developing the
fromework for studying brond ollionces. lt hos been suggested thot brond ollionces
con serye os o signol of quolity, porticulorly when consumers find it difficult to
oscertoin product quolity except through o product's brond nome (Roo ond
Ruekert 1994; Roo, Qu ond Ruekert 19991. Consumers rely on o voriety of cues for
moking inferences. ln the obsence of other informotion cues, the brond with the
lorgest morket shore must be the best product os o consumer inference represents
just one such exomple. ln coses of informotion osymmetry when consumers moy
not hove direct experience with the product, o brond nome moy become o
voluoble quolity signol. ln such o cose the ottitude toword o reputoble brond
con be predicted to be compotible with the risk reduction hypothesis. The quolity
uncertoinly ossocioted with o brond con be effectively reduced. Such benefit
moy not occrue when informotion osymmetry does not exist. For instonce, on
195
CHAPTER III
ollionce between Coco Colo ond Sony moy not provide ony incrementol benefits
to either brond if consumers perceive themselves to possess sufficient informotion
ond reosonobly confident obout quolities of both bronds. However if one brond is
perceived to be more reputoble ond well known thon the other the less estoblished
brond moy benefii more in the brond ollionce. This prediction is consistent with
the ottitude occessibility theory, which postulotes thot o strongly held brond
ottitude is more eosily retrieved from memory. Greoter fomiliority with o product is
therefore more copoble of generoting on ottitude toword o brond thon one with
which consumers ore less fomilior (Albo ond Hutchinson 1987; Bettmon ond Sujon
19871. Fomiloidty con ploy o moderoting role in brond ollionce evoluotions by the
consumer.
The ossociotive network model con olso be used to occount for the effectiveness
of joint brond promotions (Somu, Krishnon ond Smith 19991. According to this model,
piecesof informotion obouto productisstoredin memoryosfixed nodes.Thesenodes
ore connected by relotionol links (Collins ond Loftu s 1?75; Nelson, etc. 1993; Quillion
19691. A co[ BMW, moy exist in o person's memory contoining different nodes:cor;
fost, comfortoble. A cor seot deigned by Lego moy olso exist in o person's memory
contoining different nodes: cor seot, boby, toy, stylish, fun, comfortoble, etc. Some
of these nodded moy be dirpctly reloted to the BMW cor such os cor seot to cor
thot vorious nodes ore interconnected in
stylish, comfortoble, etc. To the extent
o positive monneL the imoges of either or both con be significontly enhonced.
The octivotion of informotion nodes stored in our memory con be octivoted by
odvertising. When on odvertisement feotures informotion obout two bronds,
which con be connected through memory links, the octivotion of both bronds in
memory con be ochieved rother quickly. This is so porticulorly when two bronds ore
complementory. When the two bronds ore non-complementory, such os BMW ond
Tide (o brond of detergent), consumers moy not be oble to retrieve the informotion
from the memory linkoge os eosily. This prediction is somewhot consistent with the
ottitude occessibility theory. When the brond ollionce involves two bronds, which
ore perceived to be less common or less fomilior ottitude formotion is less likely to
occur due to the unfomiliority of the brond ollionce.
196
congruity theory (osgood ond Tennenboum 1955) con be invoked when

informotion presented in on od involving two bronds ore incongruent. According
to this theory, incongruent informotion produces consumer dissononce, o stote of
psychologicoldiscomfort. Ample evidence exists in the morketing literoture pointing
to the efficocy of congruity in producing better consumer ottitudes os well os
product evoluotions (Friedmon ond Friedmon 1979; Komins 1990; Misro ond Beotty
1990;Childers ond Houston 1984; Houston, Childers ond heckler 1987; Unnovo ond
Bernkront l99l; Coxond Cox 1993; Moclnnis ond Pork lggl). However, in
Kelloris
o stote of incongruity, the ossociotion of two objects which ore incongruent moy
couse consumer
evoluotions of the two objects to move in the direction in which congruity con
be restored. This will be true porticulorly when the two bronds do not oppeor to
belong to the some leogue.For instonce, when Gucci is poired with Wolmort, there
is on immediote incongruity, which will couse consumer evoluotions of Gucciond
Wolmort to chonge in order to restore congruity. The positive imoge ossocioted

with Guccidue to its high stotus ond exclusivity will be deleteriously offected by the
negotive imoge ossocioted with Kmort. At the some time, consumer evoluotions of
Kmort moy be enhonced due to its ossociotion with Gucci.
Country Equities
ln the ero of globolizotion, brond ollionces ocross different countries ore becoming
more common. As such, countryequities moy be justos importontos brond equities
in consumer evoluotions of o brond ollionce. Like bronds consumers moy perceive
volues ossocioted with countries in which products ore mode (Popodopoulos
ond Heslop 2OO2). The foct thot some countries ore perceived in better lights thon
others when it comes to consumer evoluotions of products mode in those countries
hos been well documented in the Country-of-Origin (COO) literoture (Bilkey ond
Ness 1982; Leifield 1993; Ozsomerond Covusgil '1991; Peterson ond Jolibert tgg5).
The foct thot consumers moy prefer domestic to foreign products hos been
exploined on the bosis of ethnocentrism. However most studies in extoni literoture,
which provide evidence of consumer ethnocentrism hove been conducted
in wesfern industriolized countries such os US, Jopon ond countries in Western
197
CHAPTER III
Europe. ln developing countries such os Chino, lndio ond eost Europeon countries,
consumers oppeor to prefer products from more industriolized countries. ln this cose
xenocentrism, the opposite of ethnocentrism moy be of work. Xenocentrism is the
notion thot whotever comes from other countries must be better. Evidence exists to
show thot in some coses, this moy be true (Choo 2006, Johonsson, Ronkoinen ond
Czinkoto 1994; Klein, Ettenson ond Krishnon 2006).
ln o study oddressing brond ollionce using more thon two bronds in the ollionces,
Voss ond Gommoh (2OO4l report thot the second olly does not seem to improve
consumer evoluotion of the relotively unknown brond in the ollionce. Even though
this study is not specificolly designed to test the COO effects in the brond ollionce,
it nevertheless uses o brond which is implicitly ossocioted with onother country
(Sony of Jopon). Not surprisingly, the result obtoined in onother brond ollionce
study (Ruth ond Simonin 2003) olso shows the relotive ineffectiveness of the source
country os on event sponsor in o brond ollionce. ln both studies, ihe outhors hove
decided to test US vs. Jopon, which ore both industriolized countries. As predicted
by the informotion osymmetry hypothesis, when informotion osymmetry does not
exist, o well known ond reputoble brond is not expected to improve consumer
product evoluotions of onother brond, which is equolly well known ond reputoble.
Such oppeors to be the cose when US ond Jopon ore used to test the COO effects
on brond ollionce in both studies.
When brond ond countryvoriobles ore combined in o brond ollionce, the consumer
evoluotion process moy become more complex. lnformotion integrotion theory
(Anderson 1971,1982,1991; Bettmon, Copon ond Lutz 1975; Lynch 1985)proposes
thot consumers ossign importonce weights to vorious product ottributes os well os
rotings to the ottributes. Consumers combine these informotion to form on overoll
evoluotion of the product. One version of the informotion integrotion porodigm
suggests thot consumers moy rely on the overoging model. According to this model,
if one ottribute receives o greoter weight, the other will receive o smoller weight
since the weights should odd up to unity. A strong brond nome which con receive o
greoter weight con ihen be used to compensote for o weoker country equity since
the country will receive o smoller weight in consumer product evoluotion process.
198
Therefore, Sony mode in Mexico moy not receive o huge quolity discounting from
sony mode in Jopon even though Jopon is expected to be perceived to enjoy o
higher country equity thon Mexico os country moy receive o smoller weight in this
evoluotion when compored to the weight the brond moy receive. This hos been
portiolly confirmed in o study by Jo, Nokomoto ond Nelson (2003). One should olso
consider, howeve[ in other contexts; country moy receive o greoter weight vis-d-vis
other ottributes when other ottributes moy receive o smoller weight thon country
such os price (Choo 1993).
Research Propositions
Even though some studies hove been reported in the morketing literoture on
vorious brond ollionce issues (Levin ond Levin 2000; Levin 2000; pork, Jun ond
Shocker 1996; Simonin ond Ruth 1998; Woshburn, Till ond Priluck 2OO4), most of these
studies only involve domestic brond ollionces. Other brond ollionce studies focus
either on the effects of brond ollionce on event sponsorship (Ruth ond Simonin
2003) or oititude toword choriioble couse in o couse-brond portnership (Lofferty,
Goldsmith ond Hult 2004).
With the exception of two studies by Voss ond Tonsuhoj (1999) ond Choo ond Jo
(2000), no study hos been reported on the effectiveness of brond ollionces involving
two or more foreign bronds. ln the first study, Kodok (o US brond) or Fuji (o Joponese
brond) wos used with on imoginory comero brond mode in Singopore in o brond
ollionce. The COO effectwos notthe focus of thestudy ond wos iherefore nottested.
The second study exomined the effects of brond ollionce involving Mognovox (o
USbrond ocquired by the Philips of Netherlond) ond Philips (o Dutch opptionce
monufocturer) in Austrolio. ln this ero of globolizotion when mony multinotionol
corporotions ore increosingly forging complicoted cross border ollionces, there is o
need to extend brond ollionce studies beyond countries in the industriolized world
such os US, Jopon ond countries in Western Europe. As suggested by choo, Somiee
ond Yip (20041in o recent guesi editoriolin o Speciol lssue on lnternotionolMorketing
in the Asio-Pocific region, componies in the emerging economies of chino ond
lndio moy be reody to lounch their globol enterprises by ocquiring western firms
while using brond ollionce strotegies. The ocquisitions of RCA by TLC (Chino) ond
199
CHAPTER III
the IBM's pc division by Lenovo (Chino) ore just two coses in point. As Chino ond
lndio continue in their poths to ropid economic development, the question of how
brond ollionces between Chinese ond western componies or Chinese componies
ond lndion componies moy ploy out in the developing morkets os well os the
western industriolized morkets will become importont issues to oddress.
As indicoted by the informotion osymmetry hypothesis, when two bronds ore

well estoblished ond neorly identicolin perceived product quolities, such o brond
ollionce moy not odd ony incrementol benefit to either brond. On the other hond,
when one brond is perceived to be superior to onother brond, o brond ollionce
involving o stronger brond ond o weoker brond should benefit the weoker more
thon the stronger brond in the brond ollionce. The some should hold true for the
brond ollionce if both bronds involved in the brond ollionce ore perceived to be
weok. This prediciion is consistent with the congruity theory described eorlier. The
following reseorch propositions con thus be formuloted:
Pl o: There is no significont enhoncement in ottitude toword o brond ollionce

when both bronds ore perceived to highly reputoble.
p'lb: There significont enhoncement in product quolity perception of o brond

is
ollionce when both brond ore perceived to be highly reputoble.
p2o There is no significont ottitude enhoncement toword o brond ollionce

when both bronds ore perceived os weok in brond reputotions.
p2b: There is no significont enhoncement in product quoliiy perception of o

brond ollionce when both bronds ore perceived to be weok in brond
reputotion.
p3o: There is o significont ottitude enhoncement toword the brond ollionce in

fovor of the weoker brond when o stronger brond is poired with o weoker
brond in the ollionce.
p3b: There is o significont enhoncement in the product quolity perception of

o brond ollionce in fovor of the weoker brond when o stronger brond is
poired with o weoker brond in the brond ollionce.
200
Foro brondwith o strongerbrond equityin ollioncewith onotherbrond olso

with o stronger brond equity, o weok country equity moy odversely offect
the ottitude ond quolity evoluotion of the brond ollionce. Conversely, o
strong country equity moy be used to improve two weok bronds in o brond
ollionce. The following reseorch propositions con thus be formuloted:
P4o: Attitude toword the brond ollionce when both brond possess strong brond
equities moy be odversely offected if the bronds ore indicoted os mode
in countries with weok country equities.
P4b: Quolity perception of the brond ollionce between two bronds with strong
brond equities con be odversely offected if the bronds ore indicoted os
mode in countries with weok country equities.
P5o: Attitude toword the brond ollionce between two bronds with weok brond
equities con be significontly enhonced by indicoting thot these bronds
ore mode in countries with strong country equities.
P5b: Quolity evoluotion of the brond ollionce between two bronds with weok
brond Equities con be significontly enhonced by indicoting thot these
bronds ore mode in couniries with strong couniry equities.
As discussed eorlier fomiliority is expected to moderote ottitude toword

o brond ollionce. The ottitude occessibility posits thot o high level of
fomilioritywiih o brond con moderote ottitude toword the brond ollionce.
Similorly, o high level of fomiliority or oworeness obout o country where
the brond is mode con olso moderote the ottitude toword the brond
ollionce. The following propositions con thus be formuloted:
P5o: For higher (lower) levels of fomiliority with bronds hoving strong brond
equities in the brond ollionce, ottitude toword the brond ollionce will be
higher (lower).
P6b: For higher (lower) levels of fomiliority with bronds hoving strong brond
equities in the brond ollionce, product quolity perception of the brond
ollionce will be higher (lower).
201
CHAPTER III
P7o: For o higher level of brond fomiliority with o brond hoving o stronger
brond equity in o brond ollionce with o brond hoving o weoker brond
equity, ottitude toword the brond ollionce will be moderoted by the level
of fomiliority.
P7b: Foro higherlevelof brond fomilioritywith o brond hoving o strongerbrond

equity in o brond ollionce with o brond hoving o weoker brond equity,
product quolity perception of the brond ollionce will be moderoted by
the level of fomiliority.
P8o: For o higher level country fomiliority with

o brond hoving o stronger brond
ottitude toword the brond ollionce will be moderoted by the level of
country fomiliority.
P8b: For o higher level country fomiliority with

o brond hoving o stronger brond
product quolity perception of the brond ollionce will be moderoted by
the level of country fomiliority.
202
Conclusions
This chopter hos presented discussions of brond ollionce reseorch involving
cobronding both in the domestic ond internotionol contexts. lt olso provides
the theoreticol underpinnings, which con be used to guide globol co-bronding
reseorch.The propositionsgeneroted con be empiricollytested. As more componies
oround the world continue to pursue co-bronding os o vioble globol morketing
strotegic olternotive, reseorch of the impocts of these brond ollionces on consumer
ottitudes ond product evoluotions con provide useful insights to globol morketing
reseorchers ond proctitioners olike. The results con olso be used to formuloie globol
brond ollionce strotegies. lt hoped thot this chopter will generote interests in this
is
criticolly under-reseorched oreo in globol morketing. Studies involving cross notionol

comporisons will be especiolly voluoble.
203
CHAPTER III
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207
CHAPTER IV
210
An Empirical Investigation on Determinants of
Consumer Adoption of Foreign Brands in Korea
C. Min Han*
Introduction
Nnumerous studies hove been
conducted in the oreo of cross-culturol
consumers' buying behovior [see
Covusgil, Deligonoul ond Yoprok (2005) for
o comprehensive reviewl. Among them,
the topic of new product odoption ond
diffusion ocross the notions hos ottrocted
consideroble ottention in the morketing
literoture (e.g.,, Dekimpe, Porker ond
Sorvoy 2000; Gotignon ond Robertson
l99l; Mohojon, Muller ond Boss 1990).
The literoture suggests thot vorious foctors
ossocioted with consumer chorocteristics
os well os culturol foctors con influence
consumer odoption of foreign bronds
(Steenkomp, Hofstede ond Wedel 1999;
de Mooij 2OO4l.1
Now, the question con we extend our

is,
knowledge on new product odoption ond

diffusion to consumer odoption behovior
in Asion NlCs (newly industriolized
'C. Min Hon, Prolessor of lnlernolionql Mor-
countries) such os Koreo? How importont
ketlng, Honyong Unlverslty, Seoul, Koreq.
211
CHAPTER IV
the competitiveness of o foreign brond in consumer odoption of foreign bronds?

is
Whot voriobles os to consumer chorocteristics ore ossocioted with eorly odopters

of o foreign brond? Bosed on the theory of the diffusion ond odoption of innovotion
(Dekimpe, Porker ond Sorvoy 2000; Gotignon ond Robertson 1991; Rogers 2003)
ond reseorch on consumer innovotiveness (Foxoll ,l988; Steenkomp, Hofstede ond
Wedel 1999), our study empiricolly exomines whot determines consumer odoption
of foreign bronds in Koreo. Specificolly, the present study investigotes ihe effect
of the perceived product ottributes ond the consumers' personolity troits such os
venturesomeness, cosmopolitonism, sociol porticipotion, opinion leodership os well
os consumer potriotism on the odoption of foreign bronds.
Theoretical Background
Morketing studies often define new products in relotion to morket occeptonce.
lnnovotions frequently ore operotionolly defined os recently introduced products
thot hove not ottoined opproximotely 10 percent of their ultimote morket shore
(Engel, Blockwell ond Miniord 1995). Keegon (1989) suggested o concept of
"situotionol innovotion," bosed on the premise thot on existing product moy be
on innovotion in onother morket becouse it is o new ond different product for the
new morket. Terpstro ond Sorothy (2000) olso orgued thot on innovotion might
involve the modificotion or extension of existing products with little chonge in bosic
behovior potterns required by consumers. ln this context, purchose of foreign
bronds in Koreo moy be considered os onother kind of innovotion.
Generolly, two streoms of previous studies on odoption ond diffusion of

innovotions hove focused on the individuol consumer chorocteristics ond the
perceived product ottributes. Rogers (2003) orgues thot the rote of odoption of on
innovotion is o function of thqt innovotion's ottributes (e.g.,, product ottributes) ond
thot individuols differ remorkobly in their likelihood of trying out o new innovotion
due to differences in some personol chorocteristics. ln the following sections, the
conceptuolfromeworks specifying the consumerchorocteristics ond the perceived
product ottributes ore presented. These ore followed by the construct of consumer
potriotism.
212
ConsumerAdoption of Foreign Brands in Korea
Consumer Characteristics
Reseorch on consumers' odoption of innovotions ond consumer innovotiveness
hos resulted in o body of literoture consisting of three domoins regording consumer
chorocteristics (Foxoll l98B; Gotignon ond Robertson l99l; Mohojon, Muller ond
Boss 1993: Rogers,2003). First, severol studies hove exomined the ossociotion
between personolity iroit voriobles ond consumer innovotiveness (e.9.,, Foxoll
1988; Steenkomp ond Boumgortner 1992; Steenkomp, Hofstede ond Wedel 1999).
To be more specific, innovotiveness hos been found to be positively correloied with
consumers' venturesomeness, extroversion ond open-mindedness, but negotively
correloted with dogmotism ond conservotism (Foxoll 1988; Steenkomp, et ol.
1999). ln oddition, innovotors hove frequently, though not unequivocolly, been
described os more cosmopoliton, higher in obility to cope with unceriointy ond
risk ond
dogmotic (Rogers 2003; Johonsson 2006,p.399). Second, consumers'
less
communicotion voriobles hove been found to offect odoption of innovotions.
Severol studies including Gotignon ond Robertson (1991) ond Rogers (2003)
hove shown thot innovotors tend to be higher in sociol porticipotion ond opinion
leodership. Some of consumers' personolity troits ond communicotion voriobles
moy seem independent, but they moy be conceptuolly reloted to eoch other.
Open-mindedness, dogmotism ond conservotism moy be conceptuolly very close
to cosmopolitonism. Exiroversion ond sociol porticipotion olso moy be conceptuolly
inteneloied constructs. ln the present study, therefore, only the following consumer
chorocteristics were considered: venturesomeness, cosmopolitonism, sociol
porticipotion ond opinion leodership. Third, demogrophic voriobles, such os oge,
sociol stotus, educotion level, omount of income ond occupotionol stotus hove
been found to be closely reloted to consumers' odoption of innovotions (Medino
ond Michoels, 1994: Venkotromon ond Price, 1990).
ln oddition, o few studies on lifestyle hove provided some clues for identifying the
innovotor (Cho I 996; Croig, Greene ond Douglos 2003; Pork 1995; Solomon 1999).
Lifestyle studies of Koreon consumers suggest thot "Westernized/Americonized,
self-reolizing" or "progressive foshion-following" consumers tend to be potrons of
Western bronds, ond they olso tend to be octively engoged in vorious leisure ond
213
CHAPTER IV
culturol octivities in oddition to sociol octivities such os environmentol protection

(Cho 1996; Pork 1996).
The mojority of the reseorch, however hos been conducted on the odoption
of innovotions in odvoncing countries such os the United Stotes ond Western
Europe. Recent studies reflect o renewed interest in the odoption of innovotions
in developing countries. Medino ond Michoels (1994) orgued in iheir Mexicon
study thot consumers' modernism got linked to consumers' innovotiveness. As the
world's borders fode due to odvonces in communicotions, the ollure of Western
consumer culture hos spreod throughout the world. Severol studies demonstroted
thot in less-developed countries or in tronsitionol economies, such os Chino ond
Eostern Europe, thot ore only beginning to embroce Western-style moteriolism os
o woy of life, the degree of imitotion of Western consumption potterns hos some
effect on the odoption of innovotions (Solomon 1999; Steenkomp, et o1.2003; Zhou
ond Hui 2003).
Product Characteristics
One of the mojor foctors offecting the rote of odoption of on innovotion is the
chorocteristics of the innovotion itself. Rogers (2003) suggests five chorocteristics
thot hove o mojor influence on the rote of odoption of on innovotion. According
to him, the odoption of on innovotion is positively reloted to relotive odvontoge,
compotibility, triolobility ond observobility, but negotively reloted to complexity
of thot innovotion. LoBoy ond Kinneor (1981) found thot odopters of solor energy
systems roted these systems significontly higher thon non-odopters on relotive
odvontoge, compotibility ond simplicity. Another notoble study by Ostlund (1974)
found the close ossociotions between Rogers' five chorocteristics of innovotions
ond predicting odoption of six new pockoged foods. ln his study, the most
importont foctor in encouroging odoption ond diffusion wos relotive odvontoge.
It should be noted thot the product chorocteristics moy not opply uniformly to oll
types of innovotion odoption decision, but generolly opply to the introduction of
innovotions thot involve the estoblishment of new products with new consumption
potterns. The present study deols with foreign bronds, which ore the modificotion
214
of on existing product rother thon the estoblishment of o totolly new one. Keegon
(1989) suggests thot on innovotion is something new or different, either in on
obsolute sense or in o situotionol sense. ln on obsolute sense, once o product hos
been introduced onywhere in the world, it is no longer on innovotion becouse it is
no longer new to the world. Howeve[ on existing product moy be on innovotion
in onother country in o situotionolsense os it moy be new ond different from locol
products. Thus, o product moy be simultoneously o new product innovotion in
some countries ond o moture product in others.
Consumer Patriotism
ln morketing reseorch on how consumers moke o product choice, it hos been
found thot offective components os well os cognitive components ploy on
importont role in consumers' odoption behovior (Botro ond Stoymon 1990; Zojonc
ond Morkus 1982). Botro ond Stoymon (1990) orgue thot preferences moy consist
of cognitive ond offective foctors in o voriety of combinotions; in some coses the
cognitive foctors moy be dominont, in some the cognitive ond offective foctors
moy interoct with eoch other ond in other coses the offective foctors moy be
dominont ond primory.
ln the present study, consumer potriotism is considered os the offective

component thot is closely reloted to the topic of the odoption of foreign products.
ln severolstudies (Gronzin ond Pointer2OOl; Hon 1988, 1994), it hos been reported
thot consumers' potriotic emotions hove significont effects on consumers' ottitudes
toword foreign bronds ond purchose intentions. Potriotic consumers moy be more
likely to buy domestic rother thon foreign products compored to consumers who
ore not potriotic. According to Hon (19941, consumer potriotism moy indicote
one's willingness to moke o socrifice in order to purchose o domestic brond.
From the perspective of potriotic consumers, purchosing imporied products is
wrong becouse in their minds it moy hurt the domestic economy ond couses
losses in jobs. These potriotic emotions moy olso influence cognitive responses
os well os buying decisions. ln other words, potriotic consumers moy tend to
rote domestic products more fovorobly or foreign imports less fovorobly. On the
oiher hond, consumer ethnocentrism, introduced in the morketing literoture by
215
CHAPTER IV
Shimp ond Shormo (1987), is defined os "the beliefs held by consumers obout the
opproprioteness, indeed morolity of purchosing foreign mode products." Highly
ethnocentric consumers hove o negotive ottitude toword buying foreign bronds.
ln controst, consumers who ore less ethnocentric evoluote foreign products more
on their own merits without considerotion of where they were mode. A similor
concept, nomely notionol identity, wos olso proposed by Keiller, et ol (1996) ond
Thelen ond Honeycutt (2004). Consumers' sense of notionolidentity con influence
their purchose decisions ogoinst foreign bronds.
Research Design
Hypotheses
Bosed on the preceding discussion, the following hypotheses ore proposed ond
tested in this study.
Hl: Adopters of foreign imported bronds evoluote the ottributes of foreign

bronds more fovorobly thon those of domestic bronds.
H2: Adopters of foreign imported bronds hove different consumer

chorocteristics from non-odopters.
With regord to consumer chorocteristics, the present study, bosed on

Rogers' study (2003), moinly focuses on ihe influence of consumers'
personolity troits ond communicotion voriobles on the odoption of
foreign bronds. Open-mindedness, dogmotism ond conservotism seem
conceptuolly correloted with cosmopolitonism. lt olso oppeors thoi
extroversion is conceptuolly closest to sociol porticipotion. Therefore,
the following consumer chorocteristics were considered os voriobles in
our study: venturesomeness, cosmopolitonism, sociol porticipotion ond
opinion leodership.
H2.1: Adopters of foreign imported bronds ore more venturesome thon non-
odopters.
H2.2: Adopters of foreign imported bronds ore more cosmopoliton thon non-
odopters.
216
H2.3: Adopters of foreign imported bronds ore higher in opinion leodership

thon non-odopters.
H2.4: Adopters of foreign imported bronds ore higher in sociol porticipotion

thon non-odopters.
The finol hypothesis concerns consumer potriotism. ln oddition to the

obove consumer chorocteristics suggested by the literoture on consumer
. odoption of innovotions ond consumer innovotiveness, consumer
potriotism moy olso ploy on importont role in consumer odoption of o
foreign brond.
H3: Adopters of foreign imported bronds ore lower in consumer potriotism

thon non-odopters.
Objects.
Foreign imported cigorette bronds were chosen for our study. First, of the time of
study foreign bronds represented slightly over ten percent of the cigorette morket in
Koreo. This fits very wellwith the definition of on innovotion by Engel, Blockwell ond
Miniord (1995) who operotionolized it os recently introduced products thot hove
not ottoined opproximotely I0 percent of their ultimote morket shore. Second,
the introduction of foreign cigoretie bronds moy involve on extension of existing
products with limited chonge in technology. Thus, potterns of diffusion for foreign
cigorettes moy not be os morked ond well defined os ore those for new products
representing mojor technologicol odvonces. ln this sense, the introduction of
foreign cigoreites into the Koreon domestic morket is opplicoble to the situotionol
innovotion os suggested by Keegon (,l989). Two foreign cigorette bronds thot
showed the highest morket shores of the time of the study were selected from two
countries: Mild Seven Lights from Jopon ond Morlboro Lights from the US.
217
CHAPTER IV
Operationalizations
Adoption of lnnovotion. The morket shore of the individuol brond considered wos
less thon 5%ot the time of the study ond occurrence of socioldesirobility bios (Hon,
Lee ond Ro (1994) wos olso expected. Thus, we onticipoted o difficulty in obtoining
o sizoble ond bolonced somple of odopters of the respective bronds. Thus, those
who purchosed the respective bronds of leost once in ten post purchoses of
cigorettes were clossified os the odopter in our study.2 As the result, we obtoined
68 odopters (130 non-odopters) of Mild Seven Lights ond 52 odopters (146 non-
odopters) of Morlboro Lights.
Venfuresomeness. Venturesomeness is operotionollydefined oswillingness to toke

the purchose of new products (Rogers, 1983). lt wos meosured on four-item,
risks in
seven-point scoles: "l strongly ogree"/ "l strongly disogree." The items used ore os
follows: (l ) "l con toke risks of ony kind"; (2) "lf I find on opportunity to porochute,
to do it"; (3) "l would like to hove new ond exciting experiences"; (4)
I om willing
"Sometimes I feel on impulse to do feorful things" (Eysenck 1977; Gotignon ond
Robertson 1989).
Cosmopolitonism. How oriented the person is beyond his community is referred

to os cosmopolitonism. lt wos meosured occording to the degree of consumers'
informotion seorch octivities, using the three items by Gotignon, Elioshberg ond
Robertson (.l989). The following items ore used: o frequency of troveling obrood,
informotion chonnels in use (lnternet, sotellite broodcosting, coble TV) ond on
overoge frequency of contocts with foreigners o yeor.
Socio/ Porticipotion. Sociol porticipotion refers to the degree of porticipotion in

vorious sociol groups. lt wos meosured by the numbers of sociol orgonizotions which
subjects belong to (e.9.,, business-reloted groups, religious groups, leisure groups,
sociol groups) os suggested by Gotignon ond Robertson (.l989) ond Robertson ond
Kennedy (,l968).
Opinion Leodershp. Opinion leodership refers to the extent to which individuols

give informotion obout o topic (e.9.,, on innovotion) ond the extent to which
informotion is sought from those individuols (Gotignon ond Robertson I 989: Reynolds
218
ond Dorden 19711. Opinion leodership wos meosured on four-item, seven-point

scoles: "l strongly ogree"/ "l strongly disogree." The items chosen ore os follows:
{l ) "When I encounter o new product, I like to introduce it to others"; (2) "Others
osk me mony questions obout new products"; (3) "Others osk me mony questions
obout product informotion ond where to buy it"; (4) "When others osk me where to
buy o product, I con exploin it to them in detoil" (Price, Feick ond Smith 1986).
Consumer Pofriotism. Consumer potriotism wos meosured by subjects' emotionol

intensity ("How strongly do you feel?") ioword the following stotements: (l) "l
should buy Koreon domestic cigorettes becouse I om Koreon"; (2) "Foreign
imported cigorettes ore ond will be domoging Koreon cigorette industry"; (3)
"Foreign imported cigorettes ore ond will be domoging the income of Koreon
forming populotion"i (4) "1feel guilty if I choose to buy foreign cigorettes insteod
of Koreon bronds" (Hon 1988). These meosures reflect consumers' perceived
potrioiic obligotions to buying domestic products, their feors obout the decline of
the Koreon industry ond their guilt obout not buying Koreon products. Responses
were meosured on seven-point scoles onchored by "l strongly feel"/ "l strongly do
not feel."
Relotive Advontoge of Perceived Product Attributes. As indicoted obove, the

introduction of foreign cigorettes into the Koreon domestic morket is opplicoble
to the situotionol innovotion. Thus, relotive odvontoge, thot is the extent to which
consumers perceive o new product os superior to existing substitutes, is expected
to be o mojor influence on consumers' odoption of innovotions. Since foreign
cigorettes ore eosier to try ond comprehend, the rote of diffusion moy not depend
on the other product chorocteristics such os compotibility, simplicity, observobility
or triolobility. ln our study, relotive odvontoge refers to the degree to which on
innovotion is superior to competitive products in terms of relevont dimensions
(Rogers 2003). To identify solient oitributes of cigorettes, preliminory interviews
were conducted with twenty subjects. Bosed on the findings of o previous study
by Kim (1994) ond preliminory interviews, seven oitributes of cigorettes were
considered: volue for money, scent, mildness, impoct on heolth, pockoge design,
brond repuiotion ond suction. Subjects were osked to evoluote foreign imported
219
CHAPTER IV
cigorettes in ierms of the seven ottributes, compored to domestic cigorettes.

Relotive odvontoge wos meosured on seven-point Likert scoles: "l definitely ogree"/
"l definiiely do not ogree" .
Method
Subiecfs. The doio were obtoined from o somple of 210 respondents, who were
mole smokers over twenty yeors old, residing in Koreo. Specificolly, subjects were
selected from people who used smoking rooms of Seoul lnternotionol Airport, os
they were reodily distinguished from non-smokers ond were olso expected to be
fomilior with foreign brond cigorettes. They were likely to be either potentiol or
current mojor consumers.
Dofo Co/lection. o convenience sompling wos used to select individuols

First,
in Seoul, Koreo. Three hundred forty eight individuols were solicited for their
porticipotion by field sioffs ond then two hundred ten individuols were selected.
The porticipotion rotio wos 60.3%. Averoge respondents were, in medion volues.
26 to 40 yeors
old (82.3%) ond morried .717%). Second, o self-odministered mode
wos chosen becouse personol or telephone interviews would be more likely to
produce sociol desirobility bioses in subjects' rotings of product ottributes, ottitudes
toword products ond purchose intentions (Hon, Lee ond Ro, 1994). The occunence
of sociol desirobility bioses moy be more likely to occur when subjects evoluoie
products thot elicit strong potriotic emotions (e.g.,, cigorettes, outomobiles). ln
oddition, some countries such os Jopon moy be perceived os o threot to the Koreon
economy ond culture. Thus, evoluotions of products from these countries moy be
more susceptible to sociol desirobility bioses. Note thot the questions meosuring
the potriotism were osked of the end of the survey to prevent ony responses to the
potriotism meosures from offecting those to other meosures. A totol of 210 subjects
porticipoted in the study; the completion rotio wosg4.3% (198 out of 210).
220
Results
Reliabilities and Yalidities
Cronboch olpho wos computed to ossess the internol consistency of multiple
items for consumer chorocteristics, product ottributes ond consumer potriotism
roiings. The coefficients for Cronboch olpho were .796 for venturesomeness, .850
for opinion leodership, .823 for cosmopolitonism, .869 for product oiiributes ond
.805 for potriotism. These coefficients exceeded .6, indicoting reosonoble degrees
of reliobility for the consiructs.
Correlotions omong the independent voriobles ore presenied in the Appendix.

Conelotion between cosmopolitonism ond relotive odvontoge of the Joponese
brond wos the highest, .383 ond the mojority of correlotions were less thon .300.
These olso indicote reosonoble degrees of discriminoni volidity (Bogozzi 1982).
Hypotheseslbsting
The present study corried out logistic regressions to estimote the proposed
hypotheses, os the volues token by dependent voriobles were quolitotive ond
binory choices (Greene,2000). The dependent voriobles were encoded os'l'
(odopters of the foreign brond under considerotion) or '0' (non-odopters of the
brond). ln Toble 4.2, porometer estimotes by logit onolysis ore shown. Wiih respect
to the goodness-of-fii for the model estimotion, hit rotios ond pseudo R-squore
volues were reosonobly high for both Joponese ond US bronds.
porometer estimotes in Toble 4.1 showed thot for the Joponese brond, relotive
The
odvontoge of product ottributes hod o significont effect on product odoption.
On the other hond, for the US brond, relotive odvontoge of produci ottributes,
cosmopolitonism, sociol porticipotion ond potriotism were found to hove o
significont effect of the .05level. Venturesomeness ond opinion leodership did not
oppeor to hove ony significont influences on odoption of foreign cigorette bronds.
Thus, Hl is supported in cose of both bronds. Only in the cose of the US brond, H2.2,
H2.4 ond H3 ore supporied. On the controry, the findings do not render support to
H2.1 ond H2.3. Surprisingly, the study found thot in the cose of the Joponese brond
221
CHAPTER IV
consumer chorocteristics ond potriotism did not hove ony significont influences on
product odoption. One explonotion moy be thot subjects ore more susceptible to
sociol desirobility bioses in cose of the Joponese brond. Subjects might report whot
o 'typicol' Koreon would be sociolly expected to respond.
Although stotisticolly not significont on odoption/non-odoption of the Joponese

brond, it is ossumed thot consumer chorocteristics ond potriotism might hove o
significont effect on purchose frequency. A series of multiple regression wos run to
estimote the model. Purchose frequency wos meosured by equol intervol scoles
(e.g.,, "How mony times did you purchose it in the immediote ten post purchoses?")
os o dependent vorioble. The results ore shown in Toble 4.3. For the Joponese
brond, purchose frequency wos found to hove o stotisticolly significont relotionship
with relotive odvontoge, cosmopolitonism, sociol porticipotion, venturesomeness
ond consumer potriotism. No significont relotionship wos found in the effect of
opinion leodership on purchose frequency. For the U. s. brond, the findings of
multiple regression were olmost in line wlth the findings of logit onolysis.
Overoll, the results of multiple regression show thot relotive odvontoge (Hl),
cosmopolitonism (H2.21ond consumer potriotism (H3) hove significont effects on
purchose frequency of the .05level. Sociol porticipotion (H2.4) hos only o moderote
(o=.10) effect on purchose frequency. The effects of venturesomeness (H2.1) on
purchose frequency show mixed results. Venturesomeness hos o significont (o=.05)
effect on purchose frequency of the Joponese brond, olthough no significont
effect in cose of the US brond. On the other hond, opinion leodership
is shown
(H2.3) does not oppeor to hove ony significont influences on purchose frequency.
Discussion and Conclusions

An empiricolinvestigotion wos conducted to determine whot influences Koreon
consumers' odoption of foreign cigorette bronds from Jopon ond the US. Bosed
on the literoture of the diffusion ond odoption of innovotion ond consumer
potriotism, the study onolyzed the role of consumer chorocferistics, perceived
product ottributes ond consumer potriotism in discriminoting odopters ond non-
odopters of foreign bronds. First, the findings suggest thot the perceived relotive
222
odvontoge of product ottributes moy ploy o key role in odoption ond purchose
frequency of foreign bronds. Second, consumers' cosmopolitonism ond potriotic
emotions olso oppeor to hove o significont influence on odoption ond purchose
frequency of foreign bronds. ln other words, odopters of foreign bronds tend to be
higher in cosmopolitonism ond lower in consumer potriotism thon non-odopters.
Third, consumers' sociol porticipotion seems to ploy o moderotely significont role in
odoption ond purchose frequency of foreign bronds. Thot is, olthough not strongly
significont, the study found o tendency thot odopters of foreign bronds ore higher
in sociol porticipotion thon non-odopters. Finolly, consumers' venturesomeness
ond opinion leodership were found to hove very limited or no effects on odoption
ond purchose frequency of foreign bronds.
Generolly, the obove findings ore in line with previous reseorch on odoption
of innovotions (Gotignon ond Robertson 1985, 1991; Rogers 2003), consumer
innovotiveness (Foxoll 1988; Steenkomp, Hofstede ond Wedel 1999) ond consumer
potriotism (Gronzin ond Pointer 2OO1; Hon 1988, 19941. Howeve[ the findings
regording consumers' venturesomeness ond opinion leodership ore in controst to
the previous findings (Boumgortner ond Steenkomp 1996). One interpretotion moy
be thot odoption of foreign imported cigorettes in this study does not require so
much consumers' innovotiveness os odoption of typicol innovotions does.
The findings olso provide interesting procticol implicotions for globol os well os
locol morketers. First, the findings demonsirote thot the perceived product ottributes
of foreign bronds, of leost for cigorettes, hove o decisive influence on consumer
odoption. Thus, both foreign ond locol morketers should poy due ottention to
functionol competiiiveness of their bronds. ln oddition, foreign ond locol morketers
ought to hove o good knowledge on whot non-functionol volues their bronds
deliver consumers ond how suitoble brond identities ore to consumers' lifestyles
ond personolity troits. Our findings suggesi the existence of differences in consumer
chorocteristics between odopters ond non-odopters of foreign bronds.
Finolly, severol coveots of this study moy be noted. First. it is possible thot sociol
desirobility bioses might occur in subjects' responses. Subjects moy underreport
223
CHAPTER IV
their purchose frequencies for foreign cigorette bronds, becouse they believe
it sociolly desiroble to do so. Although sociol desirobility bioses were less likely to
occurin o self-odministered mode thon in others (Hon, Lee ond Ro 1994), future
studies need to develop ond refine olternotive meosurement of octuol odoption
of products. Second, the doto in this study were obtoined from o somple of mole
smokers who used smoking rooms of Seoul lnternotionolAirport. The somple proflle
does not exhibit o bolonced representotion of oge, moritol stotus, income ond
sex. Another is thot the study exomined only two foreign cigorette bronds. Future
reseorch needs to be bosed on more representotive somples ond o voriety of
bronds ond products.
224
Consumer Adoption of Foreign Brands in Korea
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228
Toble 4.1 Poromeler Esllmoles by Loglt Mode!- Adoplers/Non-odoplers
Japanese Brand U. S. Brand

Relative Advantage 1.358* .908*
Venturesomeness -.032 -.083
Cosmopolitanism .320 .805*
Opinion Leadership -.267 .032
Social Participation .252 .553*
Consumer Patriotism -.219 -.429*
Constant -5.066* -5.250*
Log - likelihood -69.9 -60.6
d.f 180 183
Pseudo R square (%) 42.1 44.1
Hit Ratio (%) 81.3 83.7
Ioble 4.2. Poromeler Estimoles by Multiple Regresslon - Purchose Frequency
Joponese Brond U. S. Brond
tive Advontoge .366* .227*

turesomeness -0.82* -.o32
.232* .237*
pinion Leodership 4.62 -0.07
.179* .092**
-.124* -0.81*
.762 .446
32.2 27.8
51.8 47.7
*signigicant at the .05 level, ** signiflcant at the .10 level
229
Toble 4.3 Conelollon Motrlx
xi xi x2 xt x4 x5
RelotiveAdvontoge:Xr
Joponese orond:X,"
vb
U. S. brond:at .551*
tr .?52. .222*
Venturesomeness: ^z
tl .383* .319* .142
3osmopolitonism: ^ 3
v .244* . t33 .2go* .179*

)pinionLeodership: ^ +
tl .3l g*
iociol Porticipotion: a s
.331 .200* .220* .1 18
-.244* -.300* -.0r 6 -.201*

lonsr rmerPotriotisrn' X6 .013 .121
* significant at the .05 level
Acknowledgemenl
* The Aulhor Acknowledges
Voluoble Commenls by Jung Min Kim of Myoungji University
ond Reseorch Assistonce by Hon Koo Lee.
230
A CROSS-CT]LTT]RAL
AND CROSS-NATIONAL
PERSPECTIVE ON
PRODT]CT-COT]NTRY
IMAGES
CHAPTER V
232
A Cross-Cultural and Cross-National Perspective on
Nicolas Papadopoulos *
Irfan Butt**
Introduction
"We need not osk onymore who or Morketing is founded lorgely on the
whot it is fhof hos inherifed the eorlh: premise thot perception motters. Buyers'
we know.
fhe wolking wollet... in seorch of cof-
It is otiitudes ond behovior ore shoped by
fee beons certified to hove npened in how they perceive informotion cues
the very frsf shoft of morning light ot
the tippy top of o socred mounfoin in obout o product's infrinsic ond exfrinsic
Kenyo... bedfromes lominoted of twigs
gothered otop Mounf Sinoi... underweor
chorocteristics such os, respectively, iis
hondwoven by Tibeton vrrgins... tomo- technicol feotures ond its price. Since, to
loes from Provence... We see [here] the
BMW Effect. be properly ossessed, intrinsic cues require
In fhe hopes of moking whotever they coreful product exominotion for which
produce os much fhe wonfed fhtng os
the BMW is omong cors, monufoctur- consumers most often do not hove the
ers hove slreomlined ond ottempfed to time or inclinotion ond/or extensive use
imbue wifh engrneering mystique every
orticb... they turn ouf." which involves high risk since it ossumes
(J. Freundlich, Horper's, December product purchose before the ossessment
1987):
con be mode ond/ordetoiled knowledge
of intricote product chorocteristics which
most consumers do not hove, buyers
more often thon not turn to extrinsic cues
for ossistonce. Extrinsic chorocteristics
* Nicolos Popodopoulos , Professor of Mor- encopsulote both core ond other product
keting ond lnlernollonol Business Erlc Sproll
School of Business, Coilelon Universily,
feotures, os in the cose of brond nomes,
Otlowo, Cqnodo which oct os summory informotion corriers
** lrfon Butl, Ph.D. Condldole, Eric Sproll
School of Business, Corlelon Univetsity, Ot- thoi ploy on importont role in influencing
lowo, Conodo ond Adjunct Professor, loho]e
Unlverslly, Pokiston behovior.
233
CHAPTER V
Another fundomentol principle in morketing is thot culture moffers. Numerous

studies deoling with o neor-infinite voriety of topics under the generol rubric of
"culture" show thot its role ond effects in humon behovior in generol, ond buyer
behovior in porticulo[ ore pervosive. A typicol exomple con be seen in the
juxtoposition of two thoughts on common "coffee shop" behovior in "southern",
more contemplotive, versus "northern", more progmotic, societies: Burgess (Igg8)
hos noted thot, "The greot gift of the southern londs to our civilisotion is the simple
right to sit ot on outside cof6 toble ond look ot things", while Zimionjic (2005)
observed thot "The British hove o lot to be proud of over their long history, but
grosping the essence of toking it eosy in o cof6 hos completely eluded them".
More generolly, de Mooij (2003) shows thot "it's rother cleor thot over time culture
overtokes notionol weolth os the principol explonotor of behovior" - in other words,
thot while people will buy more things os their income rises, whof they will buy will
be determined in lorge port by their culture - ond, we might odd, by how they
perceive the goods thot ore on offer. While culture is relevont in purely domestic
ond culturolly-homogeneous settings os well, these quotes suggest its porticulor
importonce in cross-culturol settings - whether ihese exist within o notion or ocross
different notions.
A product's "country of origin", or, generolly, its product-country lmoge (pcl) or

the "ploce" with which o morketer moy ossociote o product in order to enhonce
itsoppeol, is one extrinsic cue thot is much studied in reseorch ond commonly used
in proctice when developing positioning strotegies (e.g.,, volkswogen's emphosis
on the "Germon engineering" of its cors, some of which ore octuolly mode in
lower-cost developing countries). PClis of interest to both the morketers in both the
privote ond public sectors, since it con ploy o key role in enhoncing o compony's
or ploce's internotionol competitiveness. os well os to reseorchers in vorious oreos.
Given this brood scope, the oreo hos ottrocted o lot of reseorch ottention ond the
oreo hos been colled "the most reseorched" in internotionol buyer behovior. The
generol conclusion of this reseorch indeed is thot ploce imoge mofters.
chopter ihen, deols with fhe effecfs of cross-culfurot similorifies, differences,

This
ond percepfions on buyer behovior in the PCI confext - in other words, wiih the
234
Product-Cou.ti"y Images
intersection omong three of the most significont ospects of whot morketing

is oll
of the
obout, focusing on on issue thot is of greot importonce to morketers regordless
products, ond
country in which they work, the country(ies) ot which they torget their
wheiher they work in the privote or public sector.
Of the two co-outhors of this chopter the first hos led o wide-ronging ond long-
term reseorch progrom on PCl, ond hos olso porticipoted in o lorge number of
odditionol siudies led by others in this field. The second outhor is o newer leod
member of the teom thot is working on the nextwove of PClond couniry bronding
reseorch, by incorporoting positioning theory into ploce imoge-reloted strotegy.
This internotionol group hos studied ploce imoges ond their effects since the eorly
l98Os ond ploce bronding since it emerged some 15 yeors ogo. During this period,
it hos conied out more thon 80 studies, resulting in over 100 publicotions orising from
both conceptuol os well os field reseorch with over 22,000 consumers, investors,
tourists ond others in olmost 25 countries. The outhors grotefully ocknowledge the
coniributions of over 30 professors ond 300 students of universiiies worldwide who
porticipoted in one or more of these studies (while they ore too mony to list, some
of this joint work is included in the cited references), ond of more thon 20 gronting
ogencies, government deportments, universities in Conodo, the US ond Europe
which helped to fund this reseorch.
The chopter drows on these studies io focus on those of their findings thot
pertoin
to the role of cross-culturol differences, whether within or ocross notions, in PCl. To

prevent terminologicol confusion, we use "cross-culturol" os the generolterm ond
,,sub-culturol/ sub-notionol" ond "cross-notionol" to refer; respectively, to onolyses
within ond ocross countries. Following o brief overview of the relevont bodies of
knowledge ihot provides necessory bockground for the onolysis, the chopter
focuses first on sub-culturol ond then on cross-notionol reseorch ond concludes with
o summory of moin implicotions. The chopter emphosizes selected cross-culiurol
issues ihot hove not been reseorched extensively before, rother thon oitempting
to "cotologue" the entire potentiol set of reloted studies ond results.
235
CHAPTER V
Background And Overview Of Relevant Research

PCI and Perception
Since people oct on whot they be/reve is true, perception hos o mojor impoct on
behovior. lmoges ond perception ore intertwined with stereotyping (the process of
generolizing to on entire closs of objects from o limited number
of observotions).
Stereotypes develop over time os one clossifies repeoted observotions
into
schemoto which ore then coneloted to form one's view of the world. Therefore,
if one first heord of conodo in o geogrophy closs while o primory school pupil,
leorned to ossociote it with "cold ond snow", ond then consolidoted this imoge
with repeoted reports on the some theme in the medio, the probobility is thot, os
o consumer ond/or businessperson loter in life, this person olreody corries with him
or her o rother sei imoge of the country's climote. This imoge moy well be wrong,
of course. ln the populoted "lower holf', of the country, worm spring, summer
ond
foll weother losts for well over six months, some regions get snow rorely, if
ever;
ond summer temperotures ofien reoch or exceed 40oC in vorious oreos. yet in line
with perception theory, perceptions of "cold" persist not only becouse individuols
formed them of the outset but olso becouse vorious sources continue to reinforce
them (the foreign medio, for exomple, ore more likely to report ,,extreme cold,,
thon "extreme worm" weotherwhen discussing northern countries).
The "Mode in ..." nototion on produci lobels is in most coses o legolrequirement.

However, the issue is not necessorily the locotion of monufocturing, but fhe origin
wifh which the producf is ossociofed in buyers' perceptions, whether direcly or
by inference. For exomple, brond nomes like Fenori or Guccr, ond phroses like
Hungorion gu/osh or Lebonese humus, hove speciol ploce-reloted meoning. This is
recognized by brond morketers, who use ploce imoges extensively by reference
-
both to specific ploces (e.g.,, Colombion coffee, Armitron: Americo,s Wotch, Visit
Duboi, A rosfe of Novo scofio) os well os brooder oreos (e.g.,, Euro bronding in
the Europeon Union, "globol" bronds such os lJnited Co/ors of Benefon). Since the
growth of foreign competition meons o potentiolthreot to the importing countries'
economies, domestic producers olso routinely use mode-ot-home oppeols to
enhonce their products' position omong locol consumers.
236
Like obrond nome, o country's imoge is multi-foceted ond corries lorge omounts
of both foctuol ond offective informotion, ronging from its levelof industriolizotion
ond known oreos of production expertise to the likeobility of its people. The use
of PC|-bosed morketing is increosing (Johonsson 1993) in porollel with the growth
in globol competition ond morket complexity. Since products con now be mode
olmost onywhere ond hove increosingly stondordized core feotures, morketers often
turn to country ossociotions os extrinsic cues ihot con help them to differentiote
themselves from competitors. The use of stereotyped country ossociotions is
occentuoted by the proliferotion of "buy domestic" bronding compoigns, which
serve to highlight PCI os o purchose criterion, ond by higher oworeness of countries
ond their products through the medio, educotion, trovelond imported products.
The ovoiloble reseorch shows thot positive country ossociotions moy enhonce
brond imoge ond thot neutrol or negotive ones moy detroct from it. For exomple,
both consumers ond industriol buyers (Johonsson, Ronkoinen ond Czinkolo 1994)
view products from less developed countries less fovourobly. Klein, Ettenson ond
Morris (1998) tested on "onimosity" modelond showed thot cross-notionol hosiility
con impoct purchose decisions directly, ond influence them more thon potriotism
or ethnocentrism, whose effects hod olreody been estoblished (Hon 1988, Shimp
ond Shormo 1?87). As noted eorlier the PCI phenomenon hos ottrocted strong
reseorch interest thot reflects the omnipresence of ploce cues in the morket os
wellos in everydoy life ond longuoge (French ponoche, Russion roulette, Brifish sfiff
upperlip, Bolkonizotion) severolouthors hove noted thot PClis the most-reseorched
oreo in internotionol buyer behovior (Ton ond Forley 1987, Peterson ond Jolibert
1995, Joffe ond Nebenzohl200l ,2006). This is in spite of the foct thot these outhors
greotly underestimote the number of published studies, by plocing it ot 200 to
300 depending on the time of the estimote. An exhoustive dotobose of relevont
reseorch, which we mointoin, showed 766 publicotions os of 2000 ond over 1,000
os of mid-2004 (Popodopoulos ond Butt 2006; this includes well over 400 ocodemic
journolorticles ond 20 books, but not, of course, the thousonds of reloted orticles in
the public medio eoch yeor)
237
CHAPTER V
Nonetheless, close exominotion of the specific fociof the scholors involved in this
field shows thot cross-notionol ondlor cross-culfurol issues ore not well represented
in PCI reseorch. Bosed on on eorlier onolysis of the doto until 2000, os Toble 5.'l
shows there were only 23 studies (3% of the totol) thot could be clossified os "cross-
notionol" or "sub-culturol". ln other words, systemotic onolyses of PCI issues with
on intent to uncover potentiol cross-culturol similorities ond differences were few
ond for between, ond comprised one of the leost empiricolly-reseorched subfields
within PCI (see olso Al-Suloitiond Boker 1998).
Ioble 5.1 Moin Reseorch Themes

Principal focus and themes Totals Vo
Countries 191 25
Issues 167 22
Ethnocentrism (59) & domestic goods vs. imports (49) 108
Cross-national (15) & sub-cultural (8) studies 23
Hybrid products (20) 20
Longitudinal studies (10) & impact of events (6) l6
Sectors and markets ttz 15
Organizational buyers (55) & FDl-investors (21) 76
Specific sectors (e.g.,, cars, elecfronics) 28
Tourism from PCI perspective (5) & services (3) 8
Research orientation 155 20
Misc. consumer behavior approaches 75
Information processing, multi-cue studies, PCI effects 67
Studies using socio-psychological perspectives l3
Conceptual, methodological, theory dev't 82 11
Methodological aspects 39
Integrative works and models 28
Literature reviews, meta-analyses, research agendas l5
Strateg5r 59 7
General 37
Advertising ll
Other marketing mix elements 10
lesal I
Total 766 100
238
Product-Co..ni"y Images
As shown in Toble 5.2 which summorizes on onolysis of only those studies thot
hove used more odvonced stotisticolonolyses using Structurol Equotions Modelling
(SEM), mony were noteworthy, using relotively lorge somples, generolly ovoiding
non-representotive student respondents (only five studies used student somples),
ond opplying the proposed model to multiple scenorio (i.e.,, even when single-
country somples were used, respondents were osked to ossess two or more origin
countries or products in most coses, enobling model testing in severol somple-origin
combinotions). On the other hond, obout one-holf of these studies used vorious
types of convenience sompling ond, more importontly, most were bosed on one
country only, with borely o smoll hondful using doto from two to four countries.
Using o "point" system to enoble o summory roting, this onolysis shows o greot
difference between the highest- ond lowest-roted studies. Further; while recent
reseorch occounts for most of the higher-roted SEM opplicotions, some of the eorlier
studies olso were in this domoin (e.g.,, Gorlond, Borker ond crowford 1g8z) while,
on the other hond, some of the more recent reseorch oppeors to be quite limited
in scope. These findings suggest the difficulty in opplying sophisticoted onolyticol
techniques in multi-culturol settings.
239
CHAPTER V
olso occulturote to o "globol" benchmork by odopting behoviors thot ore common

worldwide (Clevelond, Loroche ond Popodopoulos 2006). Becouse of their strong
group identity, efhnic subcultures, which moy be defined on the bosis of notionolity,
linguistic, rociol, or oiher similor chorocteristics (Howkins et ol. 1995), hove been
reseorched extensively - but rorely from the country of origin (CO) perspective.
Yet ethnicity is of porticulor interest in the CO context: Ethnicity influences behovior
significontly (Loroche ei ol. I 997, 1998) ond CO con eosily be seen os o motter of
brond ethnicity.lt moy be posited ihot o subculture thot identifies with o porticulor
ethnicity-bosed core culture moy be more receptive to the products of countries
identified with the some core culture. More broodly, it con be hypothesized thot
ethnic identity moy leod to consumer reoctions ronging from very occepting to
neutrolond very negotive, depending on o brond's perceived notionolity ond the
consumer's views ioword the core culture.
Among the few studies thot hove reseorched these issues, Klein, Ettenson ond
Morris (,l998) developed on "onimosity" modelwhich showed thot olthough Jopon
is often seen os o high quolity producerin Chino, Chinese consumers in Nonjing (the
site of otrocities during the Joponese occupotion) moy not purchose Joponese
products becouse of hostility toword thot country. ln their model, they suggested
thot culture-specific foctors influence the weight given to the origin country in
product evoluotions. ln o reloted streom of reseorch, Shimp ond Shormo (1987)
introduced consumer ethnocentrism os o construct thot represents beliefs held
by Americon consumers obout the opproprioteness of purchosing foreign-mode
products.
As noted eorlier most PCI studies hove been limited to one or two somples ond
one or two origins, ond only o few hove been conied out in, or tested the imoges
of, severol countries simultoneously. This, while unfortunote, moy be exploined by
such foctors os the notionoliiy of the reseorchers involved or the foct thot much
of the existing reseorch is supported or sponsored by government ogencies in
vorious countries. ln the lotter cose, the sponsors typicolly ore interested only in
the imoge of their own country ond usuolly only in one or two torget morkets thot
moy be high on the politicologendo of o given point in time. However the typicol
242
study investigoting "the imoge of lndio in Conodo" or "of Conodo in lndio" connot
ploce responses in context. For exomple, o roting of "7" for Conodo in lndio on o
t-,10 scole would leod to totolly different conclusions if it were viewed individuolly
rother thon in comporison to, soy, o roting of 5 or 9 for Austrolio in the some lndion
study, or o roting of 5 or 9 for Conodo in o porollel study in Europe. As well, such
studies moy leod to serious bioses, since the country being investigoted is obvious
to the respondent. This moy result in higher rotings for the origin being tested if it is
the only country in the study or if respondents con deduce thot it is the principol
country of interest.
Agoinst the obove bockground, the remoinder of this chopter turns to highlighting
the findings from vorious studies conied out by the internotionol reseorch teom in
vorious sub- ond/or cross-notionol contexts.
Selected Findings And Discussion

Sub-cultural Differences in Country and Product Evaluations
Sub-notlonolsludy in Conodo (1)
ln whot is probobly the only systemotic study to dote of subculturol influences in
the country of origin context, Heslop, Popodopoulos ond Bourk (1998) reseorched
the ottitudes of English ond French Conodions in the country's notionol copitol
region (Ottowo) oreo toword products from ethnicolly offilioted origins ond hod
somewhot mixed findings. Ethno-culturollinkwere found to influence productviews
for most but not oll of the five developed origins thot were tested in the study (the
two linguistic groups' home provinces of Ontorio ond Quebec, Conodo overoll, ond
the two groups' "motherlond" countries of Greot Britoin ond Fronce). Ethnic offiliotion
oppeors to influence English Conodions' rotings of products from Ontorio, Greot
Britoin, Conodo, ond French Conodions' rotings of Quebec ond Conodo but not
Fronce. The lotter wos primorily ottributed to the uniqueness of the French group,
whose elhnic offiliotion is very closely rooted to home (Quebec) ofter some two
centuries of distinctiveness from Fronce. The study olso tested views of products from
two less developed countries thot ore offilioted culturolly ond linguisticolly with the
two groups, respectively, Zimbobwe ond C6te d'lvoire, but the findings suggested
no influence from'this offiliotion. The high risk troditionolly ossocioted with developing
243
CHAPTER V
notions' products moy be overshodowing ethnic influences on product rotings. Thus,

overoll, the volence of ethnic offiliotion in offecting product evoluotions oppeors to
be dependent on the uniqueness of the ethnic group, os well oi the stote of economic
development of the origin evoluoted.
Sub-nolionol study in Conodo (2)

A loterstudy conied out omong the some linguistic groups in Conodo but in the city
of Montreol (Quebec) enobled o more detoiled explorotion of these cross-culturol
issues, focusing this
time on the notionol rother thon sub-notionol level. The study used
two distinct 7-point scoles (l = poor, z=good), one to ossess the imoge of the origin
countries themselves ond one for their products, os shown in Tobles 5.3 ond 5.4
Toble 5.3 Ethnic Group Differences in Aililudes to counlries

(English n=254, French n=tg7)
Origin Britain Canada US Japan Sweden

Sample EF E,t EF EI EF
vrANUVA.r, (srg. at U.000) 22.6 7.E 6.4 7.0 7.6
lecnnologtcally advanced ).u 4.9 ).4 ).4 o.z 6.1 o.) o.) ).2 ).t
Wealth 4.6 5.2 5.0 5.1 5.s 5.8 5.2 5.7 5.2 5.5
Refined taste s.2 5.3 4.9 5.2 3.9 3.4 5.3 5.5 5.0 5.1
Educated 5.z 5.5 5.2 5.2 4.7 4.7 5.8 5.8 5.4 5.5
Politically stable 6.1 5.6 5.4 5.6 6.0 s.7 5.2 5.3 6.0 5.9
Admirable role in world 5.5 4.6 6.0 5.5 5.1 4.5 4.0 3.8 s.2 4.4
Know a lot (country) 5.1 3.1 6.6 6.3 6.4 5.6 3.3 2.s 2.6 1.9
naroworKrng people 4.7 5.1 ).u 5.2 +.t +./ o.u 6.2 ).1 ).1
frustworthy people 6.0 s.6 6.1 6.0 5.0 4.7 4.8 5.1 5.7 5.4
Likeable people 5.5 4.7 6.2 5.7 4.8 4.3 4.8 4.9 5.4 5.1
ldeal country 4.7 4.0 6.1 5.6 4.4 4.1 3.8 3.7 5.0 4.8
Would like to visit 6.3 6.0 n.a. n.a. 6.0 5.6 5.5 5.8 6.0 6.0
\[gneo wltn uanada s.y 4.u n.a. n.a. 5.U 5.J 4.6 Z.E 4.9 4. t
Vlore investment from 5.9 4.8 n.a. n.a. 5.1 4.8 5.2 5.0 5.7 5.2
Vlore imports from 5.7 4.1 n.a. n.a. 4.9 3.8 4.6 3.8 5.5 4.7
lloser ties with 5.0 4.3 n.a. n.a. 4.7 4.3 4.8 5.1 5.3 5.1
mean s.4 4.8 15.6 s.s 4.8 I s.0 4.8

Between subjects (paired columns for each origin; pairs in bold indicate
's at 0.009)
variables: E>F
244
Toble 5.4 Elhnic Group Differences in Attitudes lo producls

(English n=254, French n=197)
Orisin Britain Canada US .Iapan Sweden
Sample EF EF EF EF EF
\4ANOVA F (sig. at 0.000) 6.14 2.78 9.06 2.89 2.76
Workmanship s.4 5.3 5.6 5.5 4.7 4.1 6.0 5.7 5.7 s.3
Reliability 5.3 s.3 5.6 s.6 4.7 4.4 5.9 5.9 5.4 5.2
Quality 5.5 5.5 5.s 5.6 4.9 4.3 5.9 5.7 5.6 5.3
Appearance 4.9 4.9 5.3 5.1 5.4 5.0 5.5 5.5 5.2 5.0
lnnovativeness 4.5 4.8 4.4 4.7 5.1 4.6 5.2 4.9 5.0 5.1
Iechnically advanced 4.2 4.4 5.0 5.2 5.7 5.4 6.3 6.3 4.8 4.7
Value for money 4.4 4.3 s.2 5.2 5.1 4.6 5.4 5.3 4.5 4.3
After-sales service 4.4 4.6 5.2 5.6 5.0 4.7 5.0 5.1 4.5 4.4
Good products 5.2 5.2 5.6 5.7 5.4 4.7 5.8 5.7 5.3 5.0
Price level 5.4 5.1 4.6 4.6 4.2 4.2 4.6 4.7 5.1 4.7
Variety 3.6 3.5 5.0 4.9 6.5 6.1 5.7 6.1 3.3 3.4
Recognizeable brands 4.5 5.0 5.4 5.2 6.3 5.5 6.0 6.0 4.0 4.2
Easy to find 3.2 3.1 5.5 5.4 6.7 6.4 6.3 6.3 2.9 2.9
Know a lot (products) 3.4 3.0 5.4 5.5 5.7 5.5 4.7 5.1 2.9 3.0
\ormally buy 2.7 2.2 5.6 5.5 5.7 4.9 4.4 4.7 2.3 2.3
Products have what I like 4.2 3.8 5.4 5.5 5.7 4.6 5.4 5.2 4.2 4.0
For people like me s.0 4.3 6.1 5.9 5.6 4.6 5.3 5.0 4.8 4.3
Proud to own 5.2 4.3 6.4 6.0 5.1 4.0 4.9 4.6 5.1 4.2
Satisfied 5.1 4.8 5.6 5.5 5.3 4.4 5.6 5.5 4.9 4.6
Willine to buy 5.7 4.8 6.6 6.3 6.1 4.8 5.6 5.2 5.4 4.7
mean 14.6 4.3 15.5 5.41 s.4 4.8 I 5.5 5.41 4.5 4.3
Betvveen subjects (paired columns for each origin; pairs in bold indicate
significant dffirences at 0.008)
f variables: sie. E > F 4 2 l5 I 5
sis.E<F I 2
The study used cluster onolysis first, to clossify the respondents inio three moin groups
- "strong English", "strong French", ond "occulturoted" consumers who belong in

one group but shore some troits with the other. The moin hypotheses were, (o) thot
the greoter the culturol links of o "strong" ethnic consumer group with on origin
country, the more fovoroble the consumers' oititudes will be toword thot country
ond its products; ond (b) thot consumers of either group who, by virtue of living
in the some city, hove occulturoted toword the other. would foll beiween the
245
CHAPTER V
two extremes. A corollory hypothesis wos thot ottitudes would not be significontly
different when the countries of origin being tested ore not linked with either of the
linguistic groups.
Between-groups MANOVA wos used to test the first hypothesis ond oll models were
found to be highly significont. Thot is, the two somples differ in their evoluotions of
Greot Britoin, Conodo, the US ond their products. However, while ethnicity-bosed
differences cleorly exist, the direction of these findings wos surprising in some
instonces. The doto strongly confirm more positive ottitudes toword Britoin by English
thon by French Conodions (Toble 5.3). On the other hond, there were no significont
differences on l5 voriobles ond the summory meon in the product scole for Britoin.
Concerning Conodo os on origin, the number of voriobles contributing to the
overoll model differences wos smoll ond the summory meons were not significontly
different for either scole. Overoll, the French somple's views seem to be slightly less
positive, ond the differences moy be portly due to its tendency to give somewhot
lower rotings to oll the origins (to be discussed more below). The findings for the US
were perhops the most surprising. The expectotion wos thot the US would be seen
differently by eoch group, but thot the differences would be fewer thon for Britoin
ond Conodo. Yet, this origin produced the lorgest number of univoriote differences
from the product scole ond the second lorgest (ofter Britoin) os o country. lts rotings
by the French group ore low in obsolute ond often the lowest for oll origins.
The second hypothesis wos tested using Jopon ond Sweden os the origins. The
MANOVA modelswereolso highlysignificont, butthenumberof vorioblescontributing
to the overoll model differences wos very smoll ond distributed unevenly ocross
ihe two scoles. ln summory, this onolysis supports the first hypothesis (since English
Conodions ossessed Britoin, Conodo, the US, ond their products more positively thon
the French) but olso showed some unexpected intensity in inter-group differences,
ond olso the second hypothesis, since the profiles of Jopon ond Sweden, while
significontly different overoll, were highly similor on the specific voriobles.
The occulturotion hypothesis wos olso tested (detoils not shown here due to
lock of spoce) ond wos strongly supported, with the "moderote" French or English
246
groups folling between their "strong" counterports in virtuolly oll coses. This led to
o highly interesting observotion, in thot most studies of this type do not occount for
occulturotion effects. ln other words, if reseorchers study the views of consumers
in "city (or country) X" without controlling for the porticulor culture or subculture in
which theirrespondents belong, itis possible thottheirresuliswillcontoin confounding
effects thotwillbe unobservoble ond con leod to misinterpreting theirimplicotions.
(We hove olso committed this "sin" in mony other studies, given typicolly limited
resources in ocodemic reseorch.)
The doto olso enobled o closer look ot the potentiol role of offect in PC|-reloted
evoluotions. Four observotions point in this direction: (o) The voriobles thot help
exploin the MANOVA moin effects in the obove tobles most often reflect o
divergence of cognitive evo/uofions from offective ondlor conofive views. For
exomple, there ore virtuolly no inter-group differences on the cognitive product
voriobles (first nine in Toble 5.4) except for the US (b) The moin exception to the
previous point wos French Conodions' lower rotings on mony more voriobles for
Britoin ond the US. (c) The French somple roted oll foreign countries significontly
higher on "weolth" (Toble 5.3) ond indicoted o strong oversion to "more imports".
Lostly, (d) French Conodions iended to provide lower rotings in generol. lt would
oppeor thot o combinotion of three foctors, identified in numerous eorlierstudies on
the "French foctor" in Conodo, moy be of ploy in the French somple: notionolism
ond strong ethnicity; o sense of isolotion in comporison to their North Americon
counterports; ond o more emotionol orientotion. These seem to be reflected in
this cose through o brooder feeling of disoffecf. ln other words, ihe /ock of offect
direcied of Anglo origins moy be superimposed over on d obove o bose of disoffecf
thot colours percepiions of other countries in generol. This odditive result moy
exploin the very low French rotings for USproducts (summory meon 4.8), ond the
lopsided results from the tests of the Conodion ond US doto (respectively fewer vs.
more inter-group differences thon onticipoted). More importontly from the generol
reseorch perspective, this explonotion does not quite fit ony of the sociol psychology
concepts mentioned in the literoture review, such os ethnocentrism. lf it did, this
might hove been expressed in different evoluotions of Jopon ond its products, for
247
CHAPTER V
exomple, where this group's rotings were, insteod, virtuolly identicol to those of
English Conodions. Rother the findings oppeor to reflect combined elements from
two or more sources ond perhops o unique notion of disenfronchisement which
moy form o potentiolly usefulfuture reseorch ovenue.
Cross- and Sub-national study in Spain and France

ln onotherstudy. thistimeconied outinSpoin ond Fronce. thereseorch teomwosoble
to further explore the inter+eloted issues of offect ond onimosity ond olso to combine
both cross- ond sub-notionol doto. Spoin wos selected os the moin torget for the
study becouse of four chorocteristics which, combined. provide o rich environment
for reseorch of this type: (o) since it is o notion, its citizens shore o common notionol
culture; (b) it is internolly heterogeneous, ond sub-notionol differences occosionolly
leod to onimosity omong its regions; (c) its coloniol post leods to historic culturolties
with countries thot ore geogrophicolly for; ond, conversely, (d) its membership in the
Europeon Union leods to cooperotion with os well os competition ogoinst other EU
members, which ore culturolly dissimilor to it but geogrophicolly close. The study wos
corried out of three locotions: two within Spoin, including the Bosque Country (whose
citizens ore often reported in the medio to horbour onimosity toword the country ot
lorge) ond Novorro (more "moinstreom" Sponish), ond one in Fronce (Bordeoux).
ln terms of origins, respondents were osked to ossess eoch other's region/country
plus Argentino, o notion thot offilioted both culturolly ond economicolly
is closely
with Spoin. A totol of 803 usoble responses were obtoined (Novorro 302, Bosque
Country 231, Fronce 270) on three scoles (product, country in generol. onimosity)
ond the results were onolyzed using such stotistics os foctor onolysis ond between-
ond within-subjects MANOVA.
While limited spoce does not ollow o full presentotion of the results. they ore rother
foscinoting os shown in Toble 5.5 below. First, o hypothesis thot consumers "olwoys
prefer their home products" is supported but not os strongly os we expected. This
is in line with cloims by eorlier reseorchers thot such o preference should not be
token for gronted, porticulorly by proctitioners. While both the individuol voriobles
ond the overoll scores show thot there is o generolized pottern of preference for
domestic goods, the differences ore often smoll (even if in most coses stotisticolly
248
Product-Corri"y Images
significont). Given the evidence in the public domoin of Bosque notionolism, the
initiol expectotion wos thot this somple would disploy the strongest preference for
home-grown products - but the results suggest thot this preference, to the extent
thot it exists, wos in foct weoker thon in the other two somples.
Ioble 5.5 Scole Summories in Inlro- ond lnter'nolionolStudy
Samples Navarra Basque France

Origint A F S N BC A F S N BC A F s N BC
VIeans
Jroducts 3.4 4.5 5.7 5.9 5.2 3.4 4.5 5.4' 4.8 <41 3.5 5.O 4.6 3.8 4.3
Jountry 4.0 4.8 5.5, 6.0 5.5, 3.9 4.8 5.3 5.4' 5.6 3.8 s.4 4.9 4.4' 4.5'
A,ffect(+)/Animosity(-) 4.6 4.0 5.7 6.2 5.4 4.5 4.2 5.6' 5.7, il' 4.3 1',rl 5.0, 4.6 l.6l
lanks
)roducts 5 4 2 I J 5 4 I J 1 5 I 2 4 3
Jountry 5 4 2 I 2 5 4 2 2 I 5 I 2 3 J
{.ffect(+)/Animosity(-) 4 5 2 I J 4 5 I I 1 5 I 1 J 3
Legend: Ploces: Argentino, Eronce, Spoin, Novorro, Bosque Country. The highest
score per row within eoch somple is in bold ond the lowest underlined. Meons compored
ond ronked bosed on poired-somple two-toil TJests of 0.00,l. Within eoch somple, for eoch
of the three meosures, meons with the some letter superscript ore not significontly different.
Second, level of economic development ossumptions would suggest thot

Argentino should be evoluoted leost positively in comporison to the other origins
ond it wos. On the other hond, the culture ossumption would suggest thot the two
Sponish somples (especiolly Novorro) would evoluote it the highest - but they did
not. Further, both culture ond deve,opment ossumpiions would hove the Sponish
somples evoluote Fronce highly - yet this wos not the cose. The obsolute rotings
even on widely recognized French strengths were not very high, which, coupled
with lower rotings on other voriobles, resulted in overoll scores thot in other studies
ore more typicolly encountered for developing notions only.
A possible explonotion for these findings con be gleoned when the three scole
meons for eoch origin ore viewed together. On Argentino, the product, country
ond offect/onimosity rotings were ot obout 3.5-4.5 by oll somples, suggesting thot
consumers see it os less oble to produce quolity goods, but rote it significontly
249
CHAPTER V
higher os o country, ond even higher on offect (i.e., when only the offect voriobles
ore considered). On Fronce, the differences between the scoles by the Sponish
somples ore much smoller; the scores ore low for such o developed country ond
the offect scores ore the lowest (i.e.,, onimosity is highest). On Spoin, oll three scores
by both Sponish somples ore virtuolly identicol ond significonfly higher thon those
for Fronce. Therefore, if there is onimosify in either fhe Bosque Counfry or Novorro,
if is nof directed of sporn by the former ond fhe Bosgue Country by the lofter, os
hypothesized - but of Fronce by both. Some supporf for this conclusion con be
found in onother cross-notionolstudy by popodopoulos, Heslop ond Groby (2ooo),
who olso reported very low rotings for Fronce by consumers in Spoin (Modrid). lt
would oppeor thot in spite of the EU portnership, neighbour stotus, ond shored Lotin
culture, Sponish consumers horbour some ontipothy toword Fronce. This moy be
due to intro-EU trode disputes (porticulorly on wine exports ond other ogriculturol
which oll of the regions sompled hove o strong interesi) or other foctors,
issues, in
which con be lnvestigoted in future reseorch.
These results support certoin conclusions from eorlierstudies, chollenge others, ond
provide new informotion thot con be useful to both proctitioners ond reseorchers.
For the former the findings suggest thot it would certoinly be worthwhile to engoge
in internotionol os well os intro-notionol PCI reseorch prior to exponding to vorious
countries or regions, since strong positive or negotive feelings by buyers con cleorly
bios the woy ihey perceive vorious products. For reseorchers, the study contributes
to understonding the PCI phenomenon ond suggests o number of oreos for future
reseorch, including, in porticulor the potentiol linkoges between couniry ond
product meosures ond further exploroiion of offect, onimosity, ond their correlotes.
As well, ond while limited spoce does not permit presentotion of these results, it
should be noted thot the scoles used were shown to be oppropriote ond helped
to confirm seven summory constructs which popodopoulos, Heslop ond lKoN
(2000) hod cloimed portroy the potterns of consumer thoughts in the pCt context.
This points the woy toword the potentiol development of more stondordized
meosurement instruments, which would focilitote ond enhonce the usefulness of
the results of future studies.
250
Product-Corri"y Images
Cross-national Differences in Country and Product Evaluations

The preceding onolysis exomined PCI effects of the sub-culturol/-notionol level,
looking essentiolly ot the some issues (links between sub-culturol offiliotion ond
product evoluoiions) through o hondful of studies. This section olso uses findings
from vorious studies but contoins subsections thot focus on vorious different PCI-
reloted issues.
ttOther" Countries
Cross-nationalYariability on ConsumerYiews ofttHome" vs.
A cross-notionol study corried out in fifteen countries, using similor opprooches
to those described obove for sompling, questionnoire design ond onolysis
(opproximotely 300 respondents per site, drop-off/pick-up fieldwork, structured self-
odministered questionnoires, 7-point scoles, uni- ond multi-voriote stotistics), mode
it possible to moke o voriety of interesting observotions including differences from
one somple to the nexi in how eoch evoluoted iis own country ond products in
relotion to others. Toble 5.5 shows selected results by focusing on four countries in
comporison to the overollsummory view of the complete lS-country somple.
The first set of observotions ("by 15 somples") sets the benchmork - this is the
summory view of over 4,500 respondents worldwide, bosed on o composite index
of four voriobles (overoll product roting, willingness to buy, overoll country roting,
ond willingness to hove closerties with the origin tested). As con be seen, the origins
follow more or less on expected ronk-ordering from most to leost developed.
Agoinst this bockground, one might expect thot the views on the some issue but
on o somple-by-somple bosis would follow the some generol pottern - in other
words, thot consumers in ony given country might rote their "home" somewhot
higher but would generolly follow the globol pottern. Yet ihe doto show thot this
is for from being the cose ond, in foct, suggest signiflcont ond highly interesting
differences (the moin ones ore bolded for eosier identificotion). Using the some
scoles (except for "closer ties" in ossessing the home country), only in Germony
did the "home" ond "globol" ronk motch, the Germon respondents plocing their
country first just os their counterports elsewhere did. ln foct, these respondents con
be soid to be somewhot modest, since, in spite of their country's ocknowledged
industriol prowess, ossigned it only o 5.6 roting on the 7-point scole. By controst, the
251
CHAPTER V
some somple seems to hove o less enthusiostic view of Jopon thon respondenis
elsewhere (ronked 9th vs.2nd).
Toble 5.6 : views of l8 counlries by selecled Sompled counlries

? !t^
*'
Drigin --Es
t-r E \O
Gl
trdr
Eat E$ .B'r$ E.B
:ountries
rssessed
5.8Y
rrs .9rr
vs Orr
>:.s !.i tt
0rl
ES
_6
Mean Rank* Mean Rank* Mean Rank* Mean Rank* Mean Rank*
iermany 5.3 I 5.6 I 5.4 2 5.3 2 5.2 J
aparr 5.2 2 4.8 9 5.5 I 5.4 I 4.9 4
US 5 J 4.9 8 4.9 9 5.2 4 4.4 9
Flolland 5 4 5.0 7 4.8 lt 4.6 8 5.3 2
A.ustralia 5 5 5.1 4 4.9 8 4.9 7 4.8 6
lanada 5. 6 5.0 6 4.9 l0 4.4 l0 4.4 10
:rance 5.0 7 5.2 2 5.4 3 5.3 3 3.5 t7
Britain 5.0 8 4.6 1l 5.0 6 5.0 5 4.0 l3
Sweden 5.0 9 5.1 J 5.0 7 4.5 9 4.8 7
Vorway 4.9 0 5.0 5 4.7 t2 4.1 l1 4.9 5
)paln 4.8 I 4.7 0 5.1 5 4.1 l3 6.3 I
Tong Kong 4.3 2 4.3 2 4.3 l3 4.9 6 4.1 I
ireece 4.3 J 4.2 J 5.4 4 4.1 t2 4.1 2
{ungary 3.9 4 4.1 5 3.8 4 3.7 t4 3.8 4
srael 3.8 5 4.1 4 3.5 6 3.0 l7 3.5 8
Mexico 3.8 6 3.8 6 3.7 5 3.2 l5 4.5 8
lndonesia ).t 7 3.6 7 3.4 7 3.1 t6 3.7 t6
tndia 3.5 8 3.6 8 J.J 8 2.8 l8 3.8 l5
* Bosed on the unrounded meons. lnter-scole
differences of 0.2 or higher generolly ore
stotisticolly significont ot 0.01.
Even more interestingly. respondents in the other three couniries roted their
"home" signiflcontly higher thon did other consumers, resulting in notobly different
ronkings. For instonce. Greek consumers ronked Greece 4rh overoll, versus o ronking
of l3th by the full globol somple, with o full-point difference on the meons. Hong
Kong consumers were somewhot more modest, ronking their home os 6th (vs. 12f,
globolly). Bui by for the greotest difference is observed in the cose of Spoin, where
respondents gove their home country the single highest roting compored to oll
252
other coses (5.3), plocing it first internotionolly. ln other words, while Greek ond
Hong Kong respondents of leost ocknowledge the superiority of such countries
os Germony ond Jopon, those in Spoin do not. lt will be recolled thot Sponish
respondents olso roted Fronce very low in the sub-culturol study discussed obove.
Coupled with the findings in this cose, this suggests thot in some coses exporters
to couniries where, for whotever reoson, consumers consider themselves superior
ond ore reluctont to occept even mojor recognized suppliers, moy hove difflculty
penetroting the morket (or need to offer significontly more to ochieve the desired
results).
Yariability by Attribute and Product vs.Tourism Images

Two studies corried out in South Koreo ond Conodo (Elliot ond Popodopoulos
2006) moke it possible to observe some highly interesting inter-ottribuie differences
thot hove olso been noted in some other studies by the reseorch teom, ond olso to
relote the "product" to the "tourism" imoge of o ploce. Given the primory interest
of ihe reseorch to study tourism vs. product imoges, the studies were corried out by
consumer intercepts of mojor trovel foirs in Seoul ond Toronto, otherwise using the
some techniques os in the other studies discussed obove.
Tobles 5.7 ond 5.8 summorize some of the moin results. Concerning the ottribute
issue, the first toble, focusing
on the two somples' imoge of the US, shows how
perceptions by very diverse consumers con be very similor obout the some
object on some issues but not others. ln this cose, the inter-somple differences ore
relotively minor in most coses (even though some of the differences of 0.2 or more
ore stotististicolly significont) but stond ot 0.5 or more in those highlighted in bold.
Specificolly, South Koreon respondents, whose country is more distont thon Conodo
from the US in terms of development, see the US os significontly weolthier thon do
Conodions (5.6 vs. 5.1 ) ond wont to hove closer ties with it (5.0 vs. 4.5). On the other
hond. they ore less willing to buy US products ond less willing to trovel to thot country,
ond consider it to be less sofe ond its people less friendly ond trustworthy thon do
the Conodion respondents. Toble 5.8 olso shows some significont inter-ottribute
differences, this time focusing on the Koreon somples comporotive views of the US
versus three other highly developed countries. As con be seen, respondents gove
253
CHAPTER V
significontly higher rotings to the US ond Jopon on "cognitive foctors" (cognitive

country imoge, product beliefs), similor rotings to oll countries on "destinotion
beliefs", ond the reverse, significontly lower rotings to the US ond Jopon versus
Conodo ond Austrolio, on "offective country imoge" ond "receptivity".
These findings were tested using SEM (LISREL) in order to oddress o significont gop
in the literoture: Even though both PClond tourism destinotion imoge (TDl) reseorch
deolwith the some bose issue (the imoge of o ploce ond its effect on behovior),
the two fields rorely interoct, eoch developing independently of ond not leorning
from the other. ln this first study of its kind, the intent wos to explore the potentiol
inieroctions between generol country, product-specific, ond tourism-specific
constructs such os those shown in Tobles 5.7 ond 5.8. While spoce does not permit
o presentotion of the model, suffice it to see thot the results of this onolysis were
striking. The model, tested on vorious combinotions of the two sompled countries
(S. Koreo ond Conodo) ond four origins (Jopon, the ond Austrolio common to
US
both, plus the "other of the two" countries for eoch of S. Koreo ond Conodo), wos
posited so os to explore two distinct ond one cross-over sets of poths. The former
linked cognitive ond offective country imoge to eoch of product or destinotion
beliefs ond thence to receptivity, while the lotter explored the interoction between
the product ond tourism poths. ln summory, oll poths were significont in oll coses
with only minor exceptions. ln other words, the models confirm (o) o poth from
country to product beliefs ond product receptivity; (b) o poth from country to
tourism beliefs ond tourism receptivity; ond (c) poths from product or tourism beliefs
to, respectively, tourism or product beliefs ond receptivity.
Considering thot the greot efforts by mony ploces to ottroct tourists bosed on
TDIore never linked in proctice with efforts by other government units of the some
ploces to encouroge exports bosed on PCl, ond hove never been reseorched,
these findings ore signficont indeed: They suggest thot such linkoges con greotly
enhonce our understonding of the role of ploce imoges in reseorch, ond con be
extremely importont in proctice os countries ond other ploces oround the world
engoge in comprehensive "ploce bronding" compoigns to copture bigger shores
in both the trovelond export morkets.
254
Product-CountrY Images
Ioble 5.7 : US Imoge in lwo Counlries os Producer ond Trove! Deslinoiion

cl-
oo\ SR
lonstructs Yariables
bs
Iri Eil
(av ^s
Jognitive Country Image Quality of life 5.7 5.5
Wealth 5.6 5.1
A.ffective Country Image Pleasant 4.8 5.0
Friendly 4.2 4.7
Safe 3.4 3.9
frustworthy 3.9 4.3
Product Beliefs Qualtty 5.3 5.2
Workmanship 5.2 4.8
lnnovativeness 5.1 5.1
Value for money 4.8 4.9
Recognizable brands 5.4 5.8
Destination Beliefs Scenery 5.6 5.8
Attractions 5.3 5.5
Activities 5.5 5.9
Receptivity Willing to buy US products 4.3 5.4
Willins to travel to the US 5.1 5.9
lonative Country Image Mant closer ties with the US 5.0 4.5
255
CHAPTER V
Toble 5.8: Soulh Koreon Views of Four Developed Counhies
Canada Australia US Japan

Cognitive Country Image 5.2 5.0 5.5 5.3
Quality of life 5.6 5.4 5.7 5.3
Wealth 5.2 5.1 5.6 5.4
Iechnological advancement 4.8 4.6 5.6 5.7
Education 5.1 4.9 5.0 5.0
{,ffective Country Image 5.1 5.0 4.3 4.1
lleasant 5.4 5.4 4.8 4.1
3xciting 4.8 5.0 5.1 4.5
iriendly 4.7 4.8 4.2 4.0
iafe 5.2 5.0 3.4 4.5
frustworthy 4.9 4.8 3.9 3.5
.deal country 5.3 5.3 4.5 4.1
Product Beliefs 4.4 4.3 5.0 5.4
Quality 4.7 4.7 5.3 5.8
Reliability 4.5 4.4 4.8 5.2
Workmanship 4.4 4.2 5.2 5.5
lnnovativeness 4.2 4.1 5.1 5.4
Jatisfaction 4.1 4.0 4.4 4.9
Value for money 4.2 4.1 4.8 5.2
iood overall products 4.7 4.8 5.2 5.6
Destination Beliefs 5.4 5.5 5.4 5.2
lcenery 5.9 6.0 5.6 5.2
\ccommodations 4.5 4.5 4.8 4.6
\ttractions s.6 5.7 5.3 5.1
\ctivities 5.4 5.7 5.5 5.2
y'alue for money 5.3 5.4 6.0 5.7
lood overall destination 5.5 5.7 5.5 5.2
Receptivity 4.6 3.8 4.2 4.2
Pride in product ownership 3.8 3.8 J--' 3.4
Willingness to travel 5.4 5.5 5.1 5.1
The Content of Product-Country Images

Lostly, os port of the some multi-notionol study in l5 countries thot wos mentioned
obove (but using on odditionol five sompling sites in Conodo ond the US), it wos
possible to oddress o relotively simple question: Whot producfs ond bronds do
consurners hove in mind when evoluoting producfs from vorious counfries in fhe
morkefp,oce? while the question is simple, the onswer is rother hord to come
by, which is most likely why it hos never been systemoticolly reseorched before
(exceptions which oddressed o limited ronge of reloted topics include Heslop
ond Woll (1985) ond Morello (1993)). Yet. the issue is importont ond con hove
256
significont implicotions for both reseorch ond proctice. Unlike product-specific PCI
studies, which deolwith only one or o limited set of products ond therefore ore not
generolizeoble to overoll country imoges, "globol" PCI reseorch focuses on overoll
country imoges which con be generolized but hove no point of reference. ln this
onolysis we ottempted to oddress this gop.
Reseorch in sociol psychology strongly suggests thot one's oworeness of items in

memory ond obility to recoll them depends lorgely on how effectively they hove
been encoded ond whether memory troces ore ovoiloble to enoble their retrievol
(Grusec, Lockhort ond Wolters 1990). Encoding ond retrievol in turn depend on
the frequency of which on individuol hos been exposed to informotion relevont
to o given schemo (e.g.,, this leods to the principle of repetition in odvertising),
one's level of involvement with the object ond other foctors (Mowen ond Minor
1998). Troditionolly, reseorch in this oreo hos used either oided recoll techniques,
which rely on the subject responding fo severol presented cues (okin to o multiple
choice test), or unoided recoll, in which the respondeni is osked to note whotever
comes to mind of the mention of o cue. Reseorchers cleorly prefer unoided recoll
techniques, since these help to reveol stronger nodes ond ossociotions in memory
(Morkus ond Zojonc 1985, stongor ond Longe I994; Solso l9g5). Accordingty, in
this study we used unoided recoll by osking consumers to nome the products,
componies, or bronds thot come to mind in relotion to three countries. Respondents
hod up to four "blonks" to fill for eoch country. The countries were selected to
represenf two notions thot hove o strong internotionol presence in consumer
goods but offer very different ossortments of products, the US ond Jopon ond one
thot is o mojor troding notion (7th worldwide) but focuses mostly on resource ond
ogriculturol products, conodo. The responses were coded by expert coders in
eoch country. ond double-checked by coders centrolly, using o coding scheme
thot wos unique to this study ond wos developed iterotively bosed on the octuol
consumer responses (i.e.., on "emerged etic" opprooch). The coding comprised 1o
sectors ond up io l0 product cotegories within eoch sector. The coding used three
digits thot reflected the sector ond product cotegory of the consumer's response
ond whether the response represented o generic product coiegory or o specific
257
CHAPTER V
brond nome. For exomple, o mention of "cors" for Jopon would creote the code
510 (tronsportotion, cors, generic), whereos o mention of "Toyoto" would result in
5l I (tronsportotion, cors, brond nome).
Toble 5.9 shows the summory results of the study. ln totol, the moximum possible
number of responses wos 73,128 (somple 6,094 * 3 countries * 4 blonk for eoch),
ond respondents provided over 46,000 mentions of products ond bronds thot were
used to ossess the "bundle of goods" imoge of the three origin countries. lt is cleor
from Toble I thot respondents filled-in 3.1 of the 4 blonks for the US ond Jopon
but only 1.4 for Conodo (respectively 77%, 78% ond 35% of the ovoiloble blonks).
While there wos voriotion ocross the sompled countries (e.g.,, lsroeli respondents
filled-in only 62% of the blonks for the ond Jopon, ond the completion rote for
US
Conodo voried from l5% in lsroel Io 53% in Britoin), the results were quite consistent
internotionolly. One-woy ANOVA tests confirmed thot the completion rotes were
significontly different between Conodo ond either of the US or Jopon but not
between the ond Jopon, in virtuolly oll coses. ln other words, consumers recoll
US
significontly fewer products for countries with o morkedly lower level of presence
in their domestic morkets (in this cose, Conodo). Lostly, the incidence of brond
nome mentions wos similor between the US ond Jopon, both of which were ot
significontly higher levels thon Conodo (overoll, the proportion of brond nomes,
os opposed to generic product cotegories, wos 55% for the US ond 50% f or Jopon,
versus only l7%for Conodo).
258
Ioble 5.9 : Iop-of-Mind-Recoll Response Frequencies

North
Europe & Israel Pacffic
R.egion America
o0
x d
Sampk 6l
cl
E,
o
o lI)
o
6 6,
L
6 o
o d
L
a
()
tr
Il
k tr 6, bI) tr o0
(n
xo s tr tr E o c) a o
€tr
ar
G)
a tr 'tr d o o o I G) (d 6,
k o
d L
o U la frr () z () o
n :no, 586 15 l! 314 303 301 295 294 300 303 332 301 301 300 313 332
)riein . Mean number of responses provided by each sample (max. 4)

JS I 3.4 3.5 3.1 3.1 3.3 3.2 3.0 3.2 2.6 3.1 3.0 2.5 3.0 3.2 3.3
Iapan I 3.3 3.4 3.0 3.2 3.3 3.2 3.1 3.2 2.8 3.3 3.0 2.5 3.1 3.2 3.7
Canada .4 1.8 3.4 1.3 2.t 1.8 1.4 1.3 1.7 0.8 1.8 1.7 0.6 1.5 0.9 0.8
)rigln >. Percent of blanks filled bv each sample (max. (z + 4))
\o
c- $
sf
\o
t'-
\o
!n
6l +
o oo
\o
F-
o
o N €
N
$ so oo 6l
ra
oo
(\I
co (\l N
I4ax/origitr
*N ra
N \o
6l c.t N N cO 6L a.l c.l C7)
JS t7 84 87 78 77 83 80 74 78 62 77 74 62 75 80 84
Iapan I8 80 85 74 81 8l 79 74 80 68 8l 74 62 78 85 92
Canada l5 40 85 37 53 40 36 30 42 l9 42 36 l5 37 2t 4t
:. Percent of brand name mentions over total blanks filled by each sample
)rigin 'max. 100%)
JS t6 53 46 56 43 65 70 62 40 63 42 42 5l 57 72 84
lapan t0 54 44 50 29 50 62 56 26 62 44 30 50 42 69 8l
lanada t7 2t 33 l9 l5 l6 l6 t4 7 t7 5 4 l0 l4 35 45
The specific results ore in Tobles 5.10, 5.1I ond 5.12, respectively for the US, Jopon
ond Conodo. ln line with schemo theory, in eoch toble the sectors thot ottrocted
10% or more of the totol responses provided, ocross oll somples, ore identified
in bold (section (o)) ond considered to be "nodol" (i.e.,, most importont sectors
ossocioted with eoch country). Further detoil is then provided in section (b) of eoch
toble by highlighting the moin product cotegories thot comprise the nodolsectors.
Lostly, section (c) in eoch toble shows the specific brond nomes, within eoch nodol
product cotegory, thot occount for of leost 1% of the responses offered by the
totolsomple.
259
CHAPTER V
Ioble 5.10: Moln Seclors, Producl Colegories ond Bronds: US
b0 o0
Samples
RI
rd o
o tr ID
xtr
cl 6l
ritr:(dh e:: :i IEi
i.ei.P vtro
[i
frl
tr d xo
o tr ;L ct: OO bo
o
o
V) 6t
()
cd
L
E tr
tr
G!
l-{ c)
o z
o: -
*i: *
u:EiEiE:€
gi6t,9i<:S o
I
a. Sectors
-4.srsulturs,.-f, shing i3 5 5 2i4i.t. .1 ? 4 I i4 t6 !0 J li4
!ii16 t:li0
.... ..
.
-N.+IHel.r..ssptusg$ ........... 2 I I J I I i4' :3 i0 i ii0
Foo,d, bev, tot. pharma t9 ,..!5i2ti2s_ te- i1-8- i.23. l-3 _1,3 i U
I4 iii
10- t9_ ?,0_..
-1-5 -1-3
C-lp-thine t4 i l_E i 1l i t? 13- l-3 13 i12 i9 30 !5i?+ .l:2_.
i5 itli2i2 I 2 I 5 ie :l t2 3 l0:6
_1_1
Other household 5
Other Industrial 2 3 3 4:0:1 2 2 I I 3 2 I ) 2ir
S-p_f yr.-c.-eS,.mis-qsllfl ne-o..p..$........... ?9 t? i!2 i17 i33iA in :19 ia !4 12 25 t..!4.: 1.2rt. i 20 i
I ,) 2i3
_1S_
Enlsrtainmpnl.&..Ieisur...9........ ..... + i4 :6i3i?- i,? ; 4.. i4 4. 6 .._5_.. t....3.....1

Trenp.psrtati.p.n l9_ -33- ,,26;, i 14 i ls-i 15 i22 i2 i,zii .23. 2_2 r-4:,
t.!6..t ..19 : .6....
Advanced technolosv t6 2t it6 i13:10:14 it6 i13 i17 17 t2 11ii11 l5 17i28 i
"l2i
..Esad..pjs,........Sp-ft dpks....... t4Ell34i 32 _4-0 i36 7.9- i 84. i36 i 60is2 : sdi 45 iSiai 4a
5_3- 5_2
................................:...C_iel-lpbp.Qs-o_...:
,
i0lI6i5 3 l1 ..-8-.. : 1l ...-8_... i,L4 i14i18- -ll L )., ;,6i i,11
14 i
Alcoholic bev 8 t3 t9 4 25 ) i1 i9 i_3_i-q i3-iA-:9i-1 )
-QSn-fe-cl-i.-o.nery-
Cereals
6
3
f.i 4 t4
si4 j5 -3
4
I 2
9_
l4 I i6 ;2il i_3- i9 iIIi _4 11
t4 3 i3 il:0 i7i2i2i 1l I
l
2 4i3 0 i i 0., I ? 4. i _s- 0i3iIi7i )

Other 22 32t 33 3 25 l5 i2l,l t2 29 16: 16 18: 39 i 25: 15
Clothes
1
C__lpthirg i66 71 66. t..7..-6-..t t68i 52 i83:73i59a46i70
tt i i7:l-6: 4Pi, i
5_9 6-9 -90 5.7. 5?
Footwear :30 26 29 17 23_ .* +l i24li30i45 l
) 0l i6: i i5:5,2i4i2
-46.
Accessories i2 0 I 2 6 0 I
Other ) 2 5 2 6 0 2 0 2 2i li5:3;1:l I
..$.._e.ry,.-miS.g...._R.qS-tpur_a_n-1S.............i..59- 17 127 +5 46i73 175 .51 57 i54 i-13 :-58 621 5.2
1
+3i1? :
-M..p:iss, .mr.ls i. p.....i.22. 21ti38 35ii6l ii-ji 27

t-4 ,2i_lz1 | 14i20 Ei ?8 18:20 i
-M-ilila-r-v- i5 . i:l5
3ii6 8 7i2l i4i
..-8-...i I 6-i3-li-1 i .._6_.. 4 i_8 ti-It6: 7 s-"1 4 _1_q i
Tourismetc. i 4 5 ;0 6a4i 7i 4 3-i io
i1 -3_ 3: t. ..3_ i3_ 3 I !":9 ) i9
;3 4l 4i t2 2i2 6- 0:5
.-1..
l:3 I
i
-3 _t_ -1-3_
I 0 0 3
Retail stores i 2 9 l0 6 0il 0
i7 t4
I 0 I 0i0 I 0 4i3
Other 6 t0 1:0 2 6 5 7 5:9 3 5 4i17
E5 82 92 i96i8t 83 85 i87 t82 89i83 g.7 i 88i 82 w g-2.
_11 t4 6 i 3 it4 t4 t0 ll t6 7 ir3 l0- li1: .,9,, 11 t2
Other land veh 3 4 2iti3 3 5,2i1 3i3 )i
i i
9 I 6
Other I I 0:0:2 0 0i0:l 1:l I 0 0 0 0
E3 E-0 i87 78: 89 82, 72i87 7? 7-2 E-t
-Ady.te-c_h.......-Csm.p.uti-ng..........,
Telecomm i 6
"86-.i..8-6.
lzi 1
7-.i.6 li4 5 I si3 E_6
3 t2 4
-8_5-
il
E5
l0
Aer-osp.p.sp 4 lt4 3t6 16: 3 I 3 !?i I 3 3 2 2
Other 7 8i4 si3 5i4 t2 l0 8i7 t6 -1
8 8
,,
3
260
(Toble 5.10 continued on next poge.)(Toble l0 continued: Anolysis of US doto.)

c. Brarrds
Food etc. Coca-Cola 7 2 2 5;6 15 9 :11 5 8i7 1t 5i6i5 4
Pepsi I I I 1:l I I I 2tl I I I I

Marlboro I I I I I I I I i1 I
Clothing Nike 3 2 2 4i2 4 4i3 2 5:1 4 3i4 2 5
Levis 3 1
1ia 5 3i6 3 4i3 3 5:1 4 4
IhanspFord i 4 8 5i4 2 4i4 5 3i6i3 3i2 4 7 t3
Gen. Motors i3 5 5:1 2 3is 4 2i3tl 2 2 l:l
Chewolet r t 3 I I 1:l 3 I I
Boeing I 3 I I 1;l I 1:1:l I I
Chrysler i I I 1:l I 1i3 2 lt2i2 I I 1
Serv, misc McDonald's i 6 3 3i5 8 t0 t2 8 8:4 3:3:5 8 514

Disney_ i I lil 1
lil 1 il.
''''''''l: 1
J
IBM
Adv Tech : 3 ; 3i2 2 4i3 3 2i5 2i2it J 5 9
Microsoft : 3 6 3:1 I l:5 J 2i2 lili2 J 3i6
' Cells show the % of mentions by sector over the totol of responses. Moin sectors ore
in bold.
2 Cells show the % of mentions by product cotegory wiihin eoch sector for the moin
sectors from (o).

3 Cells show the % of mentions by brond over the totol of responses, for bronds with
l% or more mentions in the "Overoll overoge" column.
The findings portroy o rother foscinoting imoge of the "bundle of goods" thot is
ossocioted with the three couniries ond comprises their imoges. Five sectors, with
severol product cotegories eoch, ore nodol in the coses of the US ond Conodo,
while only two occount for fully 77% of oll mentions for Jopon (entertoinment
& leisure 4l%, tronsportotion 35%1. As well, o smoll hondful of distinct product
coiegories occounts for most responses within sectors (e.g.,, 88% for cors within
tronsportotion for Jopon, 70% for wood products within noturol resources in the
cose of Conodo).
261
CHAPTER V
Turning to brond-specific meniions, 14 Americon, 16 Joponese, ond only 4

Conodion bronds reoched or exceeded the I % cutoff point. While the percentoges
of brond mentions oppeor low, they reflect the entire somple ond concotenote up
io four mentions per respondent. For exomple, Toyoto is mentioned by 7% of the
full somple. Adjusting for blonks (mox. 24,376 * responses 787o= 19,013), this odds
to 1,331 mentions (19,013 * 7%) by 6,094 consumers. Since the some respondent
does not mention the some brond twice, tvlly 22% of the worldwide somple (1,331 /
6,094l,, o rother impressive figure, brought the "Toyoto" to mind when osked to nome
Joponese products (os well, it con be ossumed thot o lorge number of respondents
olso lumped Toyoto in o mention of "cors" os o generic cotegory, given Jopon's
known strength ond multiple bronds in thot morket). Therefore, mony of fhe bronds
seern fo be in o remorkobly strong posifion.
262
Ioble 5.11 : Moin Seclors, Producl Cotegories ond Bronds: Jopon
ih0 o0
:>
:d >.
tr
o
Samples oih -:Gt
o:- E!E vb0
ld tr a
o:.= () tr;(B o: =.
j(d
'Iis o
G!
i hl) o;d
:> <:9
:k q cB (I):,= C)
io
d:H c) i .F g E E
o O:l o:6 6 5;! E
iO >:U >ilEl trr
(l)
o z 'l : 'rr 6iE L
0 <iE *
a. Sectors
Aericulture, fishing 4 2 4 2 5 si3 4 8 4 7 I si 2
N.gur_p_t.req9q99p................ 0. I I l:
Food, bev, tob, pharma 2 2 2 2 3 3i2 I 6 I I ) I 3i3 4
Clothing 3 2 2 4 I 3:l 3 2 5 3 6 4 3i4 5
Other household 3 2 2 3 2 2it 2 8 J I 3i4 t7
Other Industrial 2 I ) 3 I l: I ) I 3 J I ti2
2- I I 2 I l: I 2 I I 2 I 2i2 6
leisrrre
4t a 45 52 47 44tu 37 37 40 31 35 a 39i41 45
T[ansportation 36 42 37 23 31 34i A 45 33 4t 42 28 M 35i41 t9
Advanced technology 7 6 5 9 9 6i7 8 8 il 6 l3 5 8:3 2
2
b. Product Categories
E&L Cons.electr 80 85r79 84: 83 80 66 69 74i85 87 i74 89i78i86 88
Cameras t2 9 it4 6;8 13 20 23 l8 ll 7 it6 5 it4i 9 5
Toys/games 6 6i5 9t7 7 t2 5 5i3 4i7 5i8!3 6
Other ) 2 ri2 2 3 3:l 2i3 I 2 I
Tlansport Cars 88 95 94 9l :89 81:87 93 t9l 88 83i63 96190 91i95
Othe(land) 1l 5 5 9:8 t9it2 6i4 t2 14t36 4 il0 2is
Other 1 2 3 I l:5 3il
c. Brands
E&L Sony i l0 ll t0 t2 8 ill lt 8 6 t4 7 4 lt 6 t4 l6
Toshiba 2 2 2 4 ti2 1 1 I 2 I 5 5
Sanyo 1 2 I ) I I I 1 ) 4 3 3 I
Hitachi : I I I 3 I I I I I 2 I 1 4
Panasonic ; I 2 I 2 I I ) I I 1 I 5
Fuji I I I I 1 I I 2
Canon : I I 2 I I I I I
Aiwa I I 2 I I I I I I
Tlansport Tovota 7 10 8 2 3 7:10 l1 4 9 7i2 3:7 l3 7
Mitsubishi 4 5 2 4 J 4i6 5 3 J 3il l0:6 5 4
Honda 4 8 7 J 3 4i4 4 2 5 312 2i2 7 4
Yamaha 2 1 I I 3:3 2 I 3 3i2 I 2 I
Nissan 2 2 2 5 2 lt4 2 I I 3i2 1i1 I
Suzuki I I I 1:1 a I 5 2i2 1:l 2
Kawasaki I I I I I ti2 I
Mazda I I I ti2 7 I 2 I I I I
1'2'3 Notes some os forToble 5.10.
263
CHAPTER V
Toble 5.12: Mqin Sectors, Product Colegories ond Brqnds: Cqnqdo
bo o0
tr
Samples d >.:
C: >,;
I
>\: o
:t R,c,, cB:d:tr 'lJ Hi c.ri
obi !?: s
i
: d: o v
k
() <i!
oaiE x | .,ll:i I6l
o i.ir
E:>:d
L: H:H
o:o:o
-:O:PiA
E!3,€
;i: d o0
D:O H:::L
Z;m: I!
I
0iziE Ei6ia =:0):d at)ttE
-r\:-
o
Jr
a. Sectors
_A_
gricu-lture, fi s_hin g. 2^7 2_l 20ir7 i4-2i40;37 :--25.: 3-1 17 2o 2-e-iL7 i50i e |?8
....
.
Nafural.r-esp..urce$-.. ...... ?_tt9 2lilli!e-i!6i2_7 i26i3-3 19 -36 35:t-5i12i22: 6

.Foord,.bey,.-tsh, ph..atma. ..... t0 30 10-:-1-1i15 i 7 : 5 i7i7 10_ 9- 2 i13;5 i12:10-
Clot-hjng. 10- 5 l0-i19:5:7-i6 i9i8 10- 13 17i16i5:r-?i1
..O-_1_he1-hgseetrold .. .. 4 1 4:10: I i I !1 i3il 4 l i10i2 i-5_ r-t3
O--t!-e1lad11strid. ......... ...-5-.. 3 ,:s:2:3:3 i514 -6
15
i.t
8 si2i4i6tt
Saiviaea;misialia;ffis t? 15 11i1ri11it2ils- !2i 7- 6.. 6 10-; 13 i 19,: 30-
E nlertainme-rrt &_ lei surg 4 J 4ist2i3t2 6i4 9 :i
IL J 4i4isit
Transportation 4 2 9i4t2t9t2 6i4 4 5 1i4t4i6t1
Advanced technologv j I a:4:tlli)
b, P19du9t Categon res
lrl 4 9ili4,3
Asri E-ish 38 2-7 i t9 i35 i25 i 9 35 i 65:50 i 31 :38 67 36is4i23 58
M+plp syryp-......
WheaVGrains
2_8
t6
2_4 :25ilE- ile
27133i10;l0i I
i E2 47 l0i12i-41iI 2 52i?5: 5
t2 19i20: 18 i 35 7 61I it4
vI
Livestock 7 8:lli5i4t2 4 i 0 il0:3 it7 l5 6 tt2i 9 6
Fruits & -v.egLs 5 3i7,4i20is oii:i:2ii 4 0: i :23 7
Other 6 3t 4 i 8 i 2 2i5i7i5:8 5 0 i 0 i26
Nat..R-es....... Wpsd..... i70 71140i74 Et i7+ 84 63iE4 E0 81i67 76 i67:27 i78
MineiitJ i t j :,1i.4ii 4 ) t4i 6
'''';'
.5....:...4.. -8 i12
:,4 :i3!46i 3
.. ........ ... ..Oil,
Other
gas_,. 9qe1............;..
II?
_8-. -8 .:...1... ) 1,4;4
..8....:..22..:...2.... I ..-8-..i..9 _12 t7i7t3
t4i2si20l 6 izt E 9i6 1l 3 it2 8 ri:i2orio
-q
i19 65 40i36i65 6 :68 52i 64 18 55 451 5 6l:14:8

ir4 9 ) i16l14 )_e t 16, 4 ie !61 6 i1:o 4 :3-1 i li
.i..9... 8 ) llql t 2si 0 8:0i0 2 0i4 t3i 6 ,45
:6 3 ..i -rZtl4i 8 .1.0.: 0 12i0:-q -10 0i4 o!6:6
Other 3t 16i 43 126 i l0 3li16 24t27 i2l 27 44i87 22i 43 i 30
C--lpthing
- .... . Clplh_es
F,ri;idjlei
... . 47
35
6l i77 i 6l :40 l9 26i 48 43_ 4!i28t?3:!5159
bl1 ifit4g 65
E9-
48i3e 48 45i66i74i24 i 18:
* 3 6
Footwear t2 ttit2i14i 9 22i10 7 eiiiiirAiEi4i
L ;, 4 :lj-,:, j
8 5
Other 6 ._8-.. ...4....:.3. ? 5i 3- i 0:7- i14-:15
-q
Sef-v,. mjSS T..o.U-nSm eL-c- 4t 28i17i38i47 76 68!40 46 8 ;75: 45i47:48 i i9 ?4
SBsrts ll 2E:13i6 i3- 5- tg: t6 6: 3-1.o i15i 6|2i:a I
Finance & ins 9 4 t12i -t3 il2
-2 i !!_ 9-: 15:-0 i16:-6 i-0_:19 t6
0-
Ms-v_ips,musig 7 7 i 6 itsits 4 3 ill 12i 0 i 8 i 0 : t2 i 15 i 0 I
Celebrij-ips. 6 2....i...4....:. 2 t...3....: 13 8-..:..-l--l 6. .-q...j...O j 23. i...-0-..:..-2 i. I
.... . .... .. .R.9qtegr-4r,rl;.. 5 4i6i0:s: a 2io. ,3 38: 0 : 0 i 6 i 2 i 6 _0
_8_..
... ...... ...... Refail s.tpr_es 5 Lj:i)i,,oisi 0. 0..:...9 -q

s:oi0io!0io E
Other l3 9:l4i26t ) 6 i ti2 l8 0i17i0:23i9:28 39
c.
Only six Canadian brands barely reached,the l% overall cut-offpoint:
Molson (beer), Air Canada, Bombardier (airplane & train manufacturer),CanadaDry (soft drink
and in fact a uS, not a canadian brand), Maple Leaf Gold coin (only in Hong Kong) and MAC
Cosmetics.
r.2 Notes some os for Toble 5.10.
264
To tesi for whether the results differed ocross the vorious somples, X2 presented
itself os on opproprioie stotistic but required o correction foctor becouse of the
lorge omount of doto (15 somples,6,094 respondents, l0 sectors) ond the foci
thot the doto wos multiple-response (eoch respondent could nome two or more
products in the some sector). While ihis opprooch is not ideol it serves os o more
rigorous criterion for comporing the sector mentions ocross the somples for eoch
origin. For oll origins, the X2 test hod 126 degrees of freedom ond on olpho level of
0.05, leoding to rejection of the null for volues of <74.22 or >129.56. The conection
foctor wos colculoted os: X'z I {(1 - (volid mentions / (somple size * # sectors))) *
(volid mentions / somple size))
This onolysis showed thot the stotistics were significont in oll coses. Nonetheless, the
inter-country voriotions leoding to the overoll stotisticolly significont differences in
the doto ore relotively eosy to identify ond exploin, by referring to Tobles 5.10 - 5.12
ond do not detroct from whot essentiolly is o remorkoble cross-notionol similority
in the responses for oll origins. ln the cose of the US, sporodic voriotions included
the lorger number of mentions of food, beveroge. tobocco ond phormoceuticol
products by the Europeon somples ,,19%-25%, versus o ronge of 9%-15% for oll other
somples) ond the smoll proportions for odvonce technology by some somples
(porticulorly Britoin. Spoin ond lsroel) - but, still, the five nodol sectors dominote
the country's imoge both overoll ond ocross virtuolly oll somples. For Jopon, the
cross-country similority is striking indeed, with the two nodol sectors dominoting in
oll somples. The only noticeoble exception to the generol pottern is the cose of
Hong Kong, which, considering its proximity to Jopon ond overoll receptivity to its
products, imporis o wider ronge of goods from thot country. Lostly, for Conodo the
pottern is similor to thot of the US - the five nodol sectors dominote. ond the only
noticeoble exception is in the clothing sector which occounts for significontly more
mentions, oI 10% or more of the totol, by seven somples (Mexico, Hungory, Greece,
Spoin, lsroel, lndonesio ond Conodo itself).
To moke this onolysis more meoningful, the obove doto wos reloted to the product
evoluotions of the origin countries, which respondents mode os port of the some
study. To moke this possible, the verbotim responses from the recoll section, thot
26s
CHAPTER V
were summorized obove, were quontified using o five-member expert ponel thot
ronk-ordered the sectors from leost to most technologicolly intense, bosed on the
ossumption thot higher perceptions of technologicolodvoncement leod to higher
perceptions of "product prowess" by o country ("if they con moke thot, they con
moke everything!"). The sectors were ronked ond weighted from 1 (ogriculture ond
fishing) to l0 (odvonced technology). Averoge scores by somple for eoch origin
were then colculoted bosed on o "technology score" thot wos computed for
eoch respondent (sum of weights of the sectors mentioned divided by the number
of mentions; e.9.,, "wheot, cors, computers" for the US would yield o score of 6.67,
colculoted os 1 (ogriculture) + 9 (tronsportotion) + l0 (odvonced technologyl = 29 1
3). These scores were then correloted with o 9-item "product" foctor thot emerged
from principol components onolysis of o 20-item bipolor odjective scole thot wos
used in the study (overoge Cronboch's olpho of .839 ocross 60 tests (20 somples
* 3 origins; only l4 coefficients were
below .80, with the lowest olpho ot .74). Using
Peorson correlotion (two{oiled), the findings showed thot the scores were strongly
correloted, with o coefficient of 0.572 of p=g.ggO. ln other words, the bronds ond
products thot respondents conjure up from their mentol schemoto when osked
to ossess "the products of country X" ore closely ond significontly correloted
with their evoluotions. The summory results ocross oll somples ore shown below.
ln line with the rotionole thot led to the weighing ond scoring scheme thot wos
developed for this onolysis, the doto show thoi consumers ossociote technologicol
odvoncement more with such products os consumer electronics ond cors thon
with other "odvonced technology" monifestotions (whetherwell-understood ones,
os in computing, or more "hidden from common view", os in the extroction of
noturol resources). As o result, Jopon is not only considered to be more odvonced
thon the US bosed on the sector scores, but the globol evoluotion of its products
is olso significontly higher (the countries' product evoluotion scores were tested
using MANOVA, not discussed here due to lock of spoce ond oll differences were
stoiisticolly signifi cont) .
266
Origin Total Sector Score (range 1-10) Product Evaluation (range 1-7)
US 6,26 5.19
Japan 7.40 5.64
Canada 4.08 4.78
Summary Implications And Conclusions

The intricocies of how PCI works, ond ihe reoson why it is importont, ore indicoted
by the following brief exchonge from the movie "Bock to the Future lll", o comedy
oboui time trovel. lt occurs in "reol time" 1955 between Doc, the scientist, ond
Morty, the young hero who hos been to 1985 ond bock, ond helps to portroy mony
of the elements thot ore the focus of this report:
Doc No wonder this circuit foiled... it soys "Mode in Jopon".
Morty Whot do you meon, Doc? All the best things ore mode in Jopon.
Doc Unbelievoble!
Severol observotions con be mode from this vignette. First, Doc ottributes the
produci's (poor) performonce to its provenonce, given his prism of experiences in
the mid-1950s when Jopon wos known os o producer of trinkets; on the other hond,
from his vontoge point of the mid-l980s, Morty cleorly hos o very positive view of
Joponese product performonce. Second, the two time points roughly conespond
to o "bottom" ond "high" of Jopon's imoge os o producer ond together they
show thot o notionol imoge con chonge over time os o result of o focused notionol
strotegy. Third, given their respective mindfromes prior to this diologue, Doc would
be highly unlikely to choose, while Morty would probobly seek out, o Joponese
circuit - pointing to the fundomentol tenet in consumer behovior theory thot
perceptions ond beliefs guide consumer choices. Fourth, the screenwriter wrote
Mortin's line os "ol/ the best things ore mode in Jopon", not just "circuits" - thot is,
the country imoges of individuol product closses moy differ from one onother but
oll ore likely to be congruent with its overoll imoge os o producer which is shoped
by vorious foctors including its flogship products - os reveoled in the lost onolysis
in the previous section. Lostly, this brief diologue is likely to leod Doc to chonge his
ottribution of the circuit foilure ond be more open to products from Jopon.
267
CHAPTER V
ln o nutshell, percepiion, which con be broodly defined os "the meoning we

ottribute to things", motters, both generolly ond specificolly with regords to PCl.
A number of specific implicotions ond conclusions orising from the findings were
highlighted in the preceding section ond they were not repeoted here. Whot
needs to be stressed, rother is the greot importonce of PCI porticulorly in the
contemporory ero where "ploce bronding" hos become o must-do for mony
governments, of both the notionol ond sub-notionol levels, worldwide. As wos
olluded to obove when discussing the South Koreon ond Conodion studies, such
ploce bronding efforts need not ond in foct must not, be limited to eitherthe tourism
or the product seciors, ond, if both sectors ore the subject of bronding compoigns,
interoctions between them must be sought to moximize the potentiol benefits from
such strotegies.
ln foct, the issue goes significontly beyond tourism ond consumer products. A
significont body of reseorch hos shown, first, thot PCI olso offects industriol buyers
(notwithstonding the common misperception thot they olwoys oct "rotionolly" ond
bosed on "focts" rother thon stereotyped mentol schemoto like everyone else).
For exomple, studies show PCI effects on businesspersons in the context of goods
.l987;
from Eostern Europe (Chosin ond Joffe Chosin, Joffe ond Holzmueller 1987;
Johonsson, Ronkoinen ond Czinkoto 1994), import monogers in the US (Ghymn
ond Kuo 1995), Chino (Koynok ond Kucukemiroglu 1992), Austrolio (Dzever ond
Quester 1999) ond Hollond (Nes ond Ghouri 1998), professionol retoil buyers ond
other purchose monogers (Heslop et ol. 2001; Alpert et ol. 1995; Ahmed, d'Astous
ond El-odrooui 1994; Ahmed ond d'Astous 1995) ond Mexicon business people with
regords to Conodo (Lobrie, Propeck ond Arellono 1994). Second, ond perhops by
for more importont, o body of knowledge hos been developing thot shows direct
PCI effects on investors when they decide where to locote their next internotionol
venture - o motter of vitol importonce to virtuolly oll countries ond especiolly those
in the developing world (e.9.,, see Vogel 1976: Johonsson ond Moinpour 1977:
Borkley ond McNomoro I ?94; Wee, Lim ond Ton 1993; Zieminski ond Wordo 1997;
Popodopoulos et ol. 1997; Florido 2000; ond Schwonen 2000).
268
Product-Courriry Images
ln this context, then, inter-sectorol coordinotion of ploce bronding

efforts, whether directed of exports, tourism, or investment ottroction. is criticol.
The potentiol to include multiple torget oudiences of interest to vorious sectors
the emerging model, in Figure 5.'l below, which includes both the
is illustroted in
potentiol of including "business buyers" (right side - see, for exomple, Heslop et ol.
2005) ond on emphosis on offect (left side - see, for exomple, Klein, Ettenson ond
Morris l99B; Shim ond Shormo 1987; Villonuevo ond Popodopoulos 2003), which hos
been mentioned severol iimes in the preceding sections of this chopter ond whose
importonce connot be overemphosized. ln short, it is hoped thot this chopter hos
helped to portroy the scope ond complexity of cross-culturolissues in PClreseorch
ond proctice, ond thot reoders moy benefit by considering some of these issues in
iheir future work.
269
CHAPTER V
Figure 5.1 : Troditlonolond Emerging PClModels
Emerging model?
Troditionol model
l"L''k"/Did',k"1 Dimensions
,Country vs. peopld

/"rG\ competence
descriptive
vs.
\
Ethno-
centrism
Weok +
270
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278
Chopter Six
THE ROLE OF NATIONAL

CT]LTTIRAL DISTANCE
ON COUNTRY IMAGE-
BASED PRODTICT
EVALI.]ATIONS
CHAPTER VI
280
The Role of National Cultural Distance on Country
Erik B. Nes*
Nicolas Papadopoulos **
Introduction
The concept of culture is of the heort
of internotionol morketing. lt influences
most or perhops ollof the brood problem
oreos thot together moke up the scope
of the field in both reseorch ond proctice,
including product development (e.9.,,
Nokoto ond Sivokumor 1996), entry
,l988),
mode (e.9.,. Kogut ond Singh
communicotion (e.g.,, Griffith ond
Horvey 2001; Griffith 2OO2) ond inter-
orgonizotionol relotions (e.g.,, Ulijn,
O'Hoir ond Ledlow 2000). One of the
most reseorched oreos in internotionol
morketing is the role of country imoge in
buyer behoviol; commonly refened to os
Product-Country lmoges (PCl) or "country
of origin" (CO) effects, which occounted
* Erlk B. Nes, Assoclqle Professor, Norweglon for more thon 1000 published orticles
School ol Monogement Bl, Oslo, Norwoy ond books (including olmost 500 journol
" Nlcolos FoPodoPoulos, Professor of Mor-
kellng ond lnlernollonol Buslness Erlc, Sproit orticles) os of mid-2004 (Popodopoulos
School of Buslness, Corlelon Unlverslly, Ot-
lowq. Conqdo ond Butt 2006l.
Nole: Ihe oulhors qre lisled olphobellcolly re-
flecting equol conlrlbullons lo thls chopler.
A lorge number of these studies ore
cross-notionol, which suggests interest in
281
CHAPTER VI
ihe potentiol effects of inter-notionol culturol voriotions on product evoluotions.

Surprisingly, however ihis interest hos not tronsloted into significont reseorch
specificolly on the issue of culture os such. While observed differences hove often
been ottributed to culture, specific culturol meosures hove rorely been included in
support of such ottributions. The scorce ottention on the role ond impoct of
culiure
in PCI issues limits our knowledge in this oreo ond con hove substontive implicotions
on the interpretotion of reseorch results ond the internotionol morketing strotegies
undertoken by proctitioners.
An odditionol issue ihot limiis understonding of how country imoges moy offect
consumer ottitudes ond behovior is thot culturol distonce often co-vories with level
of economic development of sompled ond source countries, ond this suggests
o
potentiolconfounding effect thot hos not been sufficienfly explored.
The moin purpose of this chopter is to osk o relotively simple two4old quesiion:
Does culturol distonce motter in cross-notionol product evoluotions, ond whot,
if ony, is the role of economic development in such evoluotions by consumers?
The issue is importont for reseorchers ond proctitioners in both developed ond
developing notions ond especiolly for those in the lotter. The reoson is thot the
bulk of globol trode occurs omongst the developed notions of the Triod (North
Americo, Europe, Asio-Pocific) ond thot notionolculture differences omong these
notions tend to be smoller thon those between them ond developing countries. lf
culturol distonce ploys o role in consumer behovior, then producers in developing
countries would be foced with o double-edged conundrum. First, considering
"economic development" olone, their products moy be evoluoted os of lower
quolity by consumers in developed countries while their own domestic consumers
-
moy perceive products by competitors in industriolized notions to be superior. This
creotes o disodvontogeous situotion for them both obrood ond ot home. Second.
if "culturol distonce" is found to offect consumer predispositions ond thus odded
to the equotion, their disodvontoge is further occentuoted. As will be seen in the
methodology section, below, the selection of countries for testing in this study con
be considered porticulorly relevoni to reoders of this book. To oddress its torget
issues, the chopter begins with o review of the relevont literoture leoding to stoting
282
of two hypotheses, presents the methodology used for the study, highlights the
onolysis of the doto used, ond concludes with o discussion ond implicoiions for
reseorch, business ond government.
Literature Review and Hypotheses

Culture is o brood ond extremely complex concept. lt includes olmost every
ospect of o person's life. Notionol culture is ihe ideo thot the people of o notion
hove o distinctive ond enduring pottern of behovior ond personolity chorocteristics
(Clork lgg9). Troits ore not evenly distributed in o couniry, ond individuols ond
subgroups within it moy hove culturol chorocteristics thot deviote from the notionol
troits. Culturol boundories between notions moy olso become fuzzierwith increosing
.l995).
economicintegrotion (Fukuyomo However, severolstudiessuggestdimensions
which exploin differences in notionol chorocter (Clork 1990). While severol scholors
hove mode significoni contributions to our understonding of culture (e.9.,, Schwortz
1994;Trompenoors ond Hompden-Turnerl998; lnglehort ond Boker2000), Hofstede's
(l9gO) toxonomy of culturol dimensions ond their implicotions for monogement ore
probobly the most frequently cited in this context. Hofstede (1980) defines culture
os the collective "progromming of the mind" thot distinguishes the members of
one group from onother ond his four culturol dimensions - uncertointy ovoidonce,
individuolism, mosculinity ond power distonce - ore the most frequently used in
monogement ond morketing studies.
Studies concerning the impoct of notionol culiure in PCI theory hove oddressed
four moin problem oreos: The premises of theory ond the need for o flexible model
of pCl effects (Knight ond Colontone 2000); source country culture in odvertising
(Moon lg9 6l;home country odvontoge (Gurhon-Conli ond Mohesworon 2000); ond
the impoct of culturolsimilority, or culture-reloted voriobles. on product evoluotions
ond buying inientions (Tongberg 1972;tNong 1978; Crowford ond Lomb 1981;Wong
ond Lomb 1983, Heslop et ol. l9?8; Wotson ond Wright 2000)'
As Knight ond Colontone (2000) hove noted, "Despite hundreds of studies on the
country of origin effect litile is known obout the cognitive processing thot occurs
during CO-bosed product evoluotions". These reseorchers found thoi the use
283
CHAPTER VI
of PCI informotion in forming purchose ottitudes differs between Americon ond

Joponese somples, ond ottributed this to differences in their respondents' notionol
cultures. This suggests thot culture impocts the premises of theoreticol models for
informotion processing in the PCI literoture. The question of whether iheories thot
ore confirmed in one culturol setting moy be volid in other culturol settings is o
generol problem in internotionol morketing reseorch.
Moon (1996) developed o conceptuol model of consumers' psychologicol

processing of odvertisements thot pitch o foreign product in the source
country's
own culturol context ond proposed thot ottitudes toword the odvertisement,
brond ond purchose intention depend upon ethnocentricity ond upon the ottitude
toword the culture of the foreign country ond the country itself. Gurhon-Conliond
Mohesworon (2000) exomined whether notionol culture influences CO effects
on product evoluotions in Jopon ond the United Stotes. Joponese respondents
evoluoted the produci thot originoted in the home country (versus foreign country)
more fovourobly regordless of product superiority. Americon respondents, however.
evoluoted the product thot originoted in the home country more fovourobly only
when it wos superior to its foreign competitor. The outhors othibute the differences
to differences in notionol culture with regord to individuolism ond collectivism.
Poromesworon ond Pishorodi (1994) onolyzed CO meosurements ond focior
structures using multiple equotion modeling. They hove one dimension for the
country imoge thot is split into two foctors, which they termed ,,cognitive', ond
"conotive". The lotter consists of culturol, economic ond politicolsimilority.
Severol studies suggest thot culiurol similority between source ond consuming
countries, or voriobles thot seem to be reloted to culturol similority, hove o posiiive
impoct on product evoluotions (crowford ond Lomb l9gl, wong ond Lomb
1983, Heslop et ot. lgg8. wotson ond Wright 2ooo). wong (1978) osked
Americon
respondents to indicote their willingness to buy products from 36 countries, ond
ottributed the findings to levelof economic development ond perceived similority
to the source country's culture ond politicol climote. Tongberg (1972) olso studied
preferences omong Americon respondents for selected products
mode in l3
notions of vorious stoges of economic development, ond ottributed the differences
284
to economic development ond perceived similority with the source country's belief
system. The findings of Poromesworon ond Pishorodi (1994) thot culturol, economic
ond politicol similority moke up one conotive focior support thot whot we hove
termed culture-reloted voriobles in the eorly studies ore indeed reloted to culture.
One problem in oll of the eorly studies which suggest thot culturol similority
impocts product evoluotions is o possible relotionship between culture ond
economic development. A positive relotionship between o source country's
degree of economic development ond evoluotions of products from it is probobly
the relotionship thot hos received the strongest support in the literoture (e.9.,, Nes
ond Bilkey 1993; Popodopoulos ond Heslop '1993). The literoture review by Al-Suloiti
ond Boker (1998) offers o thorough review of this issue. lf economic development
ond notionol culture ore reloted, then the design of these studies mokes it very
hord to infer which port, if ony, of the evoluotions should be ottributed to culture.
The study by Wotson ond Wright (2000) illusirotes this problem. The reseorchers
hypothesized thot individuols with high levels of consumer ethnocentrism would
hove more fovouroble ottitudes toword producis from culturolly similor countries,
in comporison to products from culturolly dissimilor countries, when no domestic
monufoctured products ore ovoiloble. The volues clossificotion of culture proposed
by Schwortz (1994) wos used to estoblish culturol similority. Using New Zeolond os
their somple, they selected Germony ond the US os culturolly similor ond ltoly ond
Singopore os culturollydissimilor origin countries.Thereseorchersfound thotproducts
mode in the culturolly similor countries received higher evoluotions ond ottributed
this to the culturol similority vorioble. Other studies hove, however demonstroted
thot Germony ond the US tend to be evoluoted omong the top source countries
irrespective of where the doto ore collected (e.9.,, Popodopoulos ond Heslop
1993, Finonciol Times, Moy 29 1995). Hence, we do not know whether the findings
ore due to culiurol similority or to o generol ottitude thot the US ond Germony ore
omong the "best" countries of origin, irrespective of the culturol distonce from the
country where doto ore collected.
285
CHAPTER VI
The obove discussion suggests thot we hove o need for informotion on the
impoct of culturol distonce in PCI evoluotions where these foctors ore token into
occount, which the moin objective of this chopter. Our hypotheses build on the
is
inferences from the studies referred to obove ond we try to control for economic
development. We do this by, first, drowing on doto collected in severol countries
thot represent vorious cultures ond degrees of economic development; ond
second, by using product ossessments ond buying intentions from the sompled
countries with regords to products from severol countries thot represent vorious
cultures ond degrees of economic development. Hence. it wos possible thot the
underlying relotionships between culturol distonce ond economic development
moy counterbolonce eoch other. Previous studies suggest thot culturol distonce
or culture-reloted distonce negotively offects product evoluotions ond/or buying
inteniions (Tongberg 1972;Wong 1978; Crowford ond Lomb l98l; Wong ond Lomb
1983, Wotson ond Wright 2000). ln light of the obove, our hypotheses ore:
Hl: Notionol culturol distonce between the country of origin of o product ond
the somple country negotively offects product evoluotions.
H2: Notionolculturoldistonce between the country of origin of o product ond

the somple country negotively offects buying intentions.
Methodology
Field doto on consumer ossessments of products from vorious notions wos
collecied os port of o lorger study corried out in the copitol or other mojor ciiy
of l3 countries, selected to represent regions ond countries of importonce in
internotionol morketing - North Americo (3), Europe (7), Asio-Pocific (2) ond lsroel.
While the number of couniries in Asio-Pocific wos constroined by the ovoilobility
of locol colloborotors for the fieldwork, the somple included o highly developed
ond o developing country, thus enobling sufficient onolysis similorly to the other
regions. The totol somple wos3,992, or on overoge of 307 respondents per locotion.
The study wos monoged centrolly ond odministered locolly ond ochieved on
overoll response rote of 63% using the drop-off/pick-up fieldwork technique. The
questionnoire wos structured ond self-odministered ond wos tronsloted ond bock-
286
tronsloted for the vorious longuoges involved. Respondents were osked to ossess
the products of I6 countries, comprising ihe 13 sompled notions plus two highly
developed ones (Jopon ond Sweden) ond one developing (lndio) notion. Two
single-item meosures, which hove been found to encopsulote product evoluotions
ond respondent intentions well in other work from the lorger study, were used for
the onolysis in this chopter: " [country X produces] overoll poor/good products" ond
"l om not / I om willing to buy products from country X". ln eoch cose, respondents
provided o roting from 'l (poor) to 7 (good).
As noted in the literoture review, Hofstede's (1980) meosures of notionol culture

is the most widely used in monogement reseorch ond were odopted for this
study. The meosure of the culturol distonce between the somple country (where
the doio wos collected) ond the origin country (the country whose products
were evoluoted) wos creoted by subtrocting eoch somple county's scores on
Hofstede's four dimensions (individuolism, power distonce, uncertointy ovoidonce,
mosculinity) from the scores of eoch origin country, ond then odding the differences
to compute o "totol culturol distonce" score for eoch poir of countries. Gross
Notionol lncome (GNl) per copito in the yeor 2000, os reported by the World Bonk,
wos used os o proxy for economic development. The sompled countries ond the
somple size in eoch, the origin countries, ond their GN|/copito, ore shown in Toble
6.1. The lorge number of somple ond origin countries, including both developing
ond industriolized notions, is on importont foctor in ossessing the volidity of the study
os this will reduce correlotion problems beiween culturol distonce ond economic
development.
287
CHAPTER VI
Ioble 6.1 : Somple ond Origln Counhies ond GN/copllo *

Somple Countries ** Somple Size Orioin Countries GNI/cooito
US 338 US 34.4
Norwoy 294 Norwoy 35.7
Greot Britoin s03 Greot Britoin 25.4
Netherlonds 300 Netherlonds 25.2
Germonv 295 Germony 25.1
Fronce 30r Fronce 24.0
Conodo 300 Conodo 21.8
Austroliq 300 Austrolio 20.1
lsroel 30r lsroel 17.1
Spoin 30r Spoin 14.8
Greece 332 Greece r r.3
Mexico 314 Mexico 5.1
lndonesio 313 lndonesio 0.6
Jopon 35.3
Sweden 28.7
lndio 0.5
* Countries orronged by GN|/copito ("somple" countries first, then

odditionol "origin" countries).
**Respondents in eoch somple country evoluoted ollthe origin countries.
Results and Analysis

Toble 5.2 shows the totol inter-country "notionol culturol distonce" using
Hofstede's (1980) four dimensions (the detoiled doto by dimension ore not shown
individuolly to reduce clutter but were used for the moin port of the onolysis os
will be seen below). Even though the doto in this toble summorize four different
meosures, it con be seen thot inter-country distonces ore very smoll in some coses
ond significont in others. For exomple, the four moin Anglo-Soxon countries in the
somple cleorly ore highly similor, with the distonces being only l1 from the US to
Ausirolio, 22 to Britoin ond 24 to Conodo; only 23 from Austrolio to Britoin ond 25
to Conodo; ond only 40 from Conodo to Britoin. By controst, Mexico, Greece ond
lndonesio hove some of the highest distonce scores from other countries (e.9.,,
288
the distonces from Mexico. Greece ond lndonesio to Sweden ore, respectively.
20B,2OO ond 164). Overoll, the doto support the ossertion mode in the lntroduction
section thot culturol distonce tends to be shorter omongst notions thot ore highly
developed ond hove significont trode flows with one onother.
Ioble 6.2: lnter-country NolionolCullurol Dislonce *
C z o z o (n o z o
Counhies (r, o @ o 'Tl C
a
t- 1l n x
= o (o
o
US
Norwoy 89 89
Gr. Britoin 22 97 60
Netherlonds 5B 27 82 59
Germony 52 79 52 80 66
Fronce t07 l l0 125 l0l BI r05

Conodo 24 55 40 44 48 85 5l
Austrolio il 80 23 61 43 r04 25 50
lsroel 14 03 22 12 70 8l 90 r03 99
Spoin 17 14 35 109 83 32 95 il4 57 95
Greece 47 74 65 69 r 13 84 35 144 107 50 30
Mexico 45 82 55 77 103 84 43 144 ll6 76 6B 27
lndonesio 33 42 5t 43 r33 108 lt r36 r39 r00 ll4 76 24
Jopon 38 75 37 70 96 97 36 137 r08 67 75 79 149 20
Sweden 03 26 89 49 r05 132 B3 102 129 140 200 208 164 l8

lndio 92 125 98 126 96 9l 82 99 120 83 103 77 53 96
Averooe 9l 107 106 1\2 88 90 r00 122 lil 88 112 il0 lll
* Countries orronged by GNUcopito os in Toble 6.1.
The relotionship between GNI/copito, eoch of the four Hofstede dimensions, ond
toiol notionol culture differences, wos tested using Peorson correlotions ond the
results ore shown in Toble 6.3. The overoge scores in eoch notion were used in the
computotions. Since l6 countries were evoluoted in 13 countries, ond evoluotions
where the somple ond origin country were the some (e.9.,, Mexicons evoluoting
Mexico) were excluded, the totol number of observotions is 195 (|5.131-13). The
correlotions between the GNl/copito ond individuolism ond power distonce in
Toble 5.2 ore significont. A high degree of economic development is ossocioted
with o high degree of individuolism ond o low degree of power distonce for the
289
CHAPTER VI
countries thot ore evoluoted. The two other dimensions, mosculinify ond uncertointy
ovoidonce, ore not correloied with GNP/copito of the .05 level but ore wellwithin
the .10 level. This implies thot we con hordly otiribute high product evoluotions
to certoin cultures without toking the degree of economic development into
occount. (Economic development moy in itself be culturolly dependent (Ryh-Song
ond Lowrence 1995), but thot subject is outside the scope of this chopter.)
The correlotion between GNP/copito ond the totol culturol distonce between
somple country ond the country being evoluoted is not significont. Eventuol
inherent relotionships between totol notionol culturol distonce ond GN|/copito
seem to be zeroed out when the scores of oll countries ore included. The impoct
of totol culturol distonce on product evoluotions ond on willingness to buy moy
therefore be indicoted without the problems of correlotions between culture ond
economic development.
Ioble 6.3: Correlolions Between CullurolDislonce ond GNUcopito
GNI / Power Uncertointy lndiv- Mosc- Totolculturol

copito distonce ovoidonce iduolism ulinity distonce
3Nl/copito lorrelotion I -.658 ** -.124 .676 *" -.r30 -.096
iig. (2Joiled) .000 .08s .000 .070 .182
)ower dist. **
lorelotion I .269 -.660 ** .301 ** .150 *
iig. (2Joiled) .000 .000 .000 .037
Jncertointy 3orreloiion I -.479 ** .387 ** il3
Sig. (2{oiled) .000 .000 115
ndividuol. 3orrelotion I .192 ** -.281 **
iig. (2Joiled) .007 .000
Vosculinity 3orrelotion I -.014
iis. (2toiled) .846
l'otol culturol
3orrelotion
listonce 1
,l95
N= for oll colculotions
**Correlotion is significont ot the 0.01 level (2-toiled).

* Correlotion is significont ot the 0.05level (2{oiled).
290
Tobles 6.4 ond 6.5 show the field results for the two voriobles of interest, product
evoluotion ond willingness to buy. The tobles leod to o number of interesting
observotions. First, Toble 6.4 shows thot consumers in sompled countries, thot ore
less developed thon the others, tend to evoluote products from the vorious origins
more positively. For exomple, by reference to the column overoges in this toble.
lsroel, Greece, Mexico ond lndonesio gove the highesi evoluotion scores overoll,
respectively of 4.8, 4.7, 4.9, ond 4.8 on the 7-point scole, compored to o ronge of
4.3 to 4.6 ossigned on overoge by consumers in the more developed countries
(overoll differences of two decimol points or higher ore stotisticolly significont).
Likewise, the overoge score received by the origin countries (row overoges) differs
significontly between developed countries, such os top-ronked Germony (6.0),
developing notions such os Mexico ond lndonesio (both ot 3.5) ond lndio (3.a). ln
other words, the distonce between the highest- ond lowest-roted countries in this
cose is fully 2.6 scole points.
On the other hond, Toble 6.5 presents o rother different picture. Considering the
column overoges first, the some lndonesion respondents who provided one of
the highest scores on "evoluotion", obove (a.8), provide one of the lowest overoll
scores on "willingness to buy" in this cose (4.4). Conversely, consumers in the more
developed notions, such os the US, the Netherlonds ond Britoin, occount for the
highest scores on "willingness fo buy" (respectively 5.0, 5.0, ond 4.9). Turning to
the row overoges, the generol ronking of countries is similor to thot of the previous
toble but the ronge of difference befween the highest- ond lowest-roted countries
is significontly norrower ot 1.8 scole points (Germony 5.5 vs. lndio 3.7). As well, while
the relotive ronking of countries in both tobles is similol there ore some significont
exceptions such os the cose of Austrolio (1Oth on product evoluotion but Sth on
willingness to buy), Spoin (11th vs.8th) ond, conversely. Fronce (4th vs.7ih) ond lsroel
(12th vs. 14th). ln other words, the findings suggest thot respondents oppeor to be
quite willing to buy some countries' products even though their evoluotion of them
is not superior (e.g.,. Austrolio), ond the reverse, indicoting o reluctonce to buy
products from some countries even though they ore evoluoted foirly highly (e.9.,,
Fronce).
291
CHAPTER VI
Toble 6.4: Evoluotion by l3 Somples of 16 Origin Counlries

(Overoll Poor/Good Products)
Sompled Counhies
Origin
Counlries C z o zt- o o a o 2 o
a o w
'Tt C
a
t- -U
n x o(, (o
US 5.2 5.2 5.0 4.9 5.4 5.2 5.1 5.7 5.0 5.5 5.8 5.8 5.4
Norwoy 4.9 5.1 5.4 4.9 5.1 4.8 4.6 5.0 5.2 4.7 5.0 4.7 4.9
Britoin 4.8 4.9 4.8 4.4 5.1 4.8 5.0 5.5 4.4 5.5 5.7 6.1 5.3
Hollond 5.1 5.0 5.3 4.9 5.3 5.3 4.8 5.4 5.5 5.1 5.4 5.5 5.3
Germony 5.9 5.9 6.0 5.9 6.1 5.8 5.6 5.7 5.9 5.3 6.1 6.4 6.0
Fronce 5.1 5.1 5.2 5.1 5.2 4.8 4.9 5.7 4.2 5.6 5.9 5.8 5.3
Conodo 4.6 4.8 4.8 4.7 4.6 5.0 4.7 4.9 4.6 5.1 5.2 5.1 4.9
Austrolio 4.8 4.8 4.9 4.9 4.7 4.7 4.7 5.0 4.6 4.8 4.8 5.4 4.8
Isroel 4.2 4.0 4.3 4.7 4.2 4.2 4.2 4.1 3.8 3.7 4.2 3.9 4.0
Spoin 4.4 4.3 4.3 4.5 4.4 4.8 4.2 4.1 4.9 4.9 5.2 4.3 4.7
Greece 4.1 3.5 3.5 3.9 3.8 3.8 3.9 4.1 4.2 3.8 4.4 4.0 4.0
Mexico 3.2 3.5 3.2 3.7 3.5 3.6 3.4 3.4 4.0 4.1 3.6 3.3 3.6
lndonesio 3.8 3.4 3.4 4.0 3.5 3.5 3.4 3.3 3.8 3.6 3.2 4.0 3.6
Jopon 6.0 5.6 5.0 5.5 5.2 5.5 5.8 5.5 5.8 5.5 6.1 5.8 5.8 5.7
Sweden 5.0 5.5 5.3 5.5 5.0 5.1 5.0 5.0 5.0 5.0 5.2 4.7 5.3 5.0
lndio 3.3 3.2 3.0 3.4 3.3 3.2 3.3 3.3 3.5 3.4 2.9 3.9 3.4 3.4
Averoge 4.5 4.5 4.5 4.6 4.3 4.5 4.4 4.4 4.8 4.4 4.7 4.9 4.8
292
Toble 6.5 : "Willingness to Buy" Producls of l6 Origin Counlries

by l3 Consumer Somples
)rigin Sompled Counlries

3ountries US N GB NL D F CA o7. IL SP GR MX INDO ovg
JS 5.7 5.7 5.2 5.3 5.3 5.6 5.1 6.0 4.4 5.3 5.4 5.5 5.3
\orwoy 5.2 5.3 5.4 5.2 5.3 5.1 4.6 5.0 4.8 4.7 5.0 4.2 4.9
Austrolio 5.5 5.4 5.6 5.3 5.4 5.1 5.4 5.2 4.7 4.9 4.8 5.0 5.1
lritoin 5.3 5.3 5.2 4.9 5.2 5.1 5.1 5.6 5.3 5.4 5.6 5.1
\-7
Sermony 5.9 5.9 5.6 5.6 5.8 5.6 5.1 4.7 5.4 6.0 6.0 5.5
EI
iollond 5.4 5.5 5.3 5.3 5.6 4.8 5.5 5.2 4.9 5.2 5.0 5.2
iweden 5.2 5.6 5.5 5.3 5.4 5.3 5.3 5.0 5.,l 4.3 4.7 4.6 4.4 4.9
Conodo 5.3 5.4 \7 5.3 5.3 5.5 5.0 5.4 3.9 4.7 4.8 4.4 4.9
Mexico 4.2 3.9 4.1 4.5 4.2 4.2 4.\ 3.8 4.1 4.5 3.7 3.0 4.0
ipoin 5.0 4.7 5.0 5.2 5.1 5.3 4.7 4.4 5.0 5.,l 5.3 4.0 4.9
3reece 4.8 3.9 4.2 4.6 4.5 4.5 4.5 4.3 4.4 4.0 4.5 3.7 4.3
sroel 4.5 4.0 4.5 4.7 4.5 4.2 4.4 4.0 3.4 3.4 4.0 3.3 3.9
ndonesio 4.2 3.6 1,7 4.8 3.9 3.9 3.7 3.8 3.9 3.7 3.3 3.9 3.8
Jopon 5.9 5.7 5.7 5.5 5.3 5.1 5.6 5.3 5.9 5.1 5.8 5.4 5.8 5.5
-ronce 5.4 5.2 5.3 5.2 5.5 4.9 4.4 5.6 2.7 5.5 5.6 5.6 5.0
ndio 4.0 3.7 4.0 4.2 3.9 3.9 3.8 3.9 3.5 3.9 3.2 4.0 3.0 3.7
Averoge 5.0 4.7 4.9 5.0 4.8 4,8 4.8 4.5 4,8 4.2 4.6 4,8 4.4
While o number of explonotions moy be offered for these findings ond the
discreponcies thot were observed, ronging from perceptions of product superiority
due to economic development (e.9.,, evoluotions of ond willingness to buy Germon
products) or, os in the cose of lndonesio, to the potentiol presence of notionolist
feelings (overoll evoluotion ot 4.8 vs. willingness to buy ot 4.4), this onolysis focuses
on culturoldistonce ond its potentiolrole.
Regression onolysis witn "overoll product evoluoiion" os the dependent

vorioble ond totol notionol culturol distonce os the independent vorioble shows
no signiflcont impoct of totol culturol distonce. Therefore, Hl, which postuloted
thot notionol culturol distonce between country of origin of o product ond the
293
CHAPTER VI
somple country negotively offects product evoluotions, is rejected. On the other

hond, regression onolysis with "willingness to buy" os the dependent vorioble ond
culturol distonce os the independent vorioble gives o significonce of 0.008 ond on
R'zof 0.036. Therefore, H2, which posited thot notionol culturol distonce negotively
offects buying intentions, is supported.
Discussion, Implications and Conclusions

This chopter seeks to explore the potentiol role of notionol culture in product
evoluotions bosed on o product's origin. Severol previous studies hove suggested
thot culture ond culture-reloted voriobles impoct product evoluotions. Our findings
show thot notionol culture, os meosured by Hofstede's (1980) four dimensions, ond
degree of economic development, os meosured by GNI per copito, ore reloted.
However the totol culturol distonce between the l3 somple ond l6 origin countries
in our siudy does not correlote with economic development. Our onolysis shows
thot totol culturol distonce does not hove o significont relotionship with product
evoluotions, but it is reloted to the willingness of respondents in the somple countries
to buy products from the origin countries.
To exploin this we build on o review of the PCI literoture conducted by Verlegh

ond steenkomp (1999). They use o fromework developed by obermiller ond
Spongenberg (1989) to clossify the processing of the CO cue os cognitive,
offective, or normotive. Cognitive informotion processing implies thot the origin
cue is used os o signol for overoll product quolity ond specific quolity ottributes.
Affective processing implies thot the CO cue links the product to symbolic ond
emotionol ossociotions. Normotive processing implies thot consumers hold sociol
ond personol norms reloted to origin countries. For exomple, consumers moy feelo
morol obligotion to boycott products from countries they dislike politicolly, or they
moy feel o morol obligotion to buy domestic products in order to protect jobs in their
home country. The three closses of processing ore of course not mutuolly exclusive.
Using this clossificotion it seems possible thot culturol distonce moy hove no role, or
o very smoll role only, in cognitive processing where product quolity is evoluoted.
Rother, culturol distonce seems to be moinly o cose of offective processing ond
moinly normotive processing, which moy hove o lorger role in willingness to buy. This
interpretotion is olso supported by the reseorch of Villonuevo ond Popodopoulos
294
(2003), who, in o study deoling with the potentiol effects of offective foctors on
behovior. found thot offect impocts "willingness to buy" directly rother thon through
"beliefs" (o cognitive meosure) obout o country's products.
For reseorchers, these findings suggest thot future studies would benefit by
including meosures of culturol distonce ond incorporoting ihem in their efforts to
better understond whether how, ond in whot woys culture moy influence vorious
consumer behoviors ond how these moy be interpreted when reporting study
results. For business firms ond for the government ogencies thot work to support their
exporters (or to protect their domestic firms from imports), the results suggest strongly
thot putting forth products thot ore judged to be of good quolity by their intended
torget morkets moy simply not be good enough. The findings of this study suggest
thot odditionol meosures directed of reducing ihe torget consumers' perception
of how dissimilor their ond the supplier's country ore con help to overcome the
potentiol negotive effects of culturol distonce. Such meosures moy, for exomple,
odvertising, pockoging, ond other morketing elements thot put less emphosis on
differences between the origin ond torget countries (e.g.,, the use of models from
the origin country in odvertising) ond thot, insteod, emphosize culturol similorities
where these moy be ovoiloble for use - or, ot the leost, thot portroy the product
ond its benefits in o culture-neutrol context.
To summorize, our study shows thot notionol culturol distonce moy not impoct
product evoluotions, but moy hove o significont negotive impoct on the willingness
to buy products. Products moy be perceived os being of equol functionol quolity,
but consumers still moy be reluctont to octuolly buy ond use products from notions
thot ore culturolly dissimilor due to psychologicol ond sociol normotive reosons.
More broodly ond quite oside from the specific findings thot ore reported here,
this study helps to emphosize o commonly-noted but rorely-reseorched issue in PCI
reseorch: thot "culture motters".
295
CHAPTER VI
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298
Acknowledgments
Ihis chopfer drows ono lorger study thot wos conied out with ossisfonce from 20 co-
reseorchers ond mony sfudenls in vorious counfries. We grotefully ocknowledge their
contributions, ond especiolly fhose of Dr. Louise Heslop, of fhe Sprotf School of Business, who
worked with the second outhor on fhe lorger study ond contributed fhoughfs ond ideos
fhof helped in the eorly sfoges of concepfuolizing fhe onolysis reported here; Dn Michoel
Boker who, while ot Sfrofhclyde tJniversity in the IJK ond in oddition to collecting fhe Brifish
doto ond ononging for the doto collection in Austrotio, offered moteriol encourogemenf
in the eorly stoges of the reseorch ond ossisled in ifs development; Dr. Jozsef Berocs of
Hungory's Corvinus University, who, os on ocfive member of the reseorch teom from the
outsef, contibuted both fietdwok ond soge odvice throughout. We olso wish nof to thonk
the Morketing Science lnslifufe (Combridge, USJ, ihe Conodion federoldeporfmenfs of
lndustry ond of Foreign Affoirs & lnternotionolTrode, the Europeon lnsfilufe for Advonced
Sfudies in Monogement, ond our universities, which provided the funding fhot mode fhe
sludy possible.
299
:hopter Seven
ST]B-CT]LTT]RAL EFFECTS
ON PRODT]CT/COUNTRY
PERCEPTIONS
CHAPTERVII
302
Sub-cultural Effects On Product/
country Perceptions
Sadrudin A. Ahmed*
Alain d'Astous **
Introduction
Globolizotion ond the widespreod
growth of internotionol communicotions
using such powerful tool os the internet
os o medium for buying ond selling
products worldwide, hove fundomentolly
offected mony products' ovoilobility
ond distribution os well os the decisions
concernin gwheretheyore mo nuf octured,
ond how they ore lobeled ond promoted.
Whether the objective is to comply to
stricter rules of origin so os to quolify
for lower toriffs, to reduce production
costs (lobor; lond, environmentol, etc.)
by relocoting monufocturing focilities,
or to toke odvontoge of tox cuts ond
governmentol incentives, todoy's
componies ore rethinking the "country of
origin" of their products ond services. Whot
ore the implicotions of these chonges
for morketing strotegy ond porticulorly
* Sodrudln A. Ahmed. Professor of Morkeling,
Foculty of Adminlshotlon, Universlty of morket segmentotion decisions? How
Ollowo, Otlowo (Ontorio), CANADA. con morketing toctics bosed on strotegic
*+Aloin d'Aslous, Professor of Morketing. HEC
Monh6ol, Monh5ol (Qu6bec). CANADA. decisions thot incorporote cou ntry of origin
303
CHAPTER VII
but new evidence suggests thot it moy be used os on offective cue os well (e.g.,,
Arob people rejecting lsroeli products). They point out view thot consumers moy
buy the products of o country thot they envy or odmire in order to estoblish closer
"links" with thot country ond vicoriously enjoy being port of thot country. ln generol,
reseorch hos considered COO os o cognitive cue, i.e.,, o piece of informotion thot
is usedby consumers to infer beliefs regording product ottributes such os quolity.
Since COO con be monipuloted without chonging the physicol product, it is
regorded os on extrinsic cue like price, brond nome ond retoiler reputotion (Phorr,
2006l'.
There is o significont body of work on COO thot hos mode significont theoreticol
ond procticol contributions to the field (see e.9.,, Al-Suloiti ond Boker, 1998; Boughn
ond Yorpok, 1993; Bilkey ond Nes, l9B2; Joffe ond Nebenzohl,2001; Liefeld, 1993;
Ozsomer ond Covusgil, 1991; Peterson ond Jolibert, 1995; Phorr 2006; Somiee, 1994;
Verlegh ond Steenkomp,l999), but most COO studies shore o limitotion which is
common in internotionol morketing reseorch (Heslop, Popodopoulos ond Bourke,
l99B), i.e.,, mony studies described os cross-culturol ore indeed cross-notionol. While
sub-culturol differences ore token into occount by proctitioners ond reseorchers
in domestic (i.e.,, the US) morkets (Schiffmon, Konuk ond Dos, 2006), they hove
not been studied extensively from the perspective of non-US countries. Much of
the literoture on culturol issues hos iended to focus on the cross-notionol divide
(Loroche, Popodopoulos, Heslop ond Bergeron, 2003). Thus in generol, mony of
the single-culture ond cross-culture studies on COO hove implicitly ossumed thot
homogeneous groups exist within the notions studied.
Culture
Culture is commonly defined ond studied os the volues, beliefs ond symbols
shored by o porticulor group. Eoch individuol perceives the world through his
own culturol lens. Voriotion is on essentiol port of culture, ond it is potterned by
sociol ond individuol differences. There ore o number of sociol ond individuol
sources of voriotion. Shoring is on importont ospect of culture. Often questions
ore roised os io how much is reolly shored ond by whom. McCrocken (1985) hos
nicely chorocterized culture os o lens thot imbues the phenomenologicol world
305
country Perceptions
culturol
with o blueprint thot is consistent with culturol principles ond cotegories.
belief systems ore importont conduits through which meoning flows from Culture
to the individuol. Belief systems supply porticiponts in o culture with principles ihot
furnish those gools os well os the cotegories of behovior relevont to ottoining those
gools.
ln o consumption context, culture moy be defined os the sum of leorned

beliefs,
volues, ond customs thoi direct the consumer behovior of members of o society
(see e.g.,, schiffmon, Konuk ond Dos, 2006). The belief ond volue components of
the definition refer to occumuloted feelings ond priorities thot individuols hove
obout moteriolihings ond possessions. Volues too ore beliefs. However, volues differ
guides
from simple beliefs in thoi: (l) they ore few in number. (2) they serve os
to
for culturolly oppropriote behovior:, (3) they ore enduring. (4) they ore not tied
specific objects ond situotions, ond (5) ihey ore widely occepted by
the members
of o society.
Subculture
By igno6ng culturol heierogeneities within notions, internotionol morketers
moy
overlook mony opportunities ond threots. Sub-culturol bioses in

preferences might
products
leod consumers to fovor products from certoin countries ond reject some
in o
originoting from other countries, especiolly if there ore well defined subcultures
country. Therefore, the development of effective internotionol morketing strotegies
thot ore sensitive to sub-culturol differences within o country is of consideroble
importonce for success in the morketploce.
Lenortowicz ond Roth (2001) define o subculture os o subdivision of o notionol

culture. composed of o combinotion of sociolfeotures such os ethnic bockground,
roce, longuoge, regionol, rurol or urbon residence, religious offiliotion. ond/or sociol
This combinotion forms o functionol unity which hos on integroted impoci
on
closs.
porticipoting individuols. Members of o specific subculture possess beliefs, volues
ond customs thot set them oport from other members of the Some society' ln
oddition, they odhere to most of the dominont beliefs, volues, ond behoviorol
potterns of the lorger society. A subculture then is o distinct culturol group thot
307
CHAPTER VII
exists oson identifioble segment within o lorger more complex society. The distinct
shored history ond volues of o sub-culturol group moy influence its consuming
potterns ond behovior (Schiffmon, Konuk ond Dos, 2OO5).
Subcultures moy be defined occording to severol chorocteristics,

such os
ethnicity, religion, geogrophic locotion, oge, sex occupotionol ond
sociol closs.
Sub-culturol onolysis forces morketing monogers to focus on sizeoble
ond noturol
morket segments. When corrying out such onolysis. morketers must determine
whether these segments' chorocteristics moke them desiroble condidotes
for
speciol morketing ottention. Subcultures, therefore, ore relevont units
of onolysis
for morket reseorch.
But os schouten ond McArexonder (rgg5) point out, consumers do not orwoys
neotly fit into the onolytic cotegories oscribed by reseorchers (i.e.,,
ethnicity, gender
sociol closs etc.)' Morketing reseorchers need to identify ond understond
orgonizing
forces thot people bring to their own lives through fheir consumption
choices ond
discover subcultures of consumption. Bosed on o three-yeor ethnogrophic
reseorch
corried out with Horley Dovidson motor-cycle owners, Schouten ond
McAlexonder
(1995) define o subculture of consumption os o
distinctive subgroup of o society
orgonized oround the shored consumption of o porticulor product,
brond, product
closs, country of origin, or consumpiion octivity. The other chorocteristics
of o
subculture of consumption ore on identifioble, hierorchicol sociol structure,
ond
o set of beliefs ond volues. Members of such subculture typicolly perceive in
certoin products ond octivities culturol meonings thoi ultimotely get orticuloted
os unique homogenous styles ond ideologies of consumption (Schwendinger
ond
Schwendinger:, '1985). Sub-culturolly creoted styles moy eventuolly
be imitoted by
o lorger oudience for moss consumption (Bloir ond Hotolo, 1992). Finolly. certoin
ochieved subcurtures hove been observed (os in the cose of US-mode
Horrey
Dovidson motorcycles) ocross notionol boundories. Prior ethnogrophies
of self-
selected ond ochieved (vs. oscribed) subcultures reveolglimpses of chorocteristics
thot moke such groups (schwendinger ond Schwendinger r 9B5).
308
country Perceptions
Subculture Literature Review And Discussion

Bosed on o comprehensive review of the COO literoture published during the
I 965-l 991 period,Al-Suloiti ond Boker (1998) conclude thot demogrophic
voriobles
ploy o significont role in exploining the relotionship between COO ond product
choice. They report thot mole ond femole oititudes iowords foreign products differ:
femoles generolly tend to show o more fovoroble bios towords domestic products
thon moles. As regords oge, older people tend to evoluote foreign products more
fovorobly thon younger people. From their synthesis, it oppeors thot educotion is
the most influentiol demogrophic vorioble. People with o high level of educotion
ore more fovoroble towords foreign products thon those with limited educotion:os
the educotion level increoses, the level of consumer ethnocentricity disployed by
respondents generolly decreoses. There is olso o significont relotionship between
income level ond ottitudes towords imported products: the higher one's income'
the more likely one will buy foreign products. lt must be noted thot in the siudies
reviewed by Al-Suloiti ond Boker (1998), foreign products refer moinly
to products
(HlCs) rother thon from
originoting from non-domestic highly industriolized countries
newly industriolized countries (NlCs).
Although the level of ocodemic interest in studying the effects of subculture on

COO perceptions hos been somewhot limited. some outhors hove corried oui
o
the
number of studies thot provide interesting insights into this oreo (see for instonce
mony studies of Ahmed ond d'Astous os well os those of Bolobonis et ol.). often,
their exominotion of sub-culturol effects wos secondory to the moin thrust of iheir
reseorch. Nevertheless, these studies provide very useful insights into the effects
of subculture on COO perceptions. ln oddition, unlike the bulk of post studies on
subculture, these reseorchers hove collected doto from both HlCs ond NlCs ond
hove considered COO perceptions of both HlCs ond NlCs'
Ahmed ond d'Astous (2OOl ) investigoted the relotionship between the evoluotion
of l3 COOs ond (1) product involvement (two products: outomobile ond video-
cossette recorder) ond (2) three demogrophic voriobles, nomely, oge. income'
ond
educotion. The doto for this survey-bosed study were collected from 250 French-
Conodion odult mole respondenis ihrough on oreo sompling procedure' The COO
309
CHAPTER VII
stimuli were five Hlcs (Jopon, Germony, the

conodo ond Englond) ond five
US,
ASEAN countries (Singopore, Moloysio, Thoilond, the philippines ond tndonesio).
Respondents' country evoluotions with respect to the coD (country of design),
coA (country of ossembly), ond cop
(country of ports) dimensions of coo were
correloted with product involvement (outomobiles ond VCR), oge, income ond
educotion.
The resultsindicoted thot outomobile involvement wos positively correloted with

the COA evoluotions of oll countries except the US ond Conodo. As regords
COD,
the conelotions with outomobile involvement were positive with respect to
oll the
Eost Asion countries ond Jopon. There wos no cleor pottern evident
in the cose
of other HICs or ASEAN countries. These results suggest thot more odvonced
Asion
countries were looked of somewhot more fovourobly by persons who
were more
highly involved in outomobiles. The effect of outomobile involvement
wos olso
observed in the cose of CoP evoluoiions of HlCs. There wos o positive
correlotion
between outomobile involvement ond the evoluotion of Germony, the
US, Englond,
Thoilond ond Chino os CoPs. Overoll, outomobile involvement wos
differentiolly
reloted to COO evoluotions, but the outhors suggested thot further reseorch
wos
needed to get o cleor picture of why this occurs.
lnvolvement in the purchose of o vCR showed o very interesting

correlotion
pottern. Whereos it wos negotively correloted with coD Jopon,
coD ond coA
Germony, ond coD US, it wos positively correloted with coD chino ond
coA
Philippines. Thus, the more involved one is in the purchose of o vcR, the
less
fovouroble is the evoluotion of products mode in such industriolised countries
os
Jopon, Germony, ond the United Stotes ond the more positive is the evoluotion of
Eost Asion countries such os the philippines ond Chino.
The coreloiions between coc perceptions ond oge were consistent

ond
sirong. Out of o totol of 24 possible correlotions involving COO judgements
of
Asion countries, only three foiled to otioin stotisticol significonce. These involved
coD Moloysio, coD Thoilond ond coD Toiwon. ln generol, younger respondents
were more fovouroble towords oll the Eost Asion countries. ln the cose of
COO
3r0
country Perceptions
perceptions of HlCs howevel out of i 5 coneloiions, only three

were significont,
nomely those with COD Jopon, COP Jopon ond COP US The outhors noted thot
these results were consistent with the existing literoture. Boughn ond yorpok (1g93)
reported thot oge is often ossocioted with foreign product occeptonce,with
younger consumers demonstroting more positive
Attitudes Toward Foreign products.

Correlotions between COo perceptions ond income ond educotion were in
opposite directions. Out of the fifteen possible correlotions between income ond
COO perceptions of ASEAN countries, ten conelotions were significont. ln controst,
only one conelotion out of the fifteen involving HlCs wos significont. As for other
Eost Asion countries, the three correlotions between COO judgements of Chino
ond income were significont but none of the correlotions involving Toiwon ond
South Koreo were significont. The lowerone's income, the more one wos fovouroble
towords products mode in Chino ond in the ASEAN countries. Educotion wos
positively correloted with coo perceptions of Germony, Jopon ond Englond.
These correlotions concerned coD, coA, ond cop Germony, coD ond coA
Jopon, ond COD ond COA Englond. Outof fifteen correlotions between educotion
ond COO perceptions of the ASEAN countries, only thot with COD philippines
wos stotisticolly significont. As for the other Eost Asion countries, educotion wos
negotively correloted with COD Chino ond positively correloted with COA South
Koreo. Thus, in generol consumers' educoiionol level wos negotively correloted
with the perception of NlCs os producers of consumer goods.
The outhors orgue thot there moy be o tendency on the port of low-income
consumers to purchose lower-priced products. Such products ore often mode in
Eost Asion NlCs. Highly
educoted respondents ore more likely to hove trovelled
globolly ond to hove purchosed reloiively expensive consumer products mode
in Jopon, Germony ond Englond. Moreover they ore less likely io hove onimosity
towords Jopon ond Germony becouse of Second World Wor ond towords Englond
becouse of the English conquest of French conodo. such experiences moy be
reflected in theirmore fovouroble evoluotion of products mode in Jopon, Germony
ond Englond.
31 I
CHAPTER VII
Ahmed ond d'Astous (2004) replicoted this study with doto collected in Thoilond
ond in the Philippines. Their questionnoire wos written in English longuoge ond
odministered io
English-speoking upper-middle closs mole respondents through
on oreo sompling procedure. A totol of 2O1 questionnoires were completed in
Bongkok (Thoilond) ond 195 in Monito (phitippines).
The results indicoted thot involvement in outomobiles wos significonfly coneloted

with the COO evoluotions of Philippine respondents. This relotionship wos somewhot
stronger in the cose of COA judgemenis. The strongest reloiionships were
observed with Jopon, the US, Singopore, Moloysio ond South Koreo. lnvolvement
in the purchose of o VCR showed on interesting pottern of correlotions. ln the
Philippine somple, it wos negotively correloted with coD chino, Germony ond
Englond, coD ond coA conodo ond coA us whereos in the Thoisomple, it wos
positively correloted with COD ond COA Moloysio, lndonesio ond Toiwon. Thus,
the more involved one wos in the purchose of o VCR, the less fovouroble were
the evoluotions of HlCs os producers of consumer goods ond the more positive
were the evoluoiions of Asion countries. According to the outhors, these results
confirmed eorlier findings reported by Eroglu ond Mochleit (1989) bosed on US
doto thot the levelof involvement in o product closs mediotes the impoct of COO
on consumer evoluotions.
Ahmed ond d'Astous (2004) olso found thot correlotions with oge were weok
omong Thoi respondents ond stronger omong Philippine respondents. Out of o
totol of 25 correlotions involving COO judgements, only one ottoined stotisticol
significonce in the cose of Thoirespondentswhereos ten correlotions weresignificont
omong Philippine respondents. ln generol, youngqr philippine consumers were
more fovouroble towords products mode in Asion countries. Thus, os pointed out
by the outhors, the results observed in the Philippine somple confirm the fovouroble
disposition of younger consumers towords products mode in newly industriolizing
countries reported eorlierwith US respondents by Hett (19g3), Shimp ond Shormo
(1987), ond with Bulgorion respondents by Leonidou, Hodjimorcou, Koleko ond
Stomenouo (l999l.Correlotions between COO perceptions, income ond educotion
were strong in the Thoisomple but weok in the Philippine somple. Only four out of 26
312
country Perceptions
conelotions involving Philippine respondents were stotisticolly significont whereos

out of the ten conelotions between income ond COO perceptions of HlCs omong
Thoi respondents, nine correlotions were negotive ond stotisticolly significont. ln
controst, none out of the ten conelotions involving ASEAN countries wos signiflcont.
As for other Eost Asion countries, the conelotions involving COA Chino ond South
Koreo were significont. Thus, the higher o Thoi's income, the more he wos fovouroble
to products mode in HlCs. ln the Thoisomple, educotion wos strongly ond positively
coneloted with COO perceptions of Germony, South Koreo, Jopon, Conodo ond
Englond. These results ore in confrostwith those reported by Rowwos, Rojendron ond
Wuehrer (1996) (US respondents) ond those of Leonidou, Hodjimorcou, Koleko ond
Stomenouo (1999) (Bulgorion respondents) where educoted ond higher income
respondents showed lower prejudice towords NIC products. Thus, the effects of
income ond educotion on COO perceptions of foreign products oppeor to be
medioted by culture. Whereos ten conelotions were positive ond significont in the
Thoi somple, only four were stotisticolly significont omong Philippine respondents.
The higher o Philippine consumer's income or educotion, the more positive wos his
evoluotion of the Philippines os o COO. This result controsts with Thoi respondents
where income ond educotion were not significontly correloted with the perception
of COO Thoilond.
The positive ond stotisticolly significont conelotions between COO perceptions

ond involvement with the purchose of outomobiles in the cose of Thoi consumers
controst with the non significont correlotions in the Philippine somple. One tentotive
explonotion for this country interoction given by the outhors is bosed on the foct
thot Thoilond enjoys o much higher stondord of living thon the Philippines. The
levelof morketing function roughly porollels the stoges of economic development
(Coteoro ond Grohom, 2005). Rostow (1991) described the toke-off stoge of
o developing economy os o stoge where on economy hos ochieved industriol
modernisotion. Bosed on income, Thoilond should be of the loter stoge of economic
toke-off ond the Philippines of the eorlier stoge. One element ossocioted with this
stoge (of economic development) is outword orientotion of locol morkets (lsook,
2O02l,where o lorge voriety of both domestic ond imported products ore ovoiloble
313
CHAPTER VII
in the morketploce. Therefore, one con speculote thot with on exponded choice
ovoiloble in the outomobile sector, Thoi respondents highly involved in outomobiles
were better oble to moke distinctions between the COOs thon low-involved
respondents.
previous reseorch hos indicoted thot older consumers ore more notionolistic thon
youngerconsumers (Shimp ond Shormo, 1987). Ahmed ond d'Astous' (2004) results
support this view ond provide further evidence in thot direction since younger
philippine respondents were more fovouroble towords Asion NlCs. The foct thot
upper income Thois hod o positive ottitude towords HlCs, ond to o smoller extent
towords Eost Asion countries, moy reflect their greoter experience with products
mode in HlCs ond Eost Asion NlCs. Becouse of higher income, there would be o
tendency to purchose higher-priced products. Such products ore often mode
in HlCs or in moderotely industriolised Eost Asion countries. The outhors' results
indicoted thot the purchose of products mode in HlCs ond Eost Asion countries
wos indeed sotisfying the stotus needs of the high-income segment of the Thoi
populotion (Coteoro ond Grohom, 2005). The higher the level of educotion, the
greoter the degree of worldmindedness (Rowwos, Rojendron ond Wuehrer,1996).
Highly educoted respondents ore more likely to hove trovelled ond more likely to
hove purchosed foreign products. Such experiences moy exploin Thoi respondents'
more fovouroble evoluotion of products mode in HlCs ond South Koreo.
Ahmed, d'Astous ond Eljobri (2002) studied the relotionship between three
psychogrophic voriobles, i.e.,, Product lnvolvement, TechnologicolSophisticotion,
ond Technologicol lnnovotiveness ond the evoluotion of fourteen countries: six HlCs,
nomely, Jopon, Germony, the United Stotes, Conodo, Englond, Fronce ond eight
Nlcs, nomely, Singopore, chile, Thoilond, Argentino, Mexico, Toiwon, south Koreo
ond Chino. These evoluotions concerned both the COD ond COA dimensions of
COO ond were mode for technologicolly simple (VCRs) ond complex (computers)
products. Their results were bosed on on oreo sompling survey of l5l French-
Conodion mole respondents.
314
country Perceptions
The results indicoted thot computer involvement wos positively correloted with
the COA evoluotion of only one HlC, nomely the US With respect to COD, the
relotionship of computerinvolvementwith COOwos positive in the cose of fourHlCs,
nomely, Jopon, the US, Conodo ond Englond ond two NlCs, nomely, Singopore
ond Jopon. TechnologicolSophisticotion wos positively reloted to the evoluotion of
Conodo ond Singopore os COD. All of the four stotisticolly significont relotionships
between Technologicol Sophisticotion ond COAs involved NlCs, nomely Singopore,
Thoilond, Toiwon ond South Koreo. Technologicol lnnovotiveness wos coneloted
with one HIC COD, nomely Conodo, three HIC COAs (Jopon, the US ond Conodo),
three NIC CODs (Singopore, Toiwon ond Chino), ond four NIC COAs (Singopore,
Thoilond, Argentino ond South Koreo). None of the perceptions of Germony,
Fronce, Chile ond Mexico were reloted to the three scoles. On the other hond,
perceptions of COO Singopore ond Conodo were significontly coneloted with the
three voriobles, olbeit to o lesser extent.
The outhors concluded thot the relotively more fovouroble light in which highly
innovotive consumers viewed the ossembly of technologicolly complex products
such os computers by countries like Singopore, Thoilond, Toiwon, ond South Koreo
ottests to the foct thot these countries moy indeed be corrying out o higher quolity
ossembly work thon the overoge consumers perception of them os COAs of
technologicolly complex products would indicote. The more fovouroble evoluotions
indicote thot innovotors perceived these countries os being more odvonced thon
respondents who score low on technologicolinnovotiveness. ln seorching for new
ond innovotive product feotures ond new technologicolly odvonced products,
technologicolly innovotive consumers moy indeed be getting exposed to products
mode by these countries, which would moke them better oble to ossess their
quolity.
Ahmed, d'Astous ond Chompogne (2005) replicoted Ahmed, d'Astous ond

Eljobri (2OO2l studyinToiwonwithosomple of 2O2middleondupper-clossresidents
of Toipei using o questionnoire written in Chinese (Mondorin) longuoge. The results
indicoted thot Computer Product lnvolvement (CPl) is positively coneloted with
COA perceptions of ollthe HlCs ond NlCs, exceptSingopore. With regords to COD,
315
CHAPTER VII
the conelotions with CPIwere positive for oll the HlCs. Howeve[ none of the COA
ond COD perceptions of NlCs wos coneloted with CPl. lt is interesting to note
thot the strongest conelotions involved the relotionship between CPI ond COD
South Koreo ond COA Toiwon. Other strong conelotions involving CPI were with
coD us, coA Toiwon ond coA Jopon. Thus, some empiricol evidence suggests
thot consumers involved in computers evoluote CODs ond COAs differently. On
the other hond, out of the thirteen conelotions of Television Product lnvolvement
with CODs, only two were stotisticolly significont. ln terms of COA, none of the
(TPl)
conelotions with TPI wos significont.
lt is not surprising to observe thot consumers who ore highly involved in the
purchose of computers recognize thot the US ore o world leoder in the design of
technologicolly complex products like computers ond thot NlCs, like Toiwon ond
South Koreo, ore cotching up technologicolly with HlCs. These respondents olso
oppeor to ocknowledge the monufocturing excellence of Jopon ond recognize
the ochievement of Toiwon os o monufocturer of high quolity, technologicolly
odvonced products. ln generol, they oppeor to volue the design ond ossembly
copocity of HlCs ond NlCs more highly thon less involved consumers. One moy
therefore speculote thot consumers who ore technologicolly sophisticoted find
it eosy to use technologicolly complex products ond ore not ofroid of tinkering
with them, ond consequently ore better oble to ossess the technologicol quolity
of o product ond the country where it wos mode. For exomple, Mohesworon ond
Sternthol (1990) found thot persons who ore technologicolly sophisticoted tend
to focus on the complex technicol ottribute informotion of o product. Whereos
technologicolly sophisticoted persons use ottribute informotion in moking
judgement obout o technologicolly complex product, novices ore likely to rely
mostly on stereotypicol informotion (Albo ond Huichinson, l98Z).
The COD ond COA evoluotions of Toiwonese respondents were olso reloted to
three demogrophic voriobles: oge, income ond educotion. The results indicoted
thot, with only five stotisticolly significont relotionships with country perceptions
out of totol possible of fifty-four income wos the worst performing demogrophic
vorioble, followed by oge with seven significont conelotions. Educotion wos the
3r6
country PercePtions
bestpredictingdemogrophicVorioblewithtwenty-fivestotisticollysignificont
were with the evoluotions of
relotionships. The strongest correlotions involving oge
COA conelotions of
HlCs ond the weokest with the evoluotions of NlCs. None of the
simple (TS) products
oge with country perceptions in the context of technologicolly
(TC) products,
wos stotisticolly significont. ln the cose of technologicolly complex
oge wos coneloted onlywith one coD evoluotion ond one
coA evoluotion' Thus'
the more likely he evoluotes
evidence suggests thot the higher the oge of o consumer
fovorobly TS products designed in Hlcs. lt is interesting
to note thot educotion wos
eight possible relotionships
correloted positively with the evoluotions of Nlcs: out of
involving Nlcs, seven were stotisticolly significont. The
impoct of educotion on the
possible relotionships
evoluotion of Hlcs wos less generolized since l2 out of 24
educotion level
were stotisticolly significont. The strongest relotionships involving
products, followed very closely by
ond the evoluotion of Hlcs were with coD TS
TS products'
COA TC products. The weokest were with COA
(2004; 2007) report results bosed
ln onother series of studies, Ahmed ond d'Astous
on on oreo sompling survey of 209 chinese respondents from the city of Beijing'
refrigerotors' comeros ond t-shirts'
The product cotegories chosen for the study were
Thirteen countries hod to be evoluoted os coDs
ond coAs: seven lndustriolized
Germony' Jopon' conodo
countries (lcs), nomely, the United stotes, ltoly, Fronce,
Mexico' Russio ond
ond south Koreo ond six Nlcs, nomely, chino, Brozil, Morocco,
consumer evoluotions of the
lndio. To get o better understonding of the chinese
wos conied out seporotely'
COOs, o foctor onolysis of the COD ond COA rotings
The results indicoted thot the six HlCs ond South Koreo
looded on the first foctor
(lc). The other six countries were
which wos interpreted os lndustriolized countries
countries (Nlc)'
grouped together in o second foctor termed Newly lndustriolized
Ahmedondd,Astous(2004)ono|yzedtherelotionshipsbetweeniheevoluotions
type of stores (smoll
of lCs ond NlCs ond the evoluotion of two sets of voriobles:
stores) ond demogrophic
stote stores, lorge stote stores ond high quolity foreign
number of children)' The
voriobles (oge, moritol stotus, educotion, income ond
onlydependentvoriobles
resultsindicoted thot coo chino ond StoreTypewerethe
were reloted' A positive
with which oll the independent demogrophic voriobles
317
CHAPTERVII
relotionship wos found between CoA Brozilond

oge ond between CoA Conodo
ond educotion. older Chinese consumers gove more fovoroble
evoluotions of coD
Chino' CoA chino, os well os of high quolity foreign stores.
Monied respondents
were olso more likely to evoluote CoA Chino ond high quolity
foreign stores. ln
the some vein, respondents who hod children evoluoted
more fovorobly CoD
Chino, CoA Chino ond high quolity foreign stores.
on the other hond, university
educoted respondents evoruoted coD chino, coA chino,
ond high quority
foreign stores less positively thon those who were
not university educoted. Middle-
income respondents evoluoted coA chino more fovorobly
ond higher-income
respondents evoruoted rorge stote owned stores
ress positivery.
According to Ahmed ond d'Astous (2004), there

moy be two expronotions for
this relotively weok predictive power of
demogrophic voriobles in the Chinese
somple' li is quite conceivoble thot the chinese form
o more homogeneous group
becouse of confucion culturol troditions (Lin 2001)
ond uniformity imposed by
the very outhoritorion communist regime of the post.
Becouse of the tronsitionol
noture of the chinese economy, the ovoilobility
of foreign goods from troditionolly
noncommunist countries is o more recent phenomenon
ond chinese consumers
hove not yet formed well-structured schemos
oround non-chinese coos. Becouse
of the limited fomiliority ond knowledge of foreign
countries, the evoluotions of
non-chinese coos moy be bosed on o holo effect
- on overoll viewpoint - rother
thon os o summory construct treoting coo os o product
ottribute (Hon, r9g9).
ln the cose of chinese products ond stores, consumers
ore more fomilior ond
knowledgeoble obout them ond therefore, ore oble
to form their opinion bosed on
knowledge' ln this cose, coo is o summory vorioble
becoming o product ottribute
whose preference vories occording to demogrophic
stotus.
Ahmed ond d'Astous (2002) hove onoryzed the rerotionship
between the
importonce ploced by chinese consumers on the purchose
of t-shirts, refrigerotors,
comeros' CoD ond CoA judgments relotive to l3
couniries. Five shopping voriobles,
nomely' purchose importonce, extent of informotion
seorch, produci involvement,
ond purchose difficurty were grouped into three product
specific purchose_bosed
foctors using foctoronolysis: Purchose lnvolvement,
Eose of purchose ond purchose
318
country Perceptions
Experience. The results indicoted ihot purchose involvement with refrigerotors wos
the best predictor of COO evoluotions with twenty two significont correlotions
out of totol possible of twenty six. The overoge size of these correlotions wos .24.
Purchose involvement with comeros followed with nineteen significont conelotions
hoving on overoge mognitude of .20. With eight significont conelotions (meon
= .22),experience with the purchose of comeros wos the only other predictive
vorioble of ony consequence. All the predictive voriobles ossocioted with the t-shirt
product cotegory performed poorly. Purchose involvement with t-shirts led to only
two significont correlotions, eose of purchose with t-shirts to three, ond experience
with the purchose of t-shirts to only one.
Chino wos the only country forwhich COD ond COA judgments were not reloted
to ony of the nine predictor voriobles. The COO evoluotion of Fronce wos confined
to three voriobles significontly reloted to COD. ln five coses, the COO evoluotion of
Itoly (COD ond COA) wos significontly coneloted with comero-purchose foctors.
wos olso the cose forSouth Koreo ond Mexico. COO Germony hod the lorgest
This
number of significont correlotions with predictive voriobles ossocioted with t-shirts

(three out of seven correlotions).
Overoll, it oppeors thot the greoterthe involvement in the purchose of refrigerotors

ond comeros, ond to o lesser extent the greoter the fomiliority with comeros, the
greoterthe likelihood of evoluoting o foreign COD ond COAfovorobly. Eorlierstudies
conducted with respondents in Conodo (Ahmed ond d'Astous,2O0l)ond in the
Philippines ond Thoilond (Ahmed ond d'Astous,2OO2) hod reveoled thot product
involvement (i.e.,, with respect to vcRs ond outomobiles) wos strongly reloted
to COD ond COA evoluotions. Thus, the results observed in Chino ore consistent
to some extent wiih those found in other industriolized ond newly industriolized
countries. The lock of significont conelotions between predictive voriobles ond the
COO evoluotion of Chino moy be exploined by the foct thot Chinese consumers
ore much more fomilior with products mode in Chino thon with foreign products.
Ahmed ond d'Astous (2007) segmented the Chinese respondents by firstly

grouping the fifteen product-specific shopping voriobles into fociors through o
319
CHAPTERVII
principol component onolysis. ln the second step, the derived foctors were used
to group the respondents into segments using o quick cluster onolysis procedure.
The best cluster onolysis solution led to the ossignment of l8Z respondents to four
clusters (segments) which were termed os follows: Durobles Enthusiosts, Durobles
Uninvolved, lnexperienced shoppers ond Apporels lnvolved. The meon coo
evoluotions were compored ocross the four segments. ln oddition, for eoch
segment five lcs (the United Stotes, Jopon, conodo, south Koreo Toiwon) ond two
NlCs (Chino ond Mexico) were controsted with respect to four country-of-origin
product dimensions: reliobility, economy, innovotiveness ond style.
The meon evoluotions of the six NlCs did not vory o greot deol ocross the four
segments. There were howeversignificont differences in the evoluotion of individuol
countries. Durobles enthusiosts evoluoted COD Chino somewhot less fovorobly
thon did the other three segment members. ln the cose of Morocco, Durobles
Uninvolved ond lnexperienced Shoppers evoluoted the country somewhot more
negotively thon Duroble Enthusiosts ond Apporels lnvolved. On the other hond, the
COD evoluotions of the seven lCs voried considerobly ocross the four segments.
Duroble Enthusiosts evoluoted the seven lCs much more fovorobly thon other
segment members. Durobles Uninvolved gove the less positive evoluotions to lCs,
followed by lnexperienced Shoppers. As regords the evoluotions of the industriolized
countries, intro-country differences between segments were lorgest in the cose of
South Koreo, followed by Jopon ond Germony. The lowest intro-country differences
were noticed for Conodo ond Fronce.
Regording comporisons ocross COO product dimensions ond countries, the

results indicoted thot Chino ond Mexico showed the smollest intro-country
differences ocross the four segments on the four ottitude scoles, porolleling the
NIC results discussed eorlier for the meon evoluotions of thirteen CODs. The lorgest
intro-country differences omong the NlCs were between Durobles Enthusiosts ond
Duroble Uninvolved segment members on the product reliobility scole: Duroble
Uninvolved respondents' perceptions of the reliobility of products mode in Chino
wos more positive thon those of the Duroble Enthusiosts. As regords between-
country differences ocross the segments, the lorgest difference wos observed
320
country Perceptions
between Chino ond Mexico with respect to product style omong members of the
Duroble Enthusiosts segment: they perceived products mode in Mexico os hoving
much more style thon those mode in Chino. Duroble Enthusiosts olso hod o more
fovoroble ottitude towords products mode in Mexicowith respectto theireconomy,
their reliobility, ond their innovotion thon members of the other three segments.
Porolleling the results discussed before regording country evoluotions, omong the
five lcs, intro-country differences were highest in the cose of the US ond Jopon
ond lowest for Conodo. lntro-country differences relotive to South Koreo ond
Toiwon fell in between those of the US/Jopon ond Conodo. ln generol, Duroble
Enthusiosts oppeored to believe thot products mode in the US, Jopon, conodo
ond Koreo ore more relioble, more innovotive ond hove more style thon members
of the other three segments. They were closely followed in these beliefs by Apporels
lnvolved ond, to o somewhot lower degree, by lnexperienced Shoppers ond
Durobles Uninvolved. ln terms of their perceptions of Toiwonese products, Durobles
Enthusiostsond Apporels lnvolved were more positive thon Durobles Uninvolved
ond lnexperienced Shoppers ond were more likely to think thot the lCs mode
economicol products thon members of the other two segments. As regords
product reliobility, innovotion ond style, between-country differences porolleled
the results reported eorlier. Attitude towords Jopon wos the most positive ocross
the four segments, followed by ottitude towords the US, Conodo ond South Koreo.
Members of the Apporels lnvolved segment hod the most negotive perceptions
of lcs regording the economicol ospect of products, followed very closely by
Duroble Enthusiosts. Thus, the pottern of the four segments' COD evoluotions does
not follow the some trend when judging the economy of products os it does for
product reliobility, innovotion ond style.
Previous studies by Ahmed, d'Astous ond Zouiten (1993) ond Ahmed ond
d'Astous (1993; d'Astous ond Ahmed, 1993) showed thot personolity voriobles
moderote the effects of COO cues. On the bosis of doto collected from French-
Conodion business students, Ahmed ond d'Astous (1993o) found thot Excellence
(Jockson, Ahmed ond Heopy,l976), Volue orthodoxy ond self-Esteem (Jockson,
'1967)
ond Hormovoidonce (Jockson, 1974) moderoted the relotionship between
321
CHAPTERVII
the evoluotion of different outomobile bronds ond their countries of origin. ln o

comporotive study involving French-Conodion ond Belgion odult mole consumers,
Ahmed ond d'Astous (1993b) found thot Excellence (Jockson, Ahmed ond Heopy,
19761, Self-Esteem (Jockson, 1967]r, Monetory Risk ond Sociol Risk (Jockson, Hourony
ond Vidmor,1972) moderoted the relotionship between the evoluotion of different

outomobile bronds ond country of origin.
Bolobonis, Diomontopoulos, Mueller ond Melwor (2001) investigoted the role of

potriotism, notionolism internotionolism ond demogrophic voriobles (gender oge,
income ond educotion) os ontecedents of consumer ethnocentrism in Turkey ond
in the Czech Republic. A reduced lO-item version of Shimp ond Shormo's (1987)
CETSCALE wos used to meosure ethnocentric tendencies. Potriotism, notionolism,
ond internotionolism were meosured using scoles developed by Kostermon ond
Feshboch (1989). Hierorchicol regression wos employed to onolyze the doto. lt
wos found thot potriotism wos reloted to ethnocentrism in the Turkish somple only
whereos notionolism wos reloted to consumer ethnocentrism in the Czech somple
only. lnternotionolism wos not reloted to ethnocentrism in either somple. As regords
the demogrophic voriobles, in Turkey, income hod the strongest impoct, followed
by oge ond gender. ln the Czech Republic however the effect of income wos
significont but very weok.
Bolobonis ond Diomontopoulos (2004l, studied the impoct of ethnocentrism

(Shimp ond Shormo,1987) os well os thot of gender oge, educotion, income on the
preference forcors, food products, TV sets, toiletries, foshion wore, toys, do-it-yourself
tools, ond furniture mode in six different COOs: Britoin, the United Stotes, Fronce,
Germony, Jopon ond ltoly. The doto were collected by meons of self-odministered
questionnoires omong 465 respondents in the United Kingdom. The preferences of
the respondents were subjected to multidimensionol unfolding onolysis. The results
indicoted thot the strength of the relotionships between consumer preferences ond
consumer ethnocentrism olong with demogrophic voriobles voried ocross both the
countries ond product cotegories.
322
country PercePtions
Bolobonis, Mueller ond Melewor (2002) studied the

impoct of the Schwortz Volue
(oge, gender ond educotion)
system (schwortz, 1992) ond demogrophic voriobles
ond czechoslovokio
on coo imoges. The doto were collected in Turkey (n = 303)
os o country
(n = 480) using the moll-intercept technique. Germony wos chosen
Pishorodi ond
of origin. coo imoge wos meosured using o scole developed by
porosuromo n 11992).Multiple regression onolysis results indicoted thot demogrophic
thon in the czech somple'
voriobles hod more predictive power in the Turkish somple
Educotion ond gender were significontly reloted to coo
Germony whereos the
were reloted to coo
effect of oge wos morginol. Although the Schwortz volues
sirength of these
imoge omong both Turkish ond czech respondenis, the levelond
Porosuromon's (1992) COO
relotionships ocross vorious dimensions of Pishorodi ond
predictive power of the
imoge scole voried ocross the two somples. overoll, the
volueswosslightlybetterihonthotofthedemogrophicvoriobles.
A number of other studies hove considered coo

differences omong consumers
be held of the notionol level'
within o country os distinct to perceptions thot might
Jopon is often seen os
Klein, Ettenson ond Morris (,l998) reported thot olthough
consumers in
o high-quoliiy coo in the People's Republic of chino, chinese
Nonjing (the site of otrocities during the Joponese
occupotion of chino) did not
thot country' ln
purchose Joponese products becouse of their hostility towords
purchose. Klein' Ettenson ond
their onimosity model reloted to foreign product
influence the weight given to
Morris (1998) suggested thot culiure-specific foctors
coo in product evoluoiions. ln o reloted streom of reseorch, os pointed out
eorlier'
Shimp ond shormo (1987) introduced the Construct

of consumer ethnocentrism
the opproprioteness of
representing beliefs held by Americon consumers obout
studies' ihey uncovered
purchosing foreign-mode products. ln four independent
regions of the United Stotes'
different levels of ethnocentric ottitudes in different
furthersupportingthenotionofdifferenceswithincountries.
English-conodions' ond
Heslop, Popodopoulos ond Bourke (1998) exomined
French-Conodions, ottitudes towords products from
ethnicolly-offilioted origins
ond obtoined somewhot mixed findings. Their hypotheses for
o preference for
products from the respondents'
Briiish goods omong English conodions, ond for
323
CHAPTERVII
home provinces, were confirmed, but those concerning preference

o for French
products by French-Conodions, ond for developing
countries linked to eoch of the
two groups, were not.
Loroche, Popodopoulos, Heslop ond Bergeron (2003)

studied English ond French-
Conodions' ethnic differences in Coo evoluotions. on
the bosis of survey doto
collected omong 554 respondents in the city of Montreol,
they found thot ethnicity
influences product views on motherlond countries.
The surveyed porticiponts
evoluoted products from nine different countries using o
four-item scole (see
Popodopoulos, Heslop ond lKoN Reseorch Group,2ooo).
Using o multidimensionol
index of ethnicity (Kim, Loroche ond Lee, r9g9),
the outhors seporoted the
respondents into three groups: English-Conodions,
French-Conodions ond
occulturoted conodions. The results were in line with
the previous study by Heslop,
Popodopoulos ond Bourke (1998) with regords
to Britoin, but showed thot English-
conodions disployed o more positive view of former
colonies Hong Kong, Austrolio,
lsroelond the United Stotes. There were no group
differences in the evoluotions of
non-culturolly rinked countries rike Germony,
Jopon ond Mexico. They orso found
thot the evoruotions of occurturoted conodions (who
spoke both Engrish ond
French ond did not totolly consider themselves
French or English) fell between the
two groups.
Ethnicity is on importont sub-culturol reference

thot guides whot members of
o multiculturol society like conodo volue ond buy (schiffmon,
Konuk ond Dos,
2006)' ln terms of consumer behovior, oncestrol pride
is monifested most strongly
in the consumption of ethnic foods, trovel to
old countries ond in the purchose of
numerous curturorortifocts. Jomorond chopmon (2000), penoroso
ond Gi[y (lggg),
on the bosis of quolitotive studies of immigronts in the
United Stotes, come to the
some conclusion' Poromesworon ond Pishorodi (2ooo)
studied ossimilotion effects
on country imoge. They collected doto from 6TSrespondents
in o culturolly-diverse
mid-western US city through o drop ond pick-up procedure
ond systemotic sompring
from lists of members of vqrious ethnic ond non-ethnic
ossociotions. comeros ond
blenders mode in Germony ond Koreo corrying
Leico ond Somsung brond nomes
were used os stimuli. Poromesworon ond Pishorodi (2ooo)
found thot US consumers
324
country Perceptions
tended to evoluote fovorobly o product from o source country similor to their own
whereos immigronts (born in Mexico,lron, Greece, Turkey, Scondinovio ond Africo)
gove poorer rotings when the source country of products wos similor to their origin
(birth) country, with first generotion respondents folling in between. According to
the outhors, the more negotive COO evoluotions given by immigronts could be
ottributed to the foct thot the immigronts were from countries less developed thon
the US.
Goldberg ond Boumgortner (2OO2) odministered o questionnoire in Thoilonguoge

to over 1300 Thoi teenogers to explore the hypothesis thot smoking cigorettes is
perceived os port of on ottroctive Americon lifestyle. Those teenogers who stoted

they would choose to be o teenoger in the US were more likely to hove puffed
ond smoked o cigorette. These respondent's exposure to the "Americon woy of
life" come in the form of US movies. They were more likely to smoke Morlboros
(Americon Brond) thon locol bronds.
John ond Rojeer (2006) collected doto in wine sections of three supermorkets in
high-immigront neighborhoods using o questionnoire. They elicited wine preferences
,l69
from 425 respondents, of whom were from immigront fomilies, using conjoint
onolysis. Wines from Chile, Fronce, Spoin, Venezuelo ond Argentino, were included
os product stimuli. The outhors found thot immigront fomilies volue wine from their
oncestrol countries significontly more thon do other fomilies. They olso found thoi
none of the demogrophic voriobles, nomely, sex, oge, educotion ond income
included in the study significontly predicted preferences for the country of origin
of wines.
Poswon ond Shormo (2004) conied out their investigotion in five cities spreod
ocross different regions of lndio using o 22-iIem scole to meosure brond-COO
knowledge. Doto were collected using personol interviews from 695 respondents
using systemotic ond convenience somple procedures. Coke, Pepsi, KFC ond
McDonold's were the bronds utilized in the study to meosure brond-country (USA)
knowledge ond their demogrophic correlotes. They found thot educotion ond
socio-economic closs were positively coneloted with the occurocy of brond-
country knowledge.
325
CHAPTERVII
Somiee, Shimp ond Shormo (2005) suggest thot socioeconomic stotus, oge ond
gender moy help exploin product origin perceptions in some counfries. A notionol
US survey of 480 respondenis reveoled thot socioeconomic stotus wos positively
ossocioted with the occurote ossociotion of bronds with their notionol origin, i.e.,,
either US or foreign. The outhors exploin this result by the foct thot socioeconomic
stotus is positively coneloted with internotionol experience. ln ihot siudy, oge hod
no stotisticolly significont impoct on brond origin recognition. Gender on the other
hond hod o significont effeci: moles were more likely to ossociote conectly foreign
bronds with their proper notionol origin whereos femoles were more likely to moke
occurote ossociotions in the cose of US bronds.
Summary
This review of reseorch deoling with the impoct of subcultures hos shown thot the
somples, sompling fromes, countries where reseorch wos corried out, product closses
ond brond nomes studied, stimulus countries, doto onolysis techniques employed
ond sub-culturol voriobles studied ore quite heterogeneous. Additionolly, in the
studies reviewed oge ond socioeconomic stotus-bosed subcultures ore meosured
through proxy voriobles using octuol oge, educotion ond income voriobles.
Porticulorly problemotic ore psychogrophic meosures thot moy be proxies for
ochieved subcultures. Thus, the tosk of providing o neot summory of the results is
quite difficult.
Most of the studies discussed were bosed on survey doto collected from potentiol
consumers ond therefore, provide some externol volidity for the results discussed.
The diversiiy in products used ond types of countries where the doio were
collected impedes cross volidity. Thus, our summory is more quolitotive in noture
thon quontitotive.
The recent studies deoling with subcultures indicote thot ethnicity in Conodo is
positively reloted to the evoluotion of countries similor to o respondent's ethnic

origin (English or French). Acculturoted respondents, hoving the chorocierisiics
of mojority ond minority ethnic origin, exhibited evoluotion thot fell between the
two groups. ln the US whereos, US respondents evoluoted products from countries
similor to their ethnic origin more fovorobly, ethnic respondents evoluoted products
326
country Perceptions
from similor countries negotively. The responses of occulturoted respondents fell in

between. There is o strong relotionship between ethnicity ond evoluotion of home
countries in the cose of ethnic food ond culturol products.
Sociol closs is reloted to preference for non-domestic HIC products. One of the
proxies for sociol closs, i.e.,, educotion, hos been found to be positively reloted to
lessprejudice towords non-domestic products ond to more fovoroble evoluotions
of NIC products. Age is positively reloted to preference for domestic, ond to o
lesser extent, HIC products. ln Chino, weolthier older consumers prefer foreign
high quolity distribution outlets. ln Western countries such os Conodo, younger
respondents ore more fovoroble to NIC products. Sex hos sometimes been found
to be reloted to preference for COO. ln some instonces, femoles prefer domestic
over foreign products.
There is olso evidence thot indicotes thot ochieved subcultures exist where the
group life style reflects consumption of foreign bronds os is the cose with Horley-
Dovison motorcycle clubs in foreign countries ond worship of Americon culture
by some young Thois reflected in their smoking of Americon Morlboro cigorettes.
A number of psychogrophic voriobles directly reloted to consumption behovior;
such os involvement in shopping for products like computers, outomobiles,
videocossettes, television, refrigerotor, comero, ond t-shirt hove shown significont
relotionships with product ond COO evoluotion omong Conodion, Thoi ond
Philippines respondents. ln Chino, items deoling with consumer shopping behovior
with refrigerotor comero ond t-shirt hove been used to derive morket segments
thot moy reflect oscribed subcultures. ln o similor vein, ottitudinol scoles such os
ethnocentrism. world-mindedness, potriotism, notionolism ond internotionolism,
were found to be reloted to COO evoluotion. These moy be used of some future
dote to derive ochieved sub-culturolgroups.
The studiesthot we reviewed indicote thot the strength of relotionship between

the evoluotion of o COO ond o sub-culturolvorioble depends on the countrywhere
the study wos conducted, on the type of product ossessed ond the type of somple
used. Figure 7.1 presents o conceptuol fromework showing sub-culturol effects on
327
CHAPTERVII
product-country evoluotion bosed on flndings covered by us. lt indicotes thot the

sub-culturol voriobles discussed in this chopter ore ontecedents to forming beliefs
regording o COO ond its products. This relotionship is moderoted by the country
where the doto ore collected ond the porticulor product studied. These beliefs ore
reflected in the evoluotion of o product's country of origin olong its monufocturing
dimensions.
Subcultures ond their relotionships with other notions significonfly offect their
ottitudes towords them. Our review of recent orticles deoling with sub-culturol
effects on product ond country evoluotion hos shown thot membership in o
previously oscribed sub-culturol group bosed on ethnicity, socio-economic
stotus
(educotion, income), oge ond sex is reloted to evoluotion of o COO. This result
is porticulorly strong for ethnicity ond educotion. As the orticles reviewed were
bosed on reosonoble-sized survey doto collected both from HlCs ond NlCs, the
effects oppeor to hove some overoll volidity. There is olso evidence to suggest
thot ochieved sub-culturol groups such os Horley-Dovidson enthusiost motorcycle
owners sub-groups exist with o loyolty to o COO. ln oddition through using techniques
such os cluster onolysis, one con discover subcultures bosed on shopping behovior
or world view reflected by such scoles os potriotism. Howeven the strength of sub-
culturoleffects vories ocross different countries ond products.
Managerial Implications
For monogers, our summory of findings strongly suggests thot coo-bosed
morketing strotegies moy need to be customized by subcultures within o country
ond not only ocross countries. At the leost, internotionol morketers should onolyze
sub-culturol differences before exponding into torgeted countries in order to
ossess the strength of these differences ond whether they moy hove on effect
on morket performonce. lf such differences ore found, then sub-culturolsubfleties
should be foctored into the development ond implementotion of morketing
strotegies. ln the cose of morkefing strotegies bosed on subculture voriobles like
ethnicity ond oge cohorts, it is importont to properly use those elements of the
morketing mix thot ore highly visible ond moy oct os "culture" flogs such os brond
nomes, pockoging, odvertising, ond perhops even the choice of retoil ouflets,
328
country Perceptions
depending on their perceived subculture reloted imoge. For exomple, bosed on

results summorized by Loroche, Popodopoulos, Heslop ond Bergeron (2003), one
would expect thot US producers who odvertise their COO in Conodo will find o
more sympothetic consumer bose omong English-Conodions thon omong French-
Conodions. Conversely, if o poriiculor morket hos o preponderonce of consumers
who horbor less positive feelings obout o porticulor COO, os it wos the cose of
Chinese consumers in ihe Nonjing oreo of Chino who developed onimosity towords
Jopon becouse of the otrocities committed during the second world wor then the
producer need to de-emphosize or perhops hide ond disguise COO informotion in
order to moke its products more occeptoble.
The results we hove summorized ore relevont for non-Chinese producers who
would be well odvised io exercise more core in customizing their morketing octivities
if they wont to penetrote the boby boomer ond senior morkets effectively in Chino.
For exomple. it is probobly wrong to simply tronslote odvertisements from o foreign
longuoge when torgeting these morkets in Chino becouse of these oge cohorts'
preference for domestic products. ln other words, these cohorts' notionolism ond
potriotism towords their home country ond culture need respect. On the other hond,
in morkets like Thoilond, simple tronslotions of odvertisements from English (US) when
torgeting the 'Y generotion'Thoicohorts moy be on oppropriote strotegy becouse
of the desire of members of this group to emulote the Americon woy of life.
The results reported oppeor to support odopted or "multi-locol" strotegies in

internotionol morketing, which might on the surfoce, be perceived os being in direct
controst to current trend globolizotion. HoweveL even the most ordent supporters
of stondordized globolstrotegies occepi thot some degree of odoptoiion moy be
necessory. Ultimotely, the issue is one of effective morket segmentotion of locol
morkets bosed on subcultures.
Multinotionol corporotions ond exporters recognize thot oll consumers ore not
olike ond seek to torget segments within o generol populotion thot ore internolly
homogenous ond likely to respond more positively thon other segments to certoin
ottributes of the morketer's offering. ln this context, segmentotion oims first ond
329
CHAPTER VII
foremost of identifying key chorocteristics. ln this chopter we hove shown thot sub-
culturolvoriobles moy represent such chorocteristics, becouse they offect lifestyles
ond other behoviors ond, through them, consumption potterns. This review,
thus, odds to thot body of reseorch by suggesting thot these con be importont
segmentotion voriobles in relotion to o product's origin, whether the lotter is seen
os o product ottribute or os holo offecting beliefs obout other product ottributes
(Verlegh ond Steenkomp 1999).
However, the tosk of defining sub-culturolsegmentotion voriobles is not eosy. For

exomple, in the US it hos been found thot the Sponish-speoking subculture hos
distinct consumer behoviors in comporison with the generol populotion (Schiffmon,
Konuk ond Dos 2@6). A number of micro sub-groups exist within this Hisponic
subculture. Thus, food ond musicol preferences of Hisponics from Mexico ore
different from those of Hisponics of Cubon origin. ln the some vein, ossimiloted,
young first generotion Hisponics ('Y generotion') consume more English thon
Sponish medio sources ond exhibit consumption potterns thot ore different from
those of their porents ('boby boomers') (Penoloso ond Gilly, 19991.
Therefore, whot the review of our literoture suggests is thot o "moss morket"
opprooch towords o populotion thot is culturolly (i.e.,, with subcultures bosed on
ethnicity, demogrophics, etc.) diverse is likely to be ineffective. Where subcultures
prevoil (os it is the cose in most countries), it simply mokes sense to suggest thot
they should be token into occount. This is especiolly true of subcultures thot ore
geogrophicolly concentroted os it is the cose in ethnicolly diverse countries such os
Conodo (French versus English), Chino (Hon versus Tibetons), lndio (Bengoli versus
Punjobi), Belgium (French versus Flemish), Switzerlond (Germon versus French)
ond hove distinct medio consumption potterns (e.g.,, moles versus femoles,
'Y generotion' versus 'seniors'), which helps to reduce the odoptotion costs in
occessing them.
ln foct, to the extent thot globolizotion entoils the identificotion of cross-

notionol segments, o product's notionol identity "if it is deemed to be imporiont
to o porticulor subculture", con be used to identify relevont segments ocross
330
Sub-cultural Effects On Product,/
country PercePtions
products in Fronce' ond

countries. This might be the cose, for "French" identity
the corresponding ethnic groups in Conodo, Switzerlond ond Belgium' Sports
tournoment is onoiher exomple of globol extension of morketing stroiegy
to sub-
through
culturolgroups. Germony's progrom to creote o fovoroble country imoge
soccer
the sponsorship of the 2006 World Soccer Chompionship ond thus reoching
enthusiosis globolly is on exomple.
The reseorch progrom of Ahmed ond d'Astous ond

to some extent the Loroche'
designed
Popodopoulos. Heslop ond Bergeron (2003) orticle, were specificolly
poriiculor
to drow useful monogeriol implicotions. ln the following porogrophs'
ottention is given to Ahmed ond d'Astous' findings for drowing
monogeriol
implicotions.
(i.e.,, the 'Y generotion'
Younger ond less offluent conodion respondents
whereos highly educoted
cohorts) ore more fovouroble towords Asion countries
more fovouroble towords
respondents (upper ond upper middle sociol closs) ore
2002). These results indicote
Htcs outside of North Americo (Ahmed ond d'Astous,
omong lower
thot products mode in Eost Asion NlCs ore more likely to succeed
in Eost Asion Nlcs
income ond younger oge segments. Given thot products mode
thot products
ore linked in consumers' minds with good volue, it is recommended
ond
directed of these segments be ossocioied with strong worronty progroms
competitive Prices.
Eljobri (2002)' n
Bosed on the reseorch corried out by Ahmed, d'Astous ond
oppeors thot corporotions thoi ossemble iheir technologicolly
complex products in
NIC countries like Singopore, Toiwon ond Souih Koreo, which

olreody hove o bose
from torgeting
for monufocturing technologicolly complex products, will benefit
their products to technologicolly sophisticoted roiher thon overoge
Conodion
consumers. Technologicolly sophisticoted consumers ore

more informed oboui
price-quoliiy
the ossembly copocity of NlCs ond ore oble to judge the fovouroble
relotionship provided by more technologicolly odvonced Nlc countries.
products mode in
Ahmed ond d'Astous (2004) found ihot in the Philippines,
segments'
Asion Nlcs ore more likely to succeed omong younger consumer
331
CHAPTERVII
Given thot products mode in Asion NlCs ore linked in consumers,

minds with poor
quolity, it is recommended thot products directed
of 'y generotion, segments in
the Philippines be offered with o strong wononty using promotionolprogroms
thot
link Asion products with high quolity. Additionolly, for
HIC firms looking for export
morkets for products where ports ore sourced in HlCs
ond which ore ossembled in
Hlcs' highly educoted ond offluent Thoi consumers
oppeor to be o very ottroctive
morket segment. Becouse consumers fomilior with Hlc products
seem to be more
fovouroble toword Hlc products, product comporison
moy be on ottroctive tool
for pushing HIC products.
Ahmed ond d'Astous' (2007) results indicote thot Chinese

mole consumers
con be segmented into homogeneous subgroups. A
cruster onolysis of shopping
voriobles resulted into the identificotion of four
distinct segments, nomely Duroble
Enthusiosts, Durobres Uninvorved, rnexperienced
Shoppers ond Apporers rnvorved.
The meon CoD evoluotions ond country ottitudes
of these segments indicoted
thot duroble products mode in industriolized countries (lcs)
ore more likely to
succeed with members of the Duroble Enthusiosts segment
ond, olbeit to o lesser
extent, opporel products with members of the Apporels
lnvolved segment. This is
porticulorly true in the cose of products mode
in more odvonced lCs such os the
US ond Jopon. These segment members
ore more likely to believe thot lc products
ore relioble, innovotive, ond stylistic thon NIC products in the product
closs of their
interest' Given thot these consumers ore likely to seorch
for o lot of informotion
when shopping for durobles or opporels, it would be beneflciol
to provide COO
informotion of the point of purchose, in pomphlets ond/or
on the web sites of the
products' Becouse products mode in lcs ore linked
in Chinese consumers, minds
with high costs, it is recommended thot products directed ot
these segments be
ossocioted wiih strong wononty progroms or product exchonge
progroms to
reinforce the volue imoge of the products by emphosizing product
reliobility. This
would be porticulorly importont for members of the Apporels
lnvolved segment
looking for opporel products from odvonced lcs becouse
these consumers ore
more likely to believe thot products mode in odvonced
lcs ore very expensive.
ln the cose of lc firms lounching o new duroble product on the
Chinese morket, it
332
Sub-cultural Effects On product/
country Perceptions
oppeors thot the Duroble Enthusiosts segment should be the initioltorget morket. A
similor comment opplies to o lesser extent to the Apporels lnvolved segment for on
opporel product. As these segment members tend to engoge in the informotion
seorch process by themselves, the cost of reoching them should be less ihon thot
for other segments. lnsteod of moss medio sources such os rodio, television ond
newspopers, less costly sources of communicotion such os speciolized mogozines,
pomphlets, ond point of purchose moteriols could be used to introduce ond
promote the products.
Notionol governments interested in promoting their products in Chino moy

undertoke institutionol odvertising in speciolized medio vehicles in order to position
their COD ond COA in the forefront of Chinese consumers' thoughts, especiolly with
members of the Duroble Enthusiosts ond Apporels lnvolved segments forthe product
oreos of interest. They moy olso involve themselves in o systemotic surveillonce of
products originoting from their country so os to mointoin, ond possibly to enhonce
the country's COO reputotion.
Ahmed ond d'Astous (2007) found thot some NlCs like Mexico were perceived to
fobricote products thot ore more relioble, innovotive ond stylistic ihon those mode
in Chino. Howeve[ these NlCs suffer from on overoll poor COO evoluotion becouse
their products ore believed to be more costly. To succeed on the Chinese morket,
these countries would hove to be cost-competitive in the morket ploce. By toking
o long-term perspective, firms originoting from these NlCs moy be oble to recoup
the higher costs of morket entry in Chino with higher profits in the long run when
their products ore occepted in the morket ploce by groduolly roising their prices
over time.
According to Ahmed ond d'Astous (2004), older ('boby boomers' ond 'seniors')
ond weolthier households with children (upper ond upper-middle sociol closs) ore
the primory torget morket of foshion morketers whose home designed products
ore ossembled in Chino. ln the cose of other morkets, it might be necessory to
ossure consumers thot the ossembly is of export quolity ond thot it is therefore of
the highest stondord.
333
CHAPTER VII
Lostly the presence of "hybrid" products in todoy's morket ploce (those thot ore
designed, monufoctured, ossembled, or used ports from vorious different countries)
presents on opportunity for producers to stress different "origins" depending on on
ossessment of how receptive consumers in porticulor morkets moy be toword eoch.
For exomple, in Toiwon oge hos been found to be positively correloted with ihe
evoluotion of COD HIC for technologicolly simple products (Ahmed, d'Astous ond
Chompogne, 2005). Therefore, HIC multinotionols morketing their technologicolly
simple products in Toiwon to 'boby boomers' ond 'seniors' should emphosize the
country of design of their products.
Morketers hove some lotitude in ossocioting their products with o porticulor

countryimoge. Forinstonce, the 'Freok' brond of wine produced in Fronce hos been
introduced in the globol morket ploce to compete ogoinst light, fresh, ond cleon
tosting newworld wines produced by the US, South Africo, Austrolio, Argentino ond
Chile. Cleorly promoting o country imoge ossocioted with the Freok brond hos little
to do with where the product wos in foct produced. ln this cose, French morketers,
foced with responses (positive or negotive) bosed on their product's origins were
oble to implement o differeni globol strotegy for consumers who prefer new world
wines. Thus, Fronce which is fomous for its old world wines, con morket its wines to
o subculture of new world wine drinkers by using o bronding strotegy to provide o
positive imoge of its light tosting wines.
ln the some vein, opportuniiies exist for creoting o subculture ossocioted with
o country's products. As discussed eorlier, this hos occurred in the cose of the
US bronds Horley Dovidson (motorcycles) ond Morlboro (cigorettes). lnternet
technology provides tools for creoting virtuol communities for users of products
ond bronds ossocioted with o country. For exomple, clubs to toste ond oppreciote
Americon wines exist in mony countries. These Americon wine drinking clubs con be
used to promote ond sell US wines. This con be done by promoting web sites where
comments reloted to US wines ore welcome. Speciolincentives, for exomple, moy
be given to internet web site users to porticipote in such virtuol communities of US
wine drinkers by providing them with coupons, prizes, etc.. i.e.,, promotions reloted
to US wines.
334
country Perceptions
Obviously, this chopter roises more questions thon it provides onswers. Although
tentotive monogeriol implicoiions were drown, much more work needs to be
done to delineote oppropriote product closses to be studied, ottitude scoles to be
used, morket segments to entet the noture of COO evoluotions. os wellos the port
ployed by such foctors os irust in enhoncing the reputotion of o country's products
globolly.
Research Implications
From o reseorch stondpoint, this literoture review highlighted the importonce of
including questions deoling with different subcultures in COO studies. Although
notions hove been used os o proxy for culture becouse it is more convenient,
cultures ond subcultures ore not oppropriotely circumscribed by notionol ond
other boundories. For exomple, the lndion Moyo culiure is prevoleni in the south
of Mexico ond in such neighboring countries like Guotemolo. The culturolond sub-
culturol groupings should not be on ossumed or infened stote, nor should the unii
of onolysis be chosen by convenience (Lenortowicz ond Roth, 2001). This opplies
to reseorchers interested in COO effects, who need to include regionol ond sub-
culturol differences in their studies where oppropriote ond possible. As this review
hos shown, ihese differences con be mojor source of voriotion in the evoluotion
of COOs. Profiling vorious sub-culturol groups in o notion would provide o much
cleorer picture of the mony different perceptions ond buying behoviors thot ore
present in those environmenis. The study of COO is o moture oreo ond therefore one
needs to go beyond merely studying the effects of COO on product evoluotions
ond explore topics like meosuring effects of subcultures ond their moderotors on
product ond country evoluotions.
Mony studies in the oreo deoling with sub-cultures such os Loroche, Popodopoulos,
Heslop ond Bergeron (2003), Poromesworon ond Pishorodi (2000) deoling with
ethnicity-bosed subcultures, were corried out in North Americo. Similor studies
need to be conducted in other geogrophicol oreos, ond porticulorly in NlCs to
ollow for the globol generolizotion of results. Such studies should toke into occount
sub-culturol groups thot often extend beyond geogrophicol boundories, such os
Arob immigronts in vorious Europeon Union (o tronsnotionolgrouping) countries like
33s
CHAPTERVII
Spoin, Fronce, Belgium, ond Hollond who moy exhibii similor country ond product
evoluotions. Perhops, such longuoge bosed subcultures moy be furthersub-divided
by toking into occount the notionol origin of the respondents. ln the cose being
discussed, the birth country of on Arob immigront moy be Algerio, Morocco, or
Tunisio with boih longuoge ond country of birth exercising on influence.
Furthermore on importont ond interesting finding thot emerged from this literoture
review is the prominent role of occulturotion in the evoluotion of foreign countries
ond their products. Therefore, in multiculturol studies focusing on ethnicity bosed
subcultures thot ore in continuous contoct with one onother it would be necessory
ond useful to incorporote occulturotion os o key vorioble.
Future studies should exomine subcultures other thon those reviewed here, in
vorious regions of the world, in order to extend ond volidote reseorch findings.
This type of reseorch is germone to countries where mony different cultures ore
living together ond/or under going ropid economic ond socio-culturol chonges.
Thus, it would be interesting to investigote the ottitudes of Hisponic communities
in ihe US towords the product ond country imoges of such countries os Mexico,
Chile, Argentino, Colombio, Venezuelo ond Peru. These studies should obviously
include respondentswho originoted from the obove mentioned countries. Belgium,
Switzerlond, Fronce, ond Germony ore olso ethnicolly diverse countries whose
member perceptions moy differ from one onother depending on the degree of
offinity they feel towords, soy, Fronce, Germony, Turkey ond Algerio. Russio, Brozil,
Chino, lndio, ond South Africo ore olso countries with different socio-economic
ond oge-bosed subcultures whose members' perceptions moy vory depending on
the degree of odmirotion or ontipothy they feel towords countries like Jopon ond
the United Stotes.
ln Ahmed ond d'Astous' COO reseorch progrom, involvement in shopping for

products like outomobiles, computers, televisions, refrigerotors, comeros ond
tshirts wos consistently reloted to COO evoluotions, but little explonotion wos
provided os to why this occurs. Therefore, further reseorch is needed to get o cleor
picture of the relotionship between shopping+eloted non ochieved subcultures
336
Suh.cultural Effects 0n Productl
country PercePtions
(2002)
ond country ond product evoluotion. For exomple, in Ahmed ond d'Astous'
HlCs ond
study, the positive conelotions observed between COO perceptions of
between
outomobile involvement controstwith the negotive conelotions observed
coo perceptions of the some countries ond VCR involvement. one tentotive
is ihot
explonotion provided by the outhors for this product cotegory interoction
the meon level of VCR involvement wos significontly lower thon the outomobile
outomobiles
involvement level in the somple (meon involvement scores: 23.2 for
is thot when
versus 18.9 for VCR; p < .OOl - poired-somples t-test)' One explonotion
not core very
involvement is very low (i.e.,, low vcR involvement), consumers do
positively
much oboui the product ond its origin ond therefore Hlcs ore evoluoted
(i'e"' high
in o stereotypicol foshion. ln controst, when involvement is very high
its origin ond
outomobile involvement), consumers core obout the product ond
Hlcs ore evoluoted positively becouse these countries meet or
even exceed
conespond
consumer expectotions. The less positive COO perceptions would then
low outomobile
to o medium level of involvement (i.e.,, high VCR involvement ond
involvement). Future reseorch should oddress such issues.
of potterns omong
Another promising oreo for future reseorch is ihe identificotion
products ond
different kinds of product cotegories (consumer ond industriol
ond its effect on
services) thot moy moderote the relotionship between subculture
in o torget country to
country-product perceptions. This would enoble morketers
depending
identify how different sub-culturolgroups cotegorize differeni countries
product, or
on whether it is for on industriol product, industriol service, consumer
purchose behovior moy be
consumer service. For exomple, industriol product
group's core
strongly reloted to ethnic subcultures, becouse of eoch sub-culturol
purchosers who ore
volues (e.g.,, individuolism vs. collectivism). Thus, industriol
positively inclined
members of the Chinese Americon subculture moy be more
relotionship
towords Joponese industriol products becouse they volue long-term
olong with
with industriol product suppliers. lbizo in Spoin hos excellent beoches
people moy evoluote
noisy ond permissive bors ond night clubs. 'Y-generotion'
lbizo much more fovourobly os o beoch destinotion thon 'senior' sub-culture
consumers who dislike noise ond noisy night life'
337
CHAPTER VII
One oreo of subculture yet to be studied is urbon vs. rurol. Mony fost growing
NlCs,
such os Chino ond lndio, exhibit lorge differences in income,
level of consumer
sophisticotion, ond modernizotion between their urbon ond rurol populotion.
Additionolly, o lorge number of formers ore leoving rurol oreos for lorge urbon
oreos' Thus, there moy be of leost three subcultures thot belong
to this closs of
vorioble: urbon, newly urbon ond rurol, eoch showing differeni
levels of knowledge
of COOs ond different preferences for product ottributes. Urbon
dwellers might be
more interested in the stylistic ospects of o product whereos
rurol dwellers might
emphosize the economy ospect. Urbon dwellers moy
be better informed obout
products from o lorge number of o coo. Thus, given
o Coo moy be differentiolly
evoluoted by o consumer depending on his/her urbon/rurolsiotus.
338
country Perceptions
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345
Flgure 7.1 A Concepluol Fromework of Sub-Culturol Effecls on COO Evotuollons
Ascrlbed Varlables
Ethnicity
Sex
Age Dimensions of Country.of-
Social Class Origin Evaluations
(Education/lncome)
Manufacturing process: design,
assembly/manufacture, parts
Product complexity (ou

Hish)
Achieved Variables
Patriotism
Animosity
Nationalism
Woddmindedness Itioderators
Purchase involvement
Nations: Level ofdevelopment
lndividualism/collectivism
Products: Level of complexity

Degree of importance
346
Chopter Eight
SERVICE COT]NTRY-OF_
ORIGIN EFFECTS:
EVIDENCE FROM THREE
COT]NTRIES
CHAPTERVIII
348
Service Country-Of-Origin Effects:
Evidence FromThree Countries
Edward R. Bruning*
Introduction
Country-of-origin (COO) is considered
on importont foctor in o number of
purchose decisions. Previous reseorch
hos indicoted the strength of its role in o
number of product cotegories: textiles
ond foshion clothing, outomobiles, fine
wines, consumer electronics, computers,
ond household goods to nome o few
more prominent opplicotions. Over the
yeors, COO studies hove dromotized thoi
consumers, to vorying degrees, ore biosed
towords their own country's products
(e.9.,, Bilkey ond Ness 1984; Peterson
ond Jolibert 1995; Al-Suloiti ond Boker
l99B; Verlegh ond Steenkomp 19991.
The reseorch shows thot consumers hold
distinct imoges of vorious notions ond use
them to evoluote product quolity, cope
with complex product informotion, ond
ossess the sociol occeptobility of their
purchoses. Consumers oppeor to use
* Edword R. Bruning, Professor of Morkellng,
l.H. Asper School of Buslness, Unlversity of country imoge os o surrogote to evoluote
Monilobo,Wlnnipeg, MB. Conqdo product ottributes when f o miliority with the
349
CHAPTER VIII
product is low, ond to employ it os o summory construct when ottribute fomiliority

is high (Hon 1989). Also, country imoge stereotype is employed when products
ore monufoctured, ossembled or sold from developing countries-country imoge
bios is generolly negotive for products from such countries. Country imoge is olso
linked to one's sociol group offiliotions-potriotic ond ethnocentric consumers tend
to view the country imoge cue in terms of group loyolty, ond ore biosed in fovor
of notionol versus foreign-mode products. While the evidence is not completely,
supporiive of o couniry bios with respect to products, it is nonetheless compelling
ond worthy of serious considerotion when devising morketing strotegies in both
foreign ond locol morkets.
But does the coo effect corry over to services? The omount of reseorch,
theoreticol ond empiricol, thot is devoted to studying the COO effect in service
contexts is substontiolly less thon for products. li is on interesting controdiction,
however thot for the post sixty yeors mony of the world's economies hove relied
on service industries to drive growth ond prosperity, yet COO reseorch hos focused
lorgely on product effects. One is led to the question-why the oversight? ts the
COO effect relevont to services?
ln the section following this introduction, I controst services ond products ond
follow with o discussion of the relevonce of COO to service purchoses. I follow
in the second section with o discussion of the theoreticol ond empiricol literoture
reloted to the service COO effect. ln section three, I evoluote the COO effect
in on internotionol oirline service consumption context for three populotions-oir
frovelers from Conodo, the United Stotes ond Mexico. I hypothesize thot the COO
cue is stotisticolly relevont ond is linked to the degree of culturolsimilority between
own-country ond foreign service-providers. My empiricol results ore presented in
section four followed by o discussion of the results in section five. ln the chopter's
finol section, section six, I summorize the findings of the siudy, link the relevoncy of
the findings to the service COO literoture ond suggest woys the findings relote to
both monogers ond reseorchers.
350
Services AndThe Service Coo Effect

Characteristics of Services
Whot is on internotionol service ond how does it differ from on internotionol
product? lnternotionol services ore defined os "deeds, performonces ond
efforts, conducted ocross notionol boundories in criticol contoct with foreign
cultures" (Clork ef o/. 1996, p. 15). Unlike physicol, tongible goods, services ore
usuolly regorded os performonces (e.g.,, legol services, physicion ossessments),
or experiences (e.9.,, trovel excursions, sporting events), which moy be primorily
equipment bosed (e.9.,, oirline trovel, telecommunicotions) or people bosed (e.g.,,
monogement consulting, independent soles representotives). or both. According
to Ziethomlond Bittner (1996l,, services ore differentioted from monufoctured goods
in severolwoys. First, they ore lorgely infongible, thot is, their intrinsic ottributes ore
more difficult to oscertoin compored to products. As Ziethoml ond Bittner (1996)
hove noted, service ottributes ore difficult to identify ond meosure, which often
o 'gop' between perceived performonce ond consumers' performonce
results in
expectotions. Much of the performonce-expectotion gop is ottributed to the lock
of specificity in detoiling performonce criterio (Porosuromon, Zeithoml ond Berry
1985). Furihermore, concepts such os volue ond quolify ore not well differentioted
ond tend to be idiosyncrotic to eoch individuol. Services tend to be cotegorized
os experience ond credence goods-goods which consumers find difficult, if
not impossible, to judge prior to purchose or consumption (Zeithoml 1988). Thus,
services tend to introduce higher risk in the purchose evoluotion process compored
to most product purchoses becouse of the limited informotion obout intrinsic
service ottributes ond, consequently, the difficulty consumers hove in setting
expectotions. Consumers find it difficult to report their experiences with respect to
services becouse they often ore not copoble of interpreting whether performonce
wos excellent, good, foir or poor. Second. services tend to be inseporob/e, thot
is, production connot be seporoted from consumpiion os is found with products.
Service providers ond clients often work together ond the deliveroble component
presented to the client is often elusive. Third, services ore perishob/e, meoning
thot they must usuolly be consumed ot the time they ore produced, or they will be
lost. Finolly, services ore highly heferogeneous in the sense thot, unlike products,
351
CHAPTER VIII
no single service performonce is identicol to onother. Eoch service encounter is
unique ond often highly customized.
Services ore ossocioted with certoin problems not found with products. The
intongible noture of service ottributes mokes communicoting quolity feotures obout
them to consumers more difficuli compored to products. whose ottributes con often
be specified by meosuroble quolity stondords. Becouse service quolity is difficult to
define ond communicote, ond, os o corollory. becouse consumers hove difficulty
in determining good quolity from overoge or poor quolity, service prices ore often
difficult to set ond to mointoin. Boniers to entry in service industries ore usuolly very
low, which olso implies thot economies of scole ore not substontiol, excepi in coses
where service firms ore protected ond operote in monopoly or neor-monopoly
conditions. Competition is often intense omong rivols. such thot relotively smoll
service providers ore copoble of performing of cost levels comporoble to lorger
providers. Finolly, becouse services ore perishoble, inventories connot be stored.
which implies service providers must be copoble of responding to demond through
immediote production. ln other words, supply must be continuously responsive
to demond potterns in the immediote period-peok lood demond requirements
estoblish the copocity levels o service provider must be copoble of offering in ony
tronsoction.
Service COO Effect

Whot is the likely COO effect in the context of services? Goods thot ore difficult
or impossible to judge, even ofter consumption, require consumer's to substitute
occurote proxies (employ extrinsic cues) in order to evoluote quolity ond volue
,l977).
dimensions (Jocoby ef ol. lntrinsic ottributes ore criticol bits of informotion
the consumer processes in judging products (Jocoby ef ol. 1977). ln coses where
intrinsic ottributes ore evident, with seorch goods for instonces, the COO cue
hos been shown to ploy o secondory role compored to instonces where they
ore less tongible ond therefore more difficult to interpret, which is often found
with experience ond credence goods (Hon 1989). ln the lotter cose, the COO
cue served os o proxy for service evoluotions; ond ottitudes, beliefs ond bioses
towords the foreign country's peoples ond products define the informotion set
352
Evidence From Three Countries
consumers employ to evoluote ond select service providers (Ahmed et ol.2OO2).

Since services tend to be less tongible thon products, we should expect the COO
cue to ploy o more centrol role in influencing service ossessments (Jovolgi, Cutler
ond Winons 2001). Furthermore, the more importoni the service is in identifying
group offiliotion, the more likely will be the cose for the country cue to signol group
offiliotion volues (e.g.,, ethnocentric, notionolistic or sociol group identity volues)
os
opposed to product ottributes. Ethnocentrism, notionolism ond sociol self-identity

literotures predict thot individuols will over-stote the volue of own-group member
offiliotions ond discount the volue of out-group members becouse of the
threot
,|906).
to one's in-group, either reol or imogined (Sumner Furihermore, numerous
exomples con be found in the literoture where country offiliotion is on importont

foctor in product ond service choices (Shimp ond Shorm o 1987; Klein, Ettenson ond
Monis 1998; Bruning 19971.
Service Coo Literature Review

As mentioned in on eorlier section, the literoture oddressing the
COO effect in
services is rother sporse. The studies cited in this chopter represent

the generol
findings regording COO cue's influence in service seitings' ln totol'
fourteen
oirlines, medicol
reseorch studies representing ten service sectors: skiresoris, retoil,
services, legol services, public services, insuronce ond cruise
lines' Three of ihe
fourteen studies were conducted in the US with Americon respondents/subjects
Austrolio' Koreo'
while the others represented consumer populotions in Singopore'
Netherlonds, Thoilond. Qotor ond conodo. A significont coo effect
wos found in
Toble 8'l
oll thirteen studies, olthough in severol coses the effect size wos weok.
orgonizes the detoils of the severol studies'
353
CHAPTERVIII
Ioble 8.1 : Summory of Service COO Studies
Study coo
Effecl Servlce lndustry Somple Source Mojor Foclor
3fir ond Lehmonn
Yes Ski Resorts JS :omiliority
I e86)
(oft ond Chung
',1992], Yes mporters Koreo :ulturol Similoriiy
(oynok et ol. (1994) Yes \irlines JS =omiliority
-oscu ond Giese
Yes ?etoil JS :omiliority
ll ees)
lornson-Wolker
I 99s) Yesr )phtholmology \4ixed :omiliority
ihoffer ond O'Horo :omiliority ond
Yes -egolServices Vixed
ll ees) 3ulturol Similority
Wetzels,et ol. (1996) Yes 'ublic Services Netherlonds CulturolFoctors
)ecotich, ef o/.
Yes lonks ond Airlines Austrolio 3ulturolFoctors
11ee6) rnd Fomilioritv
\l-Suloitiond Boker
'19tt1z Yes Airlines Qotor lot Reporied
3runing (1997) Yes Airlines 3onodo ulturol Foctors
rinkoeo ond
nsuronce iconomic
ipeece (2000) Yes Ihoilond
3omponies )evelopment
Ahmed et ot. (2002) Yes lruise Lines Singopore See note
Morchont ond Worc iingopore ond
Yes Airllnes ulturol Foctors
12003) \ustrolio
2lnformotion obout this eoto
study wos e-xtrocted from Al-suloiti ono eok.r'r excellent
literoture
K. ond Boker, M. lee8. countrv or orisin .,rrtiurs'
effects:
i."*"li:y,,:t.:.-..,9-:ty*::Jl,:rutoirl
literoture review. Morkeiing rntertigenae onJ pronning, rotit, r-Cill'vrrvrrr r\
A
3The outhors
did not ottribute tl"re coo effect to ony-speiif; fo;i;r; however
in conctuding
their study they olluded to the possibility thot the strength
notionol loyolty.
of the effect could be due to
ln terms of mojor stimuli thot occounted for significont

Coo effecis, the literoiure
points to two mojortypes: fomiliority ond culture.
Fomilioritywos generoly ossocioted
with the extent consumers knew obout or hod experience
with the service
siiuotion
prior to the study. curture's influence, on the
other hond, wos much more voried.
ln some coses culturol dissimilority wos the foctor thot stimuloted
the cue, in
3s4
other coses it wos controsts in economic development, ond yet in other coses
ethnocentrism ond notionolism oppeored to be linked to the COO cue. Severol
studies in foct observed o multi-foceted explonotion for the COO effect-both
fomiliority ond culturol. ln order to clorify the findings, I hove orgonized the review
into iwo discussions: studies thot identified fomiliority os the predominont foctor in
exploining the COO effect ond those thot suggest culture ploys the prime role'
Familiarity and the Service COO Effect

Ofir ond Lehmon (l g86) studied Americon consumers' ottitudes towords ski
resorts
in Switzerlond, Austrio ond Fronce ond found thot the coo cue wos importont
when resortswere notwell-known. Loscu ond Giese (1995) focused on o cose
of hypotheticol stort-up retoilers from Germony ond Mexico opening business in
the US. Consistent with product COO findings, with little odditionol informotion,
the outhors found respondents expected the Germon retoiler to outperform the
Mexicon retoiler in product offerings, service levels ond promotionol copobilities;
however the Mexicon retoiler wos expected to offer cheoper prices. Koynok,
Kucukemiroglu ond Koro ('1994) studied consumers' perceptions of foreign
ond
iniernotionol oirline service delivery in the US' Fomiliority with the corrier wos o
criticol foctor in determining sotisfoction-consumers with little fomiliority expressed
more fovoroble ottiiudes towords ihe domestic os opposed to the internotionol
no ottitudinol
oirline, whereos those more fomiliorwith internotionol oirlines indicoted
differences. Together with post trovel experiences, respondents identified reliobility
ond price os the three most importont foctors used in choosing o foreign oirline.
The
outhors olso indicoted the results were moderoted by o number of demogrophic

foctors (i.e.,, gender, oge, occupotion, economic stotus). Horrison-Wolker (1995)
focused on notionolstereotyping ond its effects on the seleciion of ophtholmology
services. Using students from three differeni countries, the outhors hod the subjects
ronk order preferences for service providers ofter vorying the omount ond type of
informotion obout eoch provider. They discovered no evidence of some-country
bios-Americons did not overwhelmingly support Americon providers' nor did
Joponese or Sponish providers indicote o bios towords providers from their own
countries. One interesting finding they did report, howeve[ wos thoi Americon
355
CHAPTERVIII
subjecfs preferred on Americon option when no informotion wos provided

ond
when informotion wos given obout services offered by eoch provider; but thot this
preference did not exist when informotion wos given obout provider
ovoilobility.
Their findings suggest the Coo cue moy moderote ottitudes towords foreign
versus
domestic service providers in situotions where consumers foce risks in the selection
of o service provider.
Al-Suloiti ond Boker (1998) investigoted quolity perceptions of oirlines

from one,s
own country os well os foreign oirlines. While over two-thirds of respondents
preferred o locol oirline to o foreign one, foreign oirline imoges
were superior to
locol oirlines, ond locol oirlines' imoges were higher thon locol's imoges of
Arob
oirlines in generol. The findings ore consistent with the product
COo literoture
ond dromotize the importonce of informotion, knowledge, ond risk foctors
in the
ossessment ond selection context.
Culture and the Service COO Effect

Kroft ond Chung (1992) compored Koreon importers' ottitudes towords
Americon
ond Joponese export service providers ond found significoni differences-Koreons
roted Joponese businesses higher thon their Americon counterports olong o
number of service dimensions.
Shoffer ond o'Horo (i995) studied ottitudes towords domestic versus

foreign
immigrotion lowyers. Bosing iheir findings on responses from 122
conference
ottendees from over 30 countries, the outhors discovered thot trust in on Americon
legol professionol ond oititudes obout the Americon professionol's ethics
differed
ocross the 30 countries. lndividuols from high power-distonce ond low-individuolism
cultures perceived less trust ond lower ethics for the Americon professionol
compored to those from low power-distonce ond high individuolism societies.
Their
findings moy reflect o difference in perceived service quolity bosed
on notionol
culturol volues; howevel given the brood sweeping generolizotions regording
power distonce ond individuolism volues. Another interpretotion
is thot economic
development moderotes the perceptions. Countries with high power distonce
ond
low individuolism notionol volues olso tend to be less developed economicolly,
356
which, if conect, ore consistent with Wong ond Lomb's (19g3) findings regording
the levelof economic development ond the COO effect.
ln o study conducted in the Netherlonds, Wetzels, Birgelen ond Ruyter (1996)

found thot the strength of the COO effect impocted respondent ottitudes towords
the provision of infrostruciure services by o foreign provider. Focused on Dutch
consumers of public services, the outhors discovered thot o person's degree of
culturol openness moderotes the extent of negotive ottitudes towords foreign
providers, olthough demogrophic foctors olso ploy o role.
Pecotich, Pressley ond Roth 11996) evoluoted the COO effect with respect to
service quolity perceptions, price ond purchose intentions for Austrolion bonks
ond oirlines. Using four countries of origin ond two different bronds, the ouihors
uncovered o strong COO effect for oirlines but o weoker effect for bonks. Bosed
on the results of their experiment, the outhors concluded thot the COO effect is
medioted by consumers' experience ond levelof ethnocentrism-the COO effect
wos weoker for more experienced subjects but wos stronger for subjects meosuring
high in ethnocentrism. Thus, occording to the ouihors, prior experience with the
service ond one's culturol orientotion ore importont foctors thot impoct the strength
of the COO effect.
Bruning (1997) olso studied oirlines but focused on notionol loyolty os one of
the determining influences in the corrier ossessment process. Using o conjoint
experiment conducted in three Conodion provinces, the outhor discovered thot
the country effect wos very strong-second only to price-ond thot other trovel
choice foctors (e.g.,, services, flier progroms, iimeliness ond dependobility) were
less importont. Conodions indicoted o weok but significoni preference for the
domestic corrier relotive to the Americon option; however, they strongly prefened
the Conodion relotive to the Mexicon corrier.
Pinkoeo ond Speece (2000) studied the COO effect in the Thoiinsuronce morket
ond found thot COO cue impocts prices consumers expect to poy, their quolity
ond their pride of buying. Bosed on the hierorchy of development
impressions
orgument, where products from more developed countries ore expected to be
357
CHAPTER YITT
preferred to products from developed countries, the outhors found thot

lesser
consumers volue insuronce products from developed countries higher thon
products from developing, or lesser developed countries.
Ahmed et ol. (2002) exomined the COO effect on consumers' quolity perceptions,
ottitudes ond purchose intentions for internotionol cruise lines from Singopore,
Moloysio ond the US. The results confirmed the existence of o COO effect ond
reinforcing the notion thot consumers use the COO cue to judge service providers.
ln foct, they found the COO effect stronger thon the brond effects for quolity ond
ottitude rotings, olthough brond imoge wos more importont in exploining purchose
intentions. Although they discovered thot o positive COO effect could nullify o
negotive brond effect, the reverse wos not true-o negotive COO effect could not
be overcome by o positive brond imoge.
Poswon (2003) studied loyolty to country, stote ond service provider (i.e... university
offiliotion) bronds ond discovered loyolty wos strongest for country, followed by
stote ond service provider respectively. Although country loyolty differed ocross
countries included in the study, it wos more stoble ihon either stote or service
provider (i.e.,, university) loyolty.
Morchont ond Word (2003), in their study of the internotionol oirline morket
between Singopore ond Austrolio, found thot oirline brond, COO ond price directly
impocted service evoluotions, but thot the evoluotions differed occording to intro-
country ond sub-culture foctors. They coutioned ogoinst the common proctice
of generolizing COO results to entire countries, porticulorly when populotions ore
su bsto ntiolly heterogeneous.
Severol studies oddressed country differences with respect to the impoct of

worronties ond guorontees on consumer evoluotions (Ahmed ond d'Astous 1993,
1g95). These studies, however, involved tied-purchoses of service-like products
(worronties) in the context of on outomobile purchose, rotherthon tronsoctions with
pure services. Furthermore, the reseorch focused on remediol octions morketers
could toke given thot o COO effect exists. Studies of o similor noture thot focused
on country differences hove been conducted on export services (Seringhous ond
358
Botschen 1991); fomily medicol proctioners (Schlegelmilch, Cormen ond Moore

1992); university selection (Edgeti ond Cullen 1992; Ford, Joseph ond Joseph 1993,
1999). Severol service quolity dimensions were found to differ ocross o number of
countries; however, the focus wos not on the COO effect per se, but on the country
differences in consumer's proctices ond ottitudes regording services.
Service Coo Cue, Country Branding And Cultural Similarity

Findings from the service COO literoture ore consistent with conclusions reported
by reseorchers studying product COO effects. First, the omount of informotion
ond the degree of fomiliority obout product ond country otkibutes determines
.l986; ,l995;
the COO effect size ond volence (Ofir ond Lehmon Loscu ond Giese
Koynok ef o/. 1994; Honison-Wolker 1995). As consumers become more fomiliorwith
o service, the COO effect diminishes in importonce (Koynok ef ol. 1994; Pecotich
,l996).
ef ol. olthough evidence olso points to the possibility thot, with increosed
knowledge obout the COO ond obout service feotures, the COO cue becomes
o short-cut signol for service quolity (Ahmed et ol.2OO2l. Second, notionol culturol
volues ond the exient to which consumer's ore loyol to their country impocts the
noture ond size of the service COO effect (Pecotich ef ol. 1996; Bruning I 997). Thus,
the country cue olso reflects ethnic or'notionol' bioses fovoring locolversus foreign
products to the extent consumers identify with the notion ond bose judgments
obout producis ond services bosed on notions of their notion relotive to ottitudes
ond ideos obout other noiions (Shimp ond Shormo 1987; Klein, Ettenson ond Morris
1998). Theoreticol underpinnings of the notionol bios ospect of the service COO
effeci con be troced to the literotures focusing on notionolism (Seymore 2000),
notionol identity (Ethier ond Deoux 19941, notionol chorocter (Boer ond Grobb
1993), ond ethnocentrism (Sumner 1905; LeVine ond Compbell 1972). The common
threod woven through eoch of these bodies of ihought is thot group offiliotion ploys
on importont role in on individuol's economic, politicolond sociolchoices. We see
ourselves os individuol entities; however we olso recognize ihot our economic ond
sociol interests depend upon our group relotionships (Ethier ond Deoux 1994). Thus,
we tend to think ond oct from self-interest imperotives, but we olso oct from deeply
held beliefs ossocioted with our membership in o lorger sociol collective.
359
CHAPTER VIII
Severol noticeoble trends hove emerged in the service COO literoture since
the mid-I990s. One streom of scholorship focuses on country os o brond within
morketing's well-estoblished bronding fromework, while o second deols with
country os o reflection of one's culturol identity. Within the country-bronding
streom, emphosis is ploced on studying woys in which symbols ond imoges obout
country ore combined to creote on oppropriote set of perceptions with torgeted
oudiences (Popodopoulos ond Heslop 2002), which, if monoged properly, should
impoct fovorobly upon product ond service bronds. Scholors hove explored foctors
thot moderote country brond imoge within the product cotegory (e.g.,,fomiliority,
country similority (economic, culturol, politicol), strength of regionol/notionol/
ethnic identity, level of development, onimosity between notions, etc.); however
we know little obout the effects of country bronding os opplied to services. Simonin
ond Ruth (2003) leorned thot brond notionolity ond fit chorocteristics between the
service provider situotion ond buyer offect consumers' ottitudes towords o service.
Although o moin effect country bios wos not observed in their study, the outhors
did find o significont interoction between notionolity ond service ottributes, thus
suggesting, "country-of-origin effects in event sponsorships ore context specific."
Scholors from o second evolving reseorch streom believe thot people from one
notion possess positive ond negotive stereotypes of people from other notions (Klein
ef ol. I 998), thot these stereotypes generolize beyond product or service cotegories
to include voluotions of the people's beliefs, ottitudes ond behoviors, which olters
perceptions of the people, their country, their culture ond products ond services
they produce ond sell (Shimp ond Shormo 1987; Klein. Ettenson ond Morris 1998). ln
this streom, the service COO cue reflects one's group offiliotion (Kroft ond Chung
1992; Pecotich ef ol. 1996; Morchont ond Word 2003) ond notionol loyolty (Bruning
19?7). ln recent yeors more studies hove included culturolvoriobles in service COO
onolyses olong with troditionol ottitudinol meosures obout the product. ihe country,
service sotisfociion levels ond purchose intentions. Scholors ore now quesiioning
the culturol significonce of the COO effect in greoter depth (Wetzels ef ot. lgg6;
Pecotich ef o/. 1996; Bruning 1997; Ahmed et o1.2002; ond Morchont ond word
2003).
360
An interesting contribution from sociol psychology sheds light on the relevonce of

focusing on the second growing reseorch streom thot oddresses culturol dimensions
of the service COO effect. Fiske (1982) proposed thot the schemotic motch-up
between two porties determines the extent to which relotionships ore mode. ln
his writings, he emphosizes the notion of congruence-the fit between schemos or
reolms of understonding. Congruence con be decomposed into two importont

ospects: expectoncy ond relevoncy. Expectoncy is defined os the degree to which
on item or bit of informotion fits into o known pottern or evoked structure (Heckler
ond Childers 1992), ond could be depicted os ossociotions consumers hove obout
tronsocting with o foreign service provider; or their expectotions developed from
personol or secondory occounts of post customer service performonce with o
foreign supplier. Furthermore, expectoncy o necessory condition for congruence
is
(Houston, Childers ond Heckler 1987; Heckler ond Childers 1992) ond is closely linked
,l998),
with "fomiliority" (Simonin ond Ruth "knowledge" (Roo ond Rueken W94l
ond "similority" ((Roo, Qu ond Ruekert 1999; Levin ond Levin 2000; ond Levin 2002).
Thus, expectoncy refers to the "expected ottributes" thot ore common (i.e.,, similor)
between two or more service providers. Referred to os the Similority-Controst (SC)
process, this comporison focuses on how one's expectotions of the similorities ond
controsts with respect to onother person determine the positive or negotive offinity
between them. Furthermore, similorities ond controsts relote to both products os
well os group offiliotion foctors. ln their comprehensive review, Rosenthol ef o/.
(19791 documented support for o "culturol proximity" hypothesis, which orgues
consumers expect culturolly similor countries to "fit" together more effectively
thon culturolly dissimilor countries. ln o reloted study, Gudykunst ond Ting-Toomey
(1g88) noted thot the effect of culturol similority on emotion recognition occurocy
oppeored to be highest for members of the some or very similor culturol group, thus
reinforcing the emphosis on expectoncy similorities os on explonotion of positive
ottitudes towords others.
ln summory, expectoncy relotes to common expected ottributes (both product

ond group-reloted) between two porties. Within the context of the service COO
effect. the "culturol proximity" hypothesis suggests therefore thot culturol offiliotions
361
CHAPTER VIII
ore most likely to occur when the service relotionships ore I ) highly expected (i.e.,,
the "fit" between the ottributes is similor or congruent ocross product ond sociol
group chorocteristics; 2) when consumers ore fomilior with ond owore of the
product ottributes of the foreign provider; ond 3) when consumers perceive on
identity consistence with the foreign provider.
A number of COO studies indicote thot products from countries viewed os culturolly
similor to the home country tend to be preferred over those from culturolly dissimilor
,l995).
countries (Heslop et o/. 1998; Shormo ef ol. ln their recent orticle, Loroche et
ol. (2003) orgue thot consumers evoluote products more fovorobly from countries
for which they hove close culturol ties. Other reseorchers present findings thot
show individuols with high own-country preferences hove more fovoroble ottitudes
toword products from culturolly similor countries in comporison to products from
culturolly dissimilor countries (Wotson ond Wright 2000; Klein et o/. 1998). Using the
volues clossificotion by Schwonz fi994) for culturol similority, ond o representotive
somple of New Zeolond shoppers, Wotson ond Wright (2OOO) conclude thot culturol
similorityisonimportontconsiderotionintheevoluotionofforeignproducts. Culturolly
similor countries (Germony ond the US) were more fovorobly evoluoted compored
to culturolly dissimilor countries (ltoly ond Singopore). The results hold whether or
not o locol product wos in competition with o foreign product. Gurhon-Conli ond
Mohesworon (2000)studied the extenttowhich culturolorientoiion influences COO
effects on product evoluotions in the US ond Jopon, ond discovered thot the COO
effect is reloted to o country's degree of individuolism ond collectivism. Bolobonis
et o/. {2001) report o similor finding in their study of notionolism ond ethnocentrism
in Turkey ond the Czech Republic.
Empiricol findings in bronding reseorch support o similor conclusion with respect

to brond similority between competing bronds ond consumer's response to both
bronds. Levin ond Levin (2000) found thot o brond's success depends on the
degree to which its imoge is 'similor' to thot which consumers ore led to expect.
Furthermore, greotersimilority omong individuol bronds encouroges more consumer
occepionce of both bronds. ln essence, consumers ossimilote informotion obout
individuol bronds more reodily when competiior bronds ore similor. ln the cose of
362
substontiol differences or 'controsts' omong member bronds, less occeptonce is

likely becouse it costs consumers more to gother ond process informotion (Levin,
2002).
Therefore, bosed on the predictions of the Similority-Controst processing model

ond the theoreticol ond empiricol support found for the "culturol proximity"
hypothesis, I propose two hypotheses to exploin the service COO effect in the
internotionol oirline sector. The first hypothesis osserts the expected relotionship
thot own-country preferences will exceed preferences for foreign oirlines:
H,i ln evoluoting oirline service performonce, consumers will disploy o positive
preferenceJor their own-country carrier relative to aJoreign carrier.
With respect to the second hypothesis, we know thot brond similority ond brond
fomiliority offect consumers' ottitudes towords bronds ond, ultimotely, preferences
towords the products these imoges reflect. We olso know thot individuols do
not judge oll groups equolly. Reseorch on eihnocentrism, notionolism, notionol
identity, notionol chorocter ond notionol loyolty suggests thot consumers will
respond to product ond service providers differently, depending on the relotive
similority between the provider the consumer ond her group. Evidence suggests
thot ottitudes towords o foreign service supplier will be offected by the degree of
culturol similority between the consumer ond the service provider-greoter culturol
similority will result in higher service provider ossessments. Therefore, my second
hypothesis is:
Hrt ln evoluoting oirline service performonce, consumers will prefer service

providers from
countries that are culturally proximate to them relative to those culturally mote
distant.
ln the sections thot follow. I present o tesi of the two hypotheses using doto
collected from Conodion, Americon ond Mexicon oir trovelers.
363
CHAPTERVIII
Methodology
Research Design
The focus point of the conjoint exercise is o hypotheticol 2000 mile trip between
two unspecified points. The instrument involves twenty scenorios (four of these ore
hold-out scenorios) with vorious trip ottribute combinotions ond o roting form for
subjects to indicote trip bundle preferences bosed on o nine-point preference
scole. Attributes selected for inclusion in the experiment ore suggested by previous
reseorch in morketing ond tronsportotion (Bruning 1997; Green ond Wind l9Z5). The
six ottributes ore: price, in flight service, number of stops, on time performonce,
countryofconierondwhetheroflyermileogeprogromisoffered. Priceisrepresented
os three levels-low medium ond high. ln-flight service is chorocterized by being
ot low, medium ond high levels. Low in-flight service is defined os the scenorio
of poor selection of mogozines, no newspopers, no meols, to few ottendonts for
quick service, poor music quolity, noisy oircroft ond inhospitoble stoff. Moderote
service is defined os the scenorio of of leost one interesting mogozine, no
newspoper cold sondwich ond dessert, sotisfoctory speed of service, reosonoble
music quolity, oircroft not too noisy ond congeniol stoff. The high in-flight service
is chorocterized os hoving o good selection of newspopers ond mogozines, o hot
meol, quick service, cleor music ond o movie, quiet oircroft ond excellent stoff.
All other ottributes ond their levels-number of stops (i.e.,, non-stop, one-stop ond
two-stops), on time performonce (gs%, as%,70% for high, medium ond low levels,
respectively), ond existence of o frequent flyer progrom (yes or no) ore presented
in Toble 8.2' The country of corrier ottribute (three levels) is our proxy for the relotive
importonce of the notionol identity in the oir corrier selection process ond thus the
notionol bios vorioble in our onolysis. Toble 8.2 presents the six ottributes ond their
respective levels.
364
Ioble 8.2 : Conjoinl ExperlmenlolAttrlbutes ond Attribute levels

AIIiibUte level5
Attribute Low Moderote Htgn
Pnce $s60 $6Es $77?
ln-flight Service Low Medium High
Number of Stops 2 Stops I Stop Non-5top
on-time /o% E57o ?5%
Performonce
Flyer Progrom NO Yes
Corrier Country Mexco US Conodo'

JOpOn Swlzenond (-onooo
Moloysio New conodo
Teolonci
singopore s. Atrico conodo
5porn 9. EnTqtn Conodo
tUS is substituted for Canada in the American sample and Mexico
is substituted for Canada in the Mexican sample.
We employ o full-profile, moin effects presentotion method to oir troveler subjecis.

ottribute levelcombinotions presented in the scenorios ore determined
The specific
bosed on o froctionolfoctorioldesign yielding l6 combinotions (Cochron ond Cox
1957). Orthogonol onoys ore used to determine the oppropriote combinotions
necessory for effectively estimoting moin effects. As mentioned eorlier four hold-
out scenorios ore used to test the predictive volidity of the conjoint model. As
well, o hold-out somple of Conodion oir trovelers from the severol oirporis ore used
to compore octuol ond predicted volues of the dependent vorioble. lndividuol
rotings of the experimentol scenorios ore bosed on o nine-point preference scole
ond serve os the dependeni vorioble while the six ottribute levels ore effect coded
(1,0, -l) independent voriobles representing the six flight-specific ottributes. OLS
regression is employed to estimote individuol os well os oggregote port-worth
coefficients ossocioted with eoch ottribute level (i.e.,,low, medium, ond high price;
365
CHAPTER VIII
low medium ond high service, etc.). Our procedures ore commonly opplied in
studying morketing phenomeno (Hoir onderson, Tothom ond Block I995; Green
ond Srinivoson 1978; Churchill 1999).
Typicolly, the disoggregote opprooch is used to interpret conjoint results.

However on oggregote onolysis will be conducted since our study focuses on
volues of the notionol bios ottribute to determine the extent of consumer bios
omong oirline porticiponts. The oggregote opprooch hos been supported when
the purpose is to understond ond predict oggregote behovior (Hoir et. ol., 1995).
Our primory purpose in the onolysis is to understond oggregote preferences for
own-country oirline rother thon to predict individuol oirline choices bosed on these
preferences.
Service COO Cue. ln the study, the Service COO cue is defined os the country
in which the oirline is domiciled ond is comprised of: o home country corrier ond
two foreign corriers included in o hypotheticoltrip thot is presented to respondents
in o scenorio. ln order to test for the existence of o service COO effect, five
different combinotions of countries ore included os stimuli in the conjoini scenorios.
Specificolly, of the opproximotely 400 respondents interviewed ot eoch collection
site, one-fifth of study respondents received conjoint scenorios thot required
evoluotions between Conodion, Mexicon ond US corriers. Another one-fifth
completed exercises where Jopon, Switzerlond ond Conodo were represented.
One-fifth of the respondents were presented with scenorios including New Zeolond,
Moloysio ond Conodo. One-fifth viewed Greot Britoin, Spoin ond Conodo. Finolly,
one-fifth evoluoted scenorios thot included Singopore, South Africo ond Conodo
os the oirline options. Thus, eoch of the five combinotions is equolly distributed
omong respondents in eoch of the somple sites in Conodo ond the US The inclusion
of eleven different country-of-corrier stimuli (ten foreign countries ond on own-
country conier) in the conjoint onolysis provides the obility to determine whether
positive or negotive Service COO bios exisis when choosing between domestic
ond foreign oirlines (the bosis forhypofhesis I). Furthermore. onolyzing the results
occording to whether ihe conier olternotives were oirlines from English-longuoge
or non-English-longuoge countries ollows us to determine whether ony bioses thot
exist in the doto re due to culturol dissimilorities (the bosis for testing hypothesis 2).
366
Sampling Design
As mentioned in the prior section, doto were collected of sites in Conodo ond
the US-Conodo troveler doto were collected in Holifox, Montreol, Quebec City,
Winnipeg, Colgory ond Voncouver. Somples of US respondents were collected
in Seottle, Denvet Phoenix, Birminghom, Columbus ond Syrocuse. All Mexicon
interviews were collected in Houston os it serves os o mojor gotewoy for Mexicon
trovelers coming into the US A convenience somple design wos employed to select
respondents ond odminister the conjoint instrument. Eoch odministrotion required
opproximolely 17 minutesto complete. The goolwos to collect 400 interviews from
eoch site, olthough in severol coses slightly less thon 400 people were interviews.
A totol of 4,701 (2,244 for the US, 1,855 from Conodo ond 622 from Mexico) oir
trovelers porticipoted in the conjoint exercise ond follow-up survey. A purposive
somple design wos employed to identify ond collect informotion from the somple
units. Bosed on Conodion oir iroveler stotistics, interviewers ottempted to bolonce
the somple occording to gender oge, ond deporture times ond doys. lnterviewers
were instructed to rondomly select possengers from the porticipoting oirports bosed
on seot locotions within deporture gote oreos. Eoch selected trovelerwos screened
in terms of I ) Conodion citizenship, 2) locol residency, 3) gender 4) dominont
longuoge spoken ond 5) oge of troveler (interviewers ottempted to bolonce the
somple oge distribution with the historicol oge profile for Conodion oir trovelers in
generol). The questionnoire wos tronsloted from English into French for porticiponts
whose dominont longuoge wos French. A double-bock tronslotion method wos
employed to ossure occurocy in the tronsloted items. We interviewed only citizens
from eoch of the locol oreos in order to refleci the demogrophic chorocteristics of
the populotion in eoch city somple.
367
CHAPTERVIII
Results
Model Validation and Reliability
An odditive composition rule is presumed to operote in the oir trovel populotion.
Thot is, trovelers ore presumed to simply "odd up" the volues of eoch ottribute (the
port-worth estimotes) to gei the totol preference volue for o given combinotion
of ottributes. Furthermore, we ore treoting the relotionships omong levels of
on ottribute os lineor. Preliminory tests indicoted thot o lineor relotionship exists
omong the levels of oll price ond service ottributes. For exomple, with respect to
the price ottribute, high prices reflect lower port-worth volues thon medium prices
ond medium prices incuned lower port-worth volues thon low prices. Thus, port-
worth estimotes ore inversely reloted to price levels. An opposite relotionship is
observed for the service ottributes (in-flight service, number of stops ond on-time
performonce): service levels ond pori-worth estimotes ore positively reloted ocross
ollservice ottributes.
Five woves of pre-tests confirmed thot respondents recognized the relevonce

of eoch ottribute in the conjoint exercise ond distinguished between the levels of
eoch ottribute. Preliminory onolyses demonstroted thot subjects identify 9560 os
the low pricg, $685 the moderote level price, ond 9779 os the high price. rn-flight
services, defined os low, moderote ond high, were successfully confirmed os well.
Respondents were completely in ogreement thot the number of stops ond on-time
performonce levels were oppropriotely identified os low, medium ond high.
ln designing the study, we wonted to ossure occurocy in the estimoted

models ot eoch city site. For the oggregote onolysis, therefore, we used o holdout
somple of respondents of eoch regionoloirport to ossess predictive occurocy. The
correlotion coefficients meosuring the reloiionship between octuolond predicted
preference rotings exceeded .90 (p<.01) ocross oll somple sites. The results ore
strong indicotions of ihe conjoint estimoting models predictive occurocy.
Sample Repre sentativeness.

The somple chorocteristics ore reported Age ond gender rotios ocross
in Toble 8.3.
the three country somples ore compotible with populotion proportions reported
368
in eorlier studies (Bruning 1997). Mexicon porticiponts were slightly younger ond
somewhot less fomilior with oirline trovel compored to Conodion ond Americon
trovelers. Conodion ond Americon respondent somples were quite similor with
regord to troveler oge, fomiliority ond usoge (overoge number of trips token per
yeor). A stotisticolly significont difference, however wos observed in gender split-
the proportion of Conodion moles wos higher thon the proportion of Americon
moles. considering oll foctors, however, the somples ore quite comporoble ond
conform closely to overoge volues reported in previous reseorch (Bruning 19971.
Ioble 8.3 : Descriptive Stotistics for Selected froveler Voriobles
Variable Canada US Mexico

Age 44% 42% 39%
Gender
Male 62% 53% 60%
Female 38% 47% 40%
amiliarity 4.9 5.0 3.2
Average Trips
Domestic 3 5 0
International 1 1 1
Importance of Flight Attributes

Respondents from the three countries differed in terms of the relotive importonce
ploced on eoch of the six flight ottributes. Toble 8.4 reports the meon importonce
figures for eoch country somple. Conodion trovelers ploce equolweight on price,
service ond number of stops, whereos US ond Mexicon irovelers distinguish between
them. Americons ploce greoter importonce on Price ond Number of Stops, ond
less importonce on Service, Mileoge Progroms ond Service COO Cue. Mexicons
volue Service ond On-Time Performonce obove Price ond Number of Stops. Like
Conodions, both Mexicons ond Americons volue Mileoge Progroms ond the Service
COO Cue significonily less thon Price, Service ond Number of Stops.
369
CHAPTER VIII
Toble 8.4 : Relollve lmporlonce of Six Flight Attributes:

Conodion, US ond Mexlcon Somples
Attribute Cana.da US Mexico

Price 24% 29% t8%
Service 25% 20% 28%
Number of Stops 26% 26% 20%
Jn-Time
t4% tt% 28%
Performance
Mileage Program s% 6% 2%
Country of Carrier 6% 7% 4%
Adj. R-square .404 .4t4 .363
SEE 1.677 1.787 1.956
n I 855 2244 602
The summory stotistics for the regression onolyses reported in Toble 8.4 ore neorly
identicol for the three somples. Meosures of goodness of fii (i.e.,, odjusted R2 volues)
center oround .400, ond stondord errors of the estimotes (SEE) ore respectobly
low ond consistent ocross the three country somples. The slightly lorger SEE for
the Mexicon somple is likely due to it hoving o smoller somple size compored to
Conodion ond Americon somples. ln brief, the diognostic indicotors suggest o
consistent ond occurote modeling of the conjoini relotionships hos occurred.
Service COO Effect Comparisons

Jopon ond Switzerlqnd. Toble 8.5 reports port-worth volues forthe Conodion,
Mexicon, ond US somples for the sub-somples presented the conjoint exercise with
Jopon ond Switzerlond os foreign conier choices respondents evoluoted olong
with Conodion, Mexicon ond US oir coniers.
370
Ioble 8.5: Service COO Effects:

conodo, uS ond Mexico compored to Jopon ond Switzertond
Canada US Vlexico
*.
Iapan -.290 -.1 7g- -.161-
Switzerland .037 -.079 -.044
Janada .230**
JS .245**
Mexico 119.*
**
significant atp < 0.01 level.
significant at p < 0.05 level.
As is evident in Toble 8.5, Conodions differ from Americons ond Mexicons in their
ossessments of Joponese ond Swiss oirlines. When presented with the option of
flying with o Joponese corrie[ Conodion respondents' trip ossessments chonged
by -.280 on o nine-point scole, indicoting o loss of perceived benefit flying with o
Joponese oirline. Conodion utility levels, howeve6 were not significonfly offected
when the corrier wos ideniified os the corrier in the scenorio (.032); however,
Swiss
they were positively offected when the option wos to fly with o Conodion corrier
(.230). Americon respondents responded negotively io the Joponese option
(-.178) (olthough they were less negotive thon the Conodion's), thus indicoting o
significont drop in utility when the Joponese oirline wos the chosen corier in the
scenorio. Unlike the Conodions, however Americon respondents were indifferent
to the Swiss conier (-.079)-their utility wos not enhonced or reduced with it os the
identified corrier in the scenorio. Likewise, Mexicons experienced o loss in utility
with the Joponese corrier (-.161), were indifferent to the Swiss corrier (-.044), ond
experienced o positive effect when the Mexicon corrier wos presenied in the
scenorios (.1,l8). ln summory, the results provide support for hypothesis l, which
stotes thot o positive Service COO effect exists. Hypothesis 2 wos olso supported-
trovelers will prefer oirlines from countries more culturolly similor to their own. ln this
cose, the Swiss corrier received higher ossessments thon the Joponese corrier which
is from o more dissimilor country ond whose presence in the scenorios octuolly led
to reduced ossessments for oll respondents.
371
CHAPTER VIII
Moloyslo ond New Zeolond. Toble 8.6 reports the effects upon respondent
utility functions when the conjoint scenorios included Moloysio ond New Zeolond
os foreign corrier options. The pottern is very similor to thot reported for Jopon
ond Swiss oirlines. The Conodion somple reported the greotest disutility (-.4571for
scenorios depicting them troveling with o Moloysion corrier ond o substoniiolly
higher utility for scenorios with the Conodion conier os the option (.3421. Conodions
were indifferent obout flying with on oirline from New Zeolond (.073). Similor to the
Conodions, Americon ond Mexicon trovelers reported lower ossessments (-.139
ond -.230, respectively) with ihe oirline from Moloysio. Americons ond Mexicons
olso demonstroted their opprovol of scenorios contoining eoch of their own-
country's oirlines (.501 ond .223, respectively). Although Americons regorded
the New Zeolond oirline quite positively (.230), Conodions ond Mexicons were
indifferent. These findings provide support for both study hypotheses: trovelers
'l)
indicote o significont positive Service COO effect (hypothesis ond they indicote
o significontly lower evoluotion of the oirline most culturolly distont (hypothesis 2).
loble 8.6 : Service COO Effects:

Conodo, US ond Mexico compored to Moloysio ond New Zeolond
Canada US Mexico
Malaysia -.45',7'* -.r39 -.230.*
New Zealand .073 -.482'* .006
Janada .342*'
US .501"
Mexico .223*.
*" significantatp< 0.01 level.

' signiflcant at p < 0.05 level
Singopore ond Soulh Afrlco. Toble 8.7 identifies the port-worth ottribute volues
ossocioted with trovel scenorios thoi included oirlines from Singopore ond South
Africo. ln the Toble, the doto demonstrote thot Conodions ond Americons lowered
their service ossessments
372
ond -.355, respectively) when the Singopore oirline wos presented. At

(-.351
the some time, both groups indicoted indifference with respect to the South
Africon oirline (-.013 ond.0l4, respectively) ond provided their highest scenorio
ossessments when the oirline wos from their own country 1.419 for Conodions ond
.345 for Americons). Mexicons were indifferent towords the Singopore conier
ond they were equolly indifferent towords iheir own-country conier os well. Yet
they disployed o significont but minor drop in ossessments when the South Africon
oirline wos evident. Thus, hypotheses I ond 2 ore supported by the conodion ond
Americon doto, but do not receive support from the Mexicon somple-oll Mexicon
port-worth coefficients were either insignificont or weokly significont.
Ioble 8.7 Service COO Effecis:
Cqnodo, US qnd Mexico compored to Singopore ond South Africo
Canada US Mexico
Singapore -.361- -.356.. .084
S. Africa -.013 .014 -. I 16-
Janada .4lg*"
US .345'*
Mexico .003
.. <
atp 0.01 level.
- significant
significant at p < 0.05 level
Spoin ond Greol Briloin. Respondents from ollthree countries reported reductions
in ossessments with scenorios thot included the Sponish oirline. The findings in Toble
8.8 report thot Conodions' ossessments declined the greotest (-.340), followed
by Americons' (-.lll) ond Mexicons' (-.107). Whenever the British corrier wos
presented in ihe scenorios, however Conodion ossessments improved (.125), os
did the Mexicon's (.1O7); however, Americon evoluotions fell (-.179). Conodion
ossessments were by for highest when o Conodion corrier wos presented (.345),
Americons olso roted their own-corrier the highest of the three oirlines (.2941;
howeve[ Mexicons, on the other hond, were indifferent between hoving their own-
373
CHAPTER VIII
country corier or o foreign corrier included in the scenorios (.015). The results thus
support hypotheses I but not hypothesis 2.
Ioble 8.8 Service COO Effects:
Conodo, US ond Mexico compored to Spoin ond Greot Briloin
Canada US Mexico
m -.340.. -.1 1 1- -.t07
. Britain .126. -.179** .t07
.345.*
S .294..
xtco .015
**
- significant at p < 0.05 level
Conodo, US ond Mexico. Toble 8.9 presents Service COO volues ossocioted
with scenorios presenting Conodion, Mexicon ond Americon oirlines-Conodion
irovelersevoluotedscenorioswith foreign coniersfrom the US ond Mexico,Americons
ossessed scenorios with Conodion ond Mexicon foreign oirlines ond Mexicons
evoluoted scenorios with Conodion ond Americon oir corriers. The evidence
presented in Toble 8.9 points out thot Conodions incur the highest Service COO
effect of the three groups (.421), the Mexicons the second highest (.312), ond the
Americons the lowest (.267). lt olso indicotes Conodions lowered their ossessments
for scenorios with US ond Mexicon corriers, while Mexicons' ossessments were
lowest when o Conodion (-.107) or o US (-.205) corrier wos included. Americon
ossessments, however fell when o Mexicon corrier wos the oirline described in ihe
scenorio (-.3421, ond were neutrol when o Conodion oirline wos described (.057).
The results, therefore, ore quite mixed. Hypothesis one is supported for oll three
groups; however the second hypothesis, which deols with the culturol proximity
thesis, is supported with the Mexicon doto, ond only portiolly supported with the
Americon ond Conodion doto. Mexicons respond negotively in their ossessments
when o foreign corrier from o culturolly distinct society is included (-.205 for the
Americon oirline ond -.107 for the Conodion oirline). The Americons, on ihe other
374
hond, indicote more negotive ossessments of the Mexicon corrier (-.3421, which is
consistent with the culturol proximity hypothesis, but ore neutrol with regords to the
Conodion corrier, which is weokly supportive of the hypothesis. We would expect
o positive significont Service COO effect in the Americons evoluoting Conodion
corrier cose. Conodions, on the other hond, lend support to the culturol proximity
hypothesis when the Mexicon corrier is ideniified, but rother thon ossess Americon
corrier scenorios in o positive light. they in foct reduce their ossessments of scenorios
with Americon corriers.
Toble 8.9 Service COO Effects:

Conodo, US ond Mexico
Canada US Mexico
rnada .421.. .057 -.I07.
s -.204'* .267** -.205..
exico -.186** -.342.. .312*.
..
.
significant at p < 0.05 level
Average Service COO Effects and Cultural Similarity

The results presented in Tobles 8.5 through 8.9 illustrote differences in service COO
effects for somples from eoch of the three countries-Conodo, the US ond Mexico.
ln Toble I 0, I hove compiled overoge Service COO Effect scores occording to culturol
sub-groupings-Asion. English-speoking, Sponish-speoking, otherond own-country.

The sub-groupings ore comprised of the following countries'oirlines: Asion-Jopon,
singopore ond Moloysio; English-speoking-Greot Britoin, New Zeolond, conodo,
the US ond South Africo; Sponish-speoking-Spoin ond Mexico, Other-switzerlond
ond own-country-conodo, the US ond Mexico. Referring to Toble 8.10, when
Conodions evoluoted scenorios contoining o Conodion corrier overoge Service
COO effects were highest, which lends strong support for hypothesis one. Toble 8.1O
olso shows thot Conodions, on overoge, significontly reduced their trip scenorio
ossessments whenever oirlines were from Asion (-.356) or Sponish-speoking (-.1g0)
countries. According to Hofstede (2001), Conodo differs from eoch of the countries
375
CHAPTER VIII
contoined in the Asion ond Sponish-longuoge sub-groups olong his five culturol
dimensions. Thus, the differences reported in Toble 8.10 comporing Service COO
Effects for oirlines from own-, Asion ond Sponish longuoge countries ore significont,
which supports the second study hypothesis the "culturol proximity" hypothesis.
Conodions did not indicoie o strong positive Service COO bios towords oirlines
from English-longuoge countries; however the effect for English-longuoge bosed
oirlines is significontly more positive thon the effect for Asions or Sponish-longuoge
oirlines. Americons disployed o Service COO Effect pottern neorly identicolto the
Conodions, except the Asion ond Own-Couniry bioses ore less pronounced l-.224
versus -.356 for the Conodions in terms of the Asion sub-group ond .330 versus .445
for the Own-Country meosure). Mexicon respondents were considerobly different
from both other country somples in their responses to the ethnic groups. They
were much less biosed ogoinst Asion ond Sponish-longuoge oirlines, slightly more
negotive with regords to EnglishJonguoge oirlines ond substontiolly lower in their
ossessment of their country oirline. Although both hypotheses one ond two ore
supported by results from oll three country somples, Mexicons were substontiolly
lower in overoll bios towords oirlines from culturolly dissimilor countries compored
to Conodions ond Americons, ond disployed less bios towords their own country's
conier relotive to the other two somple groups.
Ioble 8.10: Averoge Service COO Effects by Counlry Somple
ond CulturolGroup
Cultural Group Canadian American Mexican

A,sian -.366 -.224 .102
English-language -.002 .074 -.108
Spanish-language -.180 -.227 -.r07
f,ther .037 -.079 -.044
)wn-Country .445 .330 .t34
376
Discussion And Conclusions

Doto from ihe three country somples strongly support the existence of o Service
COO Effect for oir trovelers in the three countries studied in this chopter which
is quite consistent with the literoture deoling with Product COO Effects. Findings
point to o significont effect in recreotion ond leisure octivities, retoil, medicol ond
legol services, bonking, public services, insuronce ond oir trovel. Furthermore,
theoreticolorgumenis hove been offered thot suggesl the effect moy be stronger
for services thon it is for products becouse of the greoter role relotionship's ploy in
sotisfying customer service quolity demonds. Bosed on the type of service-seorch,
experience or credence the Service COO Effect moy be more or less prominent.
Seorchtype services ore likely to require less informotion, less contoct ond moy
ollow the buyer to depend less on the service. Hence, with fewer demonds in the
relotionship, the country of origin cue becomes less importont for buyers ond sellers.
As informotion requirements increose, or os service quoliiy becomes more difficult
to determine through direct observotion, testing, or through word-of-mouth, the
importonce of the buyer-seller service relotionship heightens ond, consequently,
the culturol bockgrounds ond orientotions of the porties toke on greoter meoning.
The "culturol proximity'' hypothesis predicts buyers will seek out ond prefer to deol
with service suppliers thot ore similor to them, thot communicote effectively with
them, ond with whom ihey con trust. Suppliers whose cultures ore dissimilor to the
buyers'ore less likely io develop the some degree of trusi ond commitment, ond
will likely receive lower service performonce ossessments. Thus, my model of the
Service COO Effect is bosed on ihe notion thot higher service rotings ore o result of
the extent of similority between buyer's ond seller's cultures os well os the intrinsic
ottribute volues buyers ossocioted with the services ond the service provider.
The study hypotheses were tested with doto from three different populotions-
Conodion, Americon ond Mexicon oir trovelers. An extensive set of steps involving
doto collection, doto cleonsing, processing ond onolysis led to the conclusions
reported in the eorlier section. I relied on conjoint onolysis to isolote the Service
COO Effects os well os the size ond signs of the intrinsic ottribute volues. A conjoint
exercise requires respondents to moke judgments obout trovel service options
377
CHAPTER VIII
bosed on the trode-off between intrinsic ond extrinsic ottributes os presented in the
vorious scenorios (i.e.,, price, services, on-time performonce, number of stops, ond
oir mileoge progrom plus the origin of the oidine provider). Using o combinoiion of
trovel scenorios ond five sets of oirlines from ten countries (certoin corriers thot were
culturolly similor ond others quite dissimilorwith regord to the respondents from the
three populotions), wos oble to extroct the relotive effects of eoch of the intrinsic
I
ottributes os wellos the Service coo Effeci-the oirline,s home country.
The results from the conjoint experiment supported both study hypotheses-the
Service COO Effect is positive ond stotisticolly significont; ond, furthermore, culturol
similorities between troveler ond service provider influence the size of the Service
COo Effect. Not only ore consumers biosed in fovor of their own county's service
suppliers, they olso oppeor to tronsfer positive ottitudes to suppliers from countries
more culturollysimilorto them rotherthon to thosewho ore more dissimilor. Secondly,
olthough the bios pottern oppeors to be the some ocross the study somples, the
obsolute mognitude of the effect differs morkedly for specific country poirings. For
exomple, Conodions were cleorly supportive of oll English-longuoge oirlines except
the US conier. A similor pottern wos observed for Americon trovelers, olthough
Americons did not reduce service ossessments whenever o Conodion oirline wos
presented in the scenorios-unlike Conodion ossessments when US
oirlines were
presented. Perhops it is onimosity (Klein et ol. 1998) or the perceived existence
of
o culturol threot by o lorge neighbor (Sumner 1906; LeVine ond Compbell l9Z2)
thot leods Conodions to think less of Americon providers; nonetheless, ihe findings
suggest severol moderotors ond mediotors moy impoct the Service COO Effect
before its essence is tronsfened to intentions ond behoviors. Eorlier I discussed
the informotionol ond relotionol chorocteristics of services os o cotegory (e.g.,,
informotion requirements, the obility to confirm intrinsic ottribute volues, sociol
occeptonce, etc.) ond suggested thot services with tronsporent ottributes thot do
not require lorge informotion investments, or services thot do not threoten one,s
sociol stotus or group norms, moy incur o Service COO Effect thot is relotively
low-thot is, low relotive to less tronsporent, higher informotion cost ond sociolly
importont services.
378
The generolizoiions from the study's findings hove imporiont implicotions for
Service COO reseorchers os well os procticing service providers. First, the results
confirm the existence of o positive Service COO Effect; however they olso imply
thot the specific culturol mix between consumers ond providers is importont
in determining the size of the effect. Doto reported in Tobles 8.5 through 8.,l0
refleci severol relevoni potterns. First, Conodions ond Americons disployed strong
negotive Service COO Effects with respect to Asion ond Sponish-longuoge oirlines.
Mexicon respondents, on the other hond, while disploying o positive Service COO
Effect, were much more occepiing of both Joponese ond Sponish-longuoge
oirlines. ln foct, their Service COO Effect volues generolly were significontly lower
for Asion ond SponishJonguoge oirlines compored to Conodions or Americons.
Given differences between Conodo, the ond Mexico one moy conclude the
US
existence of on economic development bios. ls the Service COO bios reloted

to the degree of economic development of the provider's country os Wong
ond Lomb (1983) hove orgued in the cose of products? The doto suggest thot
economic development is not the criticol focior. ln terms of intrinsic ottributes,
oll three somples identified Price ond Service-or some form of service-os the
most relevont criterio they use to evoluote oirline services. Therefore, respondents
ore generol in ogreement obout the dominont foctors importont in ossessing on
oirline. The size of the Service COO Effect ocross the three somples wos quite
negotive for Asion corriers, regordless of their stoge of development. Joponese
ond Singoporeon oirlines received os low o roting from Americon ond Conodion
trovelers os Moloysio. Also, South Africo's oirline wos roted higher thon Jopon's,
Singopore's ond Spoin's. in spite of its lower economic development stoge. The foct
thot Conodions, Americons ond Mexicons gove low ossessments to countries from
both developed ond developing countries suggests thot development is not the
criticolfoctor exploining voriotions in Service COO Effects. lt is interesting thot such
o negotive perception exists for the Asion corriers os both Jopon ond Singopore
ore very prosperous, well developed societies with highly developed oir. Moloysio,
while perhops still in the eorly-to-mid stoges of development, nonetheless, hos
goined wide spreod respect for its economic "mirocle" ond ropid progress over
the post two decodes. Furthermore, its notionol oirline hos gornered respect os o
379
CHAPTER VIII
volue-bosed conier ond o vitol member of one of the prominent internotionol oir
ollionces. Thus, the low evoluotion ossigned to Asion coriers from the three NAFTA
somples (porticulorly from Conodions ond Americons) is likely o reflection of sociol
distonce ond culturol bioses rother thon inferior flight-specific ottributes or country
stoge of economic development.
This study hos dromotized thot the Service COO Effeci is os prominent in services
os in products-perhops even more prominent. Reseorchers ore odvised to
seorch for moderoting ond medioting foctors thot offect biosed perceptions
ond ottitudes thot leod to consumer judgments ond decisions. Service providers
should understond the ontecedents to forming sound relotionships. The literoture in
relotionship morketing, which hos been tronsloted into the populor monogement
press, is quite useful in describing woys monogers con enhonce service quolity
ond performonce. Most importontly, o vitol lesson from the relotionship morketing
literoture is thot service connecfions between buyers ond sellers ore built on trust,
commitment ond forms of bonding thot help nurture the relotionship through
time. This study reinforces on importont point: enhoncing fomiliority by providing
informotion ond encouroging leorning in o service relotionship greotly reduces the
likelihood of incurring o negotive Service COO Effect. lt olso points to the importonce
ployed by group-bosed ottitudes ond evoluoiive processes thot influence the
noture ond size of the Service COO Effect. Reseorchers ond service providers will
goin o cleorer understonding of the Service COO Effect by understonding similorities
ond differences between the cultures of service providers ond their customers.
380
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387
Chopter Nine
CT]STOMER SERVICE
CENTERS ARE
LIKE TAXI CABS:
COUNTRY_OF-ORIGIN AND
CONSI]MER PERCEPTIONS OF
FOREIGN CI]STOMER SERVICE
CENTERS
CHAPTER IX
390
Customer Service Centers Are LikeThxi Cabs
Country-of-Origin and Consumer Perceptions of
Foreign Customer Service Centers
Francis M. Ulgado*
Moonkyu Lee**
Introduction
ln the United Stotes, colling customer
service is often like riding o ioxicob. When
you toke o toxi cob in o mojor US city such
os New York, it is likely thoi you connot help
but get the feeling thot you ore overseos
since the cob driveris usuollyfrom onother
country such os Nigerio or Pokiston. As
o result, you ore exposed to o different
culture ond o foreign occent. Similorly,
when on Americon consumer colls o toll-
free customer service number for o credit
cord bolonce inquiry or to check on o
moil-order stotus, it is not unusuol thot
one will get o customer service ogent in
Mumboi or in Monilo, olso being exposed
to onother culture ond o foreign occent.
how the foreign locotion
This illustrotes
of customer service centers (CSCs) hos
ropidly increosed in populority in recent
r Froncls M. Ulgodo, Assoclole Professor of
lnlernollonql Morkeling, Georglo lnslilule yeors. Specificolly, componies bosed in
of lechnology, College of Monogemenl,
developed countries such os the United
Atlqntq, U. S. A.
r*Moonkyu [ee, Professor of Morkellng, Stotes or the United Kingdom, hove
Yonsei Universlty, School of Business, Seou!,
Koreq. estoblished their CSCs in overseos less-
39.|
CHAPTER IX
developed countries such os lndio ond the Philippines, overwhelmingly due to

lower lobor costs. Vorious sources hove noted such o trend ond expect its growth
to continue over the next decode (A.L Keorney 2005; Betts, 2006; McCorthy 2OO2;
Powell2005).
Howevel such populority ond growth is not without its problems or concerns. For
instonce, while mony finonciol institutions ond other service firms look to extend the
omount of work corried out in foreign customer service centers ond other business
process operotions (BPOs), the lotest reseorch from monogement consulting
firm DiomondCluster lnternofionol suggests thot the number of firms premoturely
terminoting confrocts with foreign service providers hos doubled to fifty one percent
while ihe number of componies sotisfied with their foreign providers hos declined
from seventy nine percent to sixty two percent (Frouenheim, 2005). Meonwhile,
onother recent survey by Boin & Compony found thot while o significont omount of
multinotionol corporotions (MNCs) continue to locote customer services overseos,
olmost fifty percent of the respondents indicoted thot their internotionol experience
did not meet their expectotions (Ihe Economisf, 2005). Additionol reseorch hos
olso found thot overseos services con result in o bod customer service experience
ond perception, costing the compony brond equity ond goodwill (Morkefing
News,2004l.
of 2004, credit cord giont Copitol

Therefore, it is not surprising thot in Morch
One Finonciol Corporofion terminoted its controct with o New Delhi-bosed firm
to provide o 250-seot customer service coll center in lndio (Morketing News,
2004), while Delllnc. tronsferred its lndion customer service coll center suppori
for corporote business to Texos, lowo ond Tennessee in 2003 (Newsweek,2004).
Genero/ Electric hos been reported intending to sell its $400 million onnuol revenue
lndio-bosed coll-center business (King, 2005). Americon cusfomers simply hove
not been getting the type of "quolity" seryice they were used to or expected. A
recent study done by Opinion Reseorch Corporotion found thot sixty-nine percent
of Americons would be less likely to do business with o compony ofter o negotive
customer service coll center experience, while over sixiy percent of respondents
expressed dissotisfoction with their most recent experience with on overseos CSC
392
ogent (BusinessWeek, 2006). While consumers olreody ossociote higher

levels of
perceived risk with services (Zeithoml ond Bitner 19?6), much of
the quolity problems ond issues involved in these two trends ore rooted
in the odded risk ossocioted with internotionol ond hence cross-culturol
services. Such issues hove ignited continued debote on the benefits ond
costs ossocioted with foreign CSCs, from the perspective of the firm ond from
the perspective of the involved economies, porticulorly the United Stotes.
o few studies so for (Sinho ond Terdimon,2002; Buelen, Von
To this extent, only
Fenemo ond Currie, 2005) hove exomined the link between service ond service
providerquolity in the foreign locotion experience, ond the cross-culturoldimensions
of business process operotions (BPOs) delivery ond processes risk. For exomple,
Sinho ond Terdimon 12002) identified ond exomined the cross-culturolcotegories of
notionolculture,longuoge ond communicotions, securiiy ond privocy. knowledge
tronsfer; business processes ond chonge monogement, os foctors thot con influence
the outcome of the foreign operotions experience for the domestic firm. Even less
studied, o significont port of this debote comes from the perspective of the US
consumer ond the impoct of the foreign locotion of services on consumer behovior
ond perception. ln on exominotion of foreign CSCs, the results of the study done
by Kelly Services ond Purdue University confirmed thot the customer service coll
center experience hos on importont impoct on how Americon consumers perceive
o compony, ond how likely they ore to repurchose from US componies thot situote
their customer service colls in foreign locotions (Kelly Services, 2004).
The purpose of this chopteris threefold: (l ) to identifycountry-of-origin (COO) issues

ond concerns involved in the foreign locotion of customer service centers or CSCs
from o consumer's perspective, (b) to exomine the chorocteristics of products or
services ond countries which would offect consumer perceptions ond evoluotions
of foreign CSCs ond (c) to develop monogement strotegies to overcome potentiol
perceptuol problems which moy orise from the foreign locotion of CSCs.
s93
CHAPTER IX
The Country-Of-Origin Phenomenon

With recent emerging problems pertoining to the decline in compony sotisfoction
with their foreign customer services, the resulting coses of firms' reversol of overseos
service operotions locotions, ond the growing issue of the effects on customer
behovior; there is undoubtedly o need for further study on the motter, porticulorly
from the perspective of the end-user consumer ond customer perception. This
chopter seeks to help meet this need by exomining the effects of the foreign
locotion of customer services, customer service coll centers in porticulor on
customer perception ond behovior. Specificolly, our study exomines the influence
of country-of-origin (COO) foctors, olong with produci/service ond consumer
specifi c chorocteristics.
chopter ossumes the notion thot the notionolity ossocioted with consumer
This
products ond services, or their COO, is deemed to remoin o significont foctor in
consumer perception ond buying behovior (Al-Suloiti ond Boker; 1998; De Wet,
Pothos ond De wet,200l; Peterson ond Jolibert, 1gg5; verlegh ond steenkomp,
1999). lnternotionol morketing literoture offers substontiolevidence thot customers
evoluote products or services bosed on the country where they ore produced
or ossocioted with, ond thoi under specific conditions, consumers moy exhibit o
preference for domesticolly mode olternotives (Douglos ond Nijssen ,2004; Gronzin
ond olsen. 1998; Hon, 1988; Shimp ond Shormo,1987). A number of coo studies
support the notion thot consumers hove diverse perceptions obout products or
services mode in or ossocioted with foreign couniries, ond thot these perceptions
offect their behovior bosed on stereotyped notionol imoges of the country of
ossociotion. Extensive empiricol reseorch hos been done in this oreo throughout
the post twenty yeors (e.9.,, Bilkey ond Nes, 1982; lnch ond McBrid e, 2004; Koynok
ond Koro, 2oo2; Popodopoulous ond Heslop, 2oo2: Peterson ond Joliben, 1g9s:
Ulgodo ond Lee, 1993; Verlegh ond Steenkomp , 19gg).
While the mojority of COO reseorch hos involved products, the opplicotion of
COO to services hos been less. Nevertheless, Jovolgi, Cutler ond Winons (2001)
conclude thot COO does motter os well with regord to services. A hondful of
studies hove focused on specific types of services, such os legol services, trovel,
394
export ossistonce, ophiholmologist services, oirlines ond retoiling (Bruning, 1997;

Honison-Wolker 1995; Kroft ond Chung, 1992; Loscu ond Giese, 1995; Oflr ond
Lehmon, 1986; Shoffer ond O'Horo, 1995). To dote, no study hos opplied COO to
customer support services such os CSCs.
It is from this streom of literoture thot we opply the concept of COO to the cose
of the foreign locotion of CSCs ond develop ihe following rotionole to determine its
effects on the perception ond behovior of US customers. We posit thot in generol,
the COO of the CSC offectsthe perception ond ottitudesof theAmericon consumer.
More specificolly, however, we look into the deierminonts of this effect in terms of
levelof culturolsimilority, product cotegory ond economic development. We olso
consider the possible moderoting foctors to the COO effect by including other
extrinsic product cues such os brond sirength.
Research Rationale
To ochieve the reseorch gools described in the introduction section of this chopter
o field survey wos conducted. The survey wos composed of the questions exploring
potentiol issues ond concerns involved in the foreign locotion of customer service
coll centers or CSCs from o consumer's perspective. These questions in the context
of the reseorch methodology will be exploined loter. Specificolly, the survey wos
performed with the following reseorch bockground.
An imporiont country-specific foctor thot con potentiolly influence COO effects

on the consumeris culturolsimilority. Studies hove indicoted ihot customers tend to
prefer products thot come from culturolly similor countries thon from countries thot
ore culturolly dissimilor to the home country (Heslop, Popodopoulos ond Bourke,
I998; Johonsson, Douglos ond Nonoko, 1985; Wong ond Lomb, 1983). Furthermore,
reseorch hos suggested thot culturol fomiliority between o specific COO ond the
home country moy temper ihe negotive effect of consumer ethnocentrism in their
perceptions ond evoluotions (Shormo, Shimp ond Shin, 1995; Wotson ond Wright,
2000). Since we focus on the CSC experience, typicolly involving o one-on-one
verbol relotionship ond personol interoction between o customer ond o service
provider, we support the notion thot longuoge similority ond pronunciotion similority
ore importont components of the overoll culturolcomporison.
395
CHAPTER IX
Moreover, there is evidence thot COO effects vory ocross product or service
cotegories (Joffe ond Nebenzhol,200l ; Jovolgi, Cutlerond Winons,200l ; Koynokond
Covusgil, l9B3; Ulgodo ond Lee, 1993). Most studies of COO effects hove focused
on high-involvement complex products, such os outomobiles ond electronics (e.9.,,
Choo, 1989, 1993; Hon. l9B8; Hon ond Terpstro, 19BB; Mohesworon,1994; Tse ond
Lee, 1993). Others hove looked of the impoct of customers' COO perceptions on
low-involvement less complex products such os clothing or coffee (Ahmed ef o[
2004; Ulgodoond Lee, 1993; Woll, Leifeld ond Heslop, 1991). Li ond Wyer (1994)
concluded thot COO effects on product evoluotion ore more significont in the
purchose for complex high involvement producis, such os outomobiles, electronics
ond white goods. Conversely, for low-involvement bosic products such os food
ond opporel, the purchose decision is less significont. Thus, the influence of COO
in product evoluotion is expecied to be weok due portly to the product's lower
monetory risk (Ahmed et ol,2004). Similorly, for low-involvement products where
the volue for money motters more thon imoge ond quolity, price con be seen os
more influentiol thon COO effects in customers' purchose decisions (Woll, Leifeld
ond Heslop, 1991).
The COO literoture further reveols thot consumer perceptionond evoluotions of

productsond servicescon beinfluenced bythecountryof production orossociotion.
As studies hove suggested thot consumers prefer products from some counfries
over others (Tongberg, 1972; Yoprok, 1978), such preference bios for products
generolly exists ocross levels of economic development of countries, indicoting
their hierorchicol noture (Schooler; l97l; Tongberg, 1972; Wong ond Lomb, 1983).
Specificolly, reseorch hos shown thot country identificotion generolly hos o positive
effect on product evoluotions for some, relotively more developed countries
(Cottin. Joliberi ond Lohnes, 1982; Dorling ond Wood , 1989; Goedeke, I973; Hon
ond Terpstro, l9B8; Popodopoulos, Heslop ond Berocs. I990; Woll ond Heslop,
1986), while it hos o negotive impoct for other; developed countries (Khonno,
less
1985; Krishonkumor, 1974). The level of o country's economic development con be
seen os representotive of o country's overoll obility to monufocture products thot
require o porticulor level of skill ond technology (Verlegh ond Steenkomp. 1999).
396
products or services'
Therefore, o country's obility to produce globolly competitive
embodied in its economic copocity is on informotion cue thot influences customers'
perceptions ond imoge of COO (Lin ond Sternquist, 1994). ln the cose of CSCs' we
introduce the notion thot consumer perception ond evoluotion of customer service
con be significontly offected by the country-of-origin of the foreign locoted CSC,
or the couniry ossocioted with the customer coll center experience. Specificolly,
the level of economic development of the country ossocioied with the csc offects
consumer perception ond evoluotion.
ln oddition to COO, studies hove olso considered other extrinsic cues in o mulii-
cue opprooch to determining their effects on consumer perception (e'g',, Miyozoki'
Grewol ond Goodstein, 2005; Srinivoson, Join ond Sikond, 2003)' Reseorch hos
found thot when odditionol cues ore present, the relotive importonce of coo
on product evoluotion decreoses (Hostok ond Hong, 1991; Johonsson' Douglos
,l985).
ond Nonoko, 1985; Johonsson ond Nebenzhol, One extrinsic cue thot hos
received consideroble focus is brond ond reloted country-of-brond (COB) effects.
The rotionole is thot customers who lock informotion obout the
product moy resort
globol
to the brond nome to infer its quolity (Szybillo ond Jocoby, 19741' ln todoy's
ond
environment, it is not unusuol to find products monufoctured in one country
bronded in onother. Reseorch hos shown ihot o strong brond ond/or COB effect
Weroni'
con outweigh negotive COO effects (Ahmed et ol,2OO4; Choo, Wuhrer ond
2OO5; Cordell, 1993; Jo, Nokomoto ond Nelson, 2003; Tse ond
Gorn, 1993; Ulgodo
ond Lee, 1993). ln the cose of CSCs, the strength of the domestic compony's brond
moy hove o moderoiing influence on possible negotive COO effects coused by its
foreign operotions.
Research Approach
To goin better insights into whot issues ond concerns ore involved in
whoi types
of products or services ossocioted wiih foreign operotions, we incOrpOroted
questionnoire
conesponding questions in severol sections in o survey. One port of the
osked respondents to rote occording to their level of importonce (on o 7-point
Likert
questions
scole), their generol concerns obout locoting CSCs overseos' Specific
oskedoboutcreditcordinformotion/tronsoctionsecurity,communicotiondifficulties,
397
CHAPTER IX
negotive impoct on the domestic economy, performonce of the product

they
were colling obout, generol personol informotion privocy, significont job loss
in the
home country, ottitude+eloted differences due to culturoldifferences,
occurocy of
informotion/responses given by the customer service center, the quolity
of product
or service they hod purchosed, identity theft, product (service) fulfillment
deloys/
errors in processing or delivery, conflict with potriotism, ond the performonce
of the
service they would be colling obout.
Another section of the questionnoire osked the respondents to rote their

level of
ogreement with thirteen stotements regording overseos foreign toll-free
customer
service coll centers. These stotements included "l do not like them
due to their
indecipheroble occents", "They ore fine for providing informotion
but not for octuol
purchoses", "l don't mind, if the brond/compony is reputoble
ond well known,,, ,,lt
would be better if the domestic firm troins the foreign workers better", ,,They
con
be o problem due to culturoldistonce", "lwould not mind it for reloiively
low-cosi
purchoses", "lt's fine, if the purchose is for non-technicol products
or service5r', ,,lt
is not o good ideo for new products from smoll firms",
"lt is OK for purchoses of
products but not services", "lt depends on the economic
development of the foreign
country", "They ore useless becouse they give generic unhelpful informotion,,, ,,lt
isnot good for the overoll domestic economy" ond "l hove no problem
with them
of oll".
ln o third section, respondents were osked obout the likelihood

thot ihey would
switch to o competitor if they found out thot the CSC for the octuol
bronds/
componies thot they cunently use (or would use) wos locoted in lndio.
Their
opinion wos osked for l3 product ond service chorocteristics, nomely
finonciol
ond bonking services, food ond beveroge products, electronics ond opplionce
products, clothing ond opporel stores, computer products
ond service, long
distonce telephone providers, heolthcore services, oirlines, utiliiies (electric, gos,
coble TV, eic.), cellulor phone services, office supplies, cosmetics ond insuronce
services. lndio wos selected for the study becouse it is one of the countries
with o
lower level of economic development omong the five countries
used in the study.
ond it is octuolly one of the fostest growing countries for foreign CSC
businesses.
398
The respondents were odditionolly osked to indicote how they felt obout the
brond ond product (or service) when they reolize during their customer service
experience, thot the customer service center is locoted in o foreign CSC in eoch
of five specified countries (i.e.,, Austrolio, Fronce, lndio, lrelond ond the Philippines)
which voried ocross the dimensions of economic development ond culturol
similority. Respondents were further osked obout their opinion for eoch collcenter
in eoch country under vorying conditions. The situotions were monipuloted ocross
different product/service cotegories (e.g.,, consumer electronics, bonking services,
wireless phone service ond opporel).
The finol section osked for clossificotion of informotion obout the respondent.
Responses from o convenience somple of 242 consumers in o Southeostern United
Stoies urbon oreo were used for this study.
Research Findings
Survey Sample
The survey responses of 242odultswere used forthe study, of whom l20were mole
(49.5 percent) while l22werefemole (50.5 perceni). The oge ronge wos distributed
omong 18-24yeor old (23 percent), 25-34 (45 percent), 35-45 (,l2 percent), 46-55
(16 percent) ond 56-65 (4 percent). A lorge mojority of the respondenis were
well-educoted, hoving ottended o 4-yeor college (87 percent). Furthermore,
eight percent eorned o high school diplomo while two percent finished groduote
school. The occupotionol noture of ihe respondents voried ocross professionol
services ond consumer services (25 ond 20 percent respectively), business services
(20 percent), student (15 percent), technicol products ('10 percent) ond retoil (lO
percent). All respondents resided in o lorge metropoliton oreo of the southeostern
United Stotes.
Analysis oJ&esults
ln port of the survey, respondents were osked to rote the importonce of the issues
ond concerns involved in receiving services from the foreign-bosed CSCs. The
results ore shown in Toble 9.1.
399
CHAPTER IX
Toble 9.1 : Consumer Concerns About Foreign CSCs
Issues Meon. Std. Dev.

Credit cord informotion/tronsoction security 5.83 r.35
Communicotion diffi culties
differences 5.79 r.33
Accurocy of informotion/responses given by the coll center 5.42 1.57
ldentity theft 5.40 1.67
Prooucl/service f ulfl llment
deliverv 5.35 1.47
Personol informotion privocy 5.r0 1.66
Performonce of the service you ore colling obout 5.00 r.55
Quolity of ihe product or service you purchose 4.83 r.65
Attitude+eloted difficulties due to culturol differences 4.80 r.60
Performonce of product you ore colling obout 4.67 1.52
4lllqgotive impoct on your domestic economy 4.61 1.62
Significont loss of jobs in your home country 4.55 1.67
Confl ict with potriotism 4.07 1.76
* l= Not-ot-All lmportonl,T=yery
lmportont
lnterestingly enough, respondents considered credit cord informotion/tronsoction

security (M=5.83), communicotion difficulties (M=5.79), occurocy of informotion
(M=5.42) ond identity theft (M=5.40) os the most importont. ln otherwords, peopre
thought thot protection of privocy informotion ond communicotion os ihe most
serious issues, porticulorly criticol in high-involvement finonciol services. ln oddition
the results underscore the consumers' concern overforeign occents ond longuoge
differences in their perceptions of foreign-bosed CSCs.
lnonothersection of the questionnoire, respondents were osked to rote their

level of ogreement with thirteen stotements regording overseos foreign toll{ree
customer service coll centers. The purpose of this section wos to identify importont
issues ossocioted with the foreign locotion of CSCs. The results ore presented in
Toble 9.2.
400
Customer Service Centers Are LikeTirxi Cabs
Ioble 9.2: Importonce of lssues Regordlng Foreign CSCs
lssues Meon. Std. Dev.

I do not like them due to indecipheroble occents. 5.20 1.64
foreign
4.90 1.42
workers better.
They would be o problem due to culturol distonce. 4.90 1.49
lwould not mind it for relotively smoll, low-cost purchoses. 4.88 1.55
It is not o good ideo for new products from smollfirms. 4.87 r.53
It is not good for the overoll domestic economy. 4.22 1.50

Tdon.Imrhdif the brond/compony is reputoble ond well- 4.20 1.56
known
IIEependS on the economic development of the torelgn 4. t8 1.55
nnr rntru
It-Tfine,if the purchose is for non-technicol products or 4.16 r.40
services-
mey ore usetess becouse they give generic unhelpful 3.9'.| r.56
informotion.
It is O.K. for purchoses of products, but not services. 3.79 L48
3.78 r.53
ourchoses.
I hove no problem with them of oll. 3.37 1.72
*-rneyorerrneforprovidinginformotion,butnotforoctuol
l= Strongly Disogree, 7=Strongly Agree
Respondents ihought thot the longuoge (M=5.20) ond culturol differences

(M=4.90) would be the most serious concerns, further confirming the flndings shown
in Toble 1 . They olso responded thot they would not mind the foreign-bosed service
centers for relotively smoll, low-cost purchoses (M=4.88), or for non-technicol
products/services (M=4.16), o finding consistent with subsequent results ond o
following toble. Other results indicote thot brond strength (M=4.20) ond economic
involvement of the foreign CSC country (M=4.18) con moderote ony negotive COO
effect on consumer perception. The importonce of brond strength ond o proven,
well-known brond further indicoted by the consumer sentiment thot foreign CSCs
is
ore not good for new products from smoll firms (M=4.87). Lostly, the respondents
olso felt thot foreign-locoted CSCs ore not beneficiol to the domestic economy
(M=4.221.
401
CHAPTER IX
ln o third port of the explorotory survey, respondents were osked obout the
likelihood thot they would switch to o competitor if they found out thot the CSC
for the octuol bronds thot they cunently use wos locoted in lndio. The results ore
summorized in Toble 9.3.
Toble 9.3: Switchlng Llketlhood tf CSC ts in tndio
Product/Service Meon- Std. Dev.

Heolthcore Services 5.44 1.76
lnsuronce Services 4.99 1.73
Finonciol ond Bonking Services 4.98 1.78
Utilities (Electricity, 9os, Cobte TV, etc.) 4.49 1.82
Airline Services 4.43 r.88
Cellulor Phone Services 4.39 1.77
Computer Products ond Services 4.12 1.79
Long Distonce Telephone Services 3.94 1.74
Electronic Applionce Products 3.90 1.57
Clothing ond Apporel Stores 3.60 1.71
Food ond Beveroge Products 3.40 r.84
Cosmetics 3.r 6 r.80
Office Supplies 2.95 1.62
g
Itwosfound thotpeople reocted verysensitivelywhen itcome to high involvement
service items such os heolthcore services (M=5.44), insuronce services (M=4.gg)
ond finonciol/bonking services (M=4.98). on the controry, they did not reoct
sensitively in the cose of low involvement products such os office supplies (M=2.95),
cosmetics (M=3.16) ond food ond beveroge products (M=3.40). The results suggest
thot people consider the COO informotion more importont when they evoluote
high involvement items. lt con olso be inferred thot COO effects seem to be more
importont when it comes to more intongible ond complicoted services relotive to
more stondordized ond bosic physicolgoods.
Finolly, the respondents were osked to rote vorious products/services whose CSCs
were locoted in vorious different countries. The results ore indicoted in Toble 9.4.
402
Customer Service Centers Are Likelhxi Cabs
Ioble 9.4 : Meon Evoluotion Rolings of the CSCs Locoted in Different Countries'
Locotion of Customer Service Center Row
Service lndio Philippines Fronce lrelond Austrolio Averoge
2.97" 3.33b 3.55" 3.08

Credit Cord 2.75 2.850
(1.34)* (1.32) il.48) (1.38) (1.47l' (1.16)
Service
Debit Cord 2.57" 2.72b 2.75b 3..ll' 3.29d 2.88
n.40) fi.s9) (1.r6)
Service 11.29l' fi.33) 11.441
2.93" 3.04o 3.000 3.45b 3.68" 3.21
CellPhone
Service fi.32) (1.24l' il.43) 11.291 ttl.44l il.12)
3.1 90 3.07o 3.030 3.52b 3.93" 3.35
(1.37) (r.il) (1.34) fi .15) (1.30) (0.es)
Computer
Long Distonce 3.42" 3.550 3.49" 3.92b 4.10. 3.69
fi.2s) fi.0r (l .l 6) (0.87)
Telephone (1.1 I ) il.03) )
2.90" 3.050 2.95" 3.41b 3.68. 3.r 9

Electronic
Applionce il.30) (1.29], (1.31) (1.271 il.s4) fi.04)
3.19. 3.35b 3.4.lb 4.02. 4.27d 3.64
(1.07) (1 .07) il.39) {1.09) (1.22], (0.83)
Aooorel
3.17" 3.36b 3.28b 3.62' 3.92d 3.46
(l .21) n.r 2) (1 .2s) (0.93)
Shoes (1.23) fi.34)
ro\meon supersc ore
from eoch other
ot p <.05.
** Stondord devioiion
As shown, overollAustrolio deemed the relotively optimollocotion whereos lndio

is
is the leost preferred ocross oll product cotegories, ronging from

high involvement
(finonciol services such os credit cord/debit cord services) to low involvemeni
(opporel ond shoes). However, the rotings for leost prefened countries such os
lndio ond the philippines tend to increose os the level of involvement decreoses
ond os the cotegory chonges to primorily physicol products. overoll, the results
olso show support for previous reseorch indicoting thot more developed countries
(such os lrelond, Austrolio ond Fronce) iend to hove o more positive COO effect'
while less developed counterports (such os lndio ond the Philippines) tend to hove
o more negotive effect on consumers.
403
CHAPTER IX
Discussions And Implications

Although foreign-locoted CSCs oreo o focf of life these doys, the survey results
suggest thot Americon consumers seem to hove significont concerns obout
them.
These concerns stem primorily from the countries ossocioied with
these overseos
cscs ond the corresponding coo effects. According to US consumers, one
importont concern they hove involves cross-culturol communicotion problems.
Therefore, componies thot consider the foreign locotion of their
customer service
centers need to recognize thot the potentiol difficulties coused by culturol
ond
longuoge differences. Additionolly, they ore concerned obout the
ossocioted
increosed security, informotion occurocy ond privocy risks.
The Importance of Cultural Similarity

As indicoted by this study, on importont criticol foctor thot
con significonly
influence the Coo phenomenon is culturolsimilority. Foreign-bosed
CSCs locoted
in cultures or countries such os lndio, Fronce or the philippines,
thot ore distincfly
different from one's own Americon culture con potentiolly leod to
significonly
negotive customer perceptions ond ottitudes. Therefore, US firms
should weigh
the typicol foreign locotion benefits such os cosi sovings, ogoinst the possible
deirimentol effects on consumers brought obout by strong culiurol
differences.
Such o resulf con be minimized by o more selective locotion
of CSCs in countries
thot ore more culturolly olike, such os Austrolio or lrelond ond possibly
offer lobor
cost odvontoges os well.
A very importont element of culturol similority indicoted by ihe study results

is
longuoge similority. lndeed, ihe noture of CSCs ond its high degree
of verbol
communicotion octivity dictote the prominent role of longuoge in
ochieving
the customer service objectives of such focilities. Americon consumers
seem to
hove strong negotive perceptions ond ottiiudes towords customer
services if the
Ionguoge ossocioted with the CoO of the CSC is generolly considered
signiflconly
different from English (such os lndion, French, or Filipino). As o result, firms
cotering
to its US morket should locote CSCs in countries (such os Ausirolio or lrelond)
whose
longuoge more closely resembles English. For componies thot decide
to continue
CSC operotions in countries such os lndio or the Philippines, substontiol
English
404
Customer Service Centers Are LikeTaxi Cabs
longuoge educotion ond troining of their CSC stoff would be o criticol foctor to
their success.
Foreign CSCs Are Not For Everyone

ln oddition, while there ore the often-cited cost odvontoges to the foreign
locotion of CSCs from the perspective of the firm, Americon monogers should
beor in mind thot the locoting customer services in foreign countries moy not be
for everyone. US consumers ore willing ond most likely to switch to o competitor
when high involvement complex services such os heolthcore, insuronce ond
finonciol/bonking services ore locoted overseos. Finonciolservices componies like
Chose or MBNA moy need to more corefully consider the risks ond impoct thot
locoting their CSCs in foreign countries moy hove on iheir cusfomer sotisfoction.
However, for componies thot ore ossocioted with relotively bosic ond stondordized
low-involvement products such os Nike or Ecco (shoes), or Von Heusen or Hones
(opporel), the implicotions of the foreign locotion of their customer coll centers
moy not be os criticol to customer perception' Americon consumers ore more
open to foreign-bosed service centers when it involves relotively low-cost, simple,
low-involvement Purchoses.
The Impact oJEconomic Development and Brand Sttength

The results of the study further indicote thot the level of economic development
of
os
the CSC's COO con offect consumer perception ond ottitude of the CSC service,
well os the corresponding product ond brond. This effect con be o significont
foctor
thot con potentiolly negote the low lobor cost benefits of locoting customer service
centers in less developed countries such os lndio or the Philippines' Componies
moy wont io more octively consider more developed foreign environments such os
lrelond or Austrolio, to locote cSCs. Meonwhile, componies need to further keep
in mind thot consumer perception of the country locotion of CSCs con possibly
influence brond strength. A positive country imoge ossocioted wiih the foreign-
bosed CSC locotion con potentiolly enhonce the fovoroble influence of o strong
brond on consumer behovior. conversely, o strong brond con better moderote
less-thonjovoroble coo effects thon o weoker or unknown brond, such os in o
new product or service situotion.
405
CHAPTER IX
Nevertheless, besides economic development, other foreign locotion foctors

thot con possibly offect customer behovior should not be ignored. Despite being
perceived os the most developed olternotive, the study showed thot o positive
COO effect ond consumer perception wos still low for Fronce relotive to other
developed locotions such os Austrolio or lrelond. lt is therefore possible thot besides
the level of the French economy, US consumers con olso be influenced by other
considerotions such os eihnocentrism, onti-French sentiment, potriotism, culturol
dispority ond longuoge differences. Therefore, while firms should definitely
consider
economic development in foreign CSC locotion decisions, they must olso include
other potentiol foctors thot con influence consumer perception which moy even
hove o relotively stronger impoct thon economic development.
EnhancedTraining or Location Alternatives

The findings of this study suggest ihot from o monogeriol perspective,
decision- mokers, porticulorly those concerned with the US consumer
ond their
perceptions, need to corefully consider other coll center
locoiion strotegic
olternotives, besides low-cost driven foreign operotions. While the locotion
of CSCs
in foreign countries typicolly provides cost odvontoges, it could very
well be of the
expense of goodwill ond customer sotisfoction. Therefore, the firm hos
essentiolly
two opprooches- either to improve the foreign coll center experience
or to select
on olternotive to o foreign locotion.
The foreign CSC experience con be improved by goining better control of such
operotions either through ownership or ocquisition of the foreign focilities ond/
or estoblishing more effective educotion, troining ond stondords in the industry.
Some firms hove simply increosed investment ond emphosis on employee
troining
ond development, such os occent-neutrolizotion closses ond Americon culturol
immersion sessions- Meonwhile industry-wide efforts to educoie ond troin people
in telephone medioted communicotions hove been iniiioted, os
illustroted by the
estoblishment of the Coll Centre College in London. Similorly, other firms hove
even
grouped together to monoge the stondords developed for foreign providers
of
customer service ond offer certificotion services.
406
However, these meosures thot seek to improve ihe foreign

cSC olso iend to be
costly ond do not insure success os some cross-culturol issues
will olwoys persist.
Another solution would be io resort to olternotives io the typicol
low-cost overseos
foreign locotion such os lndio or the Philippines. US firms con
locote customer
service centers in more culturolly compotible countries, such
os Austrolio or lrelond.
Additionolly, firms should olso consider opiions thot ore both geogrophicolly
ond
culturolly closer such os conodo, Mexico or even south Americon
countries. Besides
the culturol odvontoge, such locotions olso offer the odvontoge
of minimol time
zone differences os well os cost ond logistics benefits.
ln controst to o foreign locotion, firms thot coter to Americon

consumers should
olso consider locoting of home or the domestic locotion of CSCs
os o foreign
operotion does not work for everyone. While some flrms hove
moved bock from
lndio to the US. other componies hove never left in the first ploce
ond continue to
rely on domestic providers. While it is often cheoper to
situote customer service
centers overseos, firms con still find cost effective olternotives within
the Uniied
Stotes while eliminoting the culturol, longuoge ond security issues
of o foreign
locoiion. Stillonother emerging olternotive thot corporotions should consider is
literolly on "in home" locotion. More ond more componies ore
moving customer
service jobs out of not only foreign locotions, but out of domestic
high-overheod,
brick-ond-mortor coll centers ond into whot is orguobly the lowest-overheod
locotion- Americon homes. Even well-known componies hove increosingly
relied
on such o proctice, involving both their own internol employees ond independent
controctor personnel offered by provider componies.
Summary And Conclusion

The overoll results of the study indicote
thot ihe foreign locotion of services such
os customer service centers or CSCs, con hove o significont
impoct on consumer
perception ond ottitude. Depending on the type of service
or product involved,
Americon consumers moy be even driven to switch to o competitordue
to foreign-
bosed customer service centers. Their moin concerns siem from culturol
ond
longuoge differences thot con leod to problems in communicotion. The
study olso
shows thot foreign customer service locotions heighten the US
customer,s sensitivity
407
CHAPTER IX
occurocy
towords finonciol tronsoction security, personol heolth ond informoiion
issues. The survey findings contend thoi culturol, longuoge ond economic
development dissimilority con potentiolly odd to o negotive effect of the
foreign
monogers
locotion of cscs. This influence on consumer perception should motivote
to look beyond the obvious cost odvontoges of locoting customer
contoct centers
flrms need to
in foreign countries. ln developing their customer support sirotegies'
consider the consumer perception ond sotisfoction odvontoges of
other CSC
olso
locotion olternoiives.
408
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415
INDEX
AUTHOR INDEX
Aoquith, ). 99. 305, 325, 34r. Chompogne, C. 3l 5, 334, 339.
Abdu!-MoleK l. 69, 95, 1 17. Beotfi, 5.E.197,206. Chonsorkor, B. 67, lO3, 152.
Agonvol, J. 85,95, 143. Becker, K. 40,99,124. Choo, P. 8, 9, 15, 28, 38, 50, 51, 52,
Agorwol, S. 105. Bennell, D.J.206 96. 100, r0r, r23, 12?, 130, 172, 180,
Ahmed, S.A. 8, 9, 20, 53,54, 55, 63, Berocs, J. 109, 113,299,387,396, l8l, r93, 198, 199,204,305,340,
65, 92, 9 5, 9 6, 97, 1 30, 132, 133, 1 42, 413. 341,396,397, 409.
143,268,271, 303,305. 309, 312, Bergeron, J. 305, 305. 324,329,331, Chopmon, M.324,342.
314, 315, 317, 3r8, 319,321,322, 335,342,384. Chosin, J. 28,35, 100, l2l, 164,175,
331, 332. 333, 334, 336,337,339, Berl, R. 105 181,268,271.
341, 342, 3s8, 38r, 396, 397. Berry, J. 241,271 , Chen,C.59,106.
Ahmed, Z. 97,173, 180,381,409. Berry,1.351,385. Chen, H.61, 100.
Akoqh, l.P. 54,55,95,128. Besl, R. 223. Chelty, S. 109.
Albo, J.W. 19 4,202,31 4,338 Betlmon, J.R. 196. 198,204. Chllders, T.L.197,205, 351, 383.
AIden, D.L.226. Betls, M. 392,409. Cho, H.213,214,225.
Al-hommod, A.A. 40,41,79,9 6,1 23. Bigne, E.109,278. Choi, M.187.
Alpoy, G.72,112,122. Bllkey, W.J.28, 95,96,99, 108, I15, Choi, S. 297,386
Alpert, t. 266,269. 162, 180, 197, 204, 206, 285, 297, Chung, K. 354, 356. 360, 384, 395.
Al-Suloiti, K.l. 3,4,7,10,18,25, 68, 304, 305. 340, 343, 349, 381, 394, 412.
79,91,92,93,94,96, 143, 144, 145, 409. Churchill, G. 366, 381.
152, 161, 166, 178, 236 ,269, 283, Blrgelen, M. I 13, 137,357,387. Clqrk, T. 272, 283, 29 6, 351, 382.
294, 302, 304, 307, 338, 347, 3s2, Biswos, A. 56, 80, 108, 130. Cochron, W. 355, 382.
354,379,392, 407, Biilner, M. 351, 387. Colllns, A.M. 159, 196,2O5, 276.
Anderson, N.H. 198,204, Block, W.C. 366, 383. Compeou. D.273.
Anderson, R.E. 365, 383. Blockwell, R. 212, 217, 225. Coney, K.A.273.
Anderson, W.T. 8l ,98, 117. Bloir, M.E.308, 340. Cooksey, R.67, 109.
Aqueveque, C.98, 153. Bolschen, G. 359, 386. Cordell, V. 83, 96, 1OO, 128, 397,
Archer, D.385. Bourke, M.296,306, 323, 324, 341, 4r 0.
Arellono, R.268,275 383, 395, 41 1. Cox,A.197,2O5.
Avlonllls, G. 108, 185,342. Brislow, D. 61,99, 139. Cox, D. 197,2O5.
Bobqkus, E.105. Browne, E.225. Cox, G.365, 382.
Bqer, D. 359, 381. Bruning, E.R. 8, 9, 21, 92, 96, 100. Crolg, C.213,225.
Bogozzi, R.221,225. 137, 349,353, 354, 357, 359, 360, Crowford, J.C. 73, 1OO, 122, 163,
Boiley, W. 81, 98, 138. 364,369,381, 395, 409. 164, 175, 177, 184,239,272,283,
Boker. M.J. 8. 9, 10, 23, 27, 28, 59, Buelen, E. 393, 409. 284,286,296.
60, 8r, 94,95,96,98,99, 15, 133, Burgess, A.234,271. Cullen, C.359,382.
I63, r 68, I 80, 238, 271,285, 296 Busolo-Schoch, J.383. CundifI, E.W.72, I 13, l2l .
Boker, W.E.238,296 Butt, l. 8, 9,17,233,237,276,281, Cunninghom, W.H. 81, 98, 117.
Bolobonis, G. 81, 99, 143,241,271, 297. Currie, C.A.95, 96,98.
309, 322, 323, 340, 362, 381 . Buzzell, R. 174, 180. Currie, W. 393, 409.
Boleslrini, ?. 67 , 99 , 1 51 . Colonlone, R. 27 4, 283, 29 6. Culler, B. 92, 103, 353, 383. 394,
Bomber, D. 81, 95, 1O4, 154. Compbell, D. 359, 378,384. 396, 41 | .
Bonnister, J.?. 28,72,81 ,96, 99 , 12O, Condel, M.278. Czlnkolo, M. 103, 173, 182, 198,
164,175,180. Coropellolti, L.172, 174, 185. 205,237,268,274.
Bqrker, 1.239,272. Cormon, J.385. d'Aslous, A. 9. 20, 53, 63, 65. 130,
Borkley, D.268,271 Cosey, M.77, lO4, 135. 132, 133,268,303,305, 309, 312,
Boss, F.211,213,227. Coleoro, P. 313, 314,340. 314, 315, 317. 318, 319,321,322,
Botro, R.215,225,228 Cotlln, ?. 28,73,96, 100, 122, 163, 33r, 333, 334, 358.
Boughn, C.C.28,80, 95, 96,99,113, 164, 180, 396,409. D'Souzo, R. 277
I I 5, 304, 306, 3l l, 340, Covusgil, S.T. 28, 7 4, 7 5, ?5, I 6, 104, Dorllng, J.R. 34. 41, 72, 100, 120,
Boumgortner, G. 80, 82, ?6,99, 121, r08, 123, 164, 183, 197,206,211, 125,165, r81,396.410.
163, 164, 180, 213, 223,225,228, 225,304,306, 343, 396, 411. Dqs, M. 306, 307,308. 324, 330,
416
INDEX
,,
345. Gommolh, 8.S. 202.
| 102, l0s, 108, 109, ll2, ll3, ll5,
Doser,S.164. l8l. Gqnesh, G.38S. 123,127, 128, 164, 172, 175,178,
De Wel, A.c. 394,410. Gorby, F. 185. |'
De Wet, J.M.394,410.
182, 184, 185, 187, 189, 197,206,
Gollgnon, H. 211, 212, 213, 2tB, 24A, 243, 250, 2s6, 268, 269, 273,
Deoux K.359,382. 223,226.
Deklmpe, M. 2t t, 212, 225. 274, 275, 276, 277, 278, 283, 284,
Gee, N.R.206. 285, 296, 297, 299,304. 305, 306,
Delfgonoul, S. 2t t, 225. Ghodlr, H. 47, 48,83, t}l , 127.
Demoofl, M.225. 323, 324, 329, 331,335, 339, 340,
Ghymn, K.268,272. 341, 342, 343, 360, 362, 383, 384,
Dlomonlopoulos, A. lOl, I35, Glese, T. 354, 3S5. 3S9, 384, 39S, 385. 394, 395, 396, 411, 413, 414.
271,322,340, 381. 412. Hesler, S. 163, 164, 171,192.
DiMolleo, M.385. Gilly, M.C. 108, 324, 330, 34s, 344. Hett, E.J. 312,341.
Dornoff, R. 33, 81, 96, 101, 1tg, 1 64. Gloullslonls, E. 65, 1 12.
175, l8l. Hoffmonn, R. 103, 140.
Goldsmllh, R.E. 199, 205. Hofstede, c. 103, 1 1 S, 21 1, 212, 213,
Douglos, S. 28, 39, tO3, 123, 163, Good, t.K.8l, l0l, 134. 223, 228, 283, 289, 29 6, 37 5, 383.
183, 213, 225, 394, 395, 397, 410, Goodslein, R.C. 392, 413.
411. Hofsho, c. 81, I 12, 127.
Gorn, G. 167 , 187 , 397 , 414. Holzmueller, H. 268, 27
Dowdles, M.273. 1.
Grobb, E. 359, 381. Honeycull Jr, E.D. 2t 6, 22g.
Dube, L. 105. 133. Grohom, J. 271, 313, 31 4, 340.
Dun M. 83,96, 103, 124, 163, Hong, H.68. il l.
171, Gronzln, K.t. 56, 80, lO8. l3O, 2lS, Hong, S. 44, 103, 126, 273, 397, 4t 1.
182. 223,226,394, 410. Hooley, c.80.81, 103, t2S.
Dzever, S. 109, 268, 272. Green, ?.364,366,382 Houslon, M.t. 197, 205, 361, 367,
Edgett, S.359, 382. Green, R.T.34. 101, il5, I19. s83.
El-qdrooul, M. 97, 268, 271. Greene, W. 213, 221, 225, 226. Hu, M. 177, 184.
Elloshberg, t. 2tB, 226, 227. Greer, l.V. 32, 8t , tO2, 117 .
ElJobri, J. 97, 314,31S, 331, 339.
Huong, Y.68, 105.
Grewol, D.397,413. Huddleslon, P.81, l0l,
Elllott, G. 79,80, 102, tS2. 134.
Grifflth, D.A.281,296. Hugslod, P. 83, 95, tO3, 124,163,
Engel, J. 212,217,225. Grusec, J.E.257,272. 171, 182.
Erffmeyer, R.226. Gudum, A. 80, 102, 136. Hul, A. 97, 144,381.
Erlckson, c.M.38, tOl. 123. Gudykunsl, W. 361, 382. Hui, M. 64, 1O3, 21 4, 228, 273.
Eroglu, S. 240, 272, 312, 341. Gurhon-Conta, Z. 283, 284, 29 6, 362, Hult, G.I. 199, 2OS. 226.
Ethier, K.A.359, 382. 383. Hulchinson, J.W. 196, 204, 316,
Eilenson, R. 17, 42, 95, 101, t2S, Hodflmorcou, J.106,312. 313, 343. 340.
168, 172, 173, 183,195, 198. 205, Hoider, D.275. Hyder, A.62,104.
237, 242, 269, 274, 323, 342, 353, Holr, J.F. 366, 383. lnch, G.S. 394, 4ll.
359, 350, 384. Holl, J.385.
Etzel, M.J. 71, 101,119.
Inglehorl, R.283,296.
Holl6n, l. | 64, 171, 182. lnsch, G. 240,274.
Eysenck, H.218,225. Homln. 79,80, 102. lssok R.E 341.
Fong, I.97,381. Hompden-Tuner, C.298. Jockson, D.N. 321, 322, 341, 342.
Forley, t.U. 237, 277, 304, 345. Homplon, c.M. 92, 96, 1O2, 120,
Fefck, 1. 219,227.
Jocoby, J. 95, 108, 352,393,397,
164,182. 414.
Feshboch, 5.322,342. Homzooui, L. 69, 102, 1 54.
Feslervond, T. 39, 81, 96,101,123,
Joffe, E. 28,35,60. l0O, 105,121,
Hon, C.M. 8,9, 17,21,28, 43, 46, 138, 164, 175, 181,237, 268,271,
1 64, 175, 181.
47,70,80,82,95, 102, 115, 125, 125, 274,306,342,396, 411.
Fiske, S. 361,382. 127, 164, 165, 173, 182,211,215,
Florido, R.268.
Join, S.C. 174, 182, 397, 4t 4.
218, 219, 220, 223, 224, 226, 230, Jomol, A.324,342.
Ford, J. 359,382. 237, 240, 272, 273,318, 330, 341,
Fox, H. 186. Josper, J. 106.
350, 352, 383. 394, 396,410. Jovolgl, R.92, 1O3, l4l. 353, 383.
Foxoll, G. 21 2, 2t 3, 223, 226. Hqnlson-Wolker, L.J. g?, 90, 9 6, 1 02,
Frouenhelm, E. 392, 410. 394,396,411.
134, 354,355, 359, 383, 395, 4l O. Jl,Y.48, 4?, 106, 131.
Frledmqn, H. 197,2O5. Horvey, M.G.281,296.
Frledmqn, L. 197,2O5. Jin,Z.57,103, 152.
Hqlolo, M.N. 308,340 Jo, M.S. 199 , 204, 205, 397 ,
Fu, S.275. 411 .
Hdubl, c.240,273. Jog,Y.M.277.
Fukuyomo, F.283,296. Howklns, D. 242,273. John, 1. 305,325,342.
Goedeke, 3,.70, 71,80, 96, t0l, 1 18, Heckler, S.E. I 92, 205, 361, 383. Johnson, J. 97, 173, 18O,381, 409.
163, 164, 175, 176,181, 396, 4lO. Heimboch, A. 165, 182. Johnslon, W. 381.
Goeth, G. 42, 101,106, 125. Heilmeyer, t. 66, 81, t}g, 1 49. Jollberl, A.73, 83,99, 10O, 121 , 122,
Gollonl, A. 1 69, l8t. 189. Heslop, t.A. 39, 80. 81, 83,96,99, l6l. 153, 164, 167, t7l, l80, 185,
417
INDEX
163,183, 412. Ung, C. 97,381.
189, 197, 207, 237, 277, 304, 305, R.S. 257, 272.
I
lHshnon B.C. 196, 198,2O5,207' Lockhorl,

344, 349, 385, 394, 396, 409, 413-
Kucukemiroglu, O. 78, 80, 87, Loflus, E.F. 195,205.
Joseph, 8.359, 382.
89,96,104, 105, 133, 138, 268, Lohnes. 73, 1 00. 122, 180,396, 4O9.
Joseph, M. 359, 382
274,355,384. Lopez, G. 66,81, 112, 149.
Jun, S.Y. 199,206.
Kulkornl, S.385. Lofz, S. 177,184.
Kogltclbosl, C. 297, 386. lll, 123, 133,
Kuo, K. 268,272. Lumpkln, J.77,101,
Koleko, A. 106. 312, 31 3, 343. l8l, 184.
Kwoi, W. 187. 163, 164, 175, 177,
Komlns, M.E.'197, 205, 271. l0l, 123, 181'
Kwon, C. I 12 Lundslrom, W.
KonuK t. 306, 307, 308, 324,33O, 2, 341 .
Kwok S.68, 105, 152. Mochleil, K.A. 27
345.
LoBoy, D.214,227. Moclnnls, D.t.206.
Koro, A. 78,80,87,89,96, 104, Modden, l. 1 62, 17O, 174, 178, 185-
133, l4l, 355. 384, 394, 412. Lobrle, M.268,275.
lolferty, B.A. I 99, 205. MohoJon, V. 21 1, 213, 227.
Kqsslm, N. 68, I I l.
Lom, [. 187. Mohesworon , D. 77, 107, 132,283,
Koisonls, t. 95, I I l.
[omb, C.W. 28,73, 100. l13, 122, 284, 296, 316, 343, 362, 383, 396,
Kovos, A.80, 102, 136'
164, 177, 187, 283, 284, 286, 296, 412.
Kqwqhoro, Y. 164, 186.
298, 379, 386, 39s, 39 6, 41 5. Molholro,N. 94, 96, 99, r03, r07.
Koynok, E. 62, 7 4, 7 5, 78, 80, 87, 89,
Lomperl, S. 60, 105, 138. r 50, 1 82, 1 84, 1 86.
96,104,1 23, 33, 140, 141,1 64. 1 83,
1
Longeord, E.34, 101. I 15, I 19. Morcello, J. V. I12.

227,268, 274, 354,355, 359, 384.
Lsroche, M. 55. 66, 105, 148,240, Morchonl, C.354, 358, 360, 384.
394,396, 411 , 412.
241, 242, 275, 305, 306, 324, 329, Morks W. 105.
Keegon, W. 212, 21 5, 217, 226.
331,342,362,384. Morkus, H. 21 5, 228, 257, 27 6.
Kelller, 8.216,226.
Loscu, D. 354. 355, 359, 384. 395, Mormel, G.36,107.
Kellorls, J.J. 197, 2O5.
412. Mon, N.E.93, 105, 128,220,318-
Keller, K. 178, 183.
Lovock A.64,111, 143, 16l. 163, Morsholl, t.277.
KennedY, J.218,227.
170, 171,179, 186. Morlinez, T. 278.
Keown, C.77, 1O4, 135.
Lqwrence, C. 7 6, 81, I 05. I 28. Mosooki A. I12.
Khocholurlqn, J.L. 44, 46, 96, 104,
Lowrence, J.J. 290, 297. McAlexonder, H. 308. 344.
115, 127.
Leclerc, F.58,59,95, 105. 133, 137. McBrlde, t.B. 27 4, 39 4, 41 1 .
Khon, H.81,95, 104, 154'
ledlow, G.281,298. McCorthy, J.C. 392, 41 4.
Khonno, S.R. 74, 104,124,167,183,
Lee, B. 218, 22O, 224, 226, 324, 342. McCrocken, G.306, 343.
396,412.
Lee, D. 28,106. McKlnney V.M.206.
Kim, C.80, 106, 129,219,227, 275,
[ee, H. 80,106,129. Mclochlon, D. I82.
342.
Lee, M. 8, 9, 22, 170. 183, 189, 391. Mcloin, S. 81, 82, 107, 128.
Kim,H.297.
394, 396, 397 , 41 4. McNomorq, K.l. 268, 27 1 .
Klm, 1.79. I10.
Lee, W. 277, 414 Medlno, J. 213, 21 4, 227.
Klm, Y. 68, 104, 153.
Lehmonn, D.40, 108, 124,354. Melewor, T. 63, 99, 271, 323, 34O,
Klng,I{. 392,412.
Kinneor, T.C.214,227. Lenorlowlcz, l. 307 , 335, 342. 38r.
Leonord, M. 186. Merlc, H. l8l.
Kinro, N. 80, 105, I51 .
Leonldou, t.60, 106, 139.312,313. Merunko, D,69,102.
KIeln, J. 1 68, 172, I 73, I 83, 198, 205,
343. Meulenberg, l. 27 8, 305, 345.
237, 240, 242, 269, 274, 323, 342,
Levin, A. 199, 206, 361, 362, 363, MIchoels, ?.213,227.
353, 359, 360, 362, 378, 384.
Mlchle, J.28, 60,81. 99.
Knlght, G. 61, 105, 139, 172, 183, 384.
levln, l. 55. 80, 96,106,130, 199, Miller, C. I10, 186.
240,274,283,296.
206,361,362.363,384. Mlller, J. 106.
Knowles, J. 17, 195, 2O5.
LeVlne, R. 359, 378,384. MIng, L. 1 12.
Knox, P.L. 241 ,275.
Kochunny, C.M. 51, 52, 105. l15. Levltt, I. 241,275. Minlqrd, P.225.
U, W.K.4l2 Minot,M.276.
129.
Ll,2.275. Misro, S. 206.
Kogut, 8.281,297.
tlefeld, J. 48, 49,81, 83, 106, I13, Mlttelstoedt, J. 105.
Kohli, C. 170,179,187.
r28, 131,304,306,343. Miyozoki, A.D. 397, 413.
Kondop, N. 67.103, 152'
Lillls, C. 34. 106, I 19, 153, 183. Molnpour, R.274.
Koslermon, R.322,342.
tlm, D.278. Moon,8.J.297.
Kofler, P.241,275.
Llm, K. 106. Moore, S.359.385.
Kroft, F. 34,72,100, 120, 354, 356.
Llm,Y.K. lll. Morelfo, G. 38, 107, 123,163,184,
360, 384, 395,412.
Lin, C. A.343 256,276.
Krieger, N. 103, 125. ,l05,
Lln, L. 106,412. Morgon, F.W. 1 I I, 128.
Krlshnokumor, P. 32,96, r 18,
418
INDEX
Morgonosky, M.A. 44, 46,96, lO4. 124, 126,164,171,172, 175, t7g, Robert B. 1 12, 304.
127. 182, 184, 185, 189, 197,233,237, Roberlson, T. 211, 212, 213, 2tB,
Monis, M. 168, 172, 173, 183,237, 240, 242, 243, 250, 253, 268, 269, 223,226.227.
242, 269, 274, 323,342, 353, 359, 272, 273, 274, 275, 276, 277, 278, Rogers, E.M. 212, 213, 214, 2t 6, 219 ,
360, 384. 281, 285, 2?4, 296, 297, 298, 305, 223,228.
Mouroll, M.105,275. 306, 323, 324,329,331, 335, 339, Rogers, P.385.
Moullnho, L.65,112. 340, 341, 342, 343,350, 383, 385, Romeo, J.B. 49, 50, 95, 96. I10,
Mowen, J. 257,276. 395,396, 411, 413. 129.
Mueller, R. 99, 271, 322, 323, 340, Poppu, R.67, 109, l5l. Ronkolnen, !. 103, 173, 182, 199,
381. Poromesworo n, X.. 7 9, 1 09, 1 43, 24O, 205,237,268, 174.
Mulder, M. 107. I15. 277, 284, 285, 297, 324. 335, 343. Rosenlho!, R. 361. 385.
Muller, E. 21 1, 213, 273. Porosuromon, A. 344, 351. 385. Roslow, W.W.313,344.
Munoy, L.W.275. Pork, C.W. 197, 199,206. Roth. D.357. 385.
Nogoshlmo, A.28, 31, 32, 34, 3b, Po*, S.Y.213,214,227. Roth, K.307,335,342.
37, 70, 72, 80, 9 6, 107, 1 17, 120, 1 64, Porker, P.225. Roth, M.S. 49, 50,95,96, 110. 129.
165, 175,184. Poswon, A.109, 385. Ruekerl, R.W. I 95, 2O7, 351, 385.
Nokomolo, K. 199, 205, 397, 4t t. Pecolich, A.354, 357, 385. Rulh, J.A. 198, 199, 207, 360, 361,
Nokolo, C.281,297. Pellon,t.E. lll. 386.
Noroyono, C. 34, 37,80, 96, 106, Penolosq, l. 344. Ruyler, K. I 13, 137,357,387.
107, 1 19, 122, 1 63, 183. 184. Perelro, A. 61, 100. Ryh-Song, Y.290,297.
Nebenzohl, l. 173, 183, 237,274, Perls, S. 109. Sood, G.275.
306,342. Pelerson, R. I 85, 207, 277, 344, 3BS, Sokono, T. 271.
Nelson, D.L. 196,206. 4r 3. Somlee, S. 8, 9, 14,28, ll0, 159,
Nelson, J.E. 199. 205. Phom, K. 185 161, 162, 163, 155. 167, 168, 169,
Nes, E. 8,82,99,109, 180,204,276, Phon, J.M. 304, 306, 344. 170, 171, 172, 174, 176, 177, 178,
281, 297, 304. 306, 340, 394, 409. Phou,l.l09. 179, 185, 186, 199, 204,304,306,
.l09,
Newmon, K.81, l3l. Plneres, S. 81, 98. 326,644.
Nguyen, D. 65, I I I 150, 186. Plnkoeo, K.385. Somu, S. 196,207.
Nlffenegger, ?. 36, 107, 121. 164, Piron, F.109. Sorothy, 1.212,228.
175,184. Plshorodf, R. 109, 277, 297, 343, Sorvory, M.225.
Nljssen, E.J.394, 410- 344. Sounders, J.A. 28, 72, 81, 96, 99,
Nlss, H. 78,107, 136,177,184. ?ons, F.275. 120,164,175, 180.
Noble, S.M.343. Polhos, A.394,41O. Schonlnger, C.28,106.
Nonoko, l. 28,39,103, 123, 163, Powell, R.392, 413. Schewe, C.D.343.
l 83, 395, 397 , 41 1 . Preez, J.P. l0l,
135. Schlegelmllch, B.B. l0l , 135.
Nydlo L. I12. Prendergosl, G.P. 105, 128. 359, 385.
O'Coss, A. 62, 81, 93, 141, 144. Pressley, M. 357, 385. Schmltl, B. 105, 133.
O'Holr, D. 281. Price, L.L. 213, 219, 227, 228. Schooler, 1,.D. 29, 30, 31, 70, 7 6, Bt,
O'Horo, B.S. 91, 96, 354, 355. Prlluck, 1,. 199,207. 96, r 10, I 15, I 16, 117,164,185. 186.
Obermlller, C. 1 62, 184, 294, 2?7. Propeck, J.268,275. 304,396, 413.
Ofir, C. 40. 108, 124,354,355, 3S9. Qu, t. 207. 361. Schoulen, T.W. 308, 344.
384, 395, 4t 3. Qu, R. 195,385. Schwonen, D.268,277.
Ohmoe, K.241,276. Quesler, P. 67, 86, 109, 140, 269, Schwortz, S. 283, 285, 297, 323, 345,
Okechuku, C. 56, 96, 1O8, 132, 173, 272. 362,386.
174,178,184. Qullllon, M.3, 195, 207. Schwendlnger, H. 308, 345.
OIsen, J.E. 56, 80, 108, ll5, 130, Rofogopolon, R.66,81, 109, 149. Schwendlnger, J. 308, 34S.
394,410. RoJorolnom, D.382. Serlnghous, F. 358. 386.
Onyemoh, V.173, 174, 178, 184. Rofeer, K. 305, 325, 342. Seymore, M. 359, 386.
Onzo,N.27l. RoJendron, K.N. 52. 96, 100, 130. Shoffer, T.R. 91. 95, 110, llS, 134,
Osgood, C.E. 108, 197,206. 313,314,344. 354, 3s6, 386. 39s, 41 3.
Ostlund, L. 214,227. Roo, A.R. 195, 2O7, 361, 385. Sholnesh, G. 1O7.
Ozsomer, A. 28, 95, 96, 108, 197, i
Rowwos, .Y.313, 314,344. Shormo, D. 64, 109, 147 , 325, 344.
304. 306, 343.
Pocheco, B. 59, 11,137. 'l
Reordon, J. 79, 80, l l0, 149. ,
Shormo, S. 8l I 10. l35, I 61,
Relerson, C. 29, 30, 70, 80, 96, 1 10, 152, 163, 164, 167, 168, 170,
Polnler, t.J. 21 5, 223, 226. 164,175,185.
1 16, r53, 171, 177, 179, 185, 186, 216,
Popodopoulos, N. 8, 9, 17, 19,28, 275.
Reln, l.
I
228, 237, 242, 269, 277, 312,

Reynolds, t.218,227.
I
40, 41, 75, 99, 105, 108, 109, 1 15, I 314, 322, 326, 344, 345. 353,
419
INDEX
359, 360, 352, 385, 394, 395, Iqlhom, R.t. 366, 383. Wee, C.268,278.
413, 414. Teos, R.K.87,97,145. Weggemon, M.298.
Shlffmqn,1.345. Terdlmon R. 393, 414. Weronl, l. 172, 18O,397, 4O9.
Shlmp, T. I10, 135, l6l, 162, Ierpstro, V.28, 43, 80,96, 1O2, 125, Welzels, M. 91, 96, 113, 137,
I53, I 64, 1 67, I 58, I 69, 170, 164, 165, \73, 182,212,228,396, 354,357,360, 387.
171, 174, 177, 178, 179, 185, 4r 0. White, G. 101, 107, l8l.
186, 216, 228, 237, 242, 277, Ihokor, M. 59, 64, 95, I I l,
137, 143, Whlte, J.36.
312. 31 4, 322, 323, 326, 344, l 5l. 1 63, 170, 171 , 179, 186, 187. Whlte, P.D. 28,73, 113, 121, 164,
345, 353, 359, 360. 386, 394, Thelen, 5. 216, 228. 1 88.
395, 4l 3, 414. Thorelll, H.B. I12. 115,126. wltdr, A.R. 30. I 10, I 15, I 16. 185.
Shin, J. I 10, 135, 163, 164, 168, flil, B.D. 199,207. Wlllom,1.D.227.
171 , 186, 385, 395, 4l 3. Tlng-Ioomey, S. 361, 382. Wlnons, W. 92, 103. 353, 383, 394,
Shlpley, D.103, 125. Iongberg, R.C. 283, 284,286,298, 396, 411.
Shocker, A.D. 199,206. 396,414. Wlnd, Y. 364,382.
Shreiber, 1.A.206. Irlondis, H. 1 12, 1 1 5, 297, 386. Wood, V. 165, 181,261,264,396,
Slkond, K.397, 414. Trompenoors, t. 283, 298. 4l 0.
Slmonin, B. 198, 199,2O7,360,361. Tse, A. 62, 112, 1 39, 1 87. Wright, K. 172, 187,283,284,285,
386. Ise, D. 1 67, 187, 227, 396, 397, 41 4. 286, 298, 362, 387, 39s, 41 5.
Singh, H. 281,297. Turmel,4.275. Wu, L. 107.
Slnho. D. 393,414. Ulgodo, F. 8, 9, 22,107,170, 183, Wuehrer, G.A. 31 3, 31 4, 344.
Slvokumor, K.281 ,297. 189, 39r, 394, 396, 397, 414. Wuhrer G. 172, 180,397, 409.
Skuros, D. 81, I 11,142. UI[n, J. 281, 398. Wyer, R.S. 44, 103, 126,396, 412.
Smlth, D.219,227. Uncles, M. 68, I05. Xu,X.48,49.106, l3l.
Smlth, R. 196,207. Usunler, J. 160. 165, 167, 187, 189. Yomooh, F. 174, 188.
Smlth,I.382. Vokrou, A. 8l, 1 11, 142. Yoprok, A. 28, 35, 56, 57,80, 95, 95,
Smith, W.R. 76,81, 1l l, l3l . Von fenemo, P.393,409. 97,99, I 13, I 15, 120, 130, 211,396,
Solomon, M. 185, 213, 21 4, 228. Von lllersum, K. 24O, 27 8. 41 5.
Solso, R. 257,277. Velouhou, C. 65, I 12, 150. Yovos, U.74,113,124.
Soulden, N.68, I I l, 153. Venkohqmo n, M. 21 3, 228. Ye, J. I 12,125.
SpongenberS, E. I 62, 184, 294, Verbeke, W. 66, 81, 112, 149. Yee, C. I I2.
297. Verlegh, P. I 53, 171, 187, 294, 298, Ylp, t.S. 199,2O4.
Speece, M. 55, I 1 l, 150, 164,168, 304, 305, 306, 330, 345,349,386, Yoon, G. 297,386.
r 86, 354, 357, 385. 394,396,414. Yuen, M. 1 63, 1 64, 171, 182.
Srlnlvoson, N. 366, 382,397, 414. Vldo,l. I10. Zojonc, R. 21 5, 228, 257, 27 6.
Srlnlvoson, S. 356, 382. 397, 414. Vldmor, N.J. 322,342. Zopolo, J.240,278.
,l06. Zelthqm!, V. 351, 385, 387, 393,
Slomenovo, G. Vlllonuevo, L. 240, 269, 278, 294,
Sloymon, D.215,225. 298. 4l 5.
Sleenkomp, J. 168, 171, 187, 211, Voss, K.E. 198, 199, 207. Zhong, Y.95, I 13, 136.
212, 213, 214, 223, 225, 228, 294, Wogner, J. 42, 101, 125. Zhou, L. 64, 1O3, 1 44, 21 4, 228, 273.
298, 304, sos, 306, 330, 34s, 349, Woh, K. I12. Zlemlnskl, J.268,278.
386,394,396, 414. Wolker, B.J. 71 ,89, 90, 96, 101 , 1O2, Zimlonjic, ?.234,278.
Slephens, K. 1 64, 171, 186. 119, 134,3s4, 3ss, 359, 383, 395, Zouilen, S. 321, 339.
Sternhol, B. 343. 4r 0.
Slernquisl, B. 57, 81, 96, 106, 107, Woll, M. 39, 48, 49,80,81, 83, 96,
r r5. 128, 132,397,412. 102, 106, l12, l13. 115,123, 127,
Slollmon, J.J. 80, I I l. 128. 128, 129, l3l, 164, 175, 181, 187,
Strutlon, D. 77, 1l l, I 15, 133. 256,273,396, 414.
Sujon, M. 196,204. Wollers, G.257,272.
Sumner, w.G. 353, 359, 378,386. Ulong, C. 28, 73, 1 13, 122, 1 64, 17 6,
Sunoo, D.H. 30. 96, ll0, 117,164, 187, 283, 284, 286, 298, 357, 379,
I 85. 386, 395, 396. 41 5.
Sunlornnond, V. 68, 109, 1 52. Word, S. 354, 358, 360, 384.
Sryblllo, G. 383, 397, 41 4. Wordq, ).268,378.
Tqn, C. 237, 268, 377, 378. 304, 345. Woshburn, J.H. 199, 207.
Tonkersley, C. l0l, l8l. Wolson, J. 172, 187, 283, 284, 285,
Tqnnenboum , P.H. 206. 286, 298, 362, 387, 395, 4l s.
TonsuhoJ, ?.198,207. Wedel, M. 21 1, 212, 213, 223, 228.
420

Country of Origin Effects On Consumer Behavior

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This edition may be sold only by lnstitute of Administrative Development (l.A.D.)

lnstitute of Administrative Development (!.A.D.)

Dr Kholid lbrohim AI-Suloiti is o Qotori notionol, currently Director Generol of

He holds o BSC in lnternotiono! Business, on MBA in Finonce, University of

held severol positions in Qotor including Director of !nformotion

Dr Al-Suloiti hos published severol orticles in leoding Journols reloted to

Dr. Al-Suloitiserved on the Editoriol Boord of Journol of Business ond Economics.

Dr. Al-Suloiti is currently conducting studies thot oddress COO effects on

Chopler One Country of OriginEffecis: Kholid l. Al-Suloiti 27

Chopler two The country-of-origin somiee

Chopter lhree Co-bronding in the Globol PoulChoo

Chopler four An Empiricol lnvestigotion on C. Min Hon 211

Chopler five A Cross-Culturolond Cross- Nicolos Popodopoulos

Chopler six The Role of NotionolCulturol Erik B' Nes 281

Chopter Seven Sub-cutturot Effects On Sodrudin A. Ahmed 303

Chopter eight Service country-of-origin 349

ChOplef nine Customer Service Centers Are Froncis M. Ulgodo* 391

the subject motter of this book.

Chapter Literature Review: Country of Origin Effects

then orgonised chronologicolly ond themoticolly. Among the themes covered

The evoluotion of products

Demogrophics ond consumer perceptions of imports

Perceived risk ond country of origin effects

Country of origin effects on service decisions.

"Why hove you slorled io moke producls in lots of different counhies?

Where ore your products mode?

Chapter 2The Country-of-Origin PhenomenonWithin the Context

At leost three sets of firm-level decisions overlop with CO+eloted considerotions

Chapter 3 Co-branding in the Global Context

Kmort ond Mortho Stewort ollionce is creoted through o non-equity structure.

ln the ero of globolizotion, internotionol brond ollionces ore olso growing in

Whereos co-bronding strotegies hove been octively pursued by domestic ond

Chapter 4An Empirical Investigation on Determinants of Consumer

chapter 5 A cross-cultural and cross-National perspective on

Whot needs to be stressed is the greot importonce of PCI porticulorly in the

inter-sectorolcoordinotion of ploce bronding efforts, whether

Chapter 7 Sub-cultural effects on Product/Country PercePtions.

"Globolizotion ond the widespreod growth of internotionol communicotions

chapter 8 Service Country of origin Effects : Evidence fromThree

indicote thot the foreign locotion of services such

l. The country of origin does offect product evoluotion.

2. The degree of influence vories occording to the noture of the evoluotion

3. Overoll, there oppeors to be o 'home country' bios olthough this moy

4. Stereotyping - Germon mochinery, Joponese cors, ltolion silk etc. -

COUNTRY OF ORIGIN EFFECTS:

Country Of Origin Effects: A Literature Review*

The literoture review in this chopter

Figure l.l: Counlry of Origin Definition

Reierson (1966) triedto determine the ottitude of Americon consumers toword

Reierson (1967) continued his work of investigoting Americon students' ottitudes

Schooler (1971) concluded the following:

- Femoles preferred foreign products more thon moles.

- The group composed of non-white people evoluoted products from Africo,

Nogoshimo (19701compored Joponese ond Americon ottitudes toword foreign

of 230 Minnesoto businesses chosen from the Minnesoto Directory of Monufocturers

recognised for their excellent croftsmonship, while US ond Joponese businessmen

Greer (1971) investigoted the usefulness of hoving ihe view of professionol

Krishnokumor (1974) ottempted to exomine the influence of country of origin

Dornoff et ol. (1974) exomined consumers' perceptions of imports. The oim of

- To find out whot consumers' perceptions of imports were.

- lf these perceptions differed for specific countries.

- lf these perceptions differed between product closses.