Country Of Origin Effect And Patriotism

INTRODUCTION Cases have been identified that show that customers may choose a domestic product over a foreign one. Extant research on this phenomenon has showed that even when customers’ perception of quality of the foreign product is better than that of the domestic product, customers may still opt for the latter. This proves that the COO effect of quality doesn’t still guarantee absolutely that customers will prefer such product over another (Papadopoulos et. al., 1990; Roth and Diamantopoulos, 2008). Even in a case of a favourable product-country match, such other dimensions which customers use in evaluating their product preference choice could affect customer’s choice. The summary of the research on the intervening variables show that a customer’s loyalty to his country (the product/brand) could make him/her refuse to choose another brand over it even when the perceived quality of the product using the COO effect is better. This research proposal using Nigeria as a case study intends to find out the implication of putting the national branding logo on local products. It seeks to find out if it has an effect in making customers choose locally made goods with the national branding logo over foreign ones and if it has an effect on customer’s product choice in choosing between locally made goods that have the logo and those that don’t. Finally, it will try to find out if association of the logo with the product has had a negative impact or a positive one on products that carry the logo. The research proposal presents a body of literature to show the relevance of the research and the questions that need to be addressed. The methods to be employed, possible limitations and ethical issues that need to be put into consideration are highlighted in the proposal. The proposal seeks to answer all the nine central arguments proposed by Maxwell (1996, cited in Creswell, 2003) (Appendix 1). It is structured as much as possible not to deviate from the main objective.

Proposed Research Title and Research Questions 1

Does adopting a national logo give local products a competitive advantage over foreign products in a domestic market? Q1: Does adopting a national product logo have any influence on customers’ preference for domestic products over foreign ones? Q2: Does a negative association with the logo in one product category lead to negative association in other product categories? Q3: Is there any significant difference in customers’ perception and product preference between domestic products with only “made in __” label/no label and those with the national logo? Q4: Does customers’ level of awareness of why local companies use the national logo have any effect on their product choice preference? These questions seek to find out which cue is most important in choosing locally produced goods, what effect does the addition of the logo have on customers perception and preference for the domestic product and what is its effect on perceived quality.

Purpose of the Research and Rationale At no time in history has the concept of branding be emphasized as much as it is today. The concept of branding today transcends only tangible consumer products. It is common to see services, universities, hospitals, and even people been branded today. In the face of intense competition and fading dividing trade lines that used to hinder the free flow of goods across nations, a favourable country-of-origin image which adds to the brand personality of products becomes a concept more to be desired and cannot be overemphasized as it has a significant effect on consumers’ product evaluation and subsequently their buying decision (Roth, P. K., & Diamantopoulos, A., 2008). However, developed nations have long enjoyed a favourable position in consumers mind due to a long season of technological advancement which has made them to be associated with a particular strength in terms of quality. Their products are perceived more favourably than products from developing countries (Laroche et. al, 2005). France is known for fashion and perfumes, German cars are known for strength, Japanese for

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Quality, and so on. This poses a great challenge for developing or newly emerging nations who also today are now fighting for the same share of the market even domestically. Focusing on the domestic market of developing nations, this research aims to find out how local industries can gain a competitive advantage over foreign ones in their local market. LITERATURE REVIEW Brand as a differentiating and symbolic device helps to differentiate one product from another. It is a name, symbol, design, or some combination, which identifies the ‘product’ of a particular organization as having a sustainable differential advantage (Peter Doyle, 1990). It serves as a peripheral cue/ heuristic that helps customers to conserve their cognitive capacity especially when choosing a product becomes a complex decision (Bettman, 1979 cited in Agrawal and Kamakura, 1999). In the face of fierce competition, a company needs to be able to differentiate itself and its products so as to be able to stand out and survive Globalization and Free Trade The order of the day is globalization and trade agreements are been signed today between countries and regions resulting in trade barriers either been lifted or lessened. An example is the African Growth and Opportunity Act (AGOA) between Africa and the US (Thompson, 2004). However, though the gain from such agreements is expected to be greater for small countries like Nigeria than for large countries like US, the risks are also larger (Wonnacott and Wonnacott 1967 cited in Daly, 1990). The President of Mozambique was quoted in reiterating that (as regards Africa) “While we are pressed to open up our countries and streamline our methods of doing international business, so that the global economy may sink roots, invisible barriers are still making it difficult for us to access resources and advanced technological knowhow. Our manufactured goods can hardly find a place in the rich markets of the North (Chissano, 1998 cited in Thompson, 2004, 458)” Considering the fact that on functional or rational level, domestic products can’t compete head on with foreign products whose quality obviously outweighs them, governments and companies have to begin to find another attribute on which their domestic products can be 3

differentiated and compete i.e. they have to find their comparative advantage in their domestic marktet. Branding In the book brand manners, four different dimensions of customer’s experience were identified; rational, emotional, political, and spiritual experience (Pringle and Gordon, 2001). These experiences are a summary of our expectations from a product or brand. A brand in itself represents promises about what we can expect from a product, a service or a company (Pringle and Gordon, 2001). However, a brand includes all the tangible and intangible aspects of a product, service or company and has been found that the sum total of all the various aspects make customers to perceive brands as having their own distinct personalities. Customers then seek brands that have images that match their own self-image (Chernatony and McDonalds, 1998) or rather personalities that match theirs. Country-of-Origin Effect The concept that every part of the brand adds to its personality and consequently on how customers perceive it has made researchers to look into the effect of the country-of-origin (COO) of the product on how it is been perceived (Srinivasan et. al., 2004; Agrawal and Kamakura, 1999; Chao, 1998; Peterson and Jolibert, 1995). Peterson and Jolibert (1995) stated that “The country of origin of a product, which is typically operationalized or communicated through the phrase “made in ____” is an extrinsic product cue – an intangible product attribute – that is distinct from a physical product characteristic or intrinsic attribute.” As part of the total product, COO influences customers’ decision making and evaluation of products (Pitt et. al., 2007; Agrawal and Kamakura, 1999). COO adds to the image of the product and like a chicken-and-egg effect (Walker and Dubitsky, 1994), if customer’s attitude towards the COO is positive, then they may transfer such attitude towards the product. There has been an extensive research into the effect COO has both as an intrinsic and an extrinsic cue and in the absence and presence of other cues (Agrawal and Kamakura, 1999). Studies have revealed that though COO has an effect on the perception of quality as regards a 4

product, its role in influencing consumers’ actual choice behaviour is said to decrease significantly in the presence of other cues (Agrawal and Kamakura, 1999; Peterson and Jolibert, 1995). However, different factors have been identified to influence customer’s preference in choosing between domestic products and foreign ones: the home country’s degree of industrial development, level of market development, consumer’s affective feeling towards the home country (national pride and patriotism), consumer’s perception of the vulnerability of imports (Papadopoulos and Heslop, 1990) and animosity (Rusell and Rusell, 2006). Consumers product preferences based on COO is made using cognitive, affective or conative dimensions (Papadopoulos, 1988, 1990, 2000 cited in Laroche, 2005). In summary, research has sufficiently shown that when the COO makes consumers to perceive a foreign product as of better quality, they may still choose domestic products which don’t measure up to the standard of the foreign product over it (Papadopoulos and Heslop, 1990). The implication of this for developing nations like Nigeria where their level of technological and educational development has not allowed them to be able to make products whose quality levels may be able to measure at par with competing foreign ones is to find the factors that favour consumers’ preference for domestic products over foreign ones and then market the local goods using these factors for differentiation. Since modern day marketing concept emphasizes a customer orientation perspective (Jobber, 2007; Kotler et. al., 2005; Kotler and Keller, 2009), research needs to be done to test the assumption that adopting a national logo will give domestic products a brand personality that will increase consumer preference and usage, evoke emotions and increase level of trust and loyalty for domestic products (Aaker, 1997).

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METHODOLOGY Considering the nature and implication of this research, practical application of the findings is a major concern. Therefore, the method for this research study will be mixed methods. The assumption here is that collecting diverse types of data provides a better understanding of a research problem (Creswell, 2003).

However, the criticisms also need to be put in

perspective so that the possible loop holes could be avoided. It is argued that qualitative and quantitative research methods are separate paradigms with different epistemological implications because they are both built on opposing epistemological positions about how social reality should be studied (Bryman and Bell, 2007). This makes some researchers believe that mixed methods of research i.e. a research that combines the two research strategies, is not feasible. To avoid the strength of these arguments, this research will be based solely on triangulation which Hammersley (1996 cited in Bryman and Bell, 2007) defines as “the use of quantitative research to corroborate qualitative research findings or vice versa”. In the case of this study, we will use data collected from qualitative methods to design our questionnaires. It would also be used to cross-check our quantitative research findings. This will make our research work more applicable as the use of mixed methods helps to counterbalance the strengths and weaknesses of each research strategy (i.e. quantitative and qualitative methods) (Bryman and Bell, 2007). Considering the lack of adequate time and resources needed to study a whole population, this research in drawing upon survey design intends to make inferences (concerning the research questions that need to be answered) from a sample and then generalize it on the population from which it is drawn. Data Collection Study population, Sampling and Data collection instrument The survey will make use of self-administered questionnaires to obtain data from respondents about their perception towards domestic products to detect any pattern of association that could give insight to factors that affect their preference for it. 6

As noted earlier, prior before the questionnaire survey, a qualitative research using semistructured interview will be employed using 6 interviewees. Students within a university environment will be surveyed using a stratified sampling method to ensure that gender and ethnic differences are well represented. Within each stratum, samples will be drawn randomly using random numbers table. The choice of university location is based on the ease to obtain relevant information to identify the members of the population on the basis of the stratifying criteria and the richness of the diversity of the student population within it. The choice of students is also on the assumption that they will be familiar with the products we intend to focus on and their COO. This is important because perceptions about a country are dependent on people’s knowledge of or familiarity with the country or its product (Roth and Romeo, 1992; Ahmed and d'Astous, 2007). One university will be chosen from each of the three major ethnic groups using random probability sampling (making three in all) where a total of 300 questionnaires will be administered (100 for each university). This number takes into account the possibility of non-response. A pre-test will be run to check for content and construct validity of the questionnaires so as to be able to improve on the questions and their format and to avoid ambiguity in the questionnaire (Creswell, 2003). The reliability would be tested after full administration of the data using the Cronbach’s alpha. The advantage of using self-administered questionnaires include, it’s cheaper, quicker, convenient for respondents and no interviewer’s effect or variability. However, it doesn’t give room for probing further and collecting additional data and the risk of missing data and low response (Bryman and Bell, 2007) could make it difficult to run meaningful statistical analysis. It also limits one to the number of questions to ask while ensuring that it is not cumbersome. Data Analysis The major strategy here to ensure a perfect integration of the quantitative and qualitative data will be a concurrent triangulation strategy (Appendix 2) (Creswell, 2003). The questionnaires gathered will be collated and numbered to avoid mixing them up. They will be labelled A, B, C to indicate which region of the country it came from in case distinct results that needs to be followed up arises. The data gathered will then be inputed and analysed using SPSS and NVivo. The quantitative data will be analysed with the assumption that the COO effect is constant and favourable. As a result we assume in all the analysis that the foreign product 7

(Fp) is perceived as better than the domestic product (Dp).

The analysis will involve

bivariate, and Regression analysis to test relationship between the variables. The variables include; Variable

name

Symbol

Independent variable

Foreign product

Fp

Independent variable

Domestic product

Dp

Intervening/Independent variable

National logo

L

Intervening variable

Negative association with the logo

Na

Dependent variable

Customers’ perception

Cpc

Dependent variable

Customers’ preference

Cpf

Resources, Timescale and Ethical Considerations Throughout the period of this research (February to September), a constant review of new literature needs to be done. Resources will be sourced using the University library and Athens (which is a collection of necessary literature and journals databases like EBSCO, ScienceDirect, Proquest/ABI Info, Taylor and Francis, SAGE, JSTOR, etc). I will need to contact the Universities Commission (NUC) in Nigeria for a comprehensive list of universities in the country. I will need to acquire Nvivo and SPSS and learn more about how to use them to avoid any delay on coding, cleaning and analysing the data collected. I will have to take into consideration the scepticism that I may face at the NUC who may need an authorised letter from a recognized body like the Business School before they release the universities list which I must also ensure I protect and keep away from third parties. I need to find out the governments rules about transferring data across borders also since I will have to fly over to Nigeria to take the survey. I may also have to obtain consent from every participant involved in the interview if I will divulge specific information about their responses (See Appendix 3). I must clearly state before hand to them the exact purpose for my research and any implication that may directly affect them. I need to state this also clearly on the questionnaires. In a case where the expected response rate is not met, I must not try to fill the questionnaires myself or falsify any data. When results appear not to be

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congruent I must not adjust them to suit my own purpose. Results must be stated exactly as they appear even if the instruments eventually proved to be faulty. The time duration will be from February to September to allow for ample time to finish the whole research project. The Gantt Chart for the time duration is highlighted in Appendix 4. Limitations, Contribution and Conclusion Mixed methods research has been identified that it could lead to dilution of research effort since resources would need to be spread instead of concentrated on one research method (Bryman and Bell, 2007). On my own part, though I have previous training in quantitative research method, my inexperience in qualitative method could be a barrier to the full utilisation of the technique and smooth synergy of both methods. The insufficient resources (time, finance, number of person involved) and this means that the number of sample that would be possible to survey will be limited. Consequently, the chosen sample seems quite homogeneous (student group) and this may limit the possibility of generalizing from such sample. The research findings should add to knowledge as research findings on factors that moderate the effect of COO on customers’ product preference in nations that are not known for any major manufacturing capability is limited. Most previous work focused on developed nations and newly emerging economies like China. It would also add to knowledge as it seeks to find out about the success of national campaigns to promote domestic goods which are becoming common place in developing nations. The findings should help governments, marketers and advertisers who intend to embark on “buy domestic products” campaign to know which cue to use to create a personality for the domestic products and then to differentiate and promote them using their campaigns effectively. Further research can build on the findings to determine the associated risk of such campaigns and how to possibly address them as this research study has not been able to justice to it. it could also find out if the use of the national logo have any difference in customer’s product preference depending on the product involvement or product category.

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REFERENCE 1. Aaker, J. L., (1997), ‘Dimensions of Brand Personality’, Journal of Marketing Research, 34, no. 3 (Aug.): 347 - 356 2. Agrawal, J., Kamakura, W. A., (1999), ‘Country of origin: A competitive advantage?’, International Journal of Research in Marketing, 16: 255 – 267 3. Ahmed, S. A. & d’Astous, A., (2007), ‘Moderating effect of nationality on countryof-origin perceptions: English-speaking Thailand versus French-speaking Canada’, Journal of Business Research, 60: 240–248 4. Butterfield Leslie, Excellence in Advertising, 1999 5. Creswell, J. W., (2003), Research design, qualitative, quantitative and mixed methods approaches, 2nd edn, California, Sage Publications, Inc. 6. Daly, D. J., (1990), ‘The Canada-United States Free Trade Agreement: The Adjustment Process for Canadian-Owned Firms’, North American Review of Economics & Finance, 1, no. 1: 105-115. 7. Doyle, Peter, (1990), ‘Building Successful Brands: The Strategic Options’, The Journal of Consumer Marketing, 7, no. 2, (Spring): 5 - 20 8. Jobber, David, (2007), Principles and Practice of Marketing, 5th edn, Maidenhead, McGraw-Hill Education. 9. Kotler, P., Wong, V., Saunders, J. & Armstrong, G., (2005), Principles of Marketing, 4th edn, England, Pearson Education Limited. 10. Kotler, P. And Keller, K. L., (2009), Marketing Management, 13th edn, New Jersey, Pearson Education. 11. Laroche, M., Papadopoulos, N., Heslop, L. A. & Mourali, M., (2005), ‘The influence of country image structure on consumer evaluations of foreign products’, International Marketing Review, 22, no. 1: 96 – 115 12. Pitt, L. F., Opoku, R., Hultman, M., Abratt, R. & Spyropoulou, S., (2007), ‘What I say about myself: Communication of brand personality by African countries’, Tourism Management, 28: 835–844 13. McDonald, Malcom & Leslie de Chernatony, (1998), Creating Powerful Brands in Consumer, Service and Industrial Markets, 2nd edn, Oxford, Butterworth-Heineman. 14. Papadopoulos, N., Bamossy G. & Heslop A. L., (1990), ‘A comparative image analysis of domestic versus imported products’, International Journal of Research in Marketing, 7: 283 – 294 10

15. Peterson, R. A., & Jolibert A. J. P., (1995), ‘A meta-analysis of Country-of-Origin effects’, Journal of International Business Studies, 26, 4, (Fourth Quarter): 883 – 896. 16. Pringle, H. & Gordon W., (2001), Brand Manners, How to create the self-confident organisation to live the brand, England, John Wiley & Sons Ltd. 17. Roth, K. P., Diamantopoulos, A., (2008), ‘Advancing the country image construct’, Journal of Business Research, 10.1016/j.jbusres.2008.05.014 18. Roth, M. S. & Romeo, J. B., (1992), ‘Matching Product Category and Country Image Perceptions: A Framework for Managing Country-Of-Origin Effects’, Journal of International Business Studies, 23, no. 3, (3rd Qtr.): 447 - 497 19. Russell, D. W., Russell, C. A., (2006), ‘Explicit and implicit catalysts of consumer resistance: The effects of animosity, cultural salience and country-of-origin on subsequent choice’, International Journal of Research in Marketing, 23: 321–331 20. Srinivasan N.,, Jain, S. C., & Sikand, K., (2004), ‘An experimental study of two dimensions of country-of-origin (manufacturing country and branding country) using intrinsic and extrinsic cues’, International Business Review ,13: 65 – 82 21. Thompson, C. B., (2004), ‘US Trade with Africa: African Growth & Opportunity?’, Review of African Political Economy, 31, no. 101, An African Scramble? (Sep.): 457474 22. Walker, D. & Dubitsky, T. M., (1994) ‘Why Liking Matters’, Journal of Advertising Research, 34, no. 3: 9 - 18

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APPENDIX 1 - Creswell, (2003) pg 50 1. What do we need to better understand your topic? 2. What do we know little about in terms of your topic? 3. What do you propose to study? 4. What are the setting and the people that you will study? 5. What methods do you plan to use to provide data? 6. How will you analyze the data? 7. How will you validate your findings? 8. What ethical issues will your study present? 9. What do preliminary results show about the practicability and value of the proposed study?

APPENDIX 2 – Creswell, (2003), pg 214

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APPENDIX 3

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APPENDIX 4 – GANTT CHART FOR RESEARCH DISSERTATION Feb

Mar

Apr

May

Write Research Proposal Negotiate access Literature review Data collection Data analysis Write first draft Write second draft Write final draft Dissertation due

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June

July

Aug

Sept