Foreign Goods Country-of-Origin Effect on the Russian Consumers

Section 7. Importance of COE and ways how to manage it

Multi-attribute model of product - is a model which creates a unified system of assessment regarding different features of a product. The product may bring different utility and value to consumers, according to their needs, expectations and priorities. Therefore it is very important for marketers to estimate the importance of attributes of a product, because the success of positioning of a product depends on this. It is crucial to remember that attributes are not only functional characteristics of a product, but also emotional. Moreover, consumers do not behave rationally and their associations are not always true. Consumers built their perceptions subjectively. One of the factors that may influence consumers' judgements in this kind of way is country of origin information (because it does not directly affect product performance). They can make false conclusions about quality or general impression, but the fact is that their purchase intention depends on these conclusions. Therefore it is essential for marketers to understand how consumers form their opinions and how to change their perceptions in order to convince them to buy a particular product.

Moreover, it was anticipated that for consumer goods the country of origin effect may have a grater power, but empirical studies found that the country-of-origin effect is not larger for consumer goods than for industrial goods (Verlegh, 2001).

The reason why country of origin effect is important for a given company seems obvious - it affects the sales and general success of it. Corporations that function on international as well as domestic markets should never neglect the possibility of threat or opportunity. Strategic decisions should be adjusted in order to avoid the risks of failure on both new and existing markets. Marketing campaigns can be organized in a way that they emphasize the country of origin information when this country has positive attitude among target audience. Implicit or explicit reference in the name or advertisement can be used to emphasise the origin of a product or company. Sometimes positive country of origin effect may be used for the product not related to the real origin of it - for example “English home” - Turkish-based Company focused on home decorations. It is so-called "foreign branding" strategy, which may be used to create more favourable image for a company (Leclerc et al. 1994).

And vice versa, if country suffers negative bias for particular products, marketing campaign should minimize the reference to such information and emphasize other product attributes like price, quality, technologies etc. that may attract consumers (Laroche and Papadopoulos, 2003). Also the wise decision in a latter case would be to emphasize design or brand origin, which consumers would likely prefer more (like Apple label on its gadgets “Designed in California”). It was also found that bias for a product labeled as coming from a certain region is less strong that of a product labeled of coming from particular country. When it is mentioned in exactly which country the product is manufactured, it evokes intense feelings of consumers. So it was concluded that in order to mitigate negative country of origin effect products could be marked as produced in a region. (Recent example can be Polish products marked as being made in EU). Moreover, this way does not require additional costs (Smith, 1993).

The general methods of coping with negative COE are:

– creating strong brand (for instance, South Korean `Hyundai' cars brand);

– disguising country of origin (Russian shoes and accessories brand `Carlo Pazolini');

– boosting the overall country image for the particular product category (wine from Chile);

– buying brands from another companies with more favorable country of origin effect on target consumers (Chinese `Geely' bought Swedish `Volvo')

Therefore all the factors should be taken into account, including country of origin effect, when competing for consumers' loyalty. Especially since there are more and more free-trade agreements and national economies are becoming more and more global, the competition is getting severe. Policymakers of countries should also be interested in this topics and try to enhance their country's image overall through country branding promotional campaigns.

Eventually, it is anticipated that the theoretical overview of the topic and survey together are going to show how exactly country of origin effect influences Russian consumers while making a decision of buying consumer electronic products, in particular smartphones.

Many researches have investigated the country of origin effect for aspects of purchase decision process, such as quality evaluations, attributes of a product perception, general attitudes to a product, risk perception, value of a product for a consumer and purchase intention or willingness to buy a product concerning all the previous aspects. Quality of a product (performance, reliability), product perception (attitude), and purchase intention are usually distinguished in the studies and tested separately. The reason for that is attitude or relation to the product is broader concept than quality. Perceived quality is a crucial component of attitude (Steenkamp 1990). Verlegh and Steenkamp (1999) found that COE has a large influence on perceived quality rather than the purchase intention. Overall attitude toward a product was found to be affected not only by perceived quality, but also by convenience, fun and beauty (Holbrook and Corfman 1985). Thus, the country of origin effect should be lower for the attitude in comparison to quality. Moreover, Peterson and Jolibert (1995) found that 63% of all the country of origin effects evidences studied were centred on subjects' perceptions of product quality or reliability rather than their purchase intentions.

Purchase intention is completely different because it is not only influenced by product quality assessment and general attitude but also it is dependent on other factors like budget and availability. Purchase intention is considered to be a good synthesis of individuals' evaluations and something that actually represents a proxy for consumer behaviour (Chandon, Morwitz, and Reinartz, 2005). Consequently, it is frequently used in country image, country of origin and brand research (Roth and Romeo 1992).

There was found no direct relationship of country of origin on purchase intentions, it influenced through consumers' general product evaluations (Parameswaran and Pisharodi, 2002). The perception of quality and overall attitude to a product can be very positive, but the limitations of a buyer affect purchase intention and it can be impossible or unlikely to purchase a product. Consumers may like the idea of fully Russian smartphone, but the may not willing to buy it for themselves due to other reasons. Therefore these 3 measures of product evaluations should be separated for this study (Verlegh & Steenkamp, 1999).

Conclusions for chapter 1

There are many literature sources on country of origin effect and this topic is sometimes viewed as well-researched, however there are divergences relating the nature of its influence, the power of the COE among extrinsic and intrinsic attributes of products and the important for consumer decision-making variables that COE influences (perceived quality, attitude and intention to purchase). In this theoretic overview it was attempted to summarize previous main flows of research and show the relation of COE and other crucial concepts like country image, consumer ethnocentrism, product involvement etc. Main groups of country of origin evaluations were reviewed (innovativeness, design, prestige, workmanship). The multi-cues studies were found to be more accurate, since reflect the real process of alternatives evaluation unlike single-cues research, where the country of origin effect was found to be stronger presumably because of absence of other attributes and emphasize on the country of origin for the consumers.

Country of origin is sometimes viewed as a feature of a product, namely extrinsic cue, on the basis of which consumers may build their judgments and make conclusions about products along with apparent features as price, warranty or intrinsic cues, or features that are inherent in a product itself. Country of origin is based on country image, however it depends on product category and was found to be valid for both end-consumers and business buyers. What should be emphasized is that country of origin effect exists on individual basis thus difficult to generalize for all the people. The individual-based factors such as demographic and psychographic characteristics, cultural peculiarities, personal needs, product involvement and familiarity are present and impact the perception of a consumer. Also marketing mix for the product affects consumers making it possible to change or at least moderate the level of country of origin effect for a product. In general, country of origin effect was divided into 3 main components in minds of consumers - the cognitive, affective and normative aspects.

Due to global competition of companies nowadays, many of them move some of the steps of a product creation (manufacture, design, assembly etc.) to other countries, usually in order to lower the costs. Therefore the country of origin of a product is not that evident anymore. Different subcategories of country of origin such as country of manufacture, country of brand, country of design etc. have different influence on consumers and marketers also try to emphasise the information of country that is more beneficial to the product. Usually, country of brand, production and design are found to be the most important for consumers.

Moreover, the connection between country image, brand image and product image was discussed - they are all not static concepts and influence each other. So the product reputation and success can also adjust country and brand image, it is not a unidirectional process. consumer good foreign brand

The holistic approach of viewing country of origin effect through endogenous and exogenous antecedents, moderators and outcomes is summarised. The outcomes (evaluations, brand image and perceived value) are in turn influencing the most important step - purchase decision.

Country of origin effect was found to have less influence on purchase decisions of consumers, among the outcomes of country of origin information processing, since it has only indirect connection through product evaluations of quality and attitude.

Implications for marketers and common solutions on how to manage the COE in the way that benefits an organization or mitigate the negative consequences are discussed in the end of the chapter.

On the basis of the analyzed data from articles and books, hypotheses and survey are going to be developed to answer the questions that the situation for a chosen company requires.



Chapter 2. Description of the case and survey analysis

Section 1. About Yota devices company

Yota devices - international, private company originated from Russia, with the main focus on development of innovative high-tech devices for modern life. At first, it used to be a part of Yota Corporation, which was focusing on modern technologies and, in particular, in 4G internet communication technologies. Yota service provider is still functioning on the Russian market, but is now a separate company and belongs to Skartel and Megafon.

Picture 6. The famous former brand logo.

Yota devices creates and produces high-tech LTE subscriber equipment (modems, routers, phones). The most famous gadget of Yota devices is Yota phone - smartphone with two screens, one of which is e-ink. Yota devices released two generations of smartphone on Android operating system with a unique design. As it is mentioned on their website, they first created the category of double screen smartphones on the market. Their main office is located in Moscow, Russia and is focused on Research and Development, UX, ID, PR, Marketing, Sales and client support in Russia and CIS countries. They also have one Research and Development office in Oulu, Finland.

Distinctions between brand origin and production origin are sometimes undermined and this study is emphasising it, through the real example of Yota devices, which is positioned as a Russian brand and Yota phone as a Russian smartphone, but it was in fact produced in Singapore and later in China. The management had idea of moving production to Russia, to lower the costs, because of certain economic reasons, among which the devaluation of rouble was the most noticeable, has led to higher prime cost of product, which led to a higher price.

Picture 7. Presentation of first dual-screen smartphone in foreign medias (Rizzo, 2013).

Management of the company was expecting huge success for the smartphone but unfortunately it did not occur. The idea was unique at that time and even foreign journalists were waiting for the success of such an innovative smartphone on the market. However, the reality was not like that. According to experts, the high price and not well-structured marketing campaign resulted in significantly smaller sales than was predicted. But there was nothing the company could do about the prime cost of the product at that moment when the sale of the smartphones started. Nevertheless, management was trying to find the ways to lowering the costs of production without the reduction in quality.

That time, when the privacy topic was raised among owners of devices, the Russian smartphone Yota phone 2 received the title of the most secure smartphone. The gadget passed security checks against illegal wiretapping, interception of traffic and received a security certificate of the FSB (Federal Security Service) of the Russian Federation. Overall, Yota 2 has become the safest smartphone in Russia and the main reason for that was that all other gadgets could not pass the certification, because to obtain such a certificate you need to provide access to software and circuitry, which any foreign company cannot do.

The total costs of creating Yota phone 2 were $ 50 million, which is several times less than the investment in foreign analogues. If Apple or Samsung has long established connections with suppliers and contractors, an experienced team has been formed, then the Russian manufacturer YotaPhone 2 created it all from nothing in three years (Business online, 2015).

Section 2. Changes in the company

At one certain moment, when sanctions and politics of import substitution of the Russian government took place, many Russian medias started to discuss the anticipated impending relocation of production of Yota phones to Russia. The head of the company in 2015 announced that the production of special version of the smartphone, which was supposed to have additional software protection from listening sand unauthorized access was going to be moved to Russia, namely to Kaluga Electromechanical Plant, which belongs to “Automatica” consortium, which was a part of The Rostec Electronic cluster. Moreover, special control of production was allowed and privacy level could be raised because of special status of the plant as a secure enterprise.

Moreover, the Yota devices case is interesting due to continuous changes in ownership of the company. Russian state company Rostec is selling 25,1 % of the company to the Chinese investment fund, thus allowing Chinese side to dominate in ownership structure, as Russian media sources comment on that `Yota is becoming more Chinese' (Lenta.ru, 2016).

Though still, Yota phone is viewed as s Russian brand and several state orders from Russian government has been made and brand support was provided. As an example, prime minister of Russian Federation Dmitry Medvedev was using his Yota phone on many official events and that caught attention of many journalists. According to the head of “Rostec”, the smartphone is made using five patented Russian innovations and has no analogues in the world. He added that Yota phone is "one hundred percept Russian invention" (Lenta.ru, 2013).

It is intriguing to know how the consumers' perception changed according to the changes in place of production and brand ownership. Also, it is going to be discovered how possible relocation of manufacturing facilities to Russia may affect consumers' willingness to buy and product and its general reputation in their eyes. May be the idea of relocating the production to Russia is worth considering by the management of the company.

The third generation of Yota phone was introduced in summer 2017 and later the sales started in China. The beginning of sales on Russian and worldwide market was planned to be in the end of 2017, but it has not happened yet. The reasons for that are unknown, but the fact is that a Russian smartphone is less available for Russian consumers, than for Chinese. Therefore it may be true that the changes of ownership structure influence management decision in a way that benefits Chinese stakeholders more as were suspected by Medias. Though Russian team is still involved in design and innovation stage of product creation, is country of origin effect going to change for Yota devices due to the substantial changes in other parts of it - ownership and production location?

Section 3. Generation of hypotheses

This survey is intended to investigate the connection between the different types of country of origin (country of brand, country of production, country of design etc.) and product quality evaluations, the relationship between the types of country of origin and overall product evaluation (attitude to the product), and the relationships between the types of country of origin and purchase intention. These insights will provide us with understanding of how the company should act and if the measures connected with the relocation of production facilities and ownership structure.

It is expected to gain opinions from target respondents (Russian consumers) from different age groups through the survey, to see whether the hypotheses suggested are valid. The hypotheses are developed on the basis of previous researches and theory reviewed. After, the questions testing them are developed and insights from consumers' about possible changes in company and product are going to be gained.

The first hypothesis is focused on the extent of COE influence on 3 main aspects for Russian consumers that are usually tested in the surveys. Based on research that separate product attitude, quality perception and purchase intentions and claim that the latter is only indirectly influenced by country of origin effect through the first two (Parameswaran and Pisharodi, 2002; Verlegh & Steenkamp, 1999), the following hypothesis is developed.

H1: The effect of country of origin is larger for quality evaluations and general attitudes towards products than for purchase intentions of consumers

The next hypothesis derived from the information gained in theoretical review is “Country of brand is more influential for consumers' perceptions of product than the made in label” (Wu, 2007; Johansson, 2006).

H2: Country of brand is more influential for Russian consumers' than the made in label for quality perception and product evaluation

As was already mentioned in theoretical part, it was previously found that Russian consumers prefer foreign products in general to domestic ones. However, we may assume that due to national identification rise and promotion of Russian products all over Russia, tensions in international politics Russian consumers tend to support local producers and evaluate Russian products better than before (Marimov, 2017).

H3: Due to the sanctions and widespread propaganda of domestic products, nowadays Russian consumers in general prefer domestic products to foreign ones

The further findings are expected to demonstrate the country-of-origin effect for the Yota smartphone and whether 'made in' label can significantly impact Russian consumers so the company should take it into consideration. The next hypothesis tested will be connected with changes in place of production and its influence on consumers' perceptions. It will be discovered if it has significant impact, and if has - positive or negative.

H4: The changes in place of production from China to Russia is going to affect the product attitude in a positive way

Reaction of consumers is going to be analysed and applied to the case. As we have seen from the literature review, though the brand origin may be more informative about product, place of production is important for consumers (Min Han, Qualls, 1985) and also there is a chance that patriotism and consumer ethnocentrism being noticeable past years will result in opposite findings. Moreover, the views of consumers on the changes in ownership will be analysed and it is anticipated that changes in brand ownership (and probably in positioning of the company) in fact will impact them more, than the relocation of production.

H5: Consumers' willingness to buy smartphones will be higher if the production will be moved to Russia (considering that the price will remain the same)

It is assumed that the price will not be changed (although was planned to be lower, because production in Russia was calculated to be cheaper than abroad because of economical reasons, in particular devaluation of rouble currency). If this hypothesis confirms, it can be concluded that consumers' country of production origin effect exists alone. Next one is focused on changes in ownership structure.

H6: The changes in company ownership (switching to Chinese ownership) will influence Russian consumers' product attitude in a negative way

Yota phone was positioned as a Russian invention and it was promoted as a Russian product. Since brand origin influences consumers very much, it is anticipated that change in ownership structure - which inevitably leads to brand belonging to Chinese owners - will influence in negative way Russian consumers.

The different influence of brand origin and actual place of production are going to be discussed in detail and recommendations concerning preferable behaviour for the companies on this specific market are going to be developed based on the data gained.

H7: The changes in company ownership will influence Russian consumers' purchase intentions

It is also anticipated that regardless of ownership Yota phone will be considered a Russian phone since it is a Russian invention etc.

H8: Regardless of company ownership, Russian consumers will view Yotaphone as Russian one

Also, from theoretical overview it was found that congruency between country of production and brand have a positive and stronger effect on consumers (Aurier and Fort, 2007). Therefore the next hypotheses will test if it is going to affect Russian consumers somehow, since in case of relocation to Russia, country of brand and production become congruent.

H9: The congruent brand origin and country of production (Russia) will have a positive effect on evaluation for products and purchase intentions

Moreover, in this study some general opinions from Russian consumers are going to be gained in order to see the changes in time.

Section 4. Survey

In order to test the hypotheses and gain consumers' opinions about country of origin significance in general and for smartphones in particular the survey was created. Questions were formulated using importance scale (for instance, answers vary from “very important” to “absolutely not important”), Likert scale (from “strongly agree” to “strongly disagree”), alternative question (yes or no question), multiple answer questions (for example, to pick the factors that may motivate consumers to prefer a Russian product to a foreign one). Questions developed using these different scales are more convenient for respondents and provide a measurement of attitude to the statements (for respondents it may be always hard to answer only yes or no, agree or disagree etc.). Likert scale is especially useful to determine the degree of judgement. The aim of the questions in the survey is to test the hypotheses suggested and to derive information on impact of country of origin on Russian products evaluation overall and smartphones in particular. Undoubtedly, the questions based on our case of Yota phone were also asked. Also, demographic data like age and sex were asked, because some previous research found connection of country of origin effect with those.

Concerning the structure, the survey was created using online-tool Google forms (docs.google.com/forms) and consists of 2 pages - the first with the questions regarding country of origin attitude of Russian consumers in general, for all products and smartphones, and the second page - with information about possible changes in Yota Devices Company, some pictures and question about the previous knowledge of Russian origin of the Yota phone and specific questions about opinions needed in order to understand consumers' information of country of origin processing. Questions in the survey were created in Russian language, since the target respondents are Russian consumers.

The survey was created in that way so it will be fast and easy for the respondents to answer. There are 18 questions and it takes no longer than 5 minutes to answer all of them. It was the aim to create a short survey, because long surveys are hard to be responded and they might be left only half filled. This one was created in that way, so it is possible to expect that the answers will be received from at least 200 respondents. The respondents were found mostly through social networks (Vk.com, twitter). Therefore probably the majority of the respondents will be youth and mainly students. This can be one of the limitations of the study, since the distribution of age groups may be not equal. And many scholars questioned the students as a representative layer of the population. The questions of the survey are presented in appendix 1.

Section 5. Discussion of the results of the survey

After the formulating the questions and moving them to the form, the survey was distributed in May 2018 during one week and 250 answers were collected. As was expected, majority of respondents were from 18-25 years age group (80%) and slightly less than 65% were women. Therefore we can claim that probably this survey will be representative of the youth age group, since as it was stated before, some researchers found correlations between age and consumer ethnocentrism and country of origin effect.

Concerning the hypothesis H1, respondents answered that country of origin information primarily impacts quality evaluations, then general perceptions and for most of them, country of origin influences their purchase intention for most of respondents to a smaller extent (picture 8). The respondents were asked to estimate the power of influence of country of origin effect on these three outcomes on the scale of 1 to 10. So the hypothesis H1 confirmed.

Quality evaluation General attitude Purchase intention

Picture 8. Influence of country of origin for consumers (from 1 to 10)

Respondents also indicated that it is important for them to know the country of origin of a product during the decision making process (picture 9). So it is indeed considered as a separate attribute of a product, which brings information for consumers and impacts their opinions. We can conclude that the studies that suspect country of origin effect to be not present that much among people due to globalisation of markets and prevalence of hybrid products are not correct, at least for this moment.

Picture 9. Importance of country of origin information for Russian consumers before a purchase.

Answers to the question “Do you prefer products of Russian origin to foreign ones in general?” varied. In the previous research in 90s the Russian consumers viewed Russian products as low quality and preferred foreign-made (Ettenson, 1993). Because of the marketing and upgrading of Russian image, rise of patriotism it was expected that consumer ethnocentrism will be present and influence people in the way that they would in general prefer Russian products. However, as it can be seen from the graph below (picture 10), nearly 40% said that “more likely no than yes' they would prefer Russian products in general.

Picture 10. General propensity of Russian consumers to buy Russian products

Nevertheless, while comparing Russia, China and Western countries as product origin, respondents most often placed Russia on the second place in list of preferable origin, while China at the last and Western countries at the first (picture 11). From these answers it can be inferred that Russian consumers have a better opinion of Russian products than before, but it is unlikely that it was because of higher level of consumer ethnocentrism or patriotism. The next question makes the reasons and stimulus that can induce consumers to buy exactly Russian goods.

USA and Western Europe Russia China

Picture 11. Rankings of countries as preferred countries of origin

For most of the participants, quality, price and design were the major factors and emotional attachment and support of local producer were marked as a reason much less often. On the graph below (picture 12) the results can be seen (it was possible for the respondents to mark several options).

It can be concluded that hypothesis H3 was not fully confirmed, since the Russian products may be viewed better than before, however foreign products from certain countries (USA and Western Europe) are still viewed more favourably by consumers.



Picture 12. Factors that induce Russian consumers to buy Russian products

The next hypothesis H2: Country of brand is more influential for Russian consumers' than the made in label for quality perception and product evaluation was not confirmed. The country of design and country of corporate ownership was found to be definitely less important for Russian consumers, but country of production was actually marked as the one that consumers pay attention to the most (picture 13).

Country of brand origin Country of production Country of design Country of ownership

Picture 13. Significance of subcategories of country of origin for respondents



Picture 14. The involvement of consumers during decision-making process for purchase of smartphone (from 1 to 10)

On the diagram (picture 14) the level of involvement of consumers regarding the purchase of smartphone is depicted. As it was expected, most of them dedicate a lot of time and attention for evaluating available options before making the final decision whether to buy it or not. High involvement products evaluation is usually less determined by country of origin effect and more on objective criteria such as technical side of the product and price (according to elaboration likelihood model).

After, the importance of characteristics such as design, price, technical characteristics, reviews from users, warranty and service, country of origin was asked to evaluate. The most important one was technical aspect of the smartphone, then brand, price, design and reviews (picture 15). Country of origin was found to be less important in general than these characteristics, which in its turn proves the idea than when other attributes of the product are given for the evaluation, the level of COE is marked as lower by the respondents than in single-cue research.



Picture 15. The importance of attributes for consumers

Respondents were asked if they knew before the text abstract in the survey that Yota phone was invented in Russia by a Russian company and around 37 % were not aware of that. Next, the questions concerning the possible changes were asked, after some information was provided. H4: The changes in place of production from China to Russia is going to affect the product attitude in a positive way did not confirm. The answers of respondents varied and actually for half of the respondents it was not influential at all for their product attitudes. Around 20% of them marked as a negative factor for them (picture 16). Quite similar situation was with the perceptions of quality - more than 50 % answered that the quality will not be higher if the relocation to Russia takes place and more than one quarter said that it would not change (picture 17).

Picture 16. Influence of relocation on product attitude



Picture 17. Influence of relocation on quality perceptions

From this we can also suspect that hypothesis H9 was also not confirmed for this particular situation - congruent brand origin and production origin did not influence product evaluations more positively and stronger.

Concerning the H5, which relates to purchase intentions, it was not confirmed, though with the decrease in price consumers showed higher propensity to purchase with the relocation (picture 18). This shows that place of production brings less value than price for consumers and country of manufacture is only important to a small extent for smartphone buyers.

With the decrease in price Without any change in price

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Размещено на http://www.allbest.ru/

Picture 18. The opinions of purchase intention influence of relocation



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Размещено на http://www.allbest.ru/

Picture 19. Influence of changes in ownership of Yota phone on product attitude (1) and purchase intentions (2)

The changes in ownership structure seemed to have a low influence on product attitudes for majority of respondents so H6 was not validated (picture 19). Hypothesis H7 was also not confirmed, since more than 70% answered that the purchase intention will not change at all and only 14% said that more likely the propensity to buy might decrease. It is also difficult to evaluate the H8 since for some respondents Yota phone was viewed as a Russian phone even with the new ownership structure, for some not anymore and slightly more than 37% said that they do not know (picture 20).

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Размещено на http://www.allbest.ru/

Picture 20. Opinions of respondents whether they view Yota phone as a Russian smartphone in case of ownership changes



Conclusions for chapter 2

The possible changes in Yota Devices Company were described, hypotheses based on the theoretical overview and information about this particular case and survey was developed. Based on the answers gained from 250 respondents country of origin influence for Russian consumers in general and for the given product was demonstrated. The significance of country of origin information before the purchase for Russian consumers was confirmed. This is indeed a signal for Russian consumers of certain product features. The information gained from survey was quite consistent with the results of previous research. The impact of country of origin on quality evaluation is the greatest and it influences purchase intention only to a relatively small extent and most probably through product quality perceptions and attitudes. Also, the general opinion of Russia as a country of origin is probably better than in 90s (in comparison to studies at that time). However, it is hard to say that such factors as consumer ethnocentrism or patriotism influenced that, because there was no proves of it found - Russian consumers may prefer products mostly because of the quality, price and design. Though emotional component was present for a third of respondents. The reason for that could be that mostly young audience was participating in the survey and the level of consumer ethnocentrism is known to rise with the age. Country of design and country of ownership as was expected from other studies were less significant for consumers, however country of production was found to be still very important for them as the brand origin. Therefore it can be inferred that in spite of globalization of markets and trade and widespread hybrid products, this information can impact consumers during decision making therefore should be treated and employed by marketers carefully using offered methods such as marketing tools, creating a strong brand, disguising country of origin, buying brands from other companies etc.

Concerning the smartphones, the involvement in the process of purchase decision making was high for most of respondents and technical, brand, price and design were found to be much more important than country of origin which is consistent with the elaboration likelihood model where central path with high involvement is characterised of considering more objective features of a product.

The possible relocation of production was not influential for most of consumers, for some even negatively, so positive effect of congruency between brand origin and production was not observed. However, together with a price reduction it leaded to higher purchase intention to buy the product. The changes in ownership structure and shifting to the Chinese owners seem not to bother Russian consumers, most probably because the other factors are more influential for their evaluations.



Conclusions and recommendations

It was demonstrated through the theoretical review and survey analysis that country of origin effect is important for Russian consumers during the purchase decision making process and should be taken into account while establishing a marketing campaign. Consumers use country of origin effect in evaluation of consumer electronics products as a highly differentiated product with high level of involvement. There are many ways to manage this effect such as creating a strong brand or purchasing a brand from other company, disguising a brand, emphasizing more favorable subcategory of country of origin (e.g. country of design), regional marking etc.

The most important subcategories of country of origin were proved to be country of production and brand origin. Country of manufacture was found to be still noticeable and influential for Russian consumers regardless of opinions from previous research, and it is quite clear because consumers nowadays are aware of hybrid products and are attentive to details. Therefore country of production is also important for the company to consider while making strategic decisions. As it was anticipated, country of origin does not effect purchase intention directly - most often influence is smaller and through the quality evaluations and general perception. It is a complex concept, which involves many factors, the company could control some of them and some not, some of them arise on the cultural level and some on the individual, some of them may be rational and some emotional or affective.

As was also predicted by previous research, we can conclude that by and large company ownership origin does not influence Russian consumers product attitude. Shifting to Chinese owners will not change consumers' attitudes or willingness to buy the smartphone, therefore most probably company management do not have to worry about that. Especially if the positioning will remain the same (as a Russian invention with a headquarter in Russia) - there are no reason to take special measures. Another important aspect is location of manufacture, and if the relocation of manufacture would not decrease the quality and would be accompanied by the decrease of costs and price reduction then it is worthwhile for management to seriously consider this opportunity. However, the relocation alone is not going to affect consumers' preference and purchase intentions significantly. Other, more objective criteria are more important and influential in case of the purchase of a smartphone for the Russian consumers.

Yota Devices Company should emphasize the Russian origin of smartphone and advantage in technologies, design, price and other objective features because they matter the most for this relatively high involvement product. It is possible o position it like Russian invention in a new marketing campaign (which is anticipated to happen soon) and distinguish it from other competitors in a way that attracts consumers in relation to technical and emotional side.



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