Product Country-of-Origin Perceptions of Portuguese Consumers

By

Soumava Bandyopadhyay
Associate Professor of Marketing
Lamar University

Rama Yelkur*
Assistant Professor of Marketing
University of Wisconsin – Eau Claire

Maria DaCosta
Professor of Economics
University of Wisconsin – Eau Claire

Francisco Coelho
Lecturer of Marketing
Instituto Português Administracão de Marketing

*Corresponding Author
Rama Yelkur
Assistant Professor of Marketing
University of Wisconsin – Eau Claire
Department of Management and Marketing
PO Box 4004
Eau Claire WI 54702-4004
Phone: 715-836-4674
Fax: 715- 836-2944
Email: yelkurr@uwec.edu

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 Product Country-of-Origin Perceptions of Portuguese Consumers

Abstract

This paper reports a field study from Portugal, where Portuguese consumers’ perceptions
of products made in Portugal are compared with those of products originating from Spain, Italy,
Germany, France, and the United States. The consumers are observed to hold distinctly different
views of products from the various countries in terms of quality, value, prestigiousness,
promotion, and availability. Evaluation of products from a country is found to be generally
dependent on the perceived image of that country. Based on the results, managerial implications
are drawn for marketers from different countries who are trying to make themselves more
competitive in the Portuguese market.

Introduction

Portugal went through some remarkable changes in the last three decades. It joined the

European Union (EU) in 1986 and the European Monetary Union (EMU) in 1998. Portugal has

been experiencing healthy rates of economic growth, which averaged 2.9% for the period 1980-

90 and 1.7% for the period 1990-97. It is now a high-income economy with a Gross Domestic

Product (GDP) of $103.9 millions of dollars and an income per capita of about $10,450. When

measured at Purchasing Power Parity (PPP), its GDP rises to $137.6 million and its income per

capita to $13,840, ranking 23rd world wide. The income gap between Portugal and the other EU

partners is steadily narrowing – Portugal’s income is now about 74% of the per capita EU

average compared to 54% in 1986(World Development Report 1999). Portugal is also a low-risk

economy as it enjoys the same risk rating in terms of inflation, interest rates, and currency

devaluation as all other Euro-zone countries.

Portugal, a country of 10 million people, represents an interesting case for a product

country-of-origin (COO) study for several reasons. It is an important emerging market, with a

booming economy and the lowest unemployment rate in Europe. Its economy has gone through

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some notable structural changes in the last two decades, namely privatization and liberalization

of markets that enhanced competition to historically unprecedented levels. It went from a highly

protected economy to a full-fledged member of the EU. For instance, in 1980, exports of goods

and services accounted for 25% of the GDP whereas in 1997, it rose to 33%. The average annual

rate of growth of exports was 8.6% and 6.0% respectively (World Development Report 1999).

Trade now represents an important part of the Portuguese economy. A measure of

openness in trade would be total trade (imports + exports) taken as a percentage of the GDP. In

1980, total trade accounted for 63% of the GDP whereas in 1996, it accounted for 74%. Imports

went up from $9,293 million in 1980 to $33,979 million in 1996. There are more import choices

available to consumers and strong competition between foreign and domestic products describe

most economic sectors.

In addition to the pure economic reasons, there are some social and cultural factors that

favor product COO research in Portugal, namely the historical and deeply ingrained negative

attitude towards everything that is Portuguese, which has affected the national self-esteem. This

national feeling is possibly one of the reasons behind the recent advertising campaigns,

sponsored by government agencies and national trade associations, that promote the idea that

“What is Portuguese is good” or “Portugal does it well.” Also, such a study has never been

reported from this country in the marketing literature.

This paper reports an exploratory study of Portuguese consumers’ relative attitudes

towards domestically-made products and products originating from five major trading partners—

Spain, Italy, Germany, France and the United States. Essentially, this is a product COO study

where consumer attitudes toward various product-related dimensions such as quality, value,

image (prestigiousness), promotion, and availability (distribution) are linked with the products’

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countries of origin. The results of the study provide a view of the relative competitive positions

of manufacturers from different exporting countries and domestic manufacturers in the

Portuguese market in terms of various marketing variables as perceived by the consumers

themselves. Portuguese manufacturers will benefit from learning how “Made in Portugal”

products are evaluated relative to imports by consumers.

A brief review of relevant background COO research is presented in the next section.

This is followed by an explanation of the research design and the presentation of the results.

Finally, in discussing the managerial implications, prescriptions are made to marketers from

different countries for improving their competitiveness in the Portuguese market given the

present perceptions of the consumers.

Background

A product’s COO is an informational cue which, like other informational cues such as

price, brand name, etc., helps consumers evaluate products and develop attitudes towards them

(Papadopoulos 1993). The most direct way in which this cue can be given is through the

product’s “made in” label. In spite of the current proliferation of global brands, COO remains an

important factor in consumer product evaluation (Tse and Gorn 1993). Consumers tend to

exhibit “national stereotyping,” which is a biased way of thinking about people and products

from a country (Johansson and Thorelli 1985). Consumers’ perceptions of a foreign country

(economic prosperity, technological advances, etc.) are often translated into consistent

perceptions regarding the quality of products from that country (Bilkey and Nes 1982). A

consumer might be cognitive of positive characteristics of those countries towards which he has

a positive attitude, and such positive cognition and attitude might well result in the consumer

purchasing products made in those countries (Schooler and Sunoo 1969). Liefeld (1993)

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reviewed the results of experimental research on COO effects through a meta-analysis, and

observed that, in the vast majority of experiments, there was a significant statistical relationship

between COO and consumer product evaluations and choices.

Research Design

During the last three decades, numerous articles have examined various aspects of

country of origin influence. There is evidence, however, that COO is contingent on a specific

product category (Cattin, Jolibert and Lohnes 1982; Ergoglu and Machleit 1988; Gaedeke 1973;

Han and Terpstra 1988). A COO study would be appropriate in a product-market where fierce

competition exists between domestic and foreign-made products. It was necessary to select an

appropriate product category in view of the previously documented relationship between the

strength of COO effects and the nature of the product (Liefeld 1993). The clothing sector was

selected because it is a sector characterised by fierce competition in terms of both exports and

imports. Clothing accounted for 2.4% of total imports into Portugal in 1997 and 2.5% in 1998.

Clothing exports represented 14.6% of total exports in 1997 and 14.1% in 1998. This product

category is also especially sensitive to increases in disposable income.

Our study investigated COO perceptions of Portuguese consumers for clothing made in

Portugal and five other countries: Spain, France, Italy, Germany, and the United States. In 1998,

Portuguese clothing imports totaled 172,623 millions of escudos. The origin of most of the

imports is the European Union, which accounted for 93.7% of all imports in 1998. Spain is the

largest exporter with 35.8%, followed by France, Italy, and Germany with 20.5%, 18.1%, and

8.3%, respectively. The United States, the other country examined in this study, represents less

than 1% of all clothing imports. The data for clothing imports into Portugal are presented in

Table 1. For our study, the United States was selected along with the four top sources of

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clothing, as an observation of the Portuguese market revealed an increasing proliferation of

products originating from the United States.

Research Questions

The following research questions were addressed in the exploratory study:

RQ1: How do Portuguese consumers rank products from Spain, France, Italy, Germany,

and the United States in terms of perceived quality, value, image (i.e., prestigiousness),

promotion, and distribution (i.e., availability)? Are there significant differences among the

countries?

RQ2: How do Portuguese consumers rank the five source countries for imports and

Portugal in terms of economic, educational, and technological factors? Are there significant

differences among the countries? How is consumer attitude toward a country reflected in

attitude toward products from that country?

The first research question sought to find out the competitive rankings of the five source

countries for imports and Portugal in terms of the quality, value, image, promotion, and

availability of products from these countries, as perceived by Portuguese consumers. The second

research question tested the previously suggested (Bilkey and Nes 1982) correlation between

consumers’ perceptions of a country and their perceptions of products from that country.

Sampling Frame

The sampling frame for the study consisted of marketing students enrolled at three

premier institutions in Portugal. Students are citizens of their respective countries and are

expected to have variations in their product COO evaluations (Netemeyer, Durvasula, and

Lichtenstein 1991). Business graduates in Portugal command some of the highest salaries of all

professional occupations. They are more likely to be able to afford expensive foreign products

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when they enter the workforce, and hence are the target market for most foreign companies

expanding into the Portuguese market.

Though student samples cannot be considered as nationally representative, they do

constitute comparable populations, which is a major concern in cross-national research (Douglas

and Craig 1983; Parmeswaran and Yaprak 1987). Table 2 provides a list of recently published

COO studies that used student samples.

The survey was distributed among 200 students at three premier institutions in different

regions of Portugal. One hundred and fourteen usable surveys were returned, representing a

response rate of 57 percent. After listwise deletion of missing values, 109 fully complete

surveys were available.

Of the 109 respondents, 64 (58.7%) were male and 45 (41.3%) were female. The average

age was 22.6 years with a range between 18 and 40 years. Twenty (18.3%) had completed high

school and were working toward two year degrees, 87 (79.8%) were working toward their

bachelor’s degrees and two (1.9%) had completed their bachelor’s and working toward their

master’s degrees.

Measures of Constructs

The subjects in the sample were given self-administered questionnaires that included

scales to measure their perceptions regarding the quality (QUALITY, 2 items), value (i.e., price

relative to quality, VALUE, 1 item), prestigiousness (IMAGE, 1 item), promotion

(PROMOTION, 2 items), and availability (AVAILABLE, 1 item) of clothing products

originating in Spain, France, Italy, Germany, the United States, and Portugal and scales to

measure their general attitudes toward the six countries in terms of economic, educational, and

technological factors (COUNTRY, 4 items). The scales were adapted from the established COO

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measure by Pisharodi and Parameswaran (1992). The respondents were asked on a 7-point

Likert scale (1 = strongly disagree, 7 = strongly agree) their extent of agreement with statements

on quality, value, image, promotion, and availability of products associated with the six countries

as well as general characteristics of the six countries. Each respondent’s scores on the various

measures were obtained by computing the means across the items in the relevant scales.

Results

Evaluation of Product-Related Dimensions (Research Question RQ1)

The mean ratings for all measures for the six countries were compared by means of

paired t-tests between all pairs of countries. The results are presented in Table 3. Based on the

information in Table 3, the ranking of the six countries on the five dimensions (as perceived by

Portuguese consumers) is presented in Table 4. Tables 3 and 4 together address the first research

question RQ1.

From Tables 3 and 4, it is seen that Italian and French clothing are perceived as the best

in quality by Portuguese consumers, followed by clothing from the United States, Portugal,

Germany, and Spain, in that order. In terms of perceived product value (i.e., price relative to

quality), the six countries could be placed in three distinct clusters with two countries in each

cluster (Portugal and Spain, Italy and the United States, and France and Germany, in that order).

Portuguese and Spanish clothing, although judged relatively inferior in quality, were perceived to

offer the best value. Italian, French, and American clothing were ranked first, second, and third,

respectively on perceived prestigiousness. They were followed by German, Portuguese, and

Spanish clothing with no statistically significant difference being found among the ratings for

these three countries. Clothing from Italy was found to be the most heavily promoted, followed

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(jointly) by clothing from France and the United States. Spanish, Portuguese, and German

clothing ranked fourth, fifth, and sixth, respectively, in terms of perceived promotional intensity.

Interestingly, Portuguese clothing was ranked only fifth in promotional intensity in the

home country. In terms of product availability (indicating the effectiveness of distribution),

Portuguese, Italian, and Spanish clothing were jointly ranked at the top, followed by clothing

from the United States, France, and Germany, in that order.

Relationship of Country Image and Product Evaluation (Research Question RQ2)

Ranking the six countries (by means of paired t-tests between all pairs of countries) in

terms of the Portuguese consumers’ perception of economic, educational, and technological

factors pertaining to these countries (i.e., country image) yielded the results shown in Table 5.

No statistically significant differences in the mean scores were found among Germany, France,

and the United States, all of which shared the top rank. Italy, Spain, and Portugal were ranked

fourth, fifth, and sixth, respectively, on the country image dimension.

To examine the predicted relationship between the perceived image of a country and the

evaluation of products from that country, correlation coefficients were computed between the

image of each country (mean score of the measure COUNTRY) and the measures for quality,

value, and prestigiousness of products from that country. Only these three variables were

considered for the correlation analysis as these variables (quality, value, and prestigiousness)

were truly perceptual measures, whereas the other two measures in the study, product promotion

and product availability, were based more on objective information (how intensely are products

advertised, or how easily are products available in the market?) than perception. The

correlations are presented in Table 6.

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 It is seen from Table 6 that most of the correlations (13 of 18) are statistically significant

at the p<.05 level or beyond. For all countries, a positive country image corresponds to a

positive perception of the quality of clothing originating from that country. Country image is

also positively correlated with perceived value of clothing from Spain, Italy, the United States,

and Portugal. A positive correlation between country image and perceived prestigiousness of

clothing is found for Italy, the United States, and Portugal. These results generally suggest that

when consumers have a positive attitude toward a country in general, they usually have a

positive attitude toward products from that country as well.

Managerial Implications

The results of the study, as summarized in Table 4, provide several managerial

implications for marketers of imported clothing in Portugal. Italian clothing products seem to

have the best overall perceptions among Portuguese consumers. They are rated at the top in

terms of perceived quality and image, as well as in terms of promotional intensity and easy

availability (indicating distribution effectiveness). Italy, however, lags behind Spain and

Portugal on the “value (i.e., price relative to quality)” dimension, indicating that Italian clothing

is considered pricey in the Portuguese market. Italian clothing importers should continue to

focus on the upper crust of the Portuguese market which is likely to be less price sensitive and

more oriented toward quality and prestige appeal. The perceived high promotional intensity by

Italian clothiers should help maintain the positive image of Italian clothing in the desired

dimensions.

France shares the top rank with Italy on the dimension of perceived quality of clothing

and just lags behind it on the dimensions of prestigiousness and promotional intensity. However,

French clothing ranks only fifth among the sixth countries on the dimensions of value and

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availability. French clothing importers into Portugal should focus on making their products more

widely available, consistent with the relatively high promotional intensity. Otherwise, desired

sales volumes will not be realized and the heavy promotion will lead to higher prices, thus

reducing the perceived value of French clothing even further.

American clothing is ranked only fourth in terms of availability and can be considered as

only “middle of the road (being ranked third)” in terms of quality, value, and prestigiousness.

From a promotional perspective, American clothing shares the second place with France and

lagging only behind Italy. With the same promotional intensity as that of French clothing,

American clothing has a relatively lower perception of quality and prestigiousness and a

relatively higher perception of value. This indicates that importers of American clothing into

Portugal ought to target the more value-conscious, price-sensitive segments of the Portuguese

market, unless they change the promotional focus to increase prestige appeal and the perception

of quality.

German clothing seems to have quite a negative perception among Portuguese

consumers, ranking fourth in prestigiousness, fifth in product quality and value, and dead last in

promotional intensity and availability. It is likely that the lack of advertising and touch-and-feel

experience (due to lack of easy availability) have prompted Portuguese consumers to form these

relatively negative opinions about clothing from Germany. More promotion and better

distribution should be able to remedy the problem to some extent.

Clothing from Spain ranks last in terms of perceived quality, and a lowly fourth in terms

of prestigiousness and promotion. Spanish clothing, however, enjoys the top rank in terms of

value and availability. It appears that Spanish clothing is very intensively distributed in Portugal

(this is supported by the fact that 35.8% of clothing imports into Portugal are from Spain, from

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Table 1) and this probably lowers prices and improves the value rating. As long as Spanish

clothing marketers continue to focus on the value-conscious, lower ends of the Portuguese

market, they should be able to continue to do well in these segments.

Stiff competition to Spanish clothing is offered by home-made Portuguese clothing

products. Portuguese clothing shares with Spanish clothing an identical top ranking on the

dimensions of value and availability, and a fourth ranking on the dimension of prestige appeal.

Portuguese clothing has an edge over Spanish clothing in terms of perceived quality, even

though both countries rank relatively low on that dimension. It is surprising though that Portugal

lags behind Spain on promotional intensity in the home market. Portuguese clothing marketers

should pay attention to this aspect if they are to continue to hold the fort against their Spanish

rivals in the lower segments of the market.

Conclusion

This exploratory study provides some initial insights into product COO perceptions of

consumers in Portugal. Clothing was used as the product category in this study. Caution should

be exercised in generalizing the results across all product categories, as the product category is a

salient factor in product COO evaluations (Wall, Liefeld, and Heslop 1991). Clothing marketers

from Spain, Italy, Germany, France, and the United States can assess their current competitive

situation in terms of various marketing-related dimensions (product quality, value, prestige

image, availability, and promotional effectiveness) in the promising Portuguese market. Future

research should include countries other than the five featured in the present study, as the

emerging Portuguese market and its increasingly affluent population attract product marketers

from many different countries.

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Table 1

Clothing Imports in 1998 (Millions of Escudos)

Non-knit Total Imports___

Knit Clothing Clothing Value %
EU 80,463 81,244 161,707 93.7
Spain 22,914 38,855 61,769 35.8
France 21,430 14,037 35,467 20.5
Italy 16,212 15,041 31,253 18.1
Germany 9,053 5,277 14,330 8.3
USA 221 444 665 0.4
Other 4,702 5,549 10,251 5.9
Total 85,386 87,237 172,623 100.0

Source: INE, Estatísticas do Comércio Internacional, 1998.

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Table 2

Recently Published Country-of-Origin Studies that used Student Samples

Author & Year Title of Article Publication Title Sample

Knight (1999) Consumer preferences for foreign Journal of Consumer 87 undergraduate
and domestic products Marketing marketing students from
the U.S.
Jo (1998) Contingency and contextual issues International 117 students from a
of ethnocentrism-pitched Marketing Review Australian University
advertisements: A cross national and 121 students from
comparison an Indian University
Durvasula, A cross-cultural comparison of Journal of 144 students from a U.S.
Andrews and consumer ethnocentrism in the International University and 60
Netemeyer (1997) United States and Russia Consumer Marketing students from two
Russian Universities
Thakor and Foreign branding and its effects on Journal of Marketing 266 undergraduate
Pacheco (1997) product perceptions and attitudes: A Theory and Practice students from a
replication and extension in a Canadian University
multi-cultural setting
Akaah and Yaprak Assessing the influence of country of Journal of 70 students from Ghana,
(1993) origin on product evaluations: An International 54 students from Turkey
application of conjoint methodology Consumer Marketing and 101 students from
the U.S.
Chao and Consumer profiles and perceptions International 449 students from a U.S
Rajendran (1993) of country of origin effects Marketing Review University
Levin, Jasper, Attitudes towards ‘buy America Advances in 71 undergraduate
Mittelstaedt and first’ and preferences for American Consumer research students from a U.S.
Gaeth (1993) and Japanese cars: A different role University
for country of origin information
Roth and Romeo Matching product category and Journal of 99 graduate students in
(1992) country image perceptions: A International Business Ireland, 130 in Mexico
framework for managing country of Studies and 139 in the U.S.
origin effects
Netemeyer, A cross-national assessment of the Journal of Marketing 71 U.S. students, 73
Durvasula and reliability and validity of the Research German students, 70
Lichenstein (1991) CETSCALE French students and 76
Japanese students
Hong and Wyer Effects of country of origin and Journal of Consumer 128 college students in
(1989) product attribute information Research the U.S. enrolled in
processing perspective introductory business
courses
Ettenson, Wagner Evaluating the effect of country of Journal of Retailing 105 U.S. students from
and Gaeth (1988) origin and ‘Made in the USA’ the University of
campaign: A conjoint approach Maryland
Shimp and Sharma Consumer ethnocentrism: Journal of Marketing One of the samples in
(1987) Construction and validation of the Research this study was 145
CETSCALE students from the U.S.
Yavas and Alpay Does an exporting nation enjoy the International Journal 59 Bahraini students and
(1986) same cross-national commercial of Advertising 94 Saudi students
image?

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Table 3

Perceptions of Spanish, Italian, German, French, U.S. and Portuguese clothing items by
Portuguese consumers
Dimension Spain Italy Germany France U.S.A. Portugal
(Measure) (A) (B) (C) (D) (E) (F)
Product Quality 3.579 5.276 4.154 5.105 4.850 4.518
(QUALITY) B,C,D,E,F A,C,E,F A,B,D,E,F A,C,E,F A,B,C,D,F A,B,C,D,E
Value 4.840 4.490 4.160 4.270 4.450 4.950
(VALUE) C,D,E C,D,F A,F A,B,F A,F B,C,D,E
Prestigiousness 3.550 6.200 3.810 5.600 5.150 3.780
(IMAGE) B,D,E A,C,D,E,F B,D,E A,B,C,E,F A,B,C,D,F B,D,E
Promotion 4.643 5.848 3.500 5.477 5.579 4.062
(PROMOTION) B,C,D,E,F A,C,D,E,F A,B,D,E,F A,B,C,F A,B,C,F A,B,C,D,E
Availability 5.380 5.390 3.530 4.730 5.120 5.590
(AVAILABLE) C,D C,D A,B,D,E,F A,B,C,E,F C,D,F C,D,E

The numbers are mean ratings, where 1 = strongly disagree, 7 = strongly agree.

Significant differences are at the p<.05 level from other countries indicated by the letters based
on pairwise t-tests. A=Spain, B=Italy, C=Germany, D=France, E=USA, F=Portugal

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Table 4

Ranking of Countries along Product-Related Dimensions

Rank along dimension:

Product
Country Quality Value Prestigiousness Promotion Availability
Spain 6 1 4 4 1
Italy 1 3 1 1 1
Germany 5 5 4 6 6
France 1 5 2 2 5
United States 3 3 3 2 4
Portugal 4 1 4 5 1

Countries share the same ranking for a dimension if no significant difference is found between
them for that dimension from the paired t-tests.

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Table 5

Relative Images of Countries (measure: COUNTRY)

Spain Italy Germany France U.S.A. Portugal

Measure (A) (B) (C) (D) (E) (F)
Country 4.607 5.040 5.524 5.405 5.326 4.296
Image B,C,D,E,F A,C,D,E,F A,B,F A,B,F A,B,F A,B,C,D,E
Rank 5 4 1 1 1 6
Significant differences are at the p<.05 level from other countries indicated by the letters based
on pairwise t-tests. A=Spain, B=Italy, C=Germany, D=France, E=USA, F=Portugal
Countries share the same ranking for a dimension if no significant difference is found between
them for that dimension from the paired t-tests.

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Table 6

Relationship of Country Image with Product Evaluation

Correlation of country image (COUNTRY) with:

Product
Product Quality Product Value Prestigiousness
Country (QUALITY) (VALUE) (IMAGE)
Spain .252 a .242a .152
Italy .210 b .226b .223b
Germany .186 b .037 .016
a
France .266 .089 .181
a b
United States .337 .217 .413a
Portugal .327 a .207b .290a

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