Understanding product origins

Insights from consumer psychology

By Tanushree Sarkar

An important finding from the field of consumer psychology has been that consumers, when evaluating products, do not just base their judgments on factors intrinsic to the product, such as quality, but are also influenced by extrinsic factors such as price and brand reputation. While this may seem obvious, since the 1960s, a rather curious phenomenon under investigation has been the role that the country of origin of a product plays consumers’ evaluation and purchasing intentions toward a particular product.

The earliest test of the country of origin effect (COO) was conducted by Schooler in 1965. He found that individuals evaluated products, which were identical in every way, differently based on the country mentioned on the “made in” label. Since Schooler’s original experiment, the country of origin effect is yet to be fully explained. However, this does not undermine the real world applications of the phenomenon. Instead, the lack of theoretical explanation has led to extensive research under various experimental manipulations in order to understand the antecedents and consequences of the country of origin effect. In other words, there is a large body of research that can be used to determine the circumstances under which the country of origin of a particular product is most likely to have an impact on consumer’s evaluation of the products.

Given the changes in ways in which products are manufactured, produced, and marketed, the definition of country of origin has now been expanded, referring to country of assembly, country of design, country of manufacture, and brand origin. More recently, research on the country of origin effect has focused on how the phenomenon plays out in the development and maintenance of brand equity. Brand equity has been found to be related to both, brand origin, which is the country with which consumers associate the brand, and country of manufacture, that is the country or countries where the brand manufactures its products. For example, Mercedes has been found to be strongly associated with Germany but less strongly associated with countries that manufacture or assemble Mercedes automobiles. On the other hand, while companies like Honda and Toyota use images of American manufacturing plants to establish an American identity, consumers have been found to associate such companies with Japan.

Originally, it was believed that the country of origin acted as a cognitive cue or a heuristic device that signaled the quality of the product. For example, technology from Japan is often considered to be of higher quality because of Japan’s reputation for manufacturing and producing technology. Other examples include Italian shoes, French perfumes, and Swiss watches. However, increasingly, affective and normative mechanisms for the country of origin effect are being recognized. That is, the country of origin often conveys emotional and symbolic meanings to consumers, which could be related to national pride, memory, identity, social status, or authenticity of the product. In addition, country of origin of a product also conveys social or personal norms. For example, consumers may prefer a product which is manufactured in a country that supports their local economy or the product of a brand which originated in a country that has policies in place for environmentally sustainable practices or have stringent labour laws. On the other hand, consumers may refrain from buying products manufactured in countries that have committed human rights violations.

Thus, it becomes pertinent for companies to understand how the different country of origin signals influence brand equity in order to develop a suitable brand policy and brand communications. Taking into account the different effects that brand origin and country of manufacture have on brand equity becomes essential, given the increase in the number of products that are hybrid in nature, that is, products that are associated with different countries at different stages of production. Understanding these effects can help brands target consumers’ perceptions in order to enhance brand equity.

Tanushree Sarkar, Social Psychologist

References: Leila Hamzaoui-Essoussi, Dwight Merunka, Boris Bartikowski, Brand origin and country of manufacture influences on brand equity and the moderating role of brand typicality, Journal of Business Research, Volume 64, Issue 9, September 2011, Pages 973-978.

Verlegh, P. W., & Steenkamp, J. B. E. (1999). A review and meta-analysis of country-of-origin research. Journal of economic psychology, 20(5), 521-546.