The Jordanian consumers' perceptions of quality, price and risk of foreign vs. domestic products : an empirical investigation

This thesis investigates the Jordanian consumers' perceptions of quality, price and risk of foreign vs. domestic product. The main objectives of this study are: (1) to identify the consumers perceptions of the quality, price and risk of the domestic versus foreign product and to find out whether consumers perceive the products of the various countries in the same way, despite their origin, or do they discriminate between them according to their source country? ; (2) to find out whether the various countries can be clustered together, in respect of the consumers' perception of the quality, price and risk, according to their level of development; (3) to explore the level of the relationship between the three main cues: quality, price and risk for each country; (4) to profile the consumers' perceptions of quality, price and risk of foreign and domestic products according to their socio-demographic variables; (5) to investigate the differences among the consumers in regard of their attitudes towards such variables as the patriotic variables, business practices . as well as the relationship between such variables and the consumers' attitudes (perceptions) of the domestic product quality, price and risk on one hand and their socio-demographic variables on the other hand; (6) to explore the differences between the consumers who attached high importance on the origin of the product in evaluating the product quality, price and risk and those who attached lower importance to the product origin and (7) to find out what the Jordanian industry and Jordanian Government can do in relation to the findings of this research. The study employed both primary and secondary data. Primary data was collected through a structured direct questionnaire from a stratified random sample of 1000 respondents. The municipalities records were used as a sampling frame. Specific statistical techniques were used to achieve the research objectives and to test the related hypotheses. The chi-squared Kolornogrov-Smirnov, T-test, and F-test are used to investigate the differences between the domestic product and the products of foreign origins as well as the differences among the consumers according to their socio-demographic variables. The Spearman Correlation Coefficient is utilised to investigate the relationship between the consumers' attitudes towards the domestic product and their perception of the quality, price and risk. The profile analysis is employed to demonstrate graphically the comparison between the domestic product and the products of the various countries. The multivariate discriminous analysis is used to investigate whether any of the socio-demographic variables could be strong enough to discriminate among the consumers and to be used s a basis for segmenting the consumers according to their demographic variables. The ANOVA analysis is used to test the significance of the differences between the domestic product quality, price and risk attributes and that of each of the participating countries. The Cluster Analysis is utilised to investigate the possibility of clustering the various countries according to the consumer's perceptions of the quality, price and risk attributes of their products. Finally factor analysis is used to group the 27 quality, price and risk attributes into smaller groups to aid in a wider understanding of the underlying dimensions of these variables. It is also used to achieve the same purpose for the attitude variables. In applying these techniques, the Sps computer package is utilised in all cases, except in the profile analysis case, where the SAS package is utilised. The thesis is organised into fourteen chapters: the first chapter discussed the research problem, questions, objectives and hypothesis; chapter two introduced the relavant theory behind the present study; the related literature is reviewed in chapter three; chapter four is devoted to the development of the research framework; chapters five and six are intended to explain the research design and the research methodology; chapter seven is related to testing the validity and reliability of the research and to introduce the characteristics of the study sample; chapters eight through to thirteen are concerned with the research findings, and finally chapter fourteen is the conclusion. The countriesof origin used in the study are: U.S.A. , U.K., Japan, Russia, Romania, Taiwan, Egypt and Jordan. The product class employed in the present study is the major household electrical and gas appliances. Overall, the findings of the study support the following main conclusions: I. The country of origin appears to have a significant relationship with the consumers' perception of the quality, price and risk of the product. 2. The economic development of the source country appears to have a significant relationship with the consumers' perception of the quality, price and risk of the products of these countries in that, the countries with a relatively similar stage of development are grouped together and the developed countries' products are perceived to be higher in quality and price, but lower in risk than the products of developing countries. 3. The home country bias appears to be more relevant in comparing the domestic product to that of other countries in a relatively similar stage of development. That is, the Jordanian product is perceived to be higher in quality and price, but lower in risk than the developing countries' product. It is also perceived to be lower in quality and price but higher in risk than developed countries' products. A consistent negative relationship between quality and risk is found for the products of the entire set of countries, in that the higher the consumers' perception of the products of the various countries, the lower their perception of the risk associated with these products. However, in spite of the significant relationship between price and quality, price and risk for most of the countries, the direction of the relationship is not consistent as it is in the case of tiie quality and risk. 5. It was found that only a relatively low percentage of the consumers who agreed in connecting the purchase of the domestic product with the patriotic duties. However, it appears that the higher the consumers agreement with such variables, the better their perception of the domestic product quality, price and risk. 6. Among the five socio-demographic variables, . sex was found to be the lowest in discriminating among the consumers and age was found to be the highest. 7. The weight given to the origin of the product in the decision process was found to be of little importance in discriminating among the consumers in regard of their perception of the quality, price and risk of the products of the various countries. The study suggests that it is to the benefit of the domestic producers to develop separate marketing strategies for the imported products of developed and developing countries, rather than dealing with the imported product under the general term "foreign".