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Country of origin

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For the legal term from European law, see Country of origin principle.
"Swiss Made" label on a TAG Heuer chronograph.
Country of origin label for a product designed in the United States, but manufactured in China.

Country of origin (CO) represents the country or countries of manufacture, production, design, or brand origin where an article or product comes from.[1] For multinational brands, CO may include multiple countries within the value-creation process.

There are differing rules of origin under various national laws and international treaties. Country of origin labelling (COL) is also known as place-based branding, the made-in image or the "nationality bias". In some regions or industries, country of origin labelling may adopt unique local terms such as terroir used to describe wine appellations based on the specific region where grapes are grown and wine manufactured.

Place-based branding has a very ancient history. Archaeological evidence points to packaging specifying the place of manufacture dating back to some 4,000 years ago. Over time, informal labels evolved into formal, often regulated labels providing consumers with information about product quality, manufacturer name and place of origin.

Definition

Country of origin of a product can have several possible definitions. It can refer to:[2]

(a) "the place from which the merchandise was directly received; that is the last border crossed or port entered before reaching its final destination;
(b) the country of consignment (i.e. from where the goods were sold); or,
(c) the country of original growth or extraction."

History of country-of-origin labelling

The distinctive shape and markings on amphorae provided consumers with information about the manufacturer and the place of origin for goods

The inclusion of place of origin on manufactured goods has an ancient history. In antiquity, informal branding which included details such as the name of manufacturer and place of origin were used by consumers as important clues as to product quality. David Wengrow has found archaeological evidence of brands, which often included origin of manufacture, dating to around 4,000 years ago. Producers began by attaching simple stone seals to products which, over time, were transformed into clay seals bearing impressed images, often associated with the producer's personal identity thus providing information about the product and its quality. For instance, an object found in a royal burial tomb in Abydos (southern Egypt) and dating to around 3,000 B.C.E., carries brand elements that would be very familiar to modern consumers. Inscriptions on the surface denote a specific place of manufacture, "finest oil of Tjehenu," a region in modern-day Libya.[3]

In China, place-names appear to have developed independently during the Han Dynasty (220 BC-AD 200); brand names and place names were relatively commonplace on goods. Eckhardt and Bengtsson have argued that in the absence of a capitalist system, branding was connected to social systems and cultural contexts; that brand development was a consumer-initiated activity rather than the manufacturer-push normally associated with Western brand management practices.[4][5]

Diana Twede has shown that amphorae used in Mediterranean trade between 1500 and 500 BCE exhibited a wide variety of shapes and markings, which provided information for purchasers during exchange. Systematic use of stamped labels dates appears to date from around the fourth century BCE. In a largely pre-literate society, the shape of the amphora and its pictorial markings functioned as a brand, conveying information about the contents, region of origin and even the identity of the producer which were understood to function as signs of product quality.[6]

The Romans preferred to purchase goods from specific places, such as oysters from Londinium and cinnamon from a specific mountain in Arabia, and these place-based preferences stimulated trade throughout Europe and the Middle East.[7] In Pompeii and nearby Herculaneum, archaeological evidence also points to evidence of branding and labelling in relatively common use. Wine jars, for example, were stamped with names, such as "Lassius" and "L. Eumachius;" probably references to the name of the producer. Carbonized loaves of bread, found at Herculaneum, indicate that some bakers stamped their bread with the producer's name.[8]

Umbricius Scauras, a manufacturer of fish sauce (also known as garum) in Pompeii c. 35 C.E., was branding his amphora which travelled across the entire Mediterranean. Mosaic patterns in the atrium of his house were decorated with images of amphora bearing his personal brand and quality claims. The mosaic comprises four different amphora, one at each corner of the atrium, and bearing labels as follows:[9][10]

1. G(ari) F(los) SCO[m]/ SCAURI/ EX OFFI[ci]/NA SCAU/RI Translated as "The flower of garum, made of the mackerel, a product of Scaurus, from the shop of Scaurus"
2. LIQU[minis]/ FLOS Translated as: "The flower of Liquamen"
3. G[ari] F[los] SCOM[bri]/ SCAURI Translated as: "The flower of garum, made of the mackerel, a product of Scaurus"
4. LIQUAMEN/ OPTIMUM/ EX OFFICI[n]/A SCAURI Translated as: "The best liquamen, from the shop of Scaurus"

Scauras' fish sauce was known to be of very high quality across the Mediterranean and its reputation travelled as far away as modern France.[10]

By the 19th century, formal labels featuring manufacturer name and place of manufacture had become relatively common. Picture Apothecary bottles, c. 1860

During the Medieval period in Europe, numerous market towns sprang up and competition between them intensified. In response to competitive pressures, towns began investing in developing a reputation for quality produce, efficient market regulation and good amenities for visitors. By the thirteenth century, English counties with important textile industries were investing in purpose built halls for the sale of cloth. London's Blackwell Hall became a centre for cloth, Bristol became associated with a particular type of cloth known as Bristol red, Stroud was known for producing fine woollen cloth, the town of Worsted became synonymous with a type of yarn; Banbury and Essex were strongly associated with cheeses.[11] Casson and Lee have argued that the chartered markets of England and Europe in medieval times were using the regional market's reputation as a sign of produce quality and that this acted as an early form of branding.[11]

Following the European age of expansion, goods were imported from afar. Marco Polo, for example, wrote about silk from China and spices from India. Consumers began to associate specific countries with merchandise - calico cloth from India, porcelain, silk and tea from China, spices from India and South-East Asia and tobacco, sugar, rum and coffee from the New World.[12]

By the late 19th century, European countries began introducing country of origin labelling legislation. In the 20th century, as markets became more global and trade barriers removed, consumers had access to a broader range of goods from almost anywhere in the world. Country of origin is an important consideration in purchase decision-making.[13]

Effects on consumers

The effects of country of origin labeling on consumer purchasing have been extensively studied.[14] The country of origin effect is also known as the "made-in image" and the "nationality bias."[15]

Research shows that consumers' broad general perceptions of a country, including of its national characteristics, economic and political background, history, traditions, and representative products, combine to create an overall image or stereotype that is then attached to the products of that country[16] or countries, as occurs for multinational brands.[17]

For example, a global survey carried out by Nielsen reported that[18] country-of-origin image has a significant influence on consumer perceptions and behaviours, and, in situations in which additional information is unavailable or difficult to get, can be the sole determinant of whether or not someone buys a product.[15] Its effect is strongest on consumers who do not know much about the product or product type and weakest on consumers who are well-informed. Sensitivity to country of origin varies by product category. It is strongest for durable goods[19] and luxury goods[20] and weakest for "low involvement" product categories such as shampoo and candy.[21] In various studies, it has also been proven that the country-of-origin effect also applies to services.[22] Of particular interest is the country image effect on prices in the sense that price allows for the "monetization" of the country of origin cue. The country image effects on product prices reveal the extent to which consumer perceptions of different country images are reflected in willingness to pay for products associated with different countries.[23]

Several studies have shown that consumers tend to have a relative preference for products from their own country[24] or may have a relative preference for or aversion against products that originate from certain countries (so-called affinity[25] and animosity[26] countries).

Labelling requirements

The requirements for Country of Origin markings are complicated by the various designations which may be required such as "Made in X", "Product of X", "Manufactured in X" etc. They also vary by country of import and export. For example:

United States

Ford automobile hubcap with Made in U.S.A. imprint

Section 304 of the Tariff Act of 1930 as amended (19 U.S.C. § 1304) requires most imports,[which?] including many food items, to bear labels informing the ultimate purchaser of their country of origin. Meats, produce, and several other raw agricultural products generally were exempt. The 2002 farm bill (P.L. 107–171, Sec. 10816), however, contains a requirement that many retail establishments provide, starting on September 30, 2004, country-of-origin information on fresh fruits and vegetables, red meats, seafood, and peanuts. However, the consolidated FY2004 appropriation (P.L. 108–199) signed January 23, 2004, delayed this requirement for two years except for seafood.[29]

The 1933 Buy American Act requires that a product be manufactured in the U.S. of more than 50 percent U.S. parts to be considered Made in USA for government procurement purposes. For more information, review the Buy American Act at 41 U.S.C. §§ 10a-10c, the Federal Acquisition Regulations at 48 C.F.R. Part 25, and the Trade Agreements Act at 19 U.S.C. §§ 2501–2582.

The 1946 Lanham Act gives any person (such as a competitor) who is damaged by a false designation of origin the right to sue the party making the false claim.

The 1958 Textile Fiber Products Identification Act[30] and 1939 Wool Products Labeling Act[31] require a Made in USA label on clothing and other textile or wool household products if the final product is manufactured in the U.S. of fabric that is manufactured in the U.S., regardless of where materials earlier in the manufacturing process (for example, the yarn and fiber) came from. Textile products that are imported must be labeled as required by the Customs Service. A textile or wool product partially manufactured in the U.S. and partially manufactured in another country must be labeled to show both foreign and domestic processing. On a garment with a neck, the country of origin must be disclosed on the front of a label attached to the inside center of the neck, either midway between the shoulder seams or very near another label attached to the inside center of the neck. On a garment without a neck and on other kinds of textile products, the country of origin must appear on a conspicuous and readily accessible label on the inside or outside of the product. Catalogs and other mail order promotional materials for textile and wool products, including those disseminated on the Internet, must disclose whether a product is made in the U.S., imported, or both.

The 1994 American Automobile Labeling Act requires that each automobile manufactured on or after October 1, 1994, for sale in the U.S. bear a label disclosing where the car was assembled, the percentage of equipment that originated in the U.S. and Canada, and the country of origin of the engine and transmission. Any representation that a car marketer makes that is required by the AALA is exempt from the commission's policy. When a company makes claims in advertising or promotional materials that go beyond the AALA requirements, it will be held to the commission's standard.

The 2010 Fur Products Labeling Act requires the country of origin of imported furs to be disclosed on all labels and in all advertising.

The Mandatory country-of-origin labeling of food sold in the United States (mCOL) rule was defeated by Canada at the WTO in 2014–2015.

CO marketing

Companies may indicate the origin of their products with a number of different marketing strategies:[32]

  • Use of the phrase "Made in..."
  • Use of quality and origin labels
  • CO embedded in the company name
  • Typical CO words embedded in the company name
  • Use of the CO language
  • Use of famous or stereotypical people from the CO
  • Use of CO flags and symbols
  • Use of typical landscapes or famous buildings from the CO

International trade

Further information: Rules of origin

When shipping products from one country to another, the products may have to be marked with country of origin, and the country of origin will generally be required to be indicated in the export/import documents and governmental submissions. Country of origin will affect its admissibility, the rate of duty, its entitlement to special duty or trade preference programs, antidumping, and government procurement.

Today, many products are an outcome of a large number of parts and pieces that come from many different countries, and that may then be assembled together in a third country. In these cases, it's hard to know exactly what is the country of origin, and different rules apply as to how to determine their "correct" country of origin. Generally, articles only change their country of origin if the work or material added to an article in the second country constitutes a substantial transformation, or, the article changes its name, tariff code, character or use (for instance from wheel to car). Value added in the second country may also be an issue.

In principle, the substantial transformation of a product is intended as a change in the harmonized system coding. For example, a rough commodity sold from country A to country B, than subjected of a transformation in country B, which sells the final processed commodity to a country C is considered a sufficient step to label the end product made in B.[33]

Film and television production

The International Federation of Film Archives defines the country of origin as the "country of the principal offices of the production company or individual by whom the moving image work was made".[34] No consistent reference or definition exists. Sources include the item itself, accompanying material (e.g. scripts, shot lists, production records, publicity material, inventory lists, synopses etc.), the container (if not an integral part of the piece), or other sources (standard and special moving image reference tools).[35] In law, definitions of "country of origin" and related terms are defined differently in different jurisdictions. The European Union, Canada, and the United States have different definitions for a variety of reasons, including tax treatment, advertising regulations, distribution; even within the European Union, different member states have different legislation. As a result, an individual work can have multiple countries as its "country of origin", and may even have different countries recognized as originating places for the purpose of different legal jurisdictions.[36] Under copyright law in the United States and other signatories of the Berne Convention, "country of origin" is defined in an inclusive way to ensure the protection of intellectual rights of writers and creators.[37]

See also

References

  1. ^ Johnson, Zachary S.; Tian, Yichao; Lee, Sangwon (2016). "Country-of-origin fit: When does a discrepancy between brand origin and country of manufacture reduce consumers' product evaluations?". Journal of Brand Management. 23 (4): 403–418. doi:10.1057/bm.2016.13. S2CID 167886281.
  2. ^ Field, Alexander J.; Clark, Gregory; Sundstorm, William A., eds. (2008). Research in Economic History, Volume 26. Emerald Group Publishing. p. 101. ISBN 978-1848553361.
  3. ^ Wengrow, David (February 2008). "Prehistories of Commodity Branding". Current Anthropology. 49 (1): 7–34. doi:10.1086/523676. JSTOR 523676. S2CID 145736919.
  4. ^ Eckhardt, Giana M.; Bengtsson, Anders (2008). "Pulling the White Rabbit Out of the Hat: Consuming Brands in Imperial China". Advances in Consumer Research. European Conference Proceedings. 8: 128.
  5. ^ Eckhardt, Giana M.; Bengtsson, Anders (10 November 2009). "A Brief History of Branding in China". Journal of Macromarketing. 30 (3): 210–221. doi:10.1177/0276146709352219. S2CID 154558621.
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  11. ^ a b Casson, Mark; Lee, John S. (2011). "The Origin and Development of Markets: A Business History Perspective". The Business History Review. 85 (1): 9–37. doi:10.1017/S0007680511000018. JSTOR 41301368.
  12. ^ Braudel, Fernand (1992). The Wheels of Commerce: Civilization and Capitalism, 15th to 18th Century. Translated by Reynold, Siân. Berkeley, CA: University of California Press. ISBN 0520081153.
  13. ^ Durairaj, Maheswaran; Chi, Cathy Yi (2009). "Nation Equity: Country-of-Origin Effects and Globalization". In Kotabe, Masaaki; Helsen, Kristaan (eds.). The SAGE Handbook of International Marketing. SAGE Publications. p. 93. ISBN 978-1446206737.
  14. ^ Dinnie, Keith (1 July 2004). "Country-of-Origin 1965-2004: A Literature Review" (PDF). Journal of Customer Behaviour. 3 (2): 165–213. doi:10.1362/1475392041829537. Archived (PDF) from the original on 12 October 2013.
  15. ^ a b Cai, Yi (2002). Country-of-origin effects on consumers' willingness to buy foreign products: an experiment in consumer decision making (PDF) (Masters of Science thesis). Athens, Georgia: University of Georgia. Archived from the original (PDF) on 7 October 2013.
  16. ^ Nagashima, Akira (1970). "A Comparison of Japanese and U. S. Attitudes toward Foreign Products". Journal of Marketing. 34 (1): 68–74. doi:10.1177/002224297003400115. JSTOR 1250298. S2CID 167941676.
  17. ^ Johnson, Zachary S.; Tian, Yichao; Lee, Sangwon (2016). "Country-of-origin fit: When does a discrepancy between brand origin and country of manufacture reduce consumers' product evaluations?". Journal of Brand Management. 23 (4): 403–418. doi:10.1057/bm.2016.13. S2CID 167886281.
  18. ^ Nielsen International (26 April 2016). "Nearly 75% of Global Respondents List Country of Origin as a Key Purchase Driver". Media Release. Archived from the original on 30 September 2017. Retrieved 16 February 2018.
  19. ^ Jain, Subhash C. (2012). Handbook of Research in International Marketing, Second Edition (Elgar Original Reference). Edward Elgar Publishing. p. 467. ISBN 978-1849803021.
  20. ^ Aiello, Gaetano; Donvito, Raffaele; Godey, Bruno; Pederzoli, Daniele; Wiedmann, Klaus-Peter; Hennigs, Nadine; Siebels, Astrid; Chan, Priscilla; Tsuchiya, Junji; Rabino, Samuel; Ivanovna, Skorobogatykh Irina; Weitz, Bart; Oh, Hyunjoo; Singh, Rahul (7 May 2009). "An international perspectiveon luxury brand and country-of-origin effect". Journal of Brand Management. 16 (5–6): 323–337. doi:10.1057/bm.2008.52. S2CID 167841793.
  21. ^ Urbonavičius, Sigitas; Gineikienė, Justina (2009). "Importance of the product country-of-origin factor on purchasing process in the context of globalisation" (PDF). Ekonomika: 41. ISSN 1392-1258. Archived from the original (PDF) on 7 October 2013.
  22. ^ Peters, Nils (2011). The country-of-origin affect on perception of services Entry mode decisions as a determinant of usability. München: GRIN Verlag GmbH. p. 116. ISBN 978-3656020790.
  23. ^ Saridakis, Charalampos; Baltas, George (2016-03-01). "Modeling price-related consequences of the brand origin cue: An empirical examination of the automobile market". Marketing Letters. 27 (1): 77–87. doi:10.1007/s11002-014-9304-3. ISSN 1573-059X. S2CID 59431918.
  24. ^ Shimp, Terence A.; Sharma, Subhash (1987). "Consumer Ethnocentrism: Construction and Validation of the CETSCALE". Journal of Marketing Research. 24 (3): 280–289. doi:10.2307/3151638. JSTOR 3151638.
  25. ^ Oberecker, Eva M.; Riefler, Petra; Diamantopoulos, Adamantios (2008). "The Consumer Affinity Construct: Conceptualization, Qualitative Investigation, and Research Agenda". Journal of International Marketing. 16 (3): 23–56. doi:10.1509/jimk.16.3.23. JSTOR 27755569. S2CID 146273890.
  26. ^ Klein, Jill Gabrielle; Ettenson, Richard; Morris, Marlene D. (1998). "The Animosity Model of Foreign Product Purchase: An Empirical Test in the People's Republic of China". Journal of Marketing. 62 (1): 89–100. doi:10.2307/1251805. JSTOR 1251805.
  27. ^ "Guidance Notes for Traders: Tackling Misleading Country of Origin Claims and Counterfeit Goods" (PDF). October 2003. Archived from the original (PDF) on 21 October 2012. Retrieved 9 October 2012.
  28. ^ "Export Requirements for United Arab Emirates". USDA. 18 April 2012. Archived from the original on 25 September 2012. Retrieved 9 October 2012.
  29. ^ Womach, Jasper (16 June 2005). "CRS Report for Congress | Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition | Order Code 97-905" (PDF). Library of Congress. Archived from the original (PDF) on 10 August 2011. Retrieved 20 January 2013.
  30. ^ (approved September 2, 1958, 85th Congress, 2d Sess.; 15 U.S.C. 70, 72 Stat. 1717)
  31. ^ "Rules and Regulations Under the Wool Products Labeling Act of 1939". Federal Register. Federal Trade Commission. 4 June 2014.
  32. ^ Aichner, Thomas (15 November 2013). "Country-of-origin marketing: A list of typical strategies with examples". Journal of Brand Management. 21 (1): 81–93. doi:10.1057/bm.2013.24. S2CID 167403265.
  33. ^ "ABC dell'import-export | La normativa comunitaria sull'origine" (PDF) (in French). Archived from the original (PDF) on 4 March 2016. Retrieved 18 March 2015.
  34. ^ "The FIAF Cataloguing Rules For Film Archives" (PDF). Archived from the original (PDF) on 24 September 2015. Retrieved 3 January 2015.
  35. ^ "Sources of information". Archived from the original on 5 September 2007. Retrieved 14 January 2007.
  36. ^ "Coordination of certain of the Member States' provisions on television broadcasting". European Parliamentary. Archived from the original on 25 February 2007. Retrieved 14 January 2007.
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