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Country of Origin-effect

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Research suggests that country of origin (COO) serves as a cue from which consumers make inferences about product and product attributes. The COO cue triggers a global evaluation of quality, performance, or specific product attributes. Consumers infer attributes to the product based on country stereotype and experiences with products from that country. Hence, a COO cue has become an important information cue for consumers who are exposed to far more internationalized product selection and multinational marketing than ever before. Thereby, the country of origin may even affect consumers' perceptions beyond their conscious control.

Table of contents:
  1. What is a Country of Origin Effect?
  2. Understanding the Country of Origin Effect
  3. Marketing Effects of Country of Origin (COO)
    1. Some Real-Life Success and Failure Examples
    2. Why should brands promote their country of origin?
  4. Country of Origin Effect Still Matters
  5. How have brands invoked country of origin perceptions?
  6. Conclusion:
  7. Country of Origin-effect example

What is a Country of Origin Effect?

COO stands for "Country of Origin." The practice of marketers and customers identifying brands with nations and making purchasing decisions based on the product's place of origin is known as an effect. For example, we tend to identify quality with the Japanese and precision with the Swiss, as we'll see later. This means that our views of the value connected with these nations determine whether we buy or discard items and brands from these countries.

In a nutshell, the country of origin effect assesses the influence of the product's manufacturing nation on customers. In recent years, there has been a lot of study on how the COO effect affects customers, which has led to a renewed attempt to associate and disassociate products from the nations where they are manufactured.

Though the benefits of COO are evident, it is also important to recognize that COO can have a detrimental influence, as illustrated by the cases given below. It is sufficient to establish that COO must be tackled scientifically by market research in target nations on how customers view the country where the brand is manufactured.

Understanding the Country of Origin Effect

If you're a seasoned corporate decision-maker, you may recall the early days of Japanese automobiles and consumer electronics, when Japanese products were seen in a significantly less favorable light than they are now. The consensus at the time was that if anything came from Japan, it had to be inexpensive! Over the last four decades, the quality of Japanese engineering has gradually gained recognition, and major Japanese businesses have evolved from "me too" producers of lower-cost goods to worldwide brand and technology leaders.

Fast forward to the twenty-first century, and you'll see that a major consumer electronics market conflict has erupted between Japanese and Korean firms. Twenty years ago, Korean VCRs and microwave ovens were ranked considerably worse than German and Japanese brands in all product categories, including quality. Today's narrative may be very different. The nation of origin of a product or service is defined as the country it is related to. In the case of products, the nation might be the country of manufacture (COM) or the country where the headquarters are located in the case of both products and services. The country of production, assembly, or design influence on a consumer's favorable or negative view of a product is known as the country of origin effect (COE). The idea of a nation of origin, on the other hand, is becoming increasingly complicated.

Marketing Effects of Country of Origin (COO)

COO has been proven to have a considerable influence on customer behavior, as seen by taglines such as created to perfection in Switzerland for Rolex and Swatch watches, and COO having a demonstrable impact on purchase choices. Furthermore, COO is linked to higher brand recall since we all know that McDonald's is an American brand, and we prefer to identify it with the nation.

Coca-Cola and Pepsi, for example, are linked with the United States, but Louis Vuitton and other high-end designer labels are connected with France. The idea is that in terms of COO, the brand and the nation get linked, which may have both beneficial and negative consequences, such as banning French fries in the US when they led an invasion that France opposed.

Since a result, marketers must be cautious about the type of COO-based branding they use, as deviating from the traditional specialist sectors might undermine their chances. Furthermore, once consumers create brand and country associations and brand recall occurs; as a result, it is difficult to reverse impressions afterward.

Some Real-Life Success and Failure Examples

The majority of us identify Japanese with quality and German with precision. This is the brand association we have with items originating in these nations. For example, Japanese vehicles and automobiles soon became synonymous with quality and fuel efficiency when they first entered the worldwide market in the 1980s. Similarly, German autos were associated with toughness, accuracy, and durability. In the same way that Swiss watches are recognized for their precision, and French fragrances are known for their fragrance and chic impact, French perfumes are known for their fragrance and chic effect. However, there have been failures in how COO was believed to affect customers, with the finest example being British firms' unsuccessful attempt to infiltrate the automotive industry. Even though British automakers such as Rolls Royce and Jaguar were known for their high-end models, they could not transition to mass-market vehicles because consumers still associated these brands with old-world products rather than the new and emerging brands from Japan and South Korea.

Why should brands promote their country of origin?

The nation of origin impact can influence consumer views of a product positively. For example, Australian qualities like healthy and cleanliness have become linked with Australian products like health supplements and fresh fruit. Unfavorable characteristics, on the other hand, might harm product assessments. Delhi and Achabou, for example, discovered that although a country of origin with a positive ecological image did not affect eco-labeled product assessments, a country of origin with a bad ecological image has a negative impact.

Furthermore, the nation of origin effects can affect brands as well as product categories. Items made at a brand's original factory are regarded as more authentic than comparable products made in a different factory - they acquire a contagion or a specific form of aura that influences product perceptions, according to Newman and Dhar.

Country of Origin Effect Still Matters

Information about the product's country of origin is a product attribute that exists outside of the product. It is a proxy for product quality, performance, dependability, prestige, and other traits that are difficult to assess directly. Consumers have consistently good or negative sentiments of things created in a certain nation, according to research. These origin biases appear to occur for both end-users and industrial customers and products in general and individual items. The type and degree of origin effects are influenced by various factors, including the product category, the study stimulus, respondent demographics, prior knowledge and experience with the product category, and consumer information processing style.

Consumers create their judgments of a country's image and perceptions of product quality, risk, probability of purchase, and other mediating variables based on various experiences and information. Buyer views are influenced by familiarity with a country's products, buying habits, demographics, and psychographics. The type of production method and the amount of technical sophistication have been found to influence these views.

Both rich and developing countries have been proven to exhibit country of origin biases. Products from less developed nations are often riskier and of poorer quality than those produced in more developed countries. In general, things made in highly industrialized nations are of higher quality and have more reputation than those made in developing countries.

How have brands invoked country of origin perceptions?

Brands may evoke notions of the country of origin in a variety of ways. 7 Brands using logos like the Australian Made mark are an assurance that they are made in Australia. Singapore Airlines, for example, has included their nation of origin into their name, making it apparent where the company is based. In addition to overt country of origin methods, marketers may subtly use symbols connected with the nation to evoke these beliefs. Iconic actors like Hugh Jackman or famous locations like the Sydney Harbour Bridge, for example, might be utilized to evoke country of origin preconceptions of Australia.

Conclusion:

The idea of country of origin impacts, according to this study, is impacted by the brand name and customer perceptions of the source nation. According to the empirical findings of a pilot study, consumer perceptions of quality for autos and televisions are greatly impacted by where the product is created and the seller's brand name.

Findings like the ones provided here should not be construed as universal rules. Nonetheless, they point to several ramifications for a company functioning in today's global economy. For example, before deciding on joint ventures or producing autos in foreign countries, companies like GM, Chrysler, and Ford should research consumer impressions.

Furthermore, the findings have significant implications for international manufacturers regarding consumer-side impacts of local manufacturing and private branding decisions, which may be just as important as cost-side effects. Another issue is how items should be promoted when customer views are influenced by source nation and foreign brand names. Because the phenomenon appears to be related to a certain product characteristic, advertising might dispel misconceptions. The findings presented here indicate that more study is required.

Country of Origin-effect example

The two example below show how we could use the Country of origin-effect as a distributor or as a brand. In the Amazon example, we just added country filters, to enable users to categorize their results by country they prefer their product to be originated from. This encourages local and responsible consumption.

The brand L'Or'eal is showcasing its country of origin within its product name being called "L'Or'eal Paris". This subtly tells consumers that product are born in the French capital, renowned for high quality perfume and luxury products.

Country of origin-effect is used by Amazon as can be seen on the screenshot

Country of origin-effect is used by L'Or'eal as can be seen on the screenshot

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Example of hypothesis applied

If we add a the country of origin, then conversions for all users on desktop devices will increase, because of Country of Origin-effect.

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