International Marketing Review

Country of origin, national loyalty and product choice: The case of international air travel
E.R. Bruning
Article information:
To cite this document:
E.R. Bruning, (1997),"Country of origin, national loyalty and product choice", International Marketing Review, Vol. 14 Iss 1
pp. 59 - 74
Permanent link to this document:
http://dx.doi.org/10.1108/02651339710159215
Downloaded on: 12 June 2015, At: 12:37 (PT)
References: this document contains references to 43 other documents.
To copy this document: permissions@emeraldinsight.com
The fulltext of this document has been downloaded 3478 times since 2006*
Users who downloaded this article also downloaded:
Khalid I. Al-Sulaiti, Michael J. Baker, (1998),"Country of origin effects: a literature review", Marketing Intelligence &
Planning, Vol. 16 Iss 3 pp. 150-199 http://dx.doi.org/10.1108/02634509810217309
Zafar U. Ahmed, James P. Johnson, Chew Pei Ling, Tan Wai Fang, Ang Kah Hui, (2002),"Country-of-origin and brand
Downloaded by New York University At 12:37 12 June 2015 (PT)

effects on consumers evaluations of cruise lines", International Marketing Review, Vol. 19 Iss 3 pp. 279-302 http://
dx.doi.org/10.1108/02651330210430703
Norjaya Mohd Yasin, Mohd Nasser Noor, Osman Mohamad, (2007),"Does image of country-of-origin
matter to brand equity?", Journal of Product & Brand Management, Vol. 16 Iss 1 pp. 38-48 http://
dx.doi.org/10.1108/10610420710731142

Access to this document was granted through an Emerald subscription provided by emerald-srm:198285 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service
information about how to choose which publication to write for and submission guidelines are available for all. Please
visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of
more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online
products and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication
Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.

*Related content and download information correct at time of download.

 National loyalty
Country of origin, national and product
loyalty and product choice choice

The case of international air travel

59
E.R. Bruning
Faculty of Management, University of Manitoba, Winnipeg, Canada Received April 1995
Revised April 1996

Introduction
Within the last year, Canada and the USA entered into an agreement which
significantly liberalized commercial air travel between the two countries. Prior
Downloaded by New York University At 12:37 12 June 2015 (PT)

to this agreement, all city-pair markets between the two countries were
determined through negotiations involving the Department of External Affairs
in Canada and the Departments of State and Transportation in the USA. In
essence, negotiated bilateral treaties identified the Canadian and US airlines
that could operate in cross-border markets. In such a shared monopoly
environment, competition was not intense nor was marketing strategy creative
or forward viewing.
With ratification of the open skies policy in 1995, Canadian-US market
environments are becoming more intensely competitive. Airlines have
significantly greater latitude in the choice of which cross-border markets to
serve and which to withdraw from. Thus, open entry is eroding the power of
shared monopoly regimes and forcing incumbent airlines to undertake radically
different marketing strategies in order to maintain market share. A
fundamental question is whether Canadian air travellers will remain loyal to
Canadian air carriers as foreign competitors enter with alternative marketing
mix arrangements? Will national loyalty serve as an advantage for Canadian
carriers in their local markets? Or, will Canadian travellers seek out airlines
with the most advantageous offerings and disregard carrier nationality in the
selection process?
Through the employment of conjoint analysis, this research seeks to identify
the role of national loyalty in air carrier choice and to explain variations in
national loyalty across a sample of respondents according to differences in
demographic, attitudinal, and usage characteristics of a sample of air travellers.
Arguments are proposed which identify national loyalty as a component of the
country-of-origin effect. Whereas the country of origin serves as a signal of
product quality when information about attributes is absent, national loyalty
operates whether attribute information is present or not. It is the basic
argument of this research that a component of the country-of-origin effect
relates to group affiliation and offers a unique influence on consumers
perceived product quality, purchase intentions, and actual purchase behaviour. International Marketing Review,
Vol. 14 No. 1, 1997, pp. 59-74.
The critical hypothesis of the study is that ones felt national loyalty impacts MCB University Press, 0265-1335
 International on international airline choices. Clarifying the role played by national loyalty in
Marketing the air travel choice decision will assist carriers in determining the extent to
Review which own-country travellers serve as a source of competitive advantage in
international markets.
14,1
Country-of-origin effect
60 A growing body of empirical literature in marketing suggests that ones country
of origin is a factor influencing the decision to purchase local versus foreign
made products and services. Researchers have reported that advertising
campaigns, such as made in the USA, buy Canada, and the like are effective
in persuading consumers to opt for locally-made goods rather than foreign
imports (Baumgartner and Jolibert, 1977; Bilkey and Ness, 1982; Erickson et al.,
1984; Han and Terpstra, 1988; Hong and Wyer, 1989). Country of origin is
Downloaded by New York University At 12:37 12 June 2015 (PT)

thought to serve as a cue from which consumers make inferences about

products and product attributes (Bilkey and Ness, 1982; Han and Terpstra,
1988; Kaynak and Cavusgil, 1983; Reierson, 1966, 1967; and Schooler, 1965). In
brief, the country-of-origin cue triggers a global evaluation of quality,
performance, or specific product/service attributes. Consumers infer attributes
to the product based on country stereotype and experiences with products from
that country.
Country of origin has been observed to operate in several ways. First,
consumers simply use the country-of-origin cue as an additional variable to
form product evaluations (Hong and Wyer, 1989). Alternatively, the country
label may be viewed as a form of halo effect whereby it impacts on consumers
attention and evaluation of other product attributes (Han, 1989; Hong and Wyer,
1989). Finally, the country-of-origin cue may be conceptualized as a form of
country stereotyping which consumers use when other product-specific
information is not easily available (Bilkey and Ness, 1982; Hong, 1987). The
literature largely favours the latter two approaches since empirical evidence
clearly suggests that the country-of-origin cue does affect consumers
evaluation of products and product attributes.

Group influence on consumer behaviour

The work focusing on the group phenomenon in consumer behaviour emanates
from theoretical contributions from marketing and social psychology. Group
influence on individual behaviour has been an important issue in consumer
behaviour research for some time. Calder and Burnkrant (1977) report three
types of studies which focus on group influences to individual consumer
behaviour. One type explores the linkage between direct group pressure and
product evaluations (Burnkrant and Cousineau, 1976; Cohen and Golden, 1972;
Witt, 1969; Witt and Bruce, 1970). A second focus has been to examine the
nature of indirect pressure to conform to group norms (Cocanongher and Bruce,
1971; Bearden and Etzell, 1982; Bearden and Rose, 1990; Bearden et al., 1989).
The third research type is represented in the work which assesses the
normative beliefs about what other people think the individual ought to do
 (Fishbein and Ajzen, 1975; Miniard and Cohen, 1983; Ryan and Bonfield, 1975). National loyalty
In each of these research thrusts the objective is to offer rationalizations for and product
group influence on individual behaviour. The contribution of the group choice
influence is to dramatize the relevance of the group effect on individual
perception, intentions, and choice. National loyalty and consumer
ethnocentrism effects are by definition manifestations of group behaviour or, at
a minimum, originate from group interaction. While the above cited works do 61
not address the national loyalty effect directly, nonetheless, they do indicate
processes and linkages between theoretical constructs that are meaningful in
developing an understanding of the group impact at the national level.

National loyalty effect

National loyalty, as a specific manifestation of group influence, has been used
Downloaded by New York University At 12:37 12 June 2015 (PT)

as a construct to separate factors which explain consumer product choices

(Han, 1988; Bruning et al., 1991; Hadjimarcou et al., 1993). Shimp and Sharma
(1987) argue that specific socio-psychological processes are invoked whenever
the country-of-origin cue is provided to consumers. These processes emanate
from fundamental predispositions towards ethnocentric attitudes which are
different from typical stereotyping processes in that the values ascribed to the
country-of-origin cue are based on whether the cue supports ones in-group
identity (Bruning et al., 1931). The creation of the national loyalty construct
follows the work of sociologists and psychologists studying ethnocentrism,
authoritarianism, and nationalism. Campbell and Levine (1968) present a
variety of social science theories related to ethnocentrism that have bearing on
national loyaltys role in consumer choices. They argue that the phenomenon
could be studied comparatively at several levels: across cultural groups, among
groups in a given region, or among diverse trading groups or nations. In
marketing applications, theorizing and empirical testing have focused on
consumer choices between products from competing nations.
Based on the socio-psychological literature on ethnocentrism, authoritarian-
ism and nationalism, and the marketing literature dealing with group influences
on product evaluations, Shimp and Sharma (1987) developed their 17-item
CETSCALE that purports to measure a dimension of behaviour termed
consumer ethnocentrism. Briefly, developers of the CETSCALE do not espouse
a theory of group action so much as present a means for measuring the extent to
which group influences (e.g. national affiliation) impact on product evaluations
and choices in the case of own versus foreign-made products. Although limited
in its account of ethnocentrism, nonetheless, the CETSCALE taps a facet of
behaviour which is referred to as economic nationalism or national loyalty
(Hadjimarcou et al., 1993).

Country of origin and national loyalty: an integration

The country of origin, reference group influence, and consumer ethnocentrism
literatures have developed independently; however, the three streams of
research merge when addressing the role of national loyalty in the purchase
 International decision process. While the country-of-origin effect serves to convey global
Marketing impressions to users about the product or product attributes when knowledge is
Review lacking, it also serves as an indicator of ones group identity. Attachment to an
in-country versus foreign produced product will be stronger, the more salient
14,1 the sense of national affiliation and loyalty (Bruning, 1994). For instance, a
person with a low sense of national loyalty is not as likely to respond to
62 promotional campaigns focusing on a national theme as are individuals
possessing a strong sense of loyalty for their nation. Brand name, store image,
specific product attributes, or other non-country specific cues to product quality
may persuade less nationalistic consumers to prefer foreign products as
opposed to their locally-made substitutes. But, the aforementioned factors are
not related to national loyalty. On the other hand, a staunch nationalist may
respond to the country-of-origin cue because of close association of nation
Downloaded by New York University At 12:37 12 June 2015 (PT)

with ones own self-identity. A true patriot should always support local versus
foreign-produced goods and services represents an attitude reflective of own-
country bias which is activated by exposure to the country-of-origin cue.
Thus, the country-of-origin effect can be separated into two discreet
components. One component is informational and provides cues to consumers
regarding the value of product attributes which are difficult or impossible to
assess, or for which there exists no prior information for assessment (Han and
Terpstra, 1988; Hong and Wyer, 1989). Simply put, the first component serves to
convey impressions of quality, dependability, economy, etc., about the product
or product attributes when more specific information is not readily present. A
second component of the country-of-origin cue relates directly to ones group
affiliation (i.e. national loyalty) and reinforces the sense of group identity. It is
the second component of the effect which this research focuses on. For the case
of airline travel, it is expected that national loyalty plays a key role in the
selection process and that country of air carrier will influence the selection
process.

Research methodology
Conjoint analysis is employed in the empirical portion of the study. Widely used
in marketing research, the technique represents a consumer side approach to
evaluating product attributes, individual characteristics, and situational factors
on consumer preferences and choices. Conjoint analysis has been found to be
both practical and unbiased (Carmone et al., 1978; Green and Srinivasan, 1978).

Model development: ordered probit

It is helpful to identify the values people place on various product attribute
combinations as they proceed through the weighing and balancing to derive
preferences and, ultimately, product choices. The conjoint procedure allows
such an assessment; however, the process is only partly reflective of the actual
process in that the rating or ranking criterion factor we empirically measure is
only a proxy for the true value (utility) people place on a specific attribute
combination. A more direct method for modelling utility would improve our
 understanding of the choice process. Outlined in the appendix is a technique National loyalty
used in economics and behavioural sciences that provides a clearer depiction of and product
the product attribute-utility relationship. The technique is a variant of the choice
probit model, termed the ordered probit (McKelvey and Zavoina, 1975).

Research instruments
There are two instruments used in securing data: a conjoint exercise where 63
subjects are presented with multiple attribute bundles and asked to rate
preferences for each of the bundles, and a questionnaire to collect demographic,
attitudinal, and usage information. The development and implementation of the
two instruments are discussed below.
Conjoint experiment. In conducting the conjoint experiment, respondents
were asked to imagine themselves taking a hypothetical international trip from
Downloaded by New York University At 12:37 12 June 2015 (PT)

a point in Canada to a point in the USA. Respondents were given the four
factors that differentiate three carriers operating between the two international
points. They were also told to assume that maintenance, baggage handling,
ground services, ticketing, and pre-flight services were identical for carriers
servicing the route. Differences between carriers resided in the levels of the four
factors presented to respondents.
The instrument for the conjoint exercise involves 27 separate cards with
various trip attribute combinations and a rating form for subjects to indicate
trip bundle preferences based on a ten-point strongly prefer to strongly not
prefer scale. Attributes selected for inclusion in the experiment are suggested
by previous research in marketing and transport (Bruning and Hu, 1984; Green
and Wind, 1975). Four trip attributes composed of three levels each are selected
for use in the conjoint experiment: price, type of aircraft, number of stops, and
country of origin of the air carrier. The last attribute, country of origin of the
carrier, is included in order to assess the relative importance of carrier domicile
(i.e. country of origin) as a factor in carrier selection. Levels for each of the trip
attributes are identified following three waves of pre-testing. In each of the pre-
tests, respondents from the travel population in Winnipeg, Manitoba are asked
to assess the extent to which the levels for each of the attributes differ.
The conjoint experiment is composed of a one-third fractional factorial
design (Cochran and Cox, 1957). A full factorial exercise would produce 81
different combinations, a fairly large and unreasonable number of scenarios for
respondents to consider. Orthogonal arrays are used to determine the
appropriate combinations necessary for effectively estimating main and first
level interaction effects. Respondents are asked to view and rate 27 scenarios
which represent combinations of flight factors and factor levels. The individual
ratings associated with each of the 27 scenarios serve as the dependent variable
while the various levels are effect dummy coded (1, 0, 1) independent variables
representing the various levels of each of the three travel specific factors and
the one country-of-origin factor. Respondents participating in the study
represent all the western provinces (British Columbia, Alberta, Saskatchewan,
and Manitoba), the central provinces (Ontario, Quebec, and New Brunswick),
 International and the eastern province of Nova Scotia. A total of 427 respondents were
Marketing interviewed during a two-week period in 1994.
Review Survey questionnaire. A questionnaire is employed to solicit usage,
attitudinal, and demographic information from respondents in order to
14,1 complete the respondent profiling component of the research design. The
questionnaire is composed of three sections. Section one captures information
64 relative to respondents frequency and patterns of air travel. The second section
of the questionnaire comprises 27 statements respondents are asked to evaluate
on a seven-point strongly agree (7), strongly disagree (1) Likert scale. Seventeen
items make up the CETSCALE (coefficient = 0.97). Attitudes regarding
mergers between major Canadian air carriers, between Canadian and foreign
air carriers, and the role of economic regulation in Canadas air transport sector
are captured in the ten remaining questions. Finally, section three of the
Downloaded by New York University At 12:37 12 June 2015 (PT)

questionnaire focuses on demographic information, such as respondent age,

gender, occupation, income, participation in travel plans, and location of
domicile. Data were collected at a major international air terminal in western
Canada.

Results
Partworth coefficients
By standardizing partworth values of attribute levels on a 1, 0 , 1 scale, it
becomes possible to compare traveller preferences for levels across attributes.
Figures 1 to 4 show the relationship between utility and attribute levels for trip
bundles using the same scale. Traveller preferences for a particular level of
attribute can be read from the utility graphs. However, the more critical
information resides in the interpretation of the slopes. With the assumption that
changes in attribute levels (improvements in attributes) are continuous, the
slopes of the utility functions could be referred to as the marginal contribution
of improved attributes on travellers preferences. The size of the contribution is
then determined by the slope.
For example, in Figure 1, the relationship between price and utility is inverse.
That is, increases from low, to moderate, to high price levels decrease utility.
Furthermore, the slope of the line decreases at higher levels of price indicating
a non-linear relationship. The interpretation from Figure 1 is that the greatest
marginal contribution associated with changing price is from the low to
medium levels. Further increases beyond the medium level has less of a
negative impact on utility in comparison to a shift from low to medium prices.
The price-utility curve thus implies significant price sensitivity for airline
travellers at lower prices, but price insensitivity at the higher levels. It is
important to note that the three levels for the price factor are based on coach
fare as a benchmark. The coach fare for the flight establishes the benchmark in
which to assess the other two price levels.
As the size of the aircraft increases, from the turbo-prop, to the 727, to the
DC-10, utility increases as indicated in Figure 2. Furthermore, the function
appears to be linear among the three levels. The slope of the function is
 National loyalty
and product
choice

65

Figure 1.
Price
Downloaded by New York University At 12:37 12 June 2015 (PT)

consistent with past research which points to the fact travellers feel they receive
more service, are more comfortable, and are safer in larger aircraft (Bruning and
Hu, 1984; Green and Wind, 1975).
Figure 3 reflects the relationship between the number of stops and utility.
The inverse relationship between the two factors is as expected. A greater
number of stops increases the total time involved in the trip as well as adds to
physical discomfort. The data represent a constant downward sloping function
for the stops-utility curve.
Finally, Figure 4 presents the country-utility function which signifies
national loyaltys role in the country-of-origin effect. As indicated in the figure,
the slope of the function is not uniform across levels of country. The change
from a Mexican to a US carrier increases respondent utility slightly. The shift to

Figure 2.
Type of aircraft
 International
Marketing
Review
14,1

66
Downloaded by New York University At 12:37 12 June 2015 (PT)

Figure 3.
Stops

a Canadian carrier, however, results in a very strong improvement in utility,

thus indicating the preference for own-country carrier. But, is preference for
own-country carrier a result of carrier specific attributes or due to nationalistic
predispositions of the air traveller? Answers to this question are offered in the
following section.

Segmentation based on national loyalty

The results reported in Figure 4 indicate that country of origin plays a
significant role in the selection process for international air carriers. But, is
preference for own-country carrier based on brand name, or other indicators

Figure 4.
Country of origin
 of service or performance quality? Or, does national loyalty of the air traveller National loyalty
play a determining role in the selection of air carrier? In other words, is carrier and product
preference based on traditional notions embodied in the country-of-origin choice
literature or in the consumer ethnocentrism notions espoused by Shimp and
Sharma (1987)?
In order to assess national loyaltys role in the carrier selection process, mean
values for the national loyalty measure are categorized according to levels of 67
the following four profiling variables:
(1) sex;
(2) income;
(3) flying frequency, and
(4) occupation.
Downloaded by New York University At 12:37 12 June 2015 (PT)

Mean values are reported in Table I. For each profiling variable, the univariate
F-statistic from a one-way analysis of variance is significant at the 95 percent
level or better. As indicated in Table I, females incur higher national loyalty
scores than do males. With respect to income levels, national loyalty scores
decline as income levels increase. Similarly, national loyalty scores are highest
for individuals with the lowest levels of flying frequency and steadily decline
with increases in flying frequency. The one aberration from this pattern is
observed for the group whose flying frequency is greater than 30 times per year.
The size of the national loyalty measure increases significantly in relation to the
two adjacent groups. Investigation of the data suggests that the higher loyalty
value is due to the fact that many members of the group are also in or very near
retirement and whose measures of loyalty are among the highest of all
respondents. Finally, national loyalty scores are lowest for managers, sales
persons, and professionals, and are highest for persons unemployed, self-
employed persons, housewives, students, and retirees. From the data it appears
that the profile of the nationally loyal air travel consumer is someone who is
female, tends to earn in the lower income levels, is an infrequent air traveller,
and whose occupation tends to be non-professional and less tied to the private
sector of the economy, i.e. more dependent on the public sector for employment
or economic assistance.

Conclusions
The data presented in this study confirm the importance of national loyalty as
a component of the country-of-origin effect. Results from the ordered probit
analysis clearly indicate that the country attribute is second only to price in
terms of relative importance in the air carrier choice decision. Canadian
respondents measuring high in national loyalty prefer a national carrier for an
international flight when other foreign carriers are in competition with the
national carrier. These results do not suggest that the country-of-origin effect
reflects the strength of national loyalty alone; however, they do indicate that the
traditional notion of the country of origin includes a component which
 International functions to cue ones felt national loyalty as well as specific product
Marketing attributes. Thus, while the generally accepted country-of-origin effect relates to
Review cues about product attributes, the national loyalty effect relates to ones group
affiliation and the strength of allegiance or loyalty to country in the purchase
14,1 decision context.
While price dominates all other attributes in terms of relative importance,
68 country of carrier is second, followed by number of stops and type of aircraft
flown. Furthermore, the data indicate that the partworth utility curves for the
price and country attributes are curvilinear, while number of stops and type of

Variable levels n Mean Significance

Sex 396 69.72 0.001

Downloaded by New York University At 12:37 12 June 2015 (PT)

Male 241 65.66

Female 165 75.65
Income 380 69.20 0.033
Below $10,000 15 76.00
10,000-19,999 16 81.5
20,000-29,999 26 73.92
30,000-39,999 34 73.18
40,000-49,999 43 68.70
50,000-59,999 51 75.31
60,000-69,999 50 66.34
70,000-79,999 30 67.47
80,000-89,999 38 68.32
90,000-99,999 22 59.55
100,000-over 55 61.84
Flying frequency 406 69.81 0.001
Less than 1 per year 39 78.26
1-4 times per year 184 74.10
5-9 times per year 82 69.12
10-15 times per year 46 60.35
16-20 times per year 24 58.42
21-30 times per year 16 47.63
Over 30 times per year 15 69.80
Occupation 393 69.65 0.008
Not employed 2 85.00
Self-employed 9 83.78
Homemaker 6 82.17
Labourer 24 79.33
Retired 36 78.33
Public sector 15 76.53
General office/clerical 16 74.50
Student 42 74.14
Skilled worker 37 70.43
Table I. Military 9 65.89
Mean values of Professional 90 63.58
national loyalty by Sales 48 63.42
demographic variables Management 36 63.00
 aircraft functions are linear. The essence of the nature of the utility function is National loyalty
that sensitivities (for price and country) vary across levels of the two attributes. and product
Travellers are less sensitive to price between medium and high levels; however,
they are very sensitive between low and medium prices. Similarly, with respect
choice
to country of carrier, Canadian travellers are marginally supportive of a US
carrier over a Mexican carrier; however, they indicate overwhelming support
for a Canadian carrier when considering international air travel. 69
The preference for own-country air carrier is not equally strong across air
traveller segments: differences are recorded based on sex, income, flight
frequency, and occupation. Those most loyal tend to represent the smallest
segment. A much larger segment appears eager to trade off country loyalty for
either lower prices or better services offered by foreign carriers.
One explanation for the occurrence of the willingness to trade off carrier
loyalty in favour of more individual benefits is rooted in the nature of North
Downloaded by New York University At 12:37 12 June 2015 (PT)

American culture which is very much dominated by a market-based exchange

system. Cultures which extol individualism will place fewer social obligations
on consumers to think of the broader society in their purchase decisions than
one emphasizing social reciprocity (Blau, 1964). Therefore, individual self-
enhancement becomes a dominant basis of evaluation. Signals of support for
producers are indicated by a willingness to pay the market price for goods and
services and withholding purchases if performance, relative to that which is
expected, is not forthcoming. Loyalty, trust, and reciprocity are not frequently
observed consumer characteristics in a market-based culture. Those who are in
a position to benefit most in the market-based system have inculcated
individual utility-maximizing values to a much greater degree than those who
exist on the fringe of society (e.g. minorities). In the study, the data indicate that
individuals the least linked to the market-based economic system (e.g. students,
unemployed workers, self-employed, homemakers, retirees, and labourers)
possess the greatest extent of national loyalty to the national air carrier. On the
contrary, individuals with the greatest links to the market-based economy (e.g.
sales, management, and professionals) indicate the lowest levels of national
loyalty to local air carriers. Furthermore, these patterns still hold after
accounting for differences in self-reported knowledge, usage levels, and
participation in air mileage programmes.
The one anomaly in the data is that those travelling in the most frequent
category (over 30 times per year) display an increase in loyalty relative to
several of the prior categories. This finding may indicate a curvilinear
relationship between frequency and loyalty; however, only 15 respondents are
reported for the category indicating a possible small numbers problem. The
data were scrutinized closely to determine whether outliers were prominent.
Indeed, several respondents indicated very strong national loyalty preferences,
thus heavily influencing the mean for the group. While the data suggest a
possible turning point in the relationship, further scrutiny of the very frequent
air traveller is necessary before confirming its existence.
The study also presents the ordered probit as an alternative method of
modelling consumer choice in a conjoint experiment. With the ordered probit,
 International the analyst has the opportunity to observe attributes as they impact directly on
Marketing utility rather than indirectly as in the typical regression approach where
preference ratings or rankings are utilized as dependent variables. The model
Review tested in this study meets all the conditions for aptness and, therefore, reflects
14,1 unbiased and efficient partworth utilities for the several levels of the four
attributes.
70
Managerial implications
The results of the research have several implications for Canadian air carriers.
First, moving to a more competitive regime as regards air transport policy may
not bode well for national carriers in terms of securing ridership through
national loyalty. While a certain segment will remain loyal, nonetheless, those
travelling frequently will seek price and service advantages in selecting air
Downloaded by New York University At 12:37 12 June 2015 (PT)

carriers. Holding all other factors constant, frequent flyers prefer travelling with
a national carrier, but will switch to a foreign carrier given service or price
advantages from switching. Furthermore, price is by far the dominant factor for
a substantial portion of the travelling public. Therefore, regardless of service
advantages and the existence of a small, quasi-loyal market segment, Canadian
carriers will find it imperative to be price competitive with American carriers in
securing traffic on a continuous basis. The key point to be drawn from the
analysis, however, is that air carriers must understand national loyaltys role in
favouring them over foreign opponents. For Canadian carriers, it is probably
worthwhile considering joint advertising programs that emphasize favouring
national versus foreign-owned air carriers. While the immediate effect may not
be great, it also could alter the perceptions of travellers in the larger segment to
support the local carrier when other salient factors are uniform across
competing carriers. At the present, intense advertising competition among the
two national air carriers, Air Canada and Canadian Airlines, focuses on
denigrating one carrier to the detriment of the other. The net effect is to
diminish a sense of national affiliation and, thus, hampers the development of
national loyalty among Canadian air travellers. Joint partnerships in
advertising could be a positive factor enhancing the sense of nation and
therefore create an incentive to support national carriers.

Public policy implications

The findings also have public policy implications. While competition brings
forth a number of advantages to carriers as well as consumers, certain costs
need to be acknowledged as well. First, we have witnessed an intense era of
price competition in the airline industry during the 1980s. Associated with this
competition has occurred the demise of a number of traditionally strong
domestic and international carriers. The down side of a purely open skies
policy relates to the likelihood for a similar wave of competitive exuberance to
reappear and dramatically affect the financial stability of Canadas two
commercial passenger air carriers. While, most everyone wants improvements
in travel choices, particularly for major routes and times of day departures and
arrivals, are we prepared to accept the potential problems that possessing such
 choices bring forth? Open skies will challenge Canadas carriers. Perhaps the National loyalty
new regime will make them stronger. But, Canadian air travellers cannot be and product
counted on to provide support simply because they are Canadian carriers.
choice
Implications for future research
The research presented in the preceding pages represents initial efforts to
integrate several strands of academic research in marketing. Country-of-origin 71
effects are more complex than indicated by earlier research findings. In fact, as
suggested by Peterson and Jolibert (1995) country-of-origin is quite
multidimensional in its effects on consumer judgements and choices. Further,
they assert that while the country-of-origin effect accounts for a substantial
proportion of variance in product quality/reliability perceptions and purchase
intentions, the conditions under which it is operative have not yet been fully
delineated (Peterson and Jolibert, 1995). While they emphasize the need for
Downloaded by New York University At 12:37 12 June 2015 (PT)

further empirical investigation to sort out the several influences comprising the
country-of-origin effect, it is this authors contention that more consideration
should be given to the theoretical antecedents that bring about the tendencies
for the effect to occur. We understand from reference group theory that
individuals respond to real or imagined opinions of relevant others in making
consumption decisions and product evaluations. Furthermore, results reported
in this research effort and in other work in consumer ethnocentrism and
national loyalty during the past several years indicate that attitudes and
intentions are affected by ones sense of loyalty to nation and to other macro-
oriented groupings. It is suggested that researchers focus on the relationships
between individual self-identity, national loyalty, consumer ethnocentrism, and
product evaluations and choice. The work in social self-identity by Turner
(1987) and Tajfel (1981) establish linkages between the individual and the
formation of a sense of social identity. Linking the formation of social self
identity and national loyalty relationships with work conducted by Bearden
et al. (1989), Bearden and Rose (1990), and Bearden and Etzell (1982) on
reference group influence will probably expose fundamental insights as to the
role of group loyalties in economic choice, the propensities towards consumer
ethnocentrism within individuals, and thus separate the various elements
comprising the country-of-origin effect. Through such theoretical investments a
solid analytical base will be established to continue pursuing empirical
knowledge on the subject.

References and further reading

Baumgartner, G. and Jolibert, A. (1977), The perception of foreign products in France, Advances
in Consumer Research, Vol. 5, pp. 603-5.
Bearden, W.O. and Etzell, M.J. (1982), Reference group influence and brand purchase decisions,
Journal of Consumer Research, Vol. 9, pp. 183-94.
Bearden, W.O. and Rose, R.L. (1990), Attention to social comparison information, Journal of
Consumer Research, Vol. 16, pp. 461-71.
Bearden, W.O., Netemeyer, R.G. and Teel, J.E. (1989), Measurement of consumer susceptibility to
interpersonal influences, Journal of Consumer Research, Vol. 15, pp. 473-81.
Bilkey, W.J. and Ness, E. (1982), Country of origin effect on product evaluation, Journal of
International Business Studies, Vol. 13, pp. 89-99.
 International Blau, P.M. (1964), Exchange and Power in Social Life, Wiley, New York, NY.
Bruning, E.R. (1994), The role of consumer ethnocentrism in the choice of international air
Marketing carrier, Journal of the Transportation Research Forum, Vol. 34 No. 2, pp. 1-12.
Review Bruning, E.R. and Hu, M.Y. (1984), Misperceptions of airline services and the degree of prior
14,1 experience, Logistics and Transportation Review, Vol. 20, pp. 213-22.
Bruning, E.R., Lockshin, L.S. and Lantz, G.E. (1993), A conjoint analysis of factors affecting
intentions of Canadian consumers to shop in US retail centres, presented at the
72 Administrative Science Association of Canada meetings, Lake Louise, Alberta, June.
Burnkrandt, R.E. and Cousineau, A. (1976), Informational and normative social influence in
buyer behavior, Journal of Consumer Research, Vol. 2, pp. 206-15.
Calder, B.J. and Burnkrandt, R.E. (1977), Interpersonal influence on consumer behavior: an
attribution theory approach, Journal of Consumer Research, Vol. 4, pp. 29-38.
Campbell, D.T. and Levine, R.A. (1968), Ethnocentrism in intergroup relations, in Abelson, R.,
Aronson, E., McGuire, W., Newcomb, T., Rosenburg, M. and Tannebaum, P. (Eds), Theories of
Cognitive Consistency: A Sourcebook, Rand McNally, Chicago, IL.
Downloaded by New York University At 12:37 12 June 2015 (PT)

Carmone, F.J., Green, P.E. and Jain, A.K. (1978), Robustness of conjoint analysis: some Monte
Carlo results, Journal of Marketing Research, Vol. 25, pp. 300-3.
Cocanougher, A.B. and Bruce, G.D. (1971), Socially distant reference groups and consumer
aspirations, Journal of Marketing Research, Vol. 9, pp. 440-43.
Cochran, W. and Cox, G. (1957), Experimental Designs, John Wiley & Sons, New York, NY.
Cohen, J.B. and Golden, E. (1972), Informational social influence and product evaluation, Journal
of Applied Psychology, Vol. 56, pp. 54-9.
Doyle, P. (1977), The application of probit, logit, and tobit in marketing: review, Journal of
Business Research, Vol. 5, pp. 235-48.
Erickson, G.M., Johansson, J.K. and Chao, P. (1984), Image variables in multi-attribute product
evaluations: country-of-origin effects, Journal of Consumer Research, Vol. 11, pp. 694-99.
Fishbein, M. and Azjen, I. (1975), Belief, Attitude, Intention, and Behaviour: An Introduction to
Theory and Research, Addison-Wesley, Reading, MA.
Green, P.E. and Srinivasan, V. (1978), Conjoint analysis in consumer research: issues and
outlook, Journal of Consumer Research, Vol. 5, pp. 103-23.
Green, P.E. and Wind, Y. (1975), New way to measure consumers judgements, Harvard
Business Review, July-August, pp. 107-17.
Hadjimarcou, J., Hu, M.Y. and Bruning, E.R. (1993), Assessing the dimensionality and reliability
of outgroup-specific versions of the CETSCALE, in Cravens, D.W. and Dickson, P.R. (Eds),
American Marketing Association Educators Proceedings, Chicago, IL.
Han, C.M. (1988), The role of consumer patriotism in the choice of domestic versus foreign
products, Journal of Advertising Research, Vol. 28, pp. 25-32.
Han, C.M. (1989), Country image: halo or summary construct?, Journal of Marketing Research,
Vol. 26, pp. 222-29.
Han, C.M. and Terpstra, V. (1988), Country-of-origin effects for uni-national and bi-national
products, Journal of International Business Studies, Summer, pp. 235-55.
Hong, S.T. (1987), Effects of country-of-origin information on product evaluation: an information
processing perspective, unpublished doctoral dissertation, University of Illinois at Urbana-
Champaign, IL.
Hong, S.T. and Wyer, R.S. (1989), Effects of country-of-origin and product-attribute information
on product evaluation: an information processing perspective, Journal of Consumer
Research, Vol. 16, pp. 175-87.
Johansson, J.K., Douglas, S.P. and Nonaka, I. (1985), Assessing the impact of country of origin on
product evaluations: a new methodological perspective, Journal of Marketing Research,
Vol. 22, pp. 388-96.
Kaynak, E. and Cavusgil, S.T. (1983), Consumer attitudes towards products of foreign origin: do
they vary across product classes?, International Journal of Advertising, Vol. 2, pp. 147-57.
 McKelvey, R. and Zavoina, W. (1975), A statistical model for the analysis of ordinal level National loyalty
dependent variables, Journal of Mathematical Sociology, Vol. 4, pp. 103-20.
Maddala, G.S. (1983), Limited-dependent and Qualitative Variables in Econometrics, Cambridge
and product
University Press, Cambridge, MA. choice
Miniard, P.W. and Cohen, J.B. (1983), Modelling personal and normative influences on
behaviour, Journal of Consumer Research, Vol. 10, pp. 169-80.
Netemeyer, R.G., Durvasula, S. and Lichtenstein, D.R. (1991), A cross-national assessment of the
reliability and validity of the CETSCALE, Journal of Marketing Research, Vol. 28, pp. 320-27. 73
Peterson, R.A. and Jolibert, A.J.P. (1995), A meta-analysis of country of origin effects, Journal of
International Business Studies, Vol. 26, pp. 883-900.
Reierson, C. (1966), Are foreign products seen as national stereotypes?, Journal of Retailing, Fall,
pp. 33-40.
Reierson, C. (1967), Attitude changes towards foreign products, Journal of Marketing Research,
November, pp. 385-87.
Ryan, M.J. and Bonfield, E.H. (1975), The Fishbein extended model and consumer behaviour,
Downloaded by New York University At 12:37 12 June 2015 (PT)

Journal of Consumer Research, Vol. 2, pp. 118-36.

Schooler, R.D. (1965), Product bias in the Central American common market, Journal of
Marketing Research, Vol. 2, pp. 394-97.
Shimp, T.A. and Sharma, S. (1987), Consumer ethnocentrism: construction and validation of the
CETSCALE, Journal of Marketing Research, Vol. 24, pp. 280-89.
Tajfel, H. (1981), Human Groups and Social Categories, Cambridge University Press, Cambridge.
Turner, J.C. (1987), Rediscovering the Social Group: A Self-categorization Theory, Basil Blackwell,
Oxford.
Witt, R.E. (1969), Informal social group influence on consumer brand choice, Journal of
Marketing Research, Vol. 7, pp. 473-77.
Witt, R.E. and Bruce, G.D. (1970), Purchase decisions and group influence, Journal of Marketing
Research, Vol. 7, pp. 533-35.

Appendix
The fundamental difference between ordered probit and the probit model is that the choice
alternatives are unlimited, Rr , r = 0, 1, 2, 3, w for the former and limited to two, Rr, r = 0, 1 for
the latter. An ordered probit model consisting of U as an unobservable dependent variable,
Rr choice alternative or observable dependent variables, S, as blocks of independent variables,
and threshold level factor is:
U = + Sv + + e (1.0 )
e ~ N ( 0, 1)
and
R =0 if U < 0
R =1 if 0 < U <
1
R =2 if < U < (1.1)
1 2
R = w if U
w2
where U is a J X 1 vector of unobservable utility of a set of trip attributes to a traveller; and Rr is
a vector of preference ratings. The rs are threshold variables or cut-off points which provide the
ratings of the alternatives.
The threshold concept is central to economic theory of consumer behaviour as typically
modelled in conjoint analyses (Doyle, 1977). The theory asserts that a buyer responds (buys or
 International rates alternatives) when utility exceeds a threshold or critical level of satisfaction. For example,
variations in the independent variables of equation (1.0) would change a travellers utility which,
Marketing when it reaches a certain level, U > r , triggers the rating to switch from one level to another.
Review The system of equations (1.1) shows the relationship among the preference ratings, utility, and
the threshold variable. It demonstrates that a producer would rate a trip attribute set rth only if
14,1 the utility of that trip to the traveller belongs to the rth category (Maddala, 1983). For example, a
traveller would rate a trip attribute set combination zero (e.g. strongly dislike) if the utility derived
74 from that trip attribute combination is negative. On the other hand, a trip attribute set would be
rated wth (e.g. strongly like) if the utility derived from that trip attribute set is greater than any
other utility from other trip attribute sets in the choice situation.
The ordered probit technique is used to estimate partworth values of the trip bundle
attributes. Two equations are involved in the estimation: an underlying model with unobservable
dependent variable, U, and a second equation with an observable dependent variable, R. The
independent variables with attribute levels are presented in Table AI. In equation form:
U = XB + e (1.2)
Downloaded by New York University At 12:37 12 June 2015 (PT)

R=i (1.3 )
where:
U = an unobserved dependent variable representing utility;
X = independent variables (usage, trip purpose, attitudes, demographic factors, conjoint
main effect attributes);
= estimated coefficients or partworth values;
e = error term;
R = preference ratings of air travellers;
i = value of the preference ratings (i.e. 1,2,3 , 10).

Attribute level
Attribute Low Moderate High

Price 50% off coach 25% off coach Coach fare

Table AI. Aircraft type TurboProp 727 DC-10
Conjoint experimental
attributes and attribute Number of stops Two stops One stop Non-stop
levels Country of origin Mexico USA Canada