Annals of the „Constantin Brâncuşi” University of Târgu Jiu, Economy Series, Issue 6/2014
THE INFLUENCE OF COUNTRY OF ORIGIN ON THE CONSUMER AND THE
PLACEBO EFFECT IN MARKETING
Drd. MURESAN LAVINIA
DRD UNIVERSITY OF WEST, FACULTY OF ECONOMICS AND BUSINESS ADMINISTRATION
e-mail: [email protected]
Dr. COSTINEL DOBRE
UNIVERSITY OF WEST, FACULTY OF ECONOMICS AND BUSINESS ADMINISTRATION
e-mail: [email protected]
Abstract
In medicine, we say that someone is under the placebo effect when their health improves after they were
administrated a simulated treatment, without any curing powers. The placebo effect was extended to marketing and in
the past several years many research studies have been made about this topic. There are many marketing factors that
have a placebo effect on the consumer.
In this article we review the existing literature about the influence that country of origin has on the consumer
and the influence of other marketing factors, such as price and brand, on the consumer from the placebo perspective.
Keywords: country of origin, consumer, placebo effect, brand, price
J.E.L. Classification: M310
1. Introduction
There are many factors that are able to influence the consumer's perception on product value. Factors such as
the design of the product, the packaging, the brand name, the advertising made for the product and the channels used for
advertising, price, country of origin and many others.
In this paper we review the literature on two subjects that have never been studied together before: the
influence that country of origin has on the consumer perception and, the placebo effect in marketing.
Also, as a next step we propose a research study in order to determine the influence of country-of-origin on the
consumer, from the placebo perspective but also to verify the influence of country of origin on the consumer in
relationship with other influence factors, such as price and brand.
2. The influence of country of origin on the consumer behavior
Country of origin is one of the main factors that determine what the consumer knows about a product. This
topic (country of origin) associated with the consumer behavior has been in the spotlight of marketing researchers for
many years. We can define the 'country of origin' effect as the positive or negative impact that the country of origin of a
product has on the way consumers evaluate the quality of a product. [1]
Consumers often use the information about the country of origin to evaluate the quality of the product. In the
study conducted by Schooler (1965) it was discovered that there were significant differences in the evaluations made for
identical products, from all points of view, except the country stated on the 'made in' label. This was the first study that
was conducted in order to determine the effect that country of origin has on the evaluation of a product. [2]
People make associations such as product - country of origin, associations that lead to the perception of a
certain level of quality of a product. This may differ from product to product, that is why the relationship between the
associations is more clearly underlined at a product category level. Many studies conducted on this subject, show that
the country-product association is used as information in regards to the quality of the product. [3][4]
People that check and search for the country of origin on a product are actually trying to confirm the quality of
a product by associations with stereotypes such as: French wines and perfumes, Swiss watches, Japanese appliances or
„ACADEMICA BRÂNCUŞI” PUBLISHER, ISSN 2344 – 3685/ISSN-L 1844 - 7007
157
Annals of the „Constantin Brâncuşi” University of Târgu Jiu, Economy Series, Issue 6/2014
German cars, convinced that products that are made in a certain country will present a higher quality. [5] Papadopoulos,
Heslop and Bamossy, notice in one of their studies that one of the factors that consumers take into account when they
plan to make a purchase is country of origin. Their study validates this for products that are specific for some countries.
[6]
Another study made by Wang and Lamb, presents the country of origin effect from the perspective of the
economic development of the countries. The authors don't make any important observation on the attitude of consumers
in regards to the country of origin but rather on the attitude that consumers show for products that are made in
developed countries and products that are made in developing countries. [7] Papadopulos and Heslop obtain a similar
result. Even though the study was conducted in 1990 they notice that in many countries in Europe (such as the
Netherlands, France, Germany, Greece and Hungary) there is a positive attitude towards products that are made in Japan
(country that, at that time, was considered as a developing country).[8] There are more positive attitudes towards
products that are made in developed countries and this was confirmed when they compared same brand cars produced in
different countries like Germany, the Philippines and Mexico. Their study shows that people were expecting a lower
price for the cars that were produced in the Philippines and they were ready to pay a higher price for the cars that were
produced in Germany. [9]
Wyer and his collaborators show in their study that the impact of country of origin on the consumer behavior
can't be fully explained as a process of quality determination. Besides its role of quality assurance, country of origin also
has a symbolic significance, it presents an emotional attachment for the consumer. [10] Fournier, observed in her study
that country of origin, links a product of national identity and this can lead to a very strong emotional attachment for
some products and/or brands. She describes the case of the second generation of Italian - American women that are very
strongly attached to Italian products, especially food products. For these consumers, made in Italy is not just a label, it
has a symbolic and emotional connotation. [11]
Botshen and Hemettsberger demonstrate, in one of their studies, that consumers link the country of origin not just with
the quality of a product but also with sentiments of patriotism, national pride and memories from vacations. [12]
3. The placebo effect in marketing
The term placebo comes from Latin and it means pleasure. This term is very well known and it is frequently
used in medicine trials. Even if there are a lot of disputes regarding the definition of the term most researchers agree that
placebo is an inactive substance that presents the same characteristics as an active substance but without and
physiological effect.
After the studies conducted by Shiv et al. (2005) we notice that the placebo effect can be seen in marketing
actions as well. For instance the price can affect the real efficiency of the product. This phenomenon got the attention of
many other researchers.
Starting from the presumption that the consumers expectations are built on day to day experience, beliefs and
expectations, these can sometimes be distorted and can influence the reality. Shiv discovered that price can influence the
expectations in regards to the quality of the product on a nonconscious level, which will affect the performance of a
product.
In their experiment they have demonstrated that the more a person pays for an energy drink that promises a
better focus ability, the more intense the performance is after drinking it. When the attention of the subjects was directed
to the price, the results have registered only a slight decrese in performance, fact that demonstrates that the placebo
effect can be present even after awareness. [13]
In the traditional economic theory, high prices have a negative impact on the consumer’s budget and as a result
price is treated as a factor with negative impact in the decision-making. But from the behavior perspective, price can be
perceived as an indicator of quality.
After Shiv study, Carmon and Ariely, Irmak, Block and Fitzsimons (2005) have conducted a study introducing
another factor - motivation. They made a test with energy drinks, placebo drinks and water. They mentioned that the
effect of the energy drink will be: pulse increase, more intense reflexes and more focus. They notice that all the effects
have been registered at the participants that were motivated to feel the effects even if they were under the placebo effect
and the participants that didn't want to feel the effects didn't feel them even if they consumed energy drinks. The authors
concluded that in order for a product to work the consumers have to want the product to work. [14]
Brands are more than simple names and symbols. Brands represent the perceptions and feelings of a consumer
in regards to a product and its performance, everything that the product or service mean to a consumer. As Kotler
suggests, the brands are in the consumers minds. So the true value of a brand will be its capacity to capture the attention
and preference of its consumers.
Another research study conducted by Fitzsimons and Charthand (2008) demonstrates that you can obtain the
placebo effect just by using the name of a brand of a product. So just by exposing the consumer to the brand that meets
the consumers desires you can obtain automated effect in the consumers behaviour. In order to demonstrate this, they
conducted a study where participants that expressed they want to be more creative have been exposed, without their
knowledge, to the brand Apple. Apple is a brand that developed its image using creativity, inovation and
„ACADEMICA BRÂNCUŞI” PUBLISHER, ISSN 2344 – 3685/ISSN-L 1844 - 7007
158
Annals of the „Constantin Brâncuşi” University of Târgu Jiu, Economy Series, Issue 6/2014
nonconformism. The study showed that all the participants that had been exposed to the brand Apple had better results
than the ones exposed, also without their knowledge, to the brand IBM. [15]
The power of the brand as a placebo is also confirmed in the study conducted by Amar, Ariely, Bar-Hillel,
Cameron and Ofir. They conducted a laboratory test using sunglasses. In the study they have used identical sunglasses
(from all points of view) the only difference was that they added a different brand name on the sunglasses’ frame. The
brands used in the trial were the prestigious and luxurious brand Giorgio Armani and a brand that is less luxurious
Mango. The participants were asked to put the sunglasses on and read a series of random words while wearing the
sunglasses. The results showed that the participants that were wearing the brand Giorgio Armani made fewer mistakes.
The researchers conclude that the brand is even able to change, not only to confirm the efficiency of a product. [16]
4. Future research steps
In the literature review that we have made so far we haven't found a lot of information on the influence that country
of origin has on the consumer behavior from the placebo effect perspective.
Based on the research made on country of origin as an influence factor on the consumer decision, we would
like to verify the influence of this factor from the placebo perspective.
The following hypotheses have been raised and will be tested in a future experiment:
• Hypothesis 1: Out of two identical products, consumers will choose the one made in an Western country.
• Hypothesis 2: Out of two identical products, consumers will report a better quality for the product made in a
Western country.
• Hypothesis 3: Out of two identical products with different countries on the made in label, consumers will be willing
to pay more for the product made in a Western country.
• Hypothesis 4: The relationship between country of origin and the preference for a product is influenced by the brand
name
• Hypothesis 5: The attitude towards country of origin is influenced by age
• Hypothesis 6: The preference for a product made in a Western country is influenced by income
• Hypothesis 7: The relationship between country of origin and the quality perception of a product is influenced by
education level
References:
[1] Lee, D., Schaninger, C., "Country of production/assembly as a new country image construct: a conceptual
application to global transplant decision", Advances in International Marketing, 1996, Vol. 7, pp. 233-254.
[2] Schooler, R. D., "Product bias in the Central American common market", Journal of Marketing Research, 1965, 2,
pp.394-364.
[3] Balabanis, G., Diamantopoulos, A., "Domestic Country Bias, Country-of-Origin Effects, and Consumer
Ethnocentrism: A Multidimensional Unfold Approach", Academy of Marketing Science Journal; Winter 2004; 32, pp.
80-85.
[4] Jagdish Agrawal, Wagner A. Kamakura, "Country of origin: A competitive advantage?", International Journal of
Research in Marketing, 16, California, 1999, pp. 255–267.
[5] Verlegh, P.W.J., Steenkamp, J.-B.E.M. PRODUCT "A review and meta-analysis of COO research", Journal of
Economic Psychology, Vol. 15, 3, pp. 32-72.
[6] Heslop, L.A., Papadopoulos, N., Bourk, M., "An interregional and intercultural perspective on subcultural
differences in product evaluations", Canadian Journal of Administrative Sciences, 1998, no.15/2, pp. 113-127.
[7] Wang, C.K., Lamb, C.W., "The impact of selected environmental forces on consumer willingness to buy foreign
products", Journal of the Academy of Marketing Science, 1983, no. 11/2, pp. 71-83.
[8] Liefeld, J., Heslop, L., Papadopoulos, N., Wall, M., "Dutch consumer use of intrinsic, country of origin, and price
cues in product evaluation and choice", Journal of International Consumer Marketing, 1996, no. 9/1, pp. 57-81.
[9] Johannson, J.K., Nebenzahl, I.D., "Multinational production: Effect on Brand Value", Journal of International
Business Studies, 1986, no. 17/3, pp.101-126.
[10] Hong, S., Wyer Jr., R., "Determinants of product evaluation: Effects of the time interval between knowledge of a
product's country of origin and information about its specific attributes", Journal of Consumer Research, 17, pp. 277288.
[11] Fournier, S., "Consumers and their brands: Developing relationship theory in consumer research", Journal of
Consumer Research, 1998, 24, pp. 439-451.
[12] Botschen, G., Hemettsberger, A., "Diagnosing means-end structures to determine the degree of potential marketing
program standardization", Journal of Business Research, 1998, Vol. 42, No.2, pp. 151-159.
[13] Shiv, B., Carmon, Z., Ariely, D., " Ruminating about placebo effects of marketing actions", Journal of Marketing
Research, 2005, Vol. XLII, November, pp. 383–393.
„ACADEMICA BRÂNCUŞI” PUBLISHER, ISSN 2344 – 3685/ISSN-L 1844 - 7007
159
Annals of the „Constantin Brâncuşi” University of Târgu Jiu, Economy Series, Issue 6/2014
[14] Irmak, C., Block, Lauren G., Fitzsimons, Gavan, J., "The Placebo Effect in Marketing: Sometimes You Just Have
to Want It to Work", Journal of Marketing Research, The American Marketing Association, Chicago, 2005, vol. XLII
(November), pp. 406-409.
[15] Fitzsimons, Gavan J., Chartrand, Tanya, L., Fitzsimons, Grainne, M., "Automatic Effects of Brand Exposure on
Motivated Behavior: How Apple Makes You Think Different", Journal Of Consumer Research, University of Chicago
Press, Cgicago, 2008, Vol. 35, pp. 21-35.
[16] Amar, M., Ariely, D., Bar-Hillel, M., Cameron Z. şi Ofir, C. "Brand names act like marketing placebos." The
Hebrew University of Jerusalem – Center for the Study of Rationality, Jerusalem, discussion paper 566 February, pp.17.
Acknowledgement
This work was cofinanced from the European Social Fund through Sectoral Operational Programme Human Resources
Development 2007-2013, project number POSDRU/159/1.5/S/134197 „Performance and excellence in doctoral and
postdoctoral research in Romanian economics science domain”
„ACADEMICA BRÂNCUŞI” PUBLISHER, ISSN 2344 – 3685/ISSN-L 1844 - 7007
160