Effects of COO on Brand Image: A Case for Made-In-Turkey Products
Consumer behaviour, including buyers’ perceptions and assessments, have been at the heart of marketing research, studying buyer behaviour phenomena in global business, as well as buyer behaviour literature. (Roth & Romeo, 1992). Over 300 articles on country of origin and brand image have been published with heavy focus on the array of nations as origins, consumer evaluations, and product categories. Former research on the phenomena in question indicates that, the country in which a brand originates has a notable effect on its image for a number of product categories for individual consumers and industrial buyers alike. According to (Kaynak & Kara, 2002), it is apparent that the country of origin influences buyers’ perceptions of the product in question. They reached these conclusions through quantitative analysis of various studies conducted with regards to the topic.
Scholars have underlined the fact that purchase decisions that favour a brand go a long way in enhancing the growth of brand equity. Brand equity may be referred to as the immense value that is inherent in a brand name that is well known. It comes around when customers are willing to pay a higher price for the same quality level thanks to the product name’s attractiveness (Chu et al, 2010). Brand equity in marketing literature arises from the customer brand loyalty, brand awareness, the perceived quality of the brand, as well as the favourable brand associations and symbolisms that a platform of future earning streams and competitive advantage. It gives a business entity a loyal customer franchise that has the capacity to bring significant returns to the entity (Chu et al, 2010). Irrespective of the definitions that it takes up, brand equity is a representation of the position of the product in the consumers’ minds in the marketplace. This, precisely is a well-established meaningfulness and representation of the brand in the consumers’ minds that gives the brand name equity. As scholars have noted, brands are said to have equity in instances where they have the capacity to influence the behaviour of individuals that behold the brand and routinizes their attitudes, purchase behaviour and preferences (Chu et al, 2010).
The information processing theory states that consumers make use of product cues so as to come up with assessments and beliefs pertaining to a product, which in turn has a bearing on their behaviours. The country-of-origin, in general, is viewed as an extrinsic product cue. Scholars have underlined the fact that customers develop stereotypical beliefs and perceptions pertaining to products from certain countries, as well as the attributes of those particular products (Chu et al, 2010). In essence, the image or perception that a country of origin (COO) arouses in the minds of the consumers has the capacity to arouse the beliefs of consumers and importers pertaining to the attributes or characteristics of those products (Podoshen & Andrzejewski, 2012). Indeed, researchers see the county’s image as the general perceptions that consumers have pertaining to the quality of products that were made in certain countries, while others see it as the defined perceptions and beliefs pertaining to the national quality standard and the industrialisation of the country (Podoshen & Andrzejewski, 2012). On the same note, researchers on consumer and marketers’ behaviour have underlined the fact that information pertaining to the country of origin, which is shown by the “Made in…” label serves a number of purposes in the purchase decisions that consumers make. It comes as a salient feature in the assessment of a product by a consumer, and stimulates the interest of the consumer in the product (Chaudhuri et al, 2011). In addition, it affects the behavioural intentions of the consumers, while also influencing their behaviour via effective processes as is the case for the patriotic feelings of consumers pertaining to their own country (Koubaa, 2008). It is worth noting that the overall assessment of a product is affected by the stereotypes that consumers hold pertaining to the country, that is, the image that is aroused in the minds of consumers pertaining to the country will shape the perceptions that the clients have for products emanating from that country (Chaudhuri et al, 2011). Since the perception of consumers pertaining to the country of origin will shape their assessment of products emanating from that country, this has a bearing on their purchase intention, preference, as well as their choice of specific brands. This would, essentially, have implications on the brand equity (Salciuviene et al, 2010).
From the perspective of consumers, the associations that a brand has with certain countries could influence the brand equity based on the level of that specific country (Salciuviene et al, 2010). For instance, consumers may view Spain and France differently with regard to the degrees of durability and reliability. It is worth noting that the country of origin effects are seen as extrinsic cues that come with associations and, consequently influence the perceptions of consumers resulting to cognitive elaboration on the part of the consumer (Chaudhuri et al, 2011). Countries that have positive image would enhance in the popularity of a brand, which would result in enhanced consumer loyalty. Indeed, consumes may have loyalty to particular countries, which would result in persistent purchase preferences for products in those countries (Hamzaoui &Merunka, 2006).
On the same note, Yasin et al (2007) underlined the fact that there exists a relationship between the image or a country and brand awareness, with the country image having a considerable effect on the brand awareness. Countries that have good images usually happen to be familiar to their consumers and are usually seen as producers or sources of quality brands and products (Koubaa, 2008).
As a fundamental dimension pertaining to brand equity, scholars have noted that the perceived quality separates a brand from others through the provision of enhanced value. Indeed, some researchers see the image of country of origin as the general perceptions of the consumers about the quality of the brands and products that are associated with that country or manufactured in the country (Hamzaoui &Merunka, 2006). Indeed, there are variations as to the levels of perceived quality according to the country of origin or the products or brand. Yasin et al (2007) underlined this notion stating that a positive relationship would be an indicator that consumers see countries that have a good image as being immensely advanced as far as efficiency and technological innovations are concerned, in which case the brands that come from them would be reliable, as well as of high quality (Grohmann et al, 2013). In essence, the examination of the relationship between the country of origin of a product and its brand equity would allow market practitioners to comprehend the manner in which they can protect, as well as improve the fundamental essence of the brand with an enhanced understanding on the quantification of brand equity, not to mention the aspects that have the capacity to alter the behaviour of consumers and modify the brand equity (Deshpandé, 2010).
Of course, literature has underlined the incredible necessity of examining other factors that affect the purchasing decisions and preferences of consumers. Nevertheless, the assessment of the effect of the country of origin is equally crucial especially with regard to its impact on brand name, price, social status and the quality of the product (Grohmann et al, 2013). However, a large volume of research and studies have been single-cue studies, which have shown that the effect of country of origin is markedly reduced once other variables are included. Indeed, single-cue studies may have overstated the origin effect, in which case it may be necessary to undertake multi-attribute studies so as to evaluate the distinctive effects of associated cues (Lee & Chen, 2008). Comparing single-cue and multi-cue treatments show that the country of origin effect is much stronger on the ratings of product quality in single-cue treatments than in multi-cue treatments. Indeed, research has shown that the country of origin effects become more powerful with increase in the product risk and complexity, as well as with decrease in the product’s purchase frequency (Nayir & Durmusoglu 2008).
With reduced capacity to make judgements, consumers seem to depend more heavily on extrinsic cues like the country of origin and brand name. In this regard, research indicates that the effect of features such as style, price, country of origin and band have an impact on the assessment of the quality of a product and comes with considerable impact on their purchase preferences (Deshpandé, 2010). For example, consumers undertook a negative assessment of the country of origin in relation to the brand name in instances where the product is manufactured in less developed countries (Lee & Chen, 2008). A negative assessment of products that were manufactured in less developed countries such as Turkey was not overcome by well-recognised brand names. In addition, the research noted that the country of origin comes with a significantly more powerful effect compared to the brand name in the assessment of bi-national products by consumers (Gu et al, 2008). On the same note, the research has indicated that the integrated country of origin with varied other intrinsic sues shows that negative effect with which production locations come may necessitate the establishment or division of different strategies of marketing and promotion (Nayir & Durmusoglu 2008).
Moreover, research suggests that the brand name cue evokes beliefs pertaining to the brand itself, as well as recall pertaining to the country with which it is associated as its country of origin. This may be seen in the case of Philips products, which, irrespective of the country in which they are manufactured, consumers associate them with their country of origin, Netherlands, thereby stimulating the relative overall image pertaining to the country of origin, as well as its image as s the source of the particular product line (Shukla, 2008). The associated country or country of origin, as is the case for country in which the products are made, affects the product line’s brand image and regulates the effect that brand image alone has.
The image that a product’s model or make has completes the processing of information pertaining to the country and the brand. In instances where consumers know the country in which the product is manufactured, the country’s image as a producer of that particular product line has an impact on the image of the product via the branded product line’s image prior to the exposure of the attributes of the product (Sanyal& Datta, 2011). In instances where consumers know the made-in country after the evaluation of the attributes of the product the country’s image as the product line’s producer would still affect the image of the product (Gu et al, 2008). In such instances, the country in which the product is made would act as the product’s feature or attribute.
However, it is worth noting that the image of a country may change with time. Indeed, there may be a dynamic change in the image of a country after the consumers have gained experience with products that are manufactured in certain countries (Lee & Chen, 2008). Scholars have also noted that there may exist a two-way influence between the brand image of a product, the image of the country in which the country is made, and the brand’s perceived country of origin (Sanyal& Datta, 2011). In this case, a well recognized global branded product may improve or enhance the country in which it is manufactured in instances where the country has a weak image, but the brand image will be damaged. Considering the experiences through which consumers have gone with purchased products, they assess the relative utility or satisfaction that they derive from the purchases (Chitturi et al, 2008). While customers undertake their own assessment, they are not restricted to their own purchases. Indeed, mass media communications and word-of-mouth expose the individual customers to other customers’ experiences as well (Melnyk et al, 2012). In essence, the assessment may be considered a learning process that allows for the integration of information pertaining to the experiences of a customer with particular products from different sources.
COUNTRY FEATURES THAT SHAPE CONSUMER PERCEPTION OF THE BRAND
Needless to say, volumes of research have shown that the country with which a particular brand is associated would result in bias on the side of the customers. This bias has its basis on the image that the customers have formed in their minds pertaining to that country (Podoshen & Andrzejewski, 2012). Of course, this introduces questions as to what the image of a country would be made of. What would make French wine to be considered the best, or watches from Switzerland to be seen as impressive or Germany to be seen as a force to reckon with as far as engineering is concerned (Sanyal& Datta, 2011). Consumers would subconsciously consider varied factors in this case.
The level of Economy comes as one of the fundamental factors that shape the perceptions of customers to the country. Indeed, scholars have stated that the level of economic growth comes as the primary proxy for other activities in the country. A large number of countries that have positive COO are developed countries that are highly industrialised, a category that Turkey is yet to attain (Sanyal& Datta, 2011). On the same note, there are considerations about the wealth index of the country or rather the actual/perceived overall wealth in the country, which is measured via consumption levels, number of billionaires and millionaires, how big the industry of luxury goods is and the sophistication that comes with the leisure industry (Chitturi et al, 2008). Customers would look at the wealth index and get a cue on the level of quality with which products come, the variety, as well as the perceived credibility pertaining to the brands or products.
Considerations pertaining to technology in general and technological innovations in particular are not surprising especially considering the extent to which they have been incorporated in the lives of present-day consumers (Baldaufet al, 2009). They shape the perception of consumers on the country as they usually have a close relationship with the level of economic development of that particular country. It goes without saying that a country that has a high COO effect would be likely to have a high level of technological capability (Melnyk et al, 2012).
Type of Government
Capitalism and its resultant market economy has been successful in a large part of the world, which has resulted in the generation of negative perceptions for countries that fail to follow capitalism (Sanyal& Datta, 2011). On the same note, most countries across the globe have adopted democracy as their defacto form of governance, in which case other forms of government including communist regimes, dictatorships and monarchies often trigger a negative perception (Baldaufet al, 2009). An associated feature would be the government’s reputation, as well as its corporate governance, which revolves around the efficiency, accountability and transparency that the country’s government exhibits.
In most cases businesses will undergo a paradigm shift from the things fo which they are known. However, as much as countries may undergo evolution to specialise in high-value industries, they would face immense difficulties in shrugging off any inappropriate or negative associations pertaining to their past (Pappu et al, 2006). In essence, the country’s business history would contribute immensely to shaping the country’s image.
WHAT HAPPENS IN INSTANCES WHERE THERE IS A CHANGE IN THE HERITAGE
There, generally, exists, a consensus as to the fact that the country of origin would affect the image of a brand or product line. However, questions emerge as to what happens to the country of origin effect in instances where the brand changes ownership and is affiliated with another country. Indeed, such a thing has happened in the business world for companies such as Land Rover, which was acquired by Tata in 2008, IBM’s PC business bought by China’s Lenovo in 2005, or even the Australian icon Vegemite, which was acquired by Kraft in 1935 (Giovannini, 2012). Scholars have underlined the fact that these acquisitions send clear indications as to the fact that the cultural links between the countries producing the products and the brands are at risk (Giovannini, 2012). Indeed, the heritage pertaining to a large number of brands would change immensely in cases where there is a change of ownership across national and international borders.
Of course, the fundamental question revolves around the effects that the modification or alteration of heritage would have on the brand. Scholars have underlined the fact that the country of origin effect on a brand or product line would be strongest during its inception and its initial stages (Pappu et al, 2006). Once the country of origin’s image has been entrenched in the personality of the brand, fashioned its identity and shaped the perceptions of the consumer, it seems to have a permanent effect on the image of the brand. Indeed, scholars note that marketers can leverage the country’s power in building the brand most effectively at the initial stages of establishing the brand (Baldaufet al, 2009). Upon the maturity of the brand, it would gain other materials that make a significant contribution to its identity including its financial record, reputation and management personalities, elements that would go a long way in enhancing the change of the image of the brand in its later stages. In essence, the country of origin doubles up as a powerful brand ingredient that may be used in enhancing the competitive advantage of the product in international marketing (Chaudhuri et al, 2011). In essence, it is imperative that decisions pertaining to whether a particular product or brand is to be associated with its country of origin must undergo careful consideration to avert the possibility of negative effects on the brand image (Pappu et al, 2006). Positive associations would have the capacity to shape the consumers’ perception of the brand and would come in handy in efforts to establish international brands that have perfect resonance with global consumers (Pappu et al, 2006). In essence, it is imperative that brand marketers that aim at taking their products and brands to the global market undertake a careful consideration of the rewards and risks that pertain to the leveraging of the country of origin effect (Kinra, 2006). In instances where such associations come with positive reinforcement of the value position of a brand, it would have a significant improvement on the capacity of the marketer to enhance the brand in the international or global market (Kinra, 2006).
ARGUMENTS TO THE CONTRARY
In the 80s and 90s, related research was mainly focused on the impact of the perception of the location of origin in relation to other attributes of the product, like price. According to Bilkey and Nes, (Bilkey & Nes, 1982; Bulent, 1997) the effects of origin on brand image were less when compared with other attributes such as price and product, and that the effects dropped substantially when more variables were considered alongside the country of origin information. In another study, it was noted that the impact of origin was more closely related to the brand quality perception than the purchase intention. Effects of origin on brand image were used as an attribute associated to reliable brand quality (Tokatli & Kizilgün, 2004). Nebenzahl et al (1997) reported that origin had a remarkable effect on product evaluation by consumers across the globe. In another study, it was apparent that country of origin was considered less significant as compared to price and brand quality by the respondents (Pappu et al. 2005).
Khan & Bamber (2008) carried out a study in Turkey on product evaluations on a sample size of 225 students. The study reported that the origin failed to influence the decision making process of the respondents. A study investigated consumers’ ability to determine a product’s country of origin and the factors that influence their identifications throughout the identification process during brand assessments. The results reflected the limited ability of the buyers to categorize brands according to their origin using key categorization of distinct brands to their origin (Baldaufet al, 2009). The most notable finding was that the country of origin did not have a prominent effect on the evaluation of the brands of the product groups involved in the research.
Evidently, extensive research has supported the significance of the effects of origin on positive and negative perceptions on foreign goods, making the country in which a brand’s product originates a critical aspect of global marketing (Kotler & Gertner, 2002). Nonetheless, country of origin image is no longer considered as an important issue in global marketing because of the decline of origin labelling by the World Trade Organization and the developments leading to the evolution and expansion of the international market place.
Other studies have investigated numerous potential determinants of the effects of origin. Motivation was highlighted as one of the factors. It was reported that effects of origin occur when buyers are lowly motivated to purchase a particular item (Mehmet et al. 2010). In addition, the role of cultural dimensions in the effects of origin has been investigated. Also, collectivism and individualism have been used to explicate why buyers prefer products from their home country even after being assured that the imported products are superior.
In addition to research on COO and brand image, much research has been conducted to determine the factors that contribute to the success of the textile and automotive manufacturing industries in Turkey. Benzing, Chu, & Kara determined that the success of the textile industry was positively affected by Turkey’s domestic cotton market, and its close involvement in silk trade as well as many other factors (Benzing 2009).
Research has also been carried out to determine what factors are beneficial for foreign companies to take their business to Turkey, as well as what the future looks like for the Turkish manufacturing industry. Tokatli and Kizilgun have researched the potential threats and benefits of the Chinese and East Asian manufacturing markets, including what aspects of Chinese manufacturing draw business away from Turkey in search of a higher profit margin, as well as how this withdrawal of foreign brands could make room for the growth and expansion of domestic brands that are focusing their efforts on the emerging markets of Central Asia and Eastern Europe (Tokatli & Kizilgun, 2009).
Little research has been conducted on consumer purchase behaviour and global opinion regarding made-in-Turkey products, and this research will aim to close this gap in information that would prove beneficial for Turkish and foreign companies alike.
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