COUNTRY OF ORIGIN EFFECTS IN DEVELOPED AND EMERGING MARKETS: EXPLORING THE CONTRASTING ROLES OF MATERIALISM AND VALUE CONCIOUSNESS Piyush sharma – Hong kong polytechnic university

About the Paper and the Author JIBS – Journal of International Business Studies – vol 42 – 2011 Piyush Sharma - Department of Management and Marketing, The Hong Kong Polytechnic University, Kowloon, Hong Kong Consumer behavior and perceptions towards imported products Little research on the differences in country of origin (COO) effects on their evaluation, behavioral intentions (BIs), and actual purchase of imported products The paper introduces a new conceptual framework incorporating consumer ethnocentrism (CET), materialism (MAT), and value consciousness (VC) to hypothesize several differences in the influence of COO effects on consumers from developed and emerging markets.

About the Paper and the Author The paper addresses the following gaps in the COO literature: differences in COO effects between consumers in developed and emerging markets; the role of CET in COO effects for emergingmarket consumers; COO effects on emerging-market consumers for products from other emerging markets; the impact of COO on actual purchase behavior in both developed and emerging markets; the impact of MAT and VC on COO effects.

BI – Behavioral Intentions CET – Customer Ethnocentrism Conceptual Framework GLOSSARY COO – Country of Origin BI – Behavioral Intentions CET – Customer Ethnocentrism MAT – Materialism VC – Value Consciousness PE – Product Evaluation

The Research – Sample and Methodology employees of a large multinational firm from its offices in four countries (China, India, the UK, and the USA) e-mail to all the employees (about 10,000) in these four countries with a URL link to a web-based survey a lucky draw, with 100 gift vouchers worth about US$50 each as prizes 1752 completed questionnaires were received – a response rate of 17.5%, reasonably high for e-mail surveys

The Research – Sample and Methodology Countries chosen because two are developed markets (the UK and the USA) and two are emerging markets (China and India). All the constructs used in this study (CET, MAT, and VC) have been used and validated in prior research in all these countries. Hence these four countries provide appropriate setting to test hypotheses in this research A basic version of the questionnaire was developed in English, and with the help of Chinese and Indian graduate students was translated into Mandarin and Hindi. Another pair of Chinese and Indian graduate students translated these versions back into English. Comparison of the original English questionnaire with the back-translated versions revealed a few minor differences. These were discussed with the graduate students to resolve the differences in their understanding, and to develop the final Mandarin and Hindi versions.

Hypothesis Hypothesis 1: Consumers in emerging markets have more favorable (a) PEs and (b) BIs for products imported from developed markets, compared with consumers in developed markets. Hypothesis 2: Consumers in developed markets have less favorable (a) PEs of and (b) BIs for products imported from emerging markets than consumers in emerging markets. Hypothesis 3: Consumers in emerging markets with low CET have more favorable (a) PEs of and (b) BIs for products imported from developed markets, but there is no such difference for consumers in developed markets.

Hypothesis Hypothesis 4: Consumers in developed markets with high CET have less favorable (a) PEs of and (b) BIs for products imported from emerging markets, but there is no such difference for consumers in emerging markets. Hypothesis 5: Consumers in emerging markets with high MAT have more favorable (a) PEs of and (b) BIs for products imported from developed markets, but there is no such difference for consumers in developed markets. Hypothesis 6: Consumers in emerging markets with high MAT have less favorable (a) PEs of and (b) BIs for products imported from emerging markets, but there is no such difference for consumers in developed markets.

Hypothesis Hypothesis 7: Consumers in emerging markets with high VC have less favorable (a) PEs of and (b) BIs for products imported from developed markets, but there is no such difference for consumers in developed markets. Hypothesis 8: Consumers in emerging markets with high VC have more favorable (a) PEs of and (b) BIs for products imported from emerging markets, but there is no such difference for consumers in developed markets.

Additional Findings - Managerial Implications Consumers in emerging markets are becoming more materialistic but many of them remain quite value conscious and price sensitive. Materialism and Value Consciousness seem not to have a significant effect on perceptions on imported products for consumers in developed markets. Easier to sell products in emerging markets for both companies from developed and emerging markets. Companies from emerging markets need to invest in improving quality and brand image.

Additional Findings - Managerial Implications Companies from both developed and emerging markets when targeting each other’s market may use the following strategies> Target less ethnocentric consumers generally young, better educated and upper income level. Underplay the foreign element in the marketing mix. Use local assembly, manufacturing or value chain as much as possible. Develop localized advertising campaigns. Educate consumer via Public Relations.