ABSTRACT - Placing the name of the country of origin upon a manufactured good carries with it the risk that both domestic and foreign consumers may have quality associations linked to goods from that country. This perceptual phenomenon has been widely researched, but in a somewhat piecemeal way. The present study elicits quality perceptions for goods from Australia, New Zealand, Indonesia and India from nationals of those countries, and finds a perceptual pattern linking the two Asian and the two European countries.||Research has shown that consumers use country of origin (COO) information as a simplifying proxy to enable them to make evaluations, particularly when other information is lacking or when the decision is deemed as difficult (Huber & McCann 1982).

Citation:

Roger Marshall, Hsien Hwei Tee, and Christina Kwai Choi Lee (1994) ,"", in AP - Asia Pacific Advances in Consumer Research Volume 1, eds. Joseph A. Cote and Siew Meng Leong, Provo, UT : Association for Consumer Research, Pages: 97-102.

Asia Pacific Advances in Consumer Research Volume 1, 1994      Pages 97-102

VARIATIONS IN THE PERCEPTION OF "COUNTRY OF ORIGIN" LABELS: AN ASIAN-PACIFIC PERSPECTIVE

Roger Marshall, Nanyang Technological University, Singapore

Hsien Hwei Tee, University of Auckland, New Zealand

Christina Kwai Choi Lee, University of Auckland, New Zealand

ABSTRACT -

Placing the name of the country of origin upon a manufactured good carries with it the risk that both domestic and foreign consumers may have quality associations linked to goods from that country. This perceptual phenomenon has been widely researched, but in a somewhat piecemeal way. The present study elicits quality perceptions for goods from Australia, New Zealand, Indonesia and India from nationals of those countries, and finds a perceptual pattern linking the two Asian and the two European countries.

INTRODUCTION

Background

Research has shown that consumers use country of origin (COO) information as a simplifying proxy to enable them to make evaluations, particularly when other information is lacking or when the decision is deemed as difficult (Huber & McCann 1982).

Most studies undertaken in the area have been concerned with perceived product quality (Heslop, Liefield & Wall 1987; Kaynak & Cavusgil 1983; Nagashima 1970, 1977; how perceptions are formed (Halfhill 1980); how important the perceptions are in product evaluation (Erickson, Johansson & Chao 1984; Khera, Anderson & Kim 1982) and how these perceptions vary with economic, social and cultural background in terms of overall product value. These studies have confirmed that generally the COO label tends to connote some national stereotypes (Erickson, Johansson & Chao 1984; Johansson, Douglas & Nonaka 1985; Lawrence, Marr & Prendergast 1992; Roth & Romeo 1992).

A better understanding of the impact of COO information on consumers' product evaluations have important implications in the light of increasing off-shore sourcing, globalisation and internationalisation. Understanding of the use of the COO heuristic will give manufacturers a better perspective of perceptions of consumers in different countries and the extent of their generalisations.

When consumers lack familiarity or find the product too difficult to assess, they are forced to rely on the stereotypical biases they have previously developed towards the specific country involved (Heimbach, Johansson & Machlachlan 1989). These stereotypes are formed from generalisations accumulated from previous experiences. Generalisation may be influenced by the consumer's overall familiarity with the country as well as the associations they make with the country (Nagashima 1970). For instance, a country that is known as a lesser developed country is less likely to produce high quality electronic goods. Similarly, consumers may learn the stereotype that China produces quality silk and that the Swiss craft extremely precise watches. It is not surprising, then, that evidence has been published showing that although, in general, the COO effect is not very strong, it is stronger for industrialised countries as there are more products in existence world-wide to assist others form their stereotypes (Cordell 1992).

Experimental research on country of origin as an informational cue has indicated that evaluations are affected for many types and classes of products (Anderson & Cunningham 1972; Bannister & Saunders 1978; Lillis & Narayana 1974; Nagashima 1970, 1977; Schooler 1965, 1971; Schooler & Sunoo 1969). Furthermore, the attitude towards products made in different countries may not be the same globally. Studies have found that respondents from certain consuming countries have different attitudes towards products from a given source country than do respondents from other consuming countries (Nagashima (1970) for US and Japan; Yaprak (1978) for US and Turkey; Krishnakumar (1974) for US, India and Taiwan; Cattin, Jolibert & Lohnes (1982) for the French). In spite of this, products made in some types of country are consistently given higher product ratings than products made elsewhere. For instance, attitudes toward products sourced from the less developed countries (LDCs) have been shown to be considerably less favourable than are products sourced from more developed countries (MDCs) (Obermiller & Spangenberg 1989). Bilkey and Nes (1982) similarly noted that there appeared to be a positive relationship between product evaluation and the degree of economic development (Schooler 1971).

Past studies have also indicated that there is a tendency for consumers to evaluate their own country's products more favourably than they do products from foreign countries (Bannister & Saunders 1978; Kaynak & Cavasgil 1983; Nagashima 1970). Product serviceability (Han & Terpstra 1988) and consumer patriotism (Shimp & Sharma 1987) have been suggested to be two of the reasons for such tendency. Again, it is important to note that this is only true for products made in the MDCs. Krishnakumar (1974) found that students from LDCs discriminated against local products in favour of products made in MDCs. It has also become evident that some countries can be grouped together, in that others see their country stereotypes as being similar to each other and different to other groupings (Kaynak & Kucukemiroglu 1992).

Research objectives

The general objective of this study is to investigate the quality associations held by various cultural groups in relation to COO information. A range of products was used with a number of described product features held constant with COO information as a manipulated variable. At a more specific level, the study was designed to determine if the consumers hold similar quality perceptions for each quality-related attribute of the different products. A second specific objective is to determine if COO quality perceptions differ by specific products or if they are generalised for each country across products. The sample was drawn from four cultures in order to move toward generalising the findings into an international context, and attempting to identify patterns of individual differences based on nationality.

RESEARCH METHOD

A research instrument was designed and administered to undergraduate respondents from four different countries. Different attribute dimensions of three selected products were evaluated by respondents to determine the perceived quality of products from the four countries. The three products selected for this research were a personal computer, a watch and a portable stereo respectively. A list of product attribute cues that were considered important when evaluating products were generated from attributes uncovered in previous research and by interviewing a convenient sample. After the products and their respective attribute cues were identified, a questionnaire was developed, using a combination of semantic differential scales, ranking and standard questions.

Sample

A convenience sample of approximately 50 undergraduate students (equal numbers of males and females) was drawn from four Universities. Although Shruptine (1975) and others have defended the use of student samples in this kind of work on the grounds that using students introduces an element of control that helps to isolate the cultural variable, there can be no doubt that these samples cannot be claimed to be truly representative of their respective populations. All students were undergraduates from commerce faculties of their Universities: Universitas Gadjah Mada in Central Java, Indonesia; the University of Calicut, in Southern India; the University of Auckland in New Zealand; and Murdoch and Curtin Universities in Western Australia.

Product choice

In order to permit meaningful comparisons, the products used in the study are confined to durable mechanical goods. To ensure product equivalence between countries, local and foreign students from Australia, India and Indonesia studying in New Zealand were interviewed. The respondents were asked to express their views on the relative familiarity they had with the products listed, then their opinions on the relative usage of each of the products. This is not ideal, but at least rough equivalence is thus established.

Descriptions of each product are specific so as to increase control. Schooler (1971) found that when the product was not tangible, different evaluations occurred not because of actual differences arising from the manipulated variable but due to the different impressions respondents had about the product. Hence the products were described thus: Product 1 is described as an AT 386/40 Personal Computer. The computer has a 40 megabyte hard disk and operated at a (high) speed of 16 mhz. It also has 1 megabyte RAM, a colour screen and used MS DOS as its operating system. Product 2 is described as a water-resistant, quartz wrist watch, with a gold face, stainless steel back and a genuine leather strap. Product 3 is described as a portable stereo that has a double tape deck with Dolby and autoreverse. The stereo also has an AM/FM radio and detachable speakers.

Attribute selection

The different attributes selected to define quality for the products were extracted from previous studies (Bannister & Saunders 1978; Han & Terpstra 1987; Erickson, Johansson & Chao 1984; Hung 1989; Nagashima 1977; Patterson & Tai 1990). A pretest was conducted with a convenience sample of Auckland University graduate students to ascertain that such attribute dimensions were important when evaluating the quality of selected products. This pretest indicated that not all attributes were considered important by the sample. Six attributes were considered important when evaluating the quality of a computer whilst seven attributes were deemed as important when evaluating the quality of a watch and a stereo.

The final instrument was to be implemented cross-culturally, hence care was taken to ensure that the administered questionnaires were equivalent for each of the countries. It was first necessary to ensure that the product attributes selected for each of the products were relevant and equivalent in all three countries. This was done by repeating the above task, but this time the selected sample consisted of Australian, Indian and Indonesian nationals. The resulting product attribute lists were compared and product attributes selected. The final list of product attributes generated included durability, warranty, reliability, workmanship, price, quality of raw materials and style.

Research instrument

The questionnaire includes four types of questions. First, the respondents ranked the countries in order of perceived quality of their products. This was done so that the general quality perception of products made in the different countries can be deciphered, simultaneously allowing the researcher to investigate the general response to different country images.

Second, an importance rating was made on a number of bipolar dimensions, including pricing, reliability, workmanship, technicality, style (after Nagashima 1977; La Tour & Henthorne 1990), and quality of materials (after Erickson, Johansson & Chao 1982; Hung 1989). The bipolar dimensions were repeated for the three products. Initial ratings of dimensions that contributed to quality perception of the products in terms of importance were measured so that weights could be obtained for further comparisons during analysis.

Third, ratings of a number of dimensions were made in respect to the four different countries. This was repeated for the three products. The different dimensions that alluded to quality assessment were stated in terms of attitude statements about the products of concern. The items consisted of questions that were evaluated on a 7-point Likert scale with 1 indicating strongly agree and 7 indicating strongly disagree. For each product, there were two sets of questions. The first set measured the perceived importance of the different product attributes. The product attributes selected for measurement were price, workmanship, reliability, quality of raw materials, durability, warranty and style (after Erickson, Johansson & Chao 1982; Hung 1989; Patterson & Tai 1990). The second set of questions investigated the ratings for the different attributes whilst COO information was varied. This was stated via attitude statements about the products of concern (ie: The computer would be expensive if made in.........). The order in which the product attributes were presented was varied in three versions for each country, and demographic screening questions were inserted at the beginning of the questionnaire.

Translated versions of each of the three questionnaires were required for Indonesia, the only country sampled where English is not the first language for undergraduates. Equivalence of content for the questionnaire were obtained via an initial translation into Indonesian that was validated by a back-translation into English. Any discrepancies were singled out and clarified. The Australian and New Zealand questionnaires were administered in October 1991, while the Indonesian and Indian questionnaires were administered in early January 1992.

Selection of countries

The countries selected for comparison were New Zealand, Australia, India and Indonesia. Although all four countries are from the Asia-Pacific region, two are European and the other two are Asian, with Australia and New Zealand being at a higher level of economic development than the Asian countries.

RESULTS OBTAINED

Overall quality associations by Country

Table 1 depicts the F-values for the main and interaction effects for the different attribute quality ratings for the three products. The picture drawn is supportive of other work in this area, in that first, there is a significant difference for the rating of similar attributes for different products. Second, there is a significant interaction between COO of products and the attitude ratings of the various attributes for all three products. This confirms the premise that consumers do indeed use stereotypical country images. Table 2 displays the overall mean ratings for products made in the four selected countries.

TABLE 1

ANOVA FOR THE COO EFFECT

TABLE 2

MEAN ATTITUDE RATINGS OF THE VARIOUS ATTRIBUTES MADE BY RESPONDENTS FOR PRODUCTS OF DIFFERENT COO

New Zealand and Australia received consistent highly positive ratings for their products. Australian-made products received the most positive ratings for the 'Durability' attribute, but Australia was also considered the country that produced the most expensive products. New Zealand's strongest points were found in the design-style of her products as well as being the country perceived to offer the longest warranty period. Products made in India were perceived to be the least durable, offering the shortest warranty period and were perceived as comparatively poor in terms of workmanship. On the other hand, Indian-made products were also perceived to be the cheapest of the four sampled countries. Indonesian-made products were perceived to be relatively strong on durability and style and weak in terms of reliability. On the whole, although some attributes received rather favourable ratings, ratings of products made in the Asian countries were relatively more negative than the products made in the Australasian countries.

Individuals tended to group Australian and New Zealand-made products in one category, and Indian and Indonesian-made products in another. Despite the overall similarity in perception between New Zealand and Australian-made products, product attributes such as durability, reliability and raw materials were observed to have significant differences under Tukey tests. In contrast, the rating of the related attributes for products made in the Asian countries were not perceived to be significantly different.

The use of attributes by Country

Table 4 shows that the use of attribute information depends on the nationality of the judge, although an F value of 1.86 (p = 0.08) indicates only a marginally significant difference in the use of attributes across products.

The overall means of attitude ratings by respondents from the different countries towards the various attribute cues are displayed in Table 4. A distinct pattern is evident; the most positive ratings for all the different attributes were given by the Indian and Indonesian respondents, the ratings given by the Australasian countries were far more conservative.

Examination of the data using Tukey's test (Table 6) confirms that most of the differences in the use of cues occurred between Australia vs India; New Zealand vs India; Australia vs Indonesia and New Zealand vs Indonesia. The rating of the attributes from the Indonesian and Indian sample can thus be roughly grouped together whilst New Zealand and Australian ratings can also be similarly grouped.

The evidence for a "patriotism bias"

Finally, a comparison of means between ratings given to local products and to foreign products was conducted to investigate the existence of patriotism in favour of locally produced products. Table 7 displays the means of the rating of quality for locally and foreign products and t-scores for their differences.

TABLE 3

BETWEEN-COUNTRY DIFFERENCE IN PERCEIVED QUALITY OF PRODUCTS, BY TUKEY'S TEST

TABLE 4

ANOVA, THE PERCEPTION OF VARIOUS ATTRIBUTES FOR THE THREE PRODUCTS BY NATIONALITY

TABLE 5

MEAN ATTITUDE RATINGS OF THE VARIOUS ATTRIBUTES MADE BY RESPONDENT SFROM DIFFERENT COUNTRIES

TABLE 6

BETWEEN-COUNTRY DIFFERENCES IN THE USE OF CUES, BY TUKEY'S TEST

TABLE 7

MEAN QUALITY RATINGS OF LOCAL AND FOREIGN PRODUCTS FOR THE FOUR SURVEYED COUNTRIES

The results from the t-tests show a significant difference in the way New Zealand, Australian and Indonesian respondents rated their products as opposed to products made in foreign countries. In three cases, the countries rated products made in their own countries as superior to foreign products. India, on the other hand seemed to rate local products in a similar fashion to foreign products, showing little favour or prejudice against foreign-made products. This finding generally contradicts the findings of a recent study by Johansson, Douglas and Nonaka, (1985), but rather supports earlier research documented by Nagashima, (1970) and Bannister et al, (1978).

CONCLUSIONS

The two European cultures tested here are increasingly contracting their manufactures to the lower-waged Asian countries; Indonesia and India are countries that have become increasing recipients of such manufacturing contracts. Understanding the general quality perceptions of products manufactured in these countries can provide important information for branding and off-shore sourcing for the specific countries surveyed.

In a more general sense, there is a caveat here for all international operators in that there is strong evidence here for between-country variations in the perception of COO labels. The specific significance of this is that if products are to be manufactured in a cheaper-labour country, that carries a poorer COO quality image for the target market, then efforts must be made to ensure that the product has other features (such as a strong brand) in compensation.

On the other hand, some evidence has also been presented here suggesting that certain national groupings may have roughly similar quality images and perceptions regarding country of origin effects. One of the strongest forces in international trade today is the grouping of countries into regional trade blocs that encourage exactly the sort of off-shore manufacturing operations discussed above. Although it would be convenient for international traders if universal COO perceptions existed, at least the possibility of regional, rather than national, COO perceptions offers some consolation and guidance.

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