News release
Does locally made make the grade?
Concordia research calls for local manufacturers to provide assurances about product quality
Montreal, April 9, 2013 – From the 100-mile diet to rooftop gardens, the local food movement is gaining momentum. As more information emerges about the benefits of eating local, more families are shopping at farmers’ markets, and more grocery stores are stocking and promoting local produce. When it comes to more expensive products like furniture, the trends are not so clear. That’s why a researcher at Concordia University decided to take a closer look.
Mrugank V. Thakor, a professor in the Department of Marketing at Concordia’s John Molson School of Business, compared American consumers’ perceptions of products that were “made in the USA” with those made locally. The results were published in the February 2013 edition of Psychology and Marketing. Thakor’s study found that consumer concerns about quality need to be addressed in order for local identity to become effective marketing strategy. Local means “fresher” and “tastier” when it comes to fruits and vegetables, but perceptions are mixed when it comes to manufactured items.
Thakor’s findings have important implications for small manufacturers seeking to target local markets. He explains that, “only when consumers are motivated to process information or when external assurances of quality are available” do products benefit from advertising their status as locally made. In these situations, people were willing to pay more for a local product than they would for a comparable product stamped with the broad tag of “Made in USA,” and were more satisfied with the deal. “Consumers want to buy local,” Thakor emphasizes, “but marketers need to find ways to reassure them that the product is as good as or better than the national brand.”
Thakor and co-author Rajneesh Suri of Drexel University in Philadelphia conducted a series of studies to evaluate how a product’s origin influences consumer perception. The researchers’ initial study assessed participants’ general feelings about locally manufactured products, and confirmed that they have conflicting responses. It turns out that consumers want to support their local economy, but they are uncertain about the quality of locally made products. That’s because they assume that small manufacturers do not have the resources to assure consistent quality.
In a follow-up study, Thakor and Suri focused on one piece of furniture: the filing cabinet. They asked participants to decide which filing cabinet they would prefer. Their responses indicated that when consumers have invested time and energy in making the right choice, they are more likely to choose locally manufactured furniture, and less sensitive to the price of the product. “Concerns about quality may have encouraged our hypothetical consumers to pay more for the locally made filing cabinet. Their uncertainty prompted them to look for other signals, and they associated higher price with better quality,” says Thakor.
Finally, the researchers assessed the impact of product ratings on the decision to buy local. Participants were much more likely to choose a locally manufactured entertainment system when they knew it had garnered good reviews. That information made them more confident in product quality while reinforcing positive feelings about buying locally made goods. Because of these positive associations, the price of the entertainment system became a less important factor in their decision-making, and they were willing to pay more.
Thakor’s research shows that, when it comes to locally made products that will last a little longer than a homegrown apple, consumers are willing to make the investment. It’s up to marketers to put their mouths where that money is.
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