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The Country-Of-Origin Effect in Japan

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The Country-Of-Origin Effect in Japan EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION Bas 1 | P a g e EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION DISCLAIMER The content of the here following report are based solely on views of the author and therefore do not necessarily reflect those of the EU-Japan Centre of Industrial Cooperation or other parties. While the preparation for this report was executed with a great care for accuracy, the author and the EU-Japan Centre cannot be held accountable for any errors. The author can be reached at: [email protected] Or on LinkedIn: https://www.linkedin.com/in/paulvanderplasmba/ ABOUT THE AUTHOR Paul van der Plas is a marketing and communications specialist with an MBA degree, specialising in international marketing, from the Solbridge international school of business in South Korea, and an MBA degree, specialising in consumer behaviour, from Meiji University in Japan. The author has worked as a marketing and communications consultant for five years and conducted independent research regarding cultural influences on consumer behaviour. 2 | P a g e EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION ABSTRACT This report follows a research on the impact of product origins in the product evaluation of the (Japanese) consumer. The research includes a comprehensive analysis of scientific literature on consumer decision making; cultural values, country images, and the country-of-origin effect. Upon this theoretic foundation, the research elaborates on the importance of product origins for the Japanese consumer with a series of interviews among market experts and two consumer surveys as well as a series of anecdotal findings from the Japanese market for illustrative purposes. Cultural characteristics explain how the product origin is of such interest to the Japanese consumer and, as such, why the country-of-origin effect should be taken into account by any exporter entering the Japanese (consumer) market. Besides answering the question as to why, the report gives product-category specific recommendations, on how to successfully incorporate the origin country into the positioning strategy for the Japanese market. 3 | P a g e EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION CONTENTS List of Abbreviations ..................................................................................................................................... 6 List of Figures ................................................................................................................................................ 7 1. Introduction .............................................................................................................................................. 8 2. Global Trade ............................................................................................................................................. 9 2.1 International Trade ............................................................................................................................ 9 2.2 EU-Japan Trade ................................................................................................................................ 10 3. The Cultural Factor in Consumer Behaviour ........................................................................................... 12 3.1 Cultural Dilemmas in International Business ................................................................................... 12 3.2 Culture in Consumer Behaviour Theory ........................................................................................... 13 3.2.1 Consumer Attitudes ................................................................................................................... 14 3.2.2 Consumer Involvement ............................................................................................................. 17 3.3 Cultural Value Models ...................................................................................................................... 20 3.3.1 The Hofstede Model .................................................................................................................. 20 3.3.2 Japan’s Cultural Orientation According to the Hofstede Scores ............................................... 21 4. The Country-of-Origin Effect .................................................................................................................. 25 4.1 Background ...................................................................................................................................... 25 4.2 COO as a Product Attribute .............................................................................................................. 25 4.2.1 Product Attribute Evaluation ..................................................................................................... 25 4.2.2 The Country-of-Origin Effect in the Japanese Food Market ...................................................... 27 4.2.3 The Country-of-Origin Effect in the Japanese Fashion & Apparel Market ................................ 28 4.2.4 The Country-of-Origin Effect in the Japanese Electronics Market ............................................ 28 4.2.5 The COO and Purchase Priorities of the Japanese Consumer ................................................... 29 4.3 Country Image .................................................................................................................................. 35 4.4 Country Equity .................................................................................................................................. 36 4.5 COO in the Evaluation Process ......................................................................................................... 39 4.5.1 The ‘COO-ELM’ .......................................................................................................................... 39 4.5.2 Product Origin Congruency ....................................................................................................... 42 4.5.3 Japan and the Country Equity’s Halo Effect............................................................................... 43 5. European Country Images in Japan ........................................................................................................ 46 5.1 The Product-Image of the EU ........................................................................................................... 46 5.2 EU Country Images ........................................................................................................................... 49 5.3 The Product-Country Image of EU Nations ...................................................................................... 51 5.3.1 The Product-Country-Image of Food Products .......................................................................... 51 4 | P a g e EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION 5.3.2 The Product-Country-Image of Fashion & Apparel Products .................................................... 53 5.3.3 The Product-country-Image of Electronic Appliances ............................................................... 54 5.4 In Sum .............................................................................................................................................. 56 6. Incorporating the COE into the Positioning Strategy ............................................................................. 57 6.1 Measuring Country Image & Country Equity ................................................................................... 57 6.2 Making use of the European Image ................................................................................................. 57 6.3 Application per Product Category .................................................................................................... 58 6.4 Making use of Country Equity .......................................................................................................... 59 6.5 Adapting the Positioning Strategy to the Japanese Market ............................................................. 60 References .................................................................................................................................................. 62 5 | P a g e EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION LIST OF ABBREVIATIONS EU European Union CE Country Equity CI Country Image COE Country-of-Origin Effect COI Country-of-Origin Image COO Country-of-Origin ELM Elaborate Likelihood Model FCB Foote, Cone and Belding Advertising GDP Gross Domestic Product HI-FEEL High-Involvement & Feel HI-THINK High-Involvement & Think IND Indulgence INV Individualist LI-FEEL Low-Involvement & Feel LI-THINK Low-Involvement & Think LTO Long Term Orientation MAS Masculinity PCI Product Country Image PDI Power Distance Index UAI Uncertainty Avoidance Index UK United Kingdom US United States 6 | P a g e EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION LIST OF FIGURES Figure 1: Global trade 1913-2013 – Based on Data by: ourworldindata.org [3] ............................................................. 9 Figure 2: EU Exports to Japan in 2017 – based on data by: European commission [8] ................................................ 10 Figure 3: The top 10 of EU exporters to Japan in 2018 by value (excl. the UK) – Source: Japan customs [10] ............ 11 Figure 4: Composition of EU export to Japan 2017– based on data by: European commission [8] ............................. 11 Figure 5: Conceptual framework for the theory of reasoned action – Fishbein &
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