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Country Of Origin Effect – Japanese Brands

Introduction

The brand image has a significant role that consumer’s buying behavious. There are so many factors that affects the consumers. The main purpose of this paper is to explain the country of origin effect, historical background of Japanese culture and the make a detailed analysis of Japanese electronic brands and impressions from origin. Thus historical background of this country, their industry, the features that influence the understanding of country of origin effect deeply.  The informations were collected from literature, media search and academic resources.

 County of Origin Effect (COE)

County of origin effect is one of the most significant factors that affects the brand image. If a brand is origined from a spesific country, it may lead consumer to have positive or negative perception on it. The counrty of the brand or product may affect the buying behaviour of the consumer because counsumers may make generalizations about the products. For instance, Japanese products are famous for quality and especially they are good at electronics so if consumer wants to buy a television, he/she may prefer japanese television brand.
According to another definition; “ The country of origin effect (COE) is a psychological effect which occurs when customers are unfamiliar with a product (e.g., product quality) and the image of the product’s country of origin has a “halo effect” on the customers’ evaluation of the product.” [1]

A positive county image may allow marketers to introduce new products because they can gain quickly acceptance and recognition. This is called positive country of origin effect. So the company gain competetive advantage by selling these new products. Sometimes the opposite situation may occur; a negative country image may damage the companies image this is called negative country of origin effect. [2]


Figure 1.1 – (a) Country-of-origin (halo) effect (Han, 1989) and (b) Model for current study.

The counrty origin effect is not stable, sometimes it may change during the time. For example in the last few decades Korean cars were very low quality but now they can break this negative image.
The demographics also affect the consumer buying behaviour. According to researches, elderly, less educated, and politically conservative people are more influenced by country of origin effect.
Country of origin effect also is dependent to the cathegory of the product. For example it is more intensive when choose new car but it is less intensive when buy new clothes.

 

History of Japanese Social and Economic Structure

Japan comes in a combination of four large, three thousand five hundred medium-sized and small islands in the Pasific Ocean. Although the majority of the population in cities, agriculture is an important part of the Japanese economy. Japan is the world’s third industrial country. Generally, it occurs heavy industry. Major industrial plants are automobile, electronic and optical equipment, locomotives, aircraft, chemical and machine manufacturing factories of all kinds. 26% of the labor force working in the industrial sector. Most of the products are exported to other countries.

Figure 1.2 – The geographic map of Japan

When Renaissance Europeans reached the Japan in the 16th century, they were quite admiring of Japan. Japan was rich in precious metal. As a result of this, Japan was to become a major exporter of copper and silver during the period. Japan was also perceived as a sophisticated feudal society with a high culture and advanced pre-industrial technology. They expertised their skills. They were more populated and more urbanized than European countries. European visitors were amazed by the quality of Japanese craftsmanship and metalsmithing.[3]

The Japanese economy was one of the earliest in Asia to industrialise. During the Meiji restoration period in the mid 19th century, the Japanese government actively pursued Western-style reforms and development – hiring more than 3,000 Westerners to teach modern science, mathematics and technology to Japan. [4]

World War II left Japan battered. They lost most of their values. Most of the country’s infrastructure and production capacity was declined during the war, and its capital city, Tokyo, lay in ruins. Most of the industrialized world viewed Japan as a defeated enemy, and the attitude of its Asian neighbors was even less favorable. Faced with such a bleak outlook, the people and the new, democratic government of Japan had little choice but to get to work. [5]

Japan recovered himself very quickly. In 1951 they reached their economic position in 1935. 16 year is not so long time such a big revolution. To achieve this they made so many reforms in every area to change economic and social structure. For example, they gave some rights to employees and women. In 1947, a liberal constitution was declared. In 1951, they re-gained the right to establish foreign relations by San Francisco Peace Treaty. After this date, the country has reached to internationally competitive. In 1964, Tokyo Olympics provive to regain the country’s international reputation and it was an important turning point.

As we mentioned Japan has made so much reforms between 1945 and 1951. The main purpose of these reforms were to stimulate the economy by making an efficient production system. During this period, they gave priority to the steel industry to provide raw metarial to the engine industries. They made so many investments to metallurgical and chemical industry, thus they gain a rapid development acceleration of electronic and consumer goods. [6]

Another key factor behind rapid development of country is the existence of a good level of educated workforce.[7]

There are generally two approach that affects Japanese management style. First, after World War II, American thought system implementation of advocating universal / organizational approach. Second, the success of Japanese industry, local culture due to perform specific methods of organization and management join advocate / cultural process approach. Japan had gained knowledge from Western counrties and implement it by combaining its own local culture. Thus, cultural relativism problems caused by Japan had overcomed beyond the time of development.[8]

In general, Japanese management practices were influenced by religious and cultural factors, the decision delivery systems, production systems, continuous improvement (Kaizen) approach and the form of specific human resource management practices. Another interesting point of Japanese management is that the senior managers don’t give strategic decisions. The decisions are taken by everyone in the group. This management system is contrary of Western and American management system. In Japanese businesses, everyone has a chance to give decision. Everyone that will be affected by this decision, also read and sign. This is called “Ring System”. [9]

The main purpose of the ring system is to achive more cooperative employees. This ring system makes the process more quality but it also make the process slower.

Nowadays, it is not possible to deny the importance and effect of Japan in business management. Especially several essays focus on production system and technique of this country.  It is important to analyze understanding of management of Japan industry because of being the  second in economy all around the world. It is underlined that the characteristics of Japan society affect their success in this field. Companies, suppliers and relation between workers are basic steps of this situation.

Japanese engineering is famous for their high quality products. To achive this approach they use some special tecniques, principles and ideas. Japanese engineers are creating innovative management approaches, tools, tecniques and technologies. Engineering is the design and implementation of solutions to solve problems. Good engineers use scientific principles and ideas that they apply. There are also plenty of good engineers in Japan. [10] Figure 1.3 – Private consuption growth, public investment growth and real GDP growth of the Japan between March 2007 and March 2012. [11]

Japanese Electronic Sector
            Today, electronic changes the nature of the world. It also attact most of other sectors so it is very important industry. Information society needs speed and only electronic devices can response this change. Despite the recent economic crisis, the electronic manufacturing service sector is still performing strongly and it is still estimating to grow. From mobile phones to the internet, from telecommunications to satellite TV, every single unit is advansing rapidly as the other sectors.[12]

The Japanese electronics industry has a high concentration of leading companies and a reputation for high quality products. Japanese companies have been responsible for a number of important innovations, including having pioneered the transistor radio and the Walkman (Sony), the first mass-produced laptops (Toshiba), the VHS recorder (JVC), and solar cells and LCD screens (Sharp) [13]

Japanese companies are good at electronics and they are the world leaders in the production of compact disc players, video cameras, laptop computers, fax machines, photocopiers, cell phones and various key computer components. Japan is providing a wide variety of new products and Technologies such as television, mobile phones, personal computers etc. [14]
Japanese Global Electronic Brands

In this part, it is given brief historical information about important Japanese global electronic brands. [15]

Allied Telesis is a network infrastructure/telecommunications company. It is founded in 1987. The company is a global driver of secure Ethernet and IP Access solutions and an industry leader in the deployment of IP triple play networks over copper and fiber access infrastructure.

Official Web Site : http://www.alliedtelesis.com

Alpline Electronics Inc. is a Japanese electronic company that is specialized car audio and navigation systems. It is a manufacturer of Alps Electric. It is headquartered in Iwaki, Fukushima.

Official Web Site : http://www.alpline.com

  Brother Industries Ltd is a multinational electrical equipment company. It is headquartered in Nagoya, Japan Its products are printers, multifunction printers, sewing machines, large machine tools, label printers, typewriters, fax machines, and other computer-related electronics.

Official Web Site : http://www.brother-usa.com

  Melco Holdings Inc.  is a family business founded by Makoto Maki in 1975 and is located in Japan. Its most known brand is Buffalo. Buffalo Inc. is currently one of the 14 subsidiaries of Melco Holdings Inc., It also has audio equipment manufacturer, the company entered the computer peripheral market in 1981 with an EEPROM writer.

Official Web Site : http://www.melcoinc.com

Canon is a specialized in the manufacture of imaging and optical products such as cameras, camcorders, photocopiers, steppers, computer printers and medical equipment. It is headquartered ted in Ota, Tokyo, Japan.

Official Web Site : http://www.canon.com

Casio Computer Co., is a multinational electronics manufacturing company  headquartered in Shibuya, Tokyo, Japan. Its products are calculators, mobile phones, cameras, musical instruments and watches. It was founded in 1946.

Official Web Site : http://www.casio.com

Clarion Co. is manufacturer of car audio, automotive navigation systems, AutoPCs, visual equipment, bus equipment, and communication equipment. It is majority owned by Hitachi. Clarion has an OEM relationship with many automotive companies, providing car headunits and components to them for their production vehicles.

Official Web Site : http://www.clarion.com

Eizo Corporation, is a manufacturer of high-end computer displays. A Japanese corporation, it was founded in March 1968 but did not adopt  its current name until 1999, when Nanao Corporation and Eizo merged. It has its headquarters in Hakusan, Ishikawa Prefecture. “Eizo” means “image” in Japanese.

Official Web Site : http://www.eizo.com

Seiko Epson Corporation, is a Japanese electronics company and one of the world’s largest manufacturers of computer printers, information and imaging related equipment.Headquartered in Suwa, Nagano, Japan. The company manufactures inkjet, dot matrix and laser printers, scanners, desktop computers, business, multimedia and home theatre projectors, large home theatre televisions, robots and industrial  automation equipment, point of sale docket printers and cash registers, laptops, integrated circuits, LCD components and other associated electronic components.

Official Web Site : http://www.epson.com

Fuji Electric Holdings Co. operating under the brand name FE,  is a Japanese holding company that retains manufacturing companies of pressure transmitters, flowmeters, gas analyzers, controllers, inverters, pumps, generators, ICs, motors, and power equipment.

Official Web Site : http://www.epson.com

Fuji Xerox Co. is a joint venture partnership between the Japanese photographic firm Fuji Photo Film Co.  (75%) and the American document management company Xerox (25%) to develop, produce and sell xerographic and document-related products and services in the Asia-Pacific region. Its headquarters is in Midtown West in Tokyo Midtown, Akasaka, Minato, Tokyo, Japan.  Fuji Xerox is the world’s longest running joint venture between a Japanese and an American company.

Official Web Site : http://www.fujixerox.com

Fujitsu Limited is a multinational information technology equipment and services company headquartered in Tokyo, Japan. It is the world’s third-largest IT services provider measured by revenues after IBM and Hewlett-Packard.

Official Web Site : www.fujitsu.com

Hitachi, is multinational engineering and electronics company headquartered in Chiyoda, Tokyo, Japan.  It is the parent of the Hitachi Group and forms part of the DKB Group of companies.  Hitachi is business segments are : Information and Telecommunication Systems, Electrical Systems, Social and Industrial Systems, Automotive Systems, Electronic Component Devices, Construction, and Financial services.

Official Web Site : http://www.hitachi.com

  Victor Company of Japan, usually referred to as JVC, is  international consumer and professional electronics corporation. Founded in 1927, the company is best known for introducing Japan’s first televisions, and for developing the Video Home System (VHS) video recorder.

Official Web Site : http://www.jvc.com

  Kenwood Corporation is a manufacturer of amateur radio as well as Hi-Fidelity and portable audio equipment.

Official Web Site : http://www.kenwood.com

Mitsubishi Electric Corporation is a multinational electronics and electrical equipments manufacturing company headquartered in Tokyo, Japan. It manufactures electric and architectural equipment and the company is a major worldwide producer of photovoltaic panels.  The Corporation was established in 1921.

Official Web Site : http://www.mitsubishielectric.com

NEC Corporation is a multinational provider of information technology services and products, with its headquarters in Minato, Tokyo, Japan. NEC provides information technology (IT) and network solutions to business  enterprises, communications services providers and to government agencies.  The company was known as the Nippon Electric Company, Limited, before rebranding in 1983 as just NEC.

Its NEC Semiconductors business unit was one of the worldwide top 20 semiconductor sales leaders before merging it with Renesas Electronics. NEC is a member of the Sumitomo Group.

Official Web Site : http://www.nec.com

Nikon Corporation is a multinational corporation headquartered in Tokyo, Japan, mastered in optics and imaging products. Its products are cameras, camera lenses, binoculars, microscopes, ophthalmic lenses, measurement instruments, and the steppers used in the photolithography steps of semiconductor fabrication.

Official Web Site : http://www.nikon.com

Nintendo Co.is a multinational consumer electronics company headquartered in Kyoto, Japan. Nintendo is the world’s largest video game company by revenue.  Founded in 1889 by Fusajiro Yamauchi. It originally produced handmade hanafuda cards. By 1963, the company had tried several small niche businesses, such as cab services and love hotels.

Official Web Site : http://www.nintendo.com

Panasonic Corporation, is a multinational electronics corporation headquartered in Kadoma, Osaka, Japan. The company was founded in 1918, and has grown to become one of the largest Japanese electronics producers.

Official Web Site : http://www.panasonic.com

Pioneer Corporation is a multinational corporation that specializes in digital entertainment products, based in Kawasaki, Kanagawa, Japan. The company was founded by Nozomu Matsumoto in 1938 in Tokyo as a radio and speaker repair shop, and its current president is Susumu Kotani. Pioneer played a role in the development of interactive cable TV, the Laser Disc player, the first automotive Compact Disc player, the first detachable face car stereo, Supertuner technology, DVD and DVD recording, plasma display (branded as Kuro), and Organic LED display (OLED).

Official Web Site : http://www.pioneer.com

Sharp Corporation is a multinational corporation that designs and manufactures electronic products. Headquartered in Abeno-ku, Osaka, Japan. It was founded in 1912 and takes its name from one of its founder’s first inventions, the Ever-Sharp mechanical pencil, which was invented by Tokuji Hayakawa in 1915. It  is the fifth-largest television manufacturer in the world.

Official Web Site : http://sharp-world.com

Sony Coorporation is one of the biggest multinational company of Japan. It is headquarted in  Konan Minato, Tokyo, Japan. It is focused on electronics and diversificate  game, entertainment and financial services sectors.  Sony is ranked 87th on the 2012 list of Fortune Global 500.

Official Web Site : http://www.sony.com

Toshiba Corporation is a multinational engineering and electronics corporation headquartered in Tokyo, Japan.  Its products and services include information technology and communications equipment and systems,  electronic components and materials, power systems, industrial and social infrastructure systems, household appliances,  medical equipment, office equipment, lighting and logistics.

Official Web Site : http://www.toshiba.com

 

COUNTRY OF ORIGIN EFFECT ON BRANDS

Nowadays, branding becomes a key subject in marketing both in academic and business world. Branding has not only applied to goods and services, it has also used in person, an opinion and place such as country, region, city marketing. Thus, it can be talked about brand personality of countries similar to product brand personality. [16]

Today, it is a well known fact that, branding is closely related with origin. Brands also have a personality like human beings. Consumer decision making behaviour is very complex and so many things affects their behaviour. There are lots of cues to make final purchase decision. The brand and the brand meaning, evokes preferences play an important role for the consumer. So, today the brand with the coming of becoming one of the most important issues in the application of marketing area is also not limited to only the goods and services, it also contains individuals, ideas, cases and places(like country, region, city). Brand image, brand personality, brand associations, communication messages influence the perception of customers about the quality of a brand.

Figure  1.4 : Information Cues, Graphic Depiction (adapted from Keller,1993)

There are many factors that influence country image such as economy, technology, wealth index, regulatory mechanisms, government and business history. [17]

Economy :
One of the main factors that influence customers’ perceptions on a country is the level of the country’s economy. Most of the countries with a positive COO mentioned above are highly industrialized, developed countries.
Technology :
It is an expected result, if the brand country has higher technology, it is absolutely gives positive perception to the consumers. For example, Japan has known their high-tech so expecially japanese brands have known good in technological products.
Wealth index:
This refers to the perceived overall wealth of a country measured. It affects the perception of brands if there are so many billionaries, millionaries, luxury goods industry, leisure industries, individuals income etc. It  offers customers a cue to infer the level of product quality, variety, and perceived credibility of the products/brands.
Regulatory mechanisms :
Regulatory mechanisms such as Intellectual Property Rights law (IPR), online piracy laws, anti-fraud regulations and others create a sense of perceived security in the minds of businesses and customers about a specific country.
Government :
The government management type such as capitalism, democracy, monarchy also affects the counrty image positive or negative.
Business history :
Country’s past successes or failures of a businesses also affect the country image. If there are lots of success stories as Japan, it is easy to attact consumers.

Brands also make advertisements to make positive feelings to their brands. For instance, the belief that purchasing foreign products hurts the local economy by causing loss of jobs, and that it is morally wrong and unpatriotic. So foreign products have to spend more effort than local brands.

 

But in some market segments foreign products have a substantial advantage because they are foreign.

On the other hand, some companies that have positive country image, they efficiently use the benefits of their country image. To highlight this point lets say, Japan has known quality of their product so the new brand can use this positive image in their marketing facilities.
Figure  1.5 : This graph shows the cultural diffences of brands.

CONCLUSION
If we summarize all the things as we mentioned above, in the challenging marketing conditions brands should have a personality to affect consumers positively. County of origin is one of the most important facts for consumer’s perception. Marketer should not be missed the importance of country of origin effect.


REFERENCES

1. [Han, C.M. (1989): Country image: halo or summary construct, in: Journal of Marketing Research, Vol. 26, No. 2, pp. 22-229.]

2. [Hulland, J./Todino, H.S./Lecraw, D.J. (1996): Country-of-Origin Effects on Sellers’ Price Premiums in Competitive Philippine Markets, in: Journal of International Marketing, Vol. 4, No. 1, pp. 57-79.]

 

3. [http://tr.wikipedia.org/wiki/Japonya%27n%C4%B1n_ekonomik_tarihi]

4. [http://www.economywatch.com/world_economy/japan/industry-sector-industries.html]

5. [http://www.japaninc.net/history-of-the-modern-japanese-economy/]

6. [Japon Yönetim Anlayışı ve şirket ağları (KEİRETSU) analizi, Muammer ZERENLER – Rıfat İRAZ, p759-776]

7. [Yıldız, Gültekin ve Ardıç, Kadir. (2002), “Japon  İşletmecilik Uygulamaları Türk  İşletme Yönetimine Bir Model Olabilir Mi?”,  Mimar ve Mühendis Dergisi, Year 6, June-July-August Number 31.p.41]

8. [Sargut, A.S. (2001),  Kültürler Arası Farklılaşma ve Yönetim.  İmge Kitabevi, Ankara.p.221]

9. [Tekin, Mahmut. (2003), Üretim Yönetimi, Cilt 2, Konya:Günay Matbaası. Vergiliel Tüz, Melek. (2001),  Japon ve Amerikan Yönetim Modeli (Türkiye Uygulaması), İstanbul:Alfa Publication. p.22]

10. [Engineered In Japan : Japanese Technology – Management Practices, JEFFREY K AUTOR LIKER,JOHN E AUTOR ETTLIE,JOHN C AUTOR CAMPBELL, p3]
http://www.google.com.tr/books?hl=tr&lr=&id=JGBCf1XEFSYC&oi=fnd&pg=PA17&dq=japanese+electronic&ots=i2dW614sW4&sig=FSB_1tIGubopFLOT0JPTyYRFVAM&redir_esc=y#v=onepage&q=japanese%20electronic&f=false

11. [http://bilbo.economicoutlook.net/blog/?p=19528]

12. [http://www.qfinance.com/sector-profiles/electronics]

13. [The mighty, fallen – Ex-world-beaters swallow their pride and do deals with foreign rivals” . The Economist. 3 March 2011. Retrieved 17 July 2012.]

14. [http://factsanddetails.com/japan.php?itemid=922&catid=24&subcatid=157]

15. [http://en.wikipedia.org/wiki/List_of_electronics_brands and official web sites of brands]

16. [İstanbul Üniversitesi İşletme Fakültesi İşletme Bölümü, Ülkelerin marka kişiliği üzerine bir araştırma, Sema Dündar Kurtulmuş,p:286]

17. [Martin Roll(2008), Branding: The Country Of Origin Effect, http://www.brandingstrategyinsider.com/2008/03/branding-the-co.html#.UXw1ZqK8Cbw]

May 8, 2013 - Posted by | MBA | , , ,

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