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Evaluating U.S. Consumer’s Propensity for American-Made Products

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Last fall, Ford announced it will soon move all small car production to Mexico. Several other U.S. auto manufacturers currently produce vehicles outside of the country, but Ford’s announcement sparked a significant amount of backlash, which was fueled by then presidential-nominee Donald Trump’s amplification.

Through this analysis, we will understand how Ford’s decision to move some of its production to Mexico has impacted sentiment & purchase intent toward the automaker. We will also examine how other U.S. auto manufacturers have been impacted by their decision to move production outside of the country. This knowledge will lead us to the final portion of the analysis where we will explore if Americans are becoming more conscious of products made in the U.S. and whether President Trump has had any role in that.

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Evaluating U.S. Consumer’s Propensity for American-Made Products

  1. 1. EVALUATING CONSUMERS’ PROPENSITY FOR AMERICAN-MADE PRODUCTS Jacob Chavis Analyst
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  3. 3. 3 WHATYOU’LLLEARN • Where a product is made is an important factor to consumers when evaluating a purchase and possibly increasingly so • Higher consideration products, with longer purchase cycles, may be less impacted by negative publicity • The perception of being “American-Made” outweighs a product’s actual origin
  4. 4. 4 “A business that makes nothing but money is a poor business.”
  5. 5. AS OFF-SHORING INCREASED, NUMBER OF FACTORYWORKERS DECREASED 5 0 5,000 10,000 15,000 20,000 1939 1941 1943 1945 1947 1949 1951 1953 1955 1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Number of Manufacturing Employees in the U.S. Source: Bureau of Labor Statistics 28%Drop in U.S. manufacturing employees from 2000 to 2016
  6. 6. FORD CONSIDERED ONE OF THE MOST “PATRIOTIC” BRANDS 6 Sources: Brand Keys – Most Patriotic Brands in America 2016; AOL Omnibus, April 2017, n=1009 US Internet Users 1.Jeep / Disney 2. Levi Strauss 3. Ralph Lauren 4. Ford 5. Coca-Cola / Jack Daniels 42%Consider Ford to be an above average brand
  7. 7. MADE INAMERICASTAMPDOES AFFECT PURCHASE DECISIONS 7 66% 32% Are aware of purchasing products made in the U.S. Have decided not to make a purchase because a product was made outside of the U.S. Source: AOL Omnibus, April 2017, n=1009 US Internet Users
  8. 8. CLICK HERE TO EDIT HEADLINE 8
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  10. 10. TRUMPQUICKLYCRITICIZED FORD’S DECISION 10 “To think that Ford is moving its small car division is a disgrace. It’s disgraceful. It’s disgraceful that our politicians allow them to get away with it. It really is.”
  11. 11. PRESIDENT TRUMPMAJOR FOCUS OF FORD SOCIALCONVERSATION 11 Pickup Trucks Henry Ford test drive Road TrumpCheck driving cars Ford Recalls Ford Taurus Ford Edge Ohio Automatic transmission TV Ford Transit Ford Explorer 4 cylinder engine Dates: 4/1/2016 – 4/16/2017 Most Prevalent Topics Source: Brandwatch
  12. 12. 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 4/1/2016 5/1/2016 6/1/2016 7/1/2016 8/1/2016 9/1/2016 10/1/2016 11/1/2016 12/1/2016 1/1/2017 2/1/2017 3/1/2017 4/1/2017 Mentions Mentions Over Time by Day ANNOUNCEMENT IGNITED FORD’S SOCIALCONVERSATION 12 Source: Brandwatch
  13. 13. 0 500 1,000 1,500 2,000 2,500 9/1/2016 9/2/2016 9/3/2016 9/4/2016 9/5/2016 9/6/2016 9/7/2016 9/8/2016 9/9/2016 9/10/2016 9/11/2016 9/12/2016 9/13/2016 9/14/2016 9/15/2016 9/16/2016 9/17/2016 9/18/2016 9/19/2016 9/20/2016 9/21/2016 9/22/2016 9/23/2016 9/24/2016 9/25/2016 9/26/2016 9/27/2016 9/28/2016 9/29/2016 9/30/2016 Mentions Sentiment Over Time by Day DECISION CREATED CONSIDERABLE AMOUNT OF NEGATIVE SENTIMENT 13 Source: Brandwatch
  14. 14. 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 4/1/2016 5/1/2016 6/1/2016 7/1/2016 8/1/2016 9/1/2016 10/1/2016 11/1/2016 12/1/2016 1/1/2017 2/1/2017 3/1/2017 4/1/2017 Mentions Mentions Over Time by Day CONFIRMATION OF KENTUCKYPLANT STAYING OPEN SPARKED CHATTER 14 Source: Brandwatch
  15. 15. 0 500 1,000 1,500 2,000 2,500 3,000 3,500 11/1/2016 11/2/2016 11/3/2016 11/4/2016 11/5/2016 11/6/2016 11/7/2016 11/8/2016 11/9/2016 11/10/2016 11/11/2016 11/12/2016 11/13/2016 11/14/2016 11/15/2016 11/16/2016 11/17/2016 11/18/2016 11/19/2016 11/20/2016 11/21/2016 11/22/2016 11/23/2016 11/24/2016 11/25/2016 11/26/2016 11/27/2016 11/28/2016 11/29/2016 11/30/2016 Mentions Sentiment Over Time by Day TRUMP, NOT FORD, RECEIVED NEGATIVE CRITICISM FROMANNOUNCEMENT 15 Source: Brandwatch
  16. 16. 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 4/1/2016 5/1/2016 6/1/2016 7/1/2016 8/1/2016 9/1/2016 10/1/2016 11/1/2016 12/1/2016 1/1/2017 2/1/2017 3/1/2017 4/1/2017 Mentions Mentions Over Time by Day CANCELED PLANS FOR MEXICAN PLANT GENERATED SIGNIFICANT NOISE 16 Source: Brandwatch
  17. 17. 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 1/1/2017 1/2/2017 1/3/2017 1/4/2017 1/5/2017 1/6/2017 1/7/2017 1/8/2017 1/9/2017 1/10/2017 1/11/2017 1/12/2017 1/13/2017 1/14/2017 1/15/2017 1/16/2017 1/17/2017 1/18/2017 1/19/2017 1/20/2017 1/21/2017 1/22/2017 1/23/2017 1/24/2017 1/25/2017 1/26/2017 1/27/2017 1/28/2017 1/29/2017 1/30/2017 1/31/2017 Mentions Sentiment Over Time by Day SOCIALAUTHORS WERE ELATED BY SCRAPED MEXICO PLANT NEWS 17 Source: Brandwatch
  18. 18. 18 SMALLCAR PRODUCTION STILL MOVING TO MEXICO
  19. 19. PRODUCTION CHATTER WAS SUBSTANTIALPART OF DISCUSSION 19 7% 93% Mentions of Production or Trump Compared to Rest of Conversation Production + Trump Uncategorized Dates: 9/1/2016 – 2/28/2017 119K Mentions 24M Impressions 86K Authors Source: Brandwatch
  20. 20. MEN & POLITICALLY-MINDED MOST ACTIVE WITHIN PRODUCTION CHATTER 20 43% 57%MaleFemale 8% 10% 15% 18% Books Sports Family & Parenting Politics Top Interests Demo Summary of Ford Production Authors Source: Brandwatch
  21. 21. MICHIGAN MOST LIKELY TO DISCUSS FORD PRODUCTION 21 Index Scale Weighted State Contribution by Index Source: Brandwatch
  22. 22. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Sentiment Over Time by Month HIGH LEVELS OF NEGATIVE SENTIMENT DID NOT LAST LONG 22 Source: Brandwatch
  23. 23. AS NEGATIVE SENTIMENT INCREASED, FORD SALES DECREASED 23 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 0 50,000 100,000 150,000 200,000 250,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ford Motor Company 2016 Monthly Sales vs. Negative Sentiment Unit Sales Negative Sentiment Sources: Ford; Brandwatch
  24. 24. NOT WILLING TO PAYPREMIUM DESPITE PREFERENCE FORAMERICAN-MADE 24 Source: AOL Omnibus, April 2017, n=1009 US Internet Users General Population Trump Voters Buying a vehicle from a U.S. manufacturer is very important 59% 71% Willing to pay premium on U.S. made vehicle 10% 15%
  25. 25. WHICH CARSARE ENTIRELYMADE IN THE U.S.? 25 Of the 450+ vehicle models sold in the U.S. for the 2016 model year… None Source: American Automobile Labeling Act
  26. 26. WHICH CARSARE MOST “AMERICAN-MADE”? 26 Source: Cars.com Annual Survey Toyota Camry Honda Accord Toyota Sienna Honda Odyssey Honda Pilot 1 2 3 4 5
  27. 27. WHERE VEHICLE IS MADE MAY BE IMPORTANT, BUT NOT TOP CONCERN 27 Source: AOL Omnibus, April 2017, n=1009 US Internet Users 5% 21% 26% 30% 32% 35% 39% Made domestically Big enough for family Budget oriented Good reputation Safety rating Handles well Fuel efficiency Consumers’ Top 3 Factors When Purchasing a New Vehicle
  28. 28. MORE LIKELY TO BUYFORD DESPITE SEEING BRAND LESS FAVORABLY 28 Source: E-Poll; 2017 comScore//GFK MRI Media MMX + Fusion (02-17/F16) 4.18% 6.95% 0.42% 3.56% 7.96% Likelihood to Purchase If Making Decision Today % of Consumers 37% 37% 16% 24% 26% 36% 36% 20% 25% 28% Consumers’ Perceptions Towards Auto Manufacturers High-Quality Reliable
  29. 29. FORD LEADINGAUTO MANUFACTURER IN THE U.S. 29 Source: Statista 2.49 2.11 2.10 1.48 1.43 0.93 0.77 Leading Car Brands in the U.S., 2016 (Unit Sales in Millions)
  30. 30. CLICK HERE TO EDIT HEADLINE 30
  31. 31. CONSUMERS PAYING MOREATTENTION TO WHERE PRODUCTSARE MADE 31 30%Pay more attention to whether a product is made in the U.S. compared to a year ago 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Mentions American-Made Social Chatter Over Time Individual Twitter Accounts 2014 2015 2016 2017 Sources: Brandwatch; AOL Omnibus, April 2017, n=1009 US Internet Users
  32. 32. WITHINAMERICAN-MADE DISCUSSION, FASHION TOPICS DISCUSSED THE MOST 32 Fashion Automobiles Tech/Electronics CosmeticsStructural Materials 31% 21% 17% 16% 9% Category Breakout of Social Chatter Dates: 4/1/2016 – 4/27/2017Source: Brandwatch
  33. 33. MEN & POLITICALLY-MINDED MOST ACTIVE WITHIN DISCUSSION 33 49% 51%MaleFemale 8% 9% 13% 14% Books Sports Family & Parenting Politics Top Interests Demo Summary of Ford Production Authors Source: Brandwatch
  34. 34. 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 4/1/2016 5/1/2016 6/1/2016 7/1/2016 8/1/2016 9/1/2016 10/1/2016 11/1/2016 12/1/2016 1/1/2017 2/1/2017 3/1/2017 4/1/2017 Mentions American-Made Mentions Over Time by Day TRUMP’S EXECUTIVE ORDER SPARKED INFLUX OF CHATTER 34Dates: 4/1/2016 – 4/27/2017Source: Brandwatch
  35. 35. INITIAL REACTION TO EXECUTIVE ORDER VERYNEGATIVE 35 20% 80% Sentiment Towards Executive Order White House Ivanka Trump Mexico American-made tools Made in China Made in the United StatesPresident Trump Trump products aren’t made made in USA New executive order Obama 1B Visas Chinese Clothing line 90 days power to make Made in the USA buy American goods visas are awarded products are stamped America first commerce secretary American-made steel Dates: 4/17/2016 – 4/27/2017Source: Brandwatch
  36. 36. KEYTAKEAWAYS 36 • Where products are made does impact consumers’ likelihood to purchase, but it’s not the most influential factor • Data suggests that the perception of being “American-Made” outweighs the products actual origin • U.S. automakers like Ford should continue to take advantage of the reputation they’ve built, while looking to improve their image of quality & reliability • Foreign owned automakers could benefit by placing more emphasis on being more “American-Made” than U.S. competitors • Higher consideration products, with longer purchase cycles, may be less impacted by negative publicity

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