The Country-Of-Origin Effect and Brand Origin Knowledge: How Little Consumers Know and How Important Knowledge Is

Terence A. Shimp, University of South Carolina, U.S.A.
Saeed Samiee, University of Tulsa, U.S.A.
Subhash Sharma, University of South Carolina, U.S.A.
[ to cite ]:
Terence A. Shimp, Saeed Samiee, and Subhash Sharma (2001) ,"The Country-Of-Origin Effect and Brand Origin Knowledge: How Little Consumers Know and How Important Knowledge Is", in E - European Advances in Consumer Research Volume 5, eds. Andrea Groeppel-Klien and Frank-Rudolf Esch, Provo, UT : Association for Consumer Research, Pages: 325-326.

European Advances in Consumer Research Volume 5, 2001      Pages 325-326

THE COUNTRY-OF-ORIGIN EFFECT AND BRAND ORIGIN KNOWLEDGE: HOW LITTLE CONSUMERS KNOW AND HOW IMPORTANT KNOWLEDGE IS

Terence A. Shimp, University of South Carolina, U.S.A.

Saeed Samiee, University of Tulsa, U.S.A.

Subhash Sharma, University of South Carolina, U.S.A.

RESEARCH OVERVIEW

This research examines consumers’ brand origin knowledge. Although country-of-origin researchers have determined that consumers discriminate between the same brand made in different countries on the basis of country stereotypes (e.g., Han 1989; Maheswaran 1994), research subjects are invariably alerted that a to-be-judged product has an unambiguous country of origin. By comparison, when consumers encounter brands in the marketplace, the country of origin (CO) is but one of many pieces of information that may or may not be sought, comprehended, and entered into the evaluative process. No compelling empirical evidence has been offered to support the salience of CO information during actual (non-laboratory) purchase processes (Samiee 1994). Moreover, Peterson and Jolibert’s (1995) exhaustive meta-analysis determined that the country-of-origin effect is inflated when research participants receive verbal descriptions of a brand’s CO compared to the more ecologically valid situation where shoppers search for such information at the point of sale or retrieve it spontaneously from memory

We define brand origin knowledge (hereafter, BOK) as the consumer’s ability to correctly identify where a representative group of widely distributed and generally well-known brands have originated, their countries of origin. Measuring brand origin knowledge required that we select a range of brands from amongthe thousands available to American consumers, who were the respondents in our study. Using a rigorous screening procedure, we selected a large initial group of brands and then reduced through a two-stage process that number to a smaller set of 84. The 84 brands consist of 40 from the United States and 44 from eight other countries: England, France, Germany, Italy, Japan, Korea, the Netherlands, and Switzerland. These brands represent a range of consumer package goods, semi-durables, and durable products and constitute a representative selection of domestic and foreign brands that are available to most American consumers in department stores, mass merchandise outlets, supermarkets, and other common retail venues. BOK scores range between 0-1 and represent, in the aggregate, the proportion of brand origins that respondents correctly identify. We distinguish between knowledge of domestic brands (US-BOK) and of foreign brands (F-BOK). It is to be expected that American consumers would be more knowledgeable of the origins of US than foreign brands.

We drew a national sample of 5,000 adult households from a data bank of individuals holding a driver’s license in the United States. Overall, 480 usable responses were returned for a response rate of 12%. Respondents were presented with a matrix that listed the 84 foreign and domestic brands down the rows and headed columns with country names. They were instructed to circle for each brand its country origin. Given the task difficulty, this procedure undoubtedly produces BOK scores that represent a combination of actual knowledge along with error variance due to guessing.

We found that respondents’ knowledge of the national origins of the brands constituting our brand sample is modest indeed. The average BOK score for all 84 brands was only slightly higher than one-third correct identification (M=35%; s.d.=16%). Though respondents correctly identified about one-half of the 40 US brands (MUS-BOK=49%; s.d.=22%), the average score for the 44 foreign brands reflected less than one-quarter correct responses (MF-BOK=22%; s.d.=14%).

We conducted separate analyses via structural equation modeling for F-BOK and US-BOK. With socioeconomic status, international experience (i.e., international travel experience and foreign-language ability), ethnocentric tendencies (Shimp and Sharma 1987), age, and gender as predictor variables, the model accounted for only 15% of the variance in US-BOK but 52% of the variance in F-BOK. Increasing degrees of F-BOK were accounted for by respondents’ having higher socioeconomic status, greater international experience, and lower ethnocentric tendencies. Also, males were more knowledgeable of foreign brands than were females.

Our research thus reveals that a brand’s originCeven if that brand happens to be from a country with positive equity (Shimp, Samiee, and Madden 1993)Cmay not represent a type of brand association that is judgment- or purchase-consequential. Consumers have limited recall of brand origins and apparently find such information relatively unimportant and unworthy of retention in memory. Retaining brand-origin information in memory may be considered nonfunctional because point-of-purchase cues (packaging and in-store displays and signs) provide consumers with external memories that can be acquired on demand (Bettman 1979).

In sum, a body of literature has reported consumer bias towards origins of products. This literature is mostly based on studies that have experimentally manipulated country-of-origin cues in controlled laboratory studies. Such manipulations are somewhat heavy-handed inasmuch as consumers are provided with little differentiating information other than a brand’s origin. Under these contrived circumstances, brands are evaluated more favorably when they are aligned with countries that are themselves judged favorably. It is easy to leap to the conclusion that country of origin plays an important role, but such a conclusion is based on the dubious assumption that consumers in the marketplaceCi.e., under natural, ecologically valid circumstancesCactually know the origins f brands when forming judgments and making purchase decisions. Our research questions this assumption.

Finally, marketers of brands that are associated with countries that have positive images can serve their brands well by aggressively communicating country-of-origin information (cf. Gnrhan-Canli and Maheswaran 2000). Germany, for example, is known for fine craftsmanship and technological sophistication. It thus is in the best interest of German brands that possess technological properties to educate and reinforce the German origin of these brands when marketing overseas. In the final analysis, it would be presumptuous for marketers to assume that consumers are knowledgeable of their brands’ countries of origin. It thus is critical that BOK be monitored and managed.

REFERENCES

Bettman, James R. (1979), An Information Processing Theory of Consumer Choice. Reading, MA: Addison-Wesley.

Gnrhan-Canli, Zeynep and Durairaj Maheswaran (2000), "Determinants of Country-of-Origin Evaluations," Journal of Consumer Research, 27 (June), 96-108.

Han, C. Min (1989), "Country Image: Halo or Summary Construct?" Journal of Marketing Research, 26 (May), 222-229.

Maheswaran, Durairaj (1994), "Country of Origin as a Stereotype: Effects of Consumer Expertise and Attribute Strength on Product Evaluations," Journal of Consumer Research, 21 (September), 354-365.

Peterson, Robert A. and Alain J. P. Jolibert (1995), "A Meta-Analysis of Country-of-Origin Effects," Journal of International Business Studies, 26 (4), 883-900.

Samiee, S. (1994), "Customer Evaluation of Products in a Global Market," Journal of International Business Studies, 25 (3), 579-604.

Shimp, Terence A. and Subhash Sharma (1987), "Consumer Ethnocentrism: Construction and Validation of the CETSCALE," Journal of Marketing Research, 24 (August), 280-289.

Shimp, Terence A., S. Samiee, and T. Madden (1993), "Countries and Their Products: A Cognitive Structure Perspective," Journal of the Academy of Marketing Science, 21 (4), 323-330.

----------------------------------------