Consumer behaviour

CONSUMERS’ PERCEPTION OF THE COUNTRY-OF-ORIGIN EFFECT ON

PURCHASING INTENTIONS OF

(IN) CONSPICUOUS PRODUCTS

What is Conspicuous What is Conspicuous products ?products ?

Conspicuous products are public display of Conspicuous products are public display of individual possession and consumption of individual possession and consumption of expensive goods ad servicesexpensive goods ad services

It conveys the idea of social status and It conveys the idea of social status and display by pattern of consumptiondisplay by pattern of consumption

• Consumers’ DecisionConsumers’ Decision

• Imagery of Country of Origin effect

e.g. Germany is associated with good engineering work ,

Japan has good association with technology

Cont…Cont…

• Impact of COOImpact of COO

• Negative PerceptionNegative Perception

• Different level of informationDifferent level of information

A Four cell matrixA Four cell matrix

PULPUL

e.g. Convertible e.g. Convertible Sports carSports car

PUNPUN

e.g. Sunglass, e.g. Sunglass, Wrist watch.Wrist watch.

PRLPRL

e.g. Home e.g. Home TheatreTheatre

PRNPRN

e.g. Toothpastee.g. Toothpaste

LUXURY NECESSITY

PRODUCT TYPE

PUBLIC

PRIVATE

CONSUMPTION

Matrix cont…Matrix cont…

• Publicly consumed luxury (PUL) :-Publicly consumed luxury (PUL) :- Product consumed in public view and Product consumed in public view and not commonly owned or used e.g. Golf not commonly owned or used e.g. Golf ClubClub

• Publicly consumed necessity (PUN) :-Publicly consumed necessity (PUN) :- Product consume din public view that Product consume din public view that virtually everyone owns or uses e.g. virtually everyone owns or uses e.g. Wrist watch, shoesWrist watch, shoes

Cont…Cont…• Privately Consumed luxury (PRL) :-Privately Consumed luxury (PRL) :-

Product consumed out of public view and Product consumed out of public view and not commonly owned or used. Home not commonly owned or used. Home theatretheatre

• Privately consumed necessity (PRN) :-Privately consumed necessity (PRN) :-

Product consumed out of public view that Product consumed out of public view that virtually everyone owns or uses e.g. virtually everyone owns or uses e.g. ToothpasteToothpaste

Luxury vs. necessity Luxury vs. necessity productsproducts

• Luxury items have a degree of Luxury items have a degree of exclusivity.exclusivity.

• Li and Wyer noted that with high-Li and Wyer noted that with high-involvement products, purchase involvement products, purchase decision become more elaborate.decision become more elaborate.

• Products commonly owned, such as Products commonly owned, such as necessity items, tend to represent necessity items, tend to represent lower monetary risk and hedonistic lower monetary risk and hedonistic value, and command less involvement.value, and command less involvement.

Publicly vs. privately consumed Publicly vs. privately consumed productsproducts

• Publicly consumed products may Publicly consumed products may reflect a consumer’s self-perception.reflect a consumer’s self-perception.

Preliminary stepsPreliminary steps(Method)(Method)

• 107 respondents given definition of four 107 respondents given definition of four product categories and asked to assign each product categories and asked to assign each one of 39 products to one of the categories.one of 39 products to one of the categories.

• 30 respondents to select the countries to be 30 respondents to select the countries to be used in the study. They were provided with a used in the study. They were provided with a list of 15 countries and then asked to list of 15 countries and then asked to evaluate whether goods produced in these evaluate whether goods produced in these countries of good quality in general.countries of good quality in general.

• The question aimed at finding whether The question aimed at finding whether respondents had a country-of-origin effect respondents had a country-of-origin effect impression of the products made in the impression of the products made in the countries listed.countries listed.

Seven scenariosSeven scenarios(Sampling design)(Sampling design)

• 7 number of scenarios and a desire to 7 number of scenarios and a desire to include 40 respondents in each scenario include 40 respondents in each scenario were selected to consider all people.were selected to consider all people.

• 336 questionnaire were prepared, 336 questionnaire were prepared, reflecting the provision that, on reflecting the provision that, on average, 8 respondents per scenario average, 8 respondents per scenario were expected to provide incomplete or were expected to provide incomplete or otherwise unusual questionnaires.otherwise unusual questionnaires.

Six section of the questionnaireSix section of the questionnaire(Questionnaire development)(Questionnaire development)

• 1- the ranking of product attribute in general1- the ranking of product attribute in general

• 2- ranking of the same product attributes 2- ranking of the same product attributes given one of the four products tested in the given one of the four products tested in the survey.survey.

• 3- measured the importance rating of each 3- measured the importance rating of each product attribute when deciding to product attribute when deciding to purchase sunglasses using a lickert scale.purchase sunglasses using a lickert scale.

Cont…Cont…

• 4- assessed consumers’ familiarity with 4- assessed consumers’ familiarity with sunglasses using a 5 point bipolar semantic sunglasses using a 5 point bipolar semantic differential scale.differential scale.

• 5- tapped the consumers’ level of agreement with 5- tapped the consumers’ level of agreement with statements about purchasing sunglasses using statements about purchasing sunglasses using lickert scale.lickert scale.

• 6- investigated the consumers’ likelihood to 6- investigated the consumers’ likelihood to purchase sunglasses with a 5 point bipolar purchase sunglasses with a 5 point bipolar semantic differential scale.semantic differential scale.

Objective Of StudyObjective Of Study

• To investigate impact of country of To investigate impact of country of origin on consumers’ purchasing origin on consumers’ purchasing intention of products that are intention of products that are consume inconspicuously.consume inconspicuously.

• Out of 336 questionnaires 296 were Out of 336 questionnaires 296 were usable. And its convenience method.usable. And its convenience method.

Results of HypothesisResults of Hypothesis

• The data indicates that information The data indicates that information on a product’s COO is more on a product’s COO is more important for Luxury than for important for Luxury than for necessity products. necessity products.

• So accept hypo. That influence of So accept hypo. That influence of COO will be greater on PUL than on COO will be greater on PUL than on PRL.PRL.

Decision-making Decision-making attributeattribute

• Here respondents are giving more Here respondents are giving more preference to attributes like price, preference to attributes like price, versatility, appearances and other versatility, appearances and other attributes than COO’s importance as attributes than COO’s importance as a decision-making attribute.a decision-making attribute.

Bonferroni Test ResultsBonferroni Test Results

• Results from this study of finding out the Results from this study of finding out the COO effect, products COO may be a weak COO effect, products COO may be a weak determinant in purchasing products, while its determinant in purchasing products, while its importance is higher when considering the importance is higher when considering the purchase of luxury over necessity products.purchase of luxury over necessity products.

• A more +ve COO or even an absence of COO A more +ve COO or even an absence of COO (e.g. japan) information elicit more purchase (e.g. japan) information elicit more purchase intentions than a less +ve COOintentions than a less +ve COO

Preference for national Preference for national product categories product categories

• Overall, our findings corroborate earlier Overall, our findings corroborate earlier research, confirming that a product’s research, confirming that a product’s extrinsic cues, such as its COO, are less extrinsic cues, such as its COO, are less important than intrinsic cues, such as important than intrinsic cues, such as reliability and performance.reliability and performance.

• But than also consumer considered the But than also consumer considered the product’s COO to be either important for product’s COO to be either important for luxury products or somewhat imp. for luxury products or somewhat imp. for necessities.necessities.

Better Understanding Better Understanding

• So as mktg manager they have to So as mktg manager they have to identified the image of their country and identified the image of their country and consider two options.consider two options.

1.1. They should stress on a very +ve COO as They should stress on a very +ve COO as an asset for the particular product an asset for the particular product categorycategory

2.2. On the other hand, they should avoid On the other hand, they should avoid giving consumers a COO cue when it is giving consumers a COO cue when it is not the most +ve. not the most +ve.

Constraints of Types Of Constraints of Types Of ProductsProducts

• Findings from this study don’t Findings from this study don’t quantitatively support the contention quantitatively support the contention that a product’s conspicuous that a product’s conspicuous consumption may be linked to its COO.consumption may be linked to its COO.

• As some consumers conspicuously As some consumers conspicuously consume brands to define themselves consume brands to define themselves towards others and their own selves.towards others and their own selves.

Executive summary and Executive summary and implication for Managersimplication for Managers

• Consumers place COO below such Consumers place COO below such things as quality and reliability as things as quality and reliability as factors influencing purchase decisions.factors influencing purchase decisions.

• For example, Mercedes make good For example, Mercedes make good cars but don’t necessarily transfer cars but don’t necessarily transfer such as +ve an impression to other such as +ve an impression to other German products .German products .

Conti…Conti…

• Piron’s findings confirm that consumers use Piron’s findings confirm that consumers use a product’s COO as a Cue in purchase a product’s COO as a Cue in purchase decision but that this decision but that this cuecue can be can be superseded by superseded by product knowledgeproduct knowledge

• Thus COO effects will remain with us and Thus COO effects will remain with us and will always colour people’s attitude to will always colour people’s attitude to Brands. But they are neither as important Brands. But they are neither as important nor as powerful as many have thought in nor as powerful as many have thought in the past.the past.