To consumers and other buyers abroad, Canadian products look and feel good. So then, why don’t those same buyers perceive Canadian products like they do those with a “Made in Japan” or “Made in Italy” label? If you answer that Canadian products abroad have in image problem, you’re right. Research conducted by these authors not only documents that image problem but describes the factors that cause the problem.
Hundreds of studies have shown that a country’s particular image influences purchase decisions significantly, quite often more so than a brand name. For example, “Made in” Germany or Japan can greatly enhance brand equity, especially for products that do not also have high-profile names like Mercedes or Toyota. Country image is especially important for Canada, which relies heavily on exports. Even though these have grown steadily over the past decade or so (from about 20 percent to over 40 percent of GDP), sustaining a strong international performance is now more challenging than ever, since the exports of many other countries are also growing quickly. Moreover, the image of Canadian products is important for stakeholders others tan just exporters. Manufacturers who compete only in the domestic market also need to understand how Canadian consumers view products made in this country compared to goods that are made abroad.
A study we conducted in the late 1980s revealed that there were several perceived weaknesses in Canadian products. It also revealed certain strengths that could enhance the products’ competitiveness at home and abroad. A lot has changed since the late 1980s, however. Those changes, and our observations on them, are documented in a new and larger study that we recently completed, and that we discuss in this article. The results allow us to re-examine the Canadian image in the current environment. Our findings have important implications for business and government as they develop effective strategies for markets at home and abroad.
For many information cues in the market, such as brand names, buyers may need to get new information in order to evaluate them. For example, one will need to examine or try a new brand to learn what it stands for and the quality it represents. Country images, in contrast, are readily available, and buyers will be able to use them to infer a product’s characteristics, since they will have already learned about various countries through the media, education, travel and previous purchases. For example, products made in Japan are generally known for their good workmanship. It is not surprising, therefore, that sellers, faced with growing product standardization and broad-based global competition, recognize the value of countries as brands and often turn to country-of-origin claims to differentiate and position their offerings internationally.
In fact, the traditional “Made in” concept has moved to a new level, well beyond its required use on product labels. Broader place associations that rarely connote just the place of manufacture, and are often borrowed, have become commonplace. Examples include New York Fries and California Raisins, and the maple leaf in Wal-Mart’s logo in Canada. Another example is Daewoo cars which are advertised as combining “British handling, Italian style, and German engineering” (while retaining the Korean brand name to also suggest low price).
Previous research has reached three important conclusions about the nature and role of Product-Country Images (PCI):
- Stereotyped PCIs affect buyers’ decisions in all types of target markets, including consumers, industrial and retail buyers, business executives, and foreign investors considering countries for expansion (in which case the country is the product, and the investor the buyer). Therefore, producers targeting industrial markets use country symbols as commonly as consumer-goods firms do (e.g., the Saint Bernard dog of Credit Suisse, used as a symbol of reliability in commercial banking, or “German-engineered” Mercedes trucks and buses).
- The images of specific products may be weaker or stronger than the “global” image of their country of origin, but they nevertheless move in tandem with it. That is, one may think more highly of Japanese cars than Japanese fashion—but the more highly one thinks of Japan, the more highly one things of both its cars and its fashion.
- In their own market, domestic products do not necessarily have an edge over imports. An early Canadian study by G. McDougall and B. Rawlings in Business Quarterly (“Canadian Advertising Appeals: Or, Will ‘Oh Canada’ Sell Beer?” 1979), and many others since, has shown that patriotic appeals may generate positive feelings, but will not necessarily lead to purchases if superior foreign products are available. That is why country image also interests producers who do not compete internationally.
Numerous studies in Canada suggest that consumers are favourably disposed to buying domestic-made products. But the studies also show that these consumers often choose foreign goods because they perceive them as better and/or less expensive, and because domestic products are difficult to find or identify as Canadian-made. Abroad, studies of foreign consumers, tourists, investors and other business executives paint a broad portrait of Canada as a vast land of scenic beauty and natural resources, rather than a highly developed G-7 nation and producer of sophisticated products.
Such findings are generally consistent with Canadians’ own belief of how others see them. But they do not provide the detailed information that decision-makers need to develop effective strategies. Our study attempts to provide such information, by focusing on the international competitiveness of Canadian products from the point of view of foreign consumers, in comparison to the images of other exporting nations.
We conducted the study in 20 principal metro areas of 15 countries (one per country, except two in the U.S. and five in Canada). We had already surveyed eight of these in the original research. The total samples were 6,094 and 2,247, respectively, and the survey was done using the drop-off/pickup approach. Respondents were asked to evaluate a core set of five countries, including Canada, using two detailed 7-point scales (7=good), and an additional 13 countries using an abbreviated scale. All the differences between country images that are reported below are statistically significant (at 0.003 or higher) based on various statistical tests.
We used 16 items (variables) to measure the images of the countries themselves, and 20 for their products. Using various statistical techniques, we first searched for patterns and relationships within the scales across the sampled countries. This step was necessary since decision-makers and researchers need to know the key “conceptual blocks,” or groups of variables measured in the scales, that underlie respondents’ patterns of thought. This analysis revealed several patterns that enabled us to classify the data into seven key groups: three from the country and four from the product scales. More importantly, this classification proved to be virtually identical to the one that emerged from the research we did 10 years ago. This significantly increases our confidence that these groups of variables represent the main mental constructs that respondents use when assessing countries and their products.
The analysis shows that, when evaluating countries, buyers use criteria connected to
- A country’s level of Advancement (represented by seven variables in our scale, such as technological advancement, overall wealth and the population’s level of education)
- Their own feelings about its People (four variables, including whether they are perceived as trustworthy, likable, and hard working), and
- Their desire for closer Links with the country in question (five variables, including “closer ties,” “want more imports from” and “want more investment from—“ the country).
When evaluating a country’s products, the summary constructs were Product Integrity, Price, Market Presence and Response (Figure 2 shows the detailed contents of each).
Figure 1 compares Canada to the other four countries that we evaluated. [For the comparative cross-country analyses, we used only one sample from each of Canada and the U.S., since using the extra samples from these countries would bias the results in their favour.] Canada’s strengths on two of the three country image constructs, People and Links, are immediately apparent. Not only was Canada rated higher than Sweden, the U.S. and Japan on both of these dimensions, it also received higher scores than the home country on the People dimension. Conversely, the respondents see Canada as less advanced than the other four countries, both as a country (Advancement) and in its ability to produce superior products (Product Integrity).
In contrast to Canada, the U.S., Japan and Sweden were rated lower on the People and Links dimensions, but significantly higher on most others. Japan, in particular, is clearly superior on Product Integrity. It is interesting to note that we coded the “price” variable so that 7=expensive, since buyers often used a high price level as a proxy for high quality. Given this, Figure 1 shows that Canadian goods were rated as being the least expensive, except for Japanese goods.
Swedish producers, who emphasize branding in both consumer products (e.g., Volvo and Saab cars, Ericsson cellphones) and industrial goods (Scania and Volvo trucks, Ericsson telecom equipment), have established a rather different international image than their Canadian counterparts. They have significantly greater Market Presence and are perceived as offering more technologically advanced products that command premium prices.
Figure 1 illustrates a Canadian paradox. On the one hand, Canada’s Presence rating is by far the lowest of all countries of origin, and very low in absolute terms (a mean of 2.8 on the 7-point scale). On the other hand, its Product Integrity rating, while also lower than those of the other countries of origin, is higher by two full scale points than the Presence score in absolute terms (4.7). This discrepancy suggests that there may be a halo effect. We discuss this on the last page of our article.
THE IMAGE OF CANADIAN PRODUCTS
Figure 2 shows the detailed data from the product scale (the detailed country ratings are not shown separately due to lack of space, but they are referred to where appropriate). The product variables are grouped into the four dimensions mentioned above (Product, Integrity, Price, Presence and Response).
The Canadian product ratings by Canadians were uniformly high, approaching an excellent 7-out-of-7 score on pride in ownership and willingness to buy. This is a very positive finding for Canadian producers. However, the ratings by foreign consumers are much lower.
- The summary “Products overall” scores from all 20 scales (4.2 by Americans, 4.1 by all others) are almost a full scale point below the corresponding “Country overall” ratings, which were 5.1 by Americans and 4.9 by all others.
- The American respondents’ scores on the individual Product Integrity variables are almost invariably lower than those of other foreign respondents, particularly for the innovativeness and technical advancement variables. Americans also rated Canada lower than did other foreign respondents on most of the Advancement variables in the country scale. Overall, in spite of the proximity and close ties between Canada and the U.S. American buyers perceive Canada as being less able to produce advanced, high-quality goods than do respondents in other countries.
- Conversely, American ratings are higher than those of the other samples on all the Response variables. This most likely reflects their naturally greater familiarity with Canada and its products when compared to consumers in distant countries.
- While the ratings for Canada by all samples on Product Integrity, Price and Response are almost always above the mid-point of the scale (4.0), the ratings on Presence are always below it, and uniformly low, particularly by foreign consumers outside the United States.
Since previous studies tell us that the images of individual products can be inferred from the country’s overall image, and since there is no efficient way to research “all” sectors individually, the scales in this study asked for “global” evaluations of each country’s products. In another section of the questionnaire, however, we also asked respondents to fill in four blanks with the names of the first four products or companies that come to mind for each of the five countries of origin they were evaluating. The top-of-mind results from this section underscore those from the quantitative scales.
The vast majority of respondents were able to fill in all the blanks for the U.S. (e.g., Coke, Ford), Japan (e.g., Toyota, Hitachi), their home country (whose products and companies they are, naturally, very familiar with), and also in most cases for Sweden (e.g., Ericsson, Volvo). For Canada, however, only a few of the 6,000+ respondents were able to supply more than two products, and in most cases they wrote down generic categories (e.g., lumber, wheat, fish) instead of brand or company names. Therefore, Canada’s image seems to persist among foreign consumers, including Americans, in spite of Canadian exports’ changed profile in recent years.
CANADA IN THE WORLD
Figure 3 shows Canada’s relative position in the broader global context, compared to the images of both the core five and the additional 13 countries that we measured using the abbreviated scale. Of the 18 countries evaluated, the first 10 are highly developed and the next eight are less so in varying degrees. In this figure, the countries within each group are plotted from highest to lowest based first on the country and then on the product measures.
Focusing first on the bars (country items), it is clear that Australia and Canada scored higher than all other developed and developing countries. The major industrial powers generally scored significantly lower, with Germany and the U.S. tied for ninth place as “ideal countries.” Japan’s score on this measure was particularly low, with a mean of 4.0 on the 7-point scale, placing it 12th overall (below all developed countries as well as Spain and Greece).
Conversely, on the product measures (lines), Germany, Japan and the U.S. are at the top, followed by France, Britain, Holland and Sweden. Canada was rated significantly lower and near the bottom of the 10 developed countries (ninth place on “good products,” eighth on “willing to buy”).
All the “closer ties” measures are higher than the “ideal country” scores, suggesting that respondents are very open to having closer relations with other countries. The same is true of their willingness to consider other countries’ products, since the “willing to buy” scores are equal to, or higher than, the “good products” ratings for 14 of the 18 countries. However, here are noticeable differences among three main types of countries of origin:
- Those whose products are evaluated significantly higher than the countries themselves (Germany, U.S., Japan)
- Those where there is a significant gap between good intentions (closer ties, willing to buy) and evaluations (ideal country, good products), as in the cases of India and Indonesia
- Those where the various ratings are quite close to each other (Australia, Canada, Norway, Greece).
Combined, these observations show that several origins have distinct country and product images, while others, including Canada, have similar ratings on both types of measures.
SHIFTS IN CANADA’S IMAGE
We compared the above findings to those in our original research, based on the variables that were common between the two studies (some items were changed to benefit from new research knowledge that became available after the original study). This produced several surprises in light of our “going-in” hypotheses when planning the new research.
- We had expected that Canadian perceptions of the domestic market would have improved significantly in all areas, given Canada’s economic growth and relative political stability, greater emphasis on branding by Canadians producers, the impact of “Buy Canadian” campaigns, and the growth of higher value-added sectors (e.g., high technology). This did materialize for the country scale and the Product Integrity variables in the product scale, all but one of which were rated higher than before (the “reliability” rating did not change). However, the Price, Presence and Response variables were rated very similarly to 10 years ago
- We had also expected that foreign perceptions of Canada and its products would have improved significantly given the dramatic growth in exports, increased international promotion (e.g., through the high-profile Team Canada missions), and the shift to higher, value-added manufactured exports. However, while we observed some improvements, they were not uniform or present in all cases:
-Canada’s country image improved in Britain and France, but remained unchanged among respondents in the other foreign countries sampled
-Concerning the image of Canadian products among foreign, non-U.S. consumers, there were several significant differences compared to 10 years ago. These were split roughly evenly between positive and negative shifts. The vast majority (20 of 23) of the positive shifts concerned Product Integrity variables; however, consumers also gave higher ratings on these variables to the other four countries evaluated, leaving Canada in last place in most cases, as in the earlier study. On the other hand, fully three-quarters (13 of 17) of the negative shifts concerned Presence variables; that is, in spite of the growth of Canadian exports, their perceived presence abroad has in fact declined.
-Interestingly, the views of U.S. respondents about Canadian products did not change much, notwithstanding the significant growth in trade between the two countries following the NAFTA. Their ratings remained the same on all but three variables. The exceptions were improvements in two country items (technology and role in the world, both from 4.2 to 4.7) and one product item (workmanship, from 4.3 to 4.8).
IMPLICATIONS AND STRATEGIC DIRECTIONS
While much has changed since the late 1980s, the new study suggests that this does not generally apply to the image of Canada and its products, in spite of some notable exceptions:
- Canadian consumers. The ratings improved in several cases, notably on Product Integrity, but not all. Considering the growing influx of imports, the lack of improvement on Market Presence may be worrisome, since it signals that Canadians still find it difficult to identify homemade goods as such. This might reduce the odds that they would choose them over imports
- Foreign consumers outside the U.S. These respondents rated both Canada and the other four countries of origin higher on such product variables as workmanship and quality, leaving Canadian products in the same relative position (fifth out of five) as before. Further, as borders open and markets become flooded with products from around the world, the presence of Canadian products seems to be declining in both absolute and relative terms. Conversely, the image of Canadians as a people remains as strong as ever.
- American respondents. Neither the NAFTA nor the resulting dramatic growth in Canadian exports to the U.S. appears to have made a significant difference in how American consumers view Canada. They still rate Canadian products low on Presence, and importantly, lower than other foreign consumers do on important variables such as technological advancement and product quality.
- Canada’s global position. Compared to the broader set of 18 countries of origin (Figure 3), Canada’s placement validates the more detailed evaluation of the core five-country set. It is perceived as a “best” country, along with Australia, but is placed near the bottom on a list of other industrialized countries in terms of manufacturing prowess.
When we reported our original study a decade ago (As Others See Us: The Image of Canadian Products Abroad, Canadian Business Review, Winter 1989), we focused on an apparent paradox, which we noted above and which still seems to exist today. Specifically, respondents rate Canadian goods as relatively weak on the product measures, but not as low as might be expected given the very low ratings on Presence. How can one say, “I don’t know what you make but what you make is reasonably OK.”?
The answer probably lies now, as it did a decade ago, in the image of Canadians as a people. This is very positive and produces a halo effect: “I don’t know what you make, but I think so highly of you that I guess whatever it is it must be reasonably OK.” We interpret this as a reflection of a bank of goodwill that Canadian firms and government agencies can leverage through branding and promotion. A product would seem to have a better chance of being sold if only buyers were told it was Canadian.
This view challenges the prevailing perception that stressing the country association might harm, or at least would not help, the marketing of a product as Canadian-made. However, the data from several thousand consumers around the world make a strong case for such associations: The “willing to buy” and “Links” scores (Figures 1 and 2) are higher than those for virtually all other items in each case.
Essentially, the respondents state that Canadian products must be reasonably good. Their conclusion is based only on the products’ provenance—and in spite of the fact that respondents are aware only of the country’s strengths in natural resources and have no prior experience with value-added goods. In strategic marketing terms, therefore, it is possible to build credible USPs (unique selling propositions) using the detailed results from the study. For example, although foreign buyers do not think of Canada as a maker of television sets, they would be likely to respond more positively to a TV set identified as Canadian-made and supported by a USP of “Canadian reliability and service.”
Since buyers are the ultimate arbiters of success in the marketplace, and since marketing rests largely on the premise that perception matters, knowing how consumers see a country (a criterion they often use when choosing products) can serve as an important input in strategy development. The results of this study suggest that, in a global market where firms need to run twice as fast as before to stay in the same place, Canadian products seem to be losing some ground in terms of buyer mind share. However, they are also associated with an extremely strong country image that, if used inventively in marketing strategies, may be able to contribute significantly to their international competitiveness.