Perception of the quality of products made in India by consumers from the United States: a longitudinal analysis.Abstract
Although India's leaders began to gradually open up the country's economy in the 1980's it was not until 1991, in the wake of the Soviet Union's collapse, that major reforms were instituted. During 1991, as a result of the dismantling dis·man·tle
tr.v. dis·man·tled, dis·man·tling, dis·man·tles
a. To take apart; disassemble; tear down.
b. of industrial controls, reduction of trade protection, and a favorable fa·vor·a·ble
1. Advantageous; helpful: favorable winds.
2. Encouraging; propitious: a favorable diagnosis.
3. attitude toward foreign investment, India's economy was opened. This resulted in a rapid increase in international trade, including trade with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Increased trade between India and the United States, the importing into the United States of talented professionals from India, the outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. of services to India, Indian students studying in the United States, tourists from India, international news media and Prime Minister Dr. Manmohan Singh's recent visit to the United States have all contributed to increased exposure by U.S. citizens to India, its culture and its products.
In order to determine if increased exposure to products from India during the past decade has resulted in a change in perceptions of the quality of products from India on the part of U.S. consumers, a longitudinal lon·gi·tu·di·nal
Running in the direction of the long axis of the body or any of its parts. analysis was conducted. Data for the study were collected in the years 1994 and 2005. This paper reports the results of that study. It should be noted that the results reported herein are only a portion of the larger research study conducted.
Economic reform and opening to the outside world have become global trends, with international markets becoming important for trade throughout the world. Moreover, this trend is not limited to developed countries. In an effort to accommodate the movement toward an integrated world economy one sees socialist countries This is a list of countries, past and present, that declared themselves socialist either in their names or their constitutions. No other criteria are used; thus, some or all of these countries may not fit any specific definition of socialism. , and some of the developing countries, making an effort to restructure their economies while adopting an open door policy toward trade. As a result of the movement toward an integrated world economy, international trade, as well as the competition inherent in it, has dramatically increased.
Research has demonstrated that as consumer knowledge of international products improves, bias against foreign products tends to decrease (Damanpour 1985). Thus, as U.S. consumers increasingly come into contact with product offerings from other countries, and as domestic firms seek to expand their markets overseas, issues of national product images become ever more apparent. The primary research in this area of inquiry is termed country-of-origin or country image studies. The principal aspect of the country-of-origin effect is that consumers form an image of various countries and their products, which in turn, may affect purchase behavior. Research has demonstrated that a consumer's image of the country in which a product is made influences the evaluation and, in some cases, the purchase intention of products from a given country (Bilkey and Nes 1982; Erickson, Johansson, and Chao 1984; Johansson, Douglas and Nonaka 1985; Darling and Arnold 1988; Han and Terpstra 1988; Hong and Wyer 1989; Thorelli, Lim and Ye 1989; Papadopoulos, Heslop and Bamossy 1990; Roth and Romeo 1992; Baughn and Yaprak 1993; Chao 1993).
Dichter (1962, p. 116) wrote that "the little phrase 'made-in ...' can have a tremendous influence on the acceptance and success of products," and Nagashima defined the "made-in" image as:
The picture, the reputation, the stereotype that businesses and consumers attach to products of a specific country ... (having) a strong influence on consumer behavior in the international market as it is associated with mass communication, personal experience, and views of national opinion leaders. (Nagashima 1970, p.680).
Since Dichter made his observation, research in the area of country-of-origin effects on product perceptions has escalated. The issue has been addressed from various perspectives, beginning with Schooler's (1965) study which identified product-origin bias on the basis of evaluation differences of products that were identical except for made-in labels.
Cultural differences have been shown to exert a pervasive pervasive,
adj indicates that a condition permeates the entire development of the individual. influence on the environment between countries and the result is what is termed the country-of-origin-effect (Schooler 1965; 1971; Reierson 1966; Nagashima 1970; 1977; Lillis and Narayana 1974; Wang and Lamb 1980; Bilkey and Nes 1982; Lumpkin, Kim and Crawford 1984; Johansson, Douglas and Nonaka 1985). More recently, the country-of-origin effect has been defined as "buyers" opinions regarding the relative qualities of goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. produced in various countries (Bilkey 1993, p. xix). It is apparent, then, that it is the consumer's perception of the relative quality of goods and services produced in various countries that is the important factor to be considered.
Quality is a complex and multifaceted concept, with each product containing multidimensional aspects of quality. The extant literature Extant literature refers to texts that have survived from the past to the present time. Extant literature can be divided into extant original manuscripts, copies of original manuscripts, quotations and paraphrases of passages of non-extant texts contained in other works, has incorporated an apparent coexistence co·ex·ist
intr.v. co·ex·ist·ed, co·ex·ist·ing, co·ex·ists
1. To exist together, at the same time, or in the same place.
2. of several approaches within its definition of quality. Garvin (1987) notes that most businesses view quality from a business perspective, with most discussions attempting to define and measure it from a company perspective. However, it is the consumer's subjective perception of a given product that determines a product's popularity and, therefore, it is the concept of perceived quality, as defined from the consumer-based point of view that is important. Thus, quality may be viewed as the consumer's standard of performance for products or services (Garvin 1983; 1987).
Evaluations of perceived quality usually occur within a comparison context wherein where·in
In what way; how: Wherein have we sinned?
1. In which location; where: the country wherein those people live.
2. a product's quality is evaluated as high or low depending upon its excellence or superiority versus its failings or inferiority relative to other products which are perceived by the consumer to be substitutes (Zeithaml 1988). Thus, consumer perception of the relative quality of goods and services produced in various countries is an important factor to be considered. For the purposes of this study, a definition by Castleberry and Resurreccion (with a few minor additions) is used to define perceived quality. Specifically, perceived quality may be understood to be:
a belief[or a consumer's perception] about the degree of excellence of a good or service [from a given country-of-origin] that is derived by one's examining, consciously or unconsciously, relevant cues that are appropriate and available, and that is made within the context of prior experience, relevant alternatives, evaluative criteria, or expectations. (Castleberry and Resurreccion, 1989, p. 23)
National Stereotyping of Product Quality
The country-of-origin of a product communicates information about a product (e.g., product quality). Prior research indicates that consumers may view products from a given country in a consistently positive or negative fashion (i.e., in a stereotypical manner). Furthermore, this phenomenon is not limited to consumer markets; research tends to indicate that even industrial customers hold stereotypical images of countries and/or a country's products. The term national stereotyping was developed to refer to consumers' tendencies to form images of imports from a designated country in a consistent manner. Research indicates that these stereotypes may affect purchase behavior.
Foundational studies related to research on stereotyping of products based on their origin originated over 40 years ago with Schooler's (1965) study. Since that time, several other studies (e.g., Schooler 1971; Barker barker
a term for an animal that does not usually bark which makes a violent respiratory effort, often during a convulsion, accompanied by a sound which roughly resembles a dog's bark. 1987; Johnson and Thorelli 1985) have demonstrated differences in consumer attitudes toward foreign products attributable to knowledge of the country-of-origin. As the term implies, national stereotyping refers to consumers' tendencies to view products from a given country in a consistent fashion. According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. Johansson and Thorelli (1985), stereotyping must be taken into consideration when determining an appropriate marketing strategy for imported goods, since the source country of an imported product will often be a salient factor in the consumer's evaluation process. They posit that the effect of a country stereotype stereotype (stĕr`ĕətīp'), plate from which printing is done, made by casting metal in a mold, usually of paper pulp. The process was patented in 1725 by the Scottish inventor William Ged. will be to shift the position of the product within the consumer's perceptual space and, thereby, alter the overall evaluation of its merits. The final outcome of this process, according to Johansson and Thorelli (1985), is that the competitive strength of the product will be affected by country biases.
Specific Product vs. General Product Debate
Some debate exists about whether product quality images are global in nature or product-specific. Research conducted using the general image of a country's products usually use the approach of Nagashima (1977) which asks respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. to rate "products from Country--." Research conducted using the specific-product approach generally asks respondents to rate specific product categories, such as electronics, or specific products, such as television sets. According to Papadopoulos (1993), it is what the consumers perceive that is important. Country-of-origin studies have used various levels of extraction including: (1) brands, (2) companies, (3) product categories and, (4) general products. Consumers have been found to be able to differentiate between the levels and assess country images at the various levels of extraction (Papadopoulos 1983).
Domestic vs. Foreign Preference
Some early studies investigating the effect of country-of-origin on the perception of product quality tended to indicate that consumers had a preference for domestic products and, therefore, rated domestic products higher in quality relative to products from other countries (Darling and Kraft 1977; Baumgartner and Jolibert 1977; Gaedeke 1973; Lillis and Narayana 1974; Dickerson 1986). However, other studies reported that consumers do not always prefer domestic products over imports (Nagashima 1970; 1977; Bannister and Saunders 1978; Heslop and Wall 1985; 1986). Domestic preference may be nonexistent non·ex·is·tence
1. The condition of not existing.
2. Something that does not exist.
non for a country and, when it does exist, is susceptible to change over time (Heslop and Papadopoulos 1993). Other researchers have found evidence that the preference for domestic products is not universal (Dornoff, Tankersley and White 1974; Czepiec and Gottko 1984; Lumpkin, Crawford and Kim 1985; Johansson, Douglas and Nonaka 1985; Sternquist and Tolbert 1986; Papadopoulos, Heslop and Beracs 1990).
The Dynamic Nature of Product-Origin Bias
It has been demonstrated that consumer preferences and other dynamic factors in the marketing environment, which influence one's assessment of product quality as well as willingness to purchase imported products, vary across time for both consumer and industrial goods industrial goods npl → bienes mpl de producción . (Gluckman 1986; Darling 1987; Nagashima 1970; 1977; Cattin, Jolibert, and Lohne 1982).
Bauer (1960; 1967). introduced the concept of perceived risk into the Consumer Behavior literature. According to Bauer's conceptualization con·cep·tu·al·ize
v. con·cep·tu·al·ized, con·cep·tu·al·iz·ing, con·cep·tu·al·iz·es
To form a concept or concepts of, and especially to interpret in a conceptual way: , risk is inherent in consumer behavior, since any action by a consumer produces consequences which cannot be anticipated with certainty. Moreover, not all of these consequences will be positive, and some may be quite negative. According to Bettman (1973), the amount of perceived risk is likely to be greater (1) when there is little information about the product category; (2) when the consumer has little experience with brands within a product category; (3) when the product is new; and/or (4) when the consumer has little self-confidence in his or her ability to evaluate the quality of a product.
According to Cunningham (1967), consumers are able to recognize explicitly that there is risk involved in the purchase of products and that such risk varies by product category. Risk perception has been found to be greater when the product is relatively expensive, important, and technologically complex and when the consumer has limited information about the product category (Bettman 1973). Research indicates that the consumer's perception of risk is greater when the purchase consideration involves products made in a country which he or she perceives as having a low image (Gaedeke 1973; Nagashima 1970; 1977; White 1979; Bilkey and Nes1982; Cattin, Jolibert and Lohnes 1982). Product evaluation has been shown to decrease when the perception of risk increases (Bauer 1960) and, moreover, the willingness to purchase a product has been found to be inversely related to the perception of risk in a given purchase situation (Bauer 1960).
The implications of the foregoing should be apparent: in a given purchase or consumption situation, U.S. consumers often evaluate products from a country with economic, political, and social orientations which may be significantly divergent di·ver·gent
1. Drawing apart from a common point; diverging.
2. Departing from convention.
3. Differing from another: a divergent opinion.
4. from those of the domestic market. Furthermore, consumers may evaluate imported products in a manner quite different from the way they look at domestic products. Thus, in a given purchase or consumption situation, consumers will evaluate a product based on the information that is available. During the time frame of this study, there has been an increased amount of information available to U.S. consumers about India, its culture and its products. For examples, as presented in Figure 1, during the past decade US imports of Indian products have increased by 300% (from 5.3 billion U.S. dollars to 15.6 billion U.S. dollars).
The number of Indian students enrolled in U.S. colleges and universities has also increased during the time frame of the current study (i.e., 1994-2005). As Figure 2 indicates, there were 34,000 Indian students studying in the U.S. in 1995 and 75,000 studying here in 2003. Interactions between students from the U.S. and India both inside and outside of the classroom provide information about the two cultures and their products. At least part of the information can be assumed to be related to products and, therefore, the perception of risk on the part of the U.S. consumer is minimized.
Another opportunity for U.S. consumers to acquire information about India's products is through interaction with, and/or observation of tourists. As presented in Figure 3, visitors from India increased from 75,000 in 1995 to 151,000 in 2002 (down from 253,000 in 2000).
As indicated above, in addition to the increase in imports from India between 1994-2005, there have been an increased number of students from India studying in the U.S. as well as an increase in the number of tourists from India. These factors have resulted in more exposure to products from India and increased the potential for interaction with people from India, thereby increasing the potential to learn more about India and its products. Also, during the time frame of this study, there has been an increase in coverage of India by the international news media. As a result, even though U.S. consumers may not know about the intricacies of India or its culture, they are exposed to general news of the country and its products. This increased information may decrease the perception of risk with products made-in- India.
Design of The Study
A convenience sampling method was employed for the data collection. For the 1994 sample, n = 99 and for the 2005 sample n = 87. The research instrument consisted of a self-explanatory, self-administered questionnaire. The questionnaire contained several sections related to the various components of the research. The focus of one part of the questionnaire utilized a general product approach to ask respondents their impression of various aspects of the marketing mix for products made in India The Term Made in India may mean the following:
Theoretical underpinnings of Charles E. anchor points were randomly assigned as·sign
tr.v. as·signed, as·sign·ing, as·signs
1. To set apart for a particular purpose; designate: assigned a day for the inspection.
2. to the left and right sides of the scale in order to prevent potential sequence bias and routinization of responses.
Another section of the survey instrument utilized a specific-product approach using specific product categories. Respondents were presented with a five point scale (very high to very low) asking them to rate the quality of products (i.e., products in general) made in India as well as the quality of mechanical products, food products, fashion products and electronic products made in India.
In order to determine the variables that show statistically significant differences between the two years, the data were analyzed an·a·lyze
tr.v. an·a·lyzed, an·a·lyz·ing, an·a·lyz·es
1. To examine methodically by separating into parts and studying their interrelations.
2. Chemistry To make a chemical analysis of.
3. using ANOVA anova
see analysis of variance.
ANOVA Analysis of variance, see there . Table 1 presents the results of the ANOVA for respondents' impressions of various aspects of the marketing mix for products made in India.
As indicated in Table 1, the respondents in the year 2005, as compared to the respondents from the year 1994, found products from India to: be technically less advanced; be more reliable; have a more common than exclusive image; be more handmade hand·made
Made or prepared by hand rather than by machine.
made by hand, not by machine
Adj. 1. than mass produced; be more for the middle and lower class than for the upper class; have more recognizable brand names and have good value.
Consumers judge a product's attributes relative to another product's attributes. During the time frame of this study, U.S. consumers were exposed to products from a number of nations that are more industrialized in·dus·tri·al·ize
v. in·dus·tri·al·ized, in·dus·tri·al·iz·ing, in·dus·tri·al·iz·es
1. To develop industry in (a country or society, for example).
2. than India. Several research studies have reported that U.S. consumers perceive products developed by industrialized countries to be superior to products developed by less industrialized countries (Erogul and Machleit 1989; Johansson 1989; Papadopolous, Heslop, and Bamossy 1989; Papadopolous et. al.., 1990). Moreover, this finding is not limited to consumers from the U.S. (Schweiger, Habul, and Friederes, 1995). Another aspect to be considered is that India is better known for producing professionals (especially academicians, medical doctors, and computer software engineers) than producing industrial goods.
The increased number of imports from India (please refer to Figure 1) during the time frame of this study has resulted in increased exposure to India's products. There is a wider range of products than in past years. The products available-from India in U.S. markets today include items such as fashion merchandise, shoes, decorations, etc. These products are found in larger quantities and in more outlets than a decade ago. Greater availability and increasing competition has led to a decline in price. As a result, it appears that U.S. consumers view these products as having a more common (i.e., rather than exclusive) image and, therefore, are available to all consumers. Although in the past consumers may have viewed handmade products as being expensive, the availability of handicrafts from India in retail stores such as Pier pier, in engineering, term applied to a mass of reinforced concrete or masonry supporting a large structure, such as a bridge. When piers are built on ground of poor bearing value, it is often necessary to drive piles to obtain a firm base. 1 and Penney's has led to the realization that handmade products are not necessarily expensive.
Increased exposure to products from India over the past decade has resulted in more brand recognition for Indian products. A study by Gaedeke (1973) reported that consumers' preference differed between branded products and non-branded products made in the U.S. and made in less developed countries. Brand recognition is important since it has been found to decrease the perception of risk in a purchase decision (Cordell 1993; Ettenson, 1993; Howard 1994).
According to Dodds (1991), a consumer's perception of value is based on their overall assessment of the product in terms of what is received (i.e., benefits) and what is given up (i.e., including, but not limited to, money). A greater number of respondents in 2005, compared to respondents in 1994, view products from India as having good value.
Table 2 shows respondents' perceptions of products in general as well as the perception of mechanical products, food products, fashion products, and electronic products. It is noted that in all categories, the respondents from the year 2005 rated quality higher than did the respondents from year 2004.
V. MANAGERIAL CONTRIBUTIONS
The results of the longitudinal survey reported in this paper have allowed us to examine the perceptions of the quality of products made in India over an l 1-year period (1994-2005). These results have strategic implications for managers from the U.S. as well as managers from India.
Given that consumption is fast becoming a global phenomenon, local suppliers are no longer guaranteed special status. Domestic preference is not universal, nor can it be counted on to be resistant to marketplace changes. For example, Americans' views of their own products have been found to fluctuate, being quite negative at times (ASQC ASQC - American Society for Quality Control 1980; Seaton and Vogel 1981; Sternquist and Tolbert 1986).
As a result, the uncertainty, and therefore the risk, surrounding sur·round
tr.v. sur·round·ed, sur·round·ing, sur·rounds
1. To extend on all sides of simultaneously; encircle.
2. To enclose or confine on all sides so as to bar escape or outside communication.
n. marketing decisions regarding the effective allocation The apportionment or designation of an item for a specific purpose or to a particular place.
In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of marketing expenditure, tends to increase when potential trade partners consist of countries with different economic, cultural, and political environments. In addition, the prediction of change within a given industry becomes more difficult. Furthermore, given the dynamic nature of the competitive environment, an efficient and effective marketing strategy at one particular time may not be efficient and effective at another point in time.
Thus, the results of this study will be beneficial to managers in their strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. process. Managers from U.S. firms want to import products from a country with a reputation for having good quality products. Managers from India, who are exporting to the United States, would also want to know consumer perceptions of their product(s). The strategic window of opportunity provided by favorable product quality perceptions must be taken advantage of while it exists. For negative product perceptions, strategies must be implemented to change the negative perception. Furthermore, since competitors in the domestic market are often subsidiaries of a foreign firm, the issue is relevant not only for firms competing in international markets but also for firms choosing not to compete internationally.
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Ruth Lumb, School of Business, Minnesota State University Moorhead The school's college radio station is KMSC. History
The plans for what would become MSUM were laid down in 1885, when the Minnesota State Legislature passed a bill declaring the need for a new state normal school in the Red River Valley, with an eye on Moorhead. , Moorhead, MN 56563, Phone: (218) 477-4652, e-mail: email@example.com
Vinod Lall, School of Business, Minnesota State University Moorhead, Moorhead, MN 56563, Phone: (218) 477-4648, e-mail: firstname.lastname@example.org
Table 1 ANOVA Year 1994 and Year 2005 Variables F df prob Technically Advanced (1) 32.3655 1,174 0.0000 Backward (7) Reliability Reliable (1) 4.6366 1,170 0.0327 Unreliable (7) Image Common (1) 6.5912 1,171 0.0111 Exclusive (7) Production Mass (1) 22.8596 1,177 0.0000 Handmade (7) Economic Class Lower (1) 93.2279 1,172 0.0000 Upper (7) Brand Recognizable (1) 8.3057 1,170 0.0045 Unrecognized (7) Value Good (1) 5.2380 1,170 0.0233 Poor (7) Group means Variables India 1994 India 2005 Technically Advanced (1) 3.0435 4.1786 Backward (7) Reliability Reliable (1) 4.5287 4.0824 Unreliable (7) Image Common (1) 4.1364 3.4118 Exclusive (7) Production Mass (1) 2.9362 4.3647 Handmade (7) Economic Class Lower (1) 5.1798 3.0000 Upper (7) Brand Recognizable (1) 5.5402 4.8363 Unrecognized (7) Value Good (1) 4.4023 3.8706 Poor (7) Table 2 ANOVA Year 1994 and Year 2005 Group means India India Variables F df prob 1994 2005 Product Quality 10.9191 1,179 0.0011 3.4737 3.1163 Mechanical Products 18.9694 1,175 0.0000 3.7582 3.2093 Food Products 21.5302 1,175 0.0000 3.6264 2.9884 Fashion Products 19.2436 1,176 0.0000 3.7736 3.1264 Electronic Products 24.1163 1,176 0.0000 3.9341 3.1839 1=very high, 2=high, 3=medium, 4=low, 5=very low Figure 1 Imports to U.S. From India Number of visitors to US Year 11 15,752.00 10 13,055.30 9 11,818.40 8 9,737.30 7 10,686.60 6 9,070.80 5 8,237.20 4 7,322.50 3 6,169.50 2 5,726.30 1 5,309.60 Source: U.S. Department of Commerce. Note: Table made from bar graph. Figure 2 Students from India enrolled in US College/Universities Number of visitors to US Year 8 75000 7 67000 6 55000 5 42000 4 31000 3 34000 2 36000 1 26000 Note: Table made from bar graph. Source: Statistical Abstract of the US: 04-05 National Data Book Figure 3 Visitors from India to US Number of visitors to US Year 4 151000 2002 3 253000 2000 2 75000 1995 1 75000 1990 Source: Statistical Abstract of the US: 04-05 National Data Book Note: Table made from bar graph.