The Background and Emergence of the Construct of the COO-image

The marketing literature has presented the COO as a promising concept to understand the consumer perception while highlighting its complexity and growing dynamisms (Guercini and Ranfagni, 2013). The sheer volume of the COO research over the last three decades provided a good indicator of the importance of the concept in international marketing strategy (Papadopoulos and Heslop, 2003; Bhambri, 2013). Series of meta-analyses by researchers such as Liefeld (1993), Thakor and Kohli (1996), Al-Sulaiti and Baker (1998), Verleegh and Steenkamp (1999), and Laroche et al., (2003) has also emphasised the importance of understanding the role of COO in marketing literature.

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The extensions of global market in the 1970s drew attention of developing countries to export their products to the markets of the developed countries (Hamin et al., 2014). Then-newly industrialised countries such as Japan (Reierson, 1967; Nagashima, 1970; Gaedeke, 1973) South Korea, Taiwan, Mexico, Hong Kong and South American countries (Schooler and Sunoo, 1969; Hugstad and Durr, 1986) penetrated the European and the USA markets. The products originated in these developing countries were moderately priced than the products of their Western competitors. Although the quality of these products was acceptable, strong negative consumer attitudes were observed against such products (Wall et al., 1991). Schooler (1965) was the pioneer of the research conducted on COO. He identified that the products which are made in less-developed countries were not considered as quality products by the consumers. Similarly Reierson (1966) and Gaedeke (1973) found considerable impact of the country stereotypes on consumers’ product evaluations and purchase intentions. These studies along with Nagashima (1970) presented the concept of the COO as the picture, the reputation, and the stereotype that businessmen and consumers attach to the products of a specific country. This image is created by such variables as representative products, national characteristics, economic and political background; history and traditions. All of these variables generate the total of all descriptive, inferential and informational beliefs one holds about a particular country (Martin and Eroglu, 1993).

Between 1980 and 1990, the COO research shifted from single cue studies to multiple-cue studies (Phau and Predergast, 2000). Mostly published studies such as those by Bilkey and Nes (1982), Cordell (1992), and Tse and Gorn (1993) found that country stereotypes do exist and have some impact on product evaluations and purchase intentions. The researchers

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introduced multilayered effects of the COO for various products in general (Howard, 1989; Darling and Wood, 1990), certain product categories (Roth and Romeo, 1992) and specific brands (Chao, 1993). Subsequent studies presented the multiple-cue nature of the COO and analysed the COO stereotypes in interactions with phenomena such as country specificity (Hong and Wyer, 1989), consumer ethnocentrism (Johansson et al., 1985; Hooley et al., 1988; Papadopoulas et al., 1990), country reputation primarily with respect to level of economic development (Bilkey and Nes, 1982; Manrai et al., 1997), product type (Hooley and Shipley, 1988, Hong and Wyer, 1989), and brand familiarity (Erickson et al., 1984).

Some researchers such as Roth and Romeo (1992) identified a relationship between consumer preferences for a specific country’s products and the perceptions of country’s culture, politics and economy. A significant number of research studies supported this notion by concluding that consumers show a tendency to prefer their home country’s products (Han, 1988; Hong and Wyer, 1989; Papadopoulas et al., 1990). Researchers defined this concept as “consumer ethnocentrism” and suggested that it has an impact on consumer choices both through product attribute evaluation and direct affective factors regarding the purchase itself (Hooley et al., 1988; Lee et al., 1992).

Empirical and experimental studies such as Tse and Gorn (1993) have indicated that the COO has a significant influence on consumer attitudes towards specific brands. However, Erickson et al. (1984) and Johansson et al. (1985) questioned the validity of this notion, and established that in the absence of relevant information about the product, consumers tend to infer product information from the image of the manufacturing country, which in turn influences their brand

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attitude. Johansson and Nebenzahl (1986) and Khachaturian and Morganosky (1990) have concluded that the brand image of quality also diminishes if it is designed or assembled in a less-prestigious country, which is why Schweiger et al. (1997) suggested that perhaps the marketing effort should stress the country of design. Furthermore, Wall and Liefeld (1991) found that unknown brands are favoured only when they are made in countries with highly favourable reputations. Han and Terpstra (1988) inferred that both the COO and brand name affect consumer perceptions of product quality, but the preference for domestic products/brands can be a consequence of patriotism. Schaefer (1997) further added that brand familiarity and objective product knowledge together also have an important effect on the use of the COO cue in product evaluations, although neither of the two has a general effect on its own. Similarly, service and product warranty are extra information cues and might have an influence on the evaluation process. In 1999, Lee and Ganesh reported that consumers with moderate product/brand familiarity use the COO information less than consumers who have low or high product/brand familiarity.

With the increase in globalisation since late 1980s and early 1990s, the process of production has shifted from single country to multiple countries in order to exploit economies of scale and costs which resulted in the emergence of hybrid products (Phau and Prendergast, 2000; Bhambri, 2013). Accordingly, focus of the COO research has shifted initially to bi-national products (Han and Terpstra, 1988), country of manufacture (Ettenson and Mathur, 1995, Iyer and Kalita, 1997), and lately in to the country of assembly, country of parts, country of design and country of brand (Chao, 1993; 2001). Research related to hybrid or multi-country products dominated the next phase of the COO research (Phau and Predergast, 2000).

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D’Astous and Ahmed (1992), and Ettenson (1993) have gone beyond `made in’ or `assembled in’ to include the concepts of `designed in’, `engineered in’ and `parts supplied by’. Their research found that several countries with various stereotypes exhibit different impacts of country of design, country of assembly and price on consumer perception of product design and quality. Ettenson and Gaeth (1991) suggested that hybrid country of origin products blur a product’s place of manufacture and question the acceptance of these as dependent on consumers’ willingness to purchase keeping in view of the importance of brand name and the COO cue. Maheswran and Yi Chen (2006) expanded the COO research paradigm by suggesting that just like brands, equity is also associated with the COO; consequently, researchers focused their attention on the interaction between country image and brand image (Phau and Prendergast, 2000; Heslop et al., 2008). The research suggested that the interaction between country image and brand image can be bilateral. On one hand, national symbols and attributes of the COO surround the brand contributing to define its image (Guercini and Ranfagni, 2013). On the other hand, strong brands might affect the country image and produce spillover effects on the other national brands (Kleppe et al., 2002; Roth and Diamantopoulos, 2009). However, research found that there is integration between the COO-image and brand image where the country image can be transferred to the brand image and vice versa (Guercini and Ranfagni, 2013) as well as there is a reciprocal interdependence between the country image and the brand image (Brijs et al., 2011).

According to Zdravkovic (2013) the COO-effects have been studied in the context of many product categories in many countries by using a variety of methodologies. In order to measure consumer purchasing behaviour and perceptions, the COO research has also focused on

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linking the COO with various marketing constructs including hybrid products, demographics, brand effects, consumer nationalism, price, product quality, product classes, purchase risks, technology sophistication, consumer perceptions, product features, country images, and advertising images (Phau and Prendergast, 2000; Ahmed et al., 2004; Hamzaoui and Merunka, 2006). Considerable COO research conducted over a period of time has suggested that the COO distinguishes one product from others (Bilkey and Nes, 1982; Verleegh and Steenkamp, 1999; Ahmed and d’Astous, 2003), however, recent COO research indicated that the COO has an impact on consumers’ willingness to buy a product (Josiassen and Harzing, 2008). Furthermore, consumer ethnocentrism and familiarity with the product have been found to moderate the effects of consumers’ use of the COO cue (Zdravkovic, 2013). For example, low familiarity with the product found to be related with greater use of extrinsic cues such as the COO to evaluate the products (Veale and Quester, 2009). In addition, the consumers tend to prefer the products of their home country (Shimp and Sharma, 1987; Zdravkovic, 2013).

The research measuring the effects of the COO has gone through multiple stages which are presented in the figure 2.1 below:

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Figure 2.1: Evolution of the COO Research

Source: Phau and Predergas ( 2000:161)

PHASE 1 - SINGLE CUE STUDIES

Schooler (1965), Reierson (1966,1967), Gaedeke (1973)

Country of Origin effects expanded --- called for multi-cue studies

PHASE 2 - PROGRESSION TO MULTI-CUE STUDIES Bilkey and Nes (1982), Erickson et al (1984), Johansson et al (1985),

Hong and Wyer (1989), Papadopoulas et al (1990)

Existence of Country of origin effects manipulations include:

Product Type/Country Specificity, Consumer Patriotism/Ethnocentrism, Country Reputation/Level of Economic Development, Hierarchy of effects of Country Brand familiarity

Caveats: Sampling Procedures, multidimensional cues.

PHASE 3 - HYBRID PRODUCTS/BINATIONAL PRODUCTS

D’Astous and Ahmed (1992), Chao (1993), Ettenson (1993), Ettenson and Gaeth (1991), Ettenson and Mathur (1995), Han and Terpstra (1988), Han (1989)

Dimensionalising Country of Origin - Country of Assembly, Country of Parts, & Country of Design. Impact of brand names in a rapidly globalising market.

Caveats: Complexity of multi-country affiliation, Cross national validity, level of involvement

in purchase decision, brand familiarity and experience

GLOBALISATION (BORDERLESS WORLD)

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