Product Evaluations Following Multinational Corporation Value-Chain Relocation: Experiments in Korea

Purpose - Recently, many multinational corporations have relocated value chains to obtain the advantage of national differences in the cost and quality of factors of production as well as to adjust to changes in international environments. In reality, many governments have attracted multinational corporation value-chain realignment. Although country-of-manufacture in addition to brand origin could be a critical concern for consumers in many product categories, few studies have provided an understanding of consumer responses to value-chain relocation. We attempted to explain and predict the effects of multinational corporation value-chain relocation on product evaluations. In addition, the moderation effects of product involvement were investigated on the effects of multinational corporation value-chain relocation on product evaluations. Design/Methodology - Two experimental studies were conducted. In Study 1, based on a within- subjects design, participants were exposed to a message of relocation of Korean, American, or Chinese brands planning to relocate manufacturing facilities from China to Korea or America. Study 2 assessed the effects of product involvement to each supposed relocation. In our study, participants were exposed between-subjects to two relocation messages with three countries of relocation. Findings - The results of Study 1 showed that all relocation types positively affect product evaluations. Nonetheless, the results of Study 2 presented that product involvement partially affects product evaluations. In a high involvement product, three relocation scenarios (an emerging country to a developed country and to semi-developed country) influence consumer attitudes and purchase intention. In a low involvement product, there are insignificant differences in all relocation scenarios. Originality/value - Our study filled a research gap in international marketing academia and suggested international business strategies for multinational corporations that desire to pursue value-chain relocation around the globe.