The concept of country-of-origin was first reviewed by Schooler in 1965. Schooler, (1965) tested 200 part-time students of a University in Guatemala who were selected at random by giving them identical products with fictitious country labels. The number of the countries included in the investigation were four; Guatemala, El Salvador, Costa Rica and Mexico.
Respondents in this survey were asked to assess the juice and fabric product whether these products were better or worse than the average in Central America. Results from the survey revealed that Guatemalan products and Mexican products were rated equally, whereas Costa
Rica and El Salvadoran products were rated at a lower level (Schooler, 1965). He found that country-of-origin effect on the products does exists and also saw that, this can have an influence on consumer‟s decision making process for products (Schooler, 1965).
Lillis and Narayana, (1974) conducted a study to unveil how Americans and Japanese consumers perceive product images with the “made in” labels. They found that both American and Japanese consumers considered German products as reliable and masculine at a high level, whereas there was a high disagreement on the products originated from the U.S.A and France. American consumers and Japanese consumers‟ attitude to the products made in Japan and England was relatively similar (Lillis and Narayana, 1974). The main result from the conducted survey showed that product‟s origin is perceived differently from consumer to consumer (Lillis and Narayana, 1974). Still dwelling on the effects of “made-in labels”, Nagashim, (1977) researched further about the effect of „made in‟ on the product image. The main purpose of his study was to find the perception of Japanese businessmen towards American products, and how the perception had changed from 1967 to 1975 (Nagashim, 1977). He found the “made-in” images of American products on the whole has been considerably degraded in the view of Japanese businessmen, whereas for the other four countries‟ (Japan, Germany, France and England) the “made-in” images of their products has been significantly upgraded during the past eight years (Nagashim, 1977).
Bilkey and Nes, (1982) reviewed the literatures on the country-of-origin effect with regards to the product evaluations when consumers purchase. The authors explained that, products are perceived by the combination of a great number of informational cues, for example, taste, design or fit considered intrinsic cue, while price, brand name or warranties as extrinsic cues (Bilkey and Nes, 1982). Bilkey and Nes (1982) believed that, customers evaluate the products based on these cues. However, since the cues had not been precisely estimated yet, future studies would have to include how the influence of the cues can be related to the real life purchasing situations; also adding that it should not be only a single cue (Bilkey and Nes, 1982). Upon reviews of the extant literature, Bilkey and Nes, (1982) concluded that country-of-origin definitely has an impact on consumer purchasing intention.
The impact of country-of-origin on product evaluations had been studied by Johansson et al, (1985). The multi-attribute attitude method used in their study showed that the level of
influence of country-of-origin is significantly harder to be found than it is estimated in previous studies. Products could be perceived not only by nationality, but also by other demographic aspects such as gender, income, age etc. and familiarity with the certain product (Johansson et al, 1985). Johansson et al, (1985) concluded that the impact of country-of-origin could be measured and explained better with regard to the specific attributes in the evaluation than overall evaluations.
Han and Terpstra (1988) studied consumer evaluations influenced by country-of-origin and brand name cues by conducting a survey with products from both home and foreign countries.
The targeted population for the survey was all USA residents. The study was primarily focused on how US consumers perceive the products; Color televisions and small cars (Han and Terpstra, 1988). Han and Terpstra (1988) found that the value of the product on consumer evaluation is impacted by both the sourcing country and brand name. For example, the product modes (US-made, US-branded/foreign-made, foreign branded/US-made, and foreign-branded/foreign-made), in which product quality as perceived by consumers at the overall level and individual dimensions varied (Han and Terpstra, 1988).
However, the most interesting finding of the study was that, the effects of country-of-origin are probably more powerful on consumer evaluations than on the brand name (Han and Terpstra, 1988). A year later, Han, (1989) developed two models to test the role of country of image on the quality of products as consumers perceive. Building on his previous year's review with Terpstra, Han used the same products (Color televisions and small cars - as selected above) in this survey. He suggested that, country image in terms of consumer evaluations could be conceptualized with the following; halo and the other is summary construct. The main finding of the study was that country image could probably be working as a halo in evaluation of the product when the country‟s products are not well-known to consumers (Han, 1989). This has an indirect impact on consumer‟s perception toward the brand because consumers evaluate the attributes of the products based on inference (Han, 1989). On the other hand, when the country‟s products are well-known to consumers, country image could be working as a construct. This summarizes the consumers‟ beliefs about the attributes of the product, giving a direct impact on their perception toward the brand (Han, 1989).
Roth and Romeo, (1992) suggested a model matching product category and country image dimension for operating the effect of country-of-origin. In the model, the significance of product categories is matched with the attitude toward the image of country-of-origin (Roth and Romeo, 1992). The investigation showed that consumers are likely to buy an automobile from Germany, the USA or Japan, whereas they are less likely to buy the same product category from Mexico or Hungary (Roth and Romeo, 1992). The major findings thus were that, purchase intention of consumers is going to be high on the countries that were assessed highly with the important dimensions of the product category (Roth and Romeo, 1992). In contrast, consumers are less likely to purchase products from the countries that were assessed and matched with an unfavorable product country (Roth and Romeo, 1992). Roth and Romeo, (1992) concluded that managers should use this model (Firugre 2.3) not only in order to evaluate consumers purchase willingness, but also to be supported for managing their products‟ country-of-origin.
Figure 2.3. Country and Product Category Dimension Matches and Mismatches, source: Roth and Romeo, (1992)
Thakor and Kohli, (1996), studied the core differences between the concept of brand origin and country-of-origin. Thakor and Kohli conceptualized brand origin as following: “We define brand origin as the place, region or country to which the brand is perceived to belong by its target consumers. We note that this may differ from the location where products carrying the brand name are manufactured or are perceived by consumers to be manufactured”(Thakor and Kohli, 1996). The authors believed that consumer perceptions might contrast from reality due to ignorance and the absence of significant origin information
for a specific brand, or intentionally planned confusion made by firms that consider purchasers attitude to an unfavorable origin (Thakor and Kohli, 1996). Consumers would have full information of where a well-known product is produced, while they would not think much about the region that it is, the brand origin (Thakor and Kohli, 1996). For instance, though Honda is manufactured in America, consumers will still perceive the brand as a Japanese car (Thakor and Kohli, 1996). Thakor and Kohli, (1996) further stated that, the effects of origin cues cannot be removed by the manufacture or country-of-assembly that is slightly manipulated, because famous brand names are already encompassed with those cues. For instance, subjects would still consider Samsung and Toyota as a South Korean and Japanese brand respectively, even though the products from these companies are assembled in other countries (Thakor and Kohli, 1996). The authors argued that, since the concept of brand origin is more comprehensive than country-of-origin, those can be separated from each other. They continued that, “Brand origin refers to signifiers of origin beyond those that merely indicate a country” (Thakor and Kohli, 1996).
Agarwal and Sikri (1996) investigated the role of country image in consumer evaluation in terms of product category extensions. Findings of the study were that, a substantial connection between the beliefs about the most famous product category from a particular country and anticipation for the new product category does exist (Agarwal and Sikri, 1996).
Moreover, it is suggested that, new products are going to have larger transference when the degree of the perceived similarity between the different product categories are greater (Agarwal and Sikri, 1996).
Zain and Yasin (1997) studied about how important the information of country-of-origin is to Uzbekistan consumers and how they (Uzbeks) perceive product quality. The main findings in the study is that the products from developed countries like Japan and USA are perceived by Uzbek consumers as more advanced in quality than the products from the likes of India and China, that are relatively less developed countries (at the time of the research) (Zain and Yasin, 1997). Furthermore, consumer attitude in Uzbekistan toward country-of-origin information was considerably influenced and depended on purchases of products that are new and expensive (Zain and Yasin, 1997). Zain and Yasin, (1997) further found that, the purchase intention of the consumers are also impacted by the “made in” label, which is a very important information for them, regardless of their level of education, sex or marital status.
Laroche et al, (2003) studied how consumer evaluations are affected by country image structure when they see foreign products. The main aim of their paper was to broaden knowledge on handling cognitive process in terms of country-of-origin cues based on the country image concept and its function in the product assessment (Laroche et al, 2003).
Laroche et al, (2003) included the concept of three-dimensions which were composed of cognitive, affective and conative elements in relation to country image. The authors gave a detailed description of the concepts as: “(1) a cognitive component, which includes consumers’ beliefs about the country’s industrial development and technological advancement; (2) an affective component that describes consumers’ affective response to the country’s people; and (3) a conative component, consisting of consumers’ desired level of interaction with the sourcing country”(Laroche et al, 2003). They proposed a framework to ascertain how the three concepts were related to country image, product beliefs, and product evaluations (Laroche et al, 2003). The framework showed that product evaluations are influenced concurrently by the other two factors (country image and product beliefs) irrespective of how much familiar consumers were with a country‟s products (Laroche et al, 2003). Laroche et al, (2003)´s framework also suggested that product evaluations can be affected by country image structure, both at the direct and indirect levels based on the concept of product beliefs. The authors added that, when an affective element is powerful on a country image, product evaluations is directly influenced by the image at a more powerful level than product beliefs (Laroche et al, 2003). However, if a cognitive element is powerful on country image, product evaluation is directly influenced by the image at a less powerful level than product beliefs (Laroche et al, 2003).
In quite a recent study, Diamantopoulos et al, (2011) studied the relationship among country-of-origin image and brand image with regards to purchase intentions. According to the authors, it is a well-known fact that carpet is skillfully made in Turkey, yogurt in Greece and cheese in Netherland (Diamantopoulos et al, 2011). Hence, certain countries have been connected by country-of-origin with specific product categories suggesting the assumption that, outstanding performance/reputation of the countries in these particular product categories considerably influences a consumer's purchase of a brand (Diamantopoulos et al, 2011). According to the authors, consumers link country image via two attitudes as indicated below;
1. Particular capabilities in relation to a product category or an industry.
2. The more inclusive capabilities of manufacturing great brands
Figure 2.4. Types of Country-of-origin influence, source: Diamantopoulos et al (2011)
As revealed by the figure 2.4, in the cases consisting of strong product image and strong brand image, country-of-origin has a positive influence products and brands from a focal country. The figure shows Germany produces both strong reputation for automobiles and strong brands such as BWM or Mercedes. However, Turkey has a case composed of strong product-centric and weak brand centric. In other words, the country (Turkey) is short of appropriate skills for turning a certain type of well-known product into strong and famous brands (Diamantopoulos et al, 2011).