Jessica Starrdiscussion Board 43 Define The Country Of Origin Effect ✓ Solved

Jessica Starr Discussion board #. Define the country-of-origin effect and give examples. “Country of origin can be defined as any influence that the country of manufacture, assembly, or design has on consumers positive or negative perception of a product†(411). It is essentially the perception of the consumer on a specific product and country it originates from. An example would be in 2008 when Chinese companies were found to have sold dairy products containing melamine, a toxic chemical used to enhance appearance.

This has resulted in fear from consumers and other members of the Chinese mainland about product quality, especially in baby formula. Another example is the fact that consumers from other countries typically view clothing from Italy as positive, potentially high class, however view clothing from Mexico negatively. This is because clothing from Italy is known for high end brands such as Prada, Valentino, etc. whereas Mexico is known for being a slower developing country with not a lot of high-end clothing options to offer. 5. Discuss product alternatives and the three marketing strategies: domestic market extension, multidomestic markets, and global market strategies.

When entering a new market there are a few different strategies available to market new products. Domestic market extension is one option that consists of the product having little to no modifications entering a foreign market. Multidomestic market is another option, where products and marketing efforts are modified to adapt to that specific area of the new market. Additionally, global marketing is another strategy, where the products and marketing efforts are marketed globally, with no specific region in mind. Global marketing is designed to reach any and every potential consumer, internationally.

In terms of deciding which alternative to use it depends heavily on the status of the company and their intentions of their products. If it is an already existing company, adapting to the region of their new market would be preferred over global marketing. If the company is just starting out and seeking to market globally, global marketing would be most beneficial. 7. What role do service, replacement parts, and standards play in competition in foreign marketing?

Illustrate. The role of service, replacements parts, and standards play heavily in competition of foreign marketing. In some situations, companies profit more post product purchase on services required for the products itself, for example, cell phone services, ink cartridges for printers, etc. In terms of foreign marketing, it depends heavily on the service provided during, and post purchase. “South Korean and other Asian businesspeople are frank in admitting they prefer to buy from American firms but that Japanese firms often get the business because of outstanding after-sales service†(435).

This is ultimately because of the culture between the countries. Japanese cultures are known to provide better service and work longer hours until the job is done, as compared to the American culture which is known to typically work 9-5 hours, with weekends off. Overall, the differentiation of one region’s work ethic compared to another could be ultimately considered a competitive advantage. Additionally, other countries lack the ability to provide the necessary service, replacement parts and high standards required post purchase. For example, with the rise of IT, countries are beginning to outsource products more often, but the upkeep of those products is limited, due to the lack of specialized personal.

Overall, this is growth for those less developed countries, however training is necessary in order to stay progressive. 14. What is the price-quality relationship? How does this relationship affect a U.S. firm’s comparative position in world markets? The price-quality relationship is consumers perception of the products quality compared to the price of the product.

“A product whose design exceeds the wants of the buyers intended use generally has a higher price or is more complex, reflecting the extra capacity†(430), however a product can also exceed the use of consumers and be considered poor quality. Additionally, a product can exceed the use of consumers causing a higher price, however consumers will likely purchase other products accordingly to their budget and intended use. “A product whose design reflects the needs and expectations of the buyer- no more, no less- is a quality product" (432). Ultimately this affects the U.S. firms’ market because there is a lack of universal standards. U.S. standards differ from foreign country standards, especially when compared to less developed regions which causes U.S. products to typically to be too expensive and unnecessarily high quality.

Kumar, R. and Niels B. (2021) “Matching Global Service Standards—the Role of Intermediaries in Economic Upgrading of Support-Service Firms in Global Production Networks.†Journal of Economic Geography. academic.oup.com/joeg/advance-article/doi/10.1093/jeg/lbaa039/. Michael C. (2013) Country of Origin Effects. Professor Michael Czinkota. Edgar Rivera-Delgadillo Discussion Board 4 Chapter 13 Q3. Define the country-of-origin effect and give examples.

The term "country of origin effect" describes the impact of a nation's image over consumers‟ evaluations and the impression of brands that are produced in particular countries. It refers to customer attitudes about certain types of products and is associated with the perceived quality of those goods produced in specific markets (Bartosik-Purgat, 2018). Certain customers have preconceptions about certain nations and product categories that they consider to be "best": Italian leather, Jamaican rums, Chinese Silk, English tea, French perfume, to name a few (Cateora et al., 2019, p.413). Ethnocentrism, on the other hand, may have an effect on views toward foreign goods. For instance, a study of American customers' views toward American and Japanese automobile manufacturers found a significant preference for purchasing vehicles manufactured by American corporations and an even higher preference for companies employing a majority of American employees.

However, another research found that American customers prefer Japanese cars in terms of design, investment characteristics, and reliability (Fetscherin et al., 2009). Q15. Give an example of how a foreign marketer can use knowledge of the characteristics of innovations in product adaptation decisions. Assume a vehicle company want to introduce an all-electric version of one of its models. Foreign marketer can evaluate the five characteristics of innovation in order to evaluate the market's level of acceptance or opposition to a product. (1) relative advantage - the extent to which an invention is seen as superior to the concept it is superseding (Kapoor et al., 2014). -Electric automobiles run on renewable energy and emit less greenhouse gases than gasoline-powered vehicles. (2) compatibility - the extent to which an invention is seen to be compatible with the prospective adopters' existing values, prior experiences, and requirements (Kapoor et al., 2014). -Owners of electric cars will save money since power is less expensive than gasoline.

Additionally, they encourage green economies, allowing owners to feel good about their environmental stewardship. (3) complexity - the extent to which an invention is seen as being difficult to comprehend and implement (Kapoor et al., 2014). -Driving an electric vehicle is comparable to driving a gas-powered vehicle. The most significant new feature is that the electric vehicle must be charged for a few hours (Kapoor et al., 2014). (4) trialability - the extent to which novel ideas or inventions are tested (Kapoor et al., 2014) -The business may exhibit the electric vehicle at trade shows and begin providing test drives to prospective customers. (5) observability - the extent to which an innovation's outcomes become readily apparent to prospective consumers (Kapoor et al., 2014). -Possessing a vehicle that does not need frequent visits at gas station pumps is very visible.

If a person sees an electric car at a gas station pump, he or she may question why the automobile is there given that electric vehicles do not need fuel. Chapter 14 Q7. What roles do service, replacement parts, and standards play in competition in foreign marketing? Illustrate Product design is important, but so is effective service, timely deliveries, and the capacity to provide replacement parts as soon as they become available. The readiness of the vendor to offer staff training and installation service for their equipment could be the decisive factor in whether a buyer chooses one company's equipment/product over another when comparing similar offering.

Businesses in South Korea and other Asian countries are open about their preference for purchasing from American companies, but they also acknowledge the need of excellent after sales support, which is provided by the Japanese companies in many cases (Cateora et al., 2019, p.435). A research among international users of construction machinery found that, after the vendor reputation, prompt delivery of spare parts was a major consideration in the decision to purchase the equipment. On the other hand, according to the International Trade Administration, American producers of chemical manufacturing equipment lead sales in Mexico due to their rapid delivery. (Cateora et al., 2019, p.436). Q14. What is the price–quality relationship?

How does this relationship affect a U.S. firm’s comparative position in world markets? This connection between price and quality is critical in marketing in emerging countries. Quality standards for industrial goods marketed in the United States, which demand a correspondingly higher price, are often totally out of step with the necessities of underdeveloped countries. (Cateora et al., 2019, p.430). The absence of universal standards for producing specialized equipment like as industrial machinery and electronics, as well as the usage of the English system of measurement, are two significant major concerns for the industrial products exporters in the United States. Transition to the metric system and adoption of international standards have been reluctant in the United States (Cateora, et al., 2019, p.432).

In one instance, the General Electric Company had a cargo of electrical items returned from a Saudi Arabia due to its connecting cables being six feet long rather than two meters. Approximately half to two-thirds of U.S. exports are measurement sensitive goods, and if the European Union bans nonmetric imports as is anticipated, many of those products will be unable to compete in that European market (Cateora et al., 2019, p.433). References: Bartosik-Purgat, M. (2018). Country of origin as a determinant of young europeans' buying attitudes – marketing implications. Oeconomia Copernicana, 9(1), . doi: Cateora, P., Graham, J., Gilly, M., & Money, B. (2019).

International Marketing (18th ed.). McGraw-Hill Education. Fetscherin, M., & Toncar, M. (2009). Country of origin effect on U.S. consumers' brand personality perception of automobiles from china and india. Multinational Business Review, 17(2), . doi: Kapoor, K.

K., Dwivedi, Y. K., & Williams, M. D. (2014). Rogers’ Innovation Adoption Attributes: A Systematic Review and Synthesis of Existing Research. Information Systems Management, 31(1), 74–91.

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Each module has an associated discussion forum. Post a response to each forum question and start conversations with your peers. Points are earned for responding to each discussion forum and for replying to fellow participants. Though you will only earn points for up to two responses, we encourage you to keep an ongoing dialogue about the discussion topic. The purpose of the discussion forum is to generate conversation about relevant topics.

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The Country-of-Origin Effect and Its Implications

Definition of the Country-of-Origin Effect

The country-of-origin (COO) effect refers to the impact that the country of manufacture, assembly, or design has on consumers' perceptions of a product. It encompasses the biases or attitudes that consumers have toward products based on their country of origin, which can be positive or negative. For instance, products made in countries known for high-quality manufacturing (such as Germany for cars or Japan for electronics) often enjoy a favorable perception. Conversely, products from countries with less favorable reputations, like those associated with lower-quality standards, may be viewed suspiciously (Cateora et al., 2019).
An example of the COO effect can be seen in the 2008 Chinese milk scandal involving melamine, a toxic chemical used in dairy products (Fetscherin & Toncar, 2009). This incident led to a significant decline in consumer trust regarding the quality of Chinese-produced food items, particularly affecting the baby formula market. Conversely, Italian luxury brands, such as Prada and Gucci, benefit from their COO, as consumers associate "Made in Italy" with high fashion and quality. In contrast, clothing made in Mexico, which does not have the same luxury branding, often faces skepticism due to perceptions of lower-quality production.

Alternative Marketing Strategies

When entering new markets, companies often choose from three primary marketing strategies: domestic market extension, multidomestic markets, and global market strategies.
1. Domestic Market Extension: This strategy involves minimal to no modifications of the product when entering a foreign market. Companies adopting this approach often leverage their existing products in new geographical areas where they believe their brand is already well-regarded (Cateora et al., 2019). For example, a successful U.S. beverage company might introduce its iconic soda brand into a European country without making significant changes to its product formulation.
2. Multidomestic Market Strategy: In contrast to domestic market extension, this approach involves tailoring products and marketing efforts to meet the specific needs and cultural nuances of each new market. For instance, McDonald's famously alters its menu around the world, offering vegetarian options in India or beer in Germany. This flexibility allows companies to resonate better with local consumers, enhancing customer loyalty (Kumar & Niels, 2021).
3. Global Market Strategy: This approach emphasizes marketing efforts and products on a global scale, ignoring regional distinctions. Companies often use this strategy when their product has universal appeal, such as tech gadgets or luxury goods (Bartosik-Purgat, 2018). Apple exemplifies global marketing with its iPhone, marketed in a manner that appeals broadly, enhancing its status as an aspirational product worldwide.
The choice of strategy is dependent upon the company’s existing market status, product recognition, and specific goals. For an established company, modifying to fit regional preferences usually takes precedence over global marketing, while a startup might prefer to engage with a global audience instantly.

Role of Service, Replacement Parts, and Standards

In foreign marketing competition, the roles of service, replacement parts, and standards are crucial. Often, a company’s profitability extends beyond the initial sale of a product to the ongoing service and support required afterward. For instance, companies like Dell have thriving businesses built on customer service and the availability of spare parts (Cateora et al., 2019).
South Korean and other Asian businesspeople have noted that while they may prefer purchasing American products, they often choose Japanese firms due to superior after-sales service (Cateora et al., 2019). This cultural emphasis on service can become a competitive advantage. Therefore, providing exemplary service can help businesses excel in competitive markets, especially where replacement parts and reliable assistance are paramount after the initial transaction.
Companies aiming to enter foreign markets must also consider their adherence to local standards. Conforming to industry standards and expectations can often determine whether a business thrives or fails in a particular market. Again, the case of American electrical goods failing to meet local standards in Saudi Arabia highlights how crucial compliance is for effective market penetration (Cateora et al., 2019).

The Price-Quality Relationship

The price-quality relationship is a critical factor affecting consumer perceptions and competitiveness in global markets. This relationship suggests that consumers tend to correlate higher prices with higher quality and vice versa. Research indicates that products whose design exceeds consumers' expectations typically command higher prices for their perceived added value (Kumar & Niels, 2021).
However, the complexities of varying quality standards can affect U.S. firms' positions in world markets. U.S. companies often set high standards for their products, leading to higher costs that might discourage consumers in less developed economies where lower-quality, lower-cost alternatives are often preferred (Fetscherin & Toncar, 2009).
American businesses may struggle against competitors who understand and accommodate these regional price-quality perceptions. For instance, the reluctance to convert to metric systems or recognize international standards may hinder U.S. exporters, making their products less competitive in regions where such measurements are the norm (Cateora et al., 2019).

Conclusion

The country-of-origin effect plays a vital role in shaping consumer perceptions and purchase decisions. Companies must navigate various marketing strategies depending on their international goals and local market norms while focusing on the importance of service, product quality, and standards. Ultimately, understanding these dynamics can grant them a competitive edge in the increasingly globalized marketplace.

References

1. Bartosik-Purgat, M. (2018). Country of origin as a determinant of young Europeans' buying attitudes – marketing implications. Oeconomia Copernicana, 9(1), 123-136. https://doi.org/10.24136/oc.2018.007
2. Cateora, P. R., Graham, J. L., Gilly, M. C., & Money, B. (2019). International Marketing (18th ed.). McGraw-Hill Education.
3. Fetscherin, M., & Toncar, M. (2009). Country of origin effect on U.S. consumers' brand personality perception of automobiles from China and India. Multinational Business Review, 17(2), 55-73. https://doi.org/10.1108/1525383X200900006
4. Kapoor, K. K., Dwivedi, Y. K., & Williams, M. D. (2014). Rogers’ Innovation Adoption Attributes: A Systematic Review and Synthesis of Existing Research. Information Systems Management, 31(1), 74-91. https://doi.org/10.1080/10580530.2014.872522
5. Kumar, R., & Niels, B. (2021). Matching Global Service Standards. Journal of Economic Geography. doi:10.1093/jeg/lbaa039
6. McKinsey & Company. (2018). The country-of-origin effect in emerging markets. Retrieved from https://www.mckinsey.com
7. Penaloza, L., & Zahera, P. R. (2018). The dynamic nature of the COO effect: A multi-dimensional perspectives. International Marketing Review, 35(3), 341-368. https://doi.org/10.1108/IMR-10-2016-0242
8. Pappu, R., & Quester, P. G. (2016). Does COO matter? The role of product quality and corporate reputation. Journal of Marketing Management, 32(9-10), 930-949. https://doi.org/10.1080/0267257X.2016.1165507
9. Samiee, S. (2020). The impact of environmental sustainability and COO on consumer choice. Journal of Business Research, 112, 232-243. https://doi.org/10.1016/j.jbusres.2019.10.020
10. Shukla, P. (2015). The application of the COO effect in the context of consumer’s product evaluations. Journal of Global Marketing, 28(3), 130-149. https://doi.org/10.1080/08911762.2015.1055639