Discuss the potential benefits and drawbacks of companies using their country of origin as a marketing tool. Use examples to illustrate how companies can effectively profit from making reference to their national origins.
There are many different kinds of marketing tools all over the world. Many companies nowadays would like to make reference to their country of origin when they are doing marketing campaigns. The made-in image can influence consumer’s attitudes, perceptions and purchasing decisions. However, making reference to national origins can bring not only benefits but also some potential shortcomings. This essay aims to illustrate how business can make a profit from a successful geographical-origin branding strategy.
Intrinsic and extrinsic are two basic informational product cues for consumers to evaluate their product. (Ulgado and Lee, 1998) The intrinsic cues are the particular part of the product, while the extrinsic cues refer to those product-related conditions, such as brand influence, company reputation and products’ country of origin. (Acebrón and Dopico, 2000)
Although the extrinsic cues are not the components of product itself, they can influence consumers’ perceptions. The label “country of origin” was established in 1887, when the British government hoped to differentiate their domestic products from imported products. Thus, they adopted a law forcing foreign companies to make reference to their national origins clearly. (Rayasam, 2013) Since then, the “made-in” image has played a more and more important role in products’ performances.
Sometimes, a successful geographical origin branding strategy may be very attractive, but it can bring negative impact as well. Many years age, since the discovery of mad cow disease in Canada, country of origin labeling has become more significant than ever because according to the labels consumers can choose or not to buy cattle with "made in Canada". In this case, customers can protect their own interests, but it indeed brought negative effects to the food company during that time. (Sams, 2011)
However, apart from some specific events, branding by national origin are basically useful. It can help the business to attract customers and also contribute to building brand reputation.
Firstly, successful geographical-origin branding can help the company to attract customers. Once the “made-in” labels are in consumer’s mind, they cannot be changed easily and they will influence customer’s choice deeply. Accompanied by the globalisation, information now can be spread all over the world in a very short time. Due to this reason, reputation to a company is becoming more and more important. Businesses can enhance their brand influence and attract customers by making reference to their country of origins. A research has been conducted to proved that when consumers were required to rank the importance of country of origin during their purchasing, the traditional drivers of choice such as design and price, were ranked much lower than the country of origin. Actually, the national origins were ranked at the second place, only after “safety”, which was ranked as the most important place. (FutureBrand, 2014) It has been reported that by using the reference of "country of origin", companies are capable of differentiating their products from strong competitors, no matter they are foreign or domestic. (Dekhili. S., Sirieix. L., Cohen.E., 2011)
Meanwhile, using their country of origin as a marketing tool can help to create a good product reputation, which is also the symbol of superior quality. The made-in label is becoming sharper because it has turned into a quality guarantee in customers’ minds. With the reference to the place or country of origin, customer can easily distinguish whether this product is reliable or not. Companies can get benefit from the reference of national origins because it makes them unique. It is not only a marketing tool but also a