UL Product Mindset 2012


Published on

The Product Mindset is conducted annually to help businesses better understand the growing concerns and priorities of their diverse constituents and the impact perceptions have on making, selling, buying and consuming products.

The 2012 study is based on quantitative research of manufacturers and consumers in China, India, Germany and the U.S. This year’s study uncovers the Forces creating uncertainty and shaping the market; the Attitudes that have shifted from last year’s optimism to a new realism and sophistication; Priorities like safety, quality and the environment that address fundamental demands; and the Impact created by the supply chain, globalization and traceability that defines how the priorities are delivered.

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

UL Product Mindset 2012

  1. 1. TABLE OF CONTENTS Product Mindset (prod•uct mind•set | prädekt mahynd-set | noun) A global collective consciousness that reflects how people feel about products—whether people are making and selling products or buying and consuming them. INTRODUCTION | 3 APPROACH | 4 FORCES | 5 ATTITUDES | 8 PRIORITIES | 18 IMPACT | 35 CONCLUSION | 48 SOURCES | 49 METHODOLOGY | 50 ACKNOWLEDGMENTS | 51 FURTHER INFORMATION | 51THE PRODUCT MINDSET TABLE OF CONTENTS | 2
  2. 2. INTRODUCTIONLast year UL launched The Product Mindset with the conviction that the collectivemindset has a central role in determining how products are conceived, traded,sold and delivered.In this, the study’s second year, we found some continued key findings from 2011,shifting beliefs and new attitudes that reflect the larger world we live in and theglobal forces at play.The Product Mindset is conducted annually to help businesses better understandthe growing concerns and priorities of their diverse constituents and the impactperceptions have on making, selling, buying and consuming products.THE PRODUCT MINDSET INTRODUCTION | 3
  3. 3. OUR APPROACHFor 2012, our second year of The Product Mindset, we explored marketplace trendsand primary data to better understand manufacturer and consumer insights acrossindustries, geographies and demographic segments.Similar to the 2011 study, our report centers around a quantitative survey of more than2,400 manufacturers and consumers in China, Germany, India and the United States.Four industries were selected to demonstrate a variety of product typologies thatencompass complexity, price, frequency of purchase and frequency of use: high-tech/consumer electronics, home building materials, food and smart appliances.This year’s Product Mindset seeks to better understand market forces; drivers ofdecisions; attitudes toward safety, quality, performance, sustainability and innovation;and the motivations and reasons behind these attitudes.STUDY KEYSECONDARY DATA: QUANTITATIVE DATA: QUANTITATIVE DATA:RED INDICATES MARKET- BLUE INDICATES GREEN INDICATESPLACE STATISTICS AND MANUFACTURERS. CONSUMERS.INFORMATION.THE PRODUCT MINDSET OUR APPROACH | 4
  4. 4. 1 FORCES This year, external forces have created a growing uncertainty around the world. From economic and political to social and environmental issues, pervasive instability, volatility and turbulence are causing a shift in the collective mindset. ECONOMIC INSTABILITY | 6 POLITICAL TURMOIL | 6 SUPPLY CHAIN COMPLEXITY | 6 TRANSPARENCY | 7 NATURAL DISASTERS | 7 ACTIVATED CONSUMERS | 7THE PRODUCT MINDSET FORCES | 5
  5. 5. FORCES ECONOMIC INSTABILITY POLITICAL TURMOIL SUPPLY CHAIN COMPLEXITY From the well-publicized concerns Uncertainty due to regime changes Businesses around the world agree about Europe’s economy, notably and related regional violence, nuclear that complexity is becoming part of the decline of Spain and Greece’s proliferation and unmet political their everyday reality. Many are seek- fiscal projections, to the reduction expectations continues to increase in ing solutions to help them manage of global trade growth and the 2012, creating concern throughout the increased challenges. continued anxiety about the U.S.’s global community. economic outlook, collective global financial instability is widespread. Global executives cited “growing Debt as a percentage of 2011 GDP for complexity of the supply chain” as the nations using the euro is the highest their top business pressure in a re- since the euro was introduced in 1999 1 cent study by the Aberdeen Group 8 Civil war in Syria, rebellions in Afghanistan, turbulence in Iraq, a regime change in Egypt and a Greek economy on the 64 potentially nuclear Iran are fueling verge of depression 2 concerns across the Middle East Rebels aggressively advanced in the Congo, forcing the United Nations to CFOs want closer relationships with 25% FALL IN turn to significant aerial bombard- ments; this is the heaviest fighting their suppliers to help overcome complexity in their supply chain, GDP in eastern Congo since 2008 5 according to a survey published by Basware 9 predicted by 2014 Harvard Business School alumni predict U.S. com- panies will be less able to compete in the global Global executives report in research economy over the next from The Economist that increased three years 3 complexity in their operating environ- A tense political climate developed ment or organizational structure has in Beijing due to the Communist become a bigger challenge over the Party preparing a transition to the past three years 10 Slowing growth of world trade 4 next generation of leaders 6 20 U.S. states have filed secession 14% 5% 4% petitions, revealing a divided political 2010 2011 2012 climate; Texas is growth growth growth leading with the (projected) Senior executives say their organiza- most signatures 7 tions have become more complex over the past two years, according to a recent study from KPMG 11THE PRODUCT MINDSET FORCES | 6
  6. 6. FORCES TRANSPARENCY NATURAL DISASTERS ACTIVATED CONSUMERS The public, media and shareholders Natural disasters have been Through the internet and social are all demanding more information increasing on the global stage, media, vigilant consumers are more about how companies conduct their disrupting economies, infrastructure active. With immediate access to business. Others want more informa- and trade. They are causing information, empowered consum- tion shared by corporations on how devastation in terms of loss of hu- ers are sharing their insights about they handle sensitive issues such as man lives and property as well as product defects, worker treatment ethical treatment and the counterfeit often crippling a nation’s ability to issues and recalls with the world in trade, which continues to grow. effectively respond. real time. Global retail value of undocu- Social media users write product mented trade 12 reviews to protect others from bad experiences 20 Even before Hurricane Sandy, a combination of unusual and severe weather events caused the U.S. $35 billion in damages and killed more than 700 people; dam- ages from Sandy are estimated Increase globally in companies’ anti- at $60 billion, and the full impact corruption programs over the past remains to be seen 16 two years 13 With the Recalls.gov app, consumers can scan product bar codes right on Increase in weather- the shelf and instantly receive infor- related disasters over mation about whether the products the past 30 years 17 they are considering buying have been recalled 21 5X | North America 4X | Asia 2.5X | Africa The California Transparency in Sup- 2X | Europe ply Chain Act of 2010 went into ef- fect this year, requiring retailers and Information is traveling faster and manufacturers above a certain size In 2011 widespread drought across further than ever before 22 to disclose measures used to track Africa left millions facing starvation possible slavery and human traffick- in Kenya, Somalia, Ethiopia, Eritrea Every minute: ing in their supply chains 14 and Djibouti 18 100,000 | Tweets are sent 684,478 | Pieces of content Transparency is largely responsible Monsoon floods in Pakistan 19 are shared on for stakeholder interest becoming Facebook the No. 1 driver of sustainable sup- 422 | Dead 2 MILLION | Search queries are ply chain efforts by corporations, 3,000 | Injured made on Google according to the 2012 Malk Supply Chain study 15 15,000 | Villages 48 HOURS | Of video are uploaded affected to YouTube 3,600 | Photos are shared on InstagramTHE PRODUCT MINDSET FORCES | 7
  7. 7. 2 ATTITUDES The overarching response to the growing uncertainty around the world is an attitude shift from optimism to realism. The attitudes that comprise today’s realism manifest in a new commitment to fundamental priorities for manufacturers and consumers. OPTIMISM GIVES WAY TO REALISM | 9 A MORE NUANCED AND SOPHISTICATED CONSUMER | 14 UNDERSTANDING OF SAFETYTHE PRODUCT MINDSET ATTITUDES | 8
  8. 8. OPTIMISM GIVESWAY TO REALISMA significant difference from last year’s mindset is the evolution from positivity andconfidence to pragmatism and realism. In 2011, we reported that manufacturers werecertain about their performance while consumers were optimistic about productquality. In 2012, we’ve seen manufacturer and consumer confidence shift to a morerealistic attitude in response to the turbulent year we’ve experienced.THE PRODUCT MINDSET OPTIMISM GIVES WAY TO REALISM | 9
  10. 10. MANUFACTURERS SEE A SIGNIFICANT NEED FOR IMPROVEMENTAll manufacturers in all geographies see the need to sharpen their abilities. Across seven key product considerations,an average of 43% of manufacturers believe there is room for significant improvement. Overall, German and U.S.manufacturers are significantly less likely to see a need for improvement than are those in China and India.AGREE THAT SIGNIFICANT IMPROVEMENT IS REQUIRED 47% Product innovation 46% Manufacturing sustainability 44% Product sustainability 43% Product quality 43% Product design 40% Product safety 40% Product reliability/performanceTHIS YEAR, ONLY A FEW MANUFACTURERS FEEL TRULY AHEAD OF THE CURVEAcross safety, quality, reliability, sustainability and product performance. Manufacturers similarly rankinnovation, fewer than 20% of manufacturers globally their need to improve across industries. The exceptionbelieve that they need no improvement. Last year, the is smart appliance manufacturers, who feel less of avast majority of manufacturers (94% average) felt they need to make improvements across all measures.were at or ahead of the curve on key dimensions ofFEEL THEY NEED NO IMPROVEMENT IN 16% 14% 13% 13% 11% Safety Quality Reliability/ Sustainability Innovation performanceTHE PRODUCT MINDSET OPTIMISM GIVES WAY TO REALISM | 11
  11. 11. CONSUMERS FEEL MANUFACTURERS NEED TO CONTINUE TO IMPROVE PRODUCT QUALITYWhen asked the top two areas manufacturers should prioritize for improvement, consumers selected product qualityas their first choice across all categories. The No. 2 priority differs by category, but in each case it is rated as needingimprovement to a significantly lesser degree than does product quality.AREAS MANUFACTURERS SHOULD PRIORITIZE FOR IMPROVEMENTHigh-tech/consumer electronics Food 45% 45% 23% 27%Home building materials Smart appliances 32% 43% 25% 22% Product quality Environmental friendliness Innovation Product safetyTHEY EXPRESS ONLY TEPID AGREEMENT THAT PRODUCT QUALITY IS BETTER TODAYTHAN IT WAS FIVE YEARS AGOThe mean ratings (i.e., the average rating on a 10-point scale) show that consumers believe that product qualityhas improved in the past year. However, the 2012 ratings, which range from 6.2 to 6.9, represent only a moderate levelof agreement — significantly below the 8.0 to 10.0 average that would constitute strong agreement. High-tech/ 6.9 6.7 Smart consumer electronics appliances 6.7 N/A 6.5 Fresh food 6.3 Home building materials 6.2 6.0 6.2 2012 Processed food 5.8 2011THE PRODUCT MINDSET OPTIMISM GIVES WAY TO REALISM | 12
  12. 12. CONSUMERS BELIEVE THAT MANUFACTURERS DO NOT ADEQUATELY CARE FOR THEIR WORKERSAlmost half of all consumers surveyed (48%) believe that manufacturers have not taken adequate steps to ensurethat both they and their suppliers are committed to workplace safety and the ethical and fair treatment of workers.Consumers in Germany and the U.S. are significantly more pessimistic about manufacturers’ treatment of workersthan are Chinese consumers.BELIEVE MANUFACTURERS HAVE NOT TAKEN ADEQUATE STEPS TO ENSURE THAT BOTH THEY AND THEIR SUPPLIERS ARE COMMITTED TO THEETHICAL/FAIR TREATMENT OF WORKERS U.S. 65% GERMANY 64% INDIA 40% CHINA 24%IN THIS YEAR’S CHALLENGING CLIMATE, CONSUMERS FEEL BETTERINFORMED BUT DON’T FEEL RESPECTED FOR ITOnly 37% of consumers strongly agree that manufacturers respect the fact that they are more informed andempowered. This varies widely by country, with Chinese and Indian consumers feeling considerably more respectedthan do German and U.S. consumers.STRONGLY AGREE THAT MANUFACTURERS RESPECT THAT CONSUMERS ARE MORE INFORMED AND EMPOWERED CHINA 60% INDIA 41% U.S. 25% GERMANY 21%THE PRODUCT MINDSET OPTIMISM GIVES WAY TO REALISM | 13
  13. 13. A MORE NUANCED ANDSOPHISTICATED CONSUMERUNDERSTANDING OF SAFETYToday’s new realism is reflected not only in a sober assessment of products andpriorities but also in the increasing sophistication of consumers who — in responseto today’s uncertainties and risks — demonstrate a nuanced understanding of safety-related issues. An interesting finding brought to light in The Product Mindset thisyear is that consumers are aware of and have more significant safety concerns aroundproducts that have an immediate impact on their health in addition to concerns aboutproducts that they are exposed to over extended periods of time. The potential forharm from food may be obvious because these products are ingested, but consumersare also aware of the longer-term hazards of home building materials. They exhibitdistinct kinds of safety concerns about high-tech/consumer electronics and smartappliances, which further underscores that today’s consumers appear more savvythan they did even a few years ago.THE PRODUCT MINDSET A MORE NUANCED AND SOPHISTICATED CONSUMER UNDERSTANDING OF SAFETY | 14
  14. 14. TWO TO THREE TIMES AS MANY CONSUMERS WANT MANUFACTURERS TO PRIORITIZE SAFETYIMPROVEMENTS FOR FOOD AND HOME BUILDING MATERIALS THAN THEY DO FOR HIGH-TECH/CONSUMER ELECTRONICS OR SMART APPLIANCESThe percentage of consumers who rate product safety as the issue manufacturers should most prioritize for improvementis significantly higher for food products and home building materials relative to high-tech/consumer electronics and smartappliances.THINK SAFETY SHOULD BE MOST PRIORITIZED BY MANUFACTURERS FOR THE FOLLOWING PRODUCT CATEGORIES 29% Fresh food 27% Processed food 23% Home building materials 10% High-tech/consumer electronics 9% Smart appliancesTHE PRODUCT MINDSET A MORE NUANCED AND SOPHISTICATED CONSUMER UNDERSTANDING OF SAFETY | 15
  15. 15. DETAILS FURTHER DIMENSION THAT CONSUMERS SEE SAFETY IMPROVEMENTAS MORE IMPORTANT FOR FOOD AND HOME BUILDING MATERIALSIn the two food categories and for home building materials, consumers rank improving product safety second out of sixissues, compared to fifth- and sixth-place rankings for high-tech/consumer electronics and smart appliances, respectively,which further demonstrates their more nuanced understanding of product safety relative to food products and homebuilding materials.THINK EACH OF THE FOLLOWING ISSUES SHOULD BE MOST PRIORITIZED BY MANUFACTURERSFresh food Processed food 37% Product quality 37% Product quality 29% Product safety 27% Product safety 16% Environmental friendliness 14% Environmental friendliness 7% Product performance 8% Product performance 6% Innovation 8% Innovation 5% Design aesthetics 6% Design aestheticsHome building materials 25% Environmental friendliness 23% Product safety 20% Product quality 12% Product performance 12% Design aesthetics 8% InnovationHigh-tech/consumer electronics Smart appliances 29% Product performance 30% Product performance 23% Innovation 22% Innovation 16% Product quality 15% Environmental friendliness 12% Design aesthetics 14% Product quality 10% Product safety 10% Design aesthetics 10% Environmental friendliness 9% Product safetyTHE PRODUCT MINDSET A MORE NUANCED AND SOPHISTICATED CONSUMER UNDERSTANDING OF SAFETY | 16
  16. 16. NOT SURPRISINGLY, PRODUCT SAFETY IS THE INFORMATION CONSUMERS MOSTWANT WHEN PURCHASING FOOD OR HOME BUILDING MATERIALSWhile consumers appear to have heightened awareness of and concerns about the safety of food and home buildingmaterials, the information they most want when purchasing high-tech/consumer electronics and smart appliancesrelates to product quality, performance and reliability. THE MOST IMPORTANT TYPES OF INFORMATION ABOUT THE PRODUCTS CONSUMERS ARE INTERESTED IN PURCHASING Food Home building High-tech/consumer Smart materials electronics appliances 1. Product safety 1. Product safety 1. Product quality/ 1. Product quality/ 2. Product quality/ 2. Product quality/ performance performance performance performance 2. Product reliability 2. Product reliability 3. Organically grown/raised 3. Product reliability 3. Product innovation 3. Cost-effective productCONSUMERS EXPRESS SAFETY CONCERNS ACROSS ALL CATEGORIES, IN EACH CASEDEMONSTRATING A NUANCED UNDERSTANDING OF DISTINCT SAFETY ISSUESSafety concerns related to food products are well known and documented in this study and others. They are focusedon foodborne illness, cleanliness and chemical additives. That consumers are as aware of toxin emissions and indoorair pollution for home building materials, as The Product Mindset data show, supports the idea that consumerstoday are increasingly savvy when it comes to product safety. For both food products and home building materials,the safety concerns focus on harmful physical effects. The concerns are different for high-tech/consumer electronicsand smart appliances. In these categories, consumers prioritize performance-related safety issues — such as onlinesecurity, wireless radio waves, interference from other smart appliances and appliance malfunction — over otherissues such as electrical shock, toxic emissions and fire. This suggests that consumers understand the nuanced issuesrelated to diverse products and have specific and different safety concerns for each.THE TOP TWO CONSUMER SAFETY CONCERNS BY CATEGORYFresh food Processed food Home building materials 31% Foodborne illness 31% 36% Toxin emissions/ Chemical additives indoor air pollution 21% Cleanliness/ 12% Foodborne illness 25% Structural safety sanitary conditionsHigh-tech/consumer electronics Smart appliances Malfunction when 28% Online security 42% sleeping/away 21% Wireless radio waves 18% Interference from other smart appliancesTHE PRODUCT MINDSET A MORE NUANCED AND SOPHISTICATED CONSUMER UNDERSTANDING OF SAFETY | 17
  17. 17. 3 PRIORITIES Manufacturers and consumers align on fundamental priorities. We have seen shifts in perceptions this year related to quality, safety and the environment that indicate a greater need for certainty and peace of mind. QUALITY IS IMPERATIVE | 19 SAFETY CONTINUES TO BE FUNDAMENTAL | 25 THE ENVIRONMENT ADVANCES | 29THE PRODUCT MINDSET PRIORITIES | 18
  18. 18. QUALITY IS IMPERATIVEFor both manufacturers and consumers, a critical element of today’s realism isthe basic and essential need for certainty, which we have discovered is beingdelivered through quality. This year we found that quality (how good a productis), performance (how well a product does what it’s supposed to do) and reliability(how consistently a product performs over time) seem to be closely related and thatas a meta-characteristic — or composite of the three characteristics — quality is atrue imperative across audiences, regions and industries. Today quality is the factormanufacturers most believe drives success, and it is what consumers most lookfor in what they buy. In a time of uncertainty, quality stands out for its durability,dependability and lack of defects — in short, quality provides a measure of certaintyin an otherwise uncertain world.THE PRODUCT MINDSET QUALITY IS IMPERATIVE | 19
  19. 19. MANUFACTURERS APPEAR TO CLOSELY LINK QUALITY, PERFORMANCE AND RELIABILITYWe examined quality in relation to other considerations Across categories, quality + performance + reliabilitysuch as performance and reliability. The data patterns remain statistically constant, while other considerationsare highly revealing, highlighting that manufacturers (11 were measured in total) — including safety, innovationfundamentally associate the three characteristics. and product sustainability — vary widely. This may indicate that other considerations are independent of eachManufacturers rate the importance of quality, reliability other, while quality, performance and reliability are moreand performance very similarly as drivers of their inextricably linked. The data suggest that the three functionbusiness success today. However, when asked to choose as a meta-characteristic in that performance and reliabilitythe one most important factor in determining their appear to be aspects of quality.future success, manufacturers overwhelmingly choosequality, while reliability and performance are rated atsimilarly lower levels. This suggests that quality maysubsume reliability and performance.STRONGLY AGREE THE FOLLOWING CONSIDERATIONS IMPACT THEIR ABILITY TO COMPETE TODAY 90% Quality 84% Reliability 82% PerformanceTHE ONE FACTOR THAT WILL HAVE THE BIGGEST IMPACT ON ABILITY TO COMPETE OVER THE NEXT 2-3 YEARSTotal 29% Quality 8% Reliability6% Performance 6%High-tech/consumer electronics Food Home building materials Smart appliances 29% Quality 33% Quality 29% Quality 23% Quality6% Reliability 5% Reliability 9% Reliability 11% Reliability5% Performance 4% Performance 5% Performance 8% PerformanceTHE PRODUCT MINDSET QUALITY IS IMPERATIVE | 20
  20. 20. TO MANUFACTURERS, PRODUCT QUALITY IS THE MOST IMPORTANT DRIVER OF SUCCESS TODAYNinety percent of manufacturers strongly agree that well. Interestingly, across both countries and industries,product quality is the most important consideration manufacturers view quality as their most importantimpacting their ability to compete in the marketplace. driver of success. Given the year’s instability, qualityThe importance of quality is significantly higher than may be a manufacturer’s best offense to avoid issuesthat of every other consideration, although reliability, related to recalls, supply chain concerns and erodingperformance and safety are rated as very important as consumer trust.STRONGLY AGREE THE FOLLOWING CONSIDERATIONS IMPACT THEIR ABILITY TO COMPETE TODAY 90% Product quality 84% Product reliability 82% Product performance 82% Product safety 76% Cost/profit 69% Innovation 66% Ethical sourcing 64% Operational sustainability 63% Speed to market 59% Sustainable products 37% OutsourcingTHE PRODUCT MINDSET QUALITY IS IMPERATIVE | 21
  21. 21. QUALITY IS ALSO SEEN AS THE MOST IMPORTANT DRIVER OF FUTURE SUCCESSLooking ahead two to three years, manufacturers believe at 28%, but quality was not a specific choice in the 2011that quality will have the biggest impact on their ability survey. The 2012 results suggest that last year’s focusto compete by nearly a 2:1 margin over the next leading on innovation might have been a reflection of a moreconsideration. Last year, innovation was ranked highest optimistic outlook.CONSIDERATIONS THAT WILL HAVE THE BIGGEST IMPACT ON ABILITY TO COMPETE OVER THE NEXT 2-3 YEARS 29% Product quality 16% Costs/profitability 14% Product innovation 8% Product reliability 7% Product safety 6% Product performance 5% Sustainable products 5% Operational sustainability 4% Speed to market 4% Outsourcing 2% Ethical sourcingTHE PRODUCT MINDSET QUALITY IS IMPERATIVE | 22
  22. 22. MANUFACTURERS THINK QUALITY IS MOST IMPORTANT TO CONSUMERSBy a similar 2:1 margin over the next leading issue, manufacturers believe that quality is what consumerscare about most. This is true across all geographies and industries. Interestingly, almost three times as manymanufacturers believe consumers care most about quality compared with the percentage who believe thatinnovation is most important to consumers.THINK CONSUMERS CARE MOST ABOUT THE FOLLOWING ISSUES Design aesthetics 8% Environmental 8% friendliness 38% Quality Safety 12% Innovation 13% 21% Performance/reliabilityBUT THERE ARE SOME NOTABLE GEOGRAPHIC AND INDUSTRY-SPECIFIC DIFFERENCESIndian and German manufacturers think consumers care more about quality than do manufacturers in China andthe U.S. Interestingly, 20% of Chinese manufacturers believe consumers care most about product safety, while 27%of U.S. manufacturers feel performance/reliability is the key issue of concern. Across industries, food manufacturers clearlysee quality as the dominant issue for consumers more significantly than do the other manufacturers surveyed.THINK CONSUMERS CARE MOST ABOUT QUALITYBy country By industry 45% GERMANY 51% Food 43% INDIA 39% Home building materials 35% U.S. 36% High-tech/consumer electronics 28% CHINA 26% Smart appliancesTHE PRODUCT MINDSET QUALITY IS IMPERATIVE | 23
  23. 23. CONSUMERS PRIMARILY MAKE PURCHASE DECISIONS BASED ON QUALITYQuality is the No. 1 reason cited by consumers to based on perceived value. The primacy of qualityexplain why they select the products they buy across for consumers mirrors the emphasis placed on it byall categories surveyed. This finding may suggest that manufacturers. In both cases, the focus on qualityconsumers have become more savvy and they purchase may be a means of enhancing certainty.QUALITY IS MOST IMPORTANT DRIVER OF PURCHASE DECISIONS 29% Home building materials 24% Food 23% High-tech/consumer electronics 21% Smart appliancesTHE DOMINANCE OF QUALITY, ALONG WITH PERFORMANCE AND RELIABILITY, IS FURTHER91DEMONSTRATED BY MANUFACTURER ATTITUDES ABOUT PERFORMANCE TESTING % OF MANUFACTURERS BELIEVE THAT PERFORMANCE TESTING IS BECOMING MORE IMPORTANTWithin performance testing, manufacturers see product durability/usability testing as the most important to theirbusiness, and this is particularly true of Chinese, Indian and German manufacturers. For U.S. manufacturers, benchmarktesting against similar products is most important. Performance testing against 28% retailer/buyer standards 42% Product durability/ usability testing Benchmark testing against 30% similar productsTHE PRODUCT MINDSET QUALITY IS IMPERATIVE | 24
  24. 24. SAFETY CONTINUESTO BE FUNDAMENTALAcross categories and regions, safety continues to be a critical factor forboth manufacturers and consumers. This year’s prevailing uncertaintyand instability may have made safety a more important considerationas a way to counter fear, ambiguity and anxiety.THE PRODUCT MINDSET SAFETY CONTINUES TO BE FUNDAMENTAL | 25
  25. 25. 73 % OF MANUFACTURERS STRONGLY AGREE THAT PRODUCT SAFETY IS BECOMING MORE IMPORTANT82 % OF MANUFACTURERS STRONGLY AGREE THAT PRODUCT SAFETY IMPACTS THEIR ABILITY TO COMPETEWHY SAFETY IS IMPORTANTThe fundamental importance of safety reinforces the the increase of consumer confidence in product safetynotion that manufacturer and consumer attitudes are and the notion that consumers are requesting morebeing shaped by today’s heightened appreciation of risk. safety information. These issues are nearly universallyOther factors may include perceptions about the increase agreed upon by manufacturers across countries andin governmental regulations, more informed consumers, industries.MANUFACTURERS AGREE THAT 89% Consumers are becoming more aware and better educated 87% Government regulations are becoming more stringent 87% Consumer confidence in product safety is increasing 83% Consumers are requesting more safety informationTHE PRODUCT MINDSET SAFETY CONTINUES TO BE FUNDAMENTAL | 26
  26. 26. MANUFACTURERS BELIEVE THE DEFINITION OF SAFETY IS BECOMING BROADEROn average, 88% of manufacturers agree that the This may reflect that some American manufacturersdefinition of safety is becoming broader. While the believe that the definition of product safety has alreadynumbers are high across all geographies, the U.S. has broadened or that some do not see the definitionthe lowest percentage of manufacturers who agree. broadening to a meaningful degree.MANUFACTURERS IN EACH COUNTRY WHO AGREE 94% GERMANY 91% CHINA 91% INDIA 78% U.S.CONSUMERS THINK MANUFACTURERS SHOULD PRIORITIZE PRODUCT SAFETYAcross all industries surveyed, almost 20% of consumers rate safety as the product improvement that should bemost prioritized by manufacturers. This makes safety the second most important issue to consumers — behind onlyquality — and more important than improving environmental friendliness, innovation or design aesthetics.BELIEVE THE FOLLOWING PRODUCT IMPROVEMENTS SHOULD BE MOST PRIORITIZED BY MANUFACTURERS Design aesthetics 9% Innovation 14% 42% Quality Environmental friendliness 16% Safety 19%THE PRODUCT MINDSET SAFETY CONTINUES TO BE FUNDAMENTAL | 27
  27. 27. CONSUMERS FEEL MANUFACTURERS CAN DO MORE TO IMPROVE PRODUCT SAFETYSimilar to consumer sentiments in 2011 and aligned with this year’s growing concerns about worker treatment,today’s more empowered consumers feel that manufacturers should give priority to product safety to a greater degree36than they currently do. % OF CONSUMERS STRONGLY BELIEVE THAT MANUFACTURERS CONDUCT THOROUGH PRODUCT SAFETY TESTING BEFORE INTRODUCING NEW PRODUCTS TO THE MARKET59 % OF CONSUMERS AGREE OVERALL THAT MANUFACTURERS VALUE SALES MORE THAN PRODUCT SAFETYTHE PRODUCT MINDSET SAFETY CONTINUES TO BE FUNDAMENTAL | 28
  28. 28. THE ENVIRONMENTADVANCESEnvironmental focus, depicted last year as more desired than imperative, hasmoved forward. While the environment has not supplanted product qualityor safety as a fundamental consideration, it is becoming more significant.Manufacturers and consumers seem to be more sophisticated in their thinkingabout the environment: they are aware of its importance, and both agree thatfurther progress is needed.THE PRODUCT MINDSET THE ENVIRONMENT ADVANCES | 29
  29. 29. MANUFACTURERS SEE SUSTAINABILITY AS CRITICAL TO THEIR ABILITY TO COMPETE EFFECTIVELYBetween 80% and 90% of manufacturers agree that sustainability-related factors are essential to thesuccess of their business. The percentages of manufacturers who believe that making sustainable productsand operating sustainably impact their ability to compete has increased significantly in the past year.Chinese and Indian manufacturers place significantly greater importance on sustainable products thando German and U.S. manufacturers. However, manufacturers across geographies are more aligned regardingoperational sustainability.AGREE THAT THE FOLLOWING CONSIDERATIONS IMPACT THEIR ABILITY TO COMPETE IN THE MARKETPLACE Sustainable products Operational sustainability 81% 89% 2012 2012 Sustainable products Operational sustainability 76% 85% 2011 2011THE PRODUCT MINDSET THE ENVIRONMENT ADVANCES | 30
  30. 30. MANUFACTURERS BELIEVE THAT BEING ENVIRONMENTALLY FRIENDLY CAN BE PROFITABLECompared with 2011, the overall percentage of Indian manufacturers stood out as being much moremanufacturers who believe environmentally friendly likely to see profitability today in being environmentallyproducts can be profitable or somewhat profitable friendly. Today 66% of manufacturers also report that theirtoday declined by 5%; however, 60% still believe that the company has an adequate ROI measure for sustainableenvironment can be profitable. From a regional perspective, manufacturing. Not profitable and 9% not expected to be in the next few years 37% Somewhat profitable Not profitable today but 31% may be over time 23% ProfitableTHE ENVIRONMENT HAS BECOME AN IMPORTANT ISSUE FOR MANUFACTURERSTwo-thirds of manufacturers strongly agree that the environment is becoming more important, with more than halfseeing increased consumer demand for eco-friendly products.STRONGLY AGREE WITH THE FOLLOWING 67% 53% 45% The environment Consumers are demanding more Consumers are willing to pay is becoming more important eco-friendly products at the same cost more for eco-friendly products as non-eco-friendly productsTHE PRODUCT MINDSET THE ENVIRONMENT ADVANCES | 31
  31. 31. HOWEVER, THE DEVELOPED ECONOMIES LAG BEHIND THE EMERGINGNATIONS IN EMPHASIZING THE ENVIRONMENTOverall, manufacturers in the emerging markets becoming more important, but it is a significantly lowerbelieve there is a stronger consumer demand for percentage than shown by manufacturers in China, Indiaenvironmentally friendly products. A majority of U.S. or Germany, which is similar to last year’s findings.manufacturers strongly agree that the environment isENVIRONMENT BECOMING MORE IMPORTANT INDIA 75% GERMANY 74% CHINA 66% U.S. 53%CONSUMERS DEMANDING MORE ECO-FRIENDLY PRODUCTS AT THE SAME COST AS NON-ECO-FRIENDLY PRODUCTS CHINA 59% INDIA 58% GERMANY 51% U.S. 48%CONSUMERS WILLING TO PAY MORE FOR ECO-FRIENDLY PRODUCTS INDIA 56% CHINA 54% U.S. 37% GERMANY 33%THE PRODUCT MINDSET THE ENVIRONMENT ADVANCES | 32
  32. 32. BEING ENVIRONMENTALLY FRIENDLY IS IMPORTANT, BUT IT IS NOT GENERALLYTHE MOST IMPORTANT PURCHASE DRIVER FOR CONSUMERSWhile the environment has advanced, it is still not as important a driver as quality or safety to consumers around theworld. Given this year’s turbulence, consumers are prioritizing essential needs; specifically, they want products that are9free from defects and safe to use. % OF CONSUMERS CITE ENVIRONMENTAL FRIENDLINESS AS THE MAIN REASON THEY SELECTED THE PRODUCTS THEY PURCHASEDAT THE SAME TIME, CONSUMERS CONTINUE TO BELIEVE THAT MANUFACTURERSARE NOT PRIORITIZING THE ENVIRONMENT ENOUGHAs in 2011, across all product categories almost half of the consumers do not feel that manufacturers take adequate stepsto ensure that environmentally friendly manufacturing procedures have been followed or prioritize creating environmentallyfriendly products.BELIEVE THAT MANUFACTURERS ARE NOT PRIORITIZING ENVIRONMENTALLY FRIENDLY MANUFACTURING PROCEDURES OR PRODUCTS 50% 49% High-tech/ Processed food consumer electronics 50% 48% 47% 46% Home building materials Fresh food 48% 46% 45% Environmentally friendly manufacturing procedures Smart appliances 42% Environmentally friendly productsTHE PRODUCT MINDSET THE ENVIRONMENT ADVANCES | 33
  33. 33. FOR CONSUMERS, THE ENVIRONMENT TRAILS ONLY PRODUCT QUALITYAND SAFETY AS A DESIRED MANUFACTURER IMPROVEMENTConsumers believe that manufacturers should give higher environmental friendliness of their products. Interestingly,priority to improving the environmental friendliness of their there are no differences based on age or orientation in theproducts more than to innovation or design aesthetics. adoption cycle. Younger consumers and early adopters areThis is especially true of German consumers, who are not any more likely to desire more environmentally friendlysignificantly more likely than consumers in China, India products than are their older or late adopter counterparts.or the U.S. to think manufacturers should improve theBELIEVE THE FOLLOWING PRODUCT IMPROVEMENTS SHOULD BE MOST PRIORITIZED BY MANUFACTURERS Design aesthetics 9% Innovation 14% 42% Quality Environmental friendliness 16% Safety 19%THE PRODUCT MINDSET THE ENVIRONMENT ADVANCES | 34
  34. 34. 4 IMPACT Impact is about helping ensure that priorities are delivered reliably, safely and cost-effectively. This year’s focus on impact reflects a growing recognition that where a product is made and what’s in it are as important as how it’s made. THE ESSENTIAL SUPPLY CHAIN | 36 INGREDIENTS MATTER | 40 ORIGIN IS CRITICAL | 44THE PRODUCT MINDSET IMPACT | 35
  35. 35. THE ESSENTIAL SUPPLY CHAINFocusing on their supply chains is how manufacturers are dealing with thegrowing complexity and shifting wants of the marketplace. At the same time,supply chains are becoming more complicated, global and difficult to control,presenting a host of problems, especially as transparency is a constant consumerand media demand. The issues raised earlier — from quality and safety to theenvironment — are being addressed by manufacturers through their supply chains.THE PRODUCT MINDSET THE ESSENTIAL SUPPLY CHAIN | 36
  36. 36. MANUFACTURERS SEE A NEED TO GET MORE FROM THEIR SUPPLY CHAINSGiven the challenges of the global economy and significant drop from the 79% reported in 2011. Onlyrelentless pressure to deliver, many manufacturers 60% of manufacturers are very satisfied with the degreestill feel their supply chains must do better. Consistent to which their supply chains help them manage costs,product quality ranks first, with 76% of manufacturers while only 57% are very satisfied with supply chainhighly satisfied, though the 2012 level represents a performance in helping them manage risk.HIGHLY SATISFIED WITH THE FOLLOWING ASPECTS OF THEIR COMPANY’S SUPPLY CHAIN PERFORMANCE 76% Consistent product quality 72% On-time delivery 67% Finding quality suppliers and partners 64% Availability of raw materials 60% Managing costs 57% Ability to manage risk 57% Finding environmentally responsible suppliers 57% Expanding into new markets 54% Finding socially responsible suppliers 50% Reducing supply chain redundanciesTHE PRODUCT MINDSET THE ESSENTIAL SUPPLY CHAIN | 37
  37. 37. OVERALL, U.S. MANUFACTURERS ARE MOST SATISFIED WITH THEIR SUPPLY CHAINSAmerican manufacturers are the most satisfied with their supply chains, with 64% very satisfied on average.Chinese manufacturers are least happy with the performance of their supply chains, with 58% very satisfied onaverage. Specific to industries, building materials manufacturers stand out as being significantly less satisfiedwith their supply chains, while smart appliance manufacturers tend to be more satisfied in general, and foodmanufacturers are the most satisfied with the ability of their supply chains to provide consistent product qualityand on-time product delivery.Consistent product quality On-time delivery CHINA 67% CHINA 65% INDIA 80% INDIA 72% GERMANY 80% GERMANY 81% U.S. 75% U.S. 70%Finding quality suppliers and partners Availability of raw materials CHINA 58% CHINA 55% INDIA 62% INDIA 62% GERMANY 78% GERMANY 72% U.S. 70% U.S. 68%Managing costs Ability to manage risk CHINA 52% CHINA 59% INDIA 58% INDIA 51% GERMANY 61% GERMANY 56% U.S. 67% U.S. 63%Finding environmentally responsible suppliers Expanding into new markets CHINA 63% CHINA 61% INDIA 56% INDIA 64% GERMANY 51% GERMANY 46% U.S. 60% U.S. 56%Finding socially responsible suppliers Reducing supply chain redundancies CHINA 56% CHINA 46% INDIA 52% INDIA 50% GERMANY 51% GERMANY 46% U.S. 56% U.S. 57%THE PRODUCT MINDSET THE ESSENTIAL SUPPLY CHAIN | 38
  38. 38. MANUFACTURERS ARE LOOKING TO GLOBAL SOURCING76 % OF MANUFACTURERS BELIEVE GLOBAL SOURCING IS A MEANS TO IMPROVE PRODUCT QUALITY This figure has risen significantly by 19% from what manufacturers noted last year, which most likely reflects a heightened need to enhance their competitiveness in a volatile and depressed economic environment and an increasingly global marketplace. Regional differences reinforce this conclusion. GLOBAL SOURCING IS VIEWED DIFFERENTLY IN EMERGING AND DEVELOPED MARKETS While manufacturers in developed markets continue to be much less likely to view global sourcing as a means to improve product quality, manufacturers in emerging nations like China and India — which benefit much more from global sourcing — continue to broadly embrace the concept. BELIEVE THAT GLOBAL SOURCING IS IMPROVING PRODUCT QUALITYEMERGING 88% INDIA 87% CHINADEVELOPED 71% GERMANY 57% U.S. SOURCING CONTINUES TO BECOME INCREASINGLY GLOBAL Forty-six percent of manufacturers will increase the with new ones. The desire to find suppliers in new degree to which their companies source raw materials, countries is further evidence of manufacturers’ need to components or ingredients from other countries. And advance their supply chains and points to the pressure to of these, 79% plan to add countries from which they constantly enhance competitiveness by reducing costs source rather than replacing their existing sources and improving quality. Yes 46% Will you be sourcing more Replace 21% If yes, will the countries from other countries in the be in addition to or a next five years? replacement for your No 54% In addition to 79% current sources? THE PRODUCT MINDSET THE ESSENTIAL SUPPLY CHAIN | 39
  39. 39. INGREDIENTS MATTERA critical aspect of supply chain management is a growing realization thatwhat goes into a product is as important as the product itself. Building onlast year’s findings, it is clear that given the accessibility of information and therise of transparency, today’s more sophisticated consumers and manufacturersare aware that not all products are created equal. In 2012, the quality ofingredients or components and where they come from are more significantthan ever before.THE PRODUCT MINDSET INGREDIENTS MATTER | 40
  40. 40. 68MANUFACTURERS BELIEVE THAT CONSUMERS WANT TO KNOW WHAT GOESINTO THEIR PRODUCTS % OF MANUFACTURERS REPORT THAT IT IS VERY IMPORTANT TO CLEARLY SHOW CONSUMERS WHAT INGREDIENTS/COMPONENTS ARE INCLUDED IN THEIR PRODUCTSChinese and Indian manufacturers feel that this is more important than do German and American manufacturers. Theimportance of detailing ingredients to consumers is most pronounced in the food category, where safety, nutrition and healthconcerns are strongest. Manufacturers also see a strong need to identify the components in smart appliances, which may be afunction of the comparatively new and untested nature of the category.AGREE THAT CONSUMERS WANT TO KNOW WHAT GOES INTO THEIR PRODUCTSBy country By industry 78% CHINA 81% Food 68% INDIA 73% Smart appliances 64% GERMANY 63% High-tech/consumer electronics 61% U.S. 54% Home building materialsTHE PRODUCT MINDSET INGREDIENTS MATTER | 41
  41. 41. TODAY’S SAVVY CONSUMERS UNDERSTAND THE IMPORTANCE OF KNOWING WHATGOES INTO THE PRODUCTS THEY BUYAcross categories, a majority of consumers believe it is very important to know what ingredients or components are in theproducts they buy. This is most true for food products and is equally true across countries.BELIEVE IT IS VERY IMPORTANT TO KNOW WHAT INGREDIENTS OR COMPONENTS ARE IN THE PRODUCTS THEY BUY 78% 52% 47% 40% Food Home building High-tech/ Smart appliances materials consumer electronics30 ONLY % OF CONSUMERS STRONGLY BELIEVE THAT MANUFACTURERS USE THE BEST POSSIBLE INGREDIENTS, RAW MATERIALS OR COMPONENTS IN THEIR PRODUCTSTHE PRODUCT MINDSET INGREDIENTS MATTER | 42
  42. 42. CONSUMERS ALSO BELIEVE IT IS MORE IMPORTANT TO KNOW WHEREPARTS COME FROM THAN WHERE A PRODUCT WAS ASSEMBLED On average, 62% of consumers across all categories surveyed think that where a product’s parts and components comefrom is more important than where the final product is assembled and packaged. This is consistent with last year’s study. Assembly/packaging Parts/components Food 29% 71% Home building 38% 62% materials High-tech/ consumer 44% 56% electronics Smart 43% 57% appliancesACROSS GEOGRAPHIES, ALMOST ALL CONSUMERS AGREE THAT ORIGINOF INGREDIENTS IS MORE IMPORTANT THAN THE FINISHED PRODUCTWith the exception of high-tech/consumer electronics and smart appliances for German consumers, the origin of partsis more important to consumers than the origin of the finished product across both categories and countries. This finding— including the two German exceptions — is consistent with the 2011 data, and it suggests that consumers have a fairlysophisticated understanding of product quality, performance and safety. CHINA INDIA GERMANY U.S. Food 29% 71% 37% 63% 29% 71% 22% 78% Home building 29% 71% 40% 60% 45% 55% 36% 64% materials High-tech/ consumer 30% 70% 44% 56% 55% 45% 46% 54% electronics Smart 32% 68% 43% 57% 55% 45% 44% 56% appliances Assembly PartsTHE PRODUCT MINDSET INGREDIENTS MATTER | 43
  43. 43. ORIGIN IS CRITICALSourcing is more international than ever before. For manufacturers, this is seenboth as a way to relieve cost pressures on their supply chains and often as ameans of improving product quality. Consumers are both aware of increasingglobalization and wary of potential risks. As was the case in 2011, consumersand manufacturers believe that when it comes to product quality, the countryof origin is extremely important.THE PRODUCT MINDSET ORIGIN IS CRITICAL | 44
  44. 44. 57CONSUMERS ARE AWARE OF MANUFACTURERS’ INCREASINGLY GLOBAL SUPPLY CHAINS % OF CONSUMERS ARE AWARE OF WHICH COUNTRY THE PRODUCTS THEY PURCHASE ARE MANUFACTURED INA majority of consumers believe they know the country were considered better or more prestigious than thosein which the products they buy are manufactured. Home made in other countries. Today, with more globalizedbuilding materials is the only exception, with 39% of manufacturing and better-informed consumers, itconsumers agreeing they know the country of origin for appears that consumers understand that the countrythis category. Traditionally, country of origin mattered of origin can impact product safety as well as quality.as a sign of quality. Products made in certain countriesBELIEVE THEY KNOW THE COUNTRY OF ORIGIN FOR PRODUCTS THEY PURCHASE 68% High-tech/consumer electronics 65% Fresh, unprocessed food 60% Smart appliances 55% Processed food 39% Home building materialsCONSUMERS SEE THEMSELVES CONTINUING TO BE VIGILANTABOUT WHERE PRODUCTS ARE MADEAcross industries, over the next five years more than four in five consumers see themselves being similarlyor increasingly sensitive to where a product is manufactured. Less 19% 44% More The same 37%THE PRODUCT MINDSET ORIGIN IS CRITICAL | 45
  45. 45. MANUFACTURERS FEEL THAT COUNTRY OF ORIGIN IS IMPORTANTOverall, country of origin grew in importance since last year. This may reflect the greater concern of manufacturersover sourcing, or it may also be influenced by manufacturers better understanding that consumers are becoming moresavvy about issues such as traceability. Results remained the same for fresh foods, which continue to demonstrate theimportance of country of origin. High-tech and building materials both saw an increase in importance since 2011.THE DEGREE OF IMPACT EACH OF THE FOLLOWING HAS ON THE QUALITY OF THE PRODUCTS PRODUCEDFood 60% 2012 Country of origin for fresh dairy products 62% 2011 60% Country of origin for fresh, unprocessed food 58% 50% Country of origin for unassembled processed food ingredients 53% 44% Country of origin for ready-to-use processed food components 41% 41% Country of origin for artificial flavorings and additives 38%High-tech/consumer electronics Home building materials 61% 33% Country of origin of 53% 23% Country of origin of 46% MORE components/ingredients 43% MORE components/ingredients 36% All assembled components being 36% All assembled components being 47% from the manufacturing country 45% from the manufacturing countrySmart appliances* 64% Country of origin of components/ingredients 58% All assembled components being from the manufacturing country*Note: Smart appliances were not included in the 2011 study.THE PRODUCT MINDSET ORIGIN IS CRITICAL | 46
  46. 46. MANUFACTURERS THINK DEVELOPED COUNTRIES HAVE A BETTERREPUTATION FOR THE QUALITY OF THEIR PRODUCTSWhether in emerging markets like China and India the least disparity between developed and emergingor developed markets like Germany and the U.S., countries of origin (32% higher for developed markets);manufacturers have a significantly more favorable whereas U.S. manufacturers see the greatest disparityopinion about the quality of materials sourced from (285% higher for developed markets). This is alsodeveloped markets compared to those sourced from consistent with 2011 findings.emerging markets. Indian manufacturers perceiveRATE COUNTRIES AS VERY GOOD/EXCELLENT AS A SOURCE FOR THEIR INDUSTRY CHINA 54% 38% Developed 39% MORE Emerging INDIA 45% 32% 34% MORE GERMANY 40% 111% 19% MORE U.S. 50% 285% 13% MORECONSUMERS ALSO THINK DEVELOPED COUNTRIES HAVE A BETTERREPUTATION FOR THE QUALITY OF THEIR PRODUCTSSimilar to that of manufacturers, consumers’ perception do consumers from Germany and the U.S. Conversely,of quality is significantly higher for products from only a small minority of consumers from the developeddeveloped nations than for those from emerging nations. markets think that products from emerging marketsConsumers in the emerging markets, China and India, are high quality.rate products from developed markets more highly thanRATE COUNTRIES AS VERY GOOD/EXCELLENT IN QUALITY FOR THE PRODUCTS THEY PRODUCE CHINA 68% 127% Developed 30% MORE Emerging INDIA 61% 74% 35% MORE GERMANY 43% 378% 9% MORE U.S. 43% 438% 8% MORETHE PRODUCT MINDSET ORIGIN IS CRITICAL | 47
  47. 47. CONCLUSIONThe Product Mindset in 2012 can be largely understood as aquest for certainty in an uncertain world. We saw a varietyof external forces drive a shift from the optimistic outlookexpressed in 2011 to a new set of attitudes, grounded in realismand a more sophisticated and nuanced point of view. Quality,safety and the environment were affirmed as priorities. And theultimate impact is delivered through the supply chain, whereglobal sourcing and an emphasis on ingredients/componentsdemonstrate that where a product is made, how it’s made andwhat’s in it are becoming paramount.FORCESShaping The Product Mindset this year were several global forces, including economic instability, political turbulence,unprecedented natural disasters, growing transparency, amplified information and supply chain complexity.ATTITUDES PRIORITIES IMPACTDirectly influenced by pervasive With today’s new realism, key priori- Impact is about how today’s prioritiesuncertainty, a new set of attitudes ties define what is truly important are delivered and about the grow-emerged. “Optimism Gives Way to and fundamental. “Quality Is Im- ing importance of information andRealism” represents a significant perative” highlights the primacy of transparency. “The Essential Supplyshift in the way consumers and quality as the most desired product Chain” details what is important tomanufacturers assess products and characteristic. “Safety Continues to manufacturers and their increasingrelated issues. Today’s increased rec- Be Fundamental” demonstrates that use of global sourcing. “Ingredientsognition of risk may have influenced safety remains a critical consider- Matter” highlights another example of“A More Nuanced and Sophisticated ation for both manufacturers and increased consumer sophistication: theConsumer Understanding of Safety” consumers. And “The Environment importance of what goes into a prod-where consumers demonstrated a Advances” shows that environmental uct. “Origin Is Critical” demonstrateskeen and nuanced understanding focus is becoming more prevalent that both consumers and manufactur-of product-related safety issues. and seen globally as a pressing issue. ers are aware of and care about a product’s country of origin.THE PRODUCT MINDSET CONCLUSION | 48
  48. 48. SOURCES1. Meier, S. and Ryan, J., “Europe’s Debt Surged to Record Last Year, 12. “Network of Global Agenda Councils Reports 2011-2012,” World Led by Greece: Economy,” Bloomberg, 22 Oct. 2012. Web: 5 Nov. 2012. Economic Forum, 2012. Web: 5 Nov. 2012. http://reports.weforum. http://www.bloomberg.com/news/2012-10-22/europe-s-debt- org/global-agenda-council-2012/#view/global-agenda-council- surged-to-record-last-year-led-by-greece-economy.html 2012/councils/illicit-trade/2. Inman, P. and Smith, H., “Greek economy to shrink 25% by 2014,” 13. “Measuring mud: How transparent are the world’s biggest listed The Guardian, 18 Sept. 2012. Web: 5 Nov. 2012. http://www.guardian.co. companies?” The Economist, 14 July 2012. Web: 5 Nov. 2012. http:// uk/business/2012/sep/18/greek-economy-shrink-great-depression www.economist.com/node/215586103. Wessel, D., “Executives Lack Confidence in U.S. Competitiveness,” 14. “How Companies Can Comply with California’s Transparency in The Wall Street Journal, 17 Oct. 2012. Web: 5 Nov. 2012. http://online.wsj. Supply Chains Act,” Triple Pundit, 24 Nov. 2011. Web: 20 Nov. 2012. com/article/SB10000872396390444592704578062401367872428.html http://www.triplepundit.com/2011/11/companies-comply-californias -transparency-supply-chains-act/4. “Trade growth to slow in 2012 after strong deceleration in 2011,” World Trade Organization, Press Release, 12 April 2012. Web: 6 Nov. 2012. 15. “Sustainable Supply Chain Management in Information Technology,” http://www.wto.org/english/news_e/pres12_e/pr658_e.htm Malk Sustainability Partners, 21 Nov. 2012. Web: November 2012. http://www.malksp.com/industries/sustainable-ict/sustainable-supply-5. “Congo Rebels Advancing on Major City,” The New York Times, 18 chain-management-in-information-technology/ Nov. 2012. Web: 20 Nov. 2012. http://www.nytimes.com/2012/11/19/ world/africa/congo-rebels-advancing-on-city-of-goma.html?_r=0 16. Borenstein, S., “U.S. Natural Disasters: 2011 an Extreme and Exhausting Year,” The Huffington Post, 3 Sept. 2011. Web: 15 Nov. 2012.6. Platt, S.R., “Is China Ripe for a Revolution?” The New York Times, http://www.huffingtonpost.com/2011/09/03/disasters-in-us-an- 9 Feb. 2012. Web: 5 Nov. 2012. http://www.nytimes.com/2012/02/12/ extrem_n_947750.html opinion/sunday/is-china-ripe-for-a-revolution.html?_r=0 17. Barret, P. M., “It’s Global Warming, Stupid,” Businessweek, 267. Weiner, R., “Secession petitions filed on White House Web site,” The Oct. 2012. Web: 5 Nov. 2012. http://www.businessweek.com/arti- Washington Post, 12 Nov. 2012. Web: 20 Nov. 2012. http://www.washin cles/2012-11-01/its-global-warming-stupid gtonpost.com/blogs/election-2012/wp/2012/11/12/states-petition- obama-administration-to-secede 18. “Top 5 worst natural disasters of 2011,” Global Post, 30 Dec. 2012. Web: 5 Nov. 2012. http://www.globalpost.com/dispatch/news/8. Heaney, B., “Supply Chain Visibility Excellence,” Aberdeen Group, regions/asia-pacific/japan/111229/worst-natural-disasters-2011 Research Paper, March 2012. Web: 5 Nov. 2012. http://www.feg.unesp. br/dpd/cegp/2012/LOG/Material%20Complementar/Textos%20 19. “Hundreds killed in Pakistan flooding,” CNN, 29 Sept. 2012. Web: gerais/supply-chain-visibility%201.pdf 20 Nov. 2012. http://www.cnn.com/2012/09/29/world/asia/ pakistan-floods/index.html9. Leach, A.,“CFOs think supply chains are overly complex,” Supply Manage- ment, 29 March 2012. Web: 5 Nov. 2012. http://www.supplymanagement. 20. “How Social Media Impacts Brand Marketing,” Nielsen Wire, 14 Oct. com/news/2012/cfos-think-supply-chains-are-overly-complex/ 2011. Web: 20 Nov. 2012. http://blog.nielsen.com/nielsenwire/consumer/10. how-social-media-impacts-brand-marketing/ Witchalls, C., “ The Complexity Challenge: How businesses are bearing up,” The Economist, Special Report, 2011. Web: 5 Nov. 2012. http://mib.rbs.com/docs/MIB/Insight/Simplifying-complexity/EIU 21. “Never Miss a Product Recall Again With This FDA-Approved App,” Blisstree, _report-The_Complexity_Challenge.pdf 7 Oct. 2011. Web: 20 Nov. 2012. http://www.blisstree.com/2011/10/07/eat/ never-miss-a-product-recall-with-fda-app-409/11. “Confronting Complexity,” KPMG, Research Paper, May 2011. Web: 20 Nov. 2012. http://www.kpmg.com/EU/en/Documents/ 22. “Twitter, Facebook, Google, YouTube – What Happens on the Internet confronting-complexity-20110101.pdf Every 60 Seconds?” All Twitter, 25 June 2012. Web: 15 Nov. 2012. http:// www.mediabistro.com/alltwitter/data-never-sleeps_b24551THE PRODUCT MINDSET SOURCES | 49
  49. 49. METHODOLOGYIn spring 2012, UL employed an independent research firm, ORC International, toconduct a global quantitative survey among 1,201 consumers and 1,202 manufacturersacross four countries: China, Germany, India and the United States. The two sampleseach have a margin of error of ±2.8% at the 95% confidence level. To meet theobjectives of the survey, manufacturers across the consumer electronics, food,building materials and smart appliances sectors were interviewed by phone,and consumers were interviewed through an online survey. Manufacturers weredirector-level executives specializing in management, research and development,marketing and sales, quality control, and product management or design. Consumerswere a representative mix of age, gender, education and income. Data tabulationsamong subgroups have been tested for statistical significance at the 90% and 95%confidence levels. Secondary research sources were used to provide supplementaryinformation, and Product Mindset considerations were selected based on theimportance and overall significance of the data.All reported differences are statistically significant at the 90% confidence level, unlessotherwise noted. Also note that “strongly agree” denotes a rating of 8, 9 or 10 on a10-point scale, while “agree” denotes a 6+ rating.THE PRODUCT MINDSET METHODOLOGY | 50
  50. 50. ACKNOWLEDGMENTSWe would like to acknowledge the enthusiastic supportthis initiative has received from UL leadership.EXECUTIVE EDITORSuzanne Lavin, Vice President, Corporate MarketingThis study was concepted and createdin association withFURTHER INFORMATIONFor more information about this studyVisit: www.ul.com/productmindsetEmail: productmindset@ul.comCall: +1 1 847.664.2226ABOUT ULUL is a premier global independent safety science company with more than 118 years of history.Employing more than 10,000 professionals with customers in over 100 countries, UL has fivedistinct business units – Product Safety, Environment, Life & Health, Knowledge Services, andVerification Services – to meet the expanding needs of our customers and to deliver on ourpublic safety mission. For more information on UL’s family of companies and network of 95laboratory, testing, and certification facilities, go to UL.com.UL AND THE PRODUCT MINDSET ARE TRADEMARKS OF UL LLC, REGISTERED IN THE UNITED STATES.THE PRODUCT MINDSET CANNOT BE COPIED, REPRODUCED, DISTRIBUTEDOR DISPLAYED WITHOUT UL’S EXPRESS WRITTEN PERMISSION. V.48THE PRODUCT MINDSET ACKNOWLEDGMENTS, FURTHER INFORMATION AND ABOUT UL | 51