THE CONSUMER: REACTIONS TO FOREIGN GOODS AND SERVICES

Rubén Weinsteiner

The influence of the country-of-origin effect on a product is one important variable, but in this section the focus is on the consumer: the person who interprets the product’s cou-ntry-of-origin information and decides whether or not to buy the product. The consumer may possess preconceived ideas about the quality of products from certain countries (Cha-sin and Jaffe 1979); they may have opinions about their duty to their nation to buy local products (Bruning 1997), or they may have the tendency to buy products that are produced in countries that are economically, socially and politically similar to their own (Han 1989).
All of these factors contribute to a reaction consumers may have when faced with foreign products and services, and it is important to identify these issues in order to overcome barriers and create an effective nation brand. Furthermore, consumer reactions vary from country to country, and it is essential to recognize these differences between consumers.



National characteristics and national identity


The consumers’ perception of a product significantly changes (for the better and for the worse) when they are told the country-of-origin of the product (Bannister and Saunders1978). If the COO can influence consumers’ perception of a product or service, then im-proving the image portrayed through the COO should be positioned to increase the number of foreign consumers.
This study first introduced the idea that countries have images (like brands) in the field of academic research.When comparing a country’s image in different sectors, the image is not consistent (Jaffe and Nebenzahl 2001).
For example, French wine may be highly valued by consu-mers, but French technology may not share the same prestigious image. Consumer ethno-centrism, therefore, is likely to also vary depending on the product. Perhaps a Taiwanese consumer would prefer buying local, Taiwanese technology, however they would choose French wine over wine from their country.

Furthermore, consumers form their country image perceptions based on more than sim-ply purchasing that country’s products (Jaffe and Nebenzahl 2001). This is a step towards broadening the field of nation brand research: country images are formed not only by ex-ports; aspects such as tourism and media coverage also affect nation brand images. In addition, Jaffe and Nebenzahl present a widely-accepted objective of nation branding: “to create a clear, simple, differentiating idea built around emotional qualities which can be symbolized both verbally and visually and understood by diverse audiences in a variety of situations.
To work effectively, nation branding must embrace political, cultural, business and sport activities” (Jaffe and Nebenzahl 2001, cited in Fan 2005, p. 3). This broad sta-tement has motivated governments to design and implement wide-ranging country brand campaigns.

The notion of branding a country is validated by the idea that a nation’s image in-fluences perceptions of products (O’Shaughnessy and O’Shaughnessy 2000).Consumers perceive foreign products in two ways: reputational capital is a belief-driven factor for consumers, where the buyer believes that the nation is (or isn’t) able to create a product that stands up to the standards they seek from the product.
Alternatively, an imagery-centric approach relies on a positive association with a nation brand which affects consumer pur-chases. Since a nation’s image can be diverse and in some cases contradictory, the product that aims to exploit its nation brand should concentrate on the adequate, positive national characteristics for the product and for the target market. The authors posed the question of whether or not this image can be exploited to promote exports.



Consumer ethnocentrism

A study about opinion of American industrial buyer’s opinions of manufactured goods from Eastern European countries showed that American buyers perceived the products from Eastern European countries to be inferior to those from the United States (Chasin and Jaffe 1979). This study was a precursor to the idea of consumer ethnocentrism: the bias that a consumer has towards products from their home country. This study inspired Shimp and Sharma’s subsequent 1987 study, and Chasin and Jaffe’s study identifies an important goal of nation branding: overcoming buyer’s tendency to choose national products over international.



Consumer ethnocentrism is defined by Shimp and Sharma as “beliefs held by...consu-mers about the appropriateness, indeed morality, of purchasing foreign-made products” (Shimp and Sharma 1987, p. 280), andwas first systematically measured using the CETS-CALE, developed in the same study.

Though this study is a starting point for research into how consumers compare foreign-made and domestic products, the investigation calls for more research into how and when these tendencies are instilled in consumers.Subsequent studies have shown that brand origin recognition accuracy is quite low - the country of origin is for the most part insignificant in consumer’s brand choice (Samiee et al. 2005). Both studies allow place branders to identify regional tendencies and work to develop strategies that are aimed at the biases of consumers in each region.

Various factors influence consumers’ ethnocentric tendency to buy or reject imported products. Some of the factors that affect the consumer’s opinion are their acceptance of other cultures, their perception of patriotism, conservatism and individualism (Sharma et al. 1995). Consumers that exhibit qualities such as openness to foreign cultures and indi-vidualism reveal weaker ethnocentric tendencies, whereas patriotism, conservatism and collectivism describe consumers with stronger ethnocentric tendencies. Demographic va-riables also play a part in consumer ethnocentrism (Han 1989; Schooler 1971).

Higher income and level of education correlate to lower ethnocentric tendencies, suggesting that these consumers are more likely to buy foreign products (Sharma et al.1995). Furthermore, the consumers’ perceived need for the product moderates their ethnocentric tendencies: if the product is foreign but is considered a necessity, the consumer will display only mode-rate ethnocentric tendencies. Similarly, the extent to which the consumer perceives that buying this product poses a threat him personally and/or to the domestic economy also influences a consumer’s ethnocentric bias.

COO bias also seems to affect consumer trust when contemplating high-risk services, such as life insurance (Michaeliset al. 2008); in the same way COO does play a role in “low-involvement” products (bread, coffee), however when other clues are introduced, such as price or brand, the role of COO diminishes (Ahmed et al. 2004). The consumer prejudices highlighted in this study are essential to keep in mind when promoting a nation brand abroad.

The influence of national loyalty varies depending on the society in question. In a study examining Canadians’ preference for airline carriers (Bruning 1997), price was found to be the deciding factor for consumers when choosing between domestic and international carriers. The second most important factor was country-of-origin. North Americans’ con-sumers show that individual benefits (a lower price) win over the sense of belonging to a group (national loyalty). Consumers in India, despite showing nationalistic and ethnocen-tristic tendencies, value the quality of foreign brands, and in turn regarded foreign brands with higher status local brands (Kinra 2006). It is important that marketers understand where consumers place the most value in consuming a product.

In consumer studies, there is an important emphasis on the difference between consu-mer ethnocentrism and international animosity (Klein 2002). Whereas the former involves choosing between a foreign and a domestic product, the latter only refers to biases for or against goods from a specific country, not foreign countries as a whole. Unlike the country-of-origin concept, animosity does not simply influence the consumers’ judgment of the product’s attributes; instead it affects the consumer’s willingness to buy the product. This study is significant because it highlights the difference between a country’s receptiveness to foreign products and a country’s hostility towards specific countries. Nation branding research frequently points to the differences between nation brand perceptions from one country to another (O’Shaughnessy and O’Shaughnessy 2000; Fan 2005; Stock 2009a), and it is important to keep in mind the individual relationship that exists between two cou-ntries when valuing the consumers’ reactions to a nation brand.

There are irregularities in the traits of consumer ethnocentrism (Balabanis and Dia-mantopoulos2004). To begin, consumer ethnocentrism is not a focal point in all product categories. In some situations, consumers disregard COO information and prefer foreign products to national products. Furthermore, foreign companies cannot assume that if their country’s products from one sector sell well (or poorly) abroad, that products of another sector will be as widely accepted (or rejected) as those from another. In this study, Bri-tish consumers preferred German cars to American, French, Italian and Japanese, but not German television sets. This inconsistency in consumer ethnocentrism provides a starting point for nation branding: if a country can create a broad, positive nation brand image, it could help improve product images in each sector.

 Rubén Weinsteiner