Consumers' Awareness of a Brand's Origin Country and Made-In Country: Development of Research Methodology and Initial Results

ABSTRACT - Nebenzahl, Jaffe and Lampert (1997) propose a theoretical model that describes the dynamic interactions between brand image, countries images, product evaluation and relative experience with products. Accounting for multinational production sourcing of modern companies, the model recognizes that the image of two countries, OC B the country of origin of the brand and MC B the county whose name appear on the product made-in label, may effect product evaluations. This paper suggests a methodology for testing the proposition that both OC and MC effect product evaluations by consumers and presents initial empirical results.



Citation:

Israel D. Nebenzahl (1998) ,"Consumers' Awareness of a Brand's Origin Country and Made-In Country: Development of Research Methodology and Initial Results", in E - European Advances in Consumer Research Volume 3, eds. Basil G. Englis and Anna Olofsson, Provo, UT : Association for Consumer Research, Pages: 149-153.

European Advances in Consumer Research Volume 3, 1998      Pages 149-153

CONSUMERS' AWARENESS OF A BRAND'S ORIGIN COUNTRY AND MADE-IN COUNTRY: DEVELOPMENT OF RESEARCH METHODOLOGY AND INITIAL RESULTS

Israel D. Nebenzahl, Bar-Ilan University, Israel

ABSTRACT -

Nebenzahl, Jaffe and Lampert (1997) propose a theoretical model that describes the dynamic interactions between brand image, countries images, product evaluation and relative experience with products. Accounting for multinational production sourcing of modern companies, the model recognizes that the image of two countries, OC B the country of origin of the brand and MC B the county whose name appear on the product made-in label, may effect product evaluations. This paper suggests a methodology for testing the proposition that both OC and MC effect product evaluations by consumers and presents initial empirical results.

BACKGROUND

Most existing research on international marketing issues is fragmentary, atheoretic and not sufficiently programmatic (Albaum and Peterson, 1984). In an attempt to add theory to the field of international marketing, Nebenzahl, Jaffe and Lampert (1997) have recently proposed a theoretical model (NJL model) that describes the dynamic interactions between brand image, country image, product evaluation and relative experience with products. Accounting for multinational production sourcing of modern companies, the model recognizes that the image of two countries, the country of origin of the brand (OC) and the country of productionµthe country whose name appears on the made-in label (MC) may effect product evaluations (Samiee, 1994; Jaffe, Nebenzahl and Lampert, 1994). OC is the country which a consumer associates with a certain branded product as being its origin, regardless of where the product is actually produced. For example, many consumers consider Japan to be the origin country of Sony home electronic products. MC is the country whose name appears on the made-in label. According to the NJL model, exposure to a product triggers it’s brand name, OC and MC in the mind of the consumer. These stimuli retrieve from memory the relative images of the brand and of the respective countries which in turn determine the relative image of the considered product. Evaluation of the similarly derived relative images of all considered competing brands leads to purchase decisions. Thus, in the first stage of the dynamic model, relative brand and country images impact purchase decisions. In the second stage, experience with the purchased products leads to a process by which all brand and country images are revised.

A key proposition of the NJL model is that in evaluating a branded product, consumers do associate the brand with a certain OC and are aware of the brand’s MC. The purpose of the present paper is to suggest a methodology for the testing this proposition and present initial findings of its application.

Most, if not all, prior studies of the country image effect (CIE) have used questionnaires to assess consumer attitudes towards brands and countries (for a recent review of this literature see Nebenzahl, Jaffe and Lampert, 1997). The typical approach is to use a multi-items scale where a leading statement such as "Products made in country X are..." is followed by the scale items. While Jaffe and Nebenzahl (1984) have shown that alternative questionnaire formats of this type lead to similar ratings, they have not addressed the risk of inducing demand effect (Sawyer, 1975). In the case of country image studies, the typical line of questioning clearly indicates to respondents that the researcher is interested in their attitudes toward different countries. Since respondents don’t know which is the target country of the researcher, this understanding doesn’t bias the expressed relative attitudes to the different countries. However, it may cause exaggeration of the impact CIE has on product evaluation per se. Accordingly, the purpose of this paper is to propose a data collection methodology that reduces the risk of such exaggeration.

If CIE is an important factor in consumer evaluation of products, we would expect it to surface in discussions that take place when products are considered for purchase. A most likely location for consumes to consider alternative products is a retail outlet. Accordingly, it is suggested here that analysis of the interactions between salespersons and buyers can be utilized in assessing the true importance of CIE. If consumers consider the made-in country to be important, we would expect them to ask for products mde in certain countries, to seek information about where unfamiliar products are made-in and even to make negative comments about products made in certain countries. Similarly, if salespersons believe that products made in certain countries are more desirable than those made in other countries, we would expect them to stress the source of products made in what they consider to be more desirable locations. These observations lead to the following two related hypotheses:

H1a While comparing alternative products in a retail environment, consumers will make comments regarding OC and/or MC.

H1b In their efforts to convince consumers about the desirability of products, salespersons will mention OC and/or MC as indicators of product value.

The NJL model proposes that consumers associate certain brands with certain countries, regardless of were they are actually produced. While OC could be any country, there is strong evidence in the CIE literature that the most likely CO is the country where the brand originated (Samiee, 1994). These observations lead to the following hypotheses:

H2a Consumers have OC of products, namely, associate brands with countries.

H2b The most likely OC is the country where a brand originated.

The NJL model assumes that as consumers evaluate products, they become aware of MC when it differs from OC. Accordingly, after a consumer completes the evaluation of competing products, we would expect him or her to know what are the MCs of these products, thus:

H3 When consumers leave a retail environment after considering alternative products, they know the MC of the alternative products they considered.

With the proliferation of international sourcing, especially where the same branded product line is produced in multiple countries around the globe, the overall country image effect on a certain product may be divided among several countries, each having its own distinct image. Under these conditions, one would expect the brand to become more important as a cue for product value. This leads to H4:

H4 For internationally sourced products, brand name is more important a product feature than OC or MC.

For H1a through H3, we test the hypotheses that the related proportions are greater than 5 percent while for H4 we test the hypotheses that differences are greater than 10 percent, all at level of significance of a=0.05.

METHODOLOGY

Research Instrument

A three-step process, by respondent, was designed for data collection in this study. In the first step, interviewers record observations, in the second, interviewers make assessments, while in the third they condct personal interviews.

Hypotheses H1a and H1b call for objective observations of the intercourse between salespersons and customers within the retail environment. We developed a form on which interviewers can quickly record the relevant data, without interfering with the activities that take place within the store. The information recorded include: Whether the salesperson on his or her own initiative mentioned OC or MC; whether the customer made a statement that identifies his or her perceived OC; whether the customer asked for a product "made-in" a certain country; and, whether the customer requests information about MC. Our pretests indicated that these recording of observed behavior do not require judgments on the part of interviewers, as interrater agreement approached 100 percent.

In the second step, when the customer is ready to leave the department, considering all that was heard and seen, the interviewer records his or her own assessment of whether the customer has been more interested in product features or in prices; and, whether the customer clearly knows (or clearly doesn’t know) where considered products are made-in.

In the third step, a structured personal interview of the customer is conducted. For each product observed to have been considered, the customer is asked whether he or she was seeking a specific brand; a specific made-in country; and where the product is actually produced. In the following part, not discussed in this paper, the customer is presented with a list of branded products and asked where each is made-in and to list all other countries where it is produced. The interview is concluded with demographic questions.

Data Collection

Data were collected in the departments of home electronics, household appliances and shoes of a large department store located in a Tel-Aviv metropolitan area shopping center. In securing its permission to conduct the study inside the department store, the store’s management was fully informed about the study objectives and procedures. To minimize the risk that the presence of interviewers might have on their behavior, salespersons were told that the purpose of the study is to find out what customers are looking for when shopping for products. To further limit the possibility of effecting the behavior of salespersons, the personal interviews were conducted outside the respective departments. The in-store behavior of 98 customers was recorded. Of these, 84 agreed to be interviewed, yielding an 86 percent response rate for the questionnaire.

RESULTS

Extent of International Sourcing

A prerequisite for meaningful data collection in this study is that at least some products sold in the departments were data are collected be sourced internationally. To determine the extent of sourcing, the brand name and MC of each product offered in the research environment were recorded. Expected OC was later determined by finding out where the headquarters of the company owning the brand is located. International sourcing is evident when MC and OC are different.

Table 1 presents a cross tabulation of MC by OC. We first note that brands associated with eight countries have made-in labels of sixteen. Of the 34 products offered in the researched departments, less than half had MC=OC. None of the three British and only three of the eleven Japanese OC products were produced in Britain and Japan, respectively. Given these observations it can be concluded that international sourcing of products offered in the research environment is extensive enough for testing te hypotheses of the present study.

Recorded Objective Observations

In the first data collection step, interviewers observed customers’ behavior and interaction with salespersons from the moment they entered the department area until they left it. Results of these observations are presented in the first part of Table 2.

As seen in the first column of Table 2, a total of 125 products were considered by respondents, averaging 1.26 products per customer. For a quarter of the considered products the customer requested to be shown a particular brand. In sixteen percent of the cases, the customer inquired about the brand name. Thus, the brand was mentioned at the customers’ initiative in 41 percent of the observed cases. In addition, sixteen percent of the considered products were promoted by the salespersons by stressing their brand. In total, in almost sixty percent of considered products, the brand name was vocalized as a marketing feature by either customer or salesperson. In comparison, in only one case (not shown in the table) a particular MC was requested by a customer. Inquiries about MC were voiced by customers in reference to eleven percent of the products, while salespersons mentioned MC as a desirable product feature in additional ten percent of the cases. Thus, in total, the name of a country was voiced as a product feature in twenty percent of the cases. It can be concluded that while brand name is clearly more important than the name of a country, the later is a product feature that should not be ignored.

Since no significant differences were found between home electronics and household appliances, these two product lines are combined into a single "consumer durables" category in Table 2. The next two columns of Table 2 provide a breakdown of the total sample by consumer durables and shoes product categories while the last column provides the significance of differences between these categories. The difference between the two product lines in the mentioning of brand as a product feature is insignificant. The country, on the other hand, is significantly more important a product feature in the consumer durables product line than in shoes. It should be noted that in the durables department salespersons made as much use of country image as of brand in their attempt to influence buyers’ choice. In contrast, no such usage was observed in the shoe department. In the durables departments the country was mentioned in 34 percent of the cases, an indication that it is an important product feature. This is not the case in the shoe department, where a country name was raised by only five percent of the customers and not at all by salespersons. Based on these results, H4 is accepted while H1a and H1b are accepted for consumer durables and rejected for sport shoes.

TABLE 1

EXTENT OF INTERNATIONAL SOURCING: MC BY OC

Interviewers’ Assessments

In the second data collection step interviewers recorded their assessment of what has transpired in the shopping process. Two assessments were made. In the first, included for control purposes, interviewers were asked to assess whether the customer was more interested in product features or in prices. Success in this task indicates that the verbal intercourse among those present facilitates meaningful interpretations. Failure would indicate that this method of data generation is questionable. In the second task, interviewers were asked to assess whether it is clear to them that the customer knows the true MC or whether it is clear to them that the customer doesn’t know MC. These assessments are presented in the second part of Table 2. Considering first the durables column of Table 2, it is clear that in these departments meaningful conversations took place so that the interviewers could make assessments about features vs. price for 66 percent of the products considered. Yet, their ability to assess the made-in nformation reached only fifteen percent. What is more surprising is that with the exception of one, all assessments were in the negative, that is, it became apparent to the interviewers that the customers did not know the true MC. Since thirteen percent is significantly different from zero, there is some evidence that consumers do not know MC. Considering next the shoe department, it is evident that less meaningful conversations took place, as only twelve percent of the cases could be assessed for features vs. price and assessment of MC knowledge is negligible. Given these results it can be concluded that H3 cannot be tested by means of interviewers’ assessment for shoes and for the other product line H3 is not only rejected but there is significant evidence to the contrary.

Personal interviews

As customers whose in-store behavior was recorded were leaving the department, they were approached by the interviewer with the structured questionnaire. For each considered product, they were asked to name its country of production. Table 3 presents the results of these questions.

The 84 respondents who cooperated in this step considered 107 products out of the 125 objectively observed. The forty respondents who did their shopping in the shoe department considered the same number of products. The 44 respondents who shopped for durable goods evaluated a total of 67 products, averaging 1.5 considered products per respondent. Cases were classified between those for which OC=MC, indicating they were not sourced internationally, and those for which OC¦MC. It is interesting to note that all sport shoe brands were sourced, that is, none was produced at the home country of the brand. MCs of 64 percent of the 25 products for which MC=OC were correctly identified by respondents. A comparison between the OC¦MC durables and shoes columns provide additional insight to consumers’ perceptions. MC was correctly identified for only 7 and 15 percent of the sourced durables and shoes, respectively, indicating lack of MC knowledge. Those who erred, tended to provide OC as if it was MC. This is evident from the two error rows of Table 3, where the "Other" row refers to sixteen countries that are neither the expected OC nor MC. For durables, OC was cited erroneously almost five time as often as the true MC. It can be concluded that country of origin is an important attribute for durables products. Most respondents "knew" where products they considered are made-in, the only problem is that they named the wrong country. This is not the case for shoes, for which two third of the respondents could not name made-in country. Based on these results it can be concluded that, by and large, consumers do not know MC when it differs from OC. Accordingly, based on the questionnaire data, H3 is rejected while H2a is accepted for durable products and rejected for shoes. H2b is accepted for both products.

TABLE 2

OBSERVED AND ASSESSED IN-STORE BEHAVIOR

TABLE 3

CONSUMERS' KNOWLEDGE OF THE MADE-IN COUNTRY

DISCUSSION

The objective of the present study has been to develop a research methodology that would assess the role of CIE at the point were purchase decisions are most likely to occur, namely, at the retail store. This is the location where consumers collect information on competing brands, consider their relative merits and, eventually, make a purchase decision. The basic premise in developing the methodology was that if CIE is an important consumer consideration, it should surface in the discussions among customers and between customers and salespersons. Based on this premise, the suggested methodology calls for the objective coding of meaningful conversations within the retail environment. The objective coding is followed by interviewers assessment of consumers’ knowledge and a factual rather than attitudinal follow-up questionnaire.

Results of the study confirm te above premise. It was found that the degree to which the country of origin was mentioned in in-store discussions relates to the knowledge consumers showed later in the follow-up questionnaire. For consumer durables, the subject was raised by customers as well as by salespersons. For the shoes product line, the subject was hardly raised and most consumers admitted having no knowledge of the country of origin.

The second step of the tested methodology calls for interviewers to assess the degree to which the consumer is aware of OC and MC. The value of this step is still questionable. On one hand it did surface the possibility that consumers act on wrong information, an observation that was confirmed by the follow-up questionnaire. On the other hand, it is not sensitive enough. Further research in testing the validity and reliability of this part is needed before firm conclusions about its value can be reached.

The third step, a short questionnaire asking for factual information, proved to be a valuable complementary to the first. Asking respondents about MC of products they have just considered has a number of advantages. First, instead of being asked about products in general or product lines they may have no interest in, respondents are asked about products about which they have demonstrated keen interest. Second, there is little reliance on respondent’s memory as the interviews take place immediately following the evaluation of products and they are asked only about products they have been observed checking. Finally, because the interview takes just a few seconds, it is not difficult to get a relatively high response rate.

In testing the methodology in the field, a number of problems that should be addressed in the future did surface. First, the value of the observation method depends on the degree to which meaningful verbal intercourse takes place. This method is bound to fail in departments where customers just pick up products without much conversation. Second, data collection was found to be relatively expensive, especially in the durables departments, where a sampled customer could spend more than half-an-hour considering different models of the same product line. Third, in these departments some customers checked more than one product line, for example, refrigerators and dishwashers. It became rather difficult to follow them without drawing attention. Fourth, suspecting that their own performance is being checked, some salespersons made efforts to find out the content of the coding and of the personal interviews. Finally, it was difficult to secure permission for conducting the experiment. Managers had to be assured that the data collection would not interfere with the work of their salespersons and would not alienate customers. These problem areas should be addressed in future refining the methodology.

We consider results of the empirical testing rather preliminary because data were collected in only one department store. Yet, a number of observations can be made. Results in the sport shoe department indicate that Israeli consumers don’t know and probably don’t care about the country of origin of these products. Results in the durable goods departments are more in line with theory. Here consumers were found to use the country of origin as an attribute in evaluating alternative products and salespersons did promote certain brands by stressing their MC. The relative importance of OC in consumers’ perceptions of product image was verified. On the other hand, with little knowledge of MC, it seams that location of actual production is of a lesser importance. In conclusion, the overall methodology developed in the present study was found to be operational. Future efforts should be directed at the refinement of the tools employed.

The impetus to this study was the NJL model that provides a theoretical model for the orderly testing of hypotheses about CIE. This model stresses that in addition to OC and MC, the country of residence of the consumer, through its culture, demographic and socio-economic attributes also impact brand and country images and their evolvement. It is recommended, therefore, hat this study be replicated in different environments before final conclusions are reached.

REFERENCES

Albaum, C. and Peterson, R. A., (1984), "Empirical Research in International Marketing: 1976-1982," Journal of International Business Studies, Spring-Summer, 161-173.

Jaffe, E.D., Nebenzahl, I. D., (1984), "Alternative Questionnaire Formats for Country Image Studies," Journal of Marketing Research, 81, 463-471.

Jaffe, E.D., Nebenzahl, I. D., and Lampert, S. I., (1994), "Towards a Theory of Country-of Origin Effect: An Integrative Paradigm," in Obloj, K. (ed.), High Speed Competition in a New Europe, Proceedings of the European International Business Association, Warsaw, 2, 79-104.

Nebenzahl, I. D., Jaffe, E. D. and Lampert, S. I., (1997), "Towards a Theory of Country Image Effect on Product Evaluation," Management International Review, 37, (1), 27-49.

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

Sawyer, A. G., (1975), "Demand Artifacts in Laboratory Experiments in Consumer Research," Journal of Consumer Research, 1, 20-30.

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Authors

Israel D. Nebenzahl, Bar-Ilan University, Israel



Volume

E - European Advances in Consumer Research Volume 3 | 1998



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