Special Session Summary the Effect of Country of Origin: Emerging Issues Regarding Consumer Evaluation of Imported Products in Taiwan

Citation:

Wanru Su (1998) ,"Special Session Summary the Effect of Country of Origin: Emerging Issues Regarding Consumer Evaluation of Imported Products in Taiwan", in AP - Asia Pacific Advances in Consumer Research Volume 3, eds. Kineta Hung and Kent B. Monroe, Provo, UT : Association for Consumer Research, Pages: 195-196.

Asia Pacific Advances in Consumer Research Volume 3, 1998      Pages 195-196

SPECIAL SESSION SUMMARY

THE EFFECT OF COUNTRY OF ORIGIN: EMERGING ISSUES REGARDING CONSUMER EVALUATION OF IMPORTED PRODUCTS IN TAIWAN

Wanru Su, Yuan Ze University, Taiwan, R.O.C.

This session addressed important emerging issues regarding how consumers in Taiwan use country of origin as a cue in their evaluation of imported products. In the case of hybrid products that are designed by one country and yet assembled in another country, the effect of country of origin is investigated along two specific dimensions: country of brand and country of assembly. The roles of award winning, reference price, product knowledge and involvement in moderating the effects of country of origin on product evaluation and customer satisfaction are also investigated.

This session consisted of three research papers. They are briefly summarized as follows. The first paper focused on hybrid products. The author examines the effects of country of brand and country of assembly on product evaluation, and their interactions with reference price. The study also investigated the moderating role of consumer’s product knowledge by analyzing its influence on product information processing and the determination of the acceptable price. The second paper examines the differential effects of country of origin on both the product expectation at the pre-trial stage and the perceived product performance at the post-trial stage when consumers have different levels of product knowledge. Also investigated is the issue of whether the major determinants of customer satisfaction vary between consumers of high versus low product knowledge. The final paper addresses the use of winning a publicly recognized award as an indicator of the product quality in consumer evaluation. Country of origin and involvement are also incorporated into the study in order to examine their moderating effects on the impact of the award on product evaluation.

 

THE IMPACT OF STEREOTYPE IMAGE OF COUNTRY OF ORIGIN, REFERENCE PRICE AND PRODUCT KNOWLEDGE ON PRODUCT EVALUATION

Dungchun Tsai, National Chengkung University, Taiwan

Due to the globalization of business, hybrid products have become very popular in the market. Many hybrid products are assembled in one country but carry a brand name from another country. To study such imported products, the construct of country-of-origin (COO) is further broken down into two specific constructs: country of brand and country of assembly in an attempt o address the impact of these two constructs on product evaluation. The interaction effects between these two constructs and reference price are also examined. Furthermore, consumer’s product knowledge is included in this study as a moderating variable in the analysis of its influence on product information processing and the determination of the acceptable price.

A between-subject experiment was conducted with college students regarding the evaluation of an automobile. The major findings of this study are as follows. First, country of brand has a significant impact on specific attribute evaluation but not on overall product evaluation. On the other hand, country of assembly bears significant influence on overall product evaluation but not on specific attribute evaluation. Secondly, the interaction effect between country of brand and reference price on specific attribute evaluation is significant. Thirdly, an advertisement with a higher reference price raises the consumer’s willingness to pay as well as the latitude of acceptable price. Finally, consumers who are more knowledgeable about the product are less likely to discount product information; as a result, their lower limits of acceptable price first increase and then level off.

 

THE IMPACT OF COUNTRY OF ORIGIN ON CUSTOMER SATISFACTION: THE CASE OF LOW VERSUS HIGH PRODUCT KNOWLEDGE

Jyh-Shen Chiou, National Chengchi University, Taiwan

Shiou-Fu Mao, National Chengchi University, Taiwan

This research investigated the differential impact of country of origin on product expectation and satisfaction when consumers have different levels of product knowledge. An experiment with a 2 ("Made in Taiwan" versus "Made in Japan") x 2 (high versus low product performance) x 2 (high versus low product knowledge) factorial design was conducted for the empirical test. The product used in the experiment was digital camera. Product expectation, perceived product performance, disconfirmation, customer satisfaction, and objective product knowledge of the digital camera were measured.

The results demonstrated the differential impact of objective product knowledge. When consumers had a low level of objective product knowledge, they followed a peripheral processing route at the product concept stage (pre-trial stage). Therefore, country of origin showed a significant effect on product expectation, with the expectation of Japanese product being higher than Taiwanese product. This country of origin effect on the perceived product performance became trivial, however, when subjects had the chance to evaluate the performance of the digital camera personally since the product performance was manipulated to be discerned easily. Perceived product performance, therefore, is the key determinant of customer satisfaction for the low knowledge group.

On the other hand, consumers follow a central processing route at the product concept stage when they had a high level of product knowledge. They had the ability to evaluate the product based on the attribute and function description of the concept board. Therefore, country of origins showed no effect on subjects’ product expectation. Since the product performance was manipulated to be discerned easily, one major determinant of satisfaction was expected to be disconfirmation according to the disconfirmation paradigm. The results, however, showed that product expectation, disconfirmation, and perceived product performance all had significant influences on customer satisfaction. Finally, customer satisfaction also had a significant effect on consumers’ purchase intention.

 

THE IMPACT OF WINNING AN AWARD ON PRODUCT EVALUATION: THE MODERATING ROLE OF COUNTRY OF ORIGIN AND INVOLVEMENT

Yung-Chien Lou, National Chengchi University, Taiwan

In an era of information overload, consumers are exposed to a great amount of promotion material among the products interested. In the fas-moving economy, buyers are also forced to make purchase decision during a limited time frame. Marketers, therefore, are trying their best to influence consumers at the moment of encounters. One possible way of doing this is to provide summarized information about the quality and/or the value of the product. For example, winning a publicly recognized award, such as the Malcolm Baldrige National Quality Award, could be an indicator of the product quality. There seems to be no research, however, that explicitly addresses the impact of the award on the product evaluation. As to the effects of the characteristics of the product and consumers themselves on the purchasing behavior, they have been well documented in the marketing literature. Both country of origin and involvement are incorporated into the current study to examine their moderating effects on the impact of the award on the purchase.

The Elaboration Likelihood Model proposes the existence of two distinct routes to attitude change. The central route emphasizes attitude changes resulting from a diligent elaboration of arguments central to an issue or object, whereas the peripheral route emphasizes attitude changes brought about by a simple inference from the information related to communication contexts. A person will be more likely to engage in cognitive elaboration of central arguments when there is a higher level of personal relevance to the issue or object. Thus, it is hypothesized that the impact of the award on the product evaluation will be stronger for the less involved subjects and the product from countries with poorer image than for the highly involved subjects and the product from countries with better image.

The results show that all the main effects of the three independent variables, (i.e., award, country of origin, and involvement) were significant. The two-way interaction effects between the award and country-of-origin on the product evaluation, however, was not significant. But the interaction effect between the award and involvement on quality evaluation was marginally significant, which provides partial support to the prediction of the ELM. One possible explanation is the culture differences in the sense that Chinese culture is more concerned with the context than the West. Thus Chinese consumers may place more emphasis on the peripheral cues regardless of the country where the products were made or their level of involvement. Further cross-cultural examination of this issue is needed.

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