{"id":2394,"date":"2008-11-18T13:10:12","date_gmt":"2008-11-18T09:10:12","guid":{"rendered":"http:\/\/geoeconomics.ge\/en\/?p=2394"},"modified":"2013-03-18T13:10:50","modified_gmt":"2013-03-18T09:10:50","slug":"georgian-consumers-perception-of-domestic-and-foreign-products","status":"publish","type":"post","link":"http:\/\/geoeconomics.ge\/en\/?p=2394","title":{"rendered":"GEORGIAN CONSUMERS\u2019 PERCEPTION OF DOMESTIC AND FOREIGN PRODUCTS"},"content":{"rendered":"

Nugzar Todua, Ivane Cevahishvili Tbilisi State University, Tbilisi, Georgia Ali Riza Apil, Ali Riza Apil is an Assistants Professor of Marketing, Department of Business Administration, International Black Sea University, Tbilisi, Georgia<\/strong><\/p>\n

The present study contributes to consumer research by providing information about consumer preferences in a less researched geography. <\/p>\n

Most of the country of origin studies were conducted in western or developed countries. Studies in the less developed nations are still scarce, especially research conducted in the republics of former Soviet Union. Within a general perspective, the present article aims to determine Georgian consumers perception of domestic products in comparison to products sourced from both developed and developing countries. The study focuses on consumers\u2019 assessment of different product categories and perceptions of different product attributes. Study results are based on the analysis of the data obtained from 313 Georgian respondents indicating that products made in Georgia perceived low in quality. Most of the products made in Germany are perceived as high in quality. Chinese products were the least appreciated ones. Italy was rated high in some major product classes like clothing and fashion products. Findings support the previous research indicating that there is a positive relationship between product evaluation and degree of economic development of the sourcing country and COO effect varied according to product class. Partial demographic differences discovered among consumer segments. Research results were discussed and certain tentative conclusions were drawn. Managerial and public policy recommendations were also offered.
\n Key words: Country of Origin, Made in Image, Consumer Product Evaluation, Georgia, Product Country Image
\n INTRODUCTION
\n Johansson (1989, p.47) starts his article published in International Marketing Review \u201cA still unresolved issue in the study of country of origin effects is whether the \u201cmade-in\u201d label on a product is actually noticed and used by the consumer in a real purchase situation.\u201d A large amount of research has documented how country-of-origin information is important on consumers\u2019 product evaluation. Some major studies specify that the \u201cMade in…\u201d label has a significant effect on consumers\u2019 attitudes and product evaluations (Bilkey and Nes, 1982; Gaedeke, 1973; Johansson, 1989; Zain and Yasin, 1997). There are also empirical findings suggesting the importance is more important for some products than for others ( Gaedeke, 1973; Zain and Yasin,1997). However it is difficult to sustain strong generalizations about country of origin effects (Johannson, 1989).
\n The recent transition from a centrally-planned economic system toward a free market economy has resulted with the creation of numerous, diversified, and unsatisfied needs of people living in the region (Quelch et al., 1991). The consumers have the ability and intentions to buy foreign products. This demand responded with the emergence of an important number of foreign business ventures toward the region in order to capture first mover advantages and enjoy benefits of untapped markets. The past 15 years have witnessed the growth of foreign products\u2019 existence in Georgian market and their intensive advertising and promotional efforts. Georgian consumers have established impressions and their own evaluation criteria of foreign products originated from different countries and regions.
\n Despite scores of studies have been conducted on consumer perceptions of products based on the COO effect in western, developed countries, such studies conducted in Eastern Europe and the former Soviet republics are scare, with no empirical research addressing this issue in Georgia. Therefore the current study was designed to explore consumers\u2019 preference and purchase intention for domestic and foreign products in Georgia, a transition country which has reestablishing its domestic industry after the ruins of former USSR.
\n Although a great deal of research conducted to uncover the mist over field, Verlegh and Steenkamp (1999) and Amine et al. (2005) stated that COO effects are not understood well yet. When we sum up all the reasons stated above, it became a driving impulse to expand the COO and ethnocentrism studies to Georgia one of the first Eastern Block Republic integrating to western world. We hope it will also contribute the understanding of transition customers of former USSR.
\n This research aims to determine Georgian consumers\u2019 perception of products sourced from Turkey as one of the largest exporter to Georgia. Specifically, the study undertaken focuses on the following research questions:
\n 1. Do Georgian consumers perceive categories of domestic products differently? What is the Georgian consumer\u2019s assessment of different product categories in comparison to products sourced from the selected countries?
\n 2. How does the demographic profile of the Georgian consumer differentiate their perceptions of domestic products?
\n Literature Review
\n Different definitions exist for \u201cCountry of origin effects\u201d in the literature. Elliott and Cameron (1994) defined COO effect as the positive or negative influence that a product\u2019s country of manufacture may have on consumers\u2019 decision processes or subsequent behaviour. According to Gurhan-Canli and Maheswaran (2000) \u201cCountry of origin effects\u201d refer to the extent to which the place of manufacture influences product evaluations. Johansson et al. (1985) and Ozsomer and Cavusgil (1991) define country of origin as the country where corporate headquarters of the company marketing the product or brand is located. Typically, this is the home country for a company. Globalization of production resulted with a proliferation of such hybrid products of binational and multinational origin (Chattalas, 2006). In this case, a more concise definition could be \u201c Country of origin of a product is the consumers\u2019 perceptions of belonging country or countries with their perceived association with the product. <\/p>\n

Starting with the Schooler\u2019s seminal work in 1965, COO effect became one of the most researched phenomena in international marketing and consumer behavior literature (Pharr,2005; Peterson and Jolibert, 1995;). Researches of half a century produced a joined conclusion: a product\u2019s country of origin can influence consumers\u2019 evaluative judgments of the product (Pharr, 2005). Significant changes occurred in international markets and business practices in recent decades. Consequently this trend has influenced the relative importance of COO and brand origin perceptions. Researchers have began to doubt for salience of COO information in determining product evaluations as well as consumer awareness of origin of brands they purchase (Pharr 2005). Although, there is overwhelming support for the existence of COO effects on consumers\u2019 evaluations of products emanating from foreign sources, the findings of past COO studies can be contradictory. Some major studies conclude that COO is a salient variable that influences product evaluations and purchase intentions (Bilkey and Nes, 1982; Gaedeke, 1973; Johansson, 1989;; Laroche et al., 2002; d\u2019Astous and Ahmed, 1999). Others have concluded that several other factors influence customer beliefs and purchase intentions much more strongly (Ettenson et al., 1988). Some researchers have also concluded that not all customers use COO cues and many cosumers may vary in use of COO cues. COO beliefs are highly contextual and evolve over time. These contradictory conclusions have constrained the generalisablity of findings, theory building, the replication of research in other contexts and the overall usefulness of findings to marketing practitioners (Bhaskaran and Sukumaran, 2007). This paper is expected to provide supporting information COO effect still exist and consumer perceptions of products sourced from different countries vary in different product classes and consumer demographics and segments. It is a necessary and useful marketing intelligence as an input to the planning of international marketing strategy.
\n In accumulated research, consumers use COO as a cue in their evaluations of new products. Maheswaran (1994) got results supporting that and stated that novices often use country of origin to evaluate a new product and give minimal consideration to product attributes. Most of the researchers agree that the \u201cCountry of Origin Image\u201d has a significant impact on consumers\u2019 evaluations of product quality and willingness to buy a product (e.g. Bilkey and Nes, 1982; Han and Terpstra, 1988; Maheswaran, 1994). On their Meta-analyze of literature on the country-of-origin effect Peterson and Jolibert (1995) showed that country of origin has a strong influence on product evaluation. Verleg and Steenkamp (1999) found that country of origin has a larger effect on perceived quality than on attitude toward the product or purchase intention. Kaynak and Cavusgil (1983) noted that country of origin may function as a substitute variable, which has stronger impact when a consumer knows little else about a product. The authors concluded that the less known about a business firm and its brands, the greater the impact of the national origin of the manufacturer. Although some studies have questioned the importance of country of origin for much consumer decision making (Elliott and Cameron, 1994), recent research has once demonstrated that the country of origin has a substantial effect on attitudes toward products and the likelihood of purchasing these products, often demonstrating effects that are as strong or stronger than those of brand name, price, or quality (Lantz and Loeb, 1996; Okechuku, 1994).
\n Pharr (2005) published a comprehensive literature review covering 1995 to October 2005. She concludes COO influence is subject to a number of culturally-derived antecedents and is moderated by both product based and individual consumer factors. The physical and cultural relationship proximity of sourcing country is an influential factor of consumer perception. Closer proximity is a positive factor for perception of that country\u2019 products (Sohail, 2005; Bilkey and Nes, 1982).
\n According to Keown and Casey (1995), COO beliefs are a strong influence in purchases of products such as wine, oriental rugs and caviar. In contrast, Agrawal and Kamakura (1999) found that they exerted greater influence in the buying of agricultural products than manufactured goods. This finding demonstrates the complexity involved in the evaluation of COO beliefs in a multi-dimensional context (Bhaskaran and Sukumaran, 2007). Knowledge and familiarity with products reduce the use of COO as an informational cue (Maheswaran, 1994).Kinra\u2019s (2006) study focussing on India, a collectivist society, concludes that COO influences purchase intentions with respect to \u201cpublic luxuries\u201d such as cars but not in the case of \u201cprivate necessities\u201d such as toothpaste.
\n Most studies concluded that there is a tendency for consumers to evaluate their own country\u2019s products more favorably than do consumers from other countries (Balabanis and Diamantopoulos, 2004;Elliott and Cameron, 1994; Samiee, 1994; Todua and Apil, 2008). Consumers who exhibit high ethnocentric tendencies evaluate products based on the moral acceptability of purchasing an imported product. So, while country of origin of a product plays a role in the product decisions of ethnocentric consumers, it is the social appropriateness of the act that drives the product decision, rather than the country of origin, per se (Huddleston et al, 2001). For non-ethnocentric consumers, foreign products should be evaluated on their own merit and on the basis of the utility they offer consumers, rather than based on where they are manufactured or assembled (Kaynak and Kara, 2001).In his comprehensive literature review of \u201cCountry of Origin effects (COO),\u201d Samiee (1994) included Consumer Ethnocentric Tendencies (CET) as one of the antecedents of COO along with several other antecedents such as a country\u2019s level of economic development and product class attributes. Shankarmahesh (2006) concludes in the integrative literature review CET which is basically an affective and normative construct may in turn lead to COO evaluation which is essentially a cognitive construct.
\n Georgian consumers are expected to perceive the domestic products from various countries different in quality. For example, while they see Germany a source for high quality technology products, they prefer French and Italian clothes and fashion products. Still, mostly having an originally western adapted materials culture, western products usually are welcomed in Georgia. The table culture is similar to that of the western with slight differences in the Georgian kitchen and food preferences. The traditional Georgian meal consists of wine and plain bread (Ozsoy and Apil, 2005). Georgians are proud of their cheese, too. Cheese and wine are culturally bound products and they have strong wine and cheese traditions. Georgian consumers are likely to perceive Georgian alcoholic drinks and cheese to be superior to others.
\n Research methodology
\n The study was conducted among 313 consumers, from Tbilisi, Batumi, Kutaisi, and Rustavi in May and June of 2005. Respondents were selected by use of a convenience sampling method. Six hundred sixty-five questionnaires were distributed and 313 of them returned allowing a response rate of 40 percent. Graduate students from several universities took part in the survey and assisted in the survey administration. Before the questionnaires were administered to the selected respondents, interviewers were thoroughly trained in effective administration of the questionnaires. Drop-off and pick-up method was used for the collection of data. Interviewers visited the homes and work places of respondents. Questionnaires were dropped and a week later they were personally retrieved. Eligible respondents were individuals aged 17 and above.
\n The questionnaire sought the respondents\u2019 evaluation on the quality of products made in specific countries. Based on the results of a market test conducted among a group of consumers from Tbilisi, ten products available in the Georgian Market were identified as relevant for the study. These were automobiles, home appliances, electronics, clothing, fashion items, alcoholic beverages, medical products, cheese, shoes, and home maintenance products. The nine countries selected were: China, Georgia, Germany, Italy, Japan, Poland, Russia, Turkey, and the USA. The reason for selecting these countries is attributable to the fact that they are all expected to be significant sources of imports of the ten selected products to Georgia in the future. A five-point Likert scale was used to gauge respondents\u2019 perceptions of quality on each product from the respective countries (5 = high quality; 1 = low quality). <\/p>\n

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Nugzar Todua, Ivane Cevahishvili Tbilisi State University, Tbilisi, Georgia Ali Riza Apil, Ali Riza Apil is an Assistants Professor of<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[39],"tags":[],"yoast_head":"\nGEORGIAN CONSUMERS\u2019 PERCEPTION OF DOMESTIC AND FOREIGN PRODUCTS - Geoeconomics<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/geoeconomics.ge\/en\/?p=2394\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"GEORGIAN CONSUMERS\u2019 PERCEPTION OF DOMESTIC AND FOREIGN PRODUCTS - Geoeconomics\" \/>\n<meta name=\"twitter:description\" content=\"Nugzar Todua, Ivane Cevahishvili Tbilisi State University, Tbilisi, Georgia Ali Riza Apil, Ali Riza Apil is an Assistants Professor of\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\">\n\t<meta name=\"twitter:data1\" content=\"13 minutes\">\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"http:\/\/geoeconomics.ge\/en\/#website\",\"url\":\"http:\/\/geoeconomics.ge\/en\/\",\"name\":\"Geoeconomics\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":\"http:\/\/geoeconomics.ge\/en\/?s={search_term_string}\",\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"http:\/\/geoeconomics.ge\/en\/?p=2394#webpage\",\"url\":\"http:\/\/geoeconomics.ge\/en\/?p=2394\",\"name\":\"GEORGIAN CONSUMERS\\u2019 PERCEPTION OF DOMESTIC AND FOREIGN PRODUCTS - Geoeconomics\",\"isPartOf\":{\"@id\":\"http:\/\/geoeconomics.ge\/en\/#website\"},\"datePublished\":\"2008-11-18T09:10:12+00:00\",\"dateModified\":\"2013-03-18T09:10:50+00:00\",\"author\":{\"@id\":\"http:\/\/geoeconomics.ge\/en\/#\/schema\/person\/c8498c0ae03a66c87b59761fbd19b04c\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"http:\/\/geoeconomics.ge\/en\/?p=2394\"]}]},{\"@type\":\"Person\",\"@id\":\"http:\/\/geoeconomics.ge\/en\/#\/schema\/person\/c8498c0ae03a66c87b59761fbd19b04c\",\"name\":\"Admin\",\"image\":{\"@type\":\"ImageObject\",\"@id\":\"http:\/\/geoeconomics.ge\/en\/#personlogo\",\"inLanguage\":\"en-US\",\"url\":\"http:\/\/2.gravatar.com\/avatar\/bf2d8703d729f003d8905b57fcab5078?s=96&d=mm&r=g\",\"caption\":\"Admin\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","_links":{"self":[{"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/posts\/2394"}],"collection":[{"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2394"}],"version-history":[{"count":1,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/posts\/2394\/revisions"}],"predecessor-version":[{"id":2395,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/posts\/2394\/revisions\/2395"}],"wp:attachment":[{"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2394"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2394"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2394"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}