Chinese Consumers’ Perceptions Of Country Design, Assembly And Parts Capabilities:
Does Country Considered Or Consumer Acculturation Matter?
Chui Yim Wong, Michael Jay Polonsky, and Romana Garma, Victoria University
Abstract
Chinese consumers are facing a diverse range of choices in regards to products produced
wholly or in part overseas or by overseas corporations based in China. This study examines
how consumers from China, both residing at home and abroad, perceived capability of
Germany, Japan, US and China in regard to three dimensions of country capabilities- design,
assembly and parts/components. The findings show that consumers have different perceptions
concerning country capabilities and that Chinese consumers residing overseas appear to have
more positive perceptions of foreign countries’ capabilities.
Background
Numerous studies have demonstrated that the country-of-origin (COO) tends to generate bias
in consumer product evaluations and purchase intentions (e.g., Kaynak et al. 2000; Au and
Sha 2003). The concept of COO is concerned with how consumers perceive products sourced
from a particular country (Chinen et al. 2000). This suggests that COO can play an important
role in the formulation of manufacturing, marketing and investment strategies for
multinational firms (Chinen et al. 2000), because the country-of-origin image can serve as a
controllable extrinsic cue in the sense that sourcing and location decisions are made by the
firm (Zhang 1996; Li et al. 2000).
Although studies of COO have been carried out for decades (Verlegh and Steenkamp 1999), a
review of existing literature reveals several limitations from past research. Firstly, the
majority of COO research have been conducted in developed countries mainly US, Canada
and Europe (e.g., Zhang 1996; Wang and Chen 2004). Studies relating to developing or nonwestern countries, especially in Asian markets, remain relatively scarce although growing in
number. Further, Ahmed and d’Astous (1999) have indicated the findings relating to western
developed countries may not necessarily apply to developing countries due to the difference
in market structures and consumer behaviour; this would be particularly true for a transitional
economy such as China. Secondly, recent research has indicated that defining COO is
becoming more complicated due to the widespread practice of global sourcing resulting in
hybrid products (e.g., Tse and Gorn 1993; Samiee 1994 and Yagic 2001). Several countries
are frequently associated with a single product, especially for products such as automobiles,
computers and white goods (Tse and Lee 1993; Jaffe and Nebenzahl 2001).
Much of the research has generally found that COO information has some influence on
consumer purchase processes. There are of course other factors that have been found to
moderate the importance of country of origin. This includes ethnocentrism - consumers’
preference for home country products (Lantz and Loeb 1996; Watson and Wright 2000) - and
consumers experience with international products and cultures (Rawwas et al. 1996; Suri and
Kwon 2002), as well as acculturation to other cultures (Parameswaran and Pisharodi 2002).
China’s “open door” policy of the 1970’s has resulted in unprecedented economic reform
(LaTour and Henthorne 1990). This includes a flood of foreign goods and investments (Li
1997; Peoples Review 2003) as well as increased exposure to western ideas (Li 1997).
ANZMAC 2005 Conference: Marketing in International and Cross-Cultural Environments
159
Chinese consumers are also increasingly travelling and studying overseas. These factors have
resulted in a broader awareness of foreign good.
This study aims to examine if differences exist in Chinese consumer perception of country
capability across three components of country capabilities, that have been examined in the
country of origin literature: country-of-design (COD), country-of-assembly (COA) and
country-of-parts/components (COP), as well as whether Chinese consumers who are based
outside China have different views to those in China. The latter variable is used as a proxy for
acculturation. We recognise that this measure of acculturation is a limitation of this work, as
there are many more sophisticated measures of acculturation, including; language spoken,
media attitudes, social participation, cultural identity, etc.
Country Capability
According to Roth and Romeo (1992), “the concept of country quality is really what makes
the COO effect take place”; while consumer perception of different capabilities drives
different countries to produce high quality products (Roth and Romeo 1992; Johansson 1993).
For example, most consumers are aware of Japan’s ability to produce sophisticated electronic
equipment and therefore consumers are likely to have a higher evaluation of Japanese
electronic products than products made in other countries (Tse and Gorn 1993). The image of
country-of-origin enables consumers to predict the likelihood that a product manufactured in a
certain country will have certain features or performance (Yu and Albaum 1999). The
increased production of hybrid products in the marketplace means that products are often
promoted as being designed in one country with components supplied by another country and
manufactured in yet other country (e.g., Chao 1993; Jaffe and Nebenzahl 2001). Therefore,
the investigation of how consumers’ perceive the capabilities of various countries needs to be
expanded to include multiple country capabilities and how they inter-relate.
Indeed, researchers have investigated the effects of various COO sub-components (e.g., Tse
and Lee 1993; Ahmed et al. 1997; Chao 1998) and found that consumers perceive
industrialized countries, i.e. Japan, US and Germany, as being superior in terms of design,
assembly and parts manufacturing capabilities and compared to newly industrialized countries,
e.g. Mexico, Indonesia and China (Insch and McBride 1998; Ahmed and d’Astous 2001). Past
research has suggested that consumers hold different perceptions of capabilities across
countries. Hypotheses 1 is:
H1: Chinese consumers’ perception of a) design; b) assembly and c) parts/components
capabilities will vary across countries being examined.
Acculturation
Acculturation can be defined as one’s culture is expected to become more and more like the
dominant majority ethnic identity from the original ethnic identity (Quester and Chung 2001).
There have been extensive studies that examine the impact of acculturation on marketing
(Burton 2000), although few focus on country of origin related issues such as country
capabilities. In many cases, acculturation looks at how consumers from one country adapt
their attitudes and behaviours of a host culture (Dion and Dion 1996, Jamal and Chapman
2000, Suri and Manchanda 2001). Several works have examined aspects of how acculturation
impacts on marketing (Burton 200, Seitz 1998, Steenkamp 2001), including issues such as
information search (Quester et al 2001), price sensitivity (Suri and Manchanda 2001),
ANZMAC 2005 Conference: Marketing in International and Cross-Cultural Environments
160
shopping behaviour (Gentry et al. 1995, Jamal and Chapman 2000, Ownbey and Horridge
1997, Xu et al. 2004) and personal influences (Kim and Kang 2001). It could be anticipated
that adaptation of “foreign” views would also impact on consumers’ perceptions of countries’
design, production and assembly capabilities, and thus modify purchases (Ownebey and
Horridge 1997, Xu et al. 2004). Such affects would of course possible be moderated by
attitudes towards home and host countries in general, similar to ethnocentrism (Yagci 2001),
although this is not included within this study. Hypothesis 2 states:
H2: Consumers, who have been acculturated (i.e. living overseas), will have different
perceptions of a) design; b) assembly and c) parts/components capabilities to consumers who
have not been acculturated,
We recognise that categorising consumers as acculturated or not, based on their residing in a
foreign country or not is an over simplification and thus a potential limitation of the research.
However, we suggest that those studying overseas would be “receptive” to trying new
products and new ideas, which is one core component of acculturation (Schiffman et al. 1981).
Methodology
To measure country capability in regard to the three COO dimensions, Insch and McBride
(1998) 14 items have been used that evaluate design, assembly and components/parts
capabilities. The items used to evaluate China, Germany, Japans and US capabilities to
produce durable goods (e.g. car or television) with respect to design, manufacture/assembly
and parts/components quality were measured on 7-point interval scales ranging from 1 to 7.
Past research indicates that the COO affects tend to be product specific, while durable goods
are likely to be affected by the source of origin (e.g. Liefled 1993; Okechuku and Onyemah
1999). The rational for selecting these foreign countries is because car sales in China
predominantly come from brands linked to these countries (Mu 2001, TRI 2003), with China
being included as consumers “home” market products. As was discussed earlier, acculturation
was defined based on where the sample was located, with those outside China being
categorised as acculturated, which has been identified as a potential limitation of the research.
Data collection
A self-completion questionnaire was used to collect data. Chinese students studying a range
of English and university programs in Australia were selected for the acculturated group of
consumers. Approximately 150 surveys were distributed to these students and 133 usable
completed surveys were collected. The non-acculturated sample comprised university
students studying in China, through a program operated by an Australian university. This
resulted in 283 returned surveys, with 272 being useable. Studies have reported there is no
difference in responses between students and actual consumers (Liefeld 1993; Samiee 1994)
and thus this is not a limitation of this work.
Analysis
MANOVA was used to determine if there are any variations in perceived capabilities based
on the country being evaluated (China, Germany, Japan and the US), whether the respondent
is acculturated (in Aus.) or not (in China) and the interaction between these two variables. We
then examined where specific differences occur using an evaluation of paired comparisons of
ANZMAC 2005 Conference: Marketing in International and Cross-Cultural Environments
161
perceived capability for each component between countries with a Bonferroni adjustment to
compensate for multiple comparisons. In addition, we also examined whether differences in
perceptions of capabilities exist for each component within each country based on whether the
respondent is acculturated or not.
Table 1. Summary of MANOVA Results: The impact of country, acculturation and
the interaction **Statistically Significant (p < .05)
Country
Factor
(Capability)
Design
Assembly
4661.858
3
1553.953
80.264
.000**
Parts
4657.662
3
1552.554
139.890
.000**
Acculturation
Design
747.186
1
747.186
15.717
.000**
Assembly
480.885
1
480.885
24.838
.000**
Parts
203.784
1
203.784
18.362
.000**
Country *
Design
690.510
3
230.170
4.842
.002**
Acculturation
Assembly
314.875
3
104.411
5.421
.001**
Parts
121.232
3
40.411
3.641
.012**
Source
Type III Sum
of Squares
21490.683
df
Mean Square
F
Sig.
3
7163.561
150.690
.000**
Table 2. Summary of mean values for each dimension in both groups of Chinese respondents
(Sig. at p<.05 with appropriate Bonferroni adjustment, N.S. = Not Significant)
Dimensions
(Acculturation
paired t-tests)
Sample
Acculturated
or not
Design
Capability
No (China)
Yes
(Australia)
T-test
Assembly
Capability
No (China)
Yes
(Australia)
T-test
No (China)
Parts/Components
Capability
Yes
(Australia)
T-test
Mean
China (a)
Mean
Germany
(b)
Mean
Japan (c)
Mean US
(d)
Significant
Country
Comparisons
29.3272
36.8088
36.9706
38.0037
ab, ac, ad, bc
29.4060
37.6692
40.7368
39.0827
ab, ac, ad
N.S.
N.S.
Sig.
N.S.
17.6507
21.5735
19.6176
20.5551
17.2632
22.9624
21.7594
22.0526
N.S.
Sig.
Sig.
Sig.
12.4779
16.7436
15.1176
15.7500
12.3158
17.6541
16.5714
16.5714
N.S.
Sig.
Sig.
Sig.
ab, ac, ad
ab, ac, ad,
bc, bd
ab, ac, ad,
bc, bd
ab, ac, ad,
bc, bd
Results
Table 1 reports the MANOVA results, which identify that Chinese consumers’ perception of
each of the components of country capability- design, assembly, and parts components –
statistically differ based on the country being examined, whether respondents are acculturated,
as well as the interaction between country being examined and acculturation. The results
suggest that the country under consideration and acculturation appear to impact on views in
regards to the three components. In addition, there is a statistically significant interaction
between country examined and acculturation.
ANZMAC 2005 Conference: Marketing in International and Cross-Cultural Environments
162
In Table 2 paired comparisons between the each capability across countries are reported as
well as whether there are statistical differences between the acculturated and non-acculturated
respondents. The Bonferroni adjustment was used to compensate for multiple comparisons
and the required significance level reduced from p<.05 to p<.0125 for the comparisons
between the Chinese and Australian respondents (i.e. .05/12) and from p<.05 to p<.0.003 for
the comparisons between the four “supply” countries within a respondent group (i.e. .05/18).
There are differences in how acculturated respondents view capabilities in regard to design (1
out of 4 countries), assembly (3 out of 4 countries) and parts (3 out of 4 countries). In all
those cases Chinese respondents in Australia have more positive views than those in China.
An examination of comparisons of how respondents perceive countries indicates that both
acculturated and non-acculturated respondents view China least positively. This supports the
view that Chinese consumers display unfavourable rating for their home country in terms of
product quality and country image but favourable stereotyping of products from developed
countries (LaTour and Henthorne 1990; Zhang 1996; Li et al. 2000).
Discussions and Conclusions
Our findings suggest that there are differences in views of country capabilities. This seems to
be influenced by whether a consumer is acculturated to foreign environments. Thus, we
cannot reject H1 and H2. It may be that exposing consumers from China to westernised
customs or political ideologies influences how they view products produced in China and
foreign countries. This is consistent with Johansson’s view (1989) that more information and
experience with a country will impact on how individual view its products. This might
explain why acculturated Chinese respondents were more positive about foreign countries’
capabilities, although they were not always less positive about China’s capabilities. This later
finding might suggest that some of those overseas seek to hold on to their Chinese identity,
which has also been found in past research (Schiffman et al. 1981).
Based on our research findings, it is suggested that a closer contact or direct interaction with
other countries might change the perception of country image of some Chinese consumers.
Although other research suggests that this “shift” in thinking takes time (Dion and Dion 1996;
Chung and Pysarchik 2000), it may have a more significant impact on consumers
acculturating to cultures significantly different to their own. Such changes in views may then
translate into shifts in consumer behaviour as well, i.e. a greater preference for specific types
of ‘foreign’ goods. As Chinese consumers are exposed to more western ideas, it would seem
that there would be increased potential to leverage “foreign” involvement. Hence, there will
possibly be an ongoing preference for non-Chinese products. The specific countries to be
leveraged will likely depend on the perceived capabilities and there may be a greater
preference for western developed countries.
There are several limitations with this work. Respondents were university students enrolled in
Australian educational programs and thus the non-acculturated sample might be positively
disposed to foreign products (at least education). Acculturation was based on location of the
respondent rather than more complex measures related to cultural assimilation as has been
suggested in the literature. Other variables could have been included such as ethnocentrism,
which would also theoretically impact on how consumers view their own and other countries.
Lastly, we did not explore generalised purchase intentions, which one might anticipate would
be affected by perceptions of country capabilities.
ANZMAC 2005 Conference: Marketing in International and Cross-Cultural Environments
163
References
Ahmed, S. A., and d'Astous, A. (2001). Canadian consumers' perceptions of products made in
newly industrializing East Asian countries. International Journal of Commerce &
Management, 11(1), 54-81.
Ahmed, A., and d'Astous, A. (1999). Product-country images in canada and in the People's
Republic of China. Journal of International Consumer Marketing, 11(1), 5-22.
Ahmed, S. A., d'Astous, A., and Lemire, S. (1997). Country-of-origin effects in the US and
Canada: Implications for the marketing of products made in Mexico. Journal of International
Consumer Marketing, 10(1/2), 79-92.
Au, A. K. M., and Sha, Z. Q. (2003). Location and souring impacts on the country-of-origin
effects on Chinese consumers: A Case in Guangzhou. Journal of International Marketing and
Marketing Research, 29(2), 69-76.
Burton, D. (2000). Ethnicity, identity and marketing: A Critical review, Journal of Marketing
Management, 16: 853-877.
Chao, P. (1993). Partitioning country of Origin Effects: Consumer evaluations of a Hybrid
Product. Journal of Internaitonal Business Studies, 24(2), 291-306.
Chao, P. (1998). Impact of Country-of-Origin Dimensions on Product Quality and Design
Quality Perceptions. Journal of Business Research, 42(1), 1-6.
Chinen, K., Jun, M., and Hampton, G. M. (2000). Product Quality, Market Presence, and
Buying Behavior: Aggregate Images of Foreign products in the US. Multinational Business
Reveiw, 8(1), 29-38.
Chung, J. E., and Pysarchik, D. T. (2000). A model of behavioral intention to buy domestic
versus imported products in a Confucian culture. Marketing Intelligence and Planning, 18(5),
281-291.
Dion, K. L., and Dion, K. K. (1996). Chinese Adaptation to Foreign Cultures. In B. Michael
(Ed.), The Handbook of Chinese Psychology (pp. 457-478). Hong Kong: Oxford University
Press.
Dinnie, K. (2004). Country-of-origin 1965-2004: A literature review. Journal of Customer
Behaviour, 3, 165-213.
Ettenson, R., and Gaeth, G. (1991). Commentary consumer perceptions of hybrid (bi-national)
products. The Journal of Consumer Marketing, 8(4), 13-18.
Gentry, J.W., Jun, S. and Tansuhaj, P. (1995). Consumer acculturation processes and cultural
conflict: how generalizable is a North American model for marketing globally? Journal of
Business Research, 32 (1), 129-139.
Insch, G. S., and McBride, J. B. (1998). Decomposing the country-of-origin construct: An
empirical test of country of design, country of parts and country of assembly. Journal of
ANZMAC 2005 Conference: Marketing in International and Cross-Cultural Environments
164
International Consumer Marketing, 10(4), 69-91.
Jaffe, E. D., and Nebenzahl, I. D. (2001). National image and competitive advantage: The
theory and practice of country-of-origin effect. Demank: Copenhagen Business School Press.
Jamal, A. and Chapman, M. (2000). Acculturation and inter-ethnic consumer perceptions:
Can you feel what we feel, Journal of Marketing Management, 16: 365-391.
Johansson, J. K. (1993). Missing a stategic opportunity mangers' denial of country-of-origin
effects. In N. Papadopoulos and L. A. Heslop (Eds.), Product-Country Images: Impact and
Role in International Marketing (pp. 77-115). NY: International Business Press.
Kaynak, E., Kucukemiroglu, O. and Hyder, A. S. (2000). Consumers' country-of-origin (COO)
perceptions of imported products in a homogenous less-developed country. European Journal
of Marketing, 34(9/10), 1221-1241.
Kim, Y.K. and Kang, J. (2001). Effects of Asian-Americans ethnicity and acculturation of
personal influences. Journal of Current issues and Research in Advertising, 23(1). 43-53.
Lantz, G., and Loeb, S. (1996). Country of origin and ethnocentrism: An analysis of Canadian
and American preferences using social identity theory. Advances in Consumer Research, 23,
374-378.
LaTour, M., S., and Henthorne, T.L. (1990). The PRC: An empirical analysis of country of
origin product perceptions. Journal of International Consumer Marketing, 2(4), 7-36.
Li, Z. G., Murray, L. W., and Scott, D. (2000). global sourcing, multiple country-of-origin
facets, and consumer reactions. Journal of Business Research, 47(2), 121-133.
Li, C. (1997). China: The Consumer Revolution. Singapore: John Wiley and Sons.
Liefeld, J. (1993). Experiments on country-of-origin effects: Review and meta-analysis of
effect size. In N. Papadopoulos and L. A. Heslop (Eds.), Product-Country Image: Impact and
Role in International Marketing (pp. 117-156). N.Y.: International Business Press.
Mu, Z. (2001), Race is on for China’s car market, Beijing Review, viewed 5 May 2003, at
http://www.bjreview.com.cn/2001/CoverStory/FM200109c.htm
Okechuku, C., and Onyemah, V. (1999). Nigerian consumer attitudes toward foreign and
domestic products. Journal of International Business Studies, 30(3), 611-622.
Owenbey, S.F. and Horridge, P.E. (1997). Acculturation levels and shopping orientations of
Asian-American consumers. Psychology and Marketing, 14(1): 1-18.
Parameswaran, R. and Pisharodi, R. M. (2002), Assimilation effects in country image
research. International Marketing Review, 19(3), pp.259-278
Peoples Review (2003), China to establish new economic record by 2020, 18-24 September,
viewed 5 November 2003, at http://www.yomari.com/preview/2003/09/18092003/prchin.htm1
ANZMAC 2005 Conference: Marketing in International and Cross-Cultural Environments
165
Quester, P. G., and Chong, I. (2001). Validating acculturation models: the case of the
Australian-Chinese consumers. Journal of Consumer Marketing, 18(3), 203-218.
Quester, P.G. A. Karunaratna and I. Chung (2001) Australian Chinese consumers: Does
acculturation affect consumer decision making. Journal of International Consumer Marketing,
1391): 7-28.
Rawwas, M. Y. A., Rajendran, K. N., and Wuehrer, G. A. (1996). The influence of
worldmindedness and nationalism on consumer evaluation of domestic and foreign products.
International Marketing Review, 13(2), 20-38.
Roth, M. S., and Romeo, J. B. (1992). Matching product categeory and country image
perceptions: A framework for managing country-of-origin effects. Journal of International
Business Studies, 23(3), 477-497.
Samiee, S. (1994). Customer evaluation of products in a global market. Journal of
Internaitonal Business Studies, 25(3), 579-604.
Schiffman, L.G., Dillion, L.W. and Nguman, F.E. (1981). The influence of subcultral and
personality factors on Consumer Acculturation, Journal of International Business Studies (fall)
137-143
Seitz, V. (1998) Acculturation and direct purchasing behavior among ethnic groups in the US:
Implications for business practitioners, Journal of Consumer Marketing, 15(1). 23-31.
Steenkamp, J.B.E.M (2001). The role of national culture in international marketing research,
International Marketing Review 18(1): 30-44.
Suri, T., and Kwon, I. W. G. (2002). Globalization and reluctant buyers. International
Marketing Review, 19(6), 663-680.
Suri, R and R.V. Manchanda (2001). The effects of acculturation on consumers’ sensitivity to
prices. International Journal of Consumer Marketing, 13(1). 35-56.
TRI – Topology Research Institute (2003), Focus the trend of it industry and market in China,
March 2003, China
Tse, D. K., and Gorn, G. J. (1993). An experiment on the salience of country-of-origin in the
era of global brands. Journal of International Marketing, 1(1), 57-76.
Tse, D. K., and Lee, W. N. (1993). Removing negative country images: Effects of
decomposition, branding, an product experience. Journal of International Marketing, 1(4), 2548.
Wang, C. L., and Chen, Z. X. (2004). Consumer ethnocentrism and willingness to buy
domestic products in a developing country setting: testing moderating effects. Journal of
Consumer Marketing, 21(6), 391-400.
Watson, J. J., and Wright, K. (2000). Consumer ethnocentrism and attitudes toward domestic
ANZMAC 2005 Conference: Marketing in International and Cross-Cultural Environments
166
and foreign products. European Journal of Marketing, 34(9/10), 1149-1166.
Xu, J., Shim, S., Lotz, S. and Almeida, D. (2004). Ethnic identity, socialization factors and
culture-specific consumption behaviour, Psychology and Marketing, 21(2): 93-112.
Yagci, M. I. (2001). Evaluating the effects of country-of-origin and consumer ethnocentrism:
A case of a transplant product. Journal of International Consumer Marketing, 13(3), 63-85.
Yu, J., and Albaum, G. (1999). Effects of the change of sovereignty on consumer
ethnocentrism and product preference in Hong Kong. Journal of Euromarketing, 8(1/2), 63-82.
Zhang, Y. (1996). Chinese consumers' evaluation of foreign products: the influence of culture,
product types and product presentation format. European Journal of Marketing, 30(12), 50-69.
Verlegh, P. W. J., and Steenkamp, J. E. M. (1999). A review and meta-analysis of country-oforigin research. Journal of Economic Psychology, 20(5), 521-546.
ANZMAC 2005 Conference: Marketing in International and Cross-Cultural Environments
167