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One of the problems that have dogged Asian companies when trying to build and promote their brands domestically and internationally is the effect of the country of origin on the brand image. In many Asian countries, for example, it is by no means uncommon to hear shoppers exclaim statements such as: "I do not want to buy that brand - it is made here."

Similarly, buyers in foreign markets have strong doubts about the quality of Asian products. Traditionally, Asian countries have suffered from "cheap" and "poor quality" images, especially with respect to their manufactured goods. Only Japan has managed to overcome this problem, and it has taken more than two decades or so, with major brands such as Sony and Canon leading the way. Other Asian countries, including India, are still struggling to overcome negative perceptions held by local and foreign consumers. But the fact is, Asian production quality is just as good as that of many western countries, according to the big-brand companies. For example, PepsiCo says that its China production facility recently won the Best Quality Award for PepsiCo International. Carlsberg's joint venture in Malaysia won the 1998 World Quality Award for Carlsberg, beating every brew from all countries with local production facilities, including the beer brewed in the home country of Denmark.

So, the reality is that international brands are perceived to offer better intrinsic quality than local ones. Two key factors govern the significance of the country of origin to consumers, according to the research: -