COUNTRY OF ORIGIN EFFECTS

Buyer behavior is affected by the national origin of products and services. Many consumers are relatively indifferent to where a product is made. Other consumers favor goods produced in their home country. Country of origin (COO) refers to the nation where a product is produced or branded.  Origin is usually indicated by means of a product label, such as “Made in China”. When consumers are aware of a product’s COO, they may react positively or negatively. For example, many people favors cars produced in Japan, but would be less upbeat about cars made in Russia. Most people feel confident about buying clothing made in Italy, but would be less receptive to clothing from Mexico. Such attitudes arise because consumers hold particular images or conceptions about specific countries. Consumers assume that Japan produces high-quality cars and that Russia makes low-quality cars. While such beliefs are often rooted in reality, many are simplified opinions, false stereotypes or effect the slowness of accepting change.

Buyer reactions to COO are influenced by various factors.  First, COO stereotypes vary depending on the origin of the judge and on the category of the product being judged.  For instance, while Japanese cars are disdained by Indians, they are prized by Russians. While people in Brazil love Japanese consumer electronics, they spurn Japanese apparel.

Second, opinion varies depending the national origin of the firm and the location where its product is actually made. Many consumers love German Volkswagens, even if the car is produced in China, Poland, or some other location outside Germany.

Third, as the capacity of countries to perform well in specific industries improves, the COO phenomenon varies over time. Until recently, for example, few Westerners would have visited India to undergo surgery.  However, many now perceive India as an excellent value for obtaining medical care for various conditions, and spend the time and money to travel there to receive heart operations, cosmetic surgery, and other procedures.

Finally, the tendency of consumers to discriminate against foreign products varies by demographic factors.  For example, senior citizens and people with limited education tend to shun products that originate from abroad.

WIPO Guide on Intellectual Property

The World Intellectual Property organization (WIPO) suggests that intellectual property owners  and rights holders can benefit from using these properties and rights as collateral to obtain credit. Doing so will make credit cheaper and more available to organizations. WIPO has issued a report explaining the process.

Click here to read the  Guide to WIPO Services.

Values and Freedom: Part 2

A second and even more crucial issue is the value system we use in making choices. There are major differences among what people value around the world. Contrasts include togetherness compared to individuality, cooperation versus competition, modesty next to assertiveness, and self-effacement compared to self-actualization. Often, global differences in value systems keep us apart and result in spectacularly destructive dissimilarities. How we value a life, for example, can be crucial in terms of how we treat individuals. What value we place on family, work, leisure time, or progress has a substantial effect on how we see and evaluate each other.

Cultural studies tell us that there are major differences between and even within nations. Global marketing, through its linkages via goods, services, ideas, and communications, can achieve important assimilation of value systems. On the consumer side, new products offer international appeal and encourage similar activities around the world. It has been claimed that local product offerings help define people and provide identity and that it is the local idiosyncrasies that make people beautiful. Some even offer the persistence of the specific breakfast habits of the English and French as evidence of local immutability in the face of globalization.

Yet, we should remember that values are learned, not genetically implanted. As life’s experience grow more international and more similar, so do values. Therefore, every time international marketing forges a new linkage in thinking, new progress is made in shaping a greater global commonality in values which makes it easier for countries, companies, and individuals to build bridges between them, may eventually become the field’s greatest gift to the world.

 

This is an excerpt from Dr. Czinkota’s book Global Business: Positioning Ventures Ahead, co-authored by Dr. Ilkka Ronkainen.

Michael R Czinkota and Ilkka A Ronkainen, Global Business: Positioning Ventures Ahead (New York: Routledge, 2011), pg. 236-237.

Click HERE to acquire the full book.

Learning More About The Global Consumer: The Boston Consulting Group

If you are interested in reading a little bit more extensively about how consumers have been affected by the financial conditions, I recommend reading this recently released report by the Boston Consulting Group. They describe and contrast the consumer climates in several different regions, highlighting key differences between Western nations and the BRIC( Brazil, Russia, India, China) markets. The report ends with six suggestions for businesses to adapt to the new consumer conditions.

Click HERE to read the report

The International Marketplace: Product Innovation May Come Mainly From China

           Since the 2007-2008 global recession, confidence in the American model of economic development has decreased significantly. Economists are eager to draw conclusions from China’s continued economic growth even though the economic slowdown that has affected much of the developed world. Many assert that Chinese economic policy is more stable because of the government’s large role. However, it may also be the demand of Chinese consumers which shapes innovation and supply.

            The American toilet company Kohler has just released the state-of-the-art Numi toilet. This toilet, designed and marketed primarily for the US and China, has many features included especially for the Chinese market. The toilet’s feet warming system is a solution to infamously cold Chinese bathrooms. Other Chinese market features include the Numi’s music system, Skype capabilities, and a bidet. This toilet suggests that even an American company must keep the Chinese populace in mind when developing products. In an editorial in the Financial Times, Christopher Caldwell concluded that the Numi toilet suggests more than just an increase in Chinese-centered goods. He claims that this toilet “is a sign that this era of US advantage is spiraling towards its close.” 

            Caldwell is not alone in his belief that Beijing will soon begin its reign of prominence. The Numi is not the only special global product marketed for China. In 2005 GM’s luxury sedan the Buick LaCrosse was redesigned especially for the Chinese market. Joe Qiu, designer of the Chinese version of the LaCrosse, told Fara Warner of Fast Company how he created a car that would sell well in the Chinese market. The interior of the car is meant to recreate the soft, luxurious environment of Chinese nightclubs and upscale Shanghai homes. The car’s exterior is sleek and trendy, targeting the chicest Chinese clientele. Since then, sales of the LaCrosse in China have outperformed those in the U.S. In 2010, GM released the updated version of the Buick LaCrosse globally. Much to US GM’s chagrin, the car’s interior was designed by Qiu. The US team was took point on the car’s interior, but had to take into account the input and edits from the Chinese design team. This move displayed how Chinese preferences trumped American ones. As a result, China gained more clout within the powerful American company GM. 

            With the second largest economy in the world and an envy-inducing continued growth, China is beginning to rival the United States’ position as the world’s economic leader. Whether the 21st century will become the age of China will be determined over time. Right now, Chinese preferences are beginning to share the lead in the development of new global products. 

Professor Michael R. Czinkota and Sophia Berhie

Sources: Caldwell, Christopher. “Telling Lessons for the Future from China’s Bathrooms.” Editorial, Financial Times (London), June 4, 2011; Waldmeir, Patti. “The Numi Toilet: Chinese Design for a Global Market.” Globe and Mail (Toronto), May 30, 2011. Accessed June 7, 2011. http://www.theglobeandmail.com/​report-on-business/​international-news/​ asian-pacific/​the-numi-toilet-chinese-design-for-a-global-market/​ article2040064/​; Warner, Fara. “Made in China.” Fast Company, April 1, 2007. Accessed June 7, 2011. http://www.fastcompany.com/​magazine/​114/​open_features-made-in-china.html.