New Report Offers 5 Lessons on the Perceptions of Manufacturers and Consumers

Cover_Flat_660pxIf you still wonder what manufacturers and consumers think about sustainability UL (Underwriters Laboratories) is here to help. A couple of weeks ago, the company released the 2012 findings of its annual global study, The Product Mindset, which examines manufacturer and consumer perceptions about how products are made, sold, bought and consumed.

Based on interviews with 2,400 manufacturers and consumers in the U.S., China, Germany and India, the report covers a wide range of issues, from quality and safety to the environment. All of these issues are, of course, interconnected, but we still tried to focus on the findings related to sustainability and figure out what we can learn from them. Here are the main five lessons we found:

1. When it comes to attitudes, manufacturers answer just like consumers

As we have noted here more than once, consumers tend to be very eco-friendly when asked about their attitudes, which is many times at odds with their behavior. In the UL report we see a somewhat similar trend with manufacturers. Take for example this finding: “Between 80 and 90 percent of manufacturers agree that sustainability-related factors are essential to the success of their business.” Or how about this one: “Two-thirds of manufacturers strongly agree that the environment is becoming more important, with more than half seeing increased consumer demand for eco-friendly products.”

If this was the case, we would be in much better shape than we are now when it comes to sustainability. Yet, other reports and studies show us that business is moving forward, but slowly. In other words, manufacturers, just like consumers, describe a reality that is not real.

2. There are 3 main reasons why manufacturers move forward slowly

The report is also very helpful in tracking the reasons behind the manufacturers’ behavior, or in other words, why their progress is relatively slow. The first reason is that that sustainability is not perceived yet as a fundamental consideration like product quality or safety, for example.

The report found that 90 percent of the manufactures agree that product quality impacts their ability to compete today, followed by product reliability (84 percent) and product performance (82 percent), while product sustainability is almost at last place on the list with 59 percent.

Another reason is profitability. Only 60 percent of manufacturers believe that greener products can be profitable or somewhat profitable. Compared to last year’s results, this figure actually declined by five percent. Last, but not least, manufacturers don’t think consumers care that much about sustainability. Only 8 percent replied that eco-friendliness is what consumers care about most, compared with 38 percent who answered quality or 21 percent who answered performance/reliability.

3. Consumers care more about quality and safety

As manufacturers seem to pay more attention to quality and safety, it is not surprising to see that consumers also care mostly about these two issues. Forty-two percent of them identified quality as the product improvements that should be most prioritized by manufacturers, followed by safety (19 percent), environmental friendliness (16 percent), innovation (14 percent) and design aesthetics (9 percent).

These findings correspond with another in the report showing that only 9 percent of consumers cite eco-friendliness as the main reason they select products they purchase. The good news is that eventually sustainability will be associated with safer and better products and not just with being good for the environment, and then both consumers and manufacturers will hopefully take notice of it.

4. Eco-friendliness of products is important for consumers when it comes to home materials and food, not electronics

The report compares the attitudes of consumers towards different product categories, asking them what issues should be most prioritized by manufacturers when it comes to fresh food, processed food, home building materials, high-tech/consumer electronics and smart applications. Environmental friendliness top the list of issues in only one category – home building materials with 25 percent.

Not surprisingly, consumers also think eco-friendliness is important when it comes to food, both processed and fresh, ranking it second only after product quality in both cases. There’s one category, though, where consumers don’t think this is a major issue – high-tech/consumer electronics, where eco-friendliness was ranked last at only 10 percent. Remember that the next time you wonder why Apple doesn’t take these issues too much into consideration.

5.  Chinese and Indian manufacturers put more emphasis on the environment

The report also provides an opportunity to see the differences between manufacturers in the emerging markets (India and China) and developed markets (U.S. and Germany). Overall, it looks like manufacturers in the emerging markets give the environment more significance than manufacturers in the developed markets. The reasons might be that they tend to identify more profitability and greater demand for such products.

The report shows that Indian manufacturers stand out as being much more likely to see profitability in being eco-friendly. In addition, more than half of both Chinese and Indian manufacturers believe that consumers demand more eco-friendly products and are also willing to pay premium for it. These findings coincide with the latest Regeneration Consumer Study, showing that if we eventually see a significant change, it will probably start in India and China, where both business and consumers seem more ready to do their part.

[Image credit: UL]

Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and the New School, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.

Raz Godelnik

Raz Godelnik is an Assistant Professor and the Co-Director of the MS in Strategic Design & Management program at Parsons School of Design in New York. Currently, his research projects focus on the impact of the sharing economy on traditional business, the sharing economy and cities’ resilience, the future of design thinking, and the integration of sustainability into Millennials’ lifestyles. Raz is the co-founder of two green startups – Hemper Jeans and Eco-Libris and holds an MBA from Tel Aviv University.

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