Leonidou et al. 2006 EJM.pdf

The current issue and full text archive of this journal is available atwww.emeraldinsight.com/0309-0566.htmEJM41,7/8786Received August 2005Accepted April 2006British consumers’ evaluations ofUS versus Chinese goodsA multi-level and multi-cue comparisonLeonidas C. LeonidouUniversity of Cyprus, Nicosia, CyprusDayananda PalihawadanaLeeds University Business School, Leeds, UK, andMichael A. TaliasInternational University Bremen, Bremen, GermanyAbstractPurpose – The article aims to identify differences in consumers’ evaluations of goods made in eitherthe USA or China at different levels of analysis; to trace variations in consumers’ evaluations withregard to various cues characterizing US or Chinese goods; and to provide a comparison of consumers’evaluations between US and Chinese goods at different levels of analysis and across different productcues.Design/methodology/approach – The study builds hypotheses that correspond to each of thethree research objectives. Information was received through personal interviews from a sample of 404British consumers, aged 18 years and above. Respondents were randomly selected at central locationsusing a systematic stratified procedure. Data were gathered using a structured questionnaire, withquestions focusing separately on the USA and China, at five different levels of analysis, and in sixdifferent categories of product cues. Using confirmatory factor analysis, the reliability and validity ofthe scales were found to be satisfactory. The hypotheses were tested using either student-t or ANOVAstatistics.Findings – The results provide support to all three hypotheses, revealing that there are significantdifferences in consumer evaluations across the various levels of analysis, caused mainly by the brand,which overshadows country-of-origin effects in the case of the USA, but emphasizes these effects inthat of Chinese goods.Research limitations/implications – The results of the study have serious implications forcorporate and public policy-makers, especially for the countries involved in the analysis. Theseimplications should be seen within the context of various geographical, product, time, and otherlimitations, which provide the basis for undertaking future research on the subject.Originality/value – As opposed to extant research on country-of-origin effects, the study offers amulti-level and multi-cue comparison for products manufactured by two major actors in theinternational trade arena (USA and China), as these are perceived by consumers living in an importantdeveloped market (the UK).Keywords Country of origin, Consumer behaviour, China, United States of America, United KingdomPaper type Research paperEuropean Journal of MarketingVol. 41 No. 7/8, 2007pp. 786-820q Emerald Group Publishing Limited0309-0566DOI 10.1108/03090560710752401The authors would like to thank the editors and the anonymous reviewers of the EuropeanJournal of Marketing for their valuable insights and constructive comments on previous versionsof the article.

Authors Study objectives Research methodology Major findingsResults of the study indicate that consumers’perceptions of new products from a given country arerelated to the image they hold for well-knownproducts for that country. Further, the extent oftransferability of beliefs is moderated by the degree ofperceived similarity between the well-known and thenew product categories. It was also found thattransference of beliefs to the new products wasgreater when the perceived similarity between theData for this study were collected using a sampleidentified through systematic sampling, using thetelephone book of the metropolitan area closest to theuniversity where the pretests were conducted as thesampling frame. This method was selected to ensurea high degree of correspondence between thegeographical sub-culture of the pretest and mainstudy samples, as well as to obtain a sample thatincluded a wide variety of demographic profiles. Ofthe 800 questionnaires mailed, 198 were returnedTo investigate the transferability of country imagesfrom well-known products to new productcategories. Also, to examine whether, which, and towhat extent the various dimensions of country imagefor a well-known product category transfer toinfluence perceptions of new productsAgarwal and Sikri(1996)well-known product and the new product was higherThe results show that Canadian consumers are morefavorable toward products made in Mexico thanAmerican consumers. American consumers, on theother hand, are more nationalistic than theCanadians. While country-of-origin cues have a muchgreater impact of consumer reactions than other cues,including brand name, this impact is significantlyattenuated when other pieces of information arepresentThe study was based on a survey of 219 US and 175Canadian consumers. Their judgments of the qualityand purchase value of automobiles, VCRs and shoeswere obtained in a multi-cue, ad-based settingAhmed et al. (1997) To manipulate country-of-origin information alongtwo dimensions, namely country of design andcountry of assemblyThe results of the experiment indicated that thetest-retest stability of attribute-based andentity-based multi-entity image ratings of the targetcountry, Germany, as a producer of smallautomobiles, were lower than the test-retest stabilityof single entity scaling image ratings of the targetcountry when the rating context (another countrybeing rated) changed between the test and retest. Thestudy also found that at least a portion of theinstability of multi-entity scaling found in previousstudies may be due to an inherent instabilityassociated with multi-entity scaling that is dependentof changes of context entitiesAn experiment involving survey respondents’ratings of small automobiles produced in variouscountries was used. Automobiles produced inGermany were selected as the target entity. Thedependent variable in the experiment consisted ofthe stability of the German automobile ratings undervarious survey conditions created by manipulatingthe experimental variables according to a 5 £ 2full-factorial experimental design. Complete sets ofresponses were received from 537 respondentsTo examine, via a controlled experiment, the issue ofmeasurement context effects in multi-entity scalingof country imagesAgarwal et al.(1997)The findings revealed that upper-income Mexicansprefer foreign products, but this was mediated by age,education, and household size. No significantdifferences in malinchismo were found for gender,marital status, employment status, and for two of thelifestyle questionsPersonal interviews among Mexican consumers (200in Mexico City, 100 in Monterey, and 100 inGuadalajara) representing upper-middle classsocio-economic groups were conducted and, as partof the larger study, the brief ten-item CETSCALEwas added to evaluate the general attitude towardimported goodsTo determine the degree to which upper-classMexicans have a positive attitude towardforeign-made products, using the CETSCALE toascertain socio-demographic characteristicsassociated with malinchismo and to evaluate ifmalinchismo influences Mexican consumersBailey and Pineres(1997)(continued)US versusChinese goods789Table I.

EJM41,7/8790Table I.Authors Study objectives Research methodology Major findingsResults from both countries support theCETSCALE’s unidimensionality, reliability,discriminant and nomological validity. US samplehad a significantly greater mean value on the scalethan the Russian sample. The Russians hadsignificantly more favorable beliefs and attitudestoward foreign products than the USAA questionnaire survey administered among 204students, of which 144 from a major, Midwestern USuniversity and 60 from two major universities in theRussian FederationTo establish the dimensionality, reliability andvalidity of the CETSCALE and its related measuresin both Russia and the USA and to examine the meandifferences between the two countriesDurvasula et al.(1997)The results invoked country images for both thecountry-of-brand origin and the country-ofmanufacture,and found that both cues are important inconsumer evaluations of product quality, productvalue, and willingness-to-buy. The relative salience ofthe country-of-manufacture and country-of-brandorigin cues were found to vary according to whetherthe product is a “non-technical fashion product” (e.g.sneakers and jeans) or it is a “low-technology, technicalproduct” (e.g. stereos and watches)The study used a 2 £ 2 £ 3 subjects design withprice (high and low), two country-of-origin brandlevels (USA and an appropriate European country)and three country-of-manufacture levels (USA, anNIC, and a developing country). A within-subjectdesign was used not only to assess how subjectsevaluated differences in price, brand origins andmanufacture information, but also to excludeextraneous between-subject differences that mayconfound the results. Subjects were 275undergraduate business students of a largeNortheastern US cityTo study: (a) the impact of price, country-of-brandorigin, and country-of-manufacture cues onconsumer evaluations of quality and value; (b) thedegree to which value perceptions follow qualityconsiderations rather than mere price, and (c) thewillingness-to-buy products that are manufacturedin the NICs and developing countriesIyer and Kalita(1997)Results offered preliminary evidence that Garvin’staxonomy has met a number of key validity criteriaand demonstrated its direct relevance to COOresearch. Results also confirmed that the adoption ofGarvin’s taxonomy in the COO research can facilitateA 4 (COO) £ 2 (brand) between-subject experimentaldesign, with each respondent answering questionscorresponding to only one of eight experimentalsituations and rating the quality of dress shirts basedon Garvin’s eight quality dimensions. The finalsample comprised 776 consumersLi and Dant (1997) To adopt Garvin’s (1984) taxonomy inconceptualizing and operationalizing product qualitydimensions for COO researchtheory-building or generalizations across studiesThe results reveal that product evaluations werehighest for highly-developed countries, followed bynewly-industrialized, newly-marketizing, anddeveloping-country groups. Further, theproduct-category and country-of-origin effectsinteracted, showing that, depending on the countrygroup, different product categories received more,equal, or less favorable evaluations compared withother product categoriesThe sample comprised 63 juniors and seniorsenrolled in the business school of an East Coast USuniversity. There were 42 females and 21 males inthe sample. The subjects were asked to evaluate 18products based on their knowledge, assuming thatthe products described were made in each of 21 givencountriesManrai et al. (1998) To examine the effects of country of origin andproduct category on product evaluations for 21countries and 18 products. Also, to assess if differentproduct categories are evaluated differentlydepending on in which group of countries they aresourced(continued)

Authors Study objectives Research methodology Major findingsThe findings provide several levels of support for theanimosity model of foreign product purchase.Animosity toward Japan and consumerethnocentrism (measured by CETSCALE) were foundto be distinct constructs. Discriminant validity wasdemonstrated, and each construct had differentconsequences in the model. Chinese consumers’animosity toward Japan was related negatively totheir willingness to purchase Japanese products, andmore important, this effect was independent of theirjudgments about the quality of Japanese productsData for the study were collected from adultconsumers in the Chinese city of Nanjing, China’s 11thlargest city. A total of 487 consumers were approachedrandomly on the street and asked to complete asurvey. Solicitation was carried out at several locationsaround Nanjing. Of these 244 agreed to participate.Respondents were asked to indicate their agreementwith statements regarding four general constructs: (a)Japanese product quality, (b) willingness to buyJapanese products, (c) consumer ethnocentrism, and (d)animosity towards Japan generally and war andeconomic animosity in particularKlein et al. (1998) To understand how attitude toward a country – inparticular, remnants of antipathy left by previousmilitary, political, or economic conflict – might affectwillingness to buy its products. Specifically, to testthe theory that animosity toward another nation canbe an important and powerful predictor of foreignproduct purchase, even when this enmity isunrelated to beliefs about the quality of productsproduced in that countryThe study shows that product specific image place amediating role between overall country image andconsumer evaluation. With product and brandfamiliarity, moderate familiarity consumers utilizecountry-of-origin information less than low or highfamiliarity consumers. Likewise, with countryfamiliarity, low familiarity consumers rely more oncountry-of-origin information than high familiarityconsumersHypotheses of the study, based on categorizationtheory, are developed and tested using a mail surveyof a random sample of 1,536 US households,identified from a reputed vendor. A total of 16versions of the questionnaire were mailed, each to 96households (16 £ 96 ¼ 1; 536)To examine the effects of grand image, countryimage, and familiarity with both brand and countryon consumer evaluation of bi-national brands. Twosub-constructs of country image: familiarity, brandfamiliarity and country familiarity are identified andutilizedLee and Ganesh(1999)Results revealed that the most common source ofinformation for evaluating products from AsianPacific countries was experiential knowledge,coupled with opinions from friends. Among thecountry origins investigated, products made in Japanappeared to be liked most, while Indian productsreceived the most negative comments. Japaneseproducts were also ranked first in terms of overallassessment, followed by products from Hong Kong,Singapore, Indonesia and India. In general, consumerdemographics did not play a serious differentiatingrole in the evaluation of products from these countriesThe study was conducted among 135 indigenousconsumers from Bulgaria. The sample consisted ofindividuals aged 18 or above who resided in thecapital of the country. The sample comprised 60males and 75 females. Data were collected by meansof personal interviewsTo identify: (1) the sources of information used byBulgarian consumers evaluating productsoriginating from Asian Pacific countries; (2) positiveor negative attitude on the part of these consumerstowards Asian Pacific products; and (c) their overallassessment of products made in Asia Pacific andhow this differs according to the consumerdemographicsLeonidou et al.(1999)Salesmen ranked COO (design and assembly) as theleast important attribute, but considered brandreputation to be the most important when consideringpurchasing electronic equipment. It was also foundthat consumers give the greatest importance to pricefollowed by brand reputation and warranty in thatorderUsing an area sampling procedure, 194 retailsalesmen of electronic equipment in three Canadiancities (Montreal, Quebec and Sherbrooke) and 190consumers in the Canadian city of Sherbrooke weresurveyedTo evaluate and compare consumer and salesmanCOO information in the context of a specificpurchase, and to assess whether brand evaluationsare affected by country-of-origin perceptionsd’Astous andAhmed (1999)(continued)US versusChinese goods791Table I.

EJM41,7/8792Table I.Authors Study objectives Research methodology Major findingsResults revealed the fact that a brand ismanufactured in its home country lifts its qualityrating significantly above the level expected basedsolely on brand and COP main effects. Findingsillustrated the powerful impact of brand-COPcongruity on consumers’ product evaluations. Theempirical evidence also suggests that manufacturinga brand outside its home country will often have adouble negative effect on consumers’ judgmentsAn empirical study was conducted amongconsumers’ judgments about the quality of each of anumber of products that vary systematically interms of brand-COP congruity. A four (brands) byfour (COPs) within- subjects full-factorial design wasused, yielding four products with, and 12 productswithout, brand-COP congruity. Data were collectedat the start of the ski season from a sample of 284Austrian skiersTo focus on interaction effects between brand andcountry of productionHaubl and Elrod(1999)about the brand’s qualityResults suggest that country of manufacture andproduct quality strongly influence consumer decisionmaking in globally available product categories.Specifically, compared with imported goods,consumers appeared to prefer domesticallymanufactured goods and are often willing to pay ahigher price for them. It is usually only whenimported goods are of significantly superior qualitythat consumers will pay more to obtain themRespondents in Japan evaluated the product thatoriginated in the home country (versus foreigncountry) more favorably regardless of productsuperiority. In contrast, respondents in the USAevaluated the product that originated in the homecountry more favorably only when the product wassuperior to competition. The results are explained onthe basis of the cultural principles of individualismand collectivismResults of the study suggested that country imagecognitive processing is significantly more complexthan previously thought, and that culture appears toplay an important role in purchase decisions. Theflexible model represents a substantive improvementin the depiction of cognitive processing regardingcountry-of-origin imageA non-probability random sample among 87shoppers at two public markets in a large US city (42for dishes and 45 for microwave ovens). The studyemployed conjoint techniques and consideredproducts from Japan to test the research hypothesesand address the related issues. Consumers wereasked to select their favorites from among severalproduct features and hypothetical, multi-attributeKnight (1999) To compare consumer preferences for goods madeabroad and in the home country by both foreign andhome country firmsproducts168 undergraduate students (86 from the US and 82from Japan) were randomly assigned to small groupsessions in a 2 (country of origin: US versus Japan)£ 2 (product description: superior versus inferior)between-subjects designTo examine the extent to which cultural orientationinfluences country of origin effects on productevaluations in two countries – a collectivist country(Japan) and an individualistic country (USA)Gurhan-Canli andMaheswaran (2000)A flexible model is devised and tested to representcountry image processing, using data from largesamples of US and Japanese consumers. Thequestionnaire survey produced 349 usable responsesthat reflected a response rate of 58 per centTotest a new model of country-of-origin image (COI)cognitive processing which is both comprehensiveand flexible and which extends and improves priorwork by Han (1989)Knight andCalantone (2000)(continued)

EJM41,7/8794Table I.Authors Study objectives Research methodology Major findingsResults indicated that human values can predictbetter country-of-origin images than other variables.However, the predictive ability of different humanvalues was inconsistent across the two samples,suggesting that the context within which values aredeveloped is important. The results have providedinsights into the country-of-image determinantsacross two culturally and economically differentcountries and showed that relational context isimportant. In addition, results provided informationon the likely effects of direct contact with the countryand language fluency on such evaluationsThe study was based on two samples of consumers,located in Turkey (303) and the Czech Republic (480)respectively. Data were collected by localcollaborators using mall-intercepts in the mainstreets and/or squares of the respective cities’ mainshopping districtsTo examine how culture may influence consumers’evaluations of a country and its products that couldhelp to better: (a) understand the controlling factorsunderlying a country-of-image, and (b) shape ormanage the use of a product’s country of origin as amarketing toolBalabanis et al.(2002)The results of the study indicated that Turkishconsumers had significantly different perceptions ofattributes for products coming from countries ofdifferent levels of socio-economic and technologicaldevelopment. It was also revealed that there wereseveral lifestyle dimensions apparent among theTurkish consumers, which were closely correlatedwith their ethnocentric basesData were collected through personal interviews inthe fourth largest Turkish city of Konya, among2,490 consumers, which has a rather cosmopolitandemographic, socio-economic and cultural makeupTo investigate product-country images, lifestylesand ethnocentric behavior of Turkish consumers andprovide suggestions to marketers about theimplications of the study resultsKaynak and Kara(2002)The results of confirmatory factor analysis ofcountry-of-origin image perceptions regarding twodifferent products from two different source countriesendorsed the potential value ofassimilation/acculturation as a segmentationdimension. Findings also indicated that theassimilation process is more gradual than can beexpected based on the melting-pot theoryA questionnaire survey among the adult populationof a large Midwestern metropolitan area in the USAthat is highly heterogeneous produced 678 usablereturns. The countries represented in the samplewere Mexico, Iran, Greece, Turkey, Scandinaviancountries, African countries, and the USATo study the extent of assimilation evident in theadaptation to host culture country-of-origin imagestereotypesParameswaran andPisharodi (2002)Results of the study show that when there iscongruence between brand origin andcountry-of-manufacture (e.g. a Sony television madein Japan), the latter information has no significanteffect on product beliefs and global product attitude.When country-of-manufacture information indicatesthat a branded product is made in a country with aless reputable image than that of the brand origin (e.g.a Sony television made in Mexico), this producesmore negative effects on product evaluations for lowequity brands than high equity brandsAn experimental design, a 2 £ 3 between-subjectsfactorial design was used, with two levels of brandequity (high and low) and three levels ofcountry-of-manufacture information (made in Japan,made in Mexico and no made-in information control).A sample of 192 undergraduate students at a majorNorth American university participated in the studyTo compare the effects of country-of-manufactureinformation on product evaluations between highand low equity brands while controlling for theeffects of brand origin (by comparing brands sharingthe same national origin)Hui and Zhou(2003)Results indicated that the observed variability inpreferences is linked to consumer ethnocentrism.However, the latter’s capability in explainingconsumer bias in favor of domestic products wasfound to be dependent on both the specific country oforigin and the particular product categoryThe study was based on six of the most economicallydeveloped countries and eight product categories.A self-completion questionnaire survey wasadministered among 465 UK consumersTo examine the relationship between consumerethnocentrism (CE), domestic country bias (DCB),and country-of-origin (COO) for different productcategories and different COOs in an integrativemannerBalabanis andDiamantopoulos(2004)

in overseas markets, and the adjustment of the marketing mix program in accordancewith the perceptual and behavioral idiosyncrasies of consumers in various countries(Martin and Eroglu, 1993; Samiee, 1994)[2]. They can also have a serious effect onpublic export promotion programs, as demonstrated by the fact that in many countriesthere are special schemes aiming to improve country image in order to attract foreigndirect investment and promote national exports (Balabanis et al., 2002).Although the sizeable research on country-of-origin evaluations has produced awealth of useful knowledge on international consumer behavior, it has been criticizedon several grounds[3]. One of these criticisms refers to the fact that, with a fewexceptions, empirical research has independently focused on the country, product, orbrand level, although there are indications that country-of-origin effects may bedifferent at each level (Ahmed and d’Astous, 1996). Another criticism, relatingparticularly to early studies on the subject, centers on the treatment ofcountry-of-origin as a single cue, as opposed to the multiple dimensions of which itis composed (Bilkey and Nes, 1982; Peterson and Jolibert, 1995). A third criticism refersto the limited investigation of country-of-origin effects of products made in theso-called “new manufacturing countries”, like China, and their comparison withcountries with a long tradition in the export of manufactured goods, like the US (Zengand Williamson, 2003)[4].This manuscript aims to remedy these criticisms by providing a multi-level andmulti-cue comparison of US and Chinese goods, as these are perceived by Britishconsumers[5]. Specifically, it has three major research objectives:(1) To identify differences in consumers’ evaluations of goods made in either theUS or China at the country, industry, product, brand, and model levels.(2) To trace variations in consumers’ evaluations with regard to various cuescharacterizing US or Chinese goods.(3) To provide a comparison of consumers’ evaluations between US and Chinesegoods at different levels of analysis and across different product cues.US versusChinese goods795Following this section, the remaining parts are organized as follows:.first, the extant literature on country-of-origin effects is reviewed;.second, hypotheses corresponding to each of the three research objectives areformulated;.third, the methodology adopted in designing and executing the study isexplained;.fourth, the study findings, with reference to each hypothesis, are presented,analyzed, and discussed; and.finally, several conclusions and implications are derived, while the limitations ofthe study, together with directions for future research, are presented.Review of the literatureCountry-of-origin is defined as the country where the headquarters of the company thatmanufactures and markets the product or brand is located (Johansson et al., 1985).Although in the past this coincided with the home country of the company, the recenttrend by multinational firms to identify more cost-effective geographic locations for

EJM41,7/8796manufacturing, designing, assembling, and producing parts for their products, hasbeen responsible for the introduction of more specialized terms, such ascountry-of-manufacture (Iyer and Kalita, 1997), country-of-design (Chao, 1998),country-of-assembly (Ahmed and d’Astous, 1996), and country-of-parts (Ulgado andLee, 1993). Country-of-origin is a complex phenomenon, which was found to affectproduct evaluations at the country, product category, individual product, or brandlevel (Bilkey and Nes, 1982; Al-Sulaiti and Baker, 1998). This may act as an intangibleinhibitor (or facilitator) for a firm to enter international markets, because of thenegative (or positive) bias toward certain imported goods by consumers residing inforeign countries (Wang and Lamb, 1983; Schooler et al., 1987).From an information theoretical perspective, consumers evaluate a product on thebasis of both intrinsic (e.g. taste, design, fit) and extrinsic (e.g. price, brand, warranty)cues (Szybillo and Jacoby, 1974). Country-of-origin is regarded as an extrinsic cue – anintangible product attribute, which is widely used by consumers, especially when theyhave only limited familiarity with products of foreign origin (Han, 1988; Han andTerpstra, 1988; Hanne, 1996). This is because, in the absence of information abouttangible traits of products, consumers tend to rely on extrinsic cues as indirectindicators of quality and risk (Han, 1988; Papadopoulos and Heslop, 1993;Maheswaran, 1994). Hence, country-of-origin is not merely a cognitive cue –providing, for example, a signal of product quality, but is also an affective one – with asymbolic and emotional meaning, in the sense that it relates to the identity, pride, andmemories of consumers (Batra et al., 1999).Apart from cognitive and affective aspects, country-of-origin also has normativeconnotations, in the sense that the consumer’s decision to purchase or avoid buying acountry’s products can be regarded as a vote in favor or against the policies, practices, oractions of a country (Verlegh and Steenkamp, 1999). In fact, consumers can reward“sympathetic” countries by purchasing their products (buycott), but punish “antipathetic”countries by refraining from buying their goods (boycott) (Smith, 1993). Another commonsalient norm of country-of-origin relates to the consumer’s inclination to purchasedomestic, as opposed to foreign, products, which is largely based on consumers’ judgmentof the morality of purchasing foreign-made goods (Shimp and Sharma, 1987). This normis usually harnessed by the “buy domestic” campaigns sponsored by governments,employers’ associations, and trade unions in several countries.The convergence of opinion among researchers in the field is that country-of-origineffects on product evaluations can occur in two different ways: “halo” and “summary”(Han, 1989). Under the “halo” hypothesis, consumers make inferences about productquality from the image they have of its country-of-origin, which in turn indirectly formspositive or negative consumer attitudes through product attribute rating (countryimage ! beliefs ! brand attitude). In the “summary” hypothesis, consumers makeabstractions of the product information into a country image[6], which subsequentlydirectly affects consumer attitude toward a brand (beliefs ! country image ! brandattitude). Thus, whatever the mechanism adopted, country-of-origin leads to a greatercognitive elaboration about tangible product attributes, thus shaping consumer attitudeand intention to purchase (Cordell, 1992; Verlegh and Steenkamp, 1999).Country-of-origin has a risk element, this being measured in terms of performance,financial, or social risk associated with the purchase and use of the foreign product bythe consumer in the foreign country (Cordell, 1992; Amine and Shin, 2002; Ahmed et al.,

2002a, b). Products made in countries characterized by high-risk cause consumers tospend more time and effort in evaluating its attributes and performance before taking afinal decision (Alden, 1993). Moreover, in high-risk countries, it is more likely for theconsumer to form a negative attitude about the product, which will subsequently reducehis/her willingness to buy it (Thorelli et al., 1989). Furthermore, there are indications thatproducts made in more-developed countries are considered less risky, compared to theircounterparts manufactured in less-developed countries (Hampton, 1977).The effects of country-of-origin on consumer behavior tend to vary from country tocountry, due to differences in economic, socio-cultural, political-legal, and other factors(Cattin et al., 1982). Within a specific country, they also tend to vary by time, because ofchanges in marketing sophistication, degree of industrialization, and lifestyle patterns(Papadopoulos and Heslop, 1993). Consumers also have different attitudes towardvarious product categories from a given country, this being the result of the existenceof associations/previous experience with the foreign country, beliefs about itsmanufacturing system, knowledge about specific brands, and so on (Etzel and Walker,1974; Kaynak and Cavusgil, 1983; Roth and Romeo, 1992). Notably, the nature of theproduct seems to play an important moderating role in shaping consumer evaluationsbased on country-of-origin information: the greater the degree of involvement in thebuying-decision process for a specific product, the more likely it is for the consumer touse country-of-origin information in his/her evaluation (Johansson, 1993).Consumer demographics also have a moderating impact on country-of-originresponses. The relationship of gender with country-of-origin evaluations showedrelatively consistent results, with female consumers generally evaluating foreign productsmore favorably compared to males (Schooler, 1971; Dornoff et al., 1974). Age was found tobe strongly correlated with country-of-origin perceptions, with older persons inclining toevaluate foreign products more positively compared to younger persons (Schooler, 1971;Smith, 1993). With regard to education, most studies have established that the higher thelevel of education reached by consumers, the more positive the attitude toward importedproducts (Anderson and Cunningham, 1972; Schooler, 1971; Dornoff et al., 1974; Wall andHeslop, 1986). Income level was also shown to be associated with consumer attitudestoward foreign products, with the better-off more positively predisposed to foreignproducts, as opposed to lower income groups (Wall et al., 1990).Finally, the psychographic characteristics of consumers were found to influencecountry-of-origin evaluations. For instance, people who are very dogmatic tend to havea less favorable attitude toward foreign products (Anderson and Cunningham, 1972).Conservatism (as opposed to liberalism) was also inversely associated with positiveforeign product evaluation (Anderson and Cunningham, 1972). Individuals who arestrongly concerned about their status were found to show a greater preference forforeign-made products (Anderson and Cunningham, 1972).US versusChinese goods797Research hypothesesThis section develops the research hypotheses corresponding to each of the setresearch objectives in a systematic way, based on theoretical argumentation andempirical evidence extracted from country-of-origin literature.

perceived and interpreted differently by individuals within a specific country. In fact,these cues tend to be evaluated by consumers in a different way for each foreigncountry, this being the outcome of contacts, associations with, or previous experiencesof the country, its people, and its products (Eroglu and Machleit, 1989; Hanne, 1996).Country-of-origin evaluations consist of positive evaluations for certain cues andnegative evaluations for others, the combined effect of which conveys the image of aspecific product. Moreover, the significance of each product cue for the consumer tendsto change over time, due to increased exposure to a foreign country, informationreceived from various sources, or an actual improvement/deterioration in goods in thesource country (Nagashima, 1970, 1977). Furthermore, consumer attitudes towardcountry-of-origin tend to be influenced by various marketing tools, such as aggressivepromotion, attractive store presentation, and price concessions (Chao, 1998). Firmsoriginating from more-developed economies, like the US, are in a better position toprovide adequate marketing support for their products abroad, as opposed to theircounterparts from less-developed countries, like China, which lack proper managementand marketing skills (Zhang, 2002; Dollan and Hardy, 2002). However, as opposed toUS-made goods, Chinese products have the advantage of being sold at a lower price,due to the cheap labor force, abundance of raw materials, and government subsidies(Zhang, 2002). The different emphasis attached by consumers to each cue is expected toprevail at different levels of analysis (i.e. country, industry, product, brand, and model),irrespective of country. The previous discussion leads to the following propositions:H2a. There are significant differences among the evaluations of British consumersof the various cues of goods made in the US at the country, industry, product,brand, or model levels.H2b. There are significant differences among the evaluations of British consumersof the various cues of goods made in China at the country, industry, product,brand, or model levels.US versusChinese goods799Country-of-origin and environmental similarityCountry-of-origin evaluations seem to be affected by the similarity perceived byconsumers with their home countries in terms of economic, socio-cultural,political-legal, and other environmental aspects (Papadopoulos et al. 1990a, b).Moreover, empirical evidence have shown that there is a positive relationship betweenproduct evaluations and degree of economic development, with products made inless-developed countries usually rated by consumers as inferior to those manufacturedin more-developed countries (Schooler, 1971; Hampton, 1977; Wang and Lamb, 1983;Bannister and Saunders, 1978). This is more likely to be the case of products with alarge technological content, as well as those requiring a high level of consumerinvolvement. Even “new manufacturing countries”, like China, often have a reputationfor lower quality, despite efforts to imitate the products of more-developed countries,like the US, which have a long-established and a widely-proliferated manufacturingsector (Zhang, 2002; Dollan and Hardy, 2002). This can be attributed to the fact thatindustrialized countries have long histories in the manufacture of quality products, arethe source of most innovations, and have expertise in producing a wide variety oftechnologically advanced goods (Nagashima, 1970; Gaedeke, 1973; Etzel and Walker,1974). Socio-cultural similarity between a purchasing country and a selling country

EJM41,7/8800may also create positive bias among consumers, because of sharing common beliefs,values, and attitudes (Wang and Lamb, 1983). Political-legal factors may also beresponsible for having consumer bias in favor of certain foreign products: residents ofcountries with similar political-legal systems are more likely to view each other’sproducts in a more positive way (Crawford and Lamb, 1981; Wang and Lamb, 1983).One would expect the above environmental factors to affect consumer evaluations ofspecific cues, not only at the country levels but also at the industry, product, brand, ormodel levels, although with a different intensity as the level of analysis becomes morespecific. Obviously, the advanced nature of a country’s economy, coupled with itssocio-cultural and political-legal similarity with the source country, is conducive toperceiving less risk of poor product performance and post-purchase dissatisfaction.Based on the above, we may postulate that:H3. There are significant differences in the evaluations of British consumers of thecues of products made in the US vis-à-vis China at the country, industry,product, brand, or model levels.Study methodResearch scopeTo test the research hypotheses, a survey was conducted in 2005 among consumersresiding in the UK. The latter represents an excellent basis for country-of-originresearch, for three major reasons:(1) it provides a huge market for foreign products, as a result of its relatively largepopulation and high per capita income;(2) it has a highly open economy, which largely depends on external trade fromAmerica and Asia; and(3) it is one of the key members of the European Union.The focus of country-of-origin was on products imported from the US and China. Bothcountries are major trading partners of the UK and have a very active involvement ininternational trade. However, they are very different in terms of economic,socio-cultural, political-legal, and other aspects, thus allowing for drawingcomparisons and identifying variations in country-of-origin evaluations (Bilkey andNes, 1982).Sampling proceduresThe target population was British consumers aged 18 years and above, withpermanent residency in the UK. Because of the multi-cultural nature of the localsociety, and in order to exclude the possibility of bias resulting from differences innationality (Parameswaran and Pisharodi, 2002), eligible respondents were confined tothose having British citizenship or permanent resident status for at least five years. Asample of 404 consumers was randomly selected using a systematic stratifiedprocedure, with provision made for the inclusion of some of the country’s major cities(namely, London, Birmingham, Manchester, Leeds, Cardiff, and Edinburgh)[7]. Anattempt was also made to ensure that the gender, age, educational, and incomecharacteristics of the participants in the sample were representative of those of thenational population. Central locations were identified in each selected area and

consumers were randomly chosen, using a predetermined key. In the case of refusalsby certain individuals, the next consumer to fulfill the prescribed demographic criteriawas selected.Levels of analysisThe study covered five levels of analysis. At the first level, the emphasis was on theBritish consumers’ overall perceptions of products made in the “USA” and “China”.The second level of analysis focused on the “electrical appliances” industry of each ofthese countries, mainly because they supply products requiring neither limited norextensive purchasing involvement by consumers. At the third level, the focus was on aspecific product within the broader industry group, namely “refrigerators”, which isregarded as a necessity and possessed by almost all British households. The fourthlevel referred to specific real brands of refrigerators, namely Whirpool from the US andHaier from China, which have been in the British market for at least five years[8]. Thefinal level comprised photographs of tangible models of each of the two brands,accompanied by leaflets containing information on product specifications, retail price,and warranty.US versusChinese goods801Questionnaire design and testingFor the purpose of collecting the data, a structured questionnaire consisting of threemajor parts was designed. The first part incorporated questions concerning thedemographic (e.g. gender, age, education) and psychographic (e.g. traveling intensity,political ideology, personality type) characteristics of the respondents. The second partwas divided into five sections, each corresponding to each of the five levels of analysis:country, industry, product, brand, and model. Each section incorporated the 6 £ 4country-of-origin cues, which were evaluated by respondents separately for US andChinese goods on a seven-point scale, ranging from 1 ¼ poor to 7 ¼ excellent. Thefinal part contained questions referring to the consumer’s buying-readiness stage (e.g.awareness, knowledgeability, likeness, intention to buy) with respect to US andChinese goods separately. Prior to launching the full-scale study, the questionnaire waspre-tested with ten consumers to ensure its workability in terms of structure, content,flow, and duration, and required only minor alterations.Data collectionData were collected by means of personal, face-to-face interviews, conducted by fourexperienced interviewers at pre-selected central locations (e.g. department stores,supermarkets, shopping malls). All interviewers had previously undergone rigoroustraining, during which the study objectives, the respondent selection method, and thequestionnaire were fully explained. Rehearsal interviews in a classroom environmentwere conducted among interviewers to ensure familiarity with the questionnaire andresolve any potential problems. Each interviewer carried out a pre-specified number ofinterviews (around 100). To ensure their proper completion, a random selection of 15percent of the respondents for each interviewer was contacted by telephone and theiranswers on key questions were cross-checked with those recorded in thequestionnaires. All questionnaires were subsequently edited to ensure that theywere properly answered, while data were carefully inserted in electronic files forstatistical analysis.

EJM41,7/8802Sample profileIn terms of demographic characteristics, the final sample was more or less equally splitbetween males and females (see Table II). About 38.6 percent of the respondents wereless than 35 years old, 38.4 percent were in the 35 to 64 age group, while the remainder(23 percent) were 65 years old and above. More than a fifth (21.8 percent) of theparticipants in the survey had had only secondary education, another fifth (20 percent)had graduated from college, while the remaining 57.2 percent had had anundergraduate or postgraduate education. In terms of household annual income,two-fifths (41.3 percent) of the respondents earned less than £25,000, another 27.3percent in the range of £25,000 to £34,999, while the remainder (31.4 percent) had anincome exceeding £35,000. With regard to the psychographic characteristics, 69.1percent of the sample were extensive travelers, 45.1 percent were interested ininternational affairs, 45.8 percent had a liberal attitude to life, while 48.8 percent had anextrovert personality.Construct reliability and validityThe scales for the product cues used in the study were extracted after an exhaustivereview of the pertinent literature. Altogether, 24 product/marketing cues wereidentified, which were categorized into six different groups reflecting elements of theCharacteristic Group Number (#) Percentage (%)Table II.Sample size and structure(n ¼ 404)Gender Male 199 49.3Female 205 50.7Age 18-34 156 38.635-54 155 38.465 þ 93 23.0Education Secondary 88 21.8College 85 21.0Undergraduate 124 30.7Postgraduate 107 26.5Income Up to £24,999 167 41.3£25,000 to £34,999 110 27.3£35,000 þ 127 31.4Traveling amount Limited traveling 44 10.9Neutral 81 20.0Extensive traveling 279 69.1Interest in affairs Domestic-oriented 59 14.6Neutral 163 40.3International-oriented 182 45.1Political ideology Conservative 48 11.9Neutral 171 42.3Liberal 185 45.8Personality type Introvert 43 10.6Neutral 164 40.6Extrovert 197 48.8

marketing mix – “external product/features”, “internal product/technology”, “productquality aspects”, “pricing considerations”, “distribution/service”, and “promotionalissues” – with each group containing four items (see Table III). To establish thereliability and validity of the scales constructed, confirmatory factor analysis, usingthe EQS program, was undertaken (see Table IV). Both the likelihood Chi-squarestatistic and the alternative fit indices revealed values within the commonly acceptedcritical levels. Construct reliability was acceptable, because the Cronbah’s alphacoefficients estimated for each construct exceeded .80 (Nunnally and Bernstein, 1994).Convergent validity was also satisfactory, because the factor loadings for all itemscomprising each construct exceeded 0.75, while the t-value for each item was greaterthan 15.0 (Bagozzi and Yi, 1988).US versusChinese goods803Analysis and discussionThis section analyzes and discusses the results with regard to each of the threeresearch hypotheses. In order to carry out the statistical analysis, compound scores foreach of the six groups of product cues were calculated, based on the average of theitems contained in each group. Differences among the means of consumer evaluationsat the five levels of analysis, as well as among the six categories of product cues, wereconducted using the ANOVA test, while to trace the source of potential differences, theScheffé’s test was employed (at a ¼ 0:05). Finally, comparisons of British consumers’evaluations of US versus Chinese goods were tested using the student-t formatched-paired samples[9].Testing hypotheses H1a and H1bBritish consumer perceptions of goods made in the USA exhibited statisticallysignificant variations across all five levels of analysis (see Table V – upper part). Thiswas true for each of the six groups of product cues, namely external product/features,internal/product technology, product quality aspects, pricing considerations,distribution/service, and promotional issues (all p’s , 0.01). The source of thesedifferences was mainly linked to the Whirpool brand, which was evaluated morefavorably by respondents compared to the country as a whole, its electrical appliancesindustry, and the refrigerators produced by US manufacturers. However, when aphotograph of the specific Whirpool model was shown to respondents, theirevaluations became less positive again compared to those expressed earlier for thebrand. Interestingly, there were no serious differences in consumer evaluations at thecountry, industry, and product level, indicating that consumers do not benefit from anyfurther information at a more specific level of analysis that would help them to havemore precise knowledge.A similar pattern was also observed in the case of British consumer evaluations ofChinese goods: there were only slight variations in their perceptions among country,industry, and product levels, for all categories of product cues (see Table V – lowerpart). However, when the Haier brand was revealed to consumers, their evaluationsseriously deteriorated, recording statistically significant differences when comparedwith perceptions of China as a whole, electrical appliances, and refrigerators (allps # 0.01). Surprisingly, when the photograph and more hands-on information aboutthe specific Haier model were disclosed, consumer evaluations became more favorableagain. This can be attributed to the fact that consumers had at their disposal more

EJM41,7/8804Table III.Literature sources ofcountry-of-origin cuesGroup Cue ReferencesExternal product/featuresInternalproduct/technologyExternal design/appearanceProduct styleInnovative productsFeature/model varietyInternaldesign/ergonomicsMeticulousworkmanshipOperating performanceTechnologicallyadvancedNagashima (1970, 1977); Heslop andPapadopoulos (1993); Roth and Romeo (1992);Papadopoulos et al. (1990a, b)Parameswaran and Yaprak (1987); Knight andCalantone (2000); Nagashima (1970, 1977); Choeand Cho (2000)Parameswaran and Yaprak (1987); Knight andCalantone (2000); Nagashima (1970, 1977); Heslopand Papadopoulos (1993); Roth and Romeo (1992)Parameswaran and Yaprak (1987); Knight andCalantone (2000); Nagashima (1970, 1977); Heslopand Papadopoulos (1993) Papadopoulos et al.(1990a, b)Roth and Romeo (1992)Parameswaran and Yaprak (1987); Knight andCalantone (2000); Heslop and Papadopoulos(1993); Han and Terpstra (1988); Roth and Romeo(1992); Hui and Zhou (2003); Haubl (1996); Choeand Cho (2000)Parameswaran and Yaprak (1987); Knight andCalantone (2000); Nagashima (1970, 1977);Papadopoulos et al. (1990a, b); Haubl(1996); Choeand Cho (2000); Johansson et al. (1994)Parameswaran and Yaprak (1987); Knight andCalantone (2000); Martin and Eroglu (1993);Nagashima (1970, 1977); Heslop andPapadopoulos (1993); Han and Terpstra (1988);Papadopoulos et al. (1990a, b); Haubl (1996); Choeand Cho (2000)Product quality aspects Overall quality Parameswaran and Yaprak (1987); Knight andCalantone (2000); Martin and Eroglu (1993);Heslop and Papadopoulos (1993); Iyer and Kalita(1997); Han (1989); Ahmed and d’Astous (1996);Papadopoulos et al. (1990a, b); Haubl (1996); Choeand Cho (2000); Johansson et al. (1994)Durability/long-lasting Parameswaran and Yaprak (1987); Knight andCalantone (2000); Hui and Zhou (2003);Papadopoulos et al. (1990a, b); Johansson et al.(1994)Product reliability Nagashima (1970, 1977); Heslop andPapadopoulos (1993); Hui and Zhou(2003);Papadopoulos et al. (1990a, b); Haubl(1996); Choeand Cho (2000)Product consistency Heslop and Papadopoulos (1993); Hui and Zhou(2003)Pricing considerations Value-for-money Parameswaran and Yaprak (1987); Knight andCalantone (2000); Nagashima (1970, 1977); Heslopand Papadopoulos (1993); Iyer and Kalita (1997);Ahmed and d’Astous (1996); Papadopoulos et al.(1990a, b); Johansson et al. (1994)(continued)

Group Cue ReferencesDistribution/servicePrice attractivenessCost efficiency Han (1989)EconomicalDealershipnetwork/supportProduct availabilityProduct serviceabilityRepairability/maintenanceParameswaran and Yaprak (1987); Knight andCalantone (2000); Nagashima (1970, 1977); Heslopand Papadopoulos (1993); Han and Terpstra(1988); Iyer and Kalita (1997); Johansson et al.(1994); Choe and Cho (2000)Parameswaran and Yaprak (1987); Knight andCalantone (2000); Nagashima (1970, 1977);Papadopoulos et al. (1990a, b)Johansson et al. (1994)Heslop and Papadopoulos (1993); Papadopouloset al. (1990a, b)Parameswaran and Yaprak (1987); Knight andCalantone (2000); Nagashima (1970, 1977); Heslopand Papadopoulos (1993); Han and Terpstra(1988); Papadopoulos et al. (1990a, b); Johanssonet al. (1994)Parameswaran and Yaprak (1987); Knight andCalantone (2000); Haubl (1996); Choe and Cho(2000); Papadopoulos et al. (1990a, b)Promotional issues Intensively advertised Parameswaran and Yaprak (1987); Knight andCalantone (2000); Nagashima (1970, 1977); Heslopand Papadopoulos (1993); Papadopoulos et al.(1990a, b)Widely-known goods Nagashima (1970, 1977); Heslop andPapadopoulos (1993); Papadopoulos et al. (1990a,b); Choe and Cho (2000)Prestigious products Nagashima (1970, 1977); Han and Terpstra(1988); Roth and Romeo (1992); Papadopouloset al. (1990a, b); Choe and Cho (2000)InternationalrecognitionSaywell (1999)US versusChinese goods805Table III.precise information that was conducive to better shaping their perceptions of a specificmodel.The above results partially confirm both parts of the first research hypothesis (H1aand H1b), in the sense that, although consumer evaluations vary among the five levelsof analysis, this variation stemmed mainly from the different way the brand wasperceived by respondents on all product cues. This confirms earlier postulations that atangible brand may overshadow or emphasize the effects of country-of-origin image,since it provides more precise and tangible information about the characteristics of aproduct (Knight and Calantone, 2000). However, the value of the brand may be eitheroverestimated or underestimated by consumers, especially when they do not have anyknowledge and/or experience of a specific model. Indeed, the findings showed thatwhen consumers are provided with more hands-on information about a model, s/he hasa more complete picture and is in a better position to make more precise evaluations. Inthe present case, the specific Whirpool model shown had diminished the value of thebrand in the eyes of consumers, while the Haier model increased it.

EJM41,7/8806Table IV.Confirmatory factoranalysis of product cuesFactor Product attribute Standardized loadings t-valueExternal product/features External design/appearance 0.918 20.650Product style 0.936 21.315Innovative products 0.907 19.571Feature/model variety 0.845 17.420Internal product/technology Internal design/ergonomics 0.900 19.629Meticulous workmanship 0.863 18.438Operating performance 0.951 21.595Technologically advanced 0.887 19.257Product quality aspects Product quality 0.956 21.708Durability/long-lasting 0.948 21.420Product reliability 0.957 21.759Product consistency 0.933 20.864Pricing considerations Value-for-money 0.784 16.263Price attractiveness 0.755 15.696Cost-efficiency 0.904 20.002Economical 0.770 15.371Distribution/service Dealership network/support 0.903 19.786Product availability 0.774 15.819Product serviceability 0.891 19.786Repairability/maintenance 0.882 19.080Promotional issues Intensively advertised 0.930 20.633Widely-known goods 0.934 20.802Prestigious products 0.843 17.710International recognition 0.765 15.402Notes: * Fit statistics: RMSEA ¼ 0:07; NFI ¼ 0:95; NNFI ¼ 0:94; CFI ¼ 0:95Testing hypotheses H2a and H2bAn analysis of the various groups of cues used to evaluate country-of-origin effects ofproducts made in the US revealed that, overall, these were relatively highly evaluated.However, significant differences were found among the groups for each of the fivelevels of analysis (namely country, industry, product, brand, and model) (allp’s , 0.01) (see Table VI – upper part). Specifically, compared to other cues, at anylevel of analysis, British consumers systematically rated US goods as poorer in termsof “pricing considerations”, probably because of the higher costs involved in producingproducts in more-industrialized countries. In contrast, products made in the USA werefound to be distinguished for their superiority on “promotional issues”, reflecting theaggressive marketing and promotional methods adopted by US firms. The remainingfour groups of cues, namely “external product/features”, “internal product/technology”,“product quality aspects”, and “distribution/service”, were more or less similarlyevaluated by respondents (close to five out of seven).Variations in the rating of the various groups of cues were also observed whenBritish consumers evaluated Chinese products, although with somewhat differentresults from those observed for US goods. The overall evaluation of Chinese goods byrespondents was moderate, while differences between the various groups of cues weremore or less the same across the five levels of analysis (all p’s , 0.01) (see Table VI –

PromotionalissuesDistribution/servicePricingconsiderationsProduct qualityaspectsInternal product/technologyExternal product/featuresLevel ofanalysisUS *Country (I) 4.80 (1.06) 4.89 (0.96) 4.86 (1.06) 3.98 (0.72) 4.77 (1.11) 5.30 (1.18)Industry (II) 4.78 (1.06) 4.81 (1.02) 4.75 (1.06) 4.02 (0.74) 4.76 (1.04) 5.12 (1.18)Product (III) 4.92 (1.15) 4.94 (1.09) 4.88 (1.15) 4.11 (0.69) 4.82 (1.13) 5.07 (1.25)Brand (IV) 5.13 (1.02) 5.11 (0.99) 5.11 (1.07) 4.27 (0.62) 5.11 (1.06) 5.43 (1.12)Model (V) 4.71 (0.96) 4.84 (0.93) 4.95 (0.92) 4.37 (0.63) 4.95 (0.94) 5.17 (0.95)F-value 9.191 5.476 5.941 10.250 7.557 6.284p-value 0.000 0.000 0.000 0.000 0.000 0.000IV . II, IV . III,IV . VIV . I, IV . IIIV . IIIIV . I, IV . II IV . I, IV . II,V . I, V . II,IV . IIIIV . I, IV . II,IV . VScheffe’s test IV . I, IV . II,IV . VChina *Country (I) 4.22 (1.18) 4.59 (1.17) 4.32 (1.27) 4.74 (0.73) 4.05 (1.16) 4.05 (1.29)Industry (II) 4.13 (1.20) 4.48 (1.14) 4.22 (1.19) 4.67 (0.74) 3.97 (1.13) 3.84 (1.25)Product (III) 4.05 (1.17) 4.29 (0.16) 4.17 (1.20) 4.61 (0.74) 3.88 (1.15) 3.66 (1.28)Brand (IV) 3.89 (1.14) 4.15 (1.15) 3.98 (1.15) 4.47 (0.78) 3.66 (1.08) 3.35 (1.20)Model (V) 4.16 (1.12) 4.45 (1.15) 4.25 (1.15) 4.75 (0.81) 3.89 (1.07) 3.39 (1.14)F-value 4.886 9.158 4.772 7.130 22.761 9.101p-value 0.001 0.000 0.001 0.000 0.000 0.000I . IV, V . IV I . IV, II . IV I . IV, I . V,II . IV, II . VIII . IV, III . V,I . IIII . IV, V . IVII . IVScheffe’s test I . IV, V . IV I . III, I . IV,II . III, V . IVNotes: Mean scores (and standard deviations) based on a seven-point scale ranging from 1 ¼ poor to 7 ¼ excellentUS versusChinese goods807Table V.A multi-level analysis ofcountry-of-originperceptions of the USAand China

EJM41,7/8808Table VI.A comparison ofperceptions on productcues from the USA andChina by level of analysisProduct attribute Country Industry Product Brand ModelUSA *External prod./features (I) 4.80 (1.06) 4.78 (1.06) 4.92 (1.15) 5.13 (1.02) 4.71 (0.96)Internal prod./technol. (II) 4.89 (0.96) 4.81 (1.02) 4.94 (1.09) 5.11 (0.99) 4.84 (0.93)Product quality aspects (III) 4.86 (1.06) 4.75 (1.06) 4.88 (1.15) 5.11 (1.07) 4.95 (0.92)Pricing considerations (IV) 3.98 (0.72) 4.02 (0.74) 4.11 (0.69) 4.27 (0.62) 4.37 (0.63)Distribution/service (V) 4.77 (1.11) 4.76 (1.04) 4.82 (1.13) 5.11 (1.06) 4.95 (0.94)Promotional issues (VI) 5.30 (1.18) 5.12 (1.18) 5.07 (1.25) 5.43 (1.12) 5.17 (0.95)F-value 68.561 50.486 39.589 61.553 36.376p-value 0.000 0.000 0.000 0.000 0.000I . IV, II . IV,III . IV, III . I,V . IV, VI . I,VI . II, VI . III,VI . IV, VI . VI . IV, II . IV,III . IV, V . IV,VI . I, VI . II,VI . III, VI . IV,VI . VI . IV, II . IV,III . IV, V . IV,VI . IV, VI . VI . IV, II . IV,III . IV, V . IV,VI . I, VI . II,VI . III, VI . IV,VI . VScheffe’s test I . IV, II . IV,III . IV, V . IV,VI . I, VI . II,VI . III, VI . IV,VI . VChina *External product/features (I) 4.22 (1.18) 4.13 (1.20) 4.05 (1.17) 3.89 (1.14) 4.16 (1.12)Internal product/technology (II) 4.59 (1.17) 4.48 (1.14) 4.29 (1.16) 4.15 (1.15) 4.45 (1.15)Product quality aspects (III) 4.32 (1.27) 4.22 (1.19) 4.17 (1.20) 3.98 (1.15) 4.25 (1.15)Pricing considerations (IV) 4.74 (0.73) 4.67 (0.74) 4.61 (0.74) 4.47 (0.78) 4.75 (.81)Distribution/service (V) 4.05 (1.16) 3.97 (1.13) 3.88 (1.15) 3.66 (1.08) 3.89 (1.07)Promotional issues (VI) 4.05 (1.29) 3.84 (1.25) 3.66 (1.28) 3.35 (1.20) 3.39 (1.14)F-value 23.501 30.139 32.982 48.145 73.212p-value 0.000 0.000 0.000 0.000 0.000I . V, I . VI,II . I, II . V,II . VI, III . V,III . VI, IV . I,IV . II, IV . IIIIV . V, IV . VI,V . VII . VI, II . V,II . VI, III . V,III . VI, IV . I,IV . II, IV . III,IV . V, IV . VI,V . VII . VI, II . V,II . VI, III . V,III . VI, IV . I,IV . II, IV . III,IV . V, IV . VIVI . I, II . I,II . V, III . V,III . VI, IV . I,IV . III, IV . V,IV . VI, VI . IIIScheffe’s test II . I, II . V,II . VI, III . VI,IV . I, IV . III,IV . V, IV . VINotes: * Mean scores (and standard deviations) based on a seven-point scale ranging from 1 ¼ poor to 7 ¼ excellent

lower part). Analytically, compared to other cues, British consumers systematicallyevaluated Chinese goods higher on “pricing considerations”, attributable to the factthat China is a low-cost producer. Respondents also stressed the “internalproduct/technology” of goods made in China, underlining the speed with whichChinese companies were able to master important technologies, usually expressed inthe form of enhancing and building upon the innovations of other foreign firms(Schrage, 2004). However, Chinese products scored low on “promotional issues”,reinforcing earlier claims that the promotional efforts of Chinese exporters arerelatively weak because of insufficient marketing knowledge (Zhang, 2002; Gao et al.,2003).These results partially validate both parts of the second hypothesis (H2a and H2b)that consumers evaluate differently the various country-of-origin cues, since only someof these were considered superior or inferior to others. Indeed, this was true at all levelsof analysis, namely country, industry, product, brand, and model. These findingsconfirm the fact that country-of-origin is not a uni-dimensional phenomenon, but onethat comprises different extrinsic and intrinsic cues, which exhibit a different degree ofsignificance to the consumer (Roth and Romeo, 1992). It also shows that the importanceof these cues varies from one country to another. Further, the fact that, compared toother cues, the “internal product/technology” of Chinese goods was better evaluated byBritish consumers (while a few decades ago the opposite was true) makes it clear thatconsumer evaluations are not static, but can change over time.US versusChinese goods809Testing H3A comparative analysis of British consumer perceptions of US and Chinese products,revealed statistically significant differences for each group of cues, as well as for eachlevel of analysis (all p’s , 0.01) (see Table VII). Analytically, respondents found USproducts better than their Chinese counterparts on “external product/features”,“internal product/technology”, “product quality aspects”, “distribution service” and“promotional issues”. However, with regard to “pricing considerations”, Chinese goodswere consistently found to have a more favorable image compared to productsoriginating from the US. Interestingly, this pattern was observed in the case ofconsumer evaluations made at the country, industry, product, brand, and model level.Notably, the widest gaps in consumer evaluations for products originating from thesecountries were observed in the case of “distribution/service” and “promotional issues”,while the lowest were obvious for “pricing considerations” and “internalproduct/technology”. With regard to the level of analysis, the largest gaps betweenUS and Chinese country-of-origin evaluations were observed at the brand level, whilethe narrowest were noted at the country level.These results fully support the third hypothesis (H3) that consumers tend toevaluate differently products originating from countries with a different economic,socio-cultural, and political-legal environment. In fact, the US, a more-developedcountry, was more highly evaluated on non-price considerations, such as product,distribution, and promotion, while China, a less-developed country, had a better imageon price-related issues. This supports the findings of earlier studies (e.g. Nagashima,1977; Elliot and Acharya, 2001), which also compared country-of-origin effects betweenmore-developed and less-developed countries. Three possible explanations could begiven for these findings:

EJM41,7/8810Table VII.A multi-level comparisonof country-of-originperceptions of the USAversus ChinaPromotionalissuesDistribution/servicePricingconsiderationsProduct qualityaspectsInternalproduct/technologyExternalproduct/featuresCountry ofanalysisCountry level * USA 4.80 (1.06) 4.89 (0.96) 4.86 (1.06) 3.98 (0.72) 4.77 (1.11) 5.30 (1.18)China 4.22 (1.18) 4.59 (1.17) 4.32 (1.27) 4.74 (0.73) 4.05 (1.16) 4.05 (1.29)t-value 8.328 4.527 7.136 214.963 10.315 14.556p-value 0.000 0.000 0.000 0.000 0.000 0.000Industry level * USA 4.78 (1.06) 4.81 (1.02) 4.75 (1.06) 4.02 (0.74) 4.76 (1.04) 5.12 (1.18)China 4.13 (1.20) 4.48 (1.14) 4.22 (1.19) 4.67 (0.74) 3.97 (1.13) 3.84 (1.25)t-value 9.462 5.276 7.689 213.170 11.990 14.733p-value 0.000 0.000 0.000 0.000 0.000 0.000Product level * USA 4.92 (1.15) 4.94 (1.09) 4.88 (1.15) 4.11 (0.69) 4.82 (1.13) 5.07 (1.25)China 4.05 (1.17) 4.29 (1.16) 4.17 (1.20) 4.61 (0.74) 3.88 (1.15) 3.66 (1.28)t-value 12.548 9.846 9.270 210.125 13.463 16.271p-value 0.000 0.000 0.000 0.000 0.000 0.000Brand level * USA 5.13 (1.02) 5.11 (0.99) 5.11 (1.07) 4.27 (0.62) 5.11 (1.06) 5.43 (1.12)China 3.89 (1.14) 4.15 (1.15) 3.98 (1.15) 4.47 (0.78) 3.66 (1.08) 3.35 (1.20)t-value 21.418 16.634 18.331 24.224 23.866 27.866p-value 0.000 0.000 0.000 0.000 0.000 0.000Model level * USA 4.71 (0.96) 4.84 (0.93) 4.95 (0.92) 4.37 (0.63) 4.95 (0.94) 5.17 (0.95)China 4.16 (1.12) 4.45 (1.15) 4.25 (1.15) 4.75 (0.81) 3.89 (1.07) 3.39 (1.14)t-value 10.407 6.879 12.423 28.318 19.519 26.524p-value 0.000 0.000 0.000 0.000 0.000 0.000Notes: * Mean scores (and standard deviations) based on a seven-point scale ranging from 1 ¼ poor to 7 ¼ excellent

(1) the external environment (e.g. economy, culture, legal matters, etc.) of the UKshares more or less similar characteristics with the US, but has very differentcharacteristics from that of China;(2) British consumers have more associations and are more familiar with the USthan with China, as a result of the long history of Anglo-American traderelations; and(3) British consumers are more aware of and knowledgeable about US products, asopposed to Chinese products, because the latter have only recently made theirappearance in international markets.US versusChinese goods811Summary and conclusionsOne summary conclusion to be derived from the findings of this study is that consumerevaluations of country-of-origin are very complex and sophisticated, since they maydiffer across different levels of analysis, different product attributes, and differentcountries. With regard to the level of analysis, our study has shown that at the country,industry, and product levels, consumer evaluations are more or less the same, probablybecause of limited differentiation in the chunks of information used by consumers.However, when it comes to brand, it has a serious moderating role to play, eitherpositive or negative, on country of origin evaluations. This is because, unlike fictitiousor vague brands, every known brand has certain equity determined by its popularity,reputation, and associated beliefs in the minds of consumers, thereby providing moreprecise information. In the present case, the high brand equity possessed by Whirpoolwas responsible for elevating further the already positive image that British consumershave of US goods, while the low brand equity of Haier was conducive to underminingfurther the already low image of products made in China. However, our study has alsoshown that brand equity may play a secondary role in country-of-origin evaluations,when consumers are confronted with an actual model of a specific brand. In this case,their judgments can become more accurate and to the point, because of the availabilityof real, hands-on information about the model. The processing of this information byconsumers may result in more favorable (e.g. Haier) or unfavorable (e.g. Whirpool)evaluations, depending on the nature and content of the information provided.Our study also reaffirmed that the country-of-origin construct consists of manydifferent cues (pertaining to product and marketing issues), each of which may beevaluated differently by consumers. This is in direct contrast to studies that have usedcountry-of-origin as a single cue in their analyses, thus producing misleading results.The evaluation of “promotional issues” for US goods, more favorably compared toother categories of cues, is indicative of the long-held, strong marketing andadvertising practices of US firms on a worldwide scale, whereas their low evaluationon “pricing considerations” reflects problems associated with the high cost ofproducing goods in industrialized countries. An inverse picture was obtained for goodsmade in China: the lowest ratings received for “promotional issues” denote handicapsin the marketing and selling abilities of Chinese firms, while the relatively highevaluations obtained for “pricing considerations” stress the low-cost productionpossibilities available in less-developed countries. These findings are consistent withthe evaluations received by the remaining cues, in the sense that US goods consistentlyreceived higher scores, denoting better design, quality, distribution, service, and so on,as opposed to Chinese goods, which received lower evaluations. As a result of this

EJM41,7/8812situation, it is not surprising that, in their marketing campaigns, US firms tend tostress the manufacturing or design origin of their products, as opposed to Chinesefirms, which in many cases try to hide their country-of-origin weaknesses bypurchasing foreign brands, manufacturing their products in countries with a betterimage, or masking the origin of their products.Finally, with regard to differences between countries, the higher evaluationsreceived by US goods vis-à-vis their Chinese counterparts on almost all categories ofcues is indicative of the superiority possessed by developed country-basedmanufacturers on non-price issues. However, this superiority has not beendeveloped overnight, but has come about through the gradual accumulation ofknowledge, expertise, and capabilities. On the other hand, China’s superiority on“pricing considerations” reflects a competency in providing manufacturing excellence,economies of scale, and low production costs. However, Chinese firms are new andinexperienced in international markets, and suffer from various marketing weaknessessuch as:.limited understanding of tastes, preferences, and habits in host countries;.heavy reliance on imitations, rather than on autonomous innovation capacity;.inability to offer pre- and after-sales service to their foreign customers; and.tendency to avoid spending money on advertising and promotional activity tosupport products (Zeng and Williamson, 2003; Schrage, 2004).These are indications of the “nascent” notion ascribed to marketing by Chineseexecutives, which to some extent can be attributed to the low-risk business traditionand the inward-looking nature of Chinese culture (Dollan and Hardy, 2002). As Gaoet al. (2003) put it, Chinese companies lack the vital marketing skills required tointroduce and sustain brands in developed markets, which are characterized byheightened complexity, uncertainty, and expensiveness.Policy implicationsThe findings of this study have several implications for public and corporatepolicy-makers. Public-policy makers should realize that country-of-origin evaluationsby foreign consumers are not formulated only at the overall country level, but also atother more specific levels, such as the industry, product, and brand. In fact, our studyhas amply demonstrated that brand image may improve or worsen evaluations madeat the country level. Having this in mind, governments, industry associations, andother parastatal organizations should do their best to improve country-of-origin. Thiscould be achieved, for example, by setting minimum quality standards for indigenousmanufacturers, that need to be attained by the provision of various financial, tax, andother incentives. US public policy-makers should capitalize on the favorableevaluations given by British consumers to their products, by developing specialcommunication campaigns in the UK, focusing on such positive attributes as quality,service, and availability. These campaigns could include, for example, press releasematerial about US manufacturers and their products, advertising spots appearing inprint and electronic media, and the organization of “US national days”. On the otherhand, Chinese officials should try to improve the image of their country on a widerange of non-price issues, such as innovations, quality, and distribution, while at the

same time keeping their prices low. To achieve this, however, it is important todisseminate marketing knowledge among Chinese business people, through theintroduction of specialized marketing courses in academic business curricula, theorganization of executive training courses, seminars and workshops on marketingissues, and the provision of free hands-on marketing consulting services to firms thatintend to sell their products abroad.Corporate policy-makers should also realize that brand image has a more significanteffect on consumer evaluations than the image of their country, industry, or product.As such, they should invest time, money, and effort in building a strong brand imagethat will make their goods attractive to overseas consumers. US managers should takeadvantage of the favorable evaluations their country received from British consumersby trying to develop their brands in a way that will enhance their positive image evenfurther. Importantly, they should fully deliver to consumers whatever is promised intheir promotional and advertising campaigns, in order to avoid disappointment anddissatisfaction with the actual products sold, and a resulting drop in consumerevaluation. Individual firms could position their products along the lines of theproduct/marketing attributes that consumers consider favorable for US goods (e.g.quality, service, warranty), and present convincing arguments that will subsequentlyconvert them into repeat buyers. As opposed to that of US firms, the situation of theirChinese counterparts in the British market is not so optimistic, as demonstrated by themoderate to low evaluations received on almost all non-price factors. Thus, it isimportant for them to make every possible effort to improve their brand image, in orderto overcome the relatively unfavorable image observed at the country, industry, andproduct level. This can be achieved by better understanding consumer needs andwants, manufacturing innovative and quality goods, offering proper service, andproviding effective distribution and promotion, while at the same time maintainingprices at competitive levels.US versusChinese goods813Limitations and future researchThe previous conclusions and implications should be seen within the context of anumber of limitations, that provide the basis for undertaking future research on thesubject. First, this study was conducted among British consumers, whose idiosyncraticevaluation patterns may be different from those residing in other countries. Thus, toestablish the stability of the study findings, it is important to replicate this study indifferent socio-economic contexts (e.g. developing countries) and geographic regions(e.g. Asian countries). Second, the focus of this study was on goods manufactured inthe US versus goods produced in China only. There is scope for expanding thisresearch to a wider range of developed (e.g. Canada) and developing (e.g. India)countries, as well as including in the investigation newly industrialized countries (e.g.South Korea). Third, the same argument applies to the selection of products. Use ofdifferent industries, products, brands, and models may provide additional insights intocountry-of-origin evaluations and help to make more illuminating inferences about theway consumers’ attitudes toward foreign products and attributes are formulated.Fourth, the study excluded goods produced by indigenous manufacturers, althoughincluding them could provide additional information as to the way consumers evaluatedomestic goods vis-à-vis their foreign counterparts on different levels of analysis. Fifth,the study captured the evaluations of consumers at a single point in time, which was

EJM41,7/8814based on their previous experiences, associations, and memories. However, theseevaluations are not static, but change over time, as a result of influences by mediareports on foreign developments, personal visits to foreign countries, export promotioncampaigns, and so on, stressing the need to investigate the longitudinal stability (orinstability) of these evaluations. Finally, nowadays an increasing number of firmsemploy multi-country input in the manufacture, design, and assembly of a singleproduct, thus necessitating the execution of studies addressing this trend. It would beuseful, for example, to examine the separate effects of a product’s country ofmanufacture, design, or assembly on consumers’ evaluations based on the multi-leveland multi-cue approach adopted in this study.Notes1. The first study on country-of-origin effects was conducted by Schooler (1965) and since thenmore than 200 articles have been published. These were thoroughly reviewed at times invarious seminal articles by Bilkey and Nes (1982), Peterson and Jolibert (1995), Al-Sulaiti andBaker (1998), and Verlegh and Steenkamp (1999).2. Despite their importance, country-of-origin effects have often been neglected by managersfor two major reasons: they are closely related to cultural issues, which are not usually easyto address due to inadequate managerial training and appreciation; and in practice, they aredifficult to identify and translate into effective marketing and communication strategies(Parameswaran and Pisharodi, 1994).3. Some general criticisms made of research on the subject refer to the atheoretic nature, limitedscientific rigor, and oversimplification of the investigation approach (Bilkey and Nes, 1982;Samiee, 1994; Nebenzah et al., 1977).4. Although there have been many attempts in the past to compare and contrast consumerperceptions of products originating from different countries, a comparison between US andChina has only been tangentially tackled. To some extent this can be attributed to the factthat China has only recently emerged as a driving force in world export trade, fiercelycompeting against traditional major actors (such as the US) to increase its share ininternational markets (The Economist, 2005).5. Although the findings of this study might run the risk of becoming outdated, as a result ofpotential changes in consumers’ evaluations, they can still be useful because of: pinpointingthat the various product cues can have a different impact on consumers’ evaluations;demonstrating how differently consumers can evaluate foreign goods, especially when theseare examined from different levels of analysis; and assisting policy-makers to identifycertain aspects of their marketing offerings, that are lagging behind their internationalcompetitors.6. This occurs because consumers recode and abstract individual elements of information inhigher order units (called “chunks”), which usually evolve around brand name (Simon, 1970;Jacoby et al., 1971).7. This sample size is much higher than the average of that used in previous studies on thesubject (which is around 300 individuals) (Al-Sulaiti and Baker, 1998). The adequacy of thesample employed can also be justified by the fact that, while the majority of the extantresearch on country-of-origin evaluations relied on mail or drop-in questionnaires, this studycollected its data through personal interviews that are more costly and difficult toadminister.8. Whirpool is a major US-based manufacturer that entered the European market afteracquiring Philips’ major home appliance line of business in the 1980s, and it currently has

about a tenth of this market (Terpstra and Sarathy, 2000). The Haier Group is the world’ssecond largest refrigerator maker and fifth largest white goods maker, and has been selling awide range of products under its own brand name in 160 countries, including the UK (Wu,2003).9. An attempt has been made in this study to examine the moderating effect of variousdemographic (i.e. gender, age, education, and income) and psychographic (i.e. travelingintensity, interest in international affairs, political ideology, and personality type) factors oneach of the three hypotheses. However, with the exception of education, all other factors didnot reveal significant results.US versusChinese goods815ReferencesAgarwal, S. and Sikri, S. (1996), “Country image: consumer evaluation of product countryextensions”, International Marketing Review, Vol. 13 No. 4, pp. 23-39.Agarwal, S., Teas, R. and Wong, J.K. (1997), “Entity context and format induced instability inmulti-attribute ratings of country image”, International Marketing Review, Vol. 14 No. 6,pp. 486-504.Ahmed, S.A. and d’Astous, A. (1993), “Cross-national evaluation of made-in concept usingmultiple cues”, European Journal of Marketing, Vol. 27 No. 7, pp. 39-52.Ahmed, S.A. and d’Astous, A. (1996), “Country of origin and brand effects: a multi-dimensionaland a multi-attribute study”, Journal of International Consumer Marketing, Vol. 9 No. 2,pp. 93-115.Ahmed, S.A., d’Astous, A. and Eljabri, J. (2002a), “The impact of technological complexity onconsumers’ perceptions of products made in highly and newly industrialised countries”,International Marketing Review, Vol. 19 No. 4, pp. 387-407.Ahmed, S.A., d’Astous, A. and Lemire, S. (1997), “Country-of-origin effects in the US and Canada:implications for the marketing of products made in Mexico”, Journal of InternationalConsumer Marketing, Vol. 10 Nos 1/2, pp. 73-92.Ahmed, Z.U., Johnson, J.P., Ling, C.P., Fang, T.W. and Hui, A.K. (2002b), “Country-of-origin andbrand effects on consumers; evaluations of cruise lines”, International Marketing Review,Vol. 19 No. 3, pp. 279-302.Al-Sulaiti, K.I. and Baker, M.J. (1998), “Country of origin effects: a literature review”, MarketingIntelligence & Planning, Vol. 16 No. 3, pp. 150-99.Alden, D.L. (1993), “Product trial and country-of-origin: an analysis of perceived risk effects”,Journal of International Consumer Marketing, Vol. 6 No. 1, pp. 7-26.Amine, L.S. and Shin, S.-H. (2002), “A comparison of consumer nationality as a determinant ofCOO preferences”, Multinational Business Review, Vol. 10 No. 1, pp. 45-53.Anderson, W.T. and Cunningham, W.H. (1972), “Gauging foreign product promotion”, Journal ofAdvertising Research, Vol. 12 No. 1, pp. 29-34.Bagozzi, R.P. and Yi, Y. (1988), “On the evaluation of structural equation models”, Journal of theAcademy of Marketing Science, Vol. 16 No. 1, pp. 271-84.Bailey, W. and Pineres, S. (1997), “Country of origin attitudes of Mexico: the malinchismo effect”,Journal of International Consumer Marketing, Vol. 9 No. 3, pp. 25-41.Balabanis, G. and Diamantopoulos, A. (2004), “Domestic country bias, country-of-origin effects,and consumer ethnocentrism: a multidimensional unfolding approach”, Journal of theAcademy of Marketing Science, Vol. 32 No. 1, pp. 80-95.Balabanis, G., Mueller, R. and Melewar, T.C. (2002), “The human values’ lenses of country oforigin images”, International Marketing Review, Vol. 19 No. 6, pp. 582-610.

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