MARKETING
HOW DO COUNTRY OF KNOW-HOW AND COUNTRY OF PERSONNEL AFFECT SERVICE EVALUATIONS: A
CATEGORICAL COMPARISON
Geliş Tarihi:21.12.2018 Kabul Tarihi:01.02.2019
Edin Güçlü SÖZER*
ORCHID ID: 0000-0003-4984-4629 ABSTRACT
This study measures the effect of country of know-how and country of personnel, two sub-dimensions of country of origin, on the perceived quality and purchase intentions of services in high and low involvement situations of consumers. The study implemented an experimental design including three manipulation factors which are involvement level, country of know-how, and country of personnel. The results of the study confirm that services which are associated with country of know-how and country of personnel are more positively evaluated by the consumers. In cases where the service provider is from the country of know-how, consumers evaluate the service provider more positively compared to others which do not have any associations. Similarly, service providers having staff from the country of personnel, they are evaluated more positively compared to others. Situational involvement level of consumers moderates the effect of country of know-how and country of personnel on service evaluations.
Keywords: Services, Country of Origin, Country of Know-How, Country of Personnel, Involvement Level.
PAZARLAMA
BİLGİ KAYNAĞI ÜLKESİ VE PERSONEL ÜLKESİ HİZMET
DEĞERLENDİRMELERİNİ NASIL ETKİLER? KATEGORİLER ARASINDA BİR KARŞILAŞTIRMA
ÖZ
Bu çalışma, menşei ülkenin iki alt boyutu olan bilgi kaynağı ülkesi ve personel ülkesi yapılarının, tüketicilerin hizmet kalitesi ve satın alma niyeti üzerindeki etkisini bu tüketicilerin yüksek ve düşük durumsal katılımları kapsamında ölçmektedir. Çalışmada, katılım düzeyi, bilgi kaynağı ülkesi ve personel ülkesi olmak üzere üç manipülasyon faktörü içeren deneysel bir tasarım uygulanmıştır. Çalışmanın sonuçları, bilgi kaynağı ülkesi ve personel ülkesi ile ilişkili hizmetlerin tüketiciler tarafından daha olumlu değerlendirildiğini doğrulamaktadır. Hizmet sağlayıcının bilgi kaynağı ülkesi ile ilişkili olduğu durumlarda, tüketiciler bu servis sağlayıcısını herhangi bir ilişkisi olmayan sağlayıcılara kıyasla daha olumlu değerlendirmektedir. Benzer şekilde, personel ülkesi mensubu hizmet vereni olan hizmet sağlayıcılar, diğerlerine göre daha olumlu değerlendirilmektedirler. Tüketicilerin durumsal katılım düzeyinin, bilgi kaynağı ülkesi ve personel ülkesinin tüketicilerin hizmete yönelik değerlendirmeleri üzerinde düzenleyici etkiye bulunmaktadır.
Anahtar Sözcükler: Hizmetler, Menşei Ülkesi, Bilgi Kaynağı Ülkesi, Personel Ülkesi, Durumsal Katılım Seviyesi
*
1. INTRODUCTION
One of the important trends, which has been experienced in the global economic system after 1950’s, is the growth of services sector in advanced economies. This structural change, which was first rooted in the economies of developed countries, spread around the world during the last couple of decades and has become the reality of the global economic system. The contribution of services in global economic growth has never been as strong as it is now. The share of services in the global GDP rose up to 65% compared to the 16% share of manufacturing (World Bank, 2016).
Moreover, the rapid growth in services sector triggered a change in employment structure globally by increasing the share of labor force who work in services sector up to 70% among OECD countries (Deloitte, 2018).
One of the main drivers of worldwide rapid growth in services sector is the erosion of national boundaries and integration of economies around the world due to the globalization (Hufbauer and Warren, 1999). The development in communication technologies and lower transportation costs led to the increasing interactivity between the countries around the world. As the interaction of countries intensified, transnational structures have been established and these led to the economic, political and cultural integration at the global level (Martens and Zywietz, 2006). One of the natural consequences of this increasing level of global integration is the growth in services exports from one country to another. Service firms as well as people who provide those services have benefited from this opportunity which has been provided by the new dynamics of the global economic system. Consequently, total commercial service exports reached at the 4.7 trillion $ level in 2016 constituting 17% of world’s total goods and services exports (Deloitte, 2018).
Increasing share of services in the global economic growth makes international services marketing one of the most important research areas which needs to be focused intensively. Due to the intangibility of services compared to goods, consumers look for extrinsic cues when they evaluate the possible outcome of the service offered (Shostack, 1977). Booms and Bitner (1981) offered the consideration of additional marketing mix elements including physical evidence, participants and process in order to provide such extrinsic cues to consumers in services marketing context. When services are considered, one of the extrinsic cues that consumers rely on is the country of service provider (Andehn, Nordin and Nilsson, 2016). Moreover, these extrinsic cues become more important when the situational involvement of the customer becomes higher due to the higher risk attributed to the possible outcomes of the purchase situation (Laurent and Kapferer, 1985). Thus, the perceptions and attitudes of consumers towards the country of service provider (Netemeyer, Durvasula and Lichtenstein, 1991) and their situational involvement level are the two important determinants of consumer evaluations in international services context.
Although the marketing literature includes a vast number of studies which deal with the determinants of success in services context (Brentani, 1990; Easingwood and
Storey, 1993; Volery and Lord, 2000), the number of studies which focus on the international aspect of services and mainly focusing on the effect of country of origin are relatively limited. Moreover, studies which focus on the effect of situational involvement on service evaluations in the international services context are also limited which leads to the necessity of focusing also on this subject to fill the gap in the literature. In this perspective, this study targets to contribute to the existing literature by exploring the effect of country of origin and situational involvement level on consumer evaluations of services. Country of know-how and country of personnel have been adopted as the two sub-dimensions of country-of-origin construct in this study (Guilhoto, 2018). The effects of these two sub-dimensions have been measured on the perceived quality and purchase intentions of consumers in different service contexts which require different levels of situational involvement.
2. LITERATURE REVIEW
2.1. Country-of-Origin Information and Its Effect on Service Evaluations Increasing activity and growth in international trade led to the extensive attention over the last 35 years on the effect of country of origin on consumer behavior. Although the construct has been defined in different ways in the literature (Özsomer and Çavuşgil, 1991), from a marketing perspective, country-of-origin can be defined as the country which consumers infer when they are exposed to the name of the brand (Han and Terpstra, 1988). Consequently, the effect of country of origin on consumer behavior can be explained as the “picture, reputation or stereotype that consumers attach to products of a specific country” (Nagashima, 1970).
The relationship between country of origin information and consumer behavior has been explained by the dynamics of consumers’ cognitive decision making process (Bloemer et al. 2009). When consumers make their evaluations about the products, they generally tend to combine intrinsic product features with extrinsic cues (Alba et al. 1999). When consumers have sufficient level of intrinsic information, such as inherent product features or direct experience with the product, they tend to make their evaluation based on the intrinsic cues rather than extrinsic cues (Purohit and Srivastava, 2001). In the opposite situation, when there is no information available about the intrinsic cues or it is not adequate, extrinsic cues dominate their product evaluation process (Naami et al. 2017). These extrinsic cues include non-product inherent information such as price, brand name, store or country of origin (Wall et al.
1994).
The effects of country-of-origin were the subject of many studies in the literature which focused on its effects in different product contexts and situations (Zdravkovic, 2013). These include the evaluation of consumers; towards the products of less developed countries (Khachaturian and Morganosky, 1990; Schooler, 1965), towards foreign products (Baker and Michie, 1995; Reierson, 1966), in comparison with a group of third countries (Ahmed et al. 1994; Darling, 1987), towards a particular
region (Chasin and Jaffe, 1979), and across different product categories (Niffenegger et al. 1980). Overall, these and many other studies in the literature confirmed the significant effects of country of origin information on differentiating the product of one country from others (Ahmed and d’Astous, 2003), on the perception of buying situation risk (Tan and Leong, 1999), on the quality perceptions (Kaynak et al. 2000) and on purchase intentions (Josiassen and Harzing, 2008).
Services are types of offerings which differ from products in terms of their intangibility, inseparability, variability and perishability characteristics (Zeithaml et al. 1985). Due to these unique characteristics, consumer evaluations of products and services differ from each other. Especially, intangibility dimension of this difference play an important role on the employment of extrinsic cues by the consumers on their evaluations in services context (Williams, 1999). The limited capability of evaluating the services with intrinsic information leads to increasing risk perception and motivates consumers to mitigate the risk by processing the extrinsic cues such as country of origin. Likewise in product related research, the effects of country of origin on consumer evaluations have been also the subject of several studies in the literature focusing on the impact of different nationalities (Shaffer and O’hara, 1995), comparison of domestic vs. foreign service providers (Al-Sulaiti and Baker, 1997) and its effects on different service contexts and situations (Ahmed et al. 2002;
Harrison and Walker, 1995; Lascu and Giese, 1995) with different types of effects including perceived quality and purchase intentions (Bai et al., 2008; Pecotich et al.
1996; Pérez, et al, 2007; Stanton and Veale, 2009). The results of these previous studies are parallel to the findings of the studies conducted in the product context and confirm that consumers prefer local service providers, service providers of developed or culturally similar countries (Guilhoto, 2018).
Although many studies reported the significant effect of country of origin information on consumer evaluations, there are some studies which report contradictory findings especially in product and service context (Arndt, 2004; Balabanis and Diamantopoulos, 2008; Ho and Foon, 2012; Pecotich and Rosenthal, 2001;). This leads us to conclude that the findings of literature are still inconclusive and require further investigation.
For the purpose of this study we implement the two sub-dimensions of country of origin, namely country of know-how and country of personnel which are developed and validated by Guilhoto (2018), as the factors which affect perceived service quality and purchase intention of consumers. Country of know-how is the source country where core service aspects and related procedures for its delivery are generated. It is believed that the core competence or knowledge is generated in the original country such as in cases of international companies where the core competence has been transferred to subsidiaries by parent companies (Birkinshaw, 1997). On the other hand, the second sub-dimension, country of personnel is the native country of the service provider. It is believed that consumers’ service quality judgement as well their decision regarding to purchase the service will be affected by their perception of fit
between the service provider nationality and the competence of his/her country on that service type (Guilhoto, 2018).
In the light of the theoretical background and existing findings, we propose the following hypothesis:
H1: Country of know how will influence perceived service quality of consumers.
H2: Country of know how will influence purchase intentions of consumers.
H3: Country of personnel will influence perceived service quality of consumers.
H4: Country of personnel will influence purchase intentions of consumers.
2.2. The Relationship Between Customer Involvement, Service Evaluations and Country of Origin Information
The involvement construct was the subject of many studies in the literature. However, there is no any consensus regarding the conceptual framework for its explanation (Baker, 2009). Different researchers have employed different views of the construct depending on the context and conditions prevail in their studies. One of the most common used explanations of the construct associates it with the personal relevance of the subject (Celsi and Olson, 1988). Involvement is further classified into enduring and situational involvement types, where the latter explains the level of concern which the customer experiences in a specific situation (Houston and Rothschild, 1977). The risk level of the situation determines the level of situational involvement. That is, when the risk is high, situational involvement is increased (Laurent and Kapferer, 1985). The view of the involvement in this study is in line with the situational involvement conceptualization of the construct.
Two inter-related models, the elaboration likelihood model (Petty and Cacioppo, 1986) and the heuristic-systematic model (Chaiken et al. 1989), helps us to explain the route and way how consumers process the information to reach a final decision in service purchase situation. The unique characteristics of the services in terms of intangibility, inseparability, variability and perishability are expected to lead consumers to show high situational involvement compared to ordinary buying situations (Laroche et al. 2003). High situational involvement level leads consumers to follow the central route to persuasion and consequently consumers try to access all purchase related information (Bienstock and Stafford, 2006) such as country of service provider (Harrison and Walker, 1995). The involvement is especially expected to be more intense when the perceived risk of consumers is high regarding the consequences of a poor service delivery.
Previous research and related findings confirm the significant relationship between involvement level and service evaluations in terms of its effect on information processing strategy (Edgett and Cullen, 1993), perceived service quality (Shaffer and Sherrel, 1997), service loyalty (Varki and Wong, 2003) and effectiveness of advertising (Stafford, 1996). Based on the theoretical background and existing findings, it is believed that the level of situational involvement will moderate the relationship between country of origin dimensions and service evaluations of consumers including perceived service quality and purchase intentions. Thus, we propose the following hypothesis:
H5: Involvement level of consumers will moderate the effect of country of know-how on perceived quality of service.
H6: Involvement level of consumers will moderate the effect of country of know-how on service purchase intentions.
H7: Involvement level of consumers will moderate the effect of country of personnel on perceived quality of service.
H8: Involvement level of consumers will moderate the effect of country of personnel on service purchase intentions.
3. RESEARCH METHODOLOGY 3.1. Experimental Design and Procedure
This study has implemented an experimental design which targets to measure the effects of country of know-how and country of personnel on perceived quality and purchase intentions of consumers and the moderating role of situational involvement level on these effects. For the purpose of this study, country of know-how, country of personnel and situational involvement levels were employed as the manipulated factors. Subjects of the study were chosen among the citizens who live in large cities of Turkey who need English language education, Waltz dance training, nanny (babysitting) and ballet training services for their children. The total number of questionnaires which were collected was 400.
The study was composed of two independent experiments. The first experiment measured the effect of country of know-how information on the perceived service quality and purchase intentions and the moderating role of situational involvement level on this effect. Total number of subjects participated in the first experiment was 200. In order to test the moderating role of situational involvement level, subjects were randomly and equally distributed into two different groups where one group of subjects was exposed to a service purchase situation scenario in English language education and the other group was exposed to an alternative scenario of Waltz dance
training. Manipulation checks were made for the determination of involvement levels of consumers regarding English language education and Waltz dance training. The results of the manipulation test confirmed the higher level of situational involvement on English language education service and lower level of situational involvement on Waltz dance training (MEN=4.06, SD=0.42; MWT=2.87, SD=0.56) (t(199) = 23.88, p<0.001). The effect of country of know-how information was measured by splitting up each service type randomly into two groups of subjects which were exposed to different types of country of know-how origins. Since English is the native language of the US citizens, the service providers of English language education were selected as a native teacher from United States and a Turkish teacher. On the other hand, since the Waltz dance was originated in Austria, the service provider of Waltz dance training was selected as an Austrian trainer and a Turkish trainer. Manipulation checks were made for the determination of perceived competence difference on the countries of service providers. The results confirmed higher competence score of United States over Turkey in terms of English language competency (MUS=4.46, SD=0.50;
MTR=3.36, SD=0.48) (t (99) = 15.03, p<0.001). Similarly, Austria scored higher than Turkey in terms of Waltz dance competency (MAT=4.66, SD=0.47; MTR=2.62, SD=0.75) (t (99) = 21.08, p<0.001).
The second experiment measured the effect of country of personnel information on the perceived service quality and purchase intentions and the moderating role of situational involvement level on this effect. Total number of subjects participated in the second experiment was 200. In order to test the moderating role of situational involvement level, subjects were distributed randomly and equally into two different groups where one group of subjects was exposed to a service purchase situation scenario in nanny services and the other group were exposed to an alternative scenario of ballet training. In parallel to the methodology implemented in the first experiment, manipulation checks were made for the determination of involvement levels of consumers regarding nanny services and ballet training. The results of the manipulation test confirmed the higher level of situational involvement on nanny service and lower level of situational involvement on ballet training (MNN=4.55, SD=0.59; MBL=2.79, SD=0.45) (t(199) = 31.22, p<0.001). The effect of country of personnel information was measured by splitting up each service type into two groups of subjects which were exposed to different types of country of personnel origins.
Since nannies from Philippines were positioned as the first-class service providers in the world, the service providers of nanny service were introduced as a nanny from Philippines and a Turkish nanny. On the other hand, since Russian ballet dancers lead the ballet category in the world, the service providers of ballet training were introduced as a Russian trainer and a Turkish trainer. Manipulation checks were made for the determination of perceived eligibility differences of the service providers. The results confirmed higher eligibility score of nannies from Philippines over Turkey (MPH=4.66, SD=0.47; MTR=3.89, SD=0.55) (t(99) = 12.47, p<0.001). Similarly, Russian ballet trainer scored higher than Turkish trainer in terms of ballet training eligibility (MRU=4.78, SD=0.41; MTR=2.12, SD=0.43) (t(99) = 40.63, p<0.001).
Both experiment groups and the associated sub-groups of subjects were introduced different scenarios of service purchases for their children based on the sub-dimensions of country of origin, the service types representing different types of involvement levels and types of service providers representing the competence and eligibility.
Respondents in each group read the associated scenario and then asked to answer the items measuring the perceived quality of the service as well as their intention to purchase it from the associated service provider. Table 1 summarizes the experimental design of the study.
Table 1. Experimental Design Groups
a. Measures
All the scales employed in the study were borrowed from the corresponding literature and adjusted for the purpose of this study. Situational involvement level of consumers was measured by the three items semantic differential scale used by Rosbergen et al.
(1997) who borrowed it from the Jain and Srinivasan (1990) and reported a construct reliability of .83. A second manipulation factor, the competence strength of the country of know-how on the service subject was measured by employing the three items, nine-point Likert-type scale developed by Maheswaran (1994). The author reported a strong reliability scores (.90, .90 and .81) for three consecutive studies. For the purpose of this study, the scale was converted into five points Likert-Type scale.
The final manipulation factor, the perceived eligibility of service provider, was measured by borrowing five items semantic differential scale used by Parameswaran and Pisharodi (1994). The authors reported a reliability score of .872 in their study.
For the purpose of this study, the scale was adjusted to three items reflecting the eligibility criteria. Perceived quality of service was measured by employing the reliability dimension of SERVQUAL scale developed by Parasuraman et al. (1991) and modified by Taylor (1995). The author reported for this five items sevent points Likert-Type scale a reliability score of .86. Finally, the purchase intention was measured by employing the three items seven-point Likert-type scale developed by Taylor and Baker (1994). The authors reported a reliability score of .94 for this scale.
For the purpose of this study, the scale was converted into five points Likert-Type scale.
Due to the modifications made, internal reliabilities of the scales were checked by conducting an exploratory factor analysis. The results of the exploratory factor analysis confirmed the internal consistencies of all constructs employed in the study.
The results of the exploratory factor analysis are summarized in Table 2.
Table 2. Results of the Exploratory Factor Analysis
3.2. Analysis
All statistical analysis and hypothesis testing were conducted by using Statistical Package for Social Sciences (SPSS) software version 25. The manipulation effects were tested with a series of paired samples t-test and the main effects of country of know-how and country of personnel on perceived quality and purchase intention were tested with a series of multivariate analysis of variance (MANOVA).
4. RESULTS
4.1. The Effect of Country of Know-How on Perceived Quality and Purchase Intentions
The effect of country of know-how on perceived quality and purchase intentions of consumers was measured by conducting a series of MANOVA tests in English language education as well as Waltz dance training service groups.
The results of the test in English teaching course confirmed the significant effect of country of know-how on perceived quality and purchase intentions. When considered jointly, there was a significant difference on consumers’ perception of service quality and purchase intentions between those evaluated US teachers and Turkish teachers in terms of English language training for their children (Wilks’ Λ2 = .116, F(2,97)=369.385, p=.000, partial η2= .88). In order to measure the separate effects of country of know-how on perceived service quality and purchase intentions, a series
of ANOVA tests were conducted. The results confirmed that there was a significant difference on the perceptions of service quality between those evaluated US teachers and Turkish teachers for the English language training of their children, F(1,98)=279.680, p=.000, partial η2= .74, with US teachers (M=4.36) received higher scores than Turkish teachers (M=2.36). The results also confirm that there is a significant difference between the two groups of consumers’ purchase intentions who evaluated US teachers and Turkish teachers, F(1,98)=612.500, p=.000, partial η2= .86.
US teachers received higher scores (M=4.80) than Turkish teachers (M=2.80) in generating purchase intentions.
The results of the test in Waltz training service also confirmed the significant effect of country of know-how on perceived quality and purchase intentions of consumers.
Parallel to English language education results, when considered jointly, there was a significant difference on consumers’ perception of service quality and purchase intentions between those evaluated Austrian trainers and Turkish trainers for the Waltz training service for their children (Wilks’ Λ2 = .122, F(2,97)=349.687, p=.000, partial η2= .87). In order to measure the separate effects of country of know-how on perceived service quality and purchase intentions, a series of ANOVA tests were conducted. The results confirmed that there was a significant difference on the perceptions of service quality between those evaluated Austrian trainers and Turkish trainers for the Waltz training service for their children, F(1,98)=190.717, p=.000, partial η2= .66, with Austrian trainers (M=4.60) received higher scores than Turkish trainers (M=3.08). The results also confirm that there is a significant difference between the two groups of consumers’ purchase intentions who evaluated Austrian trainers and Turkish trainers, F(1,98)=544.654, p=.000, partial η2= .85. Austrian trainers received higher scores (M=4.60) than Turkish teachers (M=1.88) in generating purchase intentions.
These results lead us to accept H1 and H2.
4.2. The Effect of Country of Personnel on Perceived Quality and Purchase Intentions
The effect of country of personnel on perceived quality and purchase intentions of consumers was measured by conducting a series of MANOVA tests in nanny service as well as ballet training service groups.
The results of the test in nanny services confirmed the significant effect of country of personnel on perceived quality and purchase intentions. When considered jointly, there was a significant difference on consumers’ perception of service quality and purchase intentions between those evaluated nannies from Philippines and nannies from Turkey in terms of nanny services for their children (Wilks’ Λ2 = .135, F(2,97)=310.140, p=.000, partial η2= .86). In order to measure the separate effects of country of personnel on perceived service quality and purchase intentions, a series of ANOVA tests were conducted. The results confirmed that there was a significant
difference on the perceptions of service quality between those evaluated nannies from Philippines and nannies from Turkey in terms of nanny services for their children, F(1,98)=109.180, p=.000, partial η2= .52, with nannies from Philippines (M=4.66) received higher scores than Turkish nannies (M=3.66). The results also confirm that there is a significant difference between the two groups of consumers’ purchase intentions who evaluated nannies from Philippines and nannies from Turkey, F(1,98)=571.096, p=.000, partial η2= .85. Nannies from Philippines received higher scores (M=4.78) than Turkish teachers (M=2.78) in generating purchase intentions.
The results of the test in Ballet training service also confirmed the significant effect of country of personnel on perceived quality and purchase intentions of consumers.
Parallel to the results in nanny services, when considered jointly, there was a significant difference on consumers’ perception of service quality and purchase intentions between those evaluated Russian trainers and Turkish trainers in terms of ballet training service for their children (Wilks’ Λ2 = .354, F(2,97)=88.384, p=.000, partial η2= .64). In order to measure the separate effects of country of personnel on perceived service quality and purchase intentions, a series of ANOVA tests were conducted. The results confirmed that there was a significant difference on the perceptions of service quality between those evaluated Russian trainers and Turkish trainers in terms of ballet training service for their children, F(1,98)=100.340, p=.000, partial η2= .50, with Russian trainers (M=4.48) received higher scores than Turkish trainers (M=3.40). The results also confirm that there is a significant difference between the two groups of consumers’ purchase intentions who evaluated Russian trainers and Turkish trainers, F(1,98)=153.740, p=.000, partial η2= .61. Russian trainers received higher scores (M=4.64) than Turkish trainers (M=3.38) in generating purchase intentions.
These results lead us to accept H3 and H4.
4.3. The Moderating Role of Involvement Level on the Effects of Country of Know-How and Country of Personnel
Following the confirmation of the statistically significant effects of country of origin and country of personnel on the perceived service quality and purchase intentions of consumers in different service types, a comparison of partial eta square scores between high and low involvement services were made to explore the moderating role of involvement level on these effects.
The comparison of partial eta square confirms the moderating role of involvement level on the effect of country of know-how. MANOVA test resulted in higher scores of partial eta square in English language services (η2= .88) than Waltz training services (η2= .87) where the former received higher score in involvement level. The effect of country of know-how on perceived service quality is higher on English teaching service (η2= .74) than Waltz dance training (η2= .66), where the former service type is the one which scored higher involvement level. Similarly, the effect of
country of know-how on purchase intentions of consumers is higher on English teaching service (η2= .86) than Waltz dance training (η2= .85). These results lead us to accept H5 and H6.
Parallel to the findings related to effects of country of know-how, the comparison of partial eta square also confirmed the moderating role of involvement level on the effect of country of personnel. MANOVA test resulted in higher scores of partial eta square in nanny services (η2= .86) than ballet training services (η2= .64) where the former received higher score in involvement level. The effect of country of personnel on perceived service quality is higher on nanny services (η2= .52) than ballet training services (η2= .50), where the former service type is the one which scored higher involvement level. Similarly, the effect of country of personnel on purchase intentions of consumers is higher on nanny service (η2= .85) than ballet training services (η2=
.61). These results lead us to accept H7 and H8.
5. DISCUSSION
The findings in this study needs to be discussed and elaborated in comparison with the previous findings in the literature. The main objective of this study was to measure the effect of two-sub dimensions of country of origin, namely country of know-how and country of personnel, on the perceived quality and purchase intentions in services context. In this perspective, there are two important contributions of this study: First, the study contributes to the existing literature by focusing on the country of origin effect in the context of services. Compared to physical products, there is relatively low number of studies focusing on this subject in the current literature and this brings the necessity of focusing on this area (Javalgi et al. 2001). Second, the study focuses on the untapped area of the country of origin construct by measuring the effect of its two sub-dimensions on perceived quality and purchase intentions in several service types. This contributes to the better understanding of the effects of these two sub- dimensions and sheds light for future studies.
The results of the study confirm the significant effect of these two sub-dimensions on the two constructs mentioned above in different service types. This is an expected result considering the previous findings in the literature which confirm the significant effect of country of origin on the higher level (Bose and Ponman, 2011; Pecotich et al. 1996; Shaffer and O’Hara, 1995). However, when we consider the sub-dimensions of country of origin, there are almost no studies yet, which focus on the effect of these two sub-dimensions except the study of Guilhoto (2018).
The results of this study confirm that country of know how information affects the service quality perception and purchase intentions of consumers in two types of services, namely English language course and Waltz dance training. Similarly, country of personnel information was also found to be effective on two constructs in nanny services and ballet training services. Thus, when consumers are exposed to the country of origin information of the service, the competence of the country on the
service offered affects positively the quality perception as well as the purchase intention of consumers in language education and dance training services. When the country of the service provider is the one which is attributed as the more competent one, like United States in English language course, this leads to higher perceived quality and purchase intentions. Similarly, when the service provider personnel are the one which is attributed as the more eligible one in terms of nationality, like Austrian trainer in Waltz training course, this also leads to higher perceived quality and purchase intentions. These findings are the two important contributions of this study in services context.
Another important objective of this study was to measure the moderating effect of situational involvement level of consumers on this relationship. There are many studies which focus on the effect of involvement in physical products and services contexts with different definitions and conceptualization of the construct (Baker et al.
2009; Bienstock and Stafford, 2006). The results of these studies confirm the direct and indirect effects of involvement on different dimensions of consumer behavior (Edgett and Cullen, 1993; Suh et al. 2008; Varki and Wong, 2003). However, there is a lack of studies which focus on the effect of situational involvement level on the two sub-dimensions of country of origin. The results of this study confirm the significant moderating role of situational involvement level of consumers on the effect of two sub-dimensions of country of origin. The effect of country of know-how information becomes more effective in cases where the service which is under evaluation leads to high level of situational involvement for the consumer. However, in services with lower level of involvement, this effect of country of know-how becomes weaker.
Similarly, the effect of country of personnel also leads to stronger effects when the involvement level is high and it becomes weaker in cases of lower level of situational involvement. Since there are no any other studies yet which focused on these relationships, these findings are important contributions of this study which shed light to an unexplored area of the relationship between country of origin, services and involvement constructs.
6. MANAGERIAL IMPLICATIONS, LIMITATIONS & FUTURE RESEARCH
6.1. Managerial Implications
The results which are reported in this study confirm the importance of the roles played by the involvement level as well as the characteristics of the service provider in consumers’ evaluation process of services. Thus, the study confirms the effect of such extrinsic cues on consumer decision making in services context. Several managerial implications based on the findings of this study need to be discussed and elaborated further.
Two important service provider characteristics focused in this study were country of know-how and country of personnel. The results indicate that managers who provide
a service which is not originated in their home country, that is international in its nature, should take into consideration the existence of opportunities as well as risks derived from the effects of these two constructs.
Considering the effect of country of know-how, those service providers who are established in or have an organic link with the country where the service is originated or invented, they will have a source advantage derived by the country of know how effect. Those international service providers should benefit from the source advantage by developing and communicating this secondary association as a part of their points of difference against the local or other international service providers. On the other hand, those service providers who do not have any organic link with the source country, may have a competitive disadvantage compared to service providers linked to the source country. In order to mitigate the risks derived from the source disadvantage, local service providers should develop secondary associations which connect their services to the source country. There are several ways to develop such associations such as involving into a franchise agreement, making a license agreement or know-how transfer. Whatever is the way local service providers use, this established link should be communicated with the consumers in an effective way.
Thus, local service providers should include the secondary associations related to the source country in their points of parity against the other local or international competitors.
When the eligibility or superiority of providing a specific type of service is associated with a specific country, the natives of this country who perform the service generally benefit from this native advantage in terms of consumer evaluations. When a service provider delivers the services via the service performers from the source countries of such services, they benefit from the native advantage derived by the country of personnel effect. In this perspective, those service providers who already have the service performers from these source countries, in order to benefit from the native advantage, they should develop this secondary association and communicate it as their points of difference against the local and international competitors who do not provide such performers. On the other hand, those service providers who do not have such performers, they should include into their service mix those native performers associated with the service type. If they do not have these chances, then they should try to develop the secondary associations by leveraging the eligibility of their performers with a link to the source country. This can be done by providing the performers to be trained in the source country and articulating this in the communication as a point of parity against the international competitors from the source country.
Finally, another important result of this study, which has some managerial implications, is the effect of involvement level on the relationship between the sub- dimensions of country of origin and the service evaluations. The results of the study confirm that in case when the situational involvement of consumer in the service purchased situation is higher, than the effect of both country of know-how and country
of personnel becomes more positive on service evaluations. In the light of this finding, we can conclude that those service providers which provide high involvement services and have source or native advantage should articulate the severe consequences of wrong decision of purchasing the service from a service provider who is not associated with the source country or native personnel. On the other hand, if the service is a lower involvement one, then the same provider with the source or native advantage should try to increase the involvement level by focusing on the negative consequences and risk associated with a poor service. This will increase the benefit perception related to the source or native advantage of the service provider. Service providers with no source or native advantage, whether the service is a low or high involvement type, they should try to assure the customers with some warranty programs that there will be no losses in case of unsatisfactory services.
Limitations and Suggestions for Future Research
There are some limitations of this study and suggestions for future research which needs to be mentioned. The study was conducted in the services context with four types of services including English language education, Waltz training, nanny services and ballet training. The study can be extended to different types of services with different levels of involvement in order to support the generalizability. A cross country analysis would be appropriate for future studies since country of know-how and country of personnel may have differing effects across different cultures and communities.
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