Made in America: The affects Cognitive Load Consumer Ethnocentrism and Country of Origin have on Consumer Purchasing Decisions
HALSTROM, HANNAH L. Made in America: The affects cognitive load, consumer ethnocentrism, and country of origin have on consumer purchasing decisions. Department of Neuroscience, March 2016. ADVISOR: Kenneth DeBono Previous research suggests that cognitive load affects decision making tasks. As well, a consumer varies his or her purchasing decisions based off of his or her personal level of Consumer Ethnocentrism (CE) and the Country of Origin (COO) of the product or brand. Eighty individuals participated in the study. Some participants were put under cognitive load by having remembering an 8 digit number span. All subjects were randomly exposed to one of two product sets, where COO was manipulated. Each product set consisted of 5 advertisements followed by a series of 4 questions. These questions regarded their willingness to purchase the product in the advertisement, their familiarity with the product, and a quality rating of the product. All participants then answered the CETSCALE questionnaire in order to measure their CE. It was hypothesized that participants with high CE regardless of cognitive load will tend to favor purchasing American products over products with a foreign COO. In addition, participants with low CE under cognitive load will be indifferent when making purchasing decisions on domestic versus foreign products. Error! AutoText entry not defined. Made in America: The effect Cognitive Load, Consumer Ethnocentrism and Country of Origin has on Purchasing Decisions With the changing economic and global market place, countries, especially the United States owned manufacturers, have been producing products abroad to decreased manufacturing costs. Yet the consumer realization of the potential negative implications, such as domestic job loss, has caused a national push to buy "Made in America" brands, such that 8 out of 10 Americans say they would rather purchase a "Made in America" product (Consumer Reports, 2015) This push is marked through President Obama's words having said "that's what we've got to be shooting for, is to create opportunities for hardworking Americans to get in there and start making stuff again and sending it all over the world products stamped with three proud words: Made in America" (Obama, 2012) President Obama's words further instill a sense of patriotism in American consumers, along with many other factors that may affect consumer purchasing decisions. One important factor, studied frequently, that may contribute to purchasing decisions is country of origin (COO) COO is where a product is originally made or produced. Consumers use country of origin to help assess the quality of products. Han (1989) hypothesized that consumers use the Halo Construct when choosing products. The Halo Construct is when consumers make inferences regarding the quality of a product, and that COO affects consumer's ratings of products. COO leads to perceived beliefs about a product, which then creates a consumer's brand attitude. In order to test the Halo Error! AutoText entry not defined. Construct 116 participants were sampled from a Midwestern US city. Consumers were asked about the perceived quality, personal ownership, and brand attitude of cars and TV sets from three different countries USA, Japan, and Korea. The American products were high in familiarity to the participants, the Japanese products were of medium familiarity to the participants, and the Korean products were of low familiarity to the participants. Participants were interviewed over the phone. Overall, Han (1989) found that when a product was low in familiarity to a person, that the consumer used the country image to infer a product's quality and attributes. This is turn affected the consumer's attitude towards the brand. However, when a product was high in familiarity to a consumer, the COO and country image of the product favorably affected their attitudes towards the brand. In summary, these results reveal that COO and brand familiarity correlate with participant's attitudes, perceived quality, and beliefs about a product or brand. Another key study, which examined the effect of COO on purchasing decisions, was by Maruyama and Wu (2014) The purpose of their study was to assess the importance of COO on consumer's choice between domestic and foreign products. Furthermore they sought to analyze the relevance of the retailer's COO on consumer's product choice. In this experiment, participants were surveyed about their grocery store decisions. Consumers were asked questions regarding the importance of a retailer's COO and about the consumers perceived importance of supporting domestic retailers with their purchasing decisions. Overall they found a domestic COO was an important factor for consumers when debating between buying a domestic or foreign product. While they Error! AutoText entry not defined. found that these perceptions did not necessarily translate to consumers in store purchasing behavior, consumers perceived importance of buying domestic products did have a negative correlation on that consumer's choice to buy foreign products. If we know that COO is important to consumers, it is important to understand how significant a role it plays in their decisions. Another relevant study, undertaken by Harris, Garner Earl, Sprick, and Carroll (1994) analyzed the effect of COO on purchasing decisions. In this investigation, 246 participants were sampled. All of the participants were shown 18 advertisements that were unfamiliar. The advertisements were written by the researchers in order to remove participant reactivity or bias in case the subjects had seen the advertisement before. Three sets of advertisements were utilized with each set containing 6 U.S. ads, 6 French ads, and 6 German ads. Participants either listened or read the advertisements and then answered 3 questions on a 7 item Likert scale regarding their likeliness to purchase the product. Results revealed that participants tended to prefer the U.S. products to the foreign products. However, the type of product advertised and the participant's gender also predicted participant's decisions. For example, female participants preferred German personal care products to German technical products while no difference existed for males. Overall, Harris et al (1994) concluded that country of origin matters but COO tends to interact with other variables such as sex and modality. This study clearly demonstrated that COO is an important factor in purchasing decisions. Error! AutoText entry not defined. Further studies demonstrate that COO correlates with a consumer's perceived quality of a brand or product. One such study that assessed this was by Erickson, Johannson, and Chao (1984) This study surveyed 96 MBA students from the University of Washington. These students were tested on their product familiarity, attitudes, and beliefs about certain automobiles. The researchers chose to use cars with different COO's, given source is an important factor to many people when purchasing an automobile. The vehicle options included 4 cars from the U.S. 4 cars from Japan, and 2 cars from Germany. In the questionnaire, participants were asked to respond to questions regarding their beliefs and attributes pertaining to the 10 automobiles. Respondents were asked to rate the cars on a 5 point scale, and to rank their familiarity with the cars. They were given information regarding each car's price, COO, gas mileage, reliability, durability, and workmanship. The researchers found a consumer's quality ranking positively correlated with reliability, durability, workmanship, and price. In addition, there was a positive correlation of belief on attitude towards the product. There was also a strong halo effect. They further found that familiarity directly correlates with consumer attitude, and that price correlates with a consumer's perceived quality. Finally, they noted that their results indicate that COO correlates with product beliefs but not with product attitude. In summary, these results indicate that COO correlates with a consumer's perceived product quality. It is also important to note that while consumers may try to avoid using COO in making product purchase decisions, they may not be able to do so once COO information has been presented to them. One such principle used to explain this behavior is spreading Error! AutoText entry not defined. activation. Spreading activation is the idea that once an object or an idea is in the working memory or consciousness, other associated or related objects are also activated from your long term memory and brought to your consciousness through different neural networks (Collins and Loftus, 1975) As such, this information that is brought to your consciousness is categorized and can be used to make judgments (Collins and Loftus, 1975) This action is significant because if one is aware of COO then other ideas regarding that country may be brought to one's consciousness. Furthermore, he or she may then be primed to associate certain thoughts with a product. One study that looked at the activation of COO and stereotypes was undertaken by Herz (2013) In his study, he hypothesized that the mere presence of information regarding COO will affect the cognitive and brand assessment of a consumer. If the consumer's stereotypes are functional (emotional) then there should be a stronger impact on cognitive brand evaluations. This study utilized a 3 (functional stereotypes, emotional stereotypes, and no country information) x 2 (functional advertising, emotional advertising) Two hundred and seventy Austrian consumers were randomly assigned to 6 conditions. The researchers created their own brand/product to ensure none of the participants came in with a pre existing bias. A fruit juice was utilized as the product. Each participant was first exposed to different product attributes and told to create a first impression of the brand. In the second stage, they