Pricing strategy & practice

Translating country-of-origin effects into prices

Ronald Drozdenko
Ancell School of Business, Western Connecticut State University, Danbury, Connecticut, USA, and

Marlene Jensen
Lock Haven University, Lock Haven, Pennsylvania, USA
Abstract Purpose The purpose of this paper is to examine the effects of country stereotyping, bad press, and consumer ethnocentrism on the prices a country can command and be competitive. Design/methodology/approach A total of 767 consumers were given prices for products in 11 different categories, then told each product was made in China. They were then asked how much more (if anything) they would be willing to pay if the product was made in Germany, the USA, or India. Findings Price premiums were signicant for all categories, and increased for those scoring higher on a Consumer Ethnocentric Tendencies Scale (CET Scale). However, completing the CET Scale before answering price questions caused respondents to have a lower price premium for US products. The size of the price premium was also positively correlated with the amount of exposure to negative news concerning Chinese products. Research limitations/implications It is unknown how consumers would respond to categories not studied. Practical implications The cost of setting up government controls and industry oversight is expensive. However, the cost of negative news with product recalls is also expensive. Countries who avoid such negative news may be able to price their products 14 percent to 100 percent higher. Originality/value This study quanties price premiums available to countries with a positive COO image. It also allows a manager to determine the feasibility of developing domestically produced products in specic categories, by identifying categories where consumers would pay a premium for domestically produced products. Keywords Pricing, Country of origin, Perception, China Paper type Research paper

The question
Whats in a (country) name? And if a product from one country does not smell as sweet as a product from another, what does that mean for its pricing potential? This research moves beyond the effect of country of origin (COO) on perceived product quality, and instead puts a price tag on a negative COO image. It asks how much higher a country with a positive COO image can price its products and still compete with products from a country with a poor COO.

COO effects in the literature

Early research on COO tried to understand how the originating country affected consumer perceptions about products, regardless of whether those perceptions were warranted. For example, Samlee (1994), found 60 empirical studies published on COO effects just from 1965 to 1994. Many studied country of origin effects and product perception (Al-Sulaiti and Baker, 1998; Bilkey and Nes, 1982; and Thakor and Katsanis, 1997.) Some researchers
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(e.g. Wang and Lamb, 1983) dene COO effects as a negative consumer bias toward imported products. In fact, nationalism is a factor in a number of studies which found consumers generally prefer products made in their own countries (Olsen et al., 1993; Bannister and Saunders, 1978; Chao and Rajendran, 1993; Gaedeke, 1973; and Nagashima, 1970). Levin et al. (1993) found a strong bias in US students for American-made cars over Japanese cars in the face of a Buy America First campaign. They concluded that nationalistic feelings may dominate other COO perceptions. Becker (1986), however, found US consumers desire to purchase American products dissipating in the face of perceived inferior quality. In addition, Ettenson et al. (1988) found only a minor COO effect for Made in America claims for a ladies blouse and a mans dress shirt. Relerson (1966) was at the forefront of expanding COO effects research to include stereotyping of countries. Stereotyping in COO studies can be dened as strong favorable or unfavorable predispositions towards products based solely on their COO (Hadjimarcou and Hu, 1999). For example, Schooler (1971) found a positive bias towards products from Germany and the USA and a negative bias toward those from India. Dornoff et al. (1974) found a positive bias towards electronic products from Japan and mechanical products from Germany. Bannister and Saunders (1978) found UK consumers had favorable perceptions about products from West Germany, the UK and Japan, mediocre perceptions about French, Italian and US products and very poor perceptions of products made in Russia. 371

Translating country-of-origin effects into prices Ronald Drozdenko and Marlene Jensen

Journal of Product & Brand Management Volume 18 Number 5 2009 371 378

Country stereotyping has been found to be stronger in ethnocentric consumers (Han and Terpstra, 1988; and Shimp and Sharma, 1987). To measure the extent of ethnocentrism, Shimp and Sharma developed a ten-item CET Scale. That scale was validated by them, and subsequently used and validated in other studies (e.g. Balabanis and Diamantopoulos, 2004). COO effects vary signicantly depending on the product category (Hooley et al., 1988; Janda and Rao, 1997). For example, Khachaturian and Morganosky (1990) found positive COO effects for clothing from the USA and Italy, and negative effects for clothing from South Korea, China and Costa Rica. Hadjimarcou and Hu (1999) found increased COO stereotyping in consumers faced with cognitively demanding tasks. COO research has been extended by Khachaturian and Morganosky, who argued that the degree of industrialization in a country is a separate factor in consumers image of the country; concluding the less-industrialised the country of origin, the more the potential decline in the quality image. This supported the ndings by Wang and Lamb (1983), who looked at 36 developing countries and found US willingness to purchase products depended on the industrialization of each source nation.

COO effects and pricing

Price was a limited factor in a number of the previously cited COO studies. Typically researchers have sought to discover whether price is a better predictor of a quality image than COO effects. For example, Hastak and Hong (1991) found both price and COO to be highly signicant, while Ahmed and dAstous (1993) found price not signicant in value perceptions, while COO and brand were. Yet, Ahmed et al. (1994) found price was more signicant than country of design or country of assembly to purchase managers. Ettenson et al. (1988), included price and COO as two of six variables studied through conjoint analysis. Just three studies were found that looked at price other than as a competing variable to COO effects. Schooler and Wildt (1968) found country stereotyping effects to be strong enough to prevail in the face of price reductions. Becker (1986) found a positive image of products made in Japan persisted even when they were priced lower than American products. Wall and Heslop (1986) found Canadians willing to pay more to purchase Canadian products over imported products as long as the quality was equal. No studies were found which looked at price as the measuring tool by which to quantify the extent of COO or country stereotyping effects.

Methodology
The USA and Germany were picked as countries with the highest level of industrialization and as having a potentially positive COO image. China and India were chosen to represent somewhat less industrialized countries. China was selected primarily because of the vast number of products it exports to the USA in a wide range of product categories and also due to the large amount of negative publicity its products had received over the past year. In fact, an August 2007 Gallup Poll found 63 percent of US respondents indicating they made an effort to avoid buying products made in China and were willing to pay higher prices for similar goods made in the USA. India was selected as a country of similar 372

industrialization, but without the negative press received by China. Shimp and Sharmas ten-item CET Scale was used to identify the ethnocentrism in respondents, and to evaluate how that correlated with their responses. The respondents in this study include 460 consumers in Faireld County CTand 307 consumers in Clinton County PA. A convenience sample of students and their relatives, coworkers and friends was used. The survey instrument was a web-based questionnaire, which used Chinese-made products as a base. The price questions were worded: Assume you need to purchase a specic type of TOY for a favorite youngster. You consider one which costs $10 and see it is made in China. What is the most you would be willing to pay if it was instead made in the United States? The same question was then asked, but with the choice being Germany instead of the USA or India instead of the USA. The dollar choices ranged from: I would buy the $10 toy made in China, to $12, and in $2 increments on up to More than $50. These same choices (with appropriate dollar level adjustments) were offered for 11 different product categories, including toys, pet food, tires, shampoo, MP3 player, cell phone, athletic shoes, shirt/blouse, HDTV, toothpaste and energy drinks. An attempt was made to include products which had received strong negative news for China (toys, pet food and toothpaste), as well as products that had not received negative reports. In the later category, neutral products were also contrasted with electronic products (MP3 player and HDV) where there may be favorable COO perceptions for China. The products were also selected to provide a diverse representation of different potential risks. In a previous study by the authors (Drozdenko and Jensen, 2005), consumers rated tires and ingested products high in physical risks; MP3 players, athletic shoes and HDTVs as high in performance risks; and shampoo, toothpaste and shirt/blouse as high in social risks. The ten-item version of CET Scale (Shimp and Sharma, 1987) was used as the measure of consumer ethnocentrism. Respondents, indicated the extent of their agreement or disagreement to the ten statements. The CET Scale questions came either at the start of the survey or at the end, to see if reading ethnocentric statements before answering the pricing questions would inuence the prices respondents would pay for products from their own or outside countries. A Factor Analysis revealed that one factor accounted for more than 60 percent of the variance and all items loaded on this factor above 0.69. Internal consistency of the scale as measured by Cronbachs alpha was 0.93. These ndings are comparable to those reported by Balabanis and Diamantopoulos (2004). Finally, respondents were asked how often in the last three months they had heard or read about dangerous or defective products from each of the four studied countries. Based on their response to negative news about Chinese products, consumers were divided into high and low negative Chinese media exposure groups.

Hypotheses and results

H1. US consumers are willing to pay more for US-made products compared to Chinese products.

This hypothesis was conrmed for all product categories using a one-sample t-test with the Chinese-product price as the test value. Table I shows the mean price respondents were willing to pay for a US-made product relative to a Chinese

Translating country-of-origin effects into prices Ronald Drozdenko and Marlene Jensen

Journal of Product & Brand Management Volume 18 Number 5 2009 371 378

Table I The mean higher price US consumers would pay for US made products over those from China
Product Toy Pet food Shampoo Tire MP3 Shoe Cell phone Shirt TV Toothpaste Drink USA ($) 16.12 14.78 3.32 159.24 146.11 136.50 144.51 14.22 1,395.15 2.05 1.89 Chinese ($) 10.00 10.00 2.00 100.00 100.00 100.00 100.00 10.00 1,000.00 1.00 1.00 Diff (%) 61.20 47.80 66.00 59.24 46.11 36.50 44.51 42.20 39.52 105.00 89.00

P level
, 0.001 , 0.001 , 0.001 , 0.001 , 0.001 , 0.001 , 0.001 , 0.001 , 0.001 , 0.001 , 0.001

The repeated measures MANOVA indicated that there was a signicant main effect for country F(2, 619) 246.94, p , 0.001, the US having the highest overall premium paid above the Chinese products with the German products next and the Indian products the lowest premium paid above the Chinese products. Using the Bonferroni adjustment for multiple comparisons, all countries were signicantly different from each other at the 0.001 level or less. Furthermore, the premium paid above the stated Chinese reference price was statistically signicant at the p , 0.01 level for all products for each of the countries using an adjusted one-sample t-test with the Chinese reference price as the test value: H4. Individual characteristics such as income, gender, education, age, degree of ethnocentricity and media exposure will inuence the premium that a consumer will pay for a US made product above a Chinese product.

product. The percentage over the Chinese product that respondents were willing to pay is also shown: H2. Consumer willingness to pay a premium for a product from the USA, Germany, or India over one from China is dependent on the product category.

Signicant differences by product category have been found in most pricing studies that included multiple product categories (Helgeson and Beatty, 1987; Gabor and Granger, 1966; Kalyanaram and Little, 1994; Drozdenko and Jensen, 2005). A repeated measures MANOVA indicated that there was a signicant Product Country interaction F(20, 601) 12.48, p , 0.001. This interaction is represented graphically in Figure 1. For example, while the highest premium above the Chinese product was toothpaste for all three countries, the differential was almost two times greater for the US product relative to the German product and three times greater for the US product relative to the Indian product. The differential between the countries is substantially less for other products, for example for tires the US product pricing premium is only 36 percent above the German product and just 100 percent above the Indian product: H3. Consumers are willing to spend more on products from developed countries compared to products from less developed countries.

Research on price discounts has shown signicant differences by various demographic categories (Chance and French, 1972; Drozdenko and Jensen, 2004; and Drozdenko and Jensen, 2005). A stepwise linear regression was computed (Fto-enter # 0.050, F-to-remove $ 0.100) with the abovementioned individual characteristics as independent variables and a mean percentage for all product categories as the dependent variable. Three variables, CET Scale, age and a rating of the number of stories about defective or dangerous Chinese products heard in the last three months, accounted for about 11.0 percent of the variance, about 9.0 percent attributed to CET Score (see Table II). The following hypotheses were developed to examine further the effects of age, ethnocentricity and exposure to negative news on the price premium a consumer is willing to pay for products from different countries in the 11 product categories. Grouping variables were created to help with the interpretation and visualization of the interactions: H5. The premium that a consumer is willing to pay for a product from another country above the price of a Chinese product is dependent on the consumers age.

A grouping variable (Age Grp) was created by splitting the sample in two using the age variable. The sample ranged in age from 18-78 years, mean 32.6, median 26. A repeated

Figure 1 How much a price premium consumers would pay for US, German or Indian products over Chinese products by category

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Translating country-of-origin effects into prices Ronald Drozdenko and Marlene Jensen

Journal of Product & Brand Management Volume 18 Number 5 2009 371 378

Table II Factors related to the premium consumers will pay for US products over Chinese products
Unstandardized coefcients B Std error (Constant) CET Scale Age in years Heard about bad Chinese products 2.755 0.112 20.054 0.367 0.877 0.014 0.017 0.125 Standardized coefcients Beta 0.311 20.124 0.111

t
3.141 8.188 23.249 2.933

Sig. 0.002 0.000 0.001 0.003

measures MANOVA indicated the Age Grp effect was not statistically signicant. A signicant interaction was found for Country Products Age Grp, F(20, 665) 1.75, p , 0.023. The relationships among these variables are shown in Figure 2. For particular product categories (e.g. toothpaste) younger consumers were willing to pay a greater premium: H6. The premium that a consumer is willing to pay for a product from another country above the price of a Chinese product is dependent on the consumers ethnocentricity.

products. The Pearson Correlation Coefcient for preference for US-made products and CET score is shown in Table III: H7. The premium that a consumer is willing to pay for a product from another country above the price of a Chinese product is dependent on the perception of negative news reports about Chinese products relative to negative news reports about products from other countries.

A grouping variable (CET Group) was created by splitting the sample in two groups using the median CET score as the cutpoint for the groups. A repeated measures MANOVA indicated the CET Group effect was signicant, F(1, 684) 27.78, p , 0.001). The group with the higher CET scores were willing to pay 44 percent more for products from other countries compared to a 29 percent premium for the lower CET score group. Signicant interactions were found for Country CETGroup, F(2,683) 15.81, p , 0.001), and Products CETGroup F(10, 675) 2.38, p , 0.009. The Country Product CET Group interaction was not statistically signicant F(20.665) 0.973. The relationships among these variables are shown in Figure 3. The high ethnocentricity group was willing to pay the greatest price premium for all categories of US-made Figure 2 Effect of age on willingness to pay a COO price premium

A grouping variable (China Pub) was created by splitting the sample in two using a rating of hearing about defective products from China relative to the USA, Germany and India (China/((USA Germany India)/3)). A repeated measures MANOVA indicated the China Pub effect was signicant, F(1, 684) 4.38, p , 0.037) and signicant interactions were found for Country China Pub, F(2,683) 9.41, p , 0.001), Products China Pub F(10, 675) 2.90, p , 0.001, and Country Products China Pub, F(20, 665) 1.70, p , 0.029. The relationships among these variables are shown in Figure 4. The high negative publicity group was willing to pay the greatest premium differential for US products in the higher risk product categories (e.g., toothpaste, drink, shampoo, toys) (see also Table IV). H8. Taking the CET Scale Instrument has an inuence on the respondents willingness to spend more for USmade products.

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Journal of Product & Brand Management Volume 18 Number 5 2009 371 378

Figure 3 CET Score relationship with willingness to pay for products based on COO

Table III Correlations of CET score with the price willing to pay for US product above the Chinese product
ToyUS Pearson correlation Sig. (two-tailed) n Pearson correlation Sig. (two-tailed) n Pearson correlation Sig. (two-tailed) n Pearson correlation Sig. (two-tailed) n Pearson correlation Sig. (two-tailed) n Pearson correlation Sig. (two-tailed) n Pearson correlation Sig. (two-tailed) n Pearson correlation Sig. (two-tailed) n Pearson correlation Sig. (two-tailed) n Pearson correlation Sig. (two-tailed) n Pearson correlation Sig. (two-tailed) n 0.2301 0.0000 764 0.2174 0.0000 757 0.1906 0.0000 751 0.1938 0.0000 753 0.2559 0.0000 756 0.2359 0.0000 747 0.1967 0.0000 750 0.2359 0.0000 743 0.1979 0.0000 742 0.1531 0.0000 749 0.2132 0.0000 747

PetFoodUS

Respondents who completed the CET Scale prior to completing the willingness-to-pay section of the survey had a signicantly lower price they would pay for US products over Chinese products. The overall effect of CET order was signicant at the 0.018 level (F 5.63, df 1/684). These effects were statistically signicant on several product breakdowns. The mean for each order for all products and signicance levels are presented in Table V.

ShampooUS

Discussion
This research was designed to put a price value on COO effects, specically how much more consumers would pay for products from countries with a positive COO image compared to those with a negative image. By putting a price tag on these differences, it may allow countries to quantify the upside (and downside) of both a poor and a positive brand image. This study found statistically signicant price premiums consumers are willing to pay for made-in-USA goods over Chinese goods across all 11 product categories studied. Those premiums ranged from 37 percent (for athletic shoes) up to 105 percent (toothpaste) (see Table I). The highest priced item (HDTVs) showed a 40 percent price premium for US products over Chinese products. Consumers also showed a positive bias (i.e. increased willingness to pay a higher price) toward products from developed countries relative to less developed countries. While the USA, Germany and India were signicantly different from China in the willingness of US consumers to pay more for their products, the USA and Germany were also signicantly higher among US consumers than India. This research also conrmed previous studies that COO effects varied signicantly by product category. However, that variance was found only in the degree of stereotyping for each category, not in whether or not stereotyping exists. Products that are consumed such as toothpaste and an energy drink, showed a much higher premium as compared to products that have less physical risk. While the difference between the premium paid for an Indian-made shoe compared to a US375

TireUS

MP3US

ShoeUS

CellPhoneUS

ShirtUS

HDTVUS

ToothpasteUS

DrinkUS

Translating country-of-origin effects into prices Ronald Drozdenko and Marlene Jensen

Journal of Product & Brand Management Volume 18 Number 5 2009 371 378

Figure 4 Negative publicity effect on willingness to pay a price premium based on COO

Table IV Percent higher price consumers are willing to pay for US versus Chinese goods factored by the amount of exposure consumers have had to negative press about Chinese products
Product Toy Pet food Shampoo Tire MP3Player Shoe Cell phone Shirt HDTV Toothpaste Drink Amount of negative China PR by group Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High Mean % 58.18 67.40 41.34 54.81 55.24 75.37 56.93 61.60 43.04 46.51 35.81 35.93 40.36 44.90 42.49 53.24 34.95 42.15 79.94 130.16 71.79 110.99

Table V Order effects: exposure to the CET scale decreased the price premium consumers would give to US versus Chinese products
CET order Prior exposure Post exposure ToyUS PetFoodUS ShampooUS TireUS MP3US ShoeUS CellPhoneUS ShirtUS HDTVUS ToothpasteUS DrinkUS 15.09 14.31 3.26 156.63 138.64 132.62 136.6 14.22 1,335.21 1.99 1.86 17.39 15.37 3.39 162.46 155.4 141.32 154.3 15.36 1,468.77 2.11 1.94

P level
0.000 0.003 0.169 0.344 0.001 0.073 0.002 0.009 0.009 0.135 0.254

P-level
0.090 , 0.001 , 0.001 0.430 0.520 0.918 0.373 0.029 0.136 , 0.001 , 0.001

made shoe was 23 percent, the premium differential for toothpaste was more than three times greater at 72 percent. Shampoo, toys and tires are other higher risk products that show a higher differential for being US-made. It is interesting to note, that the differential between the USA and Germany for tires was not as great as for other higher risk products. This might be due to the association of Germany with good automotive technology. 376

A CET Scale instrument was used to determine the extent of ethnocentrism for each consumer surveyed. Consumers with higher levels of US ethnocentrism demonstrated the highest premium willing to be paid for US products across all 11 product categories. This is an expected result and supports the hypothesis that ethnocentrism has an effect on aspects of purchase behavior. There was also a pattern for the high ethnocentrism group to pay a greater premium for higher risk products. The lowest level of premium paid for all products was in the low ethnocentrism group evaluating Indian products. Negative publicity about a countrys products affects the premium a consumer is willing to spend for products from countries with fewer reports of dangerous or defective products. For respondents who reported hearing more negative news about Chinese products, the premium differential was greatest for higher risk products made in the USA. For lower risk products the effects of negative publicity were minimal and for some product categories there was no effect. Age was the weakest of the signicant consumer variables that affected the premium consumers would pay above the

Translating country-of-origin effects into prices Ronald Drozdenko and Marlene Jensen

Journal of Product & Brand Management Volume 18 Number 5 2009 371 378

Chinese product. Younger consumers were more willing to pay a higher premium for some higher risk products compared to older consumers. In particular, younger consumers were willing to pay a greater premium for toothpaste made in the USA. An interesting result was found through separating the respondents into two groups based on the experimental treatment. One group completed the CET Scale before responding to the price questions, while the second group saw the CET Scale after the price questions. Exposure to the CET Scale before answering the price questions resulted in respondents willingness to pay a smaller price premium for US products. One possible explanation for these ndings might be that exposing people to strong ethnocentric statements makes them more sensitive to their own biases (Social Desirability Theory, see for example, Fisher (1993)) and thus causes them to opt for a smaller price premium for US products. Ettenson et al. (1988) hypothesized that the strong ethnocentrism as seen in Made in the USA studies might be an attempt by respondents to present a socially desirable trait of patriotism. Thus when presented with negative statements, respondents might then attempt to present themselves as lower in prejudice.

product categories, it may not be possible. For example, consumers are willing to pay about 37 percent more for a USproduced athletic shoe above a Chinese one. The costs of producing an athletic shoe in the USA may exceed this premium. As an alternative, a company might gain an advantage by subcontracting production to a more developed country. Another possible application is segmenting markets based on ethnocentrism and applying the premium feasibility discussed in the previous paragraph. That is, while it may not be feasible to develop a US product for large market segments, there may be market niches willing to pay a higher premium that might allow a protable US made product. Use of price premiums as a quantifying tool for the extent of COO effects may also allow governments to assess the potential nancial impact of money spent to develop a country brand, to improve product quality, or to pay for governmental oversight of key industries (e.g. toy factories in China). These considerable costs could now be weighed against the potential upside in pricing that their products could command if they had an improved COO image.

References Limitations
Kaynak and Cavusgil (1983) suggest that COO effects are stronger when consumers have little or no other information available from which to make their judgments. Thus this study may show stronger results than would be seen if consumers could see and touch the US and Chinese products while making a decision. Likewise, the addition of brand names and warrantee options might also reduce the effect of COO on price premiums consumers are willing to pay. Although this study used a large sample size (767 respondents), it used a convenience sample and was conducted in just two locations, Faireld County in Connecticut and Clinton County in Pennsylvania. These locations, weighted by their percentage composition in this study, have roughly the same median age and male/female ratios seen in the USA. However, they are slightly more Caucasian (88 percent instead of 80 percent) and have a 16 percent higher income level. Additionally, the sample in this study was relatively young (50.6 percent in their 20s), and thus may not reect the attitudes of older consumers. However, from an applications perceptive, there is a value to understanding the perceptions of younger, more afuent consumers. Finally, the research instrument was a survey, not a real-life purchasing situation. However, it did present respondents with a limited choice: either the Chinese-made product at one price or a US, German, or Indian product at a wide range of price premiums. Ahmed, S.A. and dAstous, A. (1993), Cross-national evaluation of made-in concept using multiple cues, European Journal of Marketing, Vol. 27 No. 7, pp. 39-52. Ahmed, S.A., dAstous, A. and El-adraoui, M. (1994), Country-of-origin effects on purchasing managers product perceptions, Industrial Marketing Management, Vol. 23 No. 4, pp. 323-32. Al-Sulaiti, K.I. and Baker, M.J. (1998), Country of origin effects: a literature review, Marketing Intelligence & Planning, Vol. 16 No. 3, pp. 150-200. Balabanis, G. and Diamantopoulos, A. (2004), Domestic country bias, country-of-origin effects, and consumer ethnocentrism: a multidimensional unfolding approach, Journal of the Academy of Marketing Science, Vol. 32 No. 1, pp. 80-95. Bannister, J.P. and Saunders, J.A. (1978), UK consumers attitudes towards imports: the measurement of national stereotype image, European Journal of Marketing, Vol. 12 No. 8, pp. 562-70. Becker, K. (1986), Halo effect inuences on the Japanese product price/quality relationship, in Malhotra, N. and Hawes, J. (Eds), Developments in Marketing Science, Vol. 9, Academy of Marketing Science, Coral Gables, FL, pp. 111-44. Bilkey, W.J. and Nes, E. (1982), Country of origin effects on product evaluation, Journal of International Business Studies, Vol. 8 No. 1, pp. 89-99. Chance, W.A. and French, N.D. (1972), An exploratory investigation of brand switching, Journal of Marketing Research, Vol. 9 No. 2, pp. 226-69. Chao, P. and Rajendran, K.N. (1993), Consumer proles and perceptions: country-of-origin effects, International Marketing Review, Vol. 10 No. 2, pp. 22-39. Dornoff, R., Tankersley, C. and White, G. (1974), Consumers perceptions of imports, Akron Business and Economic Review, Vol. 5, Summer, pp. 26-9. Drozdenko, R. and Jensen, M. (2004), Brand switching inuences in advertising: an experimental study of personal 377

Managerial application
From a managerial perspective, the most important nding of this study may be related to the possibility of putting a dollar value on COO effects in specic product categories. This may allow managers to better evaluate the feasibility of developing domestically produced products. Specically, will the premium consumers are willing to pay for a domestically produced product yield the required prot level? In some

Translating country-of-origin effects into prices Ronald Drozdenko and Marlene Jensen

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Further reading
Vence, D.L. (2007), Marketers ready for shoppers with a renewed yen for American-made goods, Marketing News, November 15, pp. 12-15.

Corresponding author
Marlene Jensen can be contacted at: Mjensen1@lhup.edu

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