Country of Origin Effect

Globalization and market saturation have led to hyper-competition, which has made a country’s brand image extremely important for companies and their products, since this image may positively and negatively impact consumer behavior.

The importance of the country of origin in the consumer’s behavior towards certain brands may generate both competitive advantages, as well as disadvantages. Due to previous experiences, knowledge acquired, or stereotyped beliefs about a certain country, consumers create their own brand country images.

If the consumers’ judgement of the country of origin is positive, then this will lead to a favorable perception of the product brands from that country. Also, brands from a country that has a better image are “better placed to benefit from high prices in contrast to a country with a discount, which characterizes brands from countries that have a negative or weak image” (Berbel-Pineda, Palacios-Florencio, Santos-Roldán, & Hurtado, 2018, p. 2).

The country of origin effect, refers to the impact on consumers of the “made in” label, or more generally, the country a branded product or service is perceived to originate from.  Products or services from countries with a positive image tend to be favorably evaluated, while those from less perceived countries tend to be downgraded.

This effect has an impact on sales, and there is evidence that such an effect does not go away over time (Johansson & Furick, 2018). The Japanese cars entry into the U.S. in the 1970’s was based more on country-specific advantages rather than firm-specific advantages.  American auto buyers bought Japanese cars, and not necessarily a Datsun or a Toyota.

With the growth of multinational production, the original emphasis on “made-in” labels has been widened i.e. brands also have “home countries”, so Sony is Sony, regardless of where the product is produced (Johansson & Furick, 2018).

Also, the country of origin effect depends on whether or not the country produces at widely different quality levels (Johansson & Furick, 2018).  For example, Germany, Japan, Sweden and Switzerland has very high-quality standards in general, which guarantee the quality of their products

. The Koreans seem to be working on joining this group.  However, the U.S., Italy and China have widely varying quality tiers or levels, which sometimes render the made-in label useless for quality judgments.
References
Berbel-Pineda, J., Palacios-Florencio, B., Santos-Roldán, L., & Hurtado, J. (2018). Relation of country-of-origin effect, culture, and type of product with the consumer’s shopping intention: An analysis for small- and medium-sized enterprises. Complexity, 2018(1), 1 – 12.

Johansson, J., & Furick, M. (2018).  The new global marketing: Local adaptation for sustainability and profit.  (2nd ed.). San Diego, CA: Cognella

C. Requirements & Questions
Discussion Topic
Choose one of the following country/product combinations when writing your paper:

Product Country
1 Cars Germany
2 Watches Switzerland
3 Electronics Japan
4 Clothes France
5 Leather Italy

Using research, define the factors that influence consumers buying decisions.

Using research, define what a country’s image is, and describe the country image of your chosen country as it relates to the product. How can a country maintain its image? What happens to the product if this image is negatively affected?

Define the country of origin effect in your own words. What role does the country of origin play in your chosen product’s brand(s)?

What are the elements that are associated with your chosen country in the consumer’s mind? For example, if you are discussing China: Huge, food, counterfeit products, communist, low cost……

Give an example of a negative country of origin effect for your chosen product using another country as an example.

Does a country of origin lose some of its luster if the same brand is made elsewhere? Or does the original country of the brand help maintain a positive perception of the brand in consumer’s mind? For example, Audi cars manufactured in China?

Only use scholarly and reliable non-scholarly sources such as Bloomberg, Reuters, Statista, WSJ, FT, Money, Forbes, and Fortune (no answer.com, QuickMBA, eHow, Wikipedia…….).

Assignment should be supported by at least two scholarly (peer-reviewed articles to support concepts), and at least four reliable non-scholarly sources (to provide consumer, market, and industry information); in addition to the course readings.

Assignment should be written in a paper format; not a question and answer format.
Include the following: A half page Introduction, and a half page Lessons Learned & Conclusion at the end of your paper. An executive summary is not required.

5. All questions are to be attempted. Relate your answers to research and course reading. Do not restate the information from the case study; go beyond the included information; analyze!

6. Paper should be 7 – 8 pages long, with one-inch margins, 12-point font, double-spacing, and should be posted as a Word document. The cover page, reference list, and appendix are not part of the page count.  All graphics (if used) should be placed in the appendix.

7. Use APA format for intext citations and the reference list.

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