Spring/Summer 1982 | WARREN J. BILKEY*, University of Wisconsin-Madison ERIK NES**, Gustav A. Ring, A.S.
This article reviews the literature on how the country of origin affects buyer evaluations of products. It highlights the significance of the location of production on demand, viewing it as an information cue that influences customer perceptions. The study draws marketing inferences and suggests future research directions. Key findings include:
1. **General Impact**: Country of origin significantly affects product evaluations across various products, classes, and specific brands, regardless of the source country's economic development level.
2. **Within MDCs**: Products from different MDCs are not evaluated equally, with attitudes changing over time. Consumers tend to favor their own country's products more than those from other countries.
3. **MDCs vs. LDCs**: A hierarchy of biases exists, with economic development, cultural and political climate, and perceived similarity influencing evaluations. Eastern European nations face stronger biases than expected based on their economic development.
4. **Promotion and Country of Origin**: Advertising and promotional strategies can mitigate negative biases, but the effectiveness varies by country and product.
5. **Perceived Risk**: Perceived risk increases for products made abroad, with some exceptions for products from other MDCs. LDCs may have a special advantage in exporting manufactured goods due to their reputation as raw material exporters.
6. **Industrial Purchasing**: Purchasing managers' perceptions of product attributes vary based on the country of origin, with economic development influencing these perceptions.
The article concludes by emphasizing the need for further research to understand the magnitude of the country-of-origin effect, how other cues can compensate for negative biases, and the determinants of these biases. The implications for multinational companies and retailers are significant, particularly in the context of sourcing from LDCs.This article reviews the literature on how the country of origin affects buyer evaluations of products. It highlights the significance of the location of production on demand, viewing it as an information cue that influences customer perceptions. The study draws marketing inferences and suggests future research directions. Key findings include:
1. **General Impact**: Country of origin significantly affects product evaluations across various products, classes, and specific brands, regardless of the source country's economic development level.
2. **Within MDCs**: Products from different MDCs are not evaluated equally, with attitudes changing over time. Consumers tend to favor their own country's products more than those from other countries.
3. **MDCs vs. LDCs**: A hierarchy of biases exists, with economic development, cultural and political climate, and perceived similarity influencing evaluations. Eastern European nations face stronger biases than expected based on their economic development.
4. **Promotion and Country of Origin**: Advertising and promotional strategies can mitigate negative biases, but the effectiveness varies by country and product.
5. **Perceived Risk**: Perceived risk increases for products made abroad, with some exceptions for products from other MDCs. LDCs may have a special advantage in exporting manufactured goods due to their reputation as raw material exporters.
6. **Industrial Purchasing**: Purchasing managers' perceptions of product attributes vary based on the country of origin, with economic development influencing these perceptions.
The article concludes by emphasizing the need for further research to understand the magnitude of the country-of-origin effect, how other cues can compensate for negative biases, and the determinants of these biases. The implications for multinational companies and retailers are significant, particularly in the context of sourcing from LDCs.