The Interactive Effects of Country of Origin, Product Involvement and Typicality on Purchase Intentions. Law Pui Ling China Business Studies

Transcription

1 The Interactive Effects of Country of Origin, Product Involvement and Typicality on Purchase Intentions BY Law Pui Ling China Business Studies AND Wong Hoi Sui China Business Studies An Honours Degree Project Submitted to the School of Business in Partial Fulfilment of the Graduation Requirement for the Degree of Bachelor of Business Administration (Honours) Hong Kong Baptist University Hong Kong April 2013

2 Contents Acknowledgements... 3 Abstract... 4 Methodology... 4 Findings... 4 Introduction... 5 Statement of problems... 5 Objective... 6 Literature Review... 7 Country-of-origin effect on product quality evaluations... 7 Moderating effect of product involvement on country-of-origin and quality... 9 Moderating effect of typicality on Country of Origin and quality Quality evaluation positively affects consumers purchase intention Research Model Methodology Independent Variable Country of Origin Moderator Product Involvement Typicality Dependent Variable Perceived Product Quality Purchase Intention Questionnaire Design Methods of data analysis Frequency Distribution Reliability test Independent-samples T Test Univariate Analysis of Variance (Two-way ANOVA) Simple Regression Analysis and Findings Demographic profile Reliability test Manipulation Check Country of Origin Typicality Product Involvement Hypothesis testing Interpretation of results Country-of-origin effect and product quality evaluations Moderating effect of Product Involvement on Country of Origin and quality Moderating effect of Typicality on Country of Origin and quality

3 Quality Evaluation and Purchase Intention Recommendations Limitations and Ways for Future Research References Appendix Questionnaire sample Product: Tea (China and Italy) Product: Coffee (China and Italy) Product: Computer (China and Italy) Product: Luxury Handbag (China and Italy) Appendix 2: SPSS Output Frequencies Independent-samples T-Test T-Test for country of origin T-Test for Product Involvement T-Test for Typicality T-Test for Typicality(After re-categorizing) Univariate Analysis of Variance Regression Reliability Test Scale: Quality Scale: Intention Scale: Country of Origin Scale: Product Involvement Scale: Typicality

4 Acknowledgements We would like to express our sincere thankfulness to our supervisor, Dr. Danny Wang for patiently guiding us to the complete our honors project during the last few months. We are very grateful that he spent his valuable time and efforts to give us advices and assistance so that we can overcome the difficulties we encounter. Without his guidance and help, we may not be able to finish the honor project smoothly. We are able to gain practical training through applying the knowledge we learnt in the university life under his supervision. In addition, we really appreciate our classmates and friends who had given us valuable suggestions and recommendations to improve the questionnaire design. Their participation facilitated our data collection process. Last but not least, we would like to thank all the respondents including our schoolmates and friends who contribute their valuable time and efforts to complete the questionnaires so that we can get useful data for analysis. 3

5 Abstract Methodology A 2x2x2 factorial design was used to examine the effect of country-of-origin with two countries (China and Italy) for two levels of product involvement (tea and coffee are defined as low involvement products while computer and luxury handbag are defined as high involvement products) and two levels of typicality (tea and computer are designed as typical to China while computer and luxury handbag are designed as typical to Italy) on purchase intentions. The 218 samples are gathered from university students in Hong Kong. Two-way ANOVA was used to examine country-of-origin effect, moderating effect of product involvement and typicality on product quality. Simple regression was used to examine the relationship between perceived product quality and final purchase intention. Findings It was found that made in China product has a negative effect on consumers quality evaluation. When the product typicality is high, the negative effect of made in China product on quality evaluation is weakened when compared with made in Italy products. However, the product involvement cannot moderate the negative effect of made in China product on quality evaluation. Customers product quality evaluation is positively related to purchase intention. 4

6 Introduction Nowadays, the market is globalized with the facilitated communication and logistic network. Consumers are exposed to both domestic and foreign products. They can easily buy products originated from different countries around the world. Therefore, having a favorable country of origin image is a significant factor that enhances the selling effectiveness around the world. Thanks to the globalized business environment, China becomes the world s factory. Local economy is largely benefited from manufacturing orders from all over the world. China is one of the largest trading partners of Hong Kong. Hong Kong people and a large amount of consumers around the world are consuming a lot of goods from mainland China every day. Made in China products play an important role in global market now. With the increasing importance in made-in-china product, consumers impression on Chinese products, however, seems to be negative based on our daily observation. While people are showing their resistance to Chinese product, at the same time, they unavoidably consume a lot of made in China products. Therefore, we think it would be interesting to see whether the made-in-china label would create poor evaluation. We also want to find out ways to solve this problem. Statement of problems There are several crisis caused by Chinese product quality problems in recent years. For instant, there are worldwide made-in China products recalls due to product security concerns and food safety problems. It is believed that China has already created a bad name for itself to some extent. Although made-in China products are of low prices, people perceived the products from China have lower quality when compared to products from more advanced countries. People may not take made-in China products into consideration when they are making purchase decisions. 5

7 In order to help Chinese companies to alleviate the negative country of origin effect and take advantages of today s globalized market, our study aims to investigate Hong Kong people s views on made-in China products and formulate solutions to the problems accordingly. Objective Although many previous studies are done on the country of origin topic, most of them are done outside Asia. Therefore, we aim to specifically focus on studying Hong Kong consumers and their attitude toward Chinese products compared to foreign products. Moreover, we also look at the moderating roles of the product involvement and typicality that may affect the strength of country of origin effect. The purpose of the study is to study the interactive relationship of country of origin, product involvement, typicality and how it affects consumers final purchase decision. We want to know whether this relationship can apply to Chinese product specifically. We would compare products from China and Italy so as to find out the difference in country of origin effect from customers in their product evaluations. By studying people s consumer behavior towards country of origin effect, especially those from China, appropriate marketing strategies can be formulated to help Chinese companies to strengthen their international businesses and raise country reputation. 6

8 Literature Review Country-of-origin effect on product quality evaluations Country-of-origin is defined as a combination of country-of- assembly, country-of-design and country-of-manufacture (Insch and McBride, 2004). Made in China is defined as the label affixed to products manufactured in Mainland China (Journalism & Mass Communication Quarterly, 2012). There are two opposite views about the country-of-origin effect on product quality. 1. Country-of-origin has a direct positive effect on product quality evaluations. Country-of-origin has a positive effect on product related perceptions (Josiassen and Assaf, 2010). The more positive the country-of-origin effect that the consumers have, the more positive their product related evaluations they would have on the products that are produced in that country. It is an important factor that influences customers quality evaluations on the products. The higher perceived quality products are from a more positive country-of-origin image (Sun and Paswan, 2011). Country-of-origin has a significant influence on product quality evaluations (Bilkey and Nes, 1982). The products from more developed western countries are perceived better than those produced in developing countries (Bilkey and Nes, 1982, Ahmed and Astous, 2001, Chinen, Jun and Hampton, 2000). For instance, many customers preferred US made products rather than a Brazil made products. More advanced countries gained a favorable acceptance abroad. This shows that the country-of-origin, whether the products are from developed countries or from developing countries, would influence people s product evaluation. 7

9 Country-of-origin has direct and indirect influence on product evaluations. It can be a product feature which has an independent influence that leads to product overall evaluations. It may affect the concepts about the country and provides a heuristic basis for judging product quality. If consumers know a country has a reputation of producing products with higher quality, they may use this information for overall evaluation without using other knowledge (Hong and Wyer, 1989). Journal is found to examine the situations in China specifically. The label of Made in China is associated with low quality (Journalism & Mass Communication Quarterly, 2012). The reasons behind may be recent years pet food and toys products recalls around the world happened. The food safety crises in China also contribute to the customers impression of low quality products. Country-of-origin directly influences product quality evaluations. 2. Country-of-origin does not have a direct effect on product quality evaluations. There is no direct effect of country-of-origin on customers product evaluations. Because of globalization, the world is merged just like one country. Products made from different countries are having the same attributes like locally made products (Wong et al., 2008). Chinese customers may not able to differentiate and care much about whether the products are made locally or from foreign countries. This shows that country-of-origin do not play an important role when people evaluate the product quality. To conclude, due to contradicting views on different journals, we would like to study the relationship between country-of-origin and product quality evaluation, especially from Hong Kong people s point of view of towards made-in China and made-in Italy products. Therefore, we propose the following hypothesis: H1: Compared with made in Italy product, made in China product has a negative effect on consumers quality evaluation. 8

10 Moderating effect of product involvement on country-of-origin and quality There are contradicting views towards the relationship between country-of-origin and two kinds of product involvement. One view is country-of-origin contributes to consumers evaluation of low-involvement products. However, this effect is weak as the purchase decisions are not important. Consumers buy the product may only due to their habit or its popularity. Other cues such as brand and price might be more significant factors than the country-of-origin in low involvement situation (Zafar, 2004). A study also shows than when product involvement is high, the summary cues such as brand name and country-of-origin may have greater roles in people s evaluation process rather than simple cues like price (d'astous and Ahmed, 1992). The degree of product involvement and the importance of country-oforigin are positively related according to this view. Other studies have different perspective. Product involvement has a negative moderating effect on country-of-origin effect, meaning that when the more involved the consumers are, the less influence country-of-origin effect has on product evaluation. (Josiassen, Lukas and Whitwell, 2008). It is only one of the product attributes but not act as an overall basis for product judgments. Consumers tend to use their prior knowledge to judge the product rather than only focusing on the country-of-origin. For low involvement product, consumers only want to use minimum effort to make the decision. Therefore, COO effect becomes more important and consumers may use it as a base for product decisions (Gurhan-Canli and Maheswaran, 2000). To conclude, due to the contradicting views on different journals, we would like to study whether there is any interaction effect of country-of-origin and product involvement on quality evaluations, especially when it is applied to made in China products and Hong Kong consumers. 9

11 Therefore, we propose the following hypothesis: H2: When the product involvement is high, the negative effect of made in China product as compared with made in Italy products on quality evaluation is strengthened. Moderating effect of typicality on Country of Origin and quality Typicality is defined as the degree an item is perceived to represent a category. It is measured by rating items along scales with endpoints of "good example/poor example", "representative/unrepresentative", "typical/ atypical", etc. (Loken and Ward, 1990). Many past studies have revealed that country of origin would affect consumers evaluation or buying behavior. However, COO effect can be product specified, meaning that the strength of the COO effect may vary among different products. While some products are strongly associated with the country of origin, consumers may not care the COO of some products (Kotler and Gertner, 2002). The COO effect of a certain country may have positive effect on certain categories, but may not have as strong effect on the others. For example, the COO effect of France may be strong and positive on perfumes, but it can be weak on cell phone. Therefore it is difficult to generalize that whether a country s COO effect is strong or weak, positive or negative. Due to the product specified nature of COO effect and the difficulties associated with studying every products and countries COO effect, Tseng and Balabanis therefore suggested using product typicality to simplify product specificity of COO effect. The two types of typicality are ethnic typicality and country typicality. Ethnic typicality means the typicality of a product in global market of its own product category. Another type is country typicality which means the representativeness of a product category of a whole country s products (Tseng and Balabanis, 2011). The research found that there are significant relationship between ethnic typicality and consumers attitude, as well as 10

12 country typicality and consumers attitude. Many famous brands are also typical to their own country-of-origin. For instance, IBM is connected with United States while Nikon is connected with Japan. United States is viewed as a better car producer than Japan because of the typicality (Johansson and Nebenzahl, 1986). Typicality may also have effect on brand from different country of origin. Therefore, we believe that typicality may have moderation effect on the COO effect. When the typicality is high, a negative COO image would be weakened. This could be a way to affect the strength of the negative impact of made in China label. In our research, we would narrow the definition of typicality to the degree of that a product is perceived to be good or natural to be produced in or originated from that country. Therefore, we propose the following hypothesis: H3: When the product typicality is high, the negative effect of made in China product as compared with made in Italy products on quality evaluation is weakened. Quality evaluation positively affects consumers purchase intention According to Zeithaml s study, Perceived quality is defined as consumers judgment about a product's overall excellence or superiority. (p. 3). It is made within consumers evoked set (Zeithaml, 1988). 1. Quality evaluation has a positive effect on purchase intention. Consumers make purchase decisions based on product quality evaluation (Sun and Paswan, 2011). Perceived quality has a positive effect in purchase intention (Chinen, Jun and Hampton, 2000). Because customers have more confidence on the quality, they would be more willing to buy the products. 2. Quality evaluation does not have a positive effect on purchase intention. 11

13 Product quality is seldom detectable before the final product purchase for use (Han and Terpstra, 1988). Quality is an intrinsic cue that is not easily evaluated before purchase. Customers would depend on other extrinsic cues like price, brands name and warranties to decide their final purchase decision. Therefore, there is no direct effect of product quality on purchase intention. There is a negative relationship exists between quality and purchase intention (Kumar, Lee and Kim, 2009, Rajput, Kalhoro and Wasif, 2012). Higher product quality evaluation does not mean there is higher purchase intention. Customers may consider other factors like prestige and other functional aspects like design. Higher quality may also mean the price is high. Due to price concern, the purchase intention may not be result. To conclude, due to the contradicting views on different journals, we would like to study whether there is any effect of people s product quality evaluation on Hong Kong people s purchase intention of made-in China products. Therefore, we propose the following hypothesis: H4: The effect of consumers quality evaluation positively affects consumers purchase intention. 12

14 Research Model The research model is constructed as follow: Hypotheses are constructed as follow: H1: Compared with made in Italy product, made in China product has a negative effect on consumers quality evaluation. H2: When the product involvement is high, the negative effect of made in China product as compared with made in Italy products on quality evaluation is strengthened. H3: When the product typicality is high, the negative effect of made in China product as compared with made in Italy products on quality evaluation is weakened. H4: The effect of consumers quality evaluation positively affects consumers purchase intention. 13

15 Methodology The research model is tested by using a 2X2X2 factorial design. Countries and products are chosen to represent the variables. China represents a less favorable country and Italy is more favorable. Tea and coffee are low involvement products, while computer and luxury handbag are high involvement products. Tea and computer are defined as typical to China, and coffee and luxury handbag are defined as typical to Italy. Eight cells of the experiment are summarized as follow: Cell Country of Product Typicality Product Origin Involvement 1 China Tea High Low 2 Italy Tea Low Low 3 China Coffee Low Low 4 Italy Coffee High Low 5 China Computer High High 6 Italy Computer Low High 7 China Luxury Handbag Low High 8 Italy Luxury Handbag High High Independent Variable Country of Origin For the country of origin variable, we have chosen China and Italy to represent countries of different preference levels of consumers. China represents less favorable country while Italy represents more favorable country. According to World Bank s definition in 2011, China is a developing country of upper middle income group while Italy is a high income economy. Products from Italy use country of origin in international communication strategies when the companies want to promote their products to global markets (Godey et al., 2012). Made in Italy products are more appealing to Asian customers when compared to 14

16 Made in China products because of its artistic design nature. It is perceived as a status symbol, especially in high end fashion area (Lu Chang, 2010). Products made in Italy are known for innovation, quality and design that people are pride of Made in Italy products (Kufahl, 2011). Made in Italy label represents image, exclusivity and uniqueness that are some of customers considerations when choosing a product (Movius, 2005). Products from Italy are perceived to have high quality while products from China are perceived to have low quality (Apil and Kaynak, 2010). Therefore, we believe that Italy would be a more favorable country to consumers than China. Moderator Product Involvement Although price of tea and coffee can varies widely, most tea and coffee are for general consumers daily consumption. The products are usually not very expensive. The purchase decision is relatively less important and does not have great impact on consumers. Customers only need limited information processing before making the decision. Therefore, we believe that tea and coffee is a low involvement product. Computer and bag are to some extent durable goods that can be used for one or more years. The products are usually involving significantly higher prices. The purchase decision is relatively important and having a greater impact on consumers. Consumers need more information processing before making the decision. Therefore, computer and bag is high-involvement product. 15

17 Typicality Four products are chosen to represent China and Italy tea and computer for China; coffee and bag for Italy. Tea is one of the signature products in China. China has a long history of drinking tea and a strong tea culture has been formed in China. Certain places in China are famous for certain types of tea. For instance, Anxi is famous for Tieguanyin tea and Dongting is famous for Biluochun Tea. Chinese people drink tea throughout the day and they even substituted as the water. They view tea drinking is a kind of pleasure and enjoyment. China even categorizes tea as one of the seven basic daily necessities which includes fuel, rice, oil, salt, soy sauce, vinegar and tea. Compared to Italy which does not have much tea culture, tea is much more typical for China than Italy. Although computer is a high technology product which people always link it to countries like USA and Japan, we think computer is typical for China when compare to Italy. The reason is that many famous PC brands set up their production factories in China like Apple, HP and Dell. Furthermore, Lenovo, one of the biggest PC brand, is a Chinese brand. It is now the largest PC maker in the world. Compare to Italy which does not have strong presence in the PC industry, it is believed that China is a typical manufacturing country of computer. Computer is chosen to represent as the high involvement product in study before because it is believed that computer purchase needs to have extensive problem solving and involve higher perceived risk (Saffu and Scott, 2009). We chose coffee as a typical product of Italy due to the wide spread of its coffee culture. Coffee consumption in Italy is one of the highest in Europe. The hot drink market is dominated by coffee which accounted for 70% of market share. Italy is famous for the different kinds of coffee drinks like espresso, cappuccino and the café latte. Coffee is an important part of daily life in Italy. Many Italians drink coffee when having breakfast, 16

18 after lunch and during the day for a break. Compare to China which do not have much coffee drinking practice, coffee is a product more typical to Italy than China. Bag is typical for Italy because Italian fashion items are world famous. Italian fashion has a long tradition and has much influence around the world. Gucci, Prada, Dolce & Gabbana are well known brands originated in Italy. Some of companies focus Made in Italy in their marketing promotion to raise customers attention and confident because Italy, as a global fashion nation, is associated with elegance and desirability. These products are popular in the world. Dependent Variable Perceived Product Quality The perceived product quality will be measured by seven-point Likert scale ranging from 1= Strongly Disagree to 7= Strongly Agree. Subjects are required to designate their degree of agreement towards a series of sentences about the product quality. The above product introduced has high quality. The above product introduced has good performance. The above product introduced is well made. The above product introduced has poor quality. The above product introduced is poorly made. Purchase Intention Consumers purchase intention of will be measured by seven-point Likert scale ranging from 1= Strongly Disagree to 7= Strongly Agree. Subjects are required to designate their degree of agreement towards a series of sentences about the probability of buying the products. 17

19 I will buy this product. If I happened to see this product in store, I am willing to buy. The probability of buying this product for me is high. Questionnaire Design Eight questionnaires are designed for the research. The questionnaires are almost identical with only differences in product and country. The Eight questionnaires can be summarized as follow: 1. Chinese Tea 2. Chinese Coffee 3. Chinese Computer 4. Chinese Luxury Handbag 5. Italian Tea 6. Italian Coffee 7. Italian Computer 8. Italian Luxury Handbag The product description and scenarios are slightly adjusted according to different products. Each respondent was asked to complete one of the eight questionnaires randomly. The questionnaire consists of two parts. In the first part, a product was displayed with some brief descriptions on the materials or functions. The description claims that the products are from an international brand, but no specific brands are mentioned. The respondents are asked to read the product description first. Then they will read a scenario. The scenario asked the respondents to imagine that they are in need of that product. In addition, effort has been made to control the effect of price of the product and purchasing power of the respondent by telling the respondents that they already have enough money to buy that product and the price is reasonable. In order to study the effect of country of origin, typicality and product involvement on respondents product evaluation, respondents were asked to evaluate the product quality and the purchase intention. They will answer five questions to evaluate the product quality and three questions to indicate their purchase intention of the product. 18

20 After that, the respondents will evaluate the country of origin, typicality and product involvement of the product so as to check whether the situations are successfully manipulated. All the questions in part one adopted the Likert scale. In the second part, demographic information are collected by asking the respondents to provide some personal information, including their gender, age group, personal monthly income, educational level and faculty, or occupation for non-student respondents. Methods of data analysis The Statistical Package for Social Sciences (SPSS) was used for data analysis. Five analysis techniques were used to test hypotheses. Frequency Distribution Respondents demographic variables which include gender, age, educational level, faulty and personal monthly income adopted in the research were analyzed by using the frequency distribution. Reliability test This method was used to test whether the measures are free from random error. The Cronbach's Alpha values should be greater than or equal to 0.7 so as to attain satisfactory internal consistency reliability. Country of origin, product involvement, typicality, product quality and purchase intention were assessed. Independent-samples T Test This method was used for manipulation checks because there are eight samples involved in this research. It is used to compare the means as to show whether there are significant difference between evaluation on China and Italy, product involvement level between the proposed high/low involvement category, and typicality level of proposed typical/atypical 19

21 product category. Country of origin, typicality and product involvement were assessed. They are successfully manipulated if the significance level is smaller than Besides, this method is used to test the differences between made-in China and made-in Italy product quality evaluations. Univariate Analysis of Variance (Two-way ANOVA) This method was used when concerned with the effect of more than one factor. In this study, one situation is to study the relationship between country-of-origin, product involvement and perceived product quality. Another situation is to study the relationship between country-of-origin, product typicality and perceived product quality. This method was also used to investigate whether there are interactions between the factors concerned respectively. Simple Regression This method was used to drive a mathematical relationship between a single metric dependent variable and a single metric independent variable. In this study, this method is used to find the relationship between product quality evaluations towards final purchase intention. 20

22 Analysis and Findings Demographic profile Eight versions of questionnaire were used for data collection. 27 respondents for each version were asked to complete the questionnaires, meaning in total 216 questionnaires were collected. All the questionnaires are distributed in person. Among the 216 respondents, 58 (26.9%) of them are male, while the remaining 158 (73.1%) of the respondents are female. For the age of respondents, 193 (89.4%) respondents fall within the age group of years old. 14 (6.5%) respondents aged 20 years old or below, 8 (3.7%) respondents aged years old and 1 respondent aged years old. Regarding the monthly personal income, 198 (91.7%) respondents have monthly personal income below $5,000, followed by 9(4.2%) respondents with $5,001-10,000 income, 3 (1.4%) respondents with $10,001-15,000 income, 4(1.9%) respondents with $15,001-20,000 income and 2(0.9%) respondents with income of $20,001 or above. In terms of educational level, 194 (89.8%) respondents are undergraduate level. 19 (8.8%) are postgraduate or above level and 3(1.4%) are secondary level. 21

23 Reliability test Cronbach s Alpha of all scales has value of 0.7 or above, which showed all data collected achieved satisfactory reliability. The measurements showed high internal consistency reliability. a) Country-of-origin b) Product quality c) Purchase intention d) Product Involvement e) Typicality 22

24 Manipulation Check Country of Origin To access the country of origin, five questions are asked and measured in seven-point Likert scales (from 1 to 7). Products produced by this country have good reputation. This country has high technology level in product production. Products produced by this country are reliable. Products produced by this country are trustworthy. I have good impression towards products produced by this country. An independent-samples T Test on country of origin showed that Italy (Mean=4.9796, p=0.000) is a more favorable country than China (Mean=2.7685, p=0.000). This indicates the effectiveness of country of origin manipulation. 23

25 Typicality To access the typicality, five questions are asked and measured in seven-point Likert scales (from 1 to 7). The country is a typical producing country of this kind of product. The country produces a lot of this kind of product. The country is very experienced in producing this kind of product. The country mastered a lot of technologies used in the production of this kind of product. The country is a leader in the industry. An independent-samples T Test on typicality showed that respondents who read Tea and Computer product versions were perceived correctly as product typical to China while respondents who read Coffee and Bag product versions were perceived correctly as product typical to Italy (Mean=4.8444, p=0.000). The respondents who read Tea and Computer product versions were perceived correctly as product atypical to Italy while respondents who read Coffee and Bag product versions were perceived correctly as product atypical to China (Mean=3.2870, p=0.000). 24

26 However, as looking at the mean values of different typicality level of different countries respectively, we can find that the mean of high-typicality product of Italy (Mean=5.0556) and the mean of high typicality product of China (Mean=4.6333) has a relatively great difference when compared to the low-typicality group (Mean=3.3259&Mean=3.2481). This may affect the accuracy of the test because respondents who answered the Chinese Tea and Computer version may give low scores to the typicality of those products. Therefore, in order to achieve a more accurate result, we decided to re-categorize the typicality. If the mean value of the Typicality is lower than the total mean (mean=4.0657), we categorize it as the low typicality group. If the mean value of the Typicality is higher than the total mean (mean=4.0657), we categorize it as the high typicality group. The following table shows the new mean values. The differences in mean value of different countries in respective typicality group are reduced. 25

27 The independent-samples T Test on typicality using the newly defined typicality level showed that respondents who read Tea and Computer product versions were still perceived correctly as product typical to China while respondents who read Coffee and Bag product versions were perceived still correctly as product typical to Italy (Mean=5.2660, p=0.000). The respondents who read Tea and Computer product versions were perceived correctly as product atypical to Italy while respondents who read Coffee and Bag product versions were perceived correctly as product atypical to China (Mean=2.9091, p=0.000). 26

28 Product Involvement To access the product involvement, five questions are asked and measured in seven-point Likert scales (from 1 to 7). I will have careful consideration before making the decision. I consult people who had bought the product for advices. Buying this product is an important decision. The purchase decision has a great impact on me. This product is of high value. An independent-samples T-Test on product involvement showed that respondents who read Computer and Bag products versions (Mean=5.3463, p=0.000) were perceived correctly as high involvement products. The respondents who read Tea and Coffee products versions (Mean=3.6537, p=0.000) were perceived correctly as low involvement products. This indicates the effectiveness of product involvement manipulation. 27

29 Hypothesis testing H1: Compared with made in Italy product, made in China product has a negative effect on consumers quality evaluation. Respondents were asked to evaluate four products models (Tea, coffee, computer and bags) with the only differences in their country of origin (made-in China or made-in Italy). Two-way ANOVA was used to study the relationship between country of origin and perceived product quality. The descriptive statistics show that respondents product quality evaluations towards made-in China product has a mean of while those product quality evaluations towards made-in Italy product has a mean of which is much higher than made-in China products. The results indicate that respondents have higher product quality evaluations on made-in Italy products when compare to made-in China products in general. The two-way ANOVA also shows that country of origin and perceived product quality has significant relationship. (F=17.706, p=0.000). Therefore, H1 is accepted. 28

30 H2: When the product involvement is high, the negative effect of made in China product as compared with made in Italy products on quality evaluation is strengthened. H3: When the product typicality is high, the negative effect of made in China product as compared with made in Italy products on quality evaluation is weakened. Univariate analysis of variance (Two-way ANOVA) was used to analyze the interaction effect of country of origin, product involvement and typicality on product quality evaluation. Gender, educational level, age, monthly income and faculty were the control variables in the model. As shown in the above two-way ANOVA table, country of origin, product involvement and typicality have significant effect on product quality evaluation. The p-values are 0.000, 0.021, and respectively. 29

31 Although product involvement do have significant effect on product quality evaluation, the country-of-origin effect does not have significant differences in different involvement levels, The interaction between country-of-origin and product involvement is not significant (p=0.672). We cannot conclude that when the product involvement is high, the negative effect of made in China product as compared with made in Italy products on quality evaluation is strengthened. Therefore, H2 is not supported. There is a significant interaction between country-of-origin and typicality (p=0.043<0.05). As shown in the above table, when the typicality is high, the mean value of perceived product quality for Chinese product is 4.933, which is higher than when the typicality is low. It represents that the negative COO effect of China was weakened when typicality is high. Therefore, H3 is supported. 30

32 H4: The effect of consumers quality evaluation positively affects consumers purchase intention. Respondents were asked to evaluate the effect of product quality on final purchase intention. Simple regression was used to drive a mathematical relationship between these two factors. The coefficient of determination (R 2 ) was used to measure the proportion of variation in one variable that is explained by the other which is used to determine the strength of association. In this study, the R 2 is which means product evaluation can explain nearly 40% of the value of purchase intention. The product moment correlation (R) was used to summarize the strength of association between two metric variables. In this study, R is a positive figure which means there is a positive relationship between product quality and purchase intention. Besides, R is reported as which is only a fairly high degree of correlation. The product quality evaluation towards purchase intention reported a significant effect (p=0.000). Therefore, H4 is supported. The linear regression equation can be present as: Purchase intention = (Product quality) 31

33 Summary Hypotheses H1: Compared with made in Italy product, made in China product has a negative effect on consumers quality evaluation. H2: When the product involvement is high, the negative effect of made in China product as compared with made in Italy products on quality evaluation is strengthened. H3: When the product typicality is high, the negative effect of made in China product as compared with made in Italy products on quality evaluation is weakened. H4: The effect of consumers quality evaluation positively affects consumers purchase intention. Result Supported Not supported Supported Supported 32

34 Interpretation of results Country-of-origin effect and product quality evaluations In manipulation check, an independent-samples T Test on country of origin showed that Italy (Mean=4.9796, p=0.000) is a more favorable country than China (Mean=2.7685, p=0.000). The results indicate that respondents have higher product quality evaluations on made-in Italy (Mean= , p=0.000) products when compare to made-in China products (Mean=4.6204, p=0.000) in general. The results are consistent with previous study that the country-of-origin has a positive effect on product related perceptions (Josiassen and Assaf, 2009, Qin and Audhesh, 2011). Respondents perceived China has a less favorable country than Italy which means China has a relatively negative country image from customers point of view when compare to Italy. At the same time, they have a lower product quality evaluation on made-in China products. Therefore, China s relatively negative country-of-origin image leads to respondents to perceive products from China have a lower product quality. The results are consistent with previous study that country-of-origin has a significant influence on product quality evaluations (Bilkey and Nes, 1982, Hong and Wyer, 1989). Customers often think products made-in more developed countries have higher product quality than those from less developed countries. Italy is a more advanced western country when compare to China which is still a developing country. This country image influence respondents product quality evaluations that they would think made-in China products are of lower quality when compared to made-in Italy products. The results are consistent with previous study that label of Made in China is associated with low quality (Journalism & Mass Communication Quarterly, 2012). There are many cases of made-in China product recalls due to product safety concerned around the world and food safety crises happened in China in recent years. Not only in China, customers around the world lost confidence on made-in China products to some extent. China has 33

35 relatively negative country image in product production due to safety result. This may lead to respondents lower product quality evaluations on made-in China products. When customers are evaluating the product quality, they may not notice or actively find out the made in label because the label is often not prominently displayed on products. The effect of country-of-origin is no longer important for product quality evaluations. Rather, customers may pay attention to other cues like brand names, product guarantee and prestigious retailers. All these factors can use to compensate the negative country-oforigin image (Bilkey and Nes, 1982) like what China has experience after its world product recalls incidents and food safety crisis in recent years. Our view is that although consumers may not actively seek out the COO of the product, when they have only limited information about the product just like the situation in the questionnaire design, or they are presented the COO of the product, consumers would still use country of origin as one of the attribute to evaluate products. Moderating effect of Product Involvement on Country of Origin and quality The findings of this research cannot conclude that there is an interaction between product involvement and the country of origin effect. The moderation effect tested in this research is found to be insignificant. Past literatures have two competing views on how product involvement would moderate the country origin effect. One view said the two are positively related and the other said they are negatively related. This shows the difficulty to conclude the moderation effect of product involvement. Although the moderation effect of product is not grounded based on this research, in related to the past literatures, there are possibilities that other factors may affect the significance of effect. That means under different circumstances, the effect of product involvement would vary. The moderation effect could interact with other 34

36 factors such as price, brand, and personality. Simply comparing high involvement and low involvement products may not be enough to explain the whole relationship between country of origin and product involvement, as well as concluding the behavioral pattern of consumers. Another possibility is that the negative country of origin effect may be too dominant that no matter what the product involvement is, they would perceive the product as having bad quality. It is also possible that when consumers are considering high involvement products, they naturally think it is of higher price and therefore may think it has better quality. Many studies have shown that price have an impact on perceived product quality. Therefore, the interaction effect would become unobvious due to various factors that are out of the scope of this research. Moderating effect of Typicality on Country of Origin and quality The findings of the research reveal that there is interaction effect of COO and typicality. Although country of origin effect would serve as an attribute of the product which affects product evaluation, a strong negative country of origin may not always impose as strong negative effect on consumers product evaluation. In some cases, the negative effect can be reduced. When the product typicality is high, the negative COO effect can be weakened. That means when the consumers see a country to be a typical country of producing certain products, they would tend to reduce the bias or the negative impression towards that kind of product from that country. In this research, although it is obvious that COO effect of China would negatively affect consumer s perception on product quality, in the product categories tea and computer, the effect is not as apparent as in the product categories luxury handbag and coffee. China is perceived as a typical country of producing tea and computer. 35

37 In general, China has a very strong and negative COO effect. However, since it is typical in producing tea and computer, consumers tend to think that although Chinese overall product quality is poor, China produces a lot of tea and computer. Therefore consumers may think that China in some way is able to produce better tea and computer. Reasons can be practice makes perfect, accumulation of experience in production, transfer of technology from superior producing country. It can also simply because consumers are used to find that China is the major producing country of tea and computer. However, when the product and country are atypical to each other, consumers would start doubting the quality. For example, when an Italian computer is displayed to the consumers, they start doubting because usually people have a stubborn impression on things. In this case, people may tend to link food, art and cultural things to Italy. They would not link high technology to Italy because Italy does not especially good at developing technology. Therefore the product evaluation would not be as good as Italian coffee. The unfit of product category and country of origin may negatively affect the product quality evaluation. Quality Evaluation and Purchase Intention The results show that the product moment correlation (R) is a positive figure which means there is a positive relationship between product quality and purchase intention. Besides, coefficient of determination (R 2 ) is which means product evaluation can explain nearly 40% of the value of purchase intention. The product quality evaluation towards purchase intention reported a significant effect (p=0.000). The results are consistent with previous study that consumers make purchase decisions based on product quality evaluation (Sun and Paswan, 2011). Product quality is positively related to purchase behavior (Chinen, Jun and Hampton, 2000). Higher product quality can give customers more confident of using or consuming the products. Thus, they are more willing to purchase the products based on quality concern. 36

38 The results are partly consistent with previous study that product quality is seldom detectable before the final product purchase for use (Han and Terpstra, 1988). As product evaluation can only explain around 40% of purchase intention, the explanation power is not strong. The reasons behind the inconsistency may due to the inaccessible nature of product quality before purchase for use. Customers need to buy the products first, and then they can able to evaluate the product quality. Other reasons may be there are more preferable factors than product quality when considering final purchase. For instance, the extrinsic cues like price and brand name which are more easily accessible when having product evaluations. Thus, significant effect of quality evaluation on purchase decision can be diluted by other factors. There is a previous study that quality is not the only factor lead to purchase intention (Kumar, Lee and Kim, 2009). Customers may have other factors to consider in the purchasing decision making process. For instance, they may consider the product design and color. Even though customers are satisfied with the product quality, it may not lead to purchase intention if they are not satisfied with other attributes. The researcher also suggested that customers may perceive higher product quality means there is higher selling price. But, we have set the situation that respondents do not have the price concern as they are assume to have enough money to buy the products. 37

39 Recommendations In long term, the actual quality of made in China products should be improved to a level that can compete with products from other country of origin. Otherwise, no matter what measures we take, when the consumers experience the product for once, they would not try for the second time. For the Chinese companies that can produce high quality products but the products are always falsely perceived as low quality product, we suggest some measures to improve the situation. In order to promote the image of made in China product in the world market, China can take part in more international trade fairs to promote its products to customers around the world. China needs to show the world that it is able to compete with international competitors because its products have high quality and can give consumers confident. In addition, Chinese firms need to find prestige retailers as the distribution channels. Prestige retailers are usually associated with reputation and the products are of relatively good quality. Distribute the products through these channels can help to convince customers that made-in China products are of high quality and has guarantee. This study shows that the moderation effect of product involvement is not significant which means there is no interaction between Country-of-origin and product involvement on made in china product. Therefore, companies may simply focus on alleviating the negative made-in-china effect. Same measures can be taken for both high and low involvement products. Based on our research finding, the negative Country-of-origin effect of China on product evaluation can be reduced by typicality. Therefore, our recommendation would be focus on using typicality to improve negative China image and using other factors to compensate the negative effect of made in China label on quality evaluation. 38

40 According to our research, typicality has a significant moderating effect on consumers perception of quality. Therefore, Chinese manufacturers are able to reduce the negative COO effect of China by improving the typicality. That is, when consumers are considering a specific product category, China would be a more typical country in that category. For instance, we can take Korea as an example. In recent years, we can witness the rise of Korean products in global market such as electronic products and cosmetic products. Not only Korean companies would market the product of their own companies, resources are also pooled to promote a certain product category by government agencies and industrial associations. One example is the Korea Agro-Fisheries Trade Corporation. It is a government owned agency which is responsible for promoting Korean food product. It spends a lot of marketing effort in promoting Korean agricultural products. For example, during the harvest of Korean strawberry in 2012, a TV commercial was launched in Hong Kong to increase the export of Korean strawberry. Korea is also becoming a more typical country in producing strawberry. We suggest that for large companies in China, they should contribute part of their marketing force and put together to promote the product category they belong to. By promoting a specific product category that can represent China in international market, the Halo effect can be gained to generalize the positive product quality image to other product categories. Besides, it is believed that consumers may consider factors other than quality when marking their final purchase decision like the brand effect. Therefore, we would suggest Chinese companies to form joint venture with foreign companies or strategically allied with famous foreign brands which are associated with high quality and prestige may help to dilute the negative image of made-in-china label. 39

41 Limitations and Ways for Future Research Most of the respondents were university students aged 20 to 24. The percentage of female respondents is also higher than ale respondents. There is possibility that differences exist between different age categories, gender and background on made-in China products evaluations when compare with product made in other countries. Therefore, larger sample size from different age and background should be included in future study so as to have better generalization on Hong Kong people s purchasing behavior. Only two countries were used for comparison in this study which is China and Italy. There may have different results depend on which country is chosen for the research. Italy may not have enough generalization power to get the result on how people evaluate made-in China products. Therefore, more countries should be included for research for generalization purpose. Besides, developed and developing countries can be included at the same time to get better comparison results. Only two products were chosen for each country s comparison like only Tea and computer are chosen to test China country-of-origin effect and only coffee and bag are chosen to test China country-of-origin effect. Therefore, more product categories should be included in future study to get better generalization results. Subjective preference for country of origin or product may also affect the result of the research. In recent year, there are many conflicts between Hong Kong and mainland China. These may create negative image of China in Hong Kong people s mind. Moreover, since we used pictures in the product description part in the questionnaires, respondents may also judge the appearance of the product subjectively. In the future, we may also need to assess how much they like the countries or the products. 40

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45 Appendix 1 Questionnaire sample 你好, 我們是浸會大學工商管理系三年級的學生 我們正調查香港人對不同商品的購買行為, 需要你寶貴的意見, 希望你能抽 5 分鐘時間填寫這份問卷, 所有我們取得的資料都會保密並只用作學術用途, 請放心填寫 謝謝你的參與! 請閱讀以下產品介紹 : 以下產品來自一個以下產品來自一個國際著名的品牌 : 產品介紹 : 本產品採用高級優質茶葉, 以傳統方法製作而成, 氣味清香, 味道甘醇 茶葉中所含的咖啡因 兒茶素等多種成分, 能降低人體血液中膽固醇的含量, 有助降低血脂, 並有降血壓, 預防心肌梗塞 腦血管梗阻等功效 等級 : 一級產地 : 中國 第一部分 : 試想像你與家人都喜歡喝茶, 剛好家中的茶葉已用完, 你打算再購買一些茶葉與家人一同享用 你在商店內看到以上產品, 產品的價格合理, 符合你的預算 請根據以上的產品介紹, 選擇你對下列的句子認同程度 (1 分為最不認同,7 分為最認同 ) 產品質量 (Product Quality) 上述介紹的產品有高品質 The above product introduced has high quality. 上述介紹的產品有良好表現 The above product introduced has good performance. 上述介紹的產品製作精良 The above product introduced is well made. 上述介紹的產品品質很差 The above product introduced has poor quality. 上述介紹的產品粗製濫造 The above product introduced is poorly made. 非常不同意 非常同意

46 購買意圖 (Purchase Intention) 我會購買這件產品 I will buy this product. 如果我在商店看到這件產品, 我願意購買 If I happened to see this product in store, I am willing to buy. 我購買這件產品可能性很高 The probability of buying this product for me is high. 非常不同意 非常同意 原產國 (Country of Origin) 這個國家生產的產品有良好的聲譽 Products produced by this country have good reputation. 這個國家在產品生產上的擁有高技術水平 This country has high technology level in product production. 這個國家生產的產品很可靠 Products produced by this country are reliable. 這個國家生產的產品值得信賴 Products produced by this country are trustworthy. 我對這個國家生產的產品有良好印象 I have good impression towards products produced by this country. 非常不同意 非常同意

47 產品涉入程度 (Product Involvement) 在選購茶葉時, 我認為 我會深思熟慮再作決定 I will have careful consideration before making the decision. 我會徵詢曾經購買這產品的人的意見 I consult people who had bought the product for advices. 購買這件產品是個重要的決定 Buying this product is an important decision. 這個購物決定對我有很大影響 The purchase decision has a great impact on me. 這件產品是高價值的 I actively seek out information from salespersons in store. 非常不同意 非常同意 典型 (Typicality) 對於茶葉這種產品, 我認為 這個國家是這種產品的典型生產國 The country is a typical producing country of this kind of product. 這個國家生產很多這種產品 The country produces a lot of this kind of product. 這個國家對生產這種產品非常有經驗 The country is very experienced in producing this kind of product. 這個國家有這種產品的生產優勢 The country mastered a lot of technologies used in the production of this kind of product. 這個國家是這個行業的領導者 The country is a leader in the industry. 非常不同意 非常同意

48 第二部分 : 個人資料 (Personal Information) 性別 (Gender) 男 (Male) 教育程度 小學程度 女 (Female) (Educational 中學程度 Level) 大學程度 年齡 (Age) 20 歲以下 研究生或以上 學院 (Faulty): 文學院 商學院 中醫藥學院 40 或以上 傳理學院 理學院 個人月收入 HKD $5,000 或以下 社會科學院 (Personal HKD $5,001 - $10,000 視覺藝術學院 Monthly HKD $10,001 - $15,000 其他學院 : Income) HKD $15,001 - $20,000 HKD $20,001 以上 不適用 ( 非學生選 填 ) 職業 : 47

49 Product: Tea (China and Italy) 產品介紹 : 本產品採用高級優質茶葉, 以傳統方法製作而成, 氣味清香, 味道甘醇 茶葉中所含的咖啡因 兒茶素等多種成分, 能降低人體血液中膽固醇的含量, 有助降低血脂, 並有降血壓, 預防心肌梗塞 腦血管梗阻等功效 等級 : 一級產地 : 中國 第一部分 : 試想像你與家人都喜歡喝茶, 剛好家中的茶葉已用完, 你打算再購買一些茶葉與家人一同享用 你在商店內看到以上產品, 產品的價格合理, 符合你的預算 請根據以上的產品介紹, 選擇你對下列的句子認同程度 (1 分為最不認同,7 分為最認同 ) 產品介紹 : 本產品採用高級優質茶葉, 以傳統方法製作而成, 氣味清香, 味道甘醇 茶葉中所含的咖啡因 兒茶素等多種成分, 能降低人體血液中膽固醇的含量, 有助降低血脂, 並有降血壓, 預防心肌梗塞 腦血管梗阻等功效 等級 : 一級產地 : 意大利 第一部分 : 試想像你與家人都喜歡喝茶, 剛好家中的茶葉已用完, 你打算再購買一些茶葉與家人一同享用 你在商店內看到以上產品, 產品的價格合理, 符合你的預算 請根據以上的產品介紹, 選擇你對下列的句子認同程度 (1 分為最不認同,7 分為最認同 ) 48

50 Product: Coffee (China and Italy) 產品介紹 : 本產品採用全球高級優質咖啡豆, 以中度烘焙製作而成, 香醇濃郁, 不酸 不苦 不澀, 口感細膩帶豐富的層次感 等級 : 一級產地 : 中國 第一部分 : 試想像你與家人都喜歡喝咖啡, 剛好家中的咖啡粉已用完, 你打算再購買一些咖啡粉與家人一同享用 你在商店內看到以上產品, 產品的價格合理, 符合你的預算 請根據以上的產品介紹, 選擇你對下列的句子認同程度 (1 分為最不認同,7 分為最認同 ) 產品介紹 : 本產品採用全球高級優質咖啡豆, 以中度烘焙製作而成, 香醇濃郁, 不酸 不苦 不澀, 口感細膩帶豐富的層次感 等級 : 一級產地 : 意大利 第一部分 : 試想像你與家人都喜歡喝咖啡, 剛好家中的咖啡粉已用完, 你打算再購買一些咖啡粉與家人一同享用 你在商店內看到以上產品, 產品的價格合理, 符合你的預算 請根據以上的產品介紹, 選擇你對下列的句子認同程度 (1 分為最不認同,7 分為最認同 ) 49

51 Product: Computer (China and Italy) 處理器 Intel Core i (1.90 GHz) 快速記憶體 4 MB 標準記憶體 8 GB DDR3 顯示屏幕呎吋 14 顯示屏幕解析度 1600 x 900 硬碟容量 550 GB 體積 ( 闊 x 高 x 深 ) 35 x 23 x 2.45 cm 重量 2.4 kg 保養 一年 產地 中國 第一部分 : 試想像你現在使用的電腦剛剛故障, 而你平日經常需要使用電腦, 用作學習, 工作及娛樂用途, 所以你決定重新添置一部電腦 你在商店內看到以上產品, 產品的價格合理, 符合你的預算, 功能及外貌都合符你的需要和期望 請根據以上的產品介紹, 選擇你對下列的句子認同程度 (1 分為最不認同,7 分為最認同 ) 處理器 Intel Core i (1.90 GHz) 快速記憶體 4 MB 標準記憶體 8 GB DDR3 顯示屏幕呎吋 14 顯示屏幕解析度 1600 x 900 硬碟容量 550 GB 體積 ( 闊 x 高 x 深 ) 35 x 23 x 2.45 cm 重量 2.4 kg 保養 一年 產地 意大利 第一部分 : 試想像你現在使用的電腦剛剛故障, 而你平日經常需要使用電腦, 用作學習, 工作及娛樂用途, 所以你決定重新添置一部電腦 你在商店內看到以上產品, 產品的價格合理, 符合你的預算, 功能及外貌都合符你的需要和期望 請根據以上的產品介紹, 選擇你對下列的句子認同程度 (1 分為最不認同,7 分為最認同 ) 50

52 Product: Luxury Handbag (China and Italy) 產品介紹 : 本產品是該手袋系列的經典產品, 由名師設計, 頂級工匠打造, 採用高級的真皮, 淺金色配飾, 擁有天然亞麻棉襯裡, 拉鍊內袋和智能手機袋, 皮包設有頂部雙提手 ( 長 13 厘米 ) 及可拆分肩帶 ( 長 40 厘米 ), 優雅時尚 中號尺寸 :38 厘米 ( 寬 ) 27 厘米 ( 高 ) 14 厘米 ( 深 ) 產地 : 中國 第一部分 : 試想像你儲蓄到一筆五位數字的金錢, 打算用這筆金錢購買一個名牌真皮手袋獎勵自己 ( 或送給家人 ) 你在商店內看到以上產品, 產品的價格合理, 符合你的預算 請根據以上的產品介紹, 選擇你對下列的句子認同程度 (1 分為最不認同,7 分為最認同 ) 產品介紹 : 本產品是該手袋系列的經典產品, 由名師設計, 頂級工匠打造, 採用高級的真皮, 淺金色配飾, 擁有天然亞麻棉襯裡, 拉鍊內袋和智能手機袋, 皮包設有頂部雙提手 ( 長 13 厘米 ) 及可拆分肩帶 ( 長 40 厘米 ), 優雅時尚 中號尺寸 :38 厘米 ( 寬 ) 27 厘米 ( 高 ) 14 厘米 ( 深 ) 產地 : 意大利 第一部分 : 試想像你儲蓄到一筆五位數字的金錢, 打算用這筆金錢購買一個名牌真皮手袋獎勵自己 ( 或送給家人 ) 你在商店內看到以上產品, 產品的價格合理, 符合你的預算 請根據以上的產品介紹, 選擇你對下列的句子認同程度 (1 分為最不認同,7 分為最認同 ) 51

53 Appendix 2: SPSS Output 1.1 Frequencies Statistics Gender Educational_Leve l Age Monthly_Income Faculty N Valid Missing Frequency Table Gender Frequency Percent Valid Percent Cumulative Percent Valid Male Female Total Educational_Level Frequency Percent Valid Percent Cumulative Percent Valid Secondary School Undergraduate Postgraduate or above Total Age Frequency Percent Valid Percent Cumulative Percent Valid 20 or below Total Monthly_Income Frequency Percent Valid Percent Cumulative Percent Valid HKD $5,000 or below HKD $5,001-$10, HKD $10,001-$15, HKD $15,001-$20, HKD $20,001 or above Total

54 dimension1 Faculty Frequency Percent Valid Percent Cumulative Percent Valid Art Business Chinese Medicine Communication Science Social Science Visuall Art Others N/A Total Independent-samples T-Test T-Test for country of origin Mean Country of Origin(Country_of_origin01-05) Group Statistics Name of country N Mean Std. Deviation Std. Error Mean Italy China Mean Country of Origin(Country_of_origin01-05) Independent Samples Test Levene's Test for Equality of Variances F Sig. Equal variances assumed Equal variances not assumed Mean Country of Origin(Country_of_origin01-05) Mean Country of Origin(Country_of_origin01-05) Independent Samples Test t-test for Equality of Means t df Sig. (2-tailed) Equal variances assumed Equal variances not assumed Independent Samples Test t-test for Equality of Means Std. Error Mean Difference Difference Equal variances assumed Equal variances not assumed

55 dimension1 dimension1 Mean Country of Origin(Country_of_origin01-05) Independent Samples Test t-test for Equality of Means 95% Confidence Interval of the Difference Lower Upper Equal variances assumed Equal variances not assumed T-Test for Product Involvement Mean Product Involvement(Product_involve ment01-05) Mean Product Involvement(Product_involve ment01-05) Group Statistics Degree of product involvement N Mean Low High Group Statistics Degree of product involvement Std. Deviation Std. Error Mean Low High Mean Product Involvement(Product_involve ment01-05) Independent Samples Test Levene's Test for Equality of Variances F Sig. Equal variances assumed Equal variances not assumed Mean Product Involvement(Product_involve ment01-05) Mean Product Involvement(Product_involve ment01-05) Independent Samples Test t-test for Equality of Means t df Sig. (2-tailed) Equal variances assumed Equal variances not assumed Independent Samples Test t-test for Equality of Means Std. Error Mean Difference Difference Equal variances assumed Equal variances not assumed

56 dimension1 Low dimension1 Low Mean Product Involvement(Product_involve ment01-05) Independent Samples Test t-test for Equality of Means 95% Confidence Interval of the Difference Lower Upper Equal variances assumed Equal variances not assumed T-Test for Typicality Mean Typicality(Typicality01-05) Mean Typicality(Typicality01-05) Group Statistics Degree of product typicality N Mean High Group Statistics Degree of product typicality Std. Deviation Std. Error Mean High Mean Typicality(Typicality01-05) Independent Samples Test Levene's Test for Equality of Variances F Sig. Equal variances assumed Equal variances not assumed Mean Typicality(Typicality01-05) Mean Typicality(Typicality01-05) Independent Samples Test t-test for Equality of Means t df Sig. (2-tailed) Equal variances assumed Equal variances not assumed Independent Samples Test t-test for Equality of Means Std. Error Mean Difference Difference Equal variances assumed Equal variances not assumed

57 dimension1 LOW Mean Typicality(Typicality01-05) Independent Samples Test t-test for Equality of Means 95% Confidence Interval of the Difference Lower Upper Equal variances assumed Equal variances not assumed T-Test for Typicality(After re-categorizing) Mean Typicality(Typicality01-05) Group Statistics NEW_TYP N Mean Std. Deviation Std. Error Mean HIGH Mean Typicality(Typicality01-05) Independent Samples Test Levene's Test for Equality of Variances F Sig. Equal variances assumed Equal variances not assumed Mean Typicality(Typicality01-05) Mean Typicality(Typicality01-05) Mean Typicality(Typicality01-05) Independent Samples Test t-test for Equality of Means t df Sig. (2-tailed) Equal variances assumed Equal variances not assumed Independent Samples Test t-test for Equality of Means Std. Error Mean Difference Difference Equal variances assumed Equal variances not assumed Independent Samples Test t-test for Equality of Means 95% Confidence Interval of the Difference Lower Upper Equal variances assumed Equal variances not assumed

58 dimension1 dimension2 dimension2 dimension2 dimension3 dimension3 dimension3 dimension3 dimension3 dimension3 dimension3 dimension3 dimension3 1.3 Univariate Analysis of Variance Between-Subjects Factors Value Label N Name of country 0 Italy China 108 Degree of product involvement 0 Low High 108 NEW_TYP.00 LOW HIGH 106 Descriptive Statistics Dependent Variable:Mean Product Quality(Quality01-05) Name of country Degree of product NEW_TYP involvement Mean Std. Deviation N Italy Low LOW HIGH Total High LOW HIGH Total Total LOW HIGH Total China Low LOW HIGH Total High LOW HIGH Total Total LOW HIGH Total Total Low LOW HIGH Total High LOW HIGH Total Total LOW HIGH Total

59 Levene's Test of Equality of Error Variances a Dependent Variable:Mean Product Quality(Quality01-05) F df1 df2 Sig Tests the null hypothesis that the error variance of the dependent variable is equal across groups. a. Design: Intercept + Country + Product_Involvement + NEW_TYP + Gender + Educational_Level + Age + Monthly_Income + Faculty + Country * Product_Involvement + Country * NEW_TYP Tests of Between-Subjects Effects Dependent Variable:Mean Product Quality(Quality01-05) Source Type III Sum of Squares df Mean Square F Sig. Corrected Model a Intercept Country Product_Involvement NEW_TYP Gender Educational_Level Age Monthly_Income Faculty Country * Product_Involvement Country * NEW_TYP Error Total Corrected Total a. R Squared =.243 (Adjusted R Squared =.206) 58

60 Profile Plots 59