Country of origin (COO) may automatically generate positive perceptions about a brand, a product or a service. Just like brands, nations have equity they can leverage to differentiate and position products and services hence the relevance of the Country of Origin as a tool for branding.
This article focuses on how COO can be leveraged as a branding tool, as well as some managerial implications with particular reference to “Made-In-Ghana”. The COO effect which is described as how the consumers’ attitudes and perceptions as well as purchase decisions are shaped by the country of origin of the product. This has been interpreted as a type of halo effect where consumers rely on their general impressions of a country to form some beliefs about a product’s attributes or performance. COO plays a role as an information cue as consumers tend to form general impressions of countries and hold idiosyncratic beliefs based on their own direct or indirect product experiences. Speaking at the launch of the Made in Ghana campaign in Accra, Dr. Ekow Spio-Garbrah, the Minister of Trade, emphasized government’s promise to improve the local manufacturing sector in order to reduce the over-dependence on import due to the preference foreign products over locally manufactured goods.
The concept Country of origin (COO) and implications
The impressions or beliefs about a country may, in turn, work as decision cues that provide consumer information to infer beliefs regarding attributes such as the quality of products originating from that country.
For example, consumers perceive a more sophisticated and educated workforce plus more stringent quality control systems in countries that are economically developed. Consequently, products originating from such countries tend to be seen as possessing better qualities and evaluated more favorably than others.
Research shows that consumers’ broad general perceptions of a country, including its national characteristics, socio-economic, political background, history, traditions and products combine to create an overall image or stereotype that is then attached to the products of that country. So what accounts for a strong COO? Why is France perceived as the best country for wines, and what makes Germany the best in engineering? It is believed that COO effects are not created through the consumer but rather a product orientation that results from the product’s core characteristics that are linked to the environment. So France makes the best wines because of the environment from which the core product characteristics originate such as the climate or the soil where key ingredients emanate. COO therefore, can also be used to cue the efficacy of a product. The decision to relocate the production of a new Mercedes Benz car outside Germany was reversed because consumers were of the opinion that the full value of the Mercedes brand could only be derived from its connection with the country-of-origin which is Germany.
The level of awareness or exposure and the age of the consumer also have an impact because the COO effect is stronger among older consumers as well as those who do not know the product than consumers who are well-informed. It must also be noted that the sensitivity to country of origin also depends on the product.
This is particularly so for durable and luxury goods than for low involvement product categories. An exploratory qualitative study of Ghanaians revealed that people trust some used imported goods from the US and Europe more than brand new of same products from China. So to some consumers “home-used” can be termed “original-used” compared to a “new-fake”. Though not all products from China may be of a low quality, the consumer perception has been largely negative and reinforced by the lack of stringent standards and inspection of such goods that arrive in Ghana.
On the other hand, the COO perception is also known to be shaped by the country of final purchase. American college students in a US study, were more willing to buy a “made in China” teddy bear when it was sold at an American store they believed was “benevolent, competent and honest”, suggesting that negative country of origin effects may be offset when consumers trust the store selling the product. In Ghana, therefore, the challenge is how to overcome a combination of attitudinal, socio-cultural and behavioural practices that hinder patronage of Made-in-Ghana goods.
Localizing the COO effect to Ghana
So what comes to mind when one hears “Made in Ghana”? Ghana as a country has been associated globally with cocoa due to the quality of the cocoa beans produced locally as well as the climate that enhances cultivation. It however, doesn’t appear that Ghana has leveraged this opportunity beyond the production of raw cocoa beans? That is however not to say the Golden Tree Chocolate brand is inferior. While the best chocolates may have a Swiss tag, the cocoa beans may originate from Ghana. Contrast this observation with wines from France or Chile.
It is possible to equate the COO effect to region of origin and examine what the unique products the different regions in Ghana offer. The Kente fabric from Bonwire in the Ashanti region or Kpetoe in the Volta region where the art of Kente weaving is believed to be attached to the tradition and heritage of these towns making them command a price premium, can be cited. Now also consider smocks and leather from Northern Ghana and beads from the Eastern region as well as Kenkey from Accra. The place of manufacture may therefore become attached to the success and marketing of these products as these characteristics also serve as quality cues.
The Ministry of Trade and Industry recognizing the power of COO effects has championed a “Made in Ghana” campaign to boost the patronage of locally made products and services. There is a need to adopt a multifaceted approach where there is emphasis on skills, education of artisans as well as branding and packaging to ensure products are of good quality and finished properly.
Ghanaians have acquired sophisticated tastes for consumer goods and will not be patronizing goods solely because they are made in Ghana or want to be seen as patriotic but because these products are unique and satisfy customers.. While Ghanaian artisans will need to be trained to ensure world-class finishing, some local companies are able to produce better quality products for the export market. Why can they not do the same for the local market? Could this be due to the low demand conditions? Under demand conditions, Michael Porter argues that the more demanding the customers in an economy are, the greater the pressure facing firms to constantly improve their competitiveness through innovative products. The fundamentals of product performance and emotional benefit are still highly relevant.
Trust and the use of COO as extrinsic cues
The Ministry of Trade and Industry’s drive to stimulate the patronage of made-in-Ghana goods is endorsed by a logo to differentiate made in Ghana goods. However, it must be noted that the effectiveness of extrinsic cues depend on the extent to which they are deemed believable by consumers. Though a brand’s history impacts the credibility, the body assigning the certification equally has a role to play here, in this case a government body or producers’ association.
So, do consumers trust the Ghana Standards Board logo more than the made-in-Ghana logo, or both? In order to instill trust it is necessary to ensure proper monitoring of products that carry the “Made in Ghana” signs due to recent revelations of unwholesome products bearing logos purporting to be certified for consumption.
There is also news of used imported refrigerators bearing energy rating stickers which are reserved only for new ones. Organic product certification presents an interesting case. In a comparative study in Germany and Denmark on organic product certification, it was revealed that Danish consumers trust their organic certification more than the Germans with an effect on intention to purchase. While in Denmark the certification is assigned by the state with government endorsement reflected by the use of the Danish royal crown, the German certifications were assigned by different bodies that had no government interference. What is more interesting is that consumers who had less trust in organic logo were more likely to buy the same product from specialty shops such as health food shops thereby substituting the extrinsic cue which is the generic mark with the shopping environment.
Country of origin without doubt therefore plays a key role in product perception and if properly leveraged presents a lot of advantages for brand building. However to ensure the success of “Made in Ghana” we need to intensify consumer education to raise awareness and demand for quality products and services. Porter holds a view that substantial industrial growth has hardly ever been built on inherited factors of land, location, natural resources, labour, and local population size. He rather suggests that the abundance of such factors may lead to interconnected firms, suppliers, related industries as well as institution in these locations.
However, the more demanding the customers in an economy are, the greater the pressure facing firms to constantly improve their competitiveness through innovative products and therefore creating a natural environment that promotes Made-In-Ghana. The enforcement of quality standards so as to instill trust may lead to favourable purchase predispositions instead of moral suasion or legal enforcement.
By Eric Hiamey
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