Young Consumers Don’t Care Where It Came From
An article on the Ad Age website contends that consumers are not motivated to buy a particular product based on where it comes from.
According to the article, consumers once sought out particular products based on a country’s reputation for manufacturing excellent goods. If a consumer wanted consumer electronics, they would compare Japanese manufacturers. If they wanted beer, then perhaps they would seek out a brand from Belgium (we’d go with Germany, ourselves).
Today, according to a study conducted by Anderson Analytics, most college-aged consumers do not even know where their favorite products originate. More importantly, they don’t care.
Tom Anderson, managing partner with the firm, told AdAge.com, “For the most part, this next generation of educated American consumers either have no clue where the brands they use come from or simply assume everything comes from the United States, Japan or Germany.”
According to the research, less than five percent of college-age consumers knew that Nokia phones are from Finland. Nearly 54 percent believed the phones were manufactured in Japan.
Many others including Lego, Samsung and Adidas were also matched to countries other than those in which the brand originated.
Among those that consumers were able to match up was IKEA, which itself was only matched correctly to Sweden by 31.2 percent. Nearly one in four thought IKEA was an American company.
Jupiter Research analyst Emily Riley told AdAge.com that college-age consumers may eventually come to know where the brands they buy originate from.
“As consumers age, we see value for quality become more of a concern and that’s when things like geographic associations come into play,” Ms. Riley said. “Teens may be too young to even know those, and are probably too young to care.”
The lesson to be learned here, some say, is that no amount of wrapping a brand in a particular country’s flag is going to have much effect on younger consumers decision to purchase.
Jonathan Paisner, brand director at CoreBrands, said, “This younger generation has a more cynical perspective on things like patriotism, and that [marketing approach] can strike this group as heavy-handed or an old-world approach. … That can be kind of a dangerous star to hitch yourself to.”
Discussion Questions: Does a national or other geographic heritage have any useful role to play in brand marketing today? Will consumers who do not know or care to know about a brand’s country of origin change in that respect as they age?
Based on recent pet food and toothpaste incidents, I think it will be changing! I know that young Chinese really like USA and other Western Brands and the young people we interview are very concerned about sustainability and the situation under which the product was produced, I think this group will be the drivers for much of the new sustainability direction, including Fair Trade Products, sustainable products and packages, etc. I also believe that geographic identification and product/package “report cards” will gain in importance in the future–and it is already starting to happen!
Brands are increasingly multinational, and who’s interested in ancient history and stereotypes? Millions of “Japanese” and “Korean” cars are made in North America. The BMW Z4 is assembled in the US. Millions of “American” cars are assembled in Mexico and Canada. Consumers are interested in merit, value, quality, features, and price. For a brief time, radio ads for Jaguar pronounced the brand name the British way, but even that gimmick was dropped. When VW’s became the first popular import, their marketing didn’t appeal to German stereotypes. They stuck to the car’s features and value. Ikea stores use Swedish colors and Swedish foods, but their success is totally based on value for the price, not “nationality.” And most of the merchandise comes from Asia, anyway.
This research study may reflect today’s college students’ view. But, it would be important to know: a) which college students, and b) from which U.S. states did the study secure the research results.
It is noted that young adults in the Western states/universities would be much more prone to product origin, even though this current college generation will be the consumers with the largest and most discretionary income in U.S. history, the Xers should be the focus to build Brand development and equity! For these consumers are spending at record clips! m
Hmmmmmmmmmmm
I think the study would have been more valuable if they had contrasted the survey against a survey of a different age group. Yes the study does show that younger consumers may not be aware or be concerned of geographic origins and associations of consumer goods, but there is no control group to compare it to see how different these numbers are for a different age group. As Emily Riley pointed out in the study, older consumers can be expected to be more aware of geographic origins of well known brands just from sheer experience. What I would like to know is, is this an age thing or a generation thing? In other words, as these young consumers age, do you expect them to develop a much greater recognition of geographic associations of brands and if they do, will they still be indifferent in their brand perceptions base don these associations?
I have a 21 year old daughter. She is a “woman of the world.” She speaks a couple of languages fluently and is conversational with another. She and her friends fit the American dream as consumers. They are young, educated, well traveled and have disposable income. They are also very much into “Martial Arts” so to speak. How you might ask? Well, each of them have advance belts in the deadly skill of SHOPPING. They are each able to hunt, kill and acquire products and services at an amazing rate! I joke, but it’s true.
These young people fit the argument perfectly that Ad Age has constructed. They see the world differently than the generation before them. They are all about efficacy, fashion and value. They couldn’t care less where the product comes from. Country of origin is not important unless there is some public issue that makes the country of origin not fashionable. They simply are concerned about the product performing its stated purpose, getting it at a value and the fashion factor of it with their friends.
If this is typical of the next wave of spenders in our economy, then Ad Age is correct. As merchants and manufacturers, we may want to rethink some of the traditional loyalty strategies based on “The Flag.” Arguably, modern manufacturing in almost any category can hardly say that my product is “made in _____.” Why? Because component ingredients or parts come from all over the world in many of the products we use everyday. That’s true simply due to cost. Manufacturers are tying to create profit while maintaining a product that works. To do this often going abroad is necessary. So waving a flag in many cases would be wildly hypocritical would it not? There is little doubt that in a test, many consumers would fail when asked the origin of today’s popular brands. Most would assign origin of production based on the phonetic sound of the brand.
It seems clear then that making a product or providing a service that perform in a manner consistent with that product’s brand promise is the smartest marketing ploy. Kids, even the 20 somethings, care about other things than where it came from. Let’s provide the consumer what they want while we show them new ways to discover what they need.
The ability to determine the true country of origin on many products such as automobiles has become so difficult that it has become a non-issue for most. Some old stereotypes die hard for me such as cars from Korea are inferior. German cars were the best in quality but that has now reversed with Mercedes at the bottom and Lexus at the top. Products from China used to be thought of as cheap and poor in quality but at least in my hobby of model railroading that has done an 180 degree turnaround. Now almost all quality products are coming from China with more detail, quality and at a cheaper price. Even Lionel recently shifted all their production to China from Michigan.
Marketers can change young people’s ideas about this issue with the right campaigns if they feel that there is enough incentive to do so. It can turn around and hurt you though, if you’re not careful. After building a successful “Buy American” campaign, when a manufacturer gives up and shifts production overseas it can be pretty embarrassing and self-defeating.
Millennials will use country or region of origin as a placeholder for authenticity, regarding ingredients, formulation or design. Place can also be a surrogate for exoticism and higher margin.
Ironically, familiarity breeds contempt–if the product is too close to home, it loses some cache.
Even young consumers will quickly get wise to the origins of their purchases when their pets begin dying from Chinese pet food. Just as it was when “Made In Japan” indicated poor quality, today’s young consumers will expect high quality and avoid poor quality. Thus, they’ll be more sensitive to the geographical origin of things to avoid than things to seek out.
After spending over 26 years working with students at the campus level I have seen a tremendous growth in the amount of requests for the origin of goods. Much of that has been in the food arena but quite a bit was moving into other products they were purchasing. The questions now are raised because of more sustainability interest rather than which company is producing the goods. The interest lies in the amount of impact on the environment by shipping goods great distances (a need to source locally), the amount of pollution controls on companies in that country, and for a lessor amount the social interests whether it be worker rights or political.
Just recently I left the campus level to go to a more administrative role across the 10 campuses, 5 medical centers, and 3 national labs of the University of California where our efforts are focused on strategic sourcing for these communities as a whole. In managing the processes for these bids we are very careful to inquire about the origin of the products during the RFP process. We include in most RFP’s quality points for efforts which deal with sustainability issues including shipping and distances. These points actually are part of the process in determining the final awardee of goods and services.
I think the survey information is actually too generalized. I think, as more education is placed behind sustainability and environmental issues, the question of where something is made will grow in interest to the college-age consumers.
Does a national or other geographic heritage have any useful role to play in brand marketing today? Yes, depending on the market segment by age group and the product. For example, baby boomers still associate products made in Japan and Germany as high quality products, while products made in China carry a connotation of lower quality, if not poor quality. Similarly, I would not buy a BMW car made or assembled outside Germany.
I do not think consumers who do not know or care to know about a brand’s country of origin change in that respect as they age. For example, my children who are in their late twenties do not even think about where a product is made and I do not think that will change as they grow older. This is simply because they grew up in a far more globalised world than my generation did.
A few years back I managed a store that specialized in modern design for the home and office. We sold high end brands like Alessi and Kosta Boda. The origin of the products was just as important as the products themselves! Nothing in my store was made in China. We always had a label that told the manufacturer, designer, country of origin and price. The customer demanded it. Everything we sold was either made in the EU, Japan or the US. If at one time it was made in the USA but they switched to outsourcing to China we discontinued the line or we sent the line back for a refund.
In our increasingly global economy, the country or place of origin does seem to have less intrinsic value or meaning to consumers, particularly younger consumers.
However, there are certainly many cases where tradition or marketing has made the origin of a product a key to the perceived value. Who would not assign more value to a wine from Napa than one from Bakersfield or Idaho? On the other hand an Idaho potato may have more cache than one from Napa.
There are many instances where value is still perceived from origin. Why do we prefer Chilean Sea Bass or Maine lobsters? I would submit that origin is still a valuable marketing attribute when it is associated with quality or value.
Back in the mid-70s there was a definite “buy American” movement afoot, especially to offset Japanese carmakers’ early gains in market share and visibility. Unfortunately, “buy American” at the time often meant buying a Ford Pinto or Plymouth Volare as the result. The parents of today’s younger consumers learned a hard lesson about buying for “country of origin” instead of buying for quality…and one hopes that U.S. automakers learned the same lesson.
“Country of origin” is a much cloudier issue today, as global sourcing and trade agreements have changed the manufacturing landscape over the past 20 years. That “Japanese” car is just as likely to be built in Kentucky with globally sourced parts, and that “American” car may have been built in Mexico. Likewise, most U.S. general merchandise manufacturers source and build offshore because retailers demand the cost savings.
So the perspective of today’s younger consumer has been shaped by this new reality as well as by their own embrace of multiculturalism. I don’t see this trend reversing itself anytime soon, if ever.
Young consumers have a tendency to care more about brands and where the brands are actually purchased, more than they care about geographic heritage or product origin or nationality. In my view, here are just a few reasons why now, and why it is not likely to change with age:
o The internet and easier access to world travel has made the globe just one economy, at least in perception.
o The automotive industry has played a role to change the perception that American made products are necessarily the best in the world.
o Consumers have become impassive about foreign made products since so many consumer goods have origins from other parts of the world.
o Consumers are more interested in price, value, and affordability.
I don’t believe these trends will change anytime soon, nor with age, unless we encounter national or world events that result in variance of attitudes, toward either economic patriotism or specific concerns toward any given nation or part of the world.
The kids are right: almost nothing is made wholly in one place anymore. There are foreign components in most every product made anywhere. (It’s called cross-border production sharing, a trend I identified some 20 years ago.) We live in a truly global economy, with outsourcing, fracturing and subcontracting.
The product (and selling) keys are quality, utility and affordability. Those features will trump patriotism, or even previous reputation, every time, in any product, from cars to shampoo.
Consumers have relationships with companies, providers of goods and services, and retailers. With countries? Not so much.
Country of origin does matter to consumers in developing countries. Research I’ve done has shown that consumers in China, for example, value imported goods (esp. luxury goods) that are clearly identified as having been manufactured outside of their country.
For U.S. consumers, though, I would agree with the article’s thrust.
Someone should write a book on this. They could call it “The World Is Flat.” I bet it would sell.
As a counter balance, I read an article in The Economist a couple of weeks ago about how Boots, the UK pharmacy (and other European retailers) will start labeling their products with a carbon footprint indicator. This will obviously favor local products (if the consumers care).
Just yesterday, I received a report from Trend Watching where this was the core theme:
(STILL) MADE HERE encompasses new and enduring manufacturers and purveyors of the local. In a world that is seemingly ruled by globalization, mass production and ‘cheapest of the cheapest’, a growing number of consumers are seeking out the local, and thereby the authentic, the storied, the eco-friendly and the obscure.”
If you’re competing in the big box area, I agree with the premise that most consumers don’t care. However, if you’re in a niche market, origin can be a selling point.
Many Y’ers and other young consumers are more interested in trends, “the look” and the “newest thing” at this stage of their lives. Where an item comes from or how long it lasts is really not part of their buying equation. Also, the willingness to buy such things as knockoffs of French designer handbags that they know full well are not authentic is indicative. Earlier generations with less disposable income were taught the “you get what you pay for” lesson. However now, I think, looking for and noticing quality in their purchases is an issue that sneaks up on people as they age and gain experience, and that is when the tradition of where things are made becomes more important. It is not a nationalistic/patriotic thing, it is that certain countries and cultures have been making certain products for generations and are really good at it. Joy’s comments above reflect this process and I agree with her insights.
Recently we were invited to a casual dinner at the home of a young married couple who are the children of friends. The casual dishes we ate from were part of the wedding registry two years ago from a reputable store. They were made in China. The dishware is cute and trendy but the glaze finish is already showing wear and the colors are fading fast. Soon they will be part of our throwaway society. In contrast, the casual dishes her mother received as wedding gifts almost 35 years ago (English Stoneware) are still in use and have withstood years of dishwashing, microwaving and growing children. They are in better condition today than the two year old dishes. They are classically fashionable. There are still replacements available. We all commented on it and laughed about it.
Sure, things they are a’changing, but there will continue to be a healthy market for German whites, Italian leather shoes, English tweeds and Dutch cheeses. They are the best in the world and knowledgeable people will seek them out.
Consumer loyalty has to be earned or bought. Apple computer is a prime example of a company who has earned loyalty. Trader Joe’s and Publix are retailers who have earned loyalty. If you don’t think young consumers are loyal, you don’t have a child. They are brand loyal and brand conscious. Where the brand comes from seems to have nothing to do with loyalty. In this day and time if you are loyal to a brand because you think you know where it comes from, in most cases you aren’t very informed. Check out that Buick and see where it’s made! Personally I would rather spend my money with a Japanese company employing Americans than an American company laying off American workers and moving production to Canada and Mexico. Country of origin and the location of a company’s headquarters would seem to have little to do with each other.