June 01, 2006
Thursday

Ailing U.S. manufacturers have a problem: "Made in the USA" doesn't have the patriotic marketing punch with consumers that it once did.

There are several reasons: Price is king, even with many shoppers who associate American goods with quality. Young adults and educated households in the global economic age have become more comfortable with imports and aren't inclined to search for U.S. products first. And the Internet has demystified foreign goods by making information about them more accessible.

Ann Khan sees it every year between Memorial Day and the Fourth of July, when shoppers come into her store in Sacramento, Calif., to purchase American flags. Her shop, Old City Kites, has Old Glory in dozens of sizes, but all are made outside the United States. Just a handful of flag manufacturers still operate here, Khan said, but their products cost up to twice the price of comparable Chinese imports.

"People care about U.S.-made until they see the price tag," she said. "We can order them, but when we quote the price to a customer they always change their mind and go with the flags we have in the store."

Marketing experts say that many consumers don't have a strong emotional connection to "Made in America," so it's not surprising that shoppers are defecting to cheaper foreign products. Most don't tie their spending to lost U.S. jobs or poor labor conditions in other countries - they're just trying to find a good deal.

"How many of us, in our own circle of connections, actually know someone who has worked in an apparel sweatshop? Or made plastic toys?" said Don Delzell, a partner at Retail Advantage, a consultant in Southern California. "(Made in America) is an obvious merchandising ploy, but it has never worked for an appreciable length of time."

U.S. consumers still tend to think highly of American-made brands, according to a survey by Synovate Global Omnibus Group, a worldwide polling firm, but those warm feelings often don't translate into cold cash purchases.

A Synovate survey of American consumers revealed that 72 percent said they "always seek out products made in the United States." The survey also gave high marks to Detroit for domestic car quality, placing U.S. cars on par with foreign brands.

"But when it comes to buying American, stated vs. actual behavior are two different things," said Thomas Mularz, a Synovate senior vice president. "People will say they value buying domestic products, then they'll go to a Toyota dealer and buy a car."

Earlier this year, Ford Motor Corp. unveiled its "Red, White and Bold" campaign, emphasizing "innovation that is formed right here in America."

Yet marketing experts think consumer loyalty to U.S. car brands is eroding in part because savvy buyers are becoming aware that globalization is blurring the line between U.S. and foreign brands.

General Motors Corp.'s cars and trucks for the U.S. market last year were made with 80 percent of the parts coming from U.S. and Canadian plants, down from 92 percent in 1997, according to the National Highway Traffic Safety Administration.

About 35 percent of the parts in Ford's 2005 Mustang came from outside North America.

German-based DaimlerChrysler AG, with longtime American car roots, built its vehicles for the U.S. market last year with 75 percent of the parts from U.S. and Canadian factories, down about 4 percent from 1997.

Some Japanese cars are headed the other direction: 70 percent of the parts in Toyota Motor Corp. vehicles made in U.S. plants came from the United States or Canada, up from 52 percent in 1997.

" 'Made in America' is an integral part of the continued existence of U.S. carmakers," Delzell said. "But what are we being asked to identify with?"

The American appetite for foreign products seems insatiable. U.S. imports of goods totaled $1.67 trillion in 2005, according to federal statistics. In 1975, the last year America logged a trade surplus, the country imported just $98 billion worth of goods.

Synovate's survey found that young adults, a group entering their prime purchasing years, and educated households - an affluent segment of the population - generally don't look for U.S. products.

"These are consumers who are more sophisticated," Mularz said. "They're more open to buying foreign products, from electronics to cars. And they're in tune with Internet shopping, where global comparisons are just a click away."

Mularz could have been describing 21-year-olds Curtis Cherry and Anthony Varner, students at California State University who were recently taking a lunch break from shopping at a Sacramento-area mall.

"I already assume that just about everything comes from China or someplace else," Varner said.

"I'd be lying if I said that I look at the tag before I buy a shirt or whatever," Cherry said.

Both use the Internet to help make shopping decisions because, Cherry said, "You can get tons of information - quick."

On the other side of a mall food court where the students sat, and two generations removed, Leonard Swedensky also was eating lunch.

"If I had my way, nothing would be imported, including oil," said Swedensky, an 80-year-old World War II veteran. "This country is all screwed up."

Swedensky's generation, the baby boomers' parents who vividly remember World War II and the postwar economy, are the "strongest pocket of pro-American consumers," said Synovate's Mularz. "But they're dying off."

Ann Khan said she'll get a few of those folks in her store asking about American-made flags.

"But really, hardly anyone asks," she said. "It's not an issue for people."

SitNews
Stories In The News
Ketchikan, Alaska