country-of-origin effect on product perception

The text discusses stereotypes, ethnocentrism, degree of economic development, and fads as the basis for generalizations about country-of-origin effect on product perception. Explain each and give an example.

The country, the type of product, and the image of the company and its brands all influence whether or not the country of origin will engender a positive or negative reaction. There are a variety of generalizations that can be made about country of origin effects on products and brands. Consumers tend to have stereotypes about products and countries that have been formed by experience, hearsay, and myth. Following are some of the more frequently cited generalizations.

Consumers have broad but somewhat vague stereotypes about specific countries and specific product categories that they judge “best”: English tea, French perfume, Chinese silk, Italian leather, Japanese electronics, Jamaican rum, and, so on. Stereotyping of this nature is typically product specific and may not extend to other categories of products from these countries.

Ethnocentrism can also have country of origin effect; feelings of national pride, the “buy American” effect among members, for example, can influence attitudes toward foreign products. Honda, which manufactures one of their models almost entirely in the United States, recognizes this phenomenon and points out how many component parts are made in America in some of their advertisements. On the other hand, others have a stereotype of Japan as producing the “best” automobiles. A recent study found that U.S. automobile producers may suffer comparatively tarnished in-country images regardless of whether they actually produce superior products.

Countries are also stereotyped on the basis of whether they are industrialized, in the process of industrializing or less-developed. These stereotypes are less country-product specific; they are more a perception of the quality of goods in general produced within the country. Industrialized countries have the highest quality image, and there is generally a bias against products from developing countries. Within groups of countries grouped by economic development there are variations of image. For example, one study of COE between Mexico and Taiwan found that a microwave oven manufactured in Mexico was perceived as significantly more risky than an oven made in Taiwan. However, for jeans there was no difference in perception between the two countries. One might generalize that the more technical the product, the less positive is the perception of one manufactured in a less-developed or newly industrializing country. There is also the tendency to favor foreign made products over domestic made in less developed countries. Not all foreign products fare equally well since consumers in developing countries have stereotypes about the quality of foreign made products even from industrialized countries. A survey of consumers in the Czech Republic found that 72 percent of Japanese products were considered to be of the highest quality, German goods followed with 51%, Swiss goods with 48%, Czech goods with 32% and, last, the United States with 29%.

One final generalization about COE involves fads that often surround products from particular countries or regions in the world. These fads are more often product specific and generally involve goods that are themselves faddish in nature. European consumers are apparently enamored with a host of American made products ranging from Jeep Cherokees, Budweiser beer, and Jim Beam bourbon, to Boise sound systems. In the 1970s and 80s there was a backlash against anything American, but, in the 1990s, American is in. In China, anything Western seems to be the fad. If it is Western it is in demand even at prices three and four times higher than domestic products. In most cases such fads wane after a few years as some new fad takes over.