The importance of country-of-origin information on product evaluation : a study of South African consumers.

Thesis (MBA)-University of Natal, Durban, 2003.International trade activity is becoming an increasingly more important part of the world economy, and it is recognized that there is a greater necessity to gauge consumers' attitude toward both domestic and foreign products (Netermeyer, Durvasula, and Lichtenstein, 1991). Research in this area has focused on what is termed the country of origin effect, that is, investigating how consumers perceive products sourced from a particular country (Roth and Romeo, 1992). Substantial portions of country of origin studies so far have focused on the consumer behavior of people in developed countries. However, because multinational companies around the world have expanded their operations in various developing countries, it is now relevant to examine this phenomenon in the developing world. This dissertation examines the importance that South African consumers place on country of origin information and how they perceive the quality of products made in various countries, namely the United States, Japan, the United Kingdom, China, India, and South Africa. Further more, this study examines the ethnocentric tendencies of South African consumers and the influence of demographical factors on consumer perception as well as the evaluation of domestic versus foreign products in South Africa. One hundred and seventy-six questionnaires were distributed to employees of the University of Natal both Durban and Westville campuses and of this total, one hundred and thirty-three questionnaires were returned. This represents a response rate of seventy-six percent. Data was analyzed using SPSS software. Statistics analysis of the results showed that South African consumers do indeed attach importance to country of origin information and that their evaluation of products is influenced by their perception and image of different countries. In line with previous research, the results indicated that consumers perceived products from developed countries as being of higher quality than products from developing countries. But they also exhibited a positive attitude towards South African products. This contradicts previous research findings whereby consumers in developing country perceive local products negatively. The result also revealed that price, country of origin, and brand are important to South African consumers before they consider purchasing decisions. Furthermore, the result indicated that South African consumers tended to be ethnocentric. Ethnocentrism scores, however, couldn't be generalized for all segments of the population. Differences were found based on sex, education and age. Young, educated, female consumers demonstrated less ethnocentric tendencies than other segments implying that this segment represents the best target groups for overseas manufacturers and marketers