“We don’t all see it the same way”: The biasing effects of country-of-origin and preference reversals on product evaluation

Country-of-origin (COO) effects on product evaluations have been widely applied in international marketing, albeit with mixed results. One stream of research values its importance in decision-making, whereas another stream posits that COO has little effect when compared to the greater diagnosticity of other product attributes. This suggests that how and along what other attributes (extrinsic or intrinsic) COO is presented play an important role in its relative impact. The purpose of this paper is to address these mixed results by applying one such framing perspective based on evaluation mode (i.e. separate versus joint evaluation) and preference reversals and their biasing effects to a study of COO and willingness to pay (WTP) for a product.

A three between-subject (joint evaluation, separate evaluation-domestic and separate evaluation-foreign) experimental design was used to assess whether evaluation mode moderates COO effects on product evaluations.

Similar results are mirrored across three/four countries. When evaluated separately, consumers value an inferior domestic-made product more than a superior foreign-made one. However, when the domestic- and foreign-made products are presented in joint evaluations, the better foreign-made product is favored.

A number of limitations in terms of countries, consumers within the countries and products studied are addressed along with future research that may address these factors and test the robustness of domestic–foreign preference reversals.

The results of this study reveal practical insights to marketers. Marketing managers for better-quality foreign brands are encouraged to engage in comparative advertising appeals and sell their products in retail stores that hold both domestic and foreign products, whereas marketers for domestic products should create a selling environment that facilitate only a separate evaluation mode to enhance WTP.

This paper provides insights on the diagnosticity of COO when presented alongside intrinsic attributes and the role of evaluation mode in shaping consumers’ preferences. This research suggests that COO has different effects in different evaluation modes, thus explaining some of the mixed results in literature regarding its importance. On the one hand, COO has a decisive effect on product evaluations when products are presented separately. On the other hand, COO effect is overridden by intrinsic cues, which become more apparent when products are presented jointly. Overall, these results demonstrate the robustness of the preference reversal effect across countries and products.