Introduction

Markets in India have rapidly evolved since 1991; Globalization had a very huge impact not
only on Indian economy but the markets and the consumers also. Entry of foreign products in
Indian markets was a big step and it gave the access of foreign brands to local people. Now in
2019, where foreign markets are integrating and across borders to satisfy the customer. Over
the years, consumers have gotten quite fond of foreign products due to the stereotypes about
the quality of local brands. But still we see a lot of consumers believe in local brands and
purchase of domestic products, which is further influenced by a lot of factors. One factor to be
considered in studying purchasing behaviour of the consumers is Country-of-origin (COO also
referred as product Country Image or PCI)

COO has been defined in many literature reviews. According to Wang and Lamb (1983),
country of origin effects are intangible barriers to enter new markets in the form of negative
consumer bias toward imported products. Ozsomer and Cavusgil (1991) define country of
origin as the country where corporate headquarters of the company marketing the product or
brand is located.

The research aims to study and analyse the effect of country of origin of a product on the
purchase intention of a consumer, and the factors working on it and to understand the position
of domestic and foreign goods in the perception of people when it comes to their buying
behaviour.

Objectives of the study

1) To identify the nature of the data collected.
2) To understand the influence of country of origin image on the purchase intention of the
Indian consumers for domestic and foreign goods
3) To study and analyse the factors influencing the purchase decision.

Hypotheses
• H1 = There is no significant effect of country of origin on the purchase intention of the
customer
• H0 = There is a significant effect of Country of origin on the purchase intention of the
customer

1
 Dependent Variable= Purchase Intention

Independent Variable= Country of origin, Price and Quality.

Limitations
1) The research sample was located in only one Indian city, Bangalore, which is a clear
constraint on the generalizability of the results and will not apply in other geographical
locations.
2) Consumers were asked to evaluate the attributes of foreign-origin products without
reference to a specific product group and specified country of origin of the product.

Review of Literature

Han (1989) found that due to unfamiliarity of a country’s product by the consumer, the
perception may be affected by a halo from which customers may infer the attributes of the
product and make a judgement about the product and the country of origin of that product
which formulated their attitude indirectly through attribute rating. In contrary, as the country’s
product starts to become familiar to the consumer country of origin may become a build that
outlines shoppers' convictions about item traits and legitimately influences their mentality
toward the brand. To study the data chi square statistic method to test the fit for alternative
models.

Elliott, Cameron (1994) conducted a thorough study to understand the consumer preference of
products on the basis of country of origin, product quality and price. They found out that the
consumers give less significance to the country of origin in choosing the product as compared
to price and quality. Consumers prefer to purchase local made products when that market is
invariant like their price, brand name and technical features and when local market is perceived
to be better or not inferior to the overseas products. Consumers prefer global products or
imported goods when the local products are perceived to be inferior quality. The primary data
of the study was collected through “face to face” survey in a shopping mall and 401 respondents
were recorded. The “artificiality” of the described scenarios and the complexity of the factorial
design of the techniques in study has been acknowledged as the limitation of the study.

Bandyopadhyay, Subir & Banerjee, Bibek (2003), established a significant effect of country of
origin on a product by recognising that foreign products are not seen or perceived to be
differently if they have been shipped from the country of design or manufactured domestically.
Indians find no quality difference between locally made or foreign made brands. The data was

2
primarily collected from 121 consumers in Ahmedabad and Calcutta about various products.
Limitation identified in the study were that the study was only from the perspective of India,
and hence might not apply in other country perspectives which gave us a scope to use similar
research methodology to understand different country perspectives with larger product
categories.

According to Liefeld (2004), his study has contrasting results compared to previous academic
researches as it suggests that country or origin is not a significant attribute or a basis in order
to purchase the product. It has appeared that lack of interest in knowing the COOP during the
purchase is a very common occurrence during consumer demographics. The evident revealed
that 93.5% of the sample did not wish to acquire the country of origin of the product they had
purchased, and hence the origin did not influence the purchase intention of the consumers. The
study gives the scope to develop new unobtrusive methods for obtaining raw data and adopt
natural sciences in order to observe human behaviour and develop accurate descriptions of the
phenomenon under study.

According to Shukla (2009) contextual factors have the strongest effect and influence on
purchase intentions; they further influence the brand loyalty and switching behaviour. The
study offers managers unique learning through subsequently verifying and testing the issue of
purchase intentions. 380 responses were taken through a questionnaire out of which 340 valid
responses were revised and tested. The generated output from hypothesis was later analysed by
correlation between independent variables. The study leaves a scope of research in other
variables which were no taken in consideration while collecting and data and testing the
hypothesis.

Son, Jin and George (2013), established that perceived behavioural control and the consumer
attitude towards the foreign branded jeans had a great influence towards consumer’s purchase
intentions rather than the normative influences i.e. face saving and subjective norm, this implies
that foreign companies should target customers with efficient resources for the purchase i.e.
time and money. The primary data was collected by a survey from 210 Indian college students
in Bangalore, India. The study was one of the first attempts in research to combine two
behavioural models to study the intention of Indian crowd towards foreign brand.

3
Research Methodology

Research Design

The study involves the different tests and analysis through different statistical methods to
determine the relationship between Purchase intention, Quality and Country of origin. The
research would be done by taking survey in a particular district of people between different age
groups, different educational qualifications with individual difference of opinions about quality
and coo effect. This is done via a Questionnaire including 22 Questions about the different
variables mentioned above which will further be tested.

Sample Selection

The Data was collected by 117 respondents through an online questionnaire. Out of 117,
Filtered data of 112 people were taken and others were rejected because of incomplete answers
and duplicate responses. This Data of 112 people is studied and tested below in the report.

Tools used for Analysis

The Data is analysed through 4 different types of statistical tools; Descriptive Statistics is used
to identify the nature of the data collected based on the demography. The dependant and
independent variables tested through Correlation, One-Way ANOVA & Regression analysis
tools. These are further interpreted and later discussed about in the discussions.

4
Analysis & Interpretation

Descriptive Statistics

Income Frequency Educational Level Frequency

Gender Frequency Valid less than 25000 Valid Secondary

2 8
Valid Male School
76 25000 - 50000 3
Diploma 3
Female 36 50000 - 100000 14
Bachelor Degree 46
Total more than 100000 93
112 Post Graduate 55
Total 112 Total 112

Statistics

Educational
Gender Age Level Income Occupation

N Valid 112 112 112 112 112

Missing 0 0 0 0 0
Mean 1.32 3.15 3.32 3.77 2.22
Std. Error of Mean .044 .118 .079 .055 .105
Median 1.00 4.00 3.00 4.00 2.00
Mode 1 4 4 4 2
Std. Deviation .469 1.254 .841 .585 1.113
Variance .220 1.571 .707 .342 1.238

Interpretation

From the acquired demographic data we can interpret various characteristics of our research
sample participants. The participants comprise of 67.85% of male population. The majority of
the sample is employed where 64.28% of them are above 35 years of age and 22.32% of them
are less than 20. The educational level of majority of the sample is a graduate or a post graduate
with 83.03% of the sample population having an annual income above 1,00,000 per annum.
This implies that the research sample is predominantly educated and mature adults, who
participate in the customer purchase activities and spend a considerable amount on these
activities; which is considered fit for the sample study.

5
Data Analysis – Correlation
Correlation- 1

Correlations

Quality factor of a
The production of product is more
different products important than its
in different Coo while making
countries affect a decision to
their overall quality purchase a product

The production of different Pearson Correlation 1 .812**

products in different countries Sig. (1-tailed) .000
affect their overall quality N 112 112
Quality factor of a product is more Pearson Correlation .812** 1
important than its Coo while Sig. (1-tailed) .000
making a decision to purchase a N
112 112
product

**. Correlation is significant at the 0.01 level (1-tailed).

Interpretation: The above analysis serves instrumental to proving the two variables quality
and purchase intention have a direct correlation with respect to their country of origin. The
value of correlation shows that they are highly corelated. Hence, we can imply that perceived
quality of the product has a big effect on the purchase intention of the customer.

6
Correlation -2

Correlations

Price factor of a Quality factor of a

product is more product is more
important than its important than it's
Coo while making a Coo while making a
decision to decision to
purchase a product purchase a product

Price factor of a product is more Pearson Correlation 1 .370**

important than its Coo while Sig. (1-tailed) .000
making a decision to purchase a N
112 112
product
Quality factor of a product is more Pearson Correlation .370** 1
important than its Coo while Sig. (1-tailed) .000
making a decision to purchase a N
112 112
product

**. Correlation is significant at the 0.01 level (1-tailed).

Interpretation

According to the above analysis, the two variables under study are country of origin awareness
to the consumer and COO as factor of purchase. From the above data we can say that the two
variables are negatively corelated, hence it implies that the Country of Origin of the product
has no relation with the purchase intention of the consumer.

7
Data Analysis – One Way Anova
Analysis by taking Educational level as a grouping factor

ANOVA

Sum of
Squares df Mean Square F Sig.

The production of Between

11.417 3 3.806 3.288 .024
different products in Groups
different countries affect Within Groups 125.003 108 1.157
their Quality Total
136.420 111

Interpretation: Results reveal that there is statistically significant difference between the
group means. We can see that the significance value is 0.024 (i.e., p = .021), which is below
0.05. and, therefore, there is a statistically significant difference in the mean of difference of
opinion with people with different educational level.

8
Data Analysis – Regression
a. Dependent Variable: Quality of a product
b. Independent Variable: Country of Origin of a product

Coefficientsa

Unstandardized Standardized 95.0% Confidence

Coefficients Coefficients Interval for B

Std. Lower Upper

Model B Error Beta t Sig. Bound Bound

1 4.688 .280 16.740 .000 4.133 5.243

Country of Origin of a
-.161 .162 -.095 -.996 .024 -.483 .160
Product

ANOVAa

Model Sum of Squares df Mean Square F Sig.

1 Regression .654 1 .654 .991 .024b

Residual 72.622 110 .660

Total 73.277 111

Model Summary

Change Statistics

R Adjusted R Std. Error of R Square F Sig. F

Model R Square Square the Estimate Change Change df1 df2 Change

1 .095a .009 .000 .813 .009 .991 1 110 .024

Interpretation

Results here deliver that; quality and Coo are positively related but not very significantly as it
is approximately 0.01. The variation in quality is affected by different products made in
different countries but not significantly as perceived by people. Further it shows similar results
as for quality and Coo for sig. level which is 0.024.

9
Findings & Discussions

The main objective of the study was to understand the effect of country of origin of a product
on the purchase intention of the customers and to analyse the factor of quality on the purchase
decision. From our study and analysis, we prove that there is no significant effect of country
of origin on the purchase intention of the product, while consumers rate country of origin after
product quality and price, and hence quality and price are considered more significant variables
in the purchase decision.

The main objective of the study was to understand the effect of country of origin of a product on
the purchase intention of the customers and to analyse the factor of quality on the
purchase decision. From our study and analysis, we prove our H1 hypothesis that there is no
significant effect of country of origin on the purchase intention of the product as there was
negative correlation between the two. while consumers rate country of origin after product
quality and price, and hence quality and price are considered more significant variables in the
purchase decision. The purchase intention of the customer is guided by quality of the product
rather than it’s the country image of the place of production of the product.

This study can be considered significant to various production players and companies in the
market as it gives them information about the marketplace trends and forces and also implies
that the companies and organisations producing and launching various products in the market,
should engage more importance on its quality and price and then it’s competition from various
nations, as the quality is what a customer goes for in order to make a purchase decision.

10