Consumer Knowledge and Use of

County-of-Origin Information

at the Point of Purchase

John Liefeld

Professor, Consumer Studies

University of Guelph

Guelph, Ontario, Canada

Author Footnote:

John P Liefeld is Professor of Consumer Behavior, Department of Consumer Studies, University of Guelph, Guelph, Ontario, Canada. N1G 2W1. The author thanks three anonymous reviewers for their comments and suggestions.


Consumer Knowledge and Use of

County-of-Origin Information,

at the Point of Purchase

ABSTRACT

Since 1965 more than 700 papers have reported consumer ‘attitudes’ about the country-of-origin of products (COP). All of the reported studies assume that consumers acquire / know COP when choosing between available purchase alternatives and before purchase. This paper reports an investigation of this assumption. The research approach was to discover if consumers ‘know’ the COP of a product they just purchased, as they leave the cash register. It also discovered, for those consumers who know the COP of a product they just purchased, what role knowledge of the COP might have played in their choice between available purchase alternatives. The assumption that consumers acquire/know the COP when choosing between available purchase alternatives, and before purchase, is found to be untenable. Only 8% of consumers leaving the cash register knew the COP of the product they just purchased. For only 33% of these 8% (2.6% of total N), did correct awareness of the COP possibly play a role in their choice between the available purchase alternatives. These findings contradict the conclusions made in the 700+ ‘attitude’ surveys, regarding the importance and role of COP in consumer choice processes. Possible explanations of this contradiction between what consumers know at the point of purchase, and what they say in response to conventional ‘attitude’ measures in non-purchase situations, are suggested.


THE COUNTRY-OF-ORIGIN OF THE PRODUCT

The place in the world where a product is manufactured is its’ Country-of-Origin (COP)[i]. COP is an extrinsic attribute of products, (Jacoby, 1972; Olson, 1997; Zeithmal, 1988). Extrinsic attributes are external to the product. Different products may have the same extrinsic attributes. For example different products may have the same brand, price, warranty, or COP. A product can have only one COP[ii]. Different products with the same brand name may have the same or different COP. Brand names, also have a Country-of–Origin, (COB) but only one – the home country of the company which owns the brand name on the product.

PUBLISHED COP RESEARCH

The first published academic study of the importance and role of the COP of products is attributed to Robert Schooler in 1965 (Papadopoulos, 1993). The first literature review of COP research was reported by Bilkey and Nes (1982). They reviewed 25 studies, all of which employed survey research. All 25 used attitude measures as the dependent variable (DV). Not one employed product choice, in purchase situations, as the DV. All 25 used verbal / language descriptions of the independent variables (IV’s). Not one used real products as the stimulus variable(s). None of the studies first determined whether consumers acquire and use COP information in making choices. Bilkey and Nes discussed methodological limitations of COP research but did not explicitly recognize that none of the reviewed research employed behaviour DV’s in real purchase situations, with Real products as IV’s, or that all the reported research contained the implicit assumption that consumers acquire/know the COP of products when choosing and purchasing them.

Following the Bilkey and Nes review academic researchers published hundreds of studies focused on investigating the factors which moderate the COP effect and the conditions which mediate the underlying processes. A few authors recently provided evidence and argued that the extensive research in this area has provided little generalizable knowledge (Obermiller and Spangenberg 1989, Liefeld 1993, Peterson and Jolibert 1995). Yet every year many more studies are published, relying on obtrusive ‘attitude measures’ of independent and dependent variables, in non-purchase contexts, and often student samples. These hundreds of studies contain serious limitations to their external validity / generalizability. Two fundamental flaws are: (a) they assume that consumers acquire/know the COP of the products they purchase; and, (b) they rely exclusively on what consumers say (mostly students), when asked, in artificial research environments, employing obtrusive and transparent questions in which respondent attention is drawn directly to the COP information and COP as the interest of the researcher. None of the published COP research reports what consumers do, when choosing between product alternatives, or what they know about the product alternatives when they make choices in purchase situations. Despite these limitations, academic researchers conclude that ‘millions of end-consumers and industrial buyers use them (COP images), to understand and make evaluations of products” (Papadopoulos, 1993), and “The “Made-in” notion is a matter of tremendous importance in international marketing strategy, public policy making and research” (Bilkey, 1993).

Reality paints a different picture. During the last four decades imported products from low image countries, flooded the North American market. North American manufacturers shifted production to other countries, seemingly with little concern for COP image. Marketing practitioner conferences and trade shows, seldom mentioned or discussed COP as a marketing variable. Some practitioners wrote that COP images were not important in consumer product choice (Ohmae, 1989). Thus the reality of the marketplace does not jibe with the findings and conclusions of academic researchers regarding the importance and role of COP in consumer choice.

Do consumers actually acquire/know the origin of products they purchase, at the time of purchase? If they do, then COP could play a role in their choice process. If consumers do not acquire or know the COP of the product alternatives they choose between, then COP cannot be part of and play a role in their choice processes. If consumers know the COP of products they purchase, what importance / role does it play in making choices between alternatives? These questions were investigated in this research.

METHOD

No unobtrusive method exists to discover which product attribute information consumers acquire or remember, or the use consumers make of such product attribute information, when deciding which of the available product alternatives to purchase. However, it is possible, using obtrusive questioning, to obtain valid information about what a shopper ‘knows’ about a product they just purchased. In this research a ‘knowledge’ approach was employed to discover if consumers acquired or knew the COP of a product they had just purchased. Store, exit intercepts were conducted with consumers as they left the cash register with a purchase.

After obtaining consent, the interviewer first asked the consumer “When you were shopping for ______(name of product category), what did you consider or take into account?” Probes, (e.g. anything else?), were made until the consumer could not suggest any additional ‘things’ they were willing to admit they took into account in choosing the product they chose. This was the ‘unprompted’ section of the interview. It informs us of the product attributes they know or remember (or think the researcher is interested in). If the consumer did not mention anything about the COP of the purchased product, the interviewer moved to the ‘prompted’ section of the interview.

In the ‘prompted’ section of the interview the consumer was asked: “do you know where the ______(name of purchased product) was made?” If the consumer did not know (or guess at), where the product was made, they were then asked whether they “looked to see where it was made”, and if not, “why not?”

If, in the unprompted or prompted sections of the interview, the consumer identified any country or provided origin information about their purchase, they were then asked: “how do you know it was made in ______?”, and, “what does being made in ______(name of country) tell you about the product?” If a consumer said they knew and gave a country name, the interviewer then asked to read the package/box to verify the correctness of the consumer’s COP identification. This procedure identified (partially[iii]), consumers who were guessing the COP.

This cash register intercept interview was replicated at six locations in North America: University Park, Pennsylvania (N=226), Columbia, Missouri (N=203), Long Beach, California (N=200), Vancouver, British Columbia (N=200), Guelph/Cambridge, Ontario (N=219), and Halifax, Nova Scotia (N=200), a total of 1248 intercepts. The author conducted the intercepts in Guelph/Cambridge. In each of the five other locations the intercepts were conducted by graduate students. The interviews were conducted at the cash registers of stores in shopping malls, and general merchandise and hardware outlets like Walmart, Home Depot, Canadian Tire, Future Shop, etc. If the shopper had purchased more than one product they were questioned about only one of their purchases, usually the most expensive one. Thus the sample is a convenience sample of purchases and consumers. As shown in Table 1, an analysis of the proportion respondents who correctly knew the COP of the product they just purchased, by location / interviewer, reveals little difference between the six locations. Consequently the findings for all six locations are combined in the following sections.

(Insert Table 1 here)

THE CONSUMERS / PRODUCTS SAMPLED

The characteristics of the sample are shown in Table 2. Because it is a convenience sample no claim for representativeness to populations is made. On the characteristics of age, gender, education, country of birth and travel experience the sample appears to be reasonably representative of the North American consumer population.

(Insert Table 2 Here)

A wide variety of product types and brands were covered. These were grouped into categories for analysis purposes. The categories and frequencies are shown in Table 3.

(Insert Table 3 Here)

Family expenditure data in Canada and the U.S.A., reveals that approximately 80% of family expenditures are for product categories in which COP cannot play a role in the choice process; e.g., food away from home, housing, household operation, vehicle operation, public transportation, health care, personal care, education, personal taxes, personal insurance and pensions, charitable donation, etc. (See: Consumer Expenditures in 1999, U.S. Department of Labor Statistics, Report 949, Table B, page 4; and, Statistics Canada, Family Expenditures in Canada, 1996, Historical Table 2, p. 23). Approximately only 20% of total family expenditures in the U.S.A. and Canada are made in expenditure categories where some proportion of the goods available in the marketplace are imported, and thus COP could be used a a choice criterion in the choice process. For some of these categories, however, the proportion of imported to domestic is much lower than for others; e.g., foods where the great majority of food products are domestically produced and imported foods and fresh produce, account for only a small proportion of the consumer’s food dollar. Another example is private transportation, where expenditures in automobile purchase are less than costs of automobile operation over its lifetime. Thus a reasonable estimate of the percentage of family expenditures for which origin could play a role in the choice process is 20% or less of total family expenditure.

Several product categories, for which origin may be part of the choice process are not present in this sample of products: automobile purchase; imported foods; beer, wine and spirits; and large furniture / appliances items. Consequently it is estimated that the sample of products in this study covers approximately 70% of the 20% of family expenditures for product categories where COP is available and could possibly play a role in choice between alternatives.

FINDINGS

Unprompted Section

In the unprompted section of the interview only 21 (1.7%) respondents, not knowing the purpose of the study, mentioned the origin of the product as one of the ‘things’ they considered / took into account when choosing the product they had purchased. Sixteen of these had read the COP information on the packaging, one knew the (local) manufacturer of the product, one asked the salesman, and three guessed using the brand name or other clues on the package, not by reading the COP declaration. Thus only 18 / 1248 (1.4%) of these consumers had explicitly acquired COP information while shopping.

The first five mentioned ‘things’ respondents said they considered / took into account were recorded. Each mention was coded into one of 5 categories: price/cost, brand, other extrinsic, intrinsic, and miscellaneous. Table 4 presents the frequencies of these five groups for 1st through to the 5th mention.

(Insert Table 4 Here)

Intrinsic properties, (eg., color, design, features, appearance, etc.), of products dominate ‘top of mind’ mentions when consumers are asked what they considered / took into account when they were choosing between the alternatives. Price was second most mentioned and brand was a distant third. Yea-saying and socially appropriate response biases probably distort what consumers say, when asked, what they took into account in making their choice, making price and other ‘rational’ factors overstated. However, even with this response biased present, the greater importance of intrinsic factors over price and brand is a consistent finding, when consumers are in pre-purchase situations, (Zeithmal, 1988).

Prompted Section

When asked directly - “where was the ______made?”, another 81 (6.5%) respondents correctly identified the COP of the product. Thus a total of 101 purchasers (8.09%) correctly knew the COP of the product they had just purchased.

The responses made by these 101 respondents to the question: “What does being made in ______tell you about the product?”, are summarized in Table 5.

(Insert Table 5 Here)

Only 33% gave a response indicating a positive relationship between the COP and their evaluation of the quality of the product. The majority those who knew the COP of the product did not evaluate the COP in a positive way with the quality of the product, or give responses which implied that COP was a factor in their choice between the available alternatives.

Guessing

Of the 1,227 respondents, asked – “where was the ______made?” 162 (13.2%), revealed themselves to be guessing about the origin of the product (i.e. maybe _____; is it ______?) Almost all these guessers used brand name as a surrogate indicator of country of origin. After the verification product check, 118 (72.9%) were discovered to be incorrect in their guesses. Only forty four (27.2%) of these ‘guessers’ were correct in their assumption about the COP of the product they had just purchased.