Bibek Banerjee

A Country of Origin Analysis of Foreign Products by Indian Consumers

Abstract Country-of-origin (COO) has been recognized in the marketing literature as one of the most important cues consumers use to perceive product quality. Products of technologically advanced countries such as Japan and Germany are known to enjoy positive country-of-origin effects. Conversely, products made in the developing countries typically suffer from negative COO effect (Gaedeke 1973). Most of the studies in this research paradigm, however, are undertaken in industrialized countries; hence their findings cannot be extrapolated to the newly industrialized countries (NIC) that offer tremendous market potential for global products. It has, therefore, become imperative for multinational companies to understand if and how consumers in the major NICs use COO and other cues to infer product quality. Using data collected from consumers in Ahmedabad and Calcutta in India, we demonstrate significant COO effect on a number of products. Results also indicate that foreign products are not perceived differently if they are imported directly from the country of design, or manufactured domestically. Finally, we highlight how these research findings will help managerial decisions about pricing, promotion, and off-shore production.

Konkan Railway Corporation Limited

Mr Rajaram, Managing Director of Konkan Railway Corporation (KRC), is concerned about the mounting debt burden of KRC. He is in the process of formulating an overall marketing strategy for KRC in the freight sector, in order to break even. He is also considering the appropriate marketing organization to serve the target market(s). Readers are invited to send their responses on the case to Vikalpa office.