CB6 6th Edition by Barry Babin,Eric Harris

Exercise 4

Born or Reinvented in the "Foreign" Land? Examining Brands and Their Country of Origin
Written by Aditi Grover, Plymouth State University
Consumers make choices while considering the expected value they would derive from products and services. Companies likewise seek to enhance the value of their product offering while considering a variety of factors that might guide consumer decision making.
Among the various factors known to play a role in consumer decision making, country of origin-where a certain product or brand was manufactured-is seen to play an important role at least under some circumstances. Research has shown consumers might choose brands manufactured in their own country over the same brands manufactured elsewhere. This preference towards products manufactured within one's own country, called consumer ethnocentrism , may be strong enough to persist regardless of price and quality.1 Furthermore, this phenomenon has been observed not only within the United States but across the globe-in Africa, France, and China, among other regions. Diverse factors may drive people's consumer ethnocentrism. For example, in 2011 the ABC World News with Diane Sawyer series "Made in America" tried to promote products made 100% within the United States. According to ABC News, "Economists say that if every one of us spent an extra $3.33 on U.S.-made goods every year, it would create nearly 10,000 new jobs in this country."2 Note, however, the preference towards products from one's home country does not automatically mean animosity towards products from other countries.
Even though data suggests that some consumers might show a preference-overt or covert-towards products manufactured in their country of origin, the question arises whether consumers possess the accurate knowledge of where a product or brand is manufactured, or where the brand originated. For example, consider the famous chocolate hazelnut spread Nutella: did the brand originate in the United States? No, the Nutella spread was born in the 1940s in northwest Italy. How about L'Oreal? How many of us know that BlackBerry is a Canadian company? These examples demonstrate that even though individuals might prefer brands manufactured in their country of birth, consumers might not possess the knowledge to identify a brand's country of origin accurately. Researchers have defined consumers' ability to correctly identify the countries of origin of well-known brands as Brand Origin Knowledge, or BoK.3
Table 1 lists selected brands from "2011 Ranking of Top 100 Brands," developed by Interbrand-the world's leading brand consultancy-alongside the brand's country of origin. Examine the table to test your BoK (or lack thereof). Visit Interbrand's website for a complete list of the top 100 brands (www.interbrand.com/).
As consumer behavior students, it would be helpful to further understand how BoK might vary from consumer to consumer, especially if such information makes a difference in consumers' decision making: Would BoK be higher for people who are more educated (versus less educated)? Could BoK vary depending on the demographic factors such as age and gender? Could the extent to which a consumer has traveled across the globe or been exposed to diverse brands be yet another factor? Consider Ms. Sandler, a citizen of the United States and a top executive at SAP, the German firm. She drives a Ferrari and shops only at Cartier for her jewelry and Armani for her clothing, while carrying her cash in her favorite Louis Vuitton bag. She likes to party with friends while sharing a drink of Corona before a

final drink of Nestlé's instant coffee. Would such a consumer be more likely to have higher or lower BoK?
While the level of knowledge about the origin of a brand might be attributed to several factors, an important one could be the length of time a "foreign" brand has existed within the United States. This might significantly alter the extent to which it is considered foreign. For example, if we trace the history of Adidas, the German sporting goods company founded in 1948, we learn that the company has had an interesting story as it traversed from Germany into other countries of the world. Even though companies such as Adidas can successfully and seamlessly surpass the preference of products manufactured in one's own country (also known as the country-of-origin effect), it might not always be the case.
Characteristics of certain products might be so inextricably mapped onto a consumer's country that it might be hard to ignore the brand's country of origin while making a consumption decision. For example, consider wine: do people generally prefer to buy wine from France or from the United States? France's history of wine-making is at least as old as the Roman Empire, and France has almost always held the title of the world's largest producer of wine. In a related vein, the United States is known for its edge in Internet services and electronics, for it gave rise to global powerhouses such as Google, Apple, and Amazon. Within the realm of brand and its country of origin, when consumers demonstrate preference for products that map onto the competitiveness of the country in which they originate, it may be referred to as "product ethnicity." Therefore, when product ethnicity is taken into account, consumers might choose to ignore their ethnocentric values while making consumption decisions.
Furthermore, it will be important to see how one brand might be showcased differently in various countries of the brand's presence. For example, a KFC that one sees in the United States has a much different menu offering than does a KFC in China. As another example, consider Wrigley's, the chewing gum. Examining how this brand might be marketed differently in the United States versus in Europe would highlight how the same brand might employ different marketing strategies. Companies analyze varied dimensions (such as culture and corporate regulations) of a country before launching a product in foreign locations. However, the core fundamental lesson of consumer behavior remains consistent around the globe: to be successful, companies need to ensure that the product offering meshes well with consumers' needs and with what they value.
Your textbook refers to the concept of perceptual maps. Construct a perceptual map using the following two dimensions: (i) product ethnicity (low vs. high), and (ii) level of BoK (low vs. high). Choose at least ten brands or product categories to represent on the map. You may use the list of brands/categories available at the Interbrand website to populate a list for the map. Use the information from question 3 to identify the average level of knowledge of product ethnicity and extent of BoK.