INTRODUCTION

Introduction

As more companies compete on the global markets and manufacture their products
worldwide, the country of origin becomes more important as consumers often evaluate
quality of a product based on the country where the product is manufactured. Past studies
showed that consumer perceptions on country of origin play a major role in influencing a
consumer’s choice of a product.
Country of origin effect can be defined as any influence that the country of manufacture
has on a consumer’s positive or negative perception of a product. With increasing
availability of foreign goods in most national markets, the country of origin has become
more important as consumers often evaluate imported goods differently than they do
competing domestic products. Nowadays, more companies are competing on the global
market, and these companies manufacture their products worldwide and the location
where they manufacture the products might affect the perception of the consumer on the
quality of the product based on the country where the product is produced.
Consumer behavior can be seriously impacted by country of origin factor in three distinct
ways: Firstly, buyers may simply use the country of origin as one of the many attributes
employed to engage in product evaluation. Secondly, the country of origin may create a
“halo effect” whereby consumers’ attention and evaluation of other product dimensions
are affected.

THE IMPACT OF COUNTRY OF ORIGIN

The impact of COO on consumer behaviour has been examined in the business and
marketing literature for many years (Al-Sulaiti and Baker, 1998; Papadopoulos and
Heslop, 2002; Dinnie, 2004). Empirical studies show that COO can affect consumers in a
number of ways, including social status, store or product choice, perceived risk, and, in
particular, product evaluation such as quality perception, product attitude or purchase
intention (Liefeld, 1993; Papadopoulos, 1993; Kaynak et al., 2000; Li et al., 2000;
Brodowsky, 1998; Chao, 1998; Huddleston et al., 2001). COO effect is concerned with

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how consumers perceive products sourced from a particular country (Chinen et al.,
2000). Empirical studies have indicated that the influence of COO exists in both product
assessment and decision making processes (Reierson, 1966; Bilkey and Nes, 1982;
LaTour and Henthorne, 1990; Jaffe and Martinez, 1995; Zain and Yasin, 1997; Verlegh
and Steenkamp, 1999; Solomon, 2004) where consumers predict the likelihood that a
product manufactured in a certain country will have certain features (Roth and Romeo,
1992; Yu and Albaum, 1999). Moreover, substantial studies have pointed to a systematic
bias in favour of products from developed countries such as Germany, US, Japan or
Australia. The positive stereotype held by consumers of developed countries is usually
associated with high levels of economic and technological development (Wang and
Lamb, 1983; Ahmed and d’Astous, 1999; Chinen et al., 2000; Huddleston et al., 2001;
Hsieh, 2004). As such, consumers perceive that products from highly industrialized
countries are of better quality and perform better.
There is also research to suggest that the level of importance consumers placed on COO
depends on the product type (Liefeld, 1993; Zhang, 1996; Ahmed and d’Astous, 2001).
The majority of COO studies confirm that products that exhibit high complexity or are
considered luxury items (i.e. cars, personal computers, cameras, VCRs, TVs, and home
theatre systems) are more likely to be affected by the product’s made-in origin (Liefeld,
1993; Ahmed and d’Astous, 1993; 2001; Okechuku and Onyemah, 1999; Piron, 2000).
Although a significant number of studies have been carried out in the COO Field, the
majority of COO research has been conducted in developed countries, mainly US,
Canada and Europe (Zhang, 1996; Wang and Chen, 2004). There are limited studies
relating to developing or non-western countries, especially Asian, although studies of
these countries are growing. As a consequence of this, our knowledge of COO effects
beyond western societies is limited (Li et al., 2000).

COUNTRY OF ORIGIN
Consumers are influenced by country image when they make an evaluation about the
quality of products from country of origin cue. According to Kotler and Gerner, country
image was described as the sum of belief and feeling people hold about specific country.
Martin and Eroglu pointed out that industrial and consumer buyers developed

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stereotypical images of countries, which subsequently affect their purchase decision
concerning products from these countries. Besides, Kim and Chung presented about
different perceptions of country image can be attributed to the unique characteristics of
countries in term of demand conditions, factor conditions, rivalry and related supporting
industries. Traditionally, country image studies have focused on the effects of country
image on the attitude of consumers towards purchasing physical products associated with
a country. In addition, these studies have viewed country image as having two functions.
The first function is a halo effect that is used by consumers to imply quality for products
of an unknown foreign brand (Bilkey and Nes 1993) and the second one is a summary
construct where consumers recode and abstract individual level elements of information
into higher order units or chunks for easier storage and removal (Mill 1956; Simon 1974).
Nebenzahl, Jaffe, and Lampet suggest that consumers use the halo effect or the summary
construct depending on their level of familiarity with the country in question so that they
can explain the relation between above functions. That gains conclusion: a consumer who
has never bought a particular product may use perceived value information about the
country to imply quality levels to the brand, whereas, a consumer had experience using
the brand, the country image becomes one of the elements used in the product’s
evaluation. Country image has long been regarded as a factor affecting people’s
evaluations of products associated countries (Echtner and Ritchie 1991; Gartner 1987,
Gunn 1972, Han 1989, Kotler 1987, Martin and Eroglu). COO has been found to
influence consumer evaluations of foreign products on two dimensions: perceptions of
quality (Khachaturian & Morganosky, 1990) and perceptions of purchase value (Ahmad
& d.Astou, 1993). Nagashima and Kaynak concluded that consumers tend to evaluate
domestic products more favorably than do foreigners and products from developed
countries more favorably than products from developing countries (Schooler 1971, Wang,
C. and Lamb, 1983). Roth, M.S. and Romeo (1992) found greater consumer willingness
to buy products made in countries with good reputations in those product categories than
to buy the same products from countries that are not well known in those product
categories. Thus, country-of-origin effects appear to be product specific. They also appear
to vary from country to country.

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In reality, consumers are usually influenced by COO when they evaluate quality of
products, and many researchers used to prove it. These studies show that a "made in"
serves as a signal of product quality (Maheswaran, 1994). When experience or
knowledge about a product is limited, consumers resort to country of origin cues in
order to evaluate products (Maheswaran, 1994). Country of origin plays a significant
role in product perception (LaTour & Henthorne, 1990). John P. Liefed concluded that
the country of origin of products is not an important attribute in the choice processes of
the great majority of North American consumers. According to Hui and Zhou (2002),
COO information had a direct effect on overall product evaluation and an indirect effect
(through product evaluation) on perceived product value, which in turn determined
purchase intention. In addition, purchase intention was also directly affected by brand
name and price factors, but not by COO. It was also revealed that COO and brand name
had a similar impact on overall product evaluation. Their study is designed to explore
the link by modeling the COO information into the relationships between evaluative
variables and behavioral tendency.
Three criterion variables are selected for the purpose of the research. Overall
evaluations of product quality and perceived product value represent two frequently-
used evaluative measures in past COO studies (Johansson and Nebenzahl 1986; Cordell
1993; Rogers et al., 1994), while purchase intention is widely used as a tendency
measure for performing behavior in consumer decision models (e.g., Ajzen and
Fishbein 1980; Miniard and Cohen 1983). Although the importance rating of COO is
much lower than other product factors including brand name and price, COO does
matter in the consumer selection of cameras or films. As a result, these researchers
suggested that “consumers may subconsciously consider country of origin while
consciously feel it less important than other factors”. In other studies, COO has been
found to play an equally important role as brand name in shaping product judgments
(Okechuku 1994). Specially, there is even evidence that a foreign-sounding name (e.g.,
a name with spelling and/or pronunciation in a foreign language) can produce stronger
impact on product perceptions and evaluations than COO information (Leclerc,
Schmitt, and Dube 1994).

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BRAND EQUITY

In normal, consumers’ perception of a product’s brand name, brand image is very

important for them to evaluate brand equity. Brand image defined as the set of
associations linked to the brand that consumers hold in memory (Keller 1993), is strong
and not easily mitigated by contradictory information. Positive brand image is associated
with consumer loyalty, consumer beliefs about a positive brand value. Brand equity stems
from the greater confidence that consumers place in a brand than they do in its
competitors. This confidence translates into consumers’ loyalty and their willingness to
pay a premium price for the brand. Unlike fictitious brands, every known brand possess a
certain value, known as brand equity, which is determined by the popularity, reputation
and associated beliefs of the brand (Aaker, 1991; Kim and Chung, 1997). Moreover, the
source of brand equity is customer perceptions (Keller, 1993), it is important for
managers to be able to measure and track it at the customer level. According to Arnould
et al (2004), brands consist of tangible attributes (e.g. packing, raw materials, and
workmanship, etc.) and intangible attributes (e.g. belief, feeling, and associations). They
argued that brands’ symbolic nature has been recognized since the 1950s. Since then
marketers realized that products have social and psychological function as well as
physical character. Consumers’ feelings, ideas, and attitudes about brands are crucial to
purchase decisions. In addition, as symbols, brand impact consumers’ status and self –
esteem. “Research across cultures suggests those brands are more likely to be purchased
and consumed if consumers recognize some symbolic link between the brand’s image and
their own actual or ideal self – image” (Arnould et al, 2004). Arnould et al., (2004) and
Solomon, (1996) point out that brand image is often created by product advertising,
packaging, branding and other marketing strategies that focus on positioning a product a
certain way. Aaker (1996) contended that a brand’s major asset categories include “brand
name awareness”, “brand loyalty”, “perceived quality”, and “associations”, which
altogether is referred to as “brand equity”. Arnould et al. (2004) contended that “brand
equity involves the accumulated beliefs, history, sentiment, and value consumers attach to
particular brands”. It comprises the sum of the brand meaning plus consumers’
confidence in and loyalty to the brand. Large amounts of brand equity differentiate the

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branded product from generic products. In addition, brand equity enables firms to charge
premium price. Closely related to brand image, consumers’ perception of the overall
quality of the brand reflect their brand attitude. Many researchers define perceived
quality as a consumer’s judgment about the superiority or excellence of product (Aaker
and Keller, 1990). Previous researchers have conceptualized brand equity as having five
dimensions to brand equity, namely perceived quality, perceived value, image,
trustworthiness and commitment (Martin and Brown, 1990).
Brand equity has been defined as the added value endowed by the brand name to product
(Farquhar 1989). Brand equity includes high equity brand name and low equity brand
name. Higher brand equity can help a brand become more profitable through higher
brand loyalty, premium pricing, lower price elasticity, lower advertising to sales ratio, and
trade leverage.” When a branded product is manufactured in a country with a less
reputable image than that of the brand origin, we suspect that country-of-manufacture
information may exert different extents of impact on global product attitude, depending
on the level of brand equity (Hui and Zhou, 2003). Ample evidence has indicated that
high equity brands are strongly associated with a set of brand beliefs, one of which may
be brand origin; meanwhile, low equity brands in general have weak brand associations.
Past researchers, appear to have ignored the fact that for many known brands, one key
brand association is the country from which the brand originated (Thakor and Kohli,
1996), known as the brand origin (e.g. the brand origin of Sony is Japan). They defined
brand origin as “the place, region or country to which a brand is perceived to belong by
its target consumers. If a brand name acts as a quality cue, it seems reasonable to assume
that adding a branded ingredient has a positive effect on product quality perceptions.
Multiple brands affect product quality perceptions, confidence in product quality
perceptions, product evaluations, taste perceptions, and purchase likelihood (McCarthy &
Norris, 1999).

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WILLINGNESS TO BUY

Willingness to buy represents the intention to perform the behavioral action of purchasing
(Jarvenpaa et al..2000). Therefore, construct willingness to buy can be mentioned in the
study’s model as purchase intention. According to Burke, 1997 consumer purchasing
decision is the process of a buyer making a decision about a product and then acquiring
that product from a seller by using one of several different selling channels. Substantial
evidence indicates that a consumer’s intention to purchase a product or service is
predicted on two influences (Brucks, 1985, Kim, Zhou, 1996). The first of these
influences is a positive attitude towards the brand itself (Laroche &Brisoux, 1989,
Laroche, et al). Such a positive attitude towards a brand appears also to be affected
negatively by attitudes towards other brand; the less inclined one is to choose one over
another. Positive attitude towards a brand would, therefore, seem to be a comparative
proposition. The second influence in purchase intention is brand familiarity (Anand,
Holbrook, & Stephens, 1988; Brucks, 1985). Recognizing the country-of-origin effect on
consumers' buying intentions and quantifying the effect not only will help consumers
understand the rationality of their purchase behavior, but also will help international
producers and marketers. Previous researchers found that country-of-origin image is one
of the most important influences on decision making for products which are marketed in
a country other than the one in which they are produced (Papadopoulos, 1993). Hui and
Zhou, 2003 concluded that country of manufacture information has only a direct impact
on purchase intention through its influence on quality perception. To them, moving
production to less developed countries may have little effects of country manufacture
information and price on consumers’ actual decisions. Lim and Darley (1997) also
indicated that COO may well be high in importance in consumer evaluations of products
but may have less impact on purchase behavior. Unlike consumers’ attitudes, which were
commonly used in previous studies, consumers’ buying intentions have seldom been
measured by researchers examining the country-of-origin effect. Ulgado and Lee (1998)
focused on consumers’ buying behaviors in their experiment using electronic products.
They found that consumers considered country-of-origin information to be equally as
important as other specific product attributes evaluating the products. However, when

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consumers made purchase decisions, country of origin was insignificant. Nevertheless, no
tangible good was used in the study, limiting the validity of their conclusions.
In addition, few researchers have examined the extent to which the country of origin for
hybrid products (with unique countries of origin for parts, assembly and/or design)
moderates country-of-origin effects on attitudes and purchase intentions. Chao (2001)
showed students advertisements for a television and a stereo system.
Brands do tell consumers many things; they are information. Brands may act a means of
risk reduction, particularly in purchase situations where other information is less than
perfect (Kaperer 1992). Brands are also thought to provide clues as to quality levels prior
to making a purchase (Bharadwaj et al. 1993). Consumers seem willing to pay a price
premium for better known brand products with the same level of quality as non –
premium priced lesser – known brand products, due to the perceived value attributed to
the brand name.

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 REVIEW OF LITERATURE
Review of literature is a body of text that aims to review the critical points of
current knowledge on a particular topic. There is a plethora of literature available in print
or on the internet. The literature reviewed for the purposes of this research has been short
listed after diligent screening to cover all aspects related to study.

REVIEW OF LITERATURE

Ghazali & et. all (2008) indicated that it is important for marketers to emphasize more
on product dimensions such as the product quality, its technological prowess and its price
in marketing their products in the local Malaysian market than its country of origin factor.
However, marketers should put more emphasis on the country of origin factor if the
product is made in developed countries such as Japan, Germany or the USA. On the other
hand, if a product is made in developing countries, or lesser known under developing
economies, the marketer should emphasize more on the product quality, its technological
prowess and its price rather than the country of origin aspect since accentuating the
country of origin dimension may be detrimental to the marketing efforts for such a
product.

Cai (2002), in his thesis concluded that ‘made- in’ effect was found to be significant in a
multi- attribute scenario. This finding suggests that the degree of economic development
of the producing country does affect consumers’ buying intentions when other
information is also present. Second, the country-of-origin effect does not totally prohibit
consumers from considering products from a country against which they have a bias.
Decreases in the prices of products from less-developed countries will induce the
consumers to increase their willingness to buy these products. Third, the hypothesized
difference between the own price elasticities of demand for different products was
confirmed: a durable good from a less-developed country is less own price elastic than is
a non-durable goods from the same country.

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Kotler and Gerner (2002), country image was described as the sum of belief and feeling
people hold about specific country. Consumers are influenced by country image when
they make an evaluation about the quality of products from country of origin cue.

Bettman (2001) , “Consumer Behavior is the study of how individuals, groups and
organizations select, buy, use, and dispose of goods, services, ideas or experiences to
satisfy their needs and wants.” Among the many different questions pertinent to consumer
behavior, one of the most difficult to explain is why a consumer makes a particular
purchase, since such answers are seldom simple or clear. However, the question is crucial
since a firm needs to know what really triggers a consumer to purchase a product. Among
others, consumer purchases are influenced to a great extent by cultural, social, personal
and psychological factors. Each individual is unique. Even consumers that come from the
same background and live in a particular society may make different purchase decisions
due to the diversity of factors that influence their consumer behavior. With the advent of
globalization, the country of origin factor has also been considered as influencing
consumer behavior.

Petterson & Jolibert (1995) reported a quantitative analysis of the country of origin
(COO) effect and suggested that country-of-origin effects are only somewhat
generalizable. The size of an observed COO effect was a function of whether the
dependent variable was a quality/reliability perception or a purchase intention; Purchase
intentions were more susceptible to methodological artifacts than were quality/reliability
perceptions. Study findings selectively confirm and refute common beliefs regarding the
impact of a country-of-origin cue on product perceptions and purchase intentions.

Elliot and Cameron (1994) suggested that Consumers rate products as being of
significantly different quality when the only variation between products is stated
country of origin. Further, consumers express a marked preference for locally made
products when price, technical features, and brand name are invariant, and where the
locally made product is perceived to be superior or, at least, not significantly inferior to
an overseas-made product. Where the locally made product is perceived to be of
inferior quality to the imported product, consumers generally prefer an imported

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product. Thus, while consumers rate country of origin after product quality and price,
when these other factors are equivalent, the fact that the product is promoted as locally
made is a positive influence on product choice.

Bilkey and Nes(1982) gave the importance of Country of origin effects for countries
(especially resource-poor, developing countries) that need to increase manufactured
exports and for firms that source products in countries different from where sold.

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 OBJECTIVES

Objectives of the Research

Nowadays, many brands that originated in countries renowned for manufactured goods
are made in other countries with less reputation images. For example,
Laptop/Computers Sony Vaio, Dell, HP products with Japan, Korean as their brand
origin are actually made in some other countries with less reputation image such as
Malaysia, China. This study researches on consumers’ willingness to buy laptops and
the country of origin and brand image effect on their perception through these
objectives:

i. To determine relative importance of Brand, Country of Origin and Price in decisions

to purchase laptops.

ii. To explore the overall image of “made in” Japan, U.S. and China products in Indian
consumers’ mind.

iii. To determine the ideal product attributes which consumers would like to purchase.

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 RESEARCH METHODOLOGY
Research Methodology is a way to systematically solve the research problem. The
Research Methodology includes the various methods and techniques for conducting a
Research “Research is the systematic design, collection, analysis and reporting of data
and filling relevant solution to a specific marketing situation or problem.”

D. Sleshinger and M. Stephenson in the encylopedia of Social Science define Research as

“the manipulation of things, concepts or symbols for the purpose of generalizing to
extend, correct or verify knowledge, whether that knowledge aids in construction of
theory or in practice of an art.”

Research is, thus, an original contribution to the existing stock of knowledge making for
its advanced. The purpose of Research is to discover answers to the Question through the
application of scientific procedure. The project had specified framework for collecting
data in an effective manner. Such framework is called “Research Design.” The research
process followed by me consisted of following steps:

Defining the problems and research objective:

It is said, “A problem well defined is half solved.” The first step done was to
define the project under study and decided the research objective. The project undertaken
is job hopping – a new culture for corporate survival in insurance sector.

Developing the research plan:

The Second stage of study consisted of developing the most efficient plan for
gathering the data. The method adopted for carrying out research was as followed:

Research design: - It’s descriptive in nature. The main purpose of descriptive research is
describing, recording, analyzing and interpreting conditions. Survey research is one
method of conducting descriptive research.

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Variables
 Dependent Variables: Product Evaluation (Quality, Prestige, Durability,
workmanship), Willingness to buy
 Independent Variables: Country of Origin, Brand Equity,
 Demographic Variables: Age, Gender, Marital Status, Education, Salary

Sampling design
 Universe: - Universe is the infinite number of elements which the researcher is
targeting in the study. The universe of this study consists of Indian consumers.

 Population: - Population is the finite number of elements which member of

researcher is going to target in a particular area. For this study population is
Young educated students and professionals b/w the age of 18 – 35 years.

 Sampling unit: - It’s a single unit of the population. The sample unit for the study
is a single advisor.

 Sample size: - Sample size refers to the total numbers of items about which the
information is desired. The sample size is 100.

Sampling procedure

It is way through which sampling is done. There are various procedures like
Random Sampling, Systematic Sampling, quota Sampling, and Convenience Sampling
etc. The sampling procedure opted for this study was Convenience Sampling. It can be
defined and when population element are selected for inclusion in the sample based on
the case of access, it can be called as convenience Sampling.

Data Collection: Information was collected from both Primary and Secondary Data.

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Primary source:

Primary data are those, which are collected afresh and for the first time, and thus
happen to be original in character. Primary Data was collected by conducting surveys
through questionnaires, which include both open ended and close-ended questions.

Secondary sources

Secondary Data are those which have already been collected by someone else and
which already had been passed through the Statistical process. Secondary data collected
for this study is through web sites & newspaper.

Study Method:

A standardized questionnaire was used to collect data.

Data Collection:

A standard questionnaire was prepared to collect data from the students and professionals
from Ludhiana. Data was collected from the students of various Colleges.

Analysis of Data and interpretation:

After collecting the data the analysis of data had been done through various tools and
techniques. The analysis of data required a number of closely related operations such as
establishment of categories, the application of these categories to raw data through
coding, tabulation and then drawing statistical inferences. The unwieldy data was
condensed into few manageable groups and tables for further analysis. Thus it helped to
classify the raw data into some purposeful and usable categories.

Coding operation was done at this stage through which the categories of data were
transformed into symbols that may be tabulated and counted.

Editing was done to improve the quality of the data for coding.

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After this Tabulation of data done wherein classified data were put in the form of tables.
After tabulation the analysis work of my project was based on the computation of various
statistical tools -Percentages, Values, Pie charts, and Graphs and Bar Diagrams.

After analysis Interpretation were i.e. to explain the finding on the bases of analysis.

LIMITATIONS
This research is expected to give better results if the number of respondents is larger and
the geographical constraints are not there. Hence if the respondents selected would have
been from whole of India, the results would have been much better. But this limitation is
mainly because of the resource (time and money) constraints.

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 BIBLIOGRAPHY & REFERENCES:

CAI, Y. (2002). Country of Origin Effects On Consumers' Willingness To Buy Foreign

Products: An Experiment In Consumer Decision Making. Thesis, The University of
Georgia,China.
Craig C.S., Douglas S.P., “International Marketing Research”, Prentice Hall inc., 1983.
Ghazali, M., Othman, M. S., & Zahiruddi, A. (2008). Products and Country of Origin
Effects: The Malaysian Consumers’ Perception. International Review of Business
Research Papers , 4 (2), 91-102. Available: http://www.bizresearchpapers.com/paper-
7.pdf
Gregory, E. R., & Ross, C. C. (1994). Consumer Perception of Product Quality and the
Country-of-Origin Effect. Journal of International Marketing, , 2 (2), 49-62. Available:
http://www.jstor.org/pss/25048542
Hui, M. K., & Zhou, L. 2002. Linking product evaluations and purchase intention for
country-of-origin effect. Journal of Global Marketing, 15: 95-116.
Maheswaran, D. 1994, “Country-of-Origin as a Stereotype: Effects of Consumer
Expertise and Attribute Strength on Product Evaluations’ Journal of Consumer Research
21, p. 354.
Malhotra N.K., ”Marketing Research – An applied orientation”, Pearson Education, 2008
Nguyen, H. L. (2008). THE COUNTRY OF ORIGIN EFFECTS ON VIETNAMESES’
PERCEPTIONS OF ELECTRONIC PRODUCTS – TELEVISIONS. Southern Taiwan
University,Department of Business Administration.
Parameswaran, R., & Pisharodi, M. R. (1994). Facets of Country of Origin Image: An
Empirical Assessment. Journal of Advertising , 23 (1), pp. 43-56.
Available: http://www.jstor.org/page/termsConfirm.jsp?
redirectUri=/stable/pdfplus/4188914.pdf

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