Exploring the Country-of-Origin Effect in B2B Purchasing Decisions: Implications for B2B Sales Strategies

Abstract

Globalization offered companies the opportunity to expand their business by reaching additional markets outside of their country boarders. Contrary, it gave purchasers the opportunity to source from various countries and diversify their supply chain. Extensive literature of research in the business-to-consumer (B2C) domain demonstrates a significant influence of country-of-origin (COO) on consumer purchasing decisions. Additionally, it is evidenced that consumers tend to favor buying from certain countries more than from other countries based on the perception they have about this country. This tendency to favor products based on the country of origin is known as the country-of-origin effect. It describes any influence on product evaluation or buying intention resulting from country-of-origin information. However, business-to-business (B2B) literature concerning the country-of-origin effect is available only in a limited quantity. Furthermore, researchers are uncertain whether professional purchase decisions are influenced by the country-of-origin of the supplier. This bachelor thesis aimed to address this uncertainty and contribute to a better understanding of the impact the origin of the supplier has on B2B purchasers. This was accomplished by a thorough review of existing literature on the COO effect and six in-depth interviews with purchasing managers from developing countries. The combined findings suggest that the COO effect exists in B2B purchasing decisions. However, its extent depends on the cultural background of individuals as well as on their expertise in the field they are working since more experienced purchasers are less influenced by the image of a country. The image of a country can be perceived as either positive or negative which forms the two outcomes considered in this thesis. A positive country image can be leveraged to increase the purchase intention among potential buyers. The strategies recommended in this thesis are the incorporation of country-of-origin information, for example in the company name, logo or in advertisements campaigns. A company can also benefit from patriotism, especially within the country boarder by attracting customers with patriotic views by utilizing the country of origin. Since individual marketing managers are not capable of changing the perception of their country by their own, this thesis suggests mitigation strategies to prevent harm occurring from a negative country image. Recommended is to either incorporate or distance the company from national stereotypes, making use of another country with a more favorable country image withing your supply chain or the consideration about more favorable market entry methods such as cooperating with a local company. Limitations of this thesis contain the small sample size as well as the focus on interview partners from developing countries. Moreover, more data and background information from the interviewees would have been needed to compare the findings with existing literature. The future research direction could contribute by considering the limitations of this thesis.

Date of Award	2024
Original language	English
Supervisor	Thomas Holzmann (Supervisor)