Country Image in Marketing Strategies: Conceptual Issues and an Empirical Asian Illustration

ABSTRACT - This paper aims to clarify how a country image is established and how it can be developed. The marketer seeks to activate specific associations from a CI, and to match these with important characteristics in the target market through the design of all the marketing mix components. If all of these components successfully come together, then it is likely that an intended image association will be established. It is only when this succeeds, i.e. when the image creating moment occurs, that the CI can develop and eventually become stronger and more multiplex. The Norwegian fish industry’s strategy to market fish in Asia is discussed to illustrate the point that a country-of-origin strategy can be beneficial even if there is little or no knowledge about the origin country within the target market.



Citation:

Nina M. Iversen, Ingeborg Astrid Kleppe, and Inger G. Stensaker (1998) ,"Country Image in Marketing Strategies: Conceptual Issues and an Empirical Asian Illustration", in AP - Asia Pacific Advances in Consumer Research Volume 3, eds. Kineta Hung and Kent B. Monroe, Provo, UT : Association for Consumer Research, Pages: 197-203.

Asia Pacific Advances in Consumer Research Volume 3, 1998      Pages 197-203

COUNTRY IMAGE IN MARKETING STRATEGIES: CONCEPTUAL ISSUES AND AN EMPIRICAL ASIAN ILLUSTRATION

Nina M. Iversen, Norwegian School of Economics and Business Administration, Norway

Ingeborg Astrid Kleppe, Norwegian School of Economics and Business Administration, Norway

Inger G. Stensaker, Norwegian School of Economics and Business Administration, Norway

ABSTRACT -

This paper aims to clarify how a country image is established and how it can be developed. The marketer seeks to activate specific associations from a CI, and to match these with important characteristics in the target market through the design of all the marketing mix components. If all of these components successfully come together, then it is likely that an intended image association will be established. It is only when this succeeds, i.e. when the image creating moment occurs, that the CI can develop and eventually become stronger and more multiplex. The Norwegian fish industry’s strategy to market fish in Asia is discussed to illustrate the point that a country-of-origin strategy can be beneficial even if there is little or no knowledge about the origin country within the target market.

INTRODUCTION

In this paper our aim is to get a better understanding of the processes involved when building country images for commercial marketing. A framework for analyzing strategic trade-offs will then be presented and used to analyze an case study of Norwegian Seafood to the Asian markets.

Country-of-origin (CoO) can be thought of as a kind of branding strategy, since both attempt to develop a competitive advantage based on familiarity with either the brand name or the country-of-origin. Sometimes the country-of-origin is used in addition to a brand name, and this is what Keller (1993) refers to as a secondary association. At other times the country-of-origin is used instead of a brand name (i.e. as the brand name). The benefit of using a country-of-origin strategy rather than a "traditional" branding strategy is the added dimension of a country image since people often already have a relationship to, or opinions about, different countries. By spinning on these relationships it is possible to sell products and services that would have little opportunity of making it internationally on their own. The CoO effect depends, among other things, upon the knowledge of the CoO in the target market.

In this paper we will focus particularly on a situation where there is little or no knowledge of the origin country in the target market. At first glance there can be a question of why small, unknown countries should use CoO in their export promotion at all. Papadopolos (1993) notes that the higher the level of market globalization, the greater the potential of CoO in influencing consumer behavior due to increased country exposure in the media, greater awareness and growing presence of foreign products, and serious benefits of simplified information processing with increased complexity in markets and products. Information on the origin is well suited for these purposes because it can be used as an indicator of product quality and acceptability.

For small countries, like Norway, a CoO marketing strategy constitutes the possibility of enhancing its international competitiveness within products and services that otherwise would be too small to position on a global scale. However, using country-of-origin within marketing entails far more than just putting a "made-in" label on the products, particularly when international knowledge of the country is limited.

WHAT IS A COUNTRY IMAGE (CI)?

A number of different terms are used in the literature: country-of-origin, country image (Martin and Eroglu, 1993), product country image (Papadopolous, 1993), country equity (Shimp, Samie and Madden, 1993), made-in country image (Schooler, 1965; Nebenzahl et al., 1977), origin country image (Nes, 1981; Han & Terpstra, 1988), etc. For our purpose we have chosen to focus on three concepts representing two levels of analysis. Country image (CI) and country equity (CE)Bi.e. those CI assets that can be commercializedBrefer to the country level. Product country image (PCI) refers to the product level.

A country image is defined by Martin and Eroglu (1993, p. 193) "as the total of all descriptive, inferential and informational beliefs one has about a particular country". Kotler, Haider, & Rein, (1993) define an image of a place as "the sum of all those emotional, and aesthetic qualities such as experience, beliefs, ideas, recollections and impressions, that a person has of a place". In this definition it is evident that an individual forms an image based on her personal frame of reference. According to Relph (1976), a common social image of a place can be established because individual images are constantly being socialized through the use of common languges, symbols, and experiences. Groups and communities can develop identities of places which reflect group interests and biases. This common ground of agreement about the identity of a place is called the consensus identity.

According to Gunn (1972) images of places are formed on two levels and referred to as "organic" and "induced". The organic image of an area is created from general exposure to information such as newspaper reports, magazine articles, television reports etc. This process of image formation can be seen as a result of lifelong socialization. In marketing the focus is on the second level which could be advertising attempts to "induce" an image into the consumer’s evoked set, and thereby increase the probability of a purchase decision in favor of a product.

The term country equity (CE) was introduced by Shimp, Samie and Madden (1993) to describe "that portion of consumer affect toward a brand or product that is derived purely from the product’s associations with a particular country". These associations, also termed country related intangible assets by Kim & Chung (1997), could be technical advancement, prestige, workmanship, innovation, design, economy, service, etc. (Han & Terpstra, 1988; Roth and Romeo, 1992). A country’s intangible assets are associations with quality dimensions that a country gradually has acquired through export of goods and services. They arise from consumer belief that there is something "special" about, e.g. the labor, technology, or manufacturing processes within a particular country. Such images of the manufacturing nation have a substantial impact on judgments of products qualities, (Bilkey and Nes 1982; Han 1988). The more commercially relevant associations within the CI, the higher the country equity.

A product country image (PCI) can be defined as the total of all descriptive, inferential and informational beliefs one has about a specific product from a particular country, which is organized in some meaningful way in a consumer’s mind. These can be any association about an origin country, which is linked in memory to the PCI. The link may be strong or weak, but it tends to be strengthened by many experiences or exposures to communication.

FIGURE 1

COUNTRY IMAGE, COUNTRY EQUITY, AND PRODUCT COUNTRY IMAGE

A PCI is the image of a country specific brand, where national symbols from the origin country surround the product to shape it’s image. Some individual brands may also be imbued with a strong national appeal which infer the CI (e.g. Coca Cola / Levi’s). This national appeal, however, is referred to as an interaction effect between the brand image and the CI, (Seaton et al. 1985; Han and Terpstra, 1988; Witt and Rao, 1992). Strong brand names (such as Sony and Mercedes) may affect the CI of their product class, and have spill-over effects on other, less known brands. Although not being deliberately induced, this interaction effect may contribute to the development of CE.

The halo and summary effect

Han (1989) identifies two major functions of the CI. Buyers can use the country image in product evaluations when they are unable to detect the true quality of a country’s products before purchase. As such, the CI indirectly affects product attitudes through inferential beliefs, which can be described as a halo effect. When this effect occurs, the consumers link country specific associations to products, independent of the products’ implicit product attributes. The second function, the summary effect, represents associations based on accumulated experience with products from a country over time.

From simplex to multiplex images

A CI is a knowledge structure with associations varying in degree of uniqueness, favorability, strength, salience, numbers of associations, and number of links between associations. Thakor and Katsanis (1997) propose that strong knowledge structures lead to more persistent and resistantattitudes, and that the transferability of CE across product categories is positively affected by the multiplexity of the CI.

Countries with a lacking or vague image in specific target markets need coordinated marketing activities to establish some knowledge of the country. Multiplex images, on the other hand, contain a variety of country related intangible assets that can be relevant for many product categories. The process of building a strong and multiplex CI is based on conscious efforts by marketers to stimulate the inducement of quality dimensions about a country’s products. As such the halo and summary effect can be viewed as two mechanisms that are interdependent and reinforce each other in a continuing process.

The image creating moment

Independent of the CI associations in a target market, a PCI strategy will not work if the marketed associations are not perceived as important or relevant by the consumer. We use the term "image creating moment" to describe when a consumer is confronted with a marketing mix designed to evoke a specific image. Chon (1990) calls this moment a primary image, which reflects a relationship between the consumers’ needs and expectations, and the ability of the image to match these.

The marketer seeks to activate specific associations from the CI, and to match these with important characteristics in the target market through the design of all the marketing mix components. If all these components successfully come together, it is likely that an intended image association will be established. It is only when this succeeds, i.e. when the image creating moment occurs, that the CI can develop and eventually become stronger and more multiplex.

Roth (1995) finds in a 10 countries/60 regions study that cultural characteristics of regional target groups have a strong moderating effect on the performance of image strategies in the market. Psychographic market characteristics such as a patriotic bias (Bilkey and Nes 1982; Herche 1992); consumer ethnocentrism (Shimp and Sharma 1987); and animosity related to military, political, or economic events (Klein et al 1998) negatively influence consumer buying behavior towards CoO profiled products. This illustrates that elicitation of both CI associations and other target market characteristics is crucial to create an optimal match.

It is crucial for reinforcement of a preferred image that image attributes are reflected in concrete product properties. As images consist of both rational and emotional elements, it is important that all of the components in the marketing mix such as design, presentation in the stores, skills of the sellers, etc., are consistent, and support the image. Contrast theory (Cardozo, 1965) suggests that if false expectations are created through an image, the consumer will react with disappointment or anger when using the product. This results in a negative reinforcement of the image. If, on the other hand, the consumers’ experience matches or exceeds her expectations, the image of the product will be positively reinforced, (Engel and Blackwell 1982; Howard and Sheth 1969).

FIGURE 2

IMAGE COMPLEXITY AND MARKETING IMPLICATIONS

FIGURE 3

THE IMAGE CREATING MOMENT

TABLE 1

TRADE-OFFS BETWEEN STANDARDIZED AND CUSTOMIZED MARKETING BASED ON A CoO STRATEGY.

A FRAMEWORK FOR ANALYSISBSTANDARDIZATION VS. CUSTOMIZATION

Marketers can achieve economies of scale, message consistency, and the ability to attract common cross-national market segments through the use of global, standardized marketing programs, (e.g. Levitt, 1983). However, because of significant differences in consumer cultural and socio-economic conditions and market structures, customization to local or national markets may be worth the additional expense (e.g. Douglas and Wind, 1987).

As we have illustrated thus far, a CI changes over time as a target market learns more about the origin country and/or aboutproducts from that country. Different combinations of standardized and customized international marketing strategies will be discussed in light of a country’s positioning in the CI developing process. It should be emphasized that the trade-off between standardization and customization is not absolute, but should be seen as a continuum.

PCI across target market

A standardized PCI strategy, across a wide range of target markets, can only be fruitful if the selected image attributes are perceived identically by the specific target groups. Two problems are associated with this challenge: (1) the degree and content of knowledge in a CI can vary substantially across different target markets, and (2) each target market is different with respect to cultural values and sociopolitical characteristics which influence their perceptions and preferences. Previous research, Roth (1995), shows that cultures with certain characteristics are more susceptible to certain types of meanings such as symbolic or sensory associations. This implies that a marketer needs to know if the target market has specific images of the origin country, and how they would respond to different marketing efforts to promote a country-of-origin message.

PCI across products

A basic requirement for a standardized PCI is that the image should be relevant across products, but specific enough to differentiate products from their competitors. The alternative to a standardized PCI strategy is to develop several PCIs adapted to specific productsBa customized strategy. A customized PCI aims to induce an image based on attributes that best promote that particular product. Two types of inconsistencies evolve when using customized PCI programs. (1) Inconsistencies can occur between the customized PCI and the existing CI, and moreover, (2) inconsistencies can occur between different customized PCI programs both within a product line and across industries.

Cell 1BOne strategy for all products across all target markets

Standardizing marketing across products and target markets represents the most cost-efficient strategy since one would be able to use the same strategy, material, packing, promotion, etc. for all markets. However, the risks of adopting a standardized strategy include both a poor fit with the product characteristics and a poor fit with the target market.

If the target market lacks an image or holds only a vague image of the CoO, the marketing challenge consists of both inducing country knowledge and product knowledge. In such a situation the benefits of a standardized strategy lie in that it supplies a strong and consistent message about the origin country, which increases the chance of inducing a favorable image association. If a simplex CI exists, a standardized strategy will serve to strengthen one particular association, but it will not contribute to broadening the country image. When the initial situation is a multiplex CI, standardization will not make it possible to exploit the potential advantages of market segmentation and product differentiation. The strategy in cell 1 thus facilitates the initial stages of image building by focusing on a clear and consistent message but it does not develop the image further to become a multiplex image.

P1:  If the existing CI is lacking or vague, a standardized strategy will serve to establish and strengthen CI associations.

P2:  Building strong, salient and unique CI-associations requires a consistent country-of-origin message across products over time.

Cell 2BStrategies adjusted for product but standardized across target markets

Employing a strategy based on product specific marketing represents one way to increase the number of country related intangible assets. However, since there is no adjustment for different target markets, the message may not sell equally well in all market situations. If different products are marketed based on conflicting associations, then confusion may occur.

Confusion hampers the image development for a vague CI and can be detrimental in the stage of CI establishment. If, on the other hand, the CI is simplex, the risk of confusion is less acute and the strategy can contribute to broadening the CI. However, being based on only a few associations, the simplex image remains fragile. With a multiplex CI, the risk of confusion is minimal since many, diverse associations already exist within the CI. Thus, the strategy in cell 2 seems more suitable the further one progresses in the image developing process.

P3:  A strategy adjusted for product but standardized across target markets can be used to increase the number of country related intangible assets and thus broaden the CI.

Cell 3BStandardized strategy across productsBadapted to target markets

The strategy in cell 3 entails use of market segmentation but no product differentiation. Since this strategy is based on the same message for all products, single associations may be strengthened but the strategy cannot serve to broaden the CI.

The strategy in cell 3 represents an opportunity to reach a target market by customizing the message. A consistent message would then reflect consumer characteristics in a particular market. However, if the message varies too much for different target markets, then the long-term consequence in today’s global world may be confusion. As stated previously, confusion poses the greatest threat in the initial stages of the development process. For the simplex and multiplex CI the need for a consistent message is reduced and the strategy represents an opportunity to strengthen existing associations.

P5:  Standardized CI strategies across products which are adapted to various markets (cell 3) serve to strengthen existing country related intangible assets, but cannot broaden the CE by adding new assets.

Cell 4BStrategies adjusted for both nations and products

In this situation one employs market segmentation and product differentiation simultaneously. The result can be both a strengthening of existing associations and introduction of new associations. As such, it is the most "complex" strategy, and it can contribute to further development of a CI. However, this type of strategy is also the one that runs the highest risk of confusion and inconsistencies. In order to be able to profit from this strategy a country needs to already have a certain amount of assets. In the initial stages of the image development process, this strategy will be difficult to employ due to the risk of not getting through with any of the customized messages.

P6:  If the CI is lacking or vague, a customized strategy both across products and markets can lead to inconsistencies and confusion.

P7:  If the CI is multiplex, then this strategy can both strengthen and broaden the CE.

DISCUSSION OF A NORWEGIAN CASE STUDY: EXPORT OF NORWEGIAN SALMON TO THE ASIAN MARKETS

The Norwegian Seafood Export Council (NSEC) represents an effort to coordinate the marketing of Norwegian Seafood based on a CoO strategy. The Norwegian fishing industry consists of many small (at least on a world-wide basis) producers, fish farmers, fishermen and exporters, and due to this fragmentation the actors in the industry saw possibilities to increase their international competitiveness through a joint marketing effort. To achieve this they acknowledged national origin as a common factor, especially as some types of Norwegian fish already have a "name" internationally.

Asia is at the moment one of the highly prioritized markets for Norwegian Seafood. Due to the assumed market potential based on the vast amount of people and their fish consuming traditions, the Norwegian fish exporters are looking at how to gain entrance to these markets. The NSEC is attempting to establish a long-term profile for Norwegian fish products in Asia, particularly Norwegian salmon. Forty percent of the marketing budget for salmon and trout is dedicated to building a name in Asian markets. A majority of the funding is targeted at segments in Japan, where Norwegian Seafood is somewhat established already. The rest of the Asian countries (Hong Kong, Taiwan, Singapore, and China) represent new markets.

Target market and product characteristicsBfish to Asian markets:

Research on cultural differences has shown that Asians are perhaps the most image conscious consumers in the world. They rely on, and infer meaning from symbolism, to a much larger extent than their counterparts in the west. Due to conformity pressure by small reference groups as well as the extended family, they rely more on word-of-mouth and informal channels of communication. This means that mass-communication has less impact in Asia. Combined with a high degree of risk aversion, Asians are regarded as the most brand loyal consumers in the world, Yigang,(1994). This implies that Asian consumers will be receptive to PCIs based on extensive symbolism rooted in social rather than functional or experiential meanings. Moreover, they will probably best be reached through personal, independent sources of market communication, which perhaps is why the NSEC is targeting opinion leaders such as chefs, restaurants, hotels and catering companies in the initial entry phases. In addition, once accepted, Asian consumers can be expected to be more loyal to PCIs.

Individual food products are presumed to be low involvement products as they are of low per unit costs, comprise a small share of consumers’ total budgets, and involve little emotion or complex decision making. This is particularly true for simple processed food (such as unprocessed Norwegian fish), wherein the consumer simply will look for variety. However, marketers worldwide assume a relatively high level of consumer involvement in food purchase decisions due to perceived risks of food consumption such as contamination, health and nutrition concerns. Product country images that extend an "aura of riskiness" to food products are a serious problem to marketers. As an increasing amount of regulation on origin labeling is required by the authorities as well, using a CoO strategy may contribute to differentiation by taking advantage of the low risk affiliated with a rich, politically stable country such as Norway.

CI and PCIs have traditionally been important in the marketing of food products, such as French wines and cheese, German beers, and Swiss chocolate etc., because the origin is then used as the most important evaluative heuristic. A PCI marketing strategy can contribute in creating more diffrentiating qualities for food products through all the marketing mix components, and in such a way further facilitate the evaluation process. However, to stimulate reinforcement of a preferred PCI for Norwegian fish products, it is crucial that image attributes are reflected in concrete product properties. For instance, firm fish meat, with a pleasant smell, matches the Norwegian image of a cold and clean environment. However, fish packed in thick plastic may not reinforce the cold, clean image, even though the thick plastic serves to preserve the freshness of the fish.

The CI and PCI situation for Norwegian fish products

Market analyses carried out by the NSEC in these new markets show that Norway’s image is fairly weak. The NSEC therefore emphasizes increasing the long-term recognition, knowledge, and preference for Norwegian Seafood in these markets. The associations they want to link to Norwegian Seafood are: quality and good taste based on the cold, clean water in Norway. A standardized marketing strategy is used to accomplish the above. In such a strategy the same message should be used for all products (salmon, trout, shrimp, mackerel, dried fish) across all markets (and nations). Today, however, Norwegian fish exporters use a mix of brand and country image promotion in more or less "noisy" message compositions. Therefore, it can be questioned if today’s practice serves to strengthen the CI in the Asian target markets.

Campaigns and activities are based on a centrally developed concept although smaller adjustments to the local market are accepted (such as changing the word for salmon in the Taiwanese brochures). At the same time however, the marketing reflects the strategic situation in the target market. If the fish products hold a dominant market share in the target market, then the focus should be to increase total consumption (although with the same message). If the fish products are being introduced to a new market (such as the Asian markets) then the main effort lies in increasing recognition and selection of the products.

Based on the findings that the CI of Norway in the Asian markets is weak, we can place Norway in the very beginning of the CI developing process. This position implies a need to establish and strengthen the CI. We have argued that if the CI is lacking or vague, then conveying a clear and consistent message will be crucial. Cell 1 and cell 3 represent the strategies where the message will be consistent and non-conflicting. The NSEC strategy can best be explained by the standardized strategy in cell 1, and thereby we can conclude that the chosen strategy is in accordance with the framework analysis we present.

Although the NSEC aims to use a standardized strategy, a quick glance at some of the products and materials marketed by the NSEC shows several different brand names and symbols of the products based on the product category (ex. salmon) and on the exporter (ex. Ler°y A/S). This indicates that cell 2Bstandardized across nations and customized across productsBperhaps better reflects how the marketing is actually done, although this strategy is far from optimal for a country with a vague/lacking image. Based on proposition 1 and 2, the strategy in cell 1 represents the most appropriate strategy for NSEC upon entering the Asian market. As stated previously, this is also in accordance with their intended strategy.

CONCLUSION

Optimal use of the CoO strategy requires the marketer to focus on the image creating moment and the components therein. This paper has identified these critical components and analyzed the relationships between them. The image creating moment occurs when the marketer successfully matches the PCI with the target market characteristics in the mrketing mix. The PCI ideally draws upon an existing CI within the target market. However, since a CI changes over time, it could be optimal to use a CoO strategy even if the target market initially lacks associations about the origin country. A CI can be developed over time to contain many and strong associations. In this paper we have argued that the CI develops in stages which depends on re-occurring image creating moments. In order to obtain this image development, the marketer has to acknowledge and take into account the existing knowledge structures in the target market when designing the marketing mix.

We have presented a framework for analysis of different marketing strategies, and propositions based on the CI knowledge structures within the target market. With a case analysis we argue that if the CI is lacking or vague, then the main focus should be on building the CI which can be achieved with a consistent CoO message across target markets and products over time.

Further research on how this framework can be used in an analysis of the trade-offs of standardizing vs. customizing CoO strategies on a national or industry level is needed. The argument for coordinating the international marketing activities of all products and services from a country is challenging. In addition, the possibility of transferring a CI from an established market to a new market requires further insight. When a country image has proven to be effective in a target market, it might be useful to try to transfer this existing image to other target markets. One approach would be to use a positive market position in "established" markets as a reference to new markets. For example, to use the strong position of Norwegian salmon in the French market as a selling point in Asian markets.

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

Authors

Nina M. Iversen, Norwegian School of Economics and Business Administration, Norway
Ingeborg Astrid Kleppe, Norwegian School of Economics and Business Administration, Norway
Inger G. Stensaker, Norwegian School of Economics and Business Administration, Norway



Volume

AP - Asia Pacific Advances in Consumer Research Volume 3 | 1998



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