Tittle: The Impact of Origin Country on Consumer Decision Making in Order to Address Alberto’s Questions and Concerns.
Author: Sendy Thahir, Julia Felicia & Florensia
This report purpose are to conduct secondary research and search the library data bases for articles regarding the impact of country origin on consumer decision making in order to address Alberto’s questions and concerns. In the body of this report analyze the three Alberto’s Question that has become the main issues on this report. They are: first, how important is the country of origin to consumer's comprehension of designer’s product; second, how could the knowledge that the product is made in china potentially harm or enhance the brand; and third, were the label ‘made in
’ impacts on a consumer’s decision to purchase a designer handbag. Italy
In investigating Alberto’s question, team of consumer research investigate has searched, solved, and create the best answer in evaluate for the success of the company for the future if Alberto’s company decide to open branch or moving production to
Some supporting theories from textbooks, journals and information from internet are included in process of analyzing those three main questions. Some conclusions and recommendation also include for the future use of this company such as: Economic, political, Legal framework and national culture are the situation that need to be investigate before decide to move production or open branch to other country. Quality control, price, competitor and trend also the essential one.
Nowadays, there are Fashion Companies in everywhere and they were competed each other to attract people to purchase their products from their company by decreasing the products price, but if they want to reduce the price they also should decreasing their cost such as labor cost and material cost in order to get profit. That is why sometime a company wants to move their production into other country that the cost of labor and materials cheaper like
than other countries or their country origin. This was making because the company would like to know how the impact with the company final decision-making process, that if the production moved from country origin to another country that have a potential, because sometime the company was worried with the impact about the moving their production. The impact can be, this moving will effect people perception or not and to know this will influence much with the brand or not and want to know this will effect with the company income or not and sometime the company was worried about the culture of other country. They worried that the other country culture is not suitable for them. That is why the company should consider first and making a finding or consumer research before their moving the production to other country. China
This report is analyzing the Impact of Origin Country on Consumer Decision Making in Order to Address Alberto’s Questions and Concerns and this report is commissioned for Mr. Alberto Gozzi as a CEO of Gozzi designer bag.
§ There is very limited information available on the internet
§ Information is difficult to acquire considering the writer domiciled in different country to where the company is.
While investigating the Alberto’s questions, it is essential to consider the information from textbooks, journals, and internet, in order to Alberto’s questions can be evaluated and in the end of this report, the conclusion and recommendation also can be identified for the future use of this company.
In the considering moving Alberto’s production to
, this company are worrying about the potential move. And before making a final decision, this company would like to have a consumer research team investigate the impact of culture of origin on the decision making process. Therefore, there are three main questions that will be investigated by Alberto’s team. The questions are Alberto’s company would like to know how important is the country of origin to consumer’s comprehension of designer products like those sold by Alberto’s company?; Further, Alberto would like to know how could the knowledge that the bag is produced in China potentially harm or enhance the brand?; and Alberto’s would like to know if the label “made in Italy’ impacts on a consumer’s decision to purchase a designer handbag. China
If a product is come from the origin country, the consumers will more trusted with the products and believe that the products are original. Moreover, Now people in the world more concern about the brand and the quality because they think if they wearing a products which is branded they will feel more comfort, confidence, have high prestige and people more respect to them. However nowadays, all consumers have a decision to purchase the products. According to Quester (2007), the decision process that consumers have is problem recognition, information search, evaluation and selection, store choice and purchase, post purchase processes. For the problem recognition is the consumers want to decide to buy the products that they wants and need. For the information search, the consumers try to find or search the information about the product and their trying to find the best products and the quality of a product for example the consumers will see the products that is original or not. For evaluation and selection, the consumers want to evaluate and compare which one of the products that the consumers want to choose. For store choice and purchase is after the consumers compare and evaluate the product the consumers will choose the store that they want to purchase it. They can decide the place that more easy to purchase for them or if the store there is a discount and more cheap. For example there is a discount in metro Mall and in another store; there is no discount, thus the consumers will decide to purchase in metro Mall. For the post purchase processes after the consumers purchase the products the consumers will evaluate that they happy or not. If they not happy with the products, the consumers will back to problem recognition and start to search information, evaluate and making the purchase again. Therefore, the consumers will be careful if they want to purchase the product they will find information first, evaluate and compare the products quality with other brand before they purchase the products because now the consumers want to wear the branded, original and cheap so the consumer will be careful to purchase the products
The importance of the country of origin has been concerned due to the consideration of quality and reliability of the product. Pricing is not the only factor that influences a consumer's decision to purchase a product; the "Country of Origin" also has an impact on buying habits (Dyes, 2008). ‘Country of Origin (COO) is an important driver of consumer’s product preferences depending on their originating factor’. (Sanjana 2008) It is widely recognized that country of origin has an impact on the purchase decision and many studies have shown that consumers have a preference for products that originate from certain countries that they have existing perceptions of (Dyes, 2008)
2.2 How could the knowledge that the product is produced in
potentially harm or enhance the brand China
Consumer product preferences are identifies three factors of CBE: country-brand loyalty, perceived country-brand quality, and country-brand awareness associations (Zeugner, 2008). They could be improved in time when various quality control measures are enforced, such as having reference samples at the production line, and placing more QC supervisions at different production stages.
The knowledge that the product is made in china potentially harm or enhance the brand. The study have shown that china have a very big number of labour as their potential resources. Most of enterprises starts to opened up the manufacturer in china to reduce the production cost, where as at China labour cost is very cheap. Harming or enhancing the brand are highly depend on the target market. If the companies are targeting the medium to high social classy society, it would harm the brand, but if the company are targeting the lower social class it would enhance the brand.
‘Some hide the “Made in
” label in the bottom of an inside pocket or stamped black on black on the back side of a tiny logo flap.’ (Thomas, 2007a) The opinion from the New York Time journalist could represent that some of the people are avoiding the made in China brands. When it comes to the term ‘made in China’ people would think twice, even more to purchase it, because how could they buy a simply home-made products with a really high price. Further more, some of these people might think, that China’s made would definetely different with Italy’s original made as the quality may be lower even could be fake. ‘China workers' cognition to world quality standard is still catching up.’ (HKQCC, 2009) China
The other tactics are they producing the bag in
China, and when taken back to its origin countries, they put the final bits by attaching, made in Italy or Western Europe (Thomas, 2007b). This can be a problem for the consumers; some people are concerned about the sweatshop issues. They see it as a social ethic. They intend to avoid sweatshop labor when purchasing clothes (Shaw, et al, 2004). Sometimes it is not difficult to differentiate whether it is sweatshop goods or not, if it is from developing country, we can assume it is a sweatshop good. This could also be the factor that harming the brand.
Several luxury companies now have their goods made in
by illegal Chinese laborers with $3 an hour (Thomas, 2007c). But it is breaching the law, for the benefit for the organization; they are sacrificing the prosperity of their home country society. Italy
2.3 Were the label ‘made in
’ impacts on a consumer’s decision to purchase a designer handbag Italy
According to the consumer behavior, the implications for marketing strategy text book, there are three types of consumer decisions making, which are ‘habitual decision making, limited decision making and extended decision making’.(Quester 2007, pp.63)
On the cases of buying the made in
handbag, the extended decision making, plays a role because the extended decision making is ' the response to a very high level of purchase involvement' (Quester 2007, pp.65) Italy
Based on the secondary research, it state that ‘Brand
capitalizes on being the home of some of world's most premium fashion houses’. (Dyes 2008) Italy
We can take Prada, Gucci, Polo,
LV, Versace and Armani brand as an example, these brands have a very strong images among the society in the world. Italy products are offered on a premium price which stands for the premium quality of the product. Italy
For now, we are analyzing the Louis Vutton bags that are made in
, Louis Vutton never offered any promotion or discount, Louis Vutton is always offering a premium price. Number one Indonesian Speaker and trainer recognize that they are aiming ‘the customers that are prioritizing the prestige, expensive price, unique and different from people in general.’ (Waringin 2008, pp.45 ) France
It is the same related with the premium brand of
, the psychology laws take place, ‘the premium price is highly related with a splendors brands’. (Waringin 2008, pp.45) Italy
The customers will surely seek information from people around to help them in making a right decision that will lead to make the best preference. The label made in
will make another impact on proving the originality and Luxurious. Italy brands have a high demand on whole over the world because of their quality, premium, genuine and unique design. If the handbag is made from other countries although the bag is from Italy , the customers will make a further consideration on the handbag, the quality, prestige and originality will be questioned. We are not going to say that having the other manufacturers outside the Italy to reduce labor cost is a wrong decision. Eight researchers from Science Direct assist the statement by stating “Consumers everywhere at every income level want more luxury” (Brun et al, 2008) Italy
That is one of the reason why luxurious has been a problem on deciding the fashion brand, including bags.
label is going to give a standard of quality.’ (Smith, P 2008) Due to the reason for luxury and prestige, the consumers will be more pleasant by purchasing made in Italy product. The originality, prestige and Luxurious can highly be shown. Italy
But it is also depend on the customers itself, if the customers just need to have a bag, without considering the originality or somewhat, they’ll just buy it. This is highly related to the social factor on the consumer behavior. ‘Marketers need to understand consumer’s perception of and attitudes towards social class in order to determine whether social class can influence purchase behavior (Quester 2007, pp.491). People with high social status, when having the branded or fake or ‘made in China’ bag people would consider, it is made in Italy, but if people with low social status, no matter how hard their effort to buy the original one, although it is made in Italy, people would consider it as the fake one. We don’t want to judge, but people can think that ‘individuals with different social standing tend to have different needs and consumption patterns (Quester 2007, pp.491).
This team of consumer research investigate has make a conclusion according to the Alberto’s questions. There are three conclusions on three Alberto’s question:
How important is the country of origin to consumer's comprehension of designer’s product?
§ The importance of the country of origin has been concerned due to the consideration of quality and reliability of the product. Pricing is not the only factor that influences a consumer's decision to purchase a product; the "Country of Origin" also has an impact on buying habits
The knowledge that the product is made in china potentially harms or enhances the brand?
§ Because of
China labor cost is very cheap; this is an opportunity for a manufacture to open in in order to reduce the production cost. Harming or enhancing the brand is highly depending on the target market. If the companies are targeting the medium to high social classy society, it would harm the brand, but if the company is targeting the lower social class it would enhance the brand. China
Were the label ‘made in
’ impacts on a consumer’s decision to purchase a designer handbag? Italy
§ Made in
label is going to give a standard of quality. But, different customers have a different perception about an original quality made in Italy and fake one. There is some customer from the low to middle economic level that cannot purchase the original, but these customers will also satisfy if they have the fake one, even they don’t have it at all; and there is some customer that more concern with the luxury and prestige, these customers will be more pleasant by purchasing made in Italy product. Therefore, it depends on who will use, who need it, and what is the purpose if they have the original or fake one. If for the prestige, they will choose the original. Italy
§ Open branch or move to other country is a good decision, but firstly, the owner has to investigate some information detail about the situation such as the Economic, Political, Legal Frameworks, and national cultural in that country.
· In competing with other handbag company in other country, we have to prioritize our product’s quality in order to our product able to compete with their local products. But, in note our products are not too expensive and cheap.
· Alberto must able to follow every trend that are available on the country, in order to can compete with other similar competitor
· Alberto must able to attract many agent and distributor to sell again their products. This is a good idea to expand their network coverage to any small area in that country.
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Dyes, RA 2008, 'Country of Origin' Makes Big Impact on Buying’, viewed 24 March 2009,
HKKQCC: Tips of China Product QC (n.d), viewed 7 April 2009 <http://www.hkqcc.com/quality_control_standards/tips_of_china_product_qc.html>
Quester, P, Neal, C, Pettigrew, S, Grimmer, M,
Davis, T & Hawkins, DI 2007,’Consumer Behavior: Implications for Marketing Strategy,’ fifth edn, McGraw-Hill, , pp 63, 65, 491 Sydney
Sanjana 2008, ‘The Impact of Country of Origin and Consumer Ethnocentrism on Chinese consumer’, viewed 14 April 2009
Shaw, D, Shui, E, Hogg, G, Wilson, E & Hassan, L 2004, ‘Fashion Victim? : The Impact of Sweatshop Concerns on Clothing Choice’, viewed 8 April 2009,
Smith, P 2008,’Why British Brands Are Beating a Path to
’, viewed 6 July 2008,
Thomas, D 2007,’Made in China on the sly’,New york times, Viewed 7 April 2007a,
China on the sly’, times, Viewed 8 April 2007b, New York
China on the sly’, times, Viewed 8 April 2007c, New York
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, pp.45 Jakarta
Zeugner-Roth KP, Diamantopoulos A, & Montesinos MA 2008, ’Home country image, country brand equity and consumer’s product preferences: an empirical study’, Journal of Management International Review, Vol.48, No.5, p. 26