PRODUCT COUNTRY-OF-ORIGIN PERCEPTIONS OF CONSUMERS IN PAKISTAN Soumava Bandyopadhyay, Lamar University Syed Tariq Anwar, West Texas A&M UniversityABSTRACTIn this paper, Pakistani consumers perceptions regarding electronic and electrical products made in Pakistan, theUnited States, Japan, South Korea, China and Germany are compared. Consumers in Pakistan are observed to holddistinctly different views of products from different countries in terms of quality, value, image and promotion.INTRODUCTIONThe attractiveness of Pakistan as a market in the global arena is on the rise. Although often eclipsed by theneighboring "big emerging markets" of China and India, Pakistan nevertheless offers many opportunities tointernational marketers. From 1950 to 1992, Pakistan grew by 700 percent, ranking it the 27th fastest growingeconomy in the world (Zonis 1997). Even after a slowdown due to domestic political turmoil and internationaleconomic sanctions following nuclear weapons testing, the real annual GNP growth rate is estimated at 3.1%(Information Please Almanac 1999). The relatively low per capita GNP (adjusted for purchasing power parity) of$2,600 (Information Please Almanac 1999) does not fully reveal the attractiveness of the Pakistani market. Only 30percent of Pakistans 135 million population would be considered economically "comfortable" by Westernstandards (Jutkins 1997), but even that puts the number of Pakistani middle-class consumers with good purchasingpower at a sizable 40 million. In fact, a recent article has rated Pakistan as one of the four choices of emergingmarkets (along with India, Egypt, and Israel) for international marketers that are likely to have robust economicgrowth in the coming decade (Zonis 1997).This paper presents an exploratory study of Pakistani consumers relative attitudes towards domestically-madeproducts and products imported from five major trading partners-the United States, Japan, China, South Korea, andGermany. Essentially, this is a product country-of-origin (COO) study where consumer attitudes toward variousproduct- and marketing-related dimensions such as quality, value, image, and promotion are linked with theproducts countries of origin. The results of the study provide a view of the relative competitive positions ofmanufacturers from other countries and domestic manufacturers in the Pakistani market in terms of variousmarketing variables as perceived by the consumers themselves. Exporters to the Pakistani market are likely to beinterested in learning about any biases that middle-class consumers in Pakistan may have toward imported productsfrom various countries. Pakistani manufacturers will benefit from learning how "Made in Pakistan" products areevaluated relative to imports by consumers.A brief review of the relevant background country-of-origin research is presented in the next section. This isfollowed by an explanation of the research design and the presentation of the results. Finally, in discussing themanagerial implications, prescriptions are made to marketers from different countries for improving theircompetitiveness in the Pakistani market given the present perceptions of the consumers.
BACKGROUND LITERATURE REVIEWA products COO is an informational cue which, like other informational cues such as price, brand name, etc., helpsconsumers evaluate products and develop attitudes towards them (Papadopoulos 1993). The most direct way inwhich this cue can be given is through the products "made in" label. In spite of the current proliferation of globalbrands, COO remains an important factor in consumer product evaluation (Tse and Gorn 1993). Consumers tend toexhibit "national stereotyping," which is a biased way of thinking about people and products from a country(Johansson and Thorelli 1985). Consumers perceptions of a foreign country (economic prosperity, technologicaladvances, etc.) are often translated into consistent perceptions regarding the quality of products from that country(Bilkey and Nes 1982). Liefeld (1993) reviewed the results of experimental research on COO effects through ameta-analysis, and observed that, in most field studies, there was a significant statistical relationship between COOand consumer product evaluations and choices.The vast majority of COO studies to date have been reported from developed country markets such as the UnitedStates (cf. Nes and Bilkey 1993), Canada (Hung 1989), France (Baumgartner and Jolibert 1977), the UnitedKingdom (Hooley, Shipley, and Krieger 1988), and Japan (Nagashima 1977). More recently, some COO studieshave been reported from emerging markets such as China (Klein, Ettenson, and Morris 1998), Korea (Sharma,Shimp, and Shin 1995), Russia, Poland, and Hungary (Ettenson 1993). There is, however, no comprehensive COOstudy reported to date from Pakistan. Given Pakistans increasing importance as a viable emerging market, thisstudy, therefore, is expected to fill a void in the literature and provide managerial directions to internationalcompetitors expanding into the Pakistani market.RESEARCH DESIGNThe study investigated COO perceptions of Pakistani consumers regarding products made in Pakistan and thoseoriginating from five of its major trading partnersthe United States, Japan, China, South Korea, and Germany. Itwas necessary to select an appropriate product category in view of the previously documented relationship betweenthe strength of COO effects and the nature of the product (Liefeld 1993). The household electronic and electricalproduct category was selected because Products in this category are generally regarded as coveted durablepossessions by the Pakistani middle class and are often seen as status symbols. Examples of products within thiscategory include television sets, VCRs, stereos, radios, telephones, calculators, autofocus still cameras, personalcomputers, kitchen appliances, etc.Research QuestionsThe following research questions were addressed in the exploratory study:1. How do Pakistani consumers rank products from the United States, Japan, China, South Korea, Germany, andPakistan in terms of perceived quality, value, image, and promotion?2. How are Pakistani consumers general attitudes toward the six countries (in terms of economic, educational, andtechnological factors) reflected in the evaluation of products from these countries?The first research question sought to find out the competitive rankings of the six countries in terms of the quality,value, image, and promotion of products from these countries, as perceived by Pakistani consumers. The secondresearch question tested the previously suggested (Bilkey and Nes 1982) correlation between consumersperceptions of a country and their perceptions of products from that country.
Sampling FrameThe sampling frame for the study comprised business students at four premier colleges in Pakistan. Surveying thesestudents was deemed appropriate as business graduates are considered to be among the elite professionals inPakistan. They are the cream of the emerging middle-class and are more likely to be able to afford expensiveforeign products. Hence, they are the target market for most foreign manufacturers expanding into the Pakistanimarket.The survey was distributed among 350 graduate business students at four institutions. A total of 180 usableresponses were received, corresponding to a response rate of 51.4 percent. Of the 180 respondents, 119 (66.1%)were male and 61 (33.9%) were female. The average age of the respondents was 23.1 years. Only six of the 180respondents (3.3%) had just completed their masters degrees, while the rest (174, or 96.7%) were enrolled inmasters degree programs after completing their bachelors degrees.Measures of ConstructsThe subjects in the sample were given selfadministered questionnaires that included scales to measure theirperceptions regarding the quality (QUALITY, 4 items), value (i.e., price relative to quality, VALUE, 2 items),image (IMAGE, 2 items), and promotion (PROMOTION, 2 items) of household electronic and electrical goodsmade in the United States, Japan, China, South Korea, Germany, and Pakistan, and scales to measure their generalattitudes toward the six countries in terms of economic, educational, and technological factors (COUNTRY, 4items). The scales were adapted from the established COO measure by Pisharodi and Parameswaran (1991). Therespondents were asked on a 7-point Likert scale (1 = strongly disagree, 7 = strongly agree) their extent ofagreement with statements on quality, value, image, and promotion of products associated with the six countries aswell as general characteristics of the six countries. A respondents score on each measure was obtained bycomputing the means across the items in the relevant scale.RESULTSProduct QualityThe mean ratings for product quality (QUALITY) for the six countries were compared by means of paired t-testsbetween all pairs of countries. The results are shown in Table 1. Japanese products were rated the best in quality byPakistani consumers. American and German products were tied for the second place (with no statistical differencefound between them from the paired t-test), followed by products from South Korea and China. The quality ofdomestically made products were rated behind that of products from all five foreign countries. Table 1 Comparison of Product Quality Perceptions (measure: QUALITY)Rank* 1 2 2 4 5 6Country Japan United States Germany S. Korea China PakistanMean Rating 6.211 5.482 5.476 4.203 3.969 2.603S.D. .971 .980 1.142 1.080 1.312 1.087 * Same ranking for two countries indicates no statistically significant difference in rating at the p < .05 level
Product ValueProduct value was operationalized as perceived product quality relative to the price charged. The mean ratings forproduct value (VALUE) for the six countries were compared by means of paired t-tests between all pairs ofcountries. The results appear in Table 2. Pakistani consumers ranked Chinese, Japanese, and South Korean productsat the top in terms of value offered (with no significant difference among the three). German and Pakistani productstied for the fourth place. American products were perceived to offer the least value and were ranked last. Table 2 Comparison of Product Value Perceptions (measure: VALUE)Rank* 1 1 1 4 4 6Country China Japan S. Korea Germany Pakistan United StatesMean Rating 4.956 4.769 4.742 3.958 3.814 3.547S.D. 1.106 1.347 1.039 1.107 1.404 1.158 * Same ranking for two countries indicates no statistically significant difference in rating at the p < .05 levelProduct ImageProduct image was operationalized in terms of perceived attractiveness and prestigiousness. Again, paired t-testsbetween all pairs of countries were conducted to compare the mean ratings, this time of the product image(IMAGE) measure. The results, presented in Table 3, indicate that the image of Japanese products was rated to bethe best. The image of Japanese products was followed by that of products from the United States, Germany, SouthKorea, China, and Pakistan, in that order. Table 3 Comparison of Product Image Perceptions (measure: IMAGE)Rank* 1 2 3 4 5 6Country Japan United States Germany S. Korea China PakistanMean Rating 5.842 5.550 5.250 4.292 3.989 3.014S.D. 1.300 1.139 1.128 1.196 1.309 1.461 * Same ranking for two countries indicates no statistically significant difference in rating at the p < .05 levelPromotionhe measurement of promotion was made in terms of perceived advertising intensity and availability ofproductrelated information. Table 4 shows the rankings of the six countries on the promotional dimension, obtainedby means of paired t-tests between all pairs of countries for the mean ratings of product promotion (measure:PROMOTION). Japan was ranked at the top in terms of product promotion, and the United States was rankedsecond. No statistically significant difference was found for the product promotion ratings for the other fourcountries (South Korea, Germany, Pakistan, and China) that followed Japan and the United States.
Table 4 Comparison of Product Promotion Perceptions (measure: PROMOTION)Rank* 1 2 3 3 3 3Country Japan United States S. Korea Germany Pakistan ChinaMean Rating 6.008 5.158 4.311 4.147 4.142 4.120S.D. 1.221 1.622 1.359 1.487 1.758 1.388 * Same ranking for two countries indicates no statistically significance in rating at the p < .05 levelRelationship of Country Image and Product Evaluationhe relationship between the perceived image of a country and the evaluation of products from that country wasexamined by computing the correlation coefficients between the image of each country (mean score of the measureCOUNTRY) and the measures for quality, value, and image of products from that country. Only these threevariables were considered for the correlation analysis as these variables (quality, value, and image) were consideredto be perceptual measures, whereas the product promotion measure was based more on objective information (howintensely are products advertised, and how easily is product-related information available in the market?) thanperception. The correlations are presented in Table 5. It is observed that all but three of the correlations arestatistically significant and positive. This, in general, confirms that when consumers have a positive attitude towarda country, they usually also have a favorable attitude towards products (in terms of quality, value, and image) fromthat country as well. Table 5 Relationship of Country Image with Product EvaluationCountry Correlation of coun image (COUNTRY) with: Product Quality Product Value Product ImageUnited States .538a -.116 .342aJapan .453a -.096 .291aSouth Korea .542a .191b .494aChina .620a .255b .540aGermany .530a .135 .376aPakistan .548a .250a .525a a Significant at p < .01, b Significant at p < .05
MANAGERIAL IMPLICATIONSThe competitive rankings of products from the six countries in terms of the various attributes are summarized fromTables 1 through 4, and are shown in Table 6 below. Pakistani consumers seem to have a more favorable attitudetoward imported products compared to domestic products along most dimensions. This general preference forimported products is consistent with previous studies in other countries, which indicated that products from moredeveloped countries were evaluated more positively by consumers than products from less-developed countries(Gaedeke 1973). Table 6 Competitive Positions of Countries along Various Product-Related DimensionsCountry Rank along dimension: Quality Value Image PromotionJapan 1 1 1 1United States 2 6 2 2Germany 2 4 3 3South Korea 4 1 4 3China 5 1 5 3Pakistan 6 4 6 3Japanese products appear to have the best overall perceptions among consumers in Pakistan. They are rated at thetop in terms of all the attributes--product quality, value, image, and promotion. One can conclude, therefore, thatJapanese electronic and electrical products are currently quite some way ahead of the competition in the Pakistanimarket.For American products, the major competition is quite well-defined--the Japanese, American products lag onlyJapanese products on three dimensions--quality, image, and promotion, in the Pakistani market. However,American products are ranked dead last in terms of perceived product value, i.e., they are perceived to be tooexpensive despite the relatively high quality. This is potentially troubling news for American marketers because,when consumers in an emerging market must make a trade off between quality and value, the majority of them arelikely to choose value over quality due to affordability concerns (Cateora 1996). Therefore, American marketersneed to reduce prices in the Pakistani market to more reasonable (as perceived by consumers) levels.German marketers also appear to suffer from a comparatively low value image. Besides, German products are tiedfor the second place on the quality dimension, but lag both Japanese and American products in terms of image andpromotion. German marketers may be able to get more mileage from the high quality perceptions if they could usemore promotion to project a better value image for their products.South Korean and Chinese marketers need to take advantage of the high value perceptions (Table 6) of theirproducts. The promotional intensity of South Korean and Chinese products lag that of Japanese products, and thequality and image perceptions lag those of Japanese, American, and German products. Even with the relatively lowquality and image perceptions, South Korean and Chinese products should have good potential in the Pakistanimarket, considering the value focus of consumers in emerging markets as mentioned before (Cateora 1996). SouthKorean and Chinese marketers may also want to increase their promotional intensity to improve the perceivedquality and image of their products, to supplement the already high perception of value.
Pakistani products lag the imports from all five countries in terms of perceived quality and image. However,Pakistani products are thought by consumers to have better value than American products and about the same valueas German products. It should be relatively easier for Pakistani manufacturers to increase the intensity of promotionin their own domestic market, and that may eventually result in an enhanced image for domesticallymade products.CONCLUSIONThis exploratory study provides some initial insights into product COO perceptions of consumers in Pakistan.Household electronic and electrical goods were considered as the product category in this study as this productcategory appeared to be very important to middle-class Pakistani consumers. Caution should be exercised ingeneralizing the results across all product categories, as the product category is a salient factor in product COOevaluations (Wall, Liefeld, and Heslop 1989). Marketers from Japan, the United States, Germany, South Korea, andChina can assess their current competitive situation in terms of various marketing-related dimensions (productquality, value, image, and promotional effectiveness) in the promising Pakistani market. Future research shouldinclude countries other than the five featured in the present study, as the increasingly affluent middle-classpopulation in the emerging Pakistani market is able to attract product marketers from many different countries.REFERENCESBaumgartner, G. and A. Jolibert (1977), "The Perception of Foreign Products in France," in Advances in ConsumerResearch, vol. 5, H.K. Hunt ed. Ann-Arbor, MI: Association for Consumer Research, 603-605.Bilkey, W.J. and E. Nes (1982), "Country of Origin Effects on Product Evaluations," Journal of InternationalBusiness Studies, 13 (Spring/Summer), 88-99.Cateora, Philip (1996), International Marketing. Ninth Edition, Burr Ridge, IL: Irwin.Ettenson, R. (1993), "Brand Name and Country-of-Origin Effects in the Emerging Market Economies of Russia,Poland, and Hungary," International Marketing Review, 10 (5), 14-36.Gaedeke, R. (1973), "Consumer Attitudes Toward Products Made in Developing Countries," Journal of Retailing,49, 13-24.Hooley, G.J., D. Shipley, and N. Krieger (1988), "A Method for Modelling Consumer Perceptions of Country ofOrigin," International Marketing Review, 6 (1), 67-76.Hung, C.L. (1989), "A Country-of-Origin Product Image Study: The Canadian Perception and Nationality Biases,"Journal of International Consumer Marketing, 1 (3), 5-26.Information Please Almanac (1999), http://lycos.infoplease.com/ipa/AO107861.html.Johansson, J.K. and H.B. Thorelli (1985), "International Product Positioning," Journal Of International BusinessStudies, 16 (Fall), 57-74.Jutkins, Ray (1997), "The New World of Direct Marketing in the Third World of Pakistan," Direct Marketing, 59(10), 22-24.
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