CULTURED MINDS

COUNTRY OF ORIGIN

 

 Sometimes knowing the country-of-origin for a product can influence consumers’ perception of the product, thus leading to/averting a purchase decision. This, somewhat debated, concept is called the COO effect. 

 

A 1995 meta-analysis of the COO effect (Peterson & Jansson, 1995) concluded that it is “somewhat generalisable… country of origin was a stronger predictor for quality/reliability perceptions than it was for purchase intentions.” Later (Steenkamp, Hofstede & Wedel, 1999) noted that collectivistic national cultures were particularly biased towards own-country products. They advised that companies emphasise local origin and local cultural positioning for their products. 

 

But with increasing globalisation do these effects still hold true? In some form they do. (Balabanis & Diamantopoulos, 2004) claimed “bias against foreign products and in favour of domestic ones does, in fact, exist.” Similarly, a study of international donation patterns across East Europe, China, Africa and the USA, found evidence for ‘Parochialism’ which the authors define as “support for organisations helping co-nationals even when donating to international causes would help more people”(Baron & Szymanska, 2010).  

 

In 2000, Gürhan-Canli and Maheswaran’s study identified the vertical dimension of individualism & collectivism as the "dominant dimension" to explain COO effects. More recent findings back this up by showing that people from vertical-individualist and vertical-collectivist cultures tend to prefer in-country products (Shavitt & Johnson, 2011).  

 

Although there is no established theory/framework to predict its consequences on consumer behaviour across different domains, companies should not overlook the COO effect.