THE EFFECT OF A PRODUCT'S COUNTRY OF ORIGIN ON THE CUSTOMER LOYALTY CREATION PROCESS

Abstract

Due to the increasing process of globalization, consumers’ attitudes and beliefs are formed under the influence of numerous factors, which are not being considered to a large degree when it comes to doing business on a national level, but which may have significant implications on evaluation of international and global aspects of company’s operation. One of these factors is the country of origin of products. Although there is a large number of papers in the field of international marketing which investigate issues of the relation of consumers’ loyalty and country of origin of products, the originality of this research arises from the fact that, this paper examines the influence of the country of origin of the products on consumers’ loyalty, not directly, but observed via specific characteristics of the product, such as quality, design and prestige. Using a regression analysis, it examines the effect of the country of origin of a product on the perception of product’s quality, design and prestige, as well as the extent to which these three variables affect consumers’ loyalty. The importance of implemented empirical research, unlike others done in Serbia, is reflected in analyzing unified influence of individual variables. It has been noticed that major influence on consumers’ behaviour has prestige related to consumption of products from certain countries, following design, while the impact of product’s quality was minimal. By applying the empirical model research, it has been confirmed that all defined variables significantly determine consumer’s loyalty when it comes to country of origin. By applying one-factor analysis of a variance, it examines whether there is a statistically significant effect of the defined variables on the loyalty, when it comes to different categories of the respondents.