Country-of-Origin Effects

Country-of-origin perceptions are the mental associations and beliefs triggered by a country. Government offi­cials want to strengthen their country’s image to help domestic marketers that export and to attract foreign firms and investors. Marketers want to use positive country-of-origin perceptions to sell their products and services.

1. BUILDING COUNTRY IMAGES

Governments now recognize that the images of their cities and countries affect more than tourism and have im­portant value in commerce. Foreign business can boost the local economy, provide jobs, and improve infrastruc­ture. Image can also help sell products. For its first global ad campaign for Infiniti luxury cars, Nissan chose to tap into its Japanese roots and association with Japanese-driven art and engineering.¹⁰⁷

Countries are being marketed like any other brand. New Zealand has developed concerted marketing programs both to sell its products outside the country, via its New Zealand Way program, and to attract tourists, by show­ing the dramatic landscapes featured in The Lord of the Rings film trilogy. Both efforts reinforce the image of New Zealand as fresh and pure. The launch of the new Hobbit trilogy in November 2012—with the fictional Middle Earth again being depicted by New Zealand—has attracted a new wave of visitors.¹⁰⁸

Another film affected the image of a country in an entirely different way. Kazakhstan has a positive story to tell given its huge size, rich natural resources, and rapid modernization. British comedian Sacha Baron Cohen’s mock documentary Borat, however, portrayed the country in a sometimes crude and vulgar light, and the character Borat was sexist, homophobic, and anti-Semitic. Despite that fact, Yerzhan Kazykhanov, Kazakhstan’s foreign min­ister, observed: “After this film, the number of visas issued to Kazakhstan grew by ten times. This is a big victory for us, and I thank Borat for attracting tourists to Kazakhstan.” Evidently, enough publicity about the country sur­rounded the film to boost its awareness.¹⁰⁹

A strong company that emerges as a global player can do wonders for a country’s image. Before World War II, Japan had a poor image, which the success of Sony with its Trinitron TV sets and of Japanese automakers Honda, Nissan, and Toyota helped change. Relying partly on the global success of Nokia, Finland campaigned to enhance

The government of New Zealand markets the country as fresh and pure, a message reinforced by the use of stunning New Zealand scenery in many popular films such as the Hobbit trilogy.

its image as a center of high-tech innovation. Current events can also shape the image of a country. When public unrest and violent protests surrounded the government’s austerity program to address Greece’s debt crisis, tourist bookings there dropped as much as 30 percent.¹¹⁰

2. CONSUMER PERCEPTIONS OF COUNTRY OF ORIGIN

Global marketers know that buyers hold distinct attitudes and beliefs about brands or products from different countries.¹¹¹ These perceptions can be attributes in decision making or influence other attributes in the process (“If it’s French, it must be stylish”). Coca-Cola’s success against local cola brand Jianlibao in China was partly due to its symbolic values of U.S. modernity and affluence.¹¹²

The mere fact that a brand is perceived as successful on a global stage—whether it sends a quality signal, taps into cultural myths, or reinforces a sense of social responsibility—may lend credibility and respect.¹¹³ Research studies have found the following:¹¹⁴

• People are often ethnocentric and favorably predisposed to their own country’s products, unless they come from a less developed country.
• The more favorable a country’s image, the more prominently the “Made in…” label should be displayed.
• The impact of country of origin varies with the type of product. Consumers want to know where a car was made, but not the lubricating oil.
• Certain countries enjoy a reputation for certain goods: Japan for automobiles and consumer electronics; the United States for high-tech innovations, soft drinks, toys, cigarettes, and jeans; France for wine, perfume, and luxury goods.
• Sometimes country-of-origin perception can encompass an entire country’s products. In one study, Chinese consumers in Hong Kong perceived U.S. products as prestigious, Japanese products as innovative, and Chinese products as cheap.

Marketers must look at country-of-origin perceptions from both a domestic and a foreign perspective. In the domestic market, these perceptions may stir consumers’ patriotic notions or remind them of their past. As international trade grows, consumers may view certain brands as symbolically important in their own cultural identity or as playing an important role in keeping jobs in their own country. More than three-quarters of U.S. consumers said that, given a choice between a product made at home and an identical one made abroad, they would choose the U.S. product.¹¹⁵

Patriotic appeals underlie marketing strategies all over the world, but they can lack uniqueness and even be overused, especially in economic or political crises. Many small businesses tap into community pride to emphasize their local roots. To be successful, these need to be clearly local and offer appealing product and service offerings.¹¹⁶

Sometimes consumers don’t know where brands come from. In surveys, they routinely guess that Heineken is German and Nokia is Japanese (they are Dutch and Finnish, respectively). Few consumers know Haagen-Dazs and Estee Lauder originated in the United States.

With outsourcing and foreign manufacturing, it’s hard to know what the country of origin really is anyway. Only 65 percent of the content of a Ford Mustang comes from the United States or Canada, whereas the Toyota Avalon is assem­bled in Georgetown, Kentucky, with one of the highest percentages of local components, 85 percent. Foreign automakers are pouring money into North America, investing in plants, suppliers, and dealerships as well as design, testing, and research centers. But what makes a product more “American”—having a higher percentage of North American components or creating more jobs in North America? The two measures may not lead to the same conclusion.117

Many brands have gone to great lengths to weave themselves into the cultural fabric of their foreign markets. One Coca-Cola executive tells of a young child visiting the United States from Japan who commented to her parents on seeing a Coca-Cola vending machine—“Look, they have Coca-Cola too!” As far as she was concerned, Coca-Cola was a Japanese brand. Haier is another global brand working hard to establish local roots in other countries.

HAIER As China’s leading maker of refrigerators, washing machines, and air conditioners, Haier was well known and respected in its home market for its well-designed products. For rural customers, Haier sold extra-durable washing machines that could wash vegetables as well as clothes; for urban customers, it made smaller washing machines to fit in tiny apartments. In 1999, the company set its sights on a much bigger goal: building a truly global brand. Unlike most other Asian companies that chose to enter Asian markets before considering Western markets, Haier decided to first target the United States and Western Europe. The company felt success there would enable greater success elsewhere in the world. In the United States, Haier established a beachhead by tapping a neglected market—mini-fridges for homes, offices, dorms, and hotels—and securing distribution at Walmart, Target, Home Depot, and other top retailers. After some initial success, the company began to sell higher-end refrigerators and other appliances such as air conditioners, washing machines, and dishwashers. Its goal is to be seen as a “localized U.S. brand,” not an “imported Chinese brand.” Thus, Haier invested $40 million in a manufacturing plant in South Carolina and became a marketing partner with the National Basketball Association. The firm’s global marketing efforts have paid off. By 2012, 30 percent of U.S. households owned a Haier product, and Haier is now the world’s top-selling home appliance brand.

Interestingly, even when the United States has not been that popular, its brands typically have been. As one marketer noted, “Regardless of all the problems we have as a country, we are still looked to as the consumer capital of the world.”¹¹⁹

Source: Kotler Philip T., Keller Kevin Lane (2015), Marketing Management, Pearson; 15th Edition.