Country of Origin and Impact on Product Category Marketing

The country of origin has a great impact on the product image and the decision of consumers to purchase a product. There are other significant demographic factors that affect consumption patterns. For example, if populations are segmented by such factors as race, religion, color, country of origin, etc. valuable marketing data can be gathered. Numerous studies are available of the Negro market, the Jewish market, the Puerto Rican market, the Mexican market, and so on. While each of these breakdowns can add valuable information for marketing strategy, and complements the discussions of segmentation by age and life cycle, space limitations preclude a meaningful discussion of such factors.

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In the article “Consumer perception of product quality and the country-of-origin effect” Elliott and Cameron (1994) discuss the impact of country of origin on purchasing power.

The researchers found that e country-of-origin effect factors have long been studies to assess market opportunities, for demographic trends and shifts greatly affect market activity. Although they explain differences in geographic movements, family composition, urban versus rural shifts, and age groups which have an impact on both purchase and consumption patterns. Good projections are available to guide executives in making decisions based on geographic shifts in population, as well as shifts among age and income. Studies of changing relationships within the family and the relative impact of husband, wife, and children are useful in understanding buyer decisions. Information on general levels of family purchases and corresponding patterns of influence is also useful. Cities have a great impact on our way of life and on buyer behavior.

Fill (1999) and Keegan and Green (2003) explain that the pattern of urbanization with the resulting growth of suburbia and megalopolis is reflected in lifestyles, in products and services, and in other components of the marketing mix. Urban people are apt to buy foreign goods while country dwellers prefer national products.

Country of origin is influenced by the life cycle, a socio-psychological concept which affords a perspective for understanding decisions made at each stage of life during the pre-family cycle of children, subteens, teenagers, and single adults, and the family cycle of young adults, middle years, maturity, and senior citizens.

McDonald (2003) explains that country of origin effects distinguish this approach from other conceptions of marketing. First, it is concerned with more than the transfer of title and movement of goods. Marketing begins before goods are produced and continue after the consumer has purchased them. Second, it emphasizes helping consumers to solve problems in ways that are compatible with the profit, volume, and image objectives of the firm. Third, it recognizes the management implications of adopting this view — for example, top-level responsibility for the marketing executive, reorganizing the marketing department, and integrating and coordinating marketing activities. The country of origin perception is the natural reaction of management in attempting to meet the needs of a keenly competitive, constantly changing environment. It is designed to direct the entire business to serve those customer wants and needs that are in line with the objectives of the corporation. It reflects an integrated and coordinated approach to the management of marketing activity and the development of total systems of business activities that recognize the market as the focal point of business. Essentially, the marketing philosophy is a way of thinking about the corporate activity; a frame of mind; an attitude. It recognizes the primacy of consumers and customers as they influence all business operations. It starts with the company’s chief executive, who must recognize that lacking markets for the company’s products and lacking customer wants and needs, no business can exist.

Tayeb (2000) and McFarlin and Sweeney (2003) state that European and American goods are more popular in third world countries perceived as high-quality products and goods. Many of the marketing situations are very complex and amorphous and involve human behavior. The standard optimization techniques of calculus and linear programming don’t work too well. Marketing problems contain nonlinear relationships, lags, interactions, and random factors. It is difficult to quantify many of the significant psychological and sociological variables that affect marketing decisions. Quantitative concepts of quality, image, motivation and communication impact are hard to conceptualize operationally. Approaches in marketing may well require new concepts linking behavioral and quantitative thinking. As a result of past experience, customers have preconceived notions or attitudes that shape their view of reality and hence their decisions. For example, experience with brands that meet expectations results in future purchasing actions, since learning takes place. Reinforcement, which is part of the learning process, encourages repetition and perhaps an automatic response-purchase by habit.

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Minor (1995) underlines that the country of origin perception depends upon national traditions and product history. This is the corporate justification for the expenditure of resources in marketing. Marketing executives are faced with the challenge of reinforcing, changing and converting customer reactions in order to stimulate demand. They try to strengthen attitudes and motives that are disposed to their products and change those that are not. This does not mean that buyers can be readily manipulated. It does mean that where people have not developed strong attitudes and feelings, where they do not have sufficient information for decision purposes, and where they are confronted with new products and product variations, marketing information can help formulate favorable attitudes and opinions toward the product. A multitude of factors affects product demand. Some of them are not controllable by the individual producer. Foreign regulations, technological developments, governmental decisions, and political action, and cultural climate are cases in point. Many demand influences can, however, be directly controlled or affected by marketing activities.

Further research is needed to investigate the impact of national traditions of consumers on the country of origin effects and their decision to purchase a product with long selling history. These include advertising, product development, pricing, merchandising, distribution channels, packaging, and product quality. Businesses, therefore, need not passively accept existing demand situations. Although situations may exist where little can be done about markets for specific goods, demand usually can be altered. Two major strategies can be employed to alter it. First, companies can adopt a marketing program that seeks to change the product, image, package, distribution, advertising campaigns, or other components of the marketing mix to bring them closer into line with customer desires and induce consumers to react favorably. Second, companies can try to change buyers and their reactions and responses to correspond with company needs and desires. The latter course is difficult and sometimes impossible to implement where strong negative buyer reactions exist. It is generally more effective to adopt the first procedure and alter company activities to fit the market.

References

Elliott, G.R., Cameron, R.C. 1994, Consumer perception of product quality and the country-of-origin effect. Journal of International Marketing, 2 (2), pp. 49-62.

Fill, C. 1999, Marketing Communication: Contexts, Contents, and Strategies 2 edn. Upper Saddle River, NJ: Prentice Hall.

Keegan, W. J. and Green, M. S. 2003, Global Marketing 3nd edn. UpperSaddle River, NJ: Prentice-Hall.

McDonald M., Christopher M. 2003. Marketing: A complete Guide. Palgrave Macmillan.

Minor, J. 1995, Administrative and Management Theory: The History of Management Thought. Darmouth Pub. Co.

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Tayeb M., 2000. International Business: Theories, Policies and Practices, Harlow, Pearson Education.

McFarlin, D.B., Sweeney, P.D. 2003, International Management: Strategic Opportunities and Cultural Challenges. Houghton Mifflin Company.

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