U.S. Manufacturers Must Face Industry Perception Issues

April 22, 2008
Americans' darkening views of their nation's products seem tied to their take on product traits as much as waning patriotic impulses and disillusionment with foreign policy.

Americans historically regard products manufactured in the United States as the best anywhere. They still do. But, as Chinese factories pump out prodigious amounts of everything from pincushions to pianos -- overwhelming wide swaths of the American market -- consumers' perceptions are being reshaped and American products' pre-eminence challenged. Manufacturers need to address this situation -- at a basic level -- before these changes become ingrained.

GfK Roper Reports routinely asks Americans which country makes the best products. Throughout much of the 1990s, the numbers who said that U.S.-made products were, broadly speaking, the best in the world increased steadily. In the past decade, however, that trend has reversed itself. The percentages have declined along all of four measured dimensions: value (down 11 percentage points) and creativity (down 9 points) as well as quality and prestige (each down 5).

The darkening of American products' image comes as Chinese products' image has been brightening. The brightening is most striking on the dimension of value -- not a surprise, given Chinese manufacturers' ability to translate advantageous labor conditions into low-priced exports. China's labor costs and its exports' prices may have begun rising, but it could take some time for Americans' perceptions of Chinese products' value to reflect that change: The percentage of Americans who feel those products provide the best value has increased 17 points in the past decade.

Beyond value, the numbers of Americans who rate Chinese products tops on creativity, quality, and prestige have also risen in the past decade. While modest, those increases are impressive in that they register despite widespread recalls of products made in China. And they extend a longer trend: The percentages of Americans who feel Chinese products are the best on all four dimensions have increased over the past 18 years by as much as 21 points.

Views of Japanese, German Products Darken

American manufacturers need not get too anxious -- yet. True, the products they make are viewed less positively than in the past. Still, "Made in America" carries a lot of clout. American products rank No. 1 on all four dimensions, and the actual shares citing those products as the best eclipse those for China by a substantial margin. No less than four in ten Americans cite their nation's products as tops on any single dimension, but no more than one in four name the Chinese'.

Moreover, America is not the only manufacturing giant whose products' image is darkening relative to China's. Not so long ago, another East Asian country, Japan, was mounting the main challenge to American products. Indeed, the only time American products have relinquished the top spot on any dimension was in 1989, when Japan led the world on creativity.

Today, however, Japanese products' position has also slipped. That in itself may for American businesses foster a sense of kinship with their Japanese counterparts, as in the period after World War II -- and before Japan began its own rise, prompting a fit of buy-America flag-waving perhaps unequaled until the immediate post-9/11 period.

Japan is not the only other major economy whose products' image has begun to tarnish a bit. German products have long boasted a relatively strong position globally on at least two dimensions, quality and prestige. In the past decade, however, Americans' views of German products have grown less positive not only on those dimensions but on value and creativity as well.

Challenge to American Manufacturers

The consistently high ratings earned by U.S. products over the years may owe in part to chauvinism -- from which no nation is, after all, immune. So it may not seem a stretch to infer that those ratings' decline may in some measure reflect increasingly negative views some Americans hold of their nation in general at a time of unpopular adventures overseas. America today is in many ways a politically polarized nation: GfK Roper research shows that self-described Democrats and Republicans disagree widely on issues like whether it is the U.S.' job to police the world. And, in the past year, the post-9/11 cross-party consensus on issues like terrorism has begun to break down.

Nevertheless, opinions of American products have grown less positive among partisans of both parties, irrespective of their positions on such issues. Americans' darkening views of their nation's products seem tied to their take on product traits as much as waning patriotic impulses, disillusionment with foreign policy, or, for that matter, any other attitude peripheral to business per se. The challenge for American manufacturers is thus clear.

They need to address the issue at the most basic product level, revving up R&D even as they step up efforts to get their message out to American consumers, a practical people more than willing to give their countrymen's efforts the benefit of the doubt. Should the trend toward more critical opinions of domestic products continue, the Chinese century could become a reality more quickly than even the most committed Sinophile might predict -- abetted, ironically enough, by the American consumer.

Phillip Lutz is a Senior Editor of GfK Roper Consulting® , which is a division of GfK Custom Research North America® . Offering more than 30 years of syndicated research and analysis, GfK Roper Consulting is responsible for GfK Roper Reports US® and GfK Roper Reports® Worldwide. In addition, in the U.S. the division has an ongoing study of consumers' attitudes towards the environment. www.gfk.com/north_america.

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