What are the Factors Influencing the Decline in Product Image in Case COM/COD. (Country-of-Manufacture / Design) Changes to an Emerging Country?

Running head: WHAT ARE THE FACTORS INFLUENCING THE DECLINE 1 What are the Factors Influencing the Decline in Product Image in Case COM/COD (Country-of-Manufacture / Design) Changes to an Emerging Country? : A Quantitative Research on Japanese University Students Ryutaro Tsuji Kansai University

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 2 Abstract This study clarifies the factors influencing the relationship country-ofmanufacture (COM) image or country-of-design (COD) image and decline in consumers product image when COM or COD changes to emerging countries. We focused on international product cycle stage and personal involvement with products as the factors and conducted quantitative research on Japanese university students to test our hypotheses. As a result, we found COM image influences the consumers product image only if the product is still manufactured in a developed country considerably. We also found personal involvement strengthens the relationship between COD image and product image if the product is designed in a developed country and mainly manufactured in an emerging country while there are no companies in the emerging countries which have huge share of the product, and personal involvement weakens the relationship between COD image and product image if the product is mainly manufactured in an emerging country and there are companies in the country which have huge share of the product. Keywords: Country-of-manufacture, Country-of-design, International product cycle stage, Product involvement

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 3 Introduction In the international marketing field, many studies have examined the influence of country-of-origin (COO), which is where the product is from, on consumer product evaluation (Bilkey & Nes, 1993; Verlegh & Steenkamp, 1999). For example, some studies have mentioned that consumers care about the image of COO when they evaluate products (Chao, 2001; Papadopoulous & Heslop, 2002; Tse & Gorn, 1993). Global sourcing has transformed COO into a multifaceted construct, which has been broken down into country-of-manufacture (COM) and country-of-design (COD). For example, the image of COM and COD influence consumer product evaluation (Hamzaoui & Dwight, 2006, 2007). From these prior research, the influence of COM and COD images on consumer product evaluation has been clarified. However, it is not identified in what situation the influence of COM and COD occur. Moreover, it is not clear COM or COD image influence consumer product evaluation with what kind of product or with what kind of person. Therefore, we focused on the international product cycle stage as a product property and personal involvement with products as a person s characteristic, and described the condition in which COM and COD image influence consumer product evaluation in this research. In the next section, we note prior research of country image, international product cycle stage and personal involvement with products, and propose hypotheses of this study. In the third section, we describe the methodology in this research. In the fourth section, we describe the result of analysis, and in the fifth section, we discuss the results. Finally, we propose research and practical implications, and suggest the limitations of our research.

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 4 Prior Research Country image and product image As stated above, country-of-origin image (COO image) influences consumer product evaluation. COO image is one of the product extrinsic cues, and it influences consumer product evaluation (Al-Sulaiti & Baker1998, Bilkey & Nes, 1982; Chao, 2001; Laroche, Papadopoulos, Heslop, & Bergeron, 2003; Nagashima, 1970; Papadopoulous & Heslop, 2002; Thakor & Katsanis, 1997; Tse & Gorn, 1993). Besides, consumers consider the COO image when they purchase products (Papadopoulous & Heslop, 2002). Especially, consumers tend to rely on COO image before they purchase them because it is difficult to know products real quality (Han & Terpstra, 1998). Thus, the COO image influences consumer product evaluation and purchase decision. Recently, the number of studies that focus on COM (the country where final manufacturing of the good took place) and COD (the country where final design of the good took place) is increasing. Delocalization and manufacturing in developing countries has been growing in recent decades. Therefore, many products are designed in one country and manufactured in others (Amano, 2005; Hamzaoui & Dwight, 2006). From this trend, the number of researches focusing on COM and COD is also increasing. For example, Hamzaoui and Dwight (2007) clarified that the higher COM and COD images, the higher perceived quality, and COD image have directly positive impact on brand image. The influence of COM and COD images to consumer product evaluation depends on the product category (Hamzaoui & Dwight, 2006). Some researchers have presented the importance of separating COM and COD in the research on Japan. (Lee, 2006, 2007). Because of modern global market expansion and

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 5 outsourcing of various aspects in the production process, it is important to identify how the COM and COD images influence products. Nevertheless, prior research about COM and COD images and consumer product evaluation has two insufficient points. First, prior researches have not suggested how the product image changes depending on COM or COD change. Product image often declines when COM or COD change from developed countries to emerging countries. Some studies have identified that products whose COM or COD is an emerging country have low evaluations (Bilkey & Nes, 1982; Gaedeke, 1973; Wang & Chen, 2004; Wang & Lamb, 1983). It is said that even Japanese university students tend to evaluate Chinese products low (Lee, 2006, 2007). However, these researches have clarified only the product image when manufactured or designed in specific countries. A number of studies have not considered how the product image changes (declines) when COM and COD change from developed countries to emerging countries. In recent decades, manufacturing and design often change to emerging countries from developed countries. Hence, it is getting more important to focus on these changes of product image and clarify what factors cause these changes. Second, there have been few studies testing what factors strengthen or weaken the influence of COM and COD images on consumer product evaluation. Some products will be evaluated by COM more and other products will be evaluated by COD more. For example, if the products whose manufacturing and design is complex, consumers consider the COD image more (Hamzaoui & Dwight, 2007). Additionally, some people may possibly think even more COM image or COD image. However, researchers have not suggested these factors in detail. Thus, we focused on the change (decline) of product image when COM or COD

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 6 change to emerging countries from developed countries and clarify what factors moderate the influence of COM and COD changes to consumer product evaluation. We focused on the international product cycle stage and personal involvement with products as moderating factors. International product cycle stage In general, manufacturing and design of products are moved to emerging countries step by step. In the case of Japanese manufacturing companies, they export their products first. Next, they manufacture their products in emerging countries, and in the last stage, research and development moves to emerging countries (Yoshikawa, Shiraki, Shintaku, & Asakawa, 2013). For example, digital cameras were developed in the 1990s. Although they were manufactured in developed countries at first, their manufacturing moved to emerging countries (e.g., China) gradually (Yabe, 2012). In the personal computer (PC) industry, PC was manufactured in developed countries such as Western countries and Japan in the beginning. After that, PC companies moved their manufacturing to emerging countries such as East Asian countries. In addition, local companies in emerging countries (e.g., Chinese companies, Taiwanese companies) grew rapidly and expanded market share (Imai, 2005). According to this research, we divided the international product cycle stage into four stages. The first stage is that the product is still manufactured and designed in a developed country. Even though the product is manufactured in an emerging country, it is considerably manufactured in the developed country. For example, the Japanese car industry is in this stage. We defined this stage as stage 1.

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 7 The second stage is that the product is designed in a developed country mainly, while it is mainly manufactured in an emerging country. In this stage, most of manufacturing functions move to emerging countries, while most of the design function remains in a developed country. This is the situation of most of Japanese electronic products. We defined this stage as stage 2. The third stage is that the product is designed in a developed country mainly, while it is mainly manufactured in an emerging country and strong local companies which have the design function of the product appear in emerging countries. Although design function of the product remains in a developed country, competitors appear in emerging countries. For example, cell phone and PC are in this stage. We defined this stage as stage 3. The fourth stage is that the product is mainly manufactured and designed in emerging countries. Few products are in this stage now, but some products will move to this stage eventually (Vernon, 1966). We defined this stage as stage 4. The figure1 shows each phase. Figure 1 Transition of the product stage

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 8 These product stages should relate to consumers product recognition. It is because consumers may not mind moving manufacturing and design to emerging countries if they think it is natural that the products are manufactured or designed in emerging countries. On the other hand, consumer may mind the COM when manufacturing or design remains in the developed country. This leads to our first hypothesis: H1: If the product is still manufactured in a developed country (Stage 1), COM image and decline in product image have negative relationship. In case of a product in stage 1, COM image will influence consumer product evaluation although COM image will not influence consumer product evaluation in cases beyond stage 1. For the same reason, it is considered the cases when design of products remains in the developed country (until stage 3), the COD image influences product evaluation. However, few products are in stage 4, so it is difficult to compare with products in stage 2 or 3 and stage 4. Thereby, we only proposed hypotheses about COM image. Personal involvement with products Next, we look at personal involvement with products. Personal involvement is defined as a person s perceived relevance of the object based on inherent needs, values, and interests (Krugman, 1967; Mitchell, 1979; Zaichowsky, 1985). The personal involvement influences the relationship between COO image and consumer product evaluation. Josiassen, Lukas, and Whitwell (2008) clarified consumer s product

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 9 involvement weaken the relationship between COO image and consumer product evaluation. This research found consumers who have high involvement do not mind the COO image much because they consider the COO image as just a part of the product information. If this study is applied to COM and COD study, people who have high involvement do not mind COM and COD images. Hence, we look at these propositions, personal involvement with products weaken the relationship between COM image and decline in product image and personal involvement with products weaken the relationship between COD image and decline in product image. Nevertheless, these propositions can be influenced by the product stage as we mentioned. If there is no relationship with COM or COD image and decline in product image, we cannot examine the influence of personal involvement on the relationship. As hypotheses 1, we suppose that COM image is important only for the product in stage 1. This leads to the next hypothesis: H2: If the product is still manufactured in a developed country (Stage 1), personal involvement weakens the relationship between COM image and decline in product image. Next, we look at the relationship between COD image and product image is also influenced by the product stage. Therefore, we focused on the difference of products between stage 2 and stage 3. In case of stage 2, most of the design function is in a developed country, and there are no huge local companies in emerging countries. Consumers who have high

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 10 involvement should be familiar with these situation, and they may possibly find the fact of design in the developed countries more important. They will possibly find design in developed countries more significant, or evaluate design in emerging countries low after taking into account other information. That is, it may strengthen the relationship between COD image and decline in product image. In case of stage 3, a huge local company of the product appears in emerging countries. Because consumers who have high involvement should familiar with the situation, they may not care about the image of the emerging country. Josiassen, Lukas and Whitwell (2008) identified consumers who have the higher personal involvement may not mind the country image. Thus, we propose the following two hypotheses: H3: For a product in stage 2, personal involvement strengthens the relationship between COD image and decline in product image. H4: For a product in stage 3, personal involvement weakens the relationship between COD image and decline in product image. Method Procedure To test these four hypotheses, we conducted a questionnaire survey on Japanese university students twice. The sample is consisted of 165 respondents for the first survey, and 147 respondents for the second survey. We carried out the questionnaire survey from July 4, 2014 to July 14, 2014 at the first time, and from August 12, 2014 to September 26, 2014 at the second time. They evaluated the different combinations of

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 11 COM and COD for three product categories: cars, digital cameras and personal computers. In our survey, we asked four different types of product image that: the product manufactured and designed in Japan, the product manufactured in China and designed in Japan, the product manufactured in Japan and designed in China and the product manufactured and designed in China. The reason we employed these products is that they match three types of stages respectively. First of all, cars are products still manufactured in Japan considerably. Secondly, digital cameras are products mostly manufactured overseas (mainly in China) rather than in Japan, but Japanese companies have 70% of the world market share (Nikkei sangyo shimbun, 2014), and Chinese companies do not have a huge market share. Finally, PCs are products mostly manufactured in China, and Chinese and Taiwanese companies have more than half the world market share. Actually, Lenovo, a Chinese company, took the first place in world market share in 2013. Thereby, these products fit the three types of stages respectively. In our study, university students were employed as subjects because university students are part of important young consumers (Chao, 2001). Although trends they create are not inclusive, they could be the main consumers that we should focus on. The reason we employed China as a target country is that China is an emerging country that manufacturing or designing actually move from Japan very often. Products manufactured or designed in China are available in the Japanese market and Japanese university students are familiar with those products. Thus, China is used because of that actual trend and ease for respondents to complete our questionnaires. Analysis

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 12 Multiple regression analysis is used for three different products: cars, digital cameras, and PCs respectively. We identify our variables below, and the items measuring each variables are reported in Appendix. Dependent variables We have two dependent variables, which are the decline in product image when COM change from Japan to China and the decline in product image when COD change from Japan to China. As stated above, we asked about four different types of product image; 1the product manufactured and designed in Japan (both COM and COD are Japan), 2the product manufactured in Japan and designed in China (COM is Japan, and COD is China), 3the product manufactured in Japan and designed in China (COM is China, and COD is Japan), and 4the product manufactured and designed in China (both COM and COD are China). We measured each product image with ten items on a five-point scale (Lee & Lee, 2011). We calculated the average of ten items as product image. Cronbach s alpha was for each item ranged over 0.8, displaying a high reliability. The average of each product image in each product category is in Table 1. By using the average of each product image, we calculated the decline in product image when COM is changed from Japan to China. The way we calculate the decline in product image is to subtract the product image of 1 from product image of 3 and to subtract product image of 2 from product image of 4. Both of them represent the decline in product image when COM is changed from Japan to China. The number of the sample was 294 for cars, 330 for digital cameras and PCs, which had twice the

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 13 number of respondents, 147 and 165 respectively because we codded the case of 1 minus 3 and the case of 2 minus 4 together as dependent variables. These variables represent decline in product image because we confirmed that every single answer represents product image of 1 > product image of 3 and product image of 2 > product image of 4. We calculated the decline in product image when COD is changed from Japan to China by subtracting product image of 1 from product image of 2 and subtracting product image of 3 from product image of 4 as well as the case of COM changing. Both of them represent the decline in product image when COD is changed from Japan to China. The number of samples is the same as the case of COD change. These variables represent decline in product image because we confirmed that every single answer represents product image of 1 > product image of 2 and product image 3 > product image of 4. From these processes, we calculated the decline in product image when COM or COD changes and used them as dependent variables. Table 1 Average of product image Independent variables

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 14 We used country image, personal involvement with products, and interaction between personal involvement and country image as independent variables. Country image Overall country image is measured with ten items on a five-point scale (Lee & Lee, 2011). We asked about country image of China and calculated the average as country image. The scales display significant reliabilities (cars: α=0.874, digital cameras, and PCs: α=0.823). Personal involvement with products We measured personal involvement with products with ten items on seven-point scale (Zaichowsky, 1986). We asked how much respondents are involved with three products: cars, digital cameras, and PCs, then calculated the average. The scales demonstrate high reliabilities (Cars: α=0.891, Digital cameras: α=0.899, and PCs: α=0.856) Interaction of personal involvement with country image This variable is created by multiplying personal involvement by country image. We created this variable in order to test whether personal involvement strengthened or weakened the relationship between country image and decline in product image. Control variables Purchase evaluation criteria (four items), fit between country and product, and gender are used as control variables.

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 15 Purchase evaluation criteria There might be a difference between how much the product image declines depending on what factor consumers care about. Therefore, we used purchase evaluation criteria in a seven-point scale (Williams, 2002) as a control variable to make sure what factors participants care about when they purchase the products. We asked them how much they care about that including four factors: Low price, Reliability, Quality, and Brand when they purchase the products. Fit between country and product It is mentioned that every country has an image related to specific products, which is not the country image we stated as an independent variable. The connection between this type of country image and specific product category is called Fit (Hamzaoui & Dwight, 2006). For examples, it is said that cars designed in Germany and watches manufactured in Switzerland rank high in the public estimation. The more COD or COM and country fit, the higher the product evaluation could be (Hamzaoui & Dwight, 2006). Thus, we controlled for this influence. Fit is measured between country and product by asking about four types of fit for each product: fit between Japan and manufacturing of the product, fit between Japan and design of the product, fit between China and manufacturing of the product, and fit between China and design of the product. We used ten items on a seven-point scale and calculated the average of ten items (Hamzaoui & Merunka, 2006). Cronbach s alpha is for each combination ranged over 0.8, demonstrating a high reliability.

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 16 Gender Previous research has found gender influences product evaluation. Especially, females set a higher valuation on foreign products than males do (Bilkey & Nes, 1982; Mittal & Tsiros, 1995). Hence, we used gender as a control variable. All variables are blow (see Figure 2). In our research, we used this model diagram for analysis for six combinations; three products (cars, digital cameras, and PCs) and COM or COD changing. Figure 2 Model diagram

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 17 Results The correlation diagram and fundamental statistics of the three products (cars, digital cameras, and PCs) are in Table 2, Table 3, and Table 4, respectively. From these results, there is the decline in product image for all the product categories when moving manufacturing or design. That means moving manufacturing or design to China is a factor for Japanese university students to make the product image lower. Moreover, results of regression analysis are in Table 5 and Table 6. These represent the case of COM change. There is a negative relationship between country image and decline in product image in case of cars (1% significance), supporting H1. However, in case of COM change, there is no significance with interaction between personal involvement and country image for all the product categories, which means H2 is rejected. On the other hand, Table 6 represents the case of COD change. From these results, we see there is negative relationship for digital cameras and PCs between country image and decline in product image (5% significance). This means if the products go through stage2 or stage3, COD image could influence product image. We also found there is a negative relationship for digital cameras between personal involvement country image and a decline in product image while there is a positive relationship for PCs between personal involvement country image and decline in product image (0.1% significance for digital camera, 1% significance for PC). Figure 3 and Figure 4 represent these relationship. In Figure 3 and 4, we defined high involvement as the cases where personal involvement is higher than the average of samples and define low involvement in case personal involvement is lower than the average. In addition, we defined high country image as the country image being higher

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 18 than the average and defined low country image as the country image being lower than the average. Figure 3 shows the relationship between COD image and product image is strengthened by personal involvement in case of digital cameras. On the other hand, Figure 4 shows the relationship between COD image and product image is weakened by personal involvement in case of PCs. Hence, H3 and H4 are supported. We summed up these results (see Table 8).

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 19 Table 2 Correlation diagram (Car)

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 20 Table 3 Correlation diagram (Digital camera)

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 21 Table 4 Correlation diagram (PC)

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 22 Table 5 The results from multiple regression analysis in case of COM changing Table 6 The results from multiple regression analysis in case of COD changing

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 23 Table 8 Summary of results Figure 3 The result of interaction (Digital camera)

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 24 Figure 4 The result of interaction (PC)

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 25 Discussion Hypothesis 1 is supported, namely in case of a product in the stage 1, COM image affects consumer product evaluation. However, in cases beyond stage 1, COM image will not affect consumer product evaluation. The reason is consumers will not care about whether manufacturing is transferred to emerging countries if a lot of people find it very common the products are manufactured in an emerging country. In other words, if the product is manufactured in a developed country often, consumers will care about COM image. Furthermore, this result has a possibility of adapting COD image. Because COD image influenced product image in stage 2 and stage 3, COD may be considered if the products are mainly designed in developed countries. Yet, whether COD image

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 26 gradually becomes not to be considered or not is only potentially argument because this paper does not employ a product in stage 4. On the other hand, hypothesis 2 is not supported. That means the degree that COM image affects consumer product evaluation is not affected by the influence of personal involvement. It is because consumers who have high involvement can discern a functional aspect of the product, so they may care about more COD than COM. (Ando, 2008). Thus, People who have high involvement mind COM at the same level as those who have low involvement. Both hypothesis 3 and 4 regarding personal involvement and country image are supported. It was found that the influence of personal involvement on the relationship between COD image and product image is different by product stage. From the above, we found the product stage and personal involvement with products affect the influence of COM/COD image on product image. COM image will not affect product image when manufacturing of the product in an emerging country becomes very common. Although finding same effect in COD image is a future issue, it was found that COD image affect product image when the product is mainly designed in a developed country. Additionally, we clarified that the combination of product stage and personal involvement affected the relationship between country image and product image. Josiassen, Lukas and Whitwell (2008) presented that the relationship between country image and consumer product evaluation will become weaker with increasing personal involvement with products. However, we identified that the relationship between country image and consumer product evaluation becomes stronger with increasing personal involvement in case of a product in the stage 2. This paper suggested that the

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 27 influence of personal involvement with products on the relationship between country image and consumer product evaluation can be influenced by the international product cycle stage. Conclusion This paper reveals what factors influence the relationship between the COM/COD image and product image. As a result, we found that the international product cycle stage and personal involvement with products influence the relationship between COM/COD image and product image. COM image affects product image only when the products were still manufactured in a developed country. Personal involvement strengthens the relationship between COD image and product image if the product is designed in a developed country and mainly manufactured in an emerging country while there are no companies in the emerging country which have huge share of the product. In contrast, if the product is mainly manufactured in an emerging country and there are companies in the country which having huge share of the product in those countries, personal involvement weakens the relationship between COD image and product image There are two academic contributions in this paper. First, we clarified international product cycle stage and personal involvement with products influence the relationship between COM/COD image and product image. Few previous researches have mentioned what situation strengthen or weaken the relationship. This paper proposes new variables: product stage and involvement influence the relationship. Second, we use the change of product image as independent variables. Prior research deals with COM/COD image and product image have not directly addressed the change of product image. This paper uses a decline in the product image when COM/COD

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 28 change to emerging country as an independent variable to reveal what factors influence that change. We directly handled decline in product image and analyzed it. This is our second contribution. Moreover, there is a practical implication in this paper. This research finds that consumers mind COM image only if the product is in stage 1. Therefore, the companies whose product is commonly manufactured in emerging countries do not necessary care about COM image. On the other hand, we clarified COD is getting more important after manufacturing of the product is moved to overseas. Thus, in this situation, the companies should pay attention to the COD image. However, how COD image affects product image depending on personal involvement and product stage. A person who has high involvement cares about COD if manufacturing of a product is transferred to an emerging country while there are no leading companies in the country, like digital cameras. Hence, if a company targets at these people, they should sell the product designed in a country having positive image. And if they sold a product designed in the country having negative image for these people, they should hide the COD. In contrast, a person who has high involvement minds COD if manufacturing of a product is transferred to an emerging country and there is leading companies in the country. Therefore, on the contrary, if a company sells a product to a person who has low involvement, they should sell the product designed in a country having positive image. And if they sell a product designed in a country having negative image to people who have low involvement, they must hide the COD. Nevertheless, this study has several limitations. First, we do not conduct the

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 29 survey about the product in stage 4. Therefore, we are not able to clarify the possibility of a product in which the COD image is not minded. Second, although we choose cars, digital cameras, and PCs as typical product in each stage, other product may have a different result. Feature research needs to choose other products in each stage to examine the generalizability of this research. Although this research has these limitations, this research has a significant contribution to the study about the relationship between COM/COD and consumer s product image. We hope these researches contribute development of this area.

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WHAT ARE THE FACTORS INFLUENCING THE DECLINE 34 Appendix Items assessing each factor Dependent variable: Product image We would like to ask you some questions about your opinion of the product on the different situations. Using the 5-point scale, please answer the following questions about your opinion of the product. 1. Country produces high technical products. 2. Known for luxury product. 3. Products are imitation, not innovation. 4. Products are a good value. 5. Products do not need frequent repairs. 6. Products are durable. 7. Products are easy to service in Japan. 8. Products are prestigious. 9. Products are attractive to me. 10. Products are made well. Dependent variables Country Image Here are some questions about your opinion of China. Please use the answer

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 35 categories below. 1. People are well-educated. 2. People are trustworthy. 3. People are creative. 4. People are friendly. 5. Emphasis on technical/vocational training. 6. Technical skills of work force are high. 7. Friendly toward my country in international affairs. 8. Actively participates in international affairs. 9. Similar political views to my country. 10. Economically similar to my country. Product Involvement Here are some questions about a person s involvement or interest in a product. To take this measure, we would like you to judge the product against a series of descriptive scales according to how you perceive the product you will be shown. Here is how you are to use these scales; If you feel that the product is very closely related to one end of the scale, you should place your check mark as follows;

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 36 If you feel that the product is quite closely related to one or the other end of the scale (but bot extremely), you should place your check mark as follows; If you feel that the product seems only slightly related (but not really neutral) to one end of the scale, you should place your check mark as follows; Please make sure that you check every scale; do not omit any. Please do not put more than one check mark on a single scale. To me (brand to be judged) is:

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 37 Control Variables Purchase evaluation criteria I would like to ask you some questions about how much you care about the following things if you purchase a product. Using the 5-point scale, please circle the number. 1. Low price 2. Reliability 3. Referent quality 4. Well-known brand Fit between country and product category

WHAT ARE THE FACTORS INFLUENCING THE DECLINE 38 We would like to ask you some questions about your perceived idea of where a product came from. Using the 7-point scale, please answer the following questions 1. It is logical that Japan manufactures products. 2. It is natural that Japan manufactures products. 3. It is appropriate that Japan manufactures products. 4. It is logical that China manufactures products. 5. It is natural that China manufactures products. 6. It is appropriate that China manufactures products. 7. It is logical that Japan designs products. 8. It is natural that Japan designs products. 9. It is appropriate that Japan designs products. 10. It is logical that China designs products. 11. It is natural that China designs products 12. It is appropriate that China designs products