Consumer Buying Decision w.r.t. Country of Origin Effects

Abstract: In a Covid-19 world more companies overloaded with new information that places importance of information on the Country of Origin of Brands in daily decisions in order to purchase to minimize the uncertainty today. According to research the brand power and value lies in hands of country in which a brand is based, designed and manufactured as compared to traditional choices. It is challenging to understand the actual meaning of Country of Origin, i.e. where the brand originates from. There are multiple reasons for these complexities today, like the country of product design management, the country where this product is manufactured and that too further in another country, for the country in which the brand is based due to cultural ties to this fourth country but this third country is using the raw materials and equipments and other resources that have been decisively sourced from a number of other countries which can be called as fifth, sixth or seventh country and the word does not end here . It is vital to know and to understand deeply about which origin component is most crucial factor for consumers who are looking for buying because the product or brand or service for product made in their own country. Four hundred and fifteen adults, drawn from six locations in NCT of India, participated in this research stud. The aim was to explore the effect put in markets due to the discrepant perceptions of various Indian population and then how these different effects cause the bigger joint impact w.r.t. current situational environment in its context sensitivity towards the varied behavior. The aim of this research is to understand the consumer perception towards the purchase of certain products because of its country of origin. Survey method was used in the form of a structured online questionnaire in order to collect responses from four hundred and fifteen people residing in parts of NCT. The findings of research tends to make us understand if there is impact of CoO on the changed purchase behaviour and how much a respondent can be foreseen to make changes in his/her buying pattern and behavior. The findings also showed that there are seven different factors that have major impact on purchase by CoO and also consumers are shifting their buying behaviour due to being self-committed and to achieve higher positive goal for the society he lives in. from disabling to enabling, a person was likely to shift towards more positive behavior.

Keywords: Country of Origin (CoO), Consumer purchase factors, Brand Value, packaging & labelling, sustainable competitive advantage.

Introduction & Review

Countries in the world are in neck-to-neck competition with each other for the share of markets and brand equity. The case is similar with organizations and the role of their host country in overcoming the entry barriers into other nations. Even today, the global branding has been a success because of support from Country of Origin (CoO) [19-24]. This can be provided by various ways and means like investments, agreements, Exim policies, etc and in return these brands contribute heavily towards growth and image of their specific CoO. It is challenging today for an average customer or consumer to actually know where the particular brand originates from because it’s not just the name of CoO but also other multiple factors involved [25-31]. Hence, a brand can be perceived from being originated from a particular country but it could have been either designed at another location in another country, further the production and manufacturing of this brand could be done in another country (makes it the third country) [48-53]. It will not be an exaggeration to know that this third country has strong political, economic, cultural or technological tie-ups with

another country. Hence, the third country is bound to use the resources from fourth country [54-61]. The point here to take is that it is upon the CoO to make its nationals understand if the county of origin is their country and upto what extent the revenues help in making. As per a research by a well-known agency, the brand does have a “Nationality”, and this is the most important part conceived and perceived by the customers across the globe [62-69]. It was found that this patriotic or at-home feeling is above all other forms affecting the purchase decision of the customer [70-74]. It can be said that product attributes, place of manufacturing or other economic ties are put less importance while buying products of that particular brand [75-81]. Put in marketing terms, w.r.t. this research, the “Made in India” has the highest competitive advantage. It is surprising that global marketplace is facing intense problems to ascertain a “sustainable competitive advantage” [82-90]. The face of markets has turned to rat race to win in exports and global image, as compared to the brands own deflating domestic image. This can be cured by brands not losing their image as of where they were born. Consumers discriminate against the foreign products and tend to keep away from products or brands that have originated out of their home country [91-94]. The buying pattern could be positive or negative, depending upon various fundamental factors which this research focuses upon. As an example, Italian clothes are perceived as high street high fashion, similarly for Japanese cars in comparison to Russian cars, yet these deep orientations built in people as their beliefs or part of cultural make-up may be “ False Stereotypical Opinions” [95-98] for many of the customers. These opinions have built a momentum towards accepting the change towards “New Global is Local”. Stereotypical Opinions also depend upon the product category and price range within that product category over a period of time; country of manufacturing being inside or outside of CoO; or originating countries capability and resources to perform to the best in a specific sector of Industry [99-104]. From the researches it is evident that there is a dramatic difference between what we call as a global product or brand or service, than how we see a global organization. The origin can succeed as well as precede the image of brand in international marketspaces. Countries like India, post Covid-19 are actually trying to makeover and transform the products into brands by providing improved business scenario at their CoO i.e. India [105-112]. Research indicates sharp diversification and decentralization by the governments in order to cultivate a sense of pride in owning Indian goods. This culmination of pride for own country has influenced the consumer purchase decisions , as seen through the digital transformation and sales revenues. The clarity in packaging towards such relevant details on CoO as well as the atheneite on quality and standardization of products have created and initiated momentum towards value of products which are made in India [113-117]. This has led to successfully combat negative CoO, if any and trying to change perceptions over time by sustainable marketing strategies that particularly reinforce upon the plus factor. Those characteristic features of a product that serve as “surrogate for product quality, performance, reliability, prestige and other product attributes” are called the Country of Origin effected. It is both tangible and intangible; hence accurate as well as direct evaluation methods are not possible to implement. The awareness and knowledge with respect to CoO is also gradually increasing [1-7]. Indian customers today are moving to become more and more conscious when it comes to purchasing brands based on their CoO [8-12]. The researches have analysed that there is a quick growing need from the country’s administration to provide awareness and exposure towards the importance and pertinence to read the labelling information on the packaged good [13-18]. The studies and researches have attempted to describe and explore the factors responsible for buying decisions based on the products’ country of origin [32-39]. The study uses survey method of collecting data, after thorough secondary review of literature [40-47]. India needs to harness its competitive advantages in order to build a stronger Made in India Branding strategy work. The various significant factors that can help in attaining this faster depend upon the catalyst/ stimulus provided [48-54]. As said “Familiarity with a country's products,

shopping, demographics and psychographics affect perceptions” [55-56]. It has been a fact finding exercise through various research papers that the foreign brands in India improve the brand image of their home country as well. Apart from achieving this, the individual organizations of originating country of brand has to do independent and smart work to reciprocate this strength in the nation [57-64]. Perceived notions about country of manufacturing provide negative as well as positive influence on the purchase decision; it has been found after immense research that customers do get affected by the categories as “lesser developed country” or “more developed country”, the former of which products are considered riskier of lower quality than the latter in which products are manufactured [65-73]. The customers from developing country like India, especially in North, classify and rate their own products inferior;as compared to its developed counterparts. This trend is seen going more for the brands in which usage of technology is the most diffused issue to consider for purchase [74-79]. The marketers, in order to push brands have made consumers exposed to increased number of products, brands, services, extensions and their variants in the offered line [15-18]. As of today it has been already established by various studies that [28-35] perceptual complexity in cognitive behaviour is collateral and simultaneous with price consciousness. Hence, if the brands of the respective CoO do not work-up to the competition in terms of brand equity and brand value, also taking care of standardization which is authenticated through the various government bodies on quality related aspects, then they can not expect rise in revenues and brand identity only based on CoO [93-94]. The country of origin has already a competitive advantage of carrying a positive identity and image of the home brand. Further, the governance is needed on at least a national scale in order to strengthen this positive brand lead; which could be attained by a holistic strategical and multi-disciplinary routes by the government by promoting the typical strengths and opportunities of being and buying local [95-104]

Research Method

The study largely attempts to understand and find out about the importance customers place to the packaging and labelling of a product when going shopping. It has been not only the different parts of packaging and labelling, but also the impact, if any, on the customer upon buying that particular brand and the extent to which the customer goes on reading the label information. Along with other crucial attributes, the researchers tried to explore the effect and emphasis placed on the Country of origin of that brand. The geographical unit if study had been the national capital territory (NCT) of India. Survey was made online using a structured Questionnaire sent online to 700 respondents, as a result of out of which 415 responses were obtained. The respondent profile comprised of customers shopping for household products online. These were a mix of genders i.e. men and women. Due to the nature of items purchased, the sample was found to be , skewed as towards women. In order to avail the information in detail, researchers used both Qualitative as well as Quantitative study and a diverse sample from urban locations in Noida, Greater Noida, Ghaziabad, Faridabad, Gurgaon and Delhi were chosen. The research methodology used had been both descriptive and exploratory. Sample unit were reduced to 415. This study focused on “structured approach” for the data analysis as well, by usage of bar charts, histograms and the frequency distributions that occurred. The survey had been conducted online and the responses of 415 respondents had been tabulated, coded and analyzed using SPSS 21 software. After carefully studying the secondary literature in depth, the research study needed to be focused on core objectives and accordingly the hypotheses that had been coming to be developed had to be in prime related to the packaging and labelling information especially w.r.t. the country of origin and its affect on the purchase patterns of the chosen samples for this research study. Further, the extent of the relationship that occurred was used to analyze and conclude in order to present the findings of the research study. It can be concluded that total 700 questionnaire were sent to reach out to chosen

sample respondents by way of using the convenience method od sampling. It was observed that the response came from 415 respondents and rest of the questionnaires were not usable for the analysis as per objectives of this research. The analysis of data collected from 415 respondents was made. The researchers chose to use the statistical tool : Correlation and Regression methods of analysis , and found out the level of relationship that is significant between the chosen variables below and the affect on consumer picking up the chosen brand as well as the impact of each variable on the purchase decision of customer. Researchers studied the following aspects as discussed broadly:

▪ Significance of Package & Label Attribution▪ Relationship with Buying Behaviour▪ CoO & Purchase Action

By taking the above into consideration, the researchers formulated the following hypotheses in order to find the significance and impact of various variables chosen. These had been put to test by using desired data analysis tools i.e. Correlation and Regression analysis:

DecisionB

uyingConsumer

H1: Package & Label Design Colour

H2: Package & Label Font & Background

H3: Package & Label Material

H4: Package & Label Level of Information

H5: Package & Label & CoO Emphasis

H6: Package & Label Print Innovation

Figure:1 (Source: Author’s own)

The aim of research was to find out what buyers look for in pieces of information provided by packaging and labelling and how much time they are ready to invest for it. Further, what is the importance of Package & Label Design Colour, Package & Label Font & Background, Package & Label Material, Package & Label Level of Information, Package & Label & CoO Emphasis, and Package & Label Print Innovation. It was important to understand the order of significance of font colour, font style, font size,

the languages, the layout, contrast used, information provided has been significant or not, and how consumers respond to labels w.r.t. their segmentation variables. Last but not the least, the researches tried to find out the impact that the CoO can make on the purchase. The online survey method used had well-structured, orderly , arranged , closed ended series of questions that could make the researchers understand how the consumers specifically behave when it comes to online grocery and home shopping. In order to calculate and secure the correct size of respondents from the population, the following formula was applied:

Figure2: Source [102]

From above, “n is the sample”, “N is the population” and “e is the level of precision”; hence the number of respondents taken were 700 and the method had been the usage of non- probability sampling method. The “reliability and validity analysis” were evaluated using the Cronbach Alpha as the standard phenomenon, which has been presented in the data analysis and findings part. It was seen that the response rate had been 98.3% and the analysis presented through series of bar graphs, charts and histograms along with the tests of correlation and regression applied as presented earlier. First and foremost, it was found out that the sample comprised of more females than males due to the nature of purchase of products or brands. Hence, the female respondents with 59.55% ; 40.45% male responses were obtained. Reliability analysis was done. This was required in order to test the consistency of statistical value that is achieved for Cronbach’s Alpha and it was was 0.898; therefore: since the value of coefficients are above 0.6 which is 0.898; the researchers found the sample data as not only reliable but consistent. In the Table 1 given below, consistent as well as reliable. As discussed, the usage of nonprobability sampling (convenience sampling) had been used by the researcher.

Table 1 : Reliability statistics

_________________________________________

Cronbach’s Alpha N of Items

0.898 415

________________________________________

Data Analysis & Interpretation

In the present research study the raw data procured from 415 respondents had been analyzed in order to attain the desired objectives of research; researchers implied the various tests that were relevant to Data was analyzed using Correlation to determine the relationship between packaging attributes and consumer buying decision behavior. Regression analysis was also used to determine the predictive value of six packing attributes and consumer buying decision behavior respectively.

Gender of Respondents

70.00%59.55%

60.00%

50.00%40.45%

40.00%

30.00%

20.00%

10.00%

0.00%Females Males

Gender of Respondents

Figure: 1

From the above Figure 1, it can be deduced that as far as genders are concerned, female respondents have led the way (59.55%), followed by males (40.45%), hence the females have provided highest number of respondents. This could be because the nature of purchase is of food items, which has been largely female-dominant in India [56-58] Similarly male segments have responded with a percentage of 40.45 respectively.

Age-Group of the Respondents100% 5.00%

90% 14.33%

80%18.33

%70%

60%

50% 27%

40%

30%20% 35.33

%10%

0%Age Group

60 & Above 5.00%50-59 14.33%40-49 18.33%30-39 27%18-29 35.33%

18-29 30-39 40-49 50-59 60 & Above

Figure: 2

From the above Figure 2, it can be deduced that the age-range of 18years to 29years carries the highest number of respondents (35.33%) who responded and that they had been more technologically savvy, as reversed to the

age group of sixty years (5.00%)and above. Researches have shown similar results [ 17, 22-29]. This could be because the respondents of same ager group has similar needs and wants and form a similar segment of the marketer based on demographic segmentation variables. Similarly the other defined age groups had shown segment similarly across the research.

Level of Education of Respondents

70 61.67

6050

40

30 23.67

20 11.33

10 3.330

Level of EducationPrimary 3.33

Secondary 23.67Tertiary 61.67Others 11.33

Primary Secondary Tertiary Others

Figure: 3

From the above Figure 3, it can be deduced that the level of education does have an impact on the purchase decision making of respondents. The category of respondents were divided into four, viz. primary education holders, secondary education holders, tertiary education holders and others. The response rate of tertiary education holders had been 61.67%, followed by 23.67% and 11.33% and 3.33% of secondary, primary and others, respectively.

Marital Status

2.33% 1.50%

42.50%

53.80%

Single Married Divorced Other

Figure: 4

From the above figure 4, represented in the form of pie-graph, it has been clear that the married couples responded heavily to above 50% (53.80% actually), followed by singles or not married; which is 42.50%. These results are in consistent which the researches done and presented under the review of literature and the factors underlying it have been discussed in the paper further. To perform correlation and linear regression analysis on the data, the researcher listed down the constructs most crucial to the role of CoO in the packaging and labelling of the product or brand or service and the table 2 mentioned below indicates the statistical representation of chosen variable or the constructs. The constructs have been put to finding out their mean /average as well as standard deviation towards the chosen variables of packaging and labelling by the responses from 415 respondents.

Table 2: Mean of packaging attributes and consumer buying decision

Descriptive StatisticsN Minimum Maximum Mean Std.

DeviationPackage & Label 415 2 5 4.35 .628Design ColourPackage & Label 415 2 5 3.81 .720Font & BackgroundPackage & Label 415 2 5 3.51 .606MaterialPackage & Label 415 2 5 3.75 .752Level ofInformationPackage & Label & 415 3 5 4.10 .679CoO EmphasisPackage & Label 415 2 5 3.85 .567Print Innovation

The above mentioned Table 2 clearly depicts that customers or respondents place the highest importance on attractiveness of packaging and labelling in terms of designing, style and colour which has a mean value of 4.35, while compared to the lowest mean value of 3.51 about the material used for packaging and labelling. Here it is to understand that this comparative analysis is between the attractiveness and

call for reading the country of manufacture as compared to the environment friendliest; which is not the objective of this research per se. In can be interpreted that the CoO has the highest attention while purchasing the food-item brand.

Table 3: Mean of Label Information emphasis

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

Label Design 415 1.00 5.00 3.04 .975ColourLabel Font & 415 1.00 5.00 3.43 .89BackgroundLabel 415 1.00 5.00 3.75 .79MaterialLabel Level 415 1.00 5.00 3.83 1.02ofInformationLabel & CoO 415 1.00 5.00 3.59 .84EmphasisLabel Print 415 1.00 5.00 4.37 .90Innovation

Valid N (listwise) 415

N Minimum Maximum Mean Std.

Deviation

Country-of –Assembly 415 1.00 4.00 2.52 .98Country-of –Manufacture 415 1.00 4.00 2.99 .93

Country- of- Origin 415 1.00 4.00 2.94 1.03

Valid N (listwise) 415

In order to determine the significance of relationship that existed between the chosen constructs or variables in the research study; and consequently the effect each one of them had on the identification, selection and purchase of food item in the cycle of consumer buying; the researchers conducted the Pearson-correlation. Table 4 below presents the results that indicate that there is a “positive significant relationship” or can be called as having a strong positively significant relationship between CBB and the constructs defined w.r.t. the country of origin and label information importance attached to it, as per table 4.

Table 4: Impact of purchase by CoO in household food-items

N Minimum Maximum Mean Std. Deviation

On a scale of 1 to 5, do youthink that Country of Originaffects your purchase 415 1.00 5.00 3.29 1.01decisions for householdproducts?Valid N (listwise) 415

From the table, it can be deduced that there is high significance between purchase behaviour and the country of origin.

Table 5: Correlation between constructs

.314** 1Packaging color Pearson Correlation

Sig. (2-tailed) .000

Background Pearson Correlation .468** .480** 1image Sig. (2-tailed) .000 .000

Packaging Pearson Correlation .357** .413** .442** 1material Sig. (2-tailed) .000 .000 .000

Pearson CorrelationFont size Sig. (2-tailed) .000 .000 .000 .000

Printed Pearson Correlation .471** .244** .377** .551** .380** 1information Sig. (2-tailed) .000 .000 .000 .000 .000

Innovation Pearson Correlation .595** .434** .472** .321** .393** .396** 1Sig. (2-tailed) .000 .000 .000 .000 .000 .000

N 415 415 415 415 415 415 415

**. Correlation is significant at the 0.01 level (2-tailed).

Further, researchers applied the regression analysis to know and to find out the depth and level of impact between independent and dependent variable. For performing regression, all were based to be tested as per the equation:

Y = a + b1X1 + b2X2 + b3X3 + b4X4 + b5X5+ b6X6 + e

where;Y: Consumer buying decision behavior X1: Packaging color X2: Background image X3: Packaging material X4: Font size X5: Printed information X6: Innovation E=error term

Table 6: Regression model for packaging label variable

Coefficients a

Model Unstandardized Coefficients Standardized Coefficients t Sig.B Std. Error Beta

(Constant) .644 .211 2.876 .005Packaging Color -.056 .042 -.055 -1.130 .271Background Image .181 .051 .178 3.432 .001packaging Material .023 .044 .018 .321 .766Font Size .182 .048 .169 3.715 .001Printed Information .231 .058 .196 3.891 .002Innovation .429 .055 .395 8.242 .001

R 0.692R square 0.475Adjusted R Square 0.466-F-Value 51.84a. Dependent Variable: Packaging Attributes heavily influences consumer buying decisions.Note. N = 362; *p < .05, **p < .01.

From the test results it was evident that the R2 value; which was 0.475 indicated clearly that all the

constructs of packaging and labelling ie six constructs had caused about fourty seven and a half percent variation in the decision making process by the customers or respondents; hence they all contribute to the reasons due to which there are different patterns of purchase seen, as per the “F value” had been found significant at .001 level in order to support the alternate hypothesis and reject the null hypothesis to support the model of goodness of fit. The significance level of each construct had been tested upon 95% confidence interval and a significance level of .271,.001,.766,.001,.002,.001. The results indicate that H6, H5, H2 and H4 are supported but hypotheses H1, H3, are rejected. Overall, the findings determine that Country of Origin has a high significant impact in purchase of food but it is stringer when the brands of this country perform to excel in more than one food product category by improving upon the threats by weaker category.

Conclusion & Recommendations

Researchers found out that Country of origin has become a significant variable that has a significant influence in upon the purchase behaviour of customers buying routine food items; the findings of this research tell that people care about the package label information about CoO while going through the decision making process of consumer behaviour. It was evident that not only the image of the country in the global markets, but also this image across a diverse range of products had high impact on purchase of that brand. The label information parameters guide purchase action. CoO and “manufactured / made in” respective country were treated almost same in terms of packaging information and customers perceive it as “home country”. Country of origin is labelled by “country of manufacture/assembly/design”. The research concluded through many findings and through the testing of chosen six hypotheses; there is consciousness towards overall social and environmental concern by the company or brand to be purchased. It was found that the more clear and stringent the information provided on the packaged labelling information, the more positive is the brand image, vis-à-vis a weak label with unclear or non-standardized form of information provided; and this what pre-dominantly separates the consumers intention to purchase and consumers attitude based on information based on authenticity of CoO [104-108]. Researchers demonstrated that there is positive significant relationship between the product purchase intention of food item and the influence by its country of manufacture. Hence, it can be deduces that CoO is amongst the prime factors that lead to weaker or stronger evaluation of product or band before purchase during the cyclic decision making. There were six constructs taken by the researchers based on packaging and labelling requirements. The conclusion came out that they hold imperial and in dominant role with the most significant factor being the information about the country of origin and manufacture of the product. [96-103] supports the findings that a positive image about country of manufacture acts as “halo effect” in triggering the buying process; provided the quality is standard for customers in repeat purchase situations. The findings show that consumers evaluate goods from developing countries differently from the developed countries. If the information on label is considered poor, it could lead to a negative association with that brand. Among the six labelling attributes, the country of origin had the highest impact on the purchase. The study had been focused on NCT of India, but it could be further taken across on many other cities all over India;extended to a national level w.r.t. a “cultural or sub cultural” context [109-113]. The other attrubutional variables and factors can be taken into consideration for further research. The variable “repeat purchase” in context of CoO can be further explored. This could need further research on the consumer’s perception and attitude towards a particular product category and its relationship with the country of manufacture, along with the overall image of that country. It can be concluded that there are multiple factors impaction that can be intrinsic or extrinsic or a mix of both. Manufacturing or home country has considerable influence

and researchers conclude that CoO factors also depend upon the type of product category and the demography of that country. Hence, a product could be manufactured at a different nation, but if the origin of product could be India , there are higher chances of selection of this product foe purchase by an Indian national. “Ethnocentric attitude happens when customers want to buy foreign products and they are loyal to products manufactured in home country” [114-117], this is result of country of origin effect. The constructs taken for the research study viz. label design, colour, font, background, material, level of information, CoO emphasis, innovative labelling information taken and put to different statistical tests proved that there is high significance with the overall variable as being the country of origin effect.

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