Do Manufacturers Really Know What Consumers Value?

posted on: Monday December 9, 2013

Express Singled  2In order to remain profitable, manufacturers have to be in touch with what their customers really want from them. With initiatives like lean and JIT working for many companies, manufacturers are ever aware of what will set them apart from their competitors. They have their eye on things like environmental impact, safety, timeliness, and cost to consumer. However, UL’s annual Product Mindset study shows some gaps in what manufacturers believe consumers want and actual consumer preferences (study results).   As Joel Hans points out in Manufacturing.net’s article, “What Aren’t Manufacturers And Customers Telling Each Other,” these gaps may be the difference between a company that succeeds and that which does not.

Hans quotes Keith Williams, Chief Executive Officer of UL, “Our research provides insight into what we believe is a tremendous opportunity for businesses in the coming years. For example, in better understanding gaps in priorities, manufacturers can uncover new ways to engage consumers in a dialogue around how their products are made and sourced to provide greater peace of mind.”

So who took the survey and what was on it? 

First understand whom UL surveyed. There is input from 1,521 manufacturers. UL describes the mix as, “Director-level executives specializing in management, research and development, marketing and sales, quality control, sustainability, product management or design.” They surveyed 1,528 consumers described as, “A representative mix of age, gender, education and income.”

The survey is divided into two categories. The first is The Fundamentals. These are considerations that are driving decision-making, and they are factors that are important to product and business success. The fundamentals are:

  • Quality
  • Cost/Price
  • Reliability
  • Performance
  • Innovation
  • Speed to Market/Newest Features

The second category is Rising Priorities. These are rated as important, but not as important as The Fundamentals. According to the Product Mindset, “Rising Priorities are growing in both visibility and relevance. They have advanced largely as a result of complexity and will likely become more important over time.” The Rising Priorities are:

  • Health Impact
  • Environmentally Friendly Manufacturing
  • Environmentally Friendly Products
  • Transparency
  • Outsourcing/Country of Origin
  • Traceability
  • Ethical Sourcing 

The Fundamentals

Participants had to rank each topic in order of most to least important. It comes as no surprise that the number one ranked factor for both manufacturers and consumers is quality.  There are some gaps in the details, however. While 91% of manufacturers agree that quality is the most important consideration, 51% of consumers believe that, regardless of quality, all manufacturers use the lowest-cost materials for their products.

This is a real opportunity for manufacturers. Those who choose materials for quality over price can take some time to educate consumers about their products and processes.  While Country of Origin ranks #4 in importance in the next section, people do associate quality with country. 60% of consumers believe that products coming from developed countries are high quality whereas only 26% believe products from emerging countries are high quality. For manufacturers whose products come from a developed country, like Germany or the US, telling consumers where the parts were made can be another advantage.

UL relates Performance and Reliability to Quality “and taken together, account for almost half of what is most important across all industries.” Indeed, consumers rate Performance second in importance; manufacturers rate it fifth. Both groups rate Reliability fourth. When talking about the quality of a product, manufacturers should definitely outline strong performance and reliability.

What is quite a large gap that may shock manufacturers is the ranking for innovation. Manufacturers rank it second, and consumers rank it dead last. Additionally, 63% of consumers believe that “Manufacturers introduce new products more quickly than consumers need them.” This is an eye opening disconnect, especially when considering what manufacturers spend on innovation in their products.

Manufacturers and consumers do agree that Cost/Price is the third most important factor in their products. This ranks highly enough that it can make a difference when a consumer is comparing to competing businesses; however, it is not so high that it outranks quality. Consumers will spend a little more to ensure they’re buying a quality product.

Rising Priorities

Here is where UL uncovered some really surprising differences in priorities. While both groups ranked Environmentally Friendly Products (EFPs) second, consumers ranked EFPs as second most in need of enhancement while manufacturers ranked it fifth in need of enhancement. Along those lines, manufacturers ranked Environmentally Friendly Manufacturing (EFM) as most important whereas consumers ranked it third. While consumers will pay more for eco-friendly products, UL writes, “…consumers seem to doubt the intentions of manufacturers in terms of their commitment to environmentally friendly products and manufacturing procedures.”

Green manufacturing is trending right now, so it is no surprise that manufacturers ranked EFM first. The output of EFPs is ever important. Along with the impact on the environment, the cost reduction in green operations is well worth the change for those manufacturers who have initiated it. However, realize that A) it is worth spending time to educate consumers about this so as to contradict the popular belief that manufacturers are dropping the ball in this area, and B) while a worthy initiative, there is something that consumers value more than the environment: Health Impact.

According to UL, “(While) 61% of manufacturers agree the impact to the environment is more important than the impact to human health, 61% of consumers agree the impact to human health is more important than the environmental impact.” In fact, consumers rate Health Impact as most important while manufacturers rate it fourth. This is a significant gap. Consider, too, that even though manufacturers agree that Health Impact is becoming a greater concern for consumers, consumers feel that manufacturers aren’t providing pertinent information about potential health impacts of their products.

Furthermore, the closer contact a product has with the human body, the more importantly consumers rate Health Impact. Products that concern consumers the most are items ingested (food), anything that goes into the body (medical devices), and products that children use.

Health Impact is an important shift in priority that manufacturers can instigate to be more successful.

Overall, despite a few significant differences in perception, consumers do feel confident in manufacturers. “Consumers appear more positive about their relationships with manufacturers, feeling increasingly respected for being informed and empowered (by 10% over last year)… and this is more true in emerging markets than in developing markets. Consumer confidence in improving product quality is also on the rise (up 5% over last year and 9% over 2011.) Manufacturers are making a good name for themselves with the public; by evaluating these survey results and making appropriate changes, manufacturers can make significant gains in both business and public perception.

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