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Consumers in U.S., China Are Willing to Pay More for Appliances Made in U.S.
Nov 16, 2012
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More than 80% of U.S. consumers - and even 60% of Chinese consumers - are willing to pay more for products labeled "Made in USA" than for those labeled "Made in China," according to The Boston Consulting Group (BCG).

Appliances were among the "Made in the USA" products that consumers were willing to pay a premium for.

One of the most important reasons for the preference: a large majority of consumers in the United States and in China feel products from the United States are of higher quality.

BCG surveyed more than 5,000 consumers in the U.S., China, Germany, and France, in September 2012, regarding their attitudes toward the value of the Made in USA brand and their actual buying behavior.

The results show U.S. consumers are willing to pay a premium for the Made in USA brand, although the premium varies from 10% to 60%, depending on the product.

The report found that almost 60% of U.S. consumers chose a Made in the USA product over a less-expensive product from China at least one time in the month before the survey.

The report found that almost 50% of Chinese consumers prefer a product made in the United States to a China-made product of similar price and quality.

The premium that Chinese consumers are willing to pay ranges from about 10% to almost 80%, for some products.

More than half of Chinese consumers bought a U.S.-made product instead of a less-expensive, made-in China product at least once in the month before the survey.

"These findings suggest that there's a big opportunity for manufacturers and retailers to command a price premium by promoting the Made in USA brand--not only in the U.S. but also in China," said Harold L. Sirkin, a BCG senior partner and coauthor of the research. "Retailers may want to adjust their strategies to capitalize on the strong consumer interest."

The findings support previous BCG analysis showing that the U.S. is becoming increasingly attractive as a location for making certain products for the U.S. market and as a base for global exports. The U.S. has improved its cost competitiveness compared with China and the advanced economies of Western Europe and Japan, leading BCG to estimate that higher U.S. exports--combined with production "reshored" from China--could create 2.5 million to 5 million new U.S. jobs in manufacturing and related services by the end of the decade.

"The higher brand value of U.S.-made goods is a further reason why companies should rethink their global manufacturing footprint and consider the U.S. as a manufacturing location," said Michael Zinser, a BCG partner who leads the firm's manufacturing work in the Americas and is a coauthor of the Made in America, Again series.

Quality is a key driver of Chinese and U.S. consumers' preference for products made in the United States. The report showed that:
* 85% of U.S. consumers said they "agree" or "strongly agree" that they feel better about "Made in USA" quality
* 82% of Chinese consumer said they "agree" or "strongly agree" that they feel better about "Made in USA" quality

To U.S. consumers, patriotism is another strong consideration:
* 93% said that they would pay more for U.S.-made goods as a way to keep jobs in the United States
* 80% said buying U.S. products demonstrates patriotism

European consumers, however, strongly prefer the products made in their own countries. More than 65% of consumers in Germany and France said they're willing to pay more for products made in their home country than for those made in the U.S.

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