Look who's watching you

A recent study by Underwriters Laboratories says consumers are increasingly gaining influence and effectively getting their voices heard across the global supply chain.

Consumers are increasingly gaining influence and effectively getting their voices heard across the global supply chain. Nearly 70 per cent of the manufacturers today agree that consumers are becoming more aware and better educated about products in general, according to a Product Mindset study by Underwriters Laboratories, an independent, third-party safety testing and certification company.

Underwriters Laboratories conducted the quantitative research among 2,400 consumers and manufacturers in China, India, Germany and the United States in the spring of 2011. The findings have interesting insights for Indian manufacturers.

In bullet points
Consumers across geographies say:

* Product quality is better today than five years ago

* Product quality as better in developed vis-à-vis emerging countries

* Product safety is improving

* Manufacturers are not following adequate environmental procedures

* Environmental orientation can be profitable

Nearly 66 per cent of the manufacturers in India agree that consumers are not only better educated about the products in general but are also requesting more safety information about the product, before purchasing them. The study also found that consumers understand and prioritise product safety enough to comprehend that there are different safety issues specific to particular industries and the products they create.

In other words, consumers are expanding their power and control and becoming a more significant stakeholder in the supply chain. They expect more information and demand more of manufacturers. And while the environment is a key factor in their consideration set, few manufacturers appear to make it a top tier issue today. Interestingly, consumers are expressing more interest in knowing where a product is made, where it is assembled and the countries that a product's ingredients and raw materials originate from. This is becoming more essential as products are becoming more complex.

More than half of manufacturers studied also agree that consumers are demanding environmentally friendly products for the same cost as non-eco-friendly products. Understanding that consumers are more concerned about components than they are with where a product is assembled demonstrates both their expanded comprehension of the supply chain and their commitment to ask for and discern more detailed product information.

In India, over a third of the respondents expressed that where the parts come from for food products is important, while nearly one in two respondents expressed a similar sentiment for high-tech products. Seventy per cent of the Indian consumers are aware of the manufacturing country of origin while making a purchase. The widespread use of the internet, social media and media reporting likely has facilitated this education.

Owing to this shift in consumer perception, 83 per cent of manufacturers have expressed a strong degree of confidence in the value of consumer endorsements They also consider claims made by consumers who use their products as the single most-valuable endorsement.

Not surprisingly, given the profitability challenges and the increasing competitiveness across categories, product innovation is becoming an increasing priority for manufacturers. Despite increasing complexity, economic challenges and pressure along all points on the supply chain, there is a pervasive mindset of confidence and optimism today, concludes the report.