Quality and Safety Are Cited Among Top Concerns of Manufacturers and Consumers

Underwriters Laboratories (UL), a global safety and science company, released its annual study called The Product Mindset, which examines manufacturer and consumer perceptions about how products are made, sold, bought and consumed. For the study, 1,201 consumers and 1,202 manufacturers in China, Germany, India and the United States were interviewed across an array of topics related to safety, performance, innovation and sustainability.

Some key findings include:

• – over three-fourths (76 percent) of manufacturers in U.S., China, India, Germany say global sourcing improves product quality.
• – 75 percent of manufacturers in these same countries think consumers are growing more concerned about the ethical and fair treatment of workers at all levels of the supply chain
• – 59 percent of consumers in the four countries say manufacturers value sales more than product safety

In addition, the study found that consumers have a more nuanced understanding of safety-related issues. Food safety and the safety of home-building materials are of more concern to consumers than the safety of high-tech consumer electronics or smart appliances. Foodborne illness and chemical additives are the top concerns for food safety; toxin emissions are the top safety concern for home building materials; online security is the top issue for high tech electronics; and malfunctions are the top safety concerns for smart appliances.

Certainty is being demanded by both manufacturers and consumers, and this certainty is being delivered through quality. Over the next 2-3 years, manufacturers site quality as having the biggest impact on their ability to compete by a margin of 2 to 1. In 2011, innovation was ranked highest (though quality was not a choice last year.) Quality is the #1 reason consumers select the products they buy across all product categories (versus other options such as cost, features, brand name, and design.) 91% of manufacturers believe that performance testing is becoming more important.

Across categories and regions, safety continues to be a crucial consideration for both manufactures and consumers. This year’s prevailing uncertainty and instability may have made safety a more important consideration as a way to counter fear, ambiguity and anxiety.

• · 73% of manufacturers strongly agree that product safety is becoming more important, and 82% strongly agree that product safety impacts their ability to compete.
• 89% of manufacturers agree that consumers are becoming more aware and better educated; 87% that government regulations are becoming more stringent; 87% that consumer confidence in product safety is increasing; and 83% that consumers are requesting more safety information.
• Only 36% of consumers strongly believe that manufacturers conduct thorough enough product safety testing before introducing new products to the market.
• 59% of consumers agree overall that manufacturers value sales more than product safety.
• Environmental focus, depicted last year as more desired than imperative, has moved forward. While the environment has not supplanted product quality or safety as a fundamental consideration, it has progressed as a fundamental consideration. Both manufacturers and consumers seem more sophisticated about their thinking related to the environment and are more aware of its importance.
• Between 80-90% of manufacturers agree that sustainability-related factors are essential to the success of their business (Chinese and Indian manufactures more so than those in Germany and the US).
• 53% of manufacturers site that consumers are demanding more eco-friendly products at the same cost as non-eco-friendly products.
• More than half of consumers in India and China are willing to pay more for eco-friendly products; while only 37% and 33% in the US and Germany respectively, are willing to pay more.

The Essential Supply Chain

• Manufacturers are focusing on their supply chains as a response to the complexity and shifting wants of the marketplace. Simultaneously, supply chains are more complex, global and difficult to control, and consumers and the media have access to information about supply chains like never before.
• 76% of manufacturers believe global sourcing is a means to improve product quality; a 19% increase from what manufacturers noted last year, reflecting manufacturers’ need to enhance competitiveness in a volatile and financially challenged global marketplace. The global differences include 87%-88% of Chinese and Indian manufacturers viewing global sourcing as improving quality, while 71% of German and only 57% of US manufacturers viewing global sourcing as improving quality.
• 46% of manufacturers will be sourcing more from other countries over the next five years, and of these, 79% will add countries from which they source rather than replace their existing sources with new ones.

Ingredients Matter

• There is an increasing awareness on components’ role in product quality among both consumers and manufacturers.
• 68% of manufactures report that it is very important to clearly show consumers what ingredients/components are included in their products.
• Only 30% of consumers strongly believe that manufactures use the best possible ingredients, raw materials or components in the products they buy.

Origin is Critical

• Sourcing is more international than ever before, often as a means for manufacturers to both reduce costs and improve quality. Consumers are increasingly aware of this globalization and often wary of associated potential risks.
• 57% of consumers are aware of which country the products they purchase are manufactured in.
• Both manufacturers and consumers from across the globe rate the quality of sourced materials from developed countries as superior to those from developing countries.
• In conclusion, the 2012 Product Mindset can be largely understood as a quest for certainty in an uncertain world. Quality, safety and the environment were affirmed as priorities, and the ultimate impact is seen through the supply chain where global sourcing and an emphasis on ingredients and components demonstrate that where a product is made, how it’s made and what’s in it are becoming paramount.

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