Does "made in..." matter to consumers? A Malaysian study of country of origin effect

Multinational Business Review, Fall 2000 by Mohamad, Osman, Ahmed, Zafar U, Honeycutt, Earl D Jr, Tyebkhan, Taizoon Hyder

This study examines Malaysian consumer perceptions of products originating in developed, newly industrialized, and developing countries. Country image, which affects consumer attitudes or preferences, is measured by four product constructs: innovativeness, design, prestige and workmanship. Malaysian consumers prefer local over imported clothing products. Like previous research, there was significant consumer preference and positive image perceptions for products originating in such developed countries as the United States, Japan, France, and Italy. Based upon the findings of this study, managers are provided with suggestions for utilizing COO as a strategic tool to position and market both locally made and imported goods.

INTRODUCTION

International trade is an extremely important activity that exists to meet the needs and wants of global consumers, serves as an avenue of growth and profit for business firms, and results in improved economic health for nations. Global trade has expanded an average of 13% annually since 1970 and is expected to exceed US$7.0 trillion by 2005 (Cateora and Graham 1999). One result of this economic trend is increased interest in the effect of the country of origin (COO) on consumer behavior and product positioning strategy in the global marketplace. COO affects consumer perceptions of product quality (Chao 1993; Roth and Romeo 1992; Cordell 1991) and has a significant influence, beyond advertising and marketing techniques, on the acceptance and success of a product (Baker and Currie 1993). The goal of global marketers is take advantage or benefit from positive, and to neutralize negative, country of origin biases (Czinkota and Ronkainen 1990).

LITERATURE REVIEW

COO studies have measured country quality as a summary construct, rather than as a defined set of items that infer quality (Hong and Wyer 1989). Other authors (Roth and Romeo 1992; Cattin, Jaffe, and Nebenzahl 1984) viewed country image as a multidimensional or summary construct, of which perceived quality was but one dimension. This approach can be better understood if country image is viewed as a "halo" or summary construct by consumers who are unfamiliar with a country's products (Han 1989).

COO based stereotyping may be universal in nature; however, the degree to which it is applied and the prominence given in the evaluation of the product varies. That is, consumer sensitivity to the COO image diverges from one country to another (Papadopoulos et al. 1987), may be hierarchical by country (Chao 1989), and varies by the level of consumer knowledge (Schaefer 1997). Studies have also concluded there is a tendency for consumers to more favorably evaluate their own home country products (Kaynak and Cavusgil 1983). Cordell (1991) suggests that consumer preferences are more product specific for industrialized than less developed countries. That is, a negative COO effect is evident when the home country of manufacture is less developed than alternative sources of goods (Tan and Farley 1987; Hulland, Todino, and Lecraw 1996). In general, a specific country can rank high in one product class and low in another (Roth and Romeo 1992).

Operationalization of Country Image Although previous studies used disparate variables to assess country image (Roth and Romeo 1992), four dimensions are common among the research: innovativeness, design, prestige, and workmanship. These dimensions are defined as:

Innovativeness -- the inclusion of new technology and engineering advances in a product.

Design - the appearance, style, color(s), and variety.

Prestige - the exclusivity, status, and brand name reputation

Workmanship - the product's reliability, durability, craftsmanship, and manufacturing quality.

For the purpose of this study a multidimensional country image, as defined and operationalized by Roth and Romeo (1992), is employed.

RESEARCH OBJECTIVES

"[B]y relating country images to product category characteristics, decision-makers can better understand preference formations for their products" since "this information provides insight into what underlies consumers' attitudes toward products manufactured in particular countries" (Roth and Romeo 1992, p.478). The purpose of this study is to examine COO effect in terms of country image of garments and accessories (as one product category) as measured via four individual dimensions: innovativeness, design, prestige, and workmanship. The following research statements guide this study:

a) To determine consumer purchasing attitudes toward locally and foreign made goods and accessories, i.e. are consumers more likely to buy locally or foreign made goods?; and

b) To determine whether there are perceived consumer differences in goods and accessories made locally in Malaysia, when compared to those manufactured overseas.

METHODOLOGY

Data were collected by both mail and personally administered surveys from a convenience sample, that involved respondents from both the public and University of Science students, living in the Province of Penang, Malaysia. The use of convenience sampling for this type of research is well documented (c.f. Speece, Kawahara and Miller 1996; Roth and Romeo 1992).