Where do your shoes come from?

When I want to buy new shoes I go, in the following order for: made in Italy, made in Spain, made in Portugal/Brazil, when I go for wine is: Italy, French, Spanish and…., even for tomatoes sauce I have my preference I want sauce made from Italian tomatoes! I feel a specific product coming from a specific country is better made or has better taste, and If I think quality is better I am willing to pay more.

Country of Origin bias (COO) for example French perfume, German car associated with safety and high quality. how country made influencing valuation. Our perception of the country and associated with the product and give it more value.

A study on Product and Prejudice (Products and Prejudice: Measuring Country-of-Origin Bias in U.S. Wine Imports, Eileen L. Brooks) on wine showed that wine bottle labelled from Italy and France can raise their price (per bottle) more than 50% compared to wines from other countries (e.g. South American wine).  The price is actually influenced by the COE ( Country of Origin Effect).

Customers view some countries associated with bad or good perception and that has an influence on prices.

What companies can do to take advantage of this COE is either to promote it or to mask. There are many example of products that promote the COO by making it a selling point for their product, stating in big characters the provenance for example on Olive Olive bottles if they are 100% from a country that has a good reputation for it (100% Greek, Italian or Spain).

Olio d oliva
(http://www.cavannaolii.com/_templates/images/prodotti/prod_centello/fotobig_centello_olio_extravergine_100_italiano.jpg)

 

Other if they feel that customers will perceive the COO of their product as negative they will try to mask it. For example while I was in Italy I was looking to buy a Moka (cafetiere) so I was looking at the most well known brand Bialetti. On the package it was written in big characters “Designed in Italy” or “Italian design” and then on the back and in very small characters…”made in China” or “made in Romania”.

Bialetti

(http://i.ebayimg.com/00/s/MTIxNVgxNjAw/$(KGrHqJHJBoE7yMgFi5zBPGg8p8uvg~~60_35.JPG)

 

Sometime, however, it is difficult to establish the COO of one product especially if it is food.

(http://youtu.be/cXolDLA428I)

It seems that many people accord a degree of importance to the COO but we can already see that some Companies abuse the system. Believing you are buying a product made in your country (lower carbon footprint, helping local economy…) and discovering (or not) that in the end the product has just been processed in the country.. If the idea to have local product seems to be good, we might need to put in place a tighter legislation. What do you think?

 

Products and Prejudice: Measuring Country-of-Origin Bias in U.S. Wine Imports, Eileen L. Brooks, University of California, Santa Cruz – Department of Economics, June 2003,UC Santa Cruz Center for International Economics Working Paper No. 03-10. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=421800 accessed on 21/12/2013.

http://onlinelibrary.wiley.com/doi/10.1002/hfm.20126/pdf

http://www.emeraldinsight.com/journals.htm?articleid=855271

http://www.youtube.com/watch?v=kFo6vYLd4bw

http://www.youtube.com/watch?v=JC4o7Gt8SSA

http://en.wikipedia.org/wiki/Country-of-origin_effect

http://www.citeman.com/20090-country-of-origin-effect-on-global-brands.html

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3 thoughts on “Where do your shoes come from?

  1. The COO system is very interesting and can be very helpful to develop some qualitative production in restricted area (parmigiano (Italy), Champagne (France), etc..). The famous “Champagne” that can only be produce in a very limited area is a good example of the benefits of COO (and other similar labels) It as given to the region Champagne-Ardennes a very important and unique resource that is well advertised and recognize by many people all over the world and bring some investment and work to this part of France (17th on 22 for the GDP) (1), since 61,4% of the land is today dedicated to farming and Champagne being the leading exporting product for the region, you can imagine that without this AOC (french “COO”) the local economy wouldn’t be so healthy.

    Champagne sounds like a “Brand” to my ears, we can imagine that the benefits of a COO or an AOC could be in some extend, similar to a regular branding.

    I found this very interesting article that shows the conflicts and the non sense that can results in term of labels, since the horse meat scandal (horse meat as been found in 5% of all beef products within the EU) consumer groups tried to push for a full country-of-origin labelling for all meat products, of course meat producers fought against and the European Commission finally dropped the project (they are now working on a label that would only be base on the last period of rearing and the country of slaughter (2). It doesn’t make sense to me, the meat can still come from anywhere with uncontrolled conditions.

    (1) http://www.regions-of-france.com/regions/champagne_ardenne/economy/

    (2) http://www.europeanvoice.com/article/2013/october/eu-drops-country-of-origin-plans/78419.aspx

  2. Hi, good post. Although I think I was not affected by the COO during my purchasing, but it is nature that people trust some kinds of products from a specific location. I am too lazy to see where do the goods come from.
    I think this can be applied in another way, I mean there might be something like “City of Origin bias”. For example, in China, people trust the chinaware products from Jingdezhen. This can be useful for the company that target domestic market. I believe some companies have already been using it.

  3. I feel very strongly for COO effects but I think it´s because of Word of mouth. I hear a lot of information from friends and family about how Swiss and Belgian chocolate is amazing and even though I don´t really like chocolate or eat it much if somebody asks me what two countries make the best chocolate in the world they´re going to be Belgium and Switzerland. Word of mouth effects/ media effects can be very strong in influencing our beliefs. The french make very good cheese and wine apparently. Word of mouth can affect the brands we like Witt (1969) and our expectations of products. Anderson (2003)

    Anderson, E. W. (2003). The Formation of Market‐Level Expectations and Its Covariates. Journal of Consumer Research, 30(1), 115-124.

    Witt, R. E. (1969). Informal social group influence on consumer brand choice. Journal of Marketing Research, 473-476.

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