The country of origin effect influe

The country of origin effect influences whether a nation’s products and services can demand a premium, both inside the country of origin and outside. Products originating from a country with a weak national image lead buyers to expect a greater price discount compared with products produced by a na- tion with a stronger image (Nebenzahl and Jaffe, 1996). Changing the manufacturing location of a Buick car from the US to Mexico reduces the perceived value of the car by a measurable amount (Johansson and Nebenzahl, 1986; Seaton and Laskey, 1999). In the early 1990s, when Brand Korea had a poor national image in the international
arena, research indicated that Korean-made VCRs had to discount by approximately 40 per cent in order to compete with VCRs with a ‘Made in Japan’ label (Nebenzahl and Jaffe, 1993). These research findings demon- strate that there is a substantial monetary value to the nation brand.