Leonidou et al. 2006 EJM.pdf

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.,