RESEARCH PAPER

On

The Impact Of Country Of Origin On Consumer Buying Decisions

Submitted by
Avichal Kumar
A0101913004
MBA Class of 2015
Under the Supervision of
Ms. Amanpreet Kang
Professor
Department of International Business
In Partial Fulfillment of the Requirements for the Degree of
Master of Business Administration
AMITY BUSINESS SCHOOL
AMITY UNIVERSITY UTTAR PRADESH
SECTOR 125, NOIDA - 201303, UTTAR PRADESH, INDIA

ABSTRACT
The concept of country of origin has become one of the major phenomenon in the study of
consumer behaviour. The purpose behind this research is to analyse the country of origin
literature and also the different variables that have an impact on the purchase intentions of the
consumers. This research is valuable for promotion of the literature regarding consumer
behaviour and also providing different relationships between different variables and the purchase
intention of the consumer. Also it helps the marketers by providing helpful insights to work on
related topics as per the country of origin perspective. Research conducted over several years
indicates that when the consumers are aware about the certain characteristics of a country

they

are more in favour or inclined to see the country of origin as an external factor in evaluating the
quality of the product and guiding their purchasing process. However in today's continuous
expanding markets and the era of globalization , it is possible to nullify the effect of country of
origin on the evaluation of quality of the product and the influence on the purchasing process of
the consumer

INTRODUCTION
Any country wherein a product has been developed or the country to which the product belongs
to is called the country of origin. On almost all the products, the country of origin is indicated
within the phrase, made in.....
The history of country of origin lies in ancient Greece. Then, it was very common to mark the
goods with the logos or some marks in order to specify where the product came from. This was
prevalent even in ancient Egypt, where the bricks were marked by the brick makers in order to
categorise the goods. The marking was done to identify and differentiate the products from one
another. The concept of marking the goods was originated not only for the purpose of
identification, but also for signalling the quality of the product.
Every country has some special sets of skills that it puts in the products it manufactures. For
example, India is famous for its spices, wines and perfumes are famous from France, Egypt for
textiles, etc. as such they possess certain standards of quality that reflect in their products. As
such, country of origin becomes important. With the markings or the labelling of the country
where the product is made, there comes a certain sense of quality that comes complimentary with
the products. As a human tendency, people tend to judge the products from the country they
come from. This is the main area of research here.

LITERATURE REVIEW
MUNJAL(April 2014) studies the impact of nation of birthplace has an effect on customer
convictions, discernments and mentality. The impact of the nation and picture and
ethnocentricity of the buyer prompts a few predispositions for specific results of specific nations
which kills as customer get to be more commonplace about the item included in his buy. The
profile of the purchaser which contrasts in demographics likewise prompts shifting level of
nation of beginning impacts. The examination led serves to give data which is of significance to
the advertisers who are regularly in a quandary about the decision of technique embraced in the
commercial center in light of the fact that even because of globalization it still conveys limits of
its social, political and monetary enviornment. Because of being considered in setting with the
customer conduct nation of root is a complex zone. Practices of the customers are questionable to
foresee and break down. Practices change from spot to place and zone to range and this is the
thing that underlines the purpose behind such a limitless and conflicting research here. There is a
direct impact on customer disposition towards item in light of purchaser inclination of being
ethnocentric or buyer feeling of sensitivity for that nation. These inclinations make
predispositions for local items. Because of such inclinations nations tries to initate "purchase
national" battles to make a boundary to worldwide exchange. These certain predispositions and
perceptual mutilations helps the advertiser about what suggestions does nation of birthplace
marks have on a specific item. The exploration directed issues us a thought that as the customer
get more included in buying methodology he hunt down more data and afterward handle it
reasonably. The information and inclusion parts of every buyer shift with one another because of
the vicinity of distinction in demographics. It has been recognized in examination to old
individuals the more youthful ones are more educated and included also females try for more

drive

and

nonsensical

in

purchasing

in

correlation

to

guys.

D.KALICHARAN(September/October, 2014) assesses the impact of nation of inception on

impression of the shoppers of item quality in created and rising economies. Endless supply of
different experimental studies more than quite a long while it got to be pass that when the buyers
are mindful or have learning of qualities of certain nation they were more slanted in evaluating
the nation of cause as an outer sign in managing their buy choice methodology. Because of the
vicinity of innovative headways and the aggressive way of businesses in created nations
customers gave a higher assessment of item quality. Additionally the study uncovers that in
specific nations ,shoppers lean toward those items which are produced by regional standards or
locally because of the vicinity of feeling of ethnocentrism and patriotism. It is basic to the
makers of buyer items and the advertisers display in the retail business to comprehend the rules
that impacts the purchasers or buyers utilize either when assessing the nature of the item or
settling on obtaining choices. To the developing working class of customer and buyers with
ethnocentric convictions, the nation of birthplace does make a difference for status and picture
situated items. Despite the fact that the nation of source is an outside component which impacts
the buy choices, there are different elements which are similarly essential and can without a
doubt have an effect on the purchaser purchasing choices. It is the shoppers who eventually
choose whose item they will buy and which organizations and brands will fizzle or succeed.

OBJECTIVES OF THE STUDY

My study focuses on the impact of products made in Korea on the buying decisions of the
Indians. The following are the objectives:

It has been noticed from secondary research that the country of origin impacts the perceptions

of the consumers and influences their buying behaviour.

To measure the level of awareness among Indians about Korean brands.
To know what do the Indians think about the people of Korea and the country, itself.
To study the factors that can influence the perceptions of the Indians while buying Korean
products and the overall perception of these products.

RESEARCH METHODOLOGY
Exploratory and descriptive designs were used as a part of the research. The population in this
case comprises of Indian consumers from all parts of India, from all age groups and belonging to
any income level. The sample size which was to be administered was 138. A non-probability
sampling technique is used as it is the most feasible in my research.

DATA ANALYSIS AND INTERPRETATION

Figure 1: Awareness about Korean Brands

Interpretation: Out of the 138 respondents who responded, 78 were able to mention the
Korean brands and 60 were not able to mention it. Hence making it a ratio of 1.3:1
AWARENESS OF INDIANS ABOUT KOREAN PRODUCTS ON THE BASIS OF 4
ATTRIBUTES:
Table no 2: Descriptive Statistics
N

Minimum

Maximum

Mean

Std.
Deviati
on

what is your belief about korean

manufactured products? - value
for money

138

4.42

1.377

what is your belief about korean

manufactured
products?
technically good

138

4.54

1.529

138

4.54

1.384

138

4.35

1.376

what is your belief about korean

manufactured
products?
quality
what is your belief about korean
manufactured
products?
reliability
Valid N (listwise)

138

Interpretation: As we can see that the mean is more on the higher side of the scale which
means that the Indians somewhat agree that the Korean products offer value for money, are
technically good, are good in quality and are reliable
BELIEF OF INDIAN CONSUMERS HOLD ABOUT THE PEOPLE OF KOREA. IT
TALKS ABOUT THE OVERALL IMAGE OF THE COUNTRY THAT INDIANS
PERCEIVE. 12 ITEMS LISTED IN THE FORM OF VARIABLES
A:Cronbach's Alpha
Interpretation: In this analysis the reliability of the scale is measured. This question had a list
of 12 items that were asked to be rated on a scale of 1-10. This analysis is done to check the
internal consistency of the scale. In the above statistics we can see that the cronbach's alpha
is .905 which is a good value that indicates good internal consistency of the scale. It shows
that the Indian consumers have a positive view about the people of Korea. Any value that is
equal to or higher than 0.6 indicates good internal consistency of the scale as shown in this
table.
INDIANS PERCEPTION ABOUT KOREAN PRODUCTS. THERE ARE 18 ITEMS
LISTED IN THE FORM OF VARIABLES.
A: CRONBACH'S ALPHA
We can see that in this question also the coefficient of the scale is 0.976 which is greater that
0.6 . This shows that the Indian consumers have a positive image about the Korean products.
The value shows good internal consistency of the scale and we can say that the scale is
reliable.
B: BARTLETTS TEST OF SPHERICITY AND KMO MEASURE OF SAMPLING
ADEQUACY:

The test shows that the null hypothesis is rejected on the basis of Bartletts test of sphericity.
The approximate chi-square statistic is 2984.907 with 153 degrees of freedom, which is
significant at 0.05 level.
The KMO statistic has a value of 0.953, which is greater than 0.5. As such, the factor analysis
is considered an appropriate technique for analyzing the data

ANOVA
Image of the people of korea and the overall image of the country
Interpretation:
The variables that are highlighted have a statistic value of less than 0.05. so, the null
hypothesis is rejected. there is significant difference between the two groups of consumers
who are aware about the Korean brands and who are not. Hence, these factors influence their
decisions. The variables that are not highlighted have a value of more than 0.05. therefore,
there is no significant difference between the two groups.
Image of the Korean products
Interpretation:
From the above tables we can see that the statistic value of all the above variables is more than
0.05. so we reject the alternate hypothesis. There is no difference between the two groups. The
level of awareness or no awareness does not affect the decisions of the consumers about
Korean products
Perceptions about Korean-made products on the basis of 4 features: quality, reliability,
technology, value for money.
Interpretation:
The above variables have a statistic value of more than 0.05. The alternate hypothesis is
rejected. There is no difference between the two groups when it comes to the level of
awareness about Korean brands.

LIMITATIONS OF THE RESEARCH

There are a certain number of limitation which occurred while conducting the research. These
limitations can be listed as under:-

The effect of the country of origin on the consumer purchase decision has been analysed only

in the respect of tangible products and categories and not for the service sector.
Another limitation which can be is that this study has been conducted only with relation to
single cue which is the country of origin and does not take into account other extrinsic cues
such as design, price, warranty etc.
The above study has been conducted in a relatively small geographical area and the sample
size is also not very large. This research has only included 138 respondents from India which
is not enough to determine the impact of country of origin relation to Korean products.
Similar studies should be conducted in other South Asian countries and then the data should
be clubbed and analysed for arriving at an more appropriate decision regarding the impact of
country of origin on the consumer buying decisions. The imapact of country of origin can be
different in more of the industrialized countries as the country of origin depends on the
industrial development also.

CONCLUSION
The research was conducted to assess the impact of country of origin in respect of Korea on
the buying decision of consumers. The data of the study and the analysis concludes that:

only 56.5% of the people who responded to the questions are aware of the Korean brands and

could actually name them. Rest of the people were not aware of the Korean brands.
The perceptions of Indians about the Korean products gives us a mean of approx 4.5 in terms
of the products being technically backward or advanced, value for money, quality and

reliability. This means that the Indians have a positive perceptions about the Korean products.
The Korean people are perceived to be:-Less artistic and creative
-People who don't have similar political views
-places less emphasis on technical education

Specifically on two parameters Indians have a high perception of about Korean products

which are:-That the products are offered in wide variety

-The products involve high technology.
The perceptions of Indians about foreign products was also recorded and taken into account.
The responses gives a mean value of more than 3.5(scale being 1-7) which indicates that the
Indians are not in favor of foreign products and have a negative view about them.
So it can be said that the country of origin does have an impact on the buying decision of the
consumers. Also foreign goods are liked by Indians. In this research it depends on factors: the
image of the Korean people and the country and the Korean products.

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