Customer Closeness Emerges As Emerging Market Strategy

More than 30 years ago, the Carpenters scored big with a recording of "Close to You." These days, manufacturers are making that song title part of their global strategies and hoping for similar success.

"Manufacturers are setting up factories in emerging markets as part of a strategy to have their production operations close to new customers -- not just as a means to flee high labor costs in their home markets as commonly thought," said KPMG LLP on March 27 as it released the results of a recent survey of 232 global manufacturing executives. Indeed, the survey showed labor costs to be a relatively minor factor in determining production locations, cited by only 20% of the executives.

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