‘Country-of-Origin’ Effect and Consumer Decision-making

Abstract

The association between ‘place of origin’ of a product and its effect on consumer preference has been in existence and researched for long. The country-of-origin effect is created in the minds of consumer from individual’s knowledge, experience, exposure and inclination towards a particular country. It helps in reducing cognition load in consumer decision-making by becoming a proxy for quality, reliability and acceptability of products originating from a specific country. The phenomenon is identified by researchers in different contexts and levels, leading to many concepts and definitions. There are many product-specific factors that contribute to the generation of country-of-origin biases along with moderating factors influencing the effect. In modern hybrid products, with distributed locations of production, it has become more complicated with differences in brand/country of the brand, country of design, country of parts and country of assembly and so on. However, the importance of the country-of-origin effect is still a reality as the consumer uses these cues in product differentiation.