Preventing a Misguided Manufacturing Investment

Across six countries, manufacturing location was perceived as a strong advantage—but did not influence buying decisions.

Low visibility of country of origin and inconsistent brand selection limited its impact.

We assessed whether this perceived benefit would translate into share gain or pricing power—and whether the investment should proceed.

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Background

A global industrial manufacturer was evaluating whether to open a manufacturing plant in a country known for high-quality production to enhance perceived product quality.

The study spanned six countries, capturing buyer perceptions of manufacturing quality, competitive structure, and decision dynamics.

 

The hypothesis was straightforward:

Manufacturing in this country would strengthen perceived quality and support both share growth and a price premium.

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Objective

Determine whether opening a new plant would:

• Expand consideration among target buyers
• Strengthen perceived quality and reduce risk
• Support a measurable price premium
• Translate into realistic, capturable market share

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Our Approach

We analyzed each stage of the decision process:

Awareness → Consideration → Evaluation → Choice → Market Outcome

This included:

 

• Measuring awareness of manufacturing origin
• Identifying how brands enter and exit consideration
• Quantifying gaps between perception and actual knowledge
• Analyzing brand usage patterns within firms
• Profiling market structure across 22 competing brands

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Critical Findings

1. Manufacturing in the Preferred Country Was Viewed Very Positively

Manufacturing in the preferred country was associated with:

 

• Higher perceived quality
• Greater reliability
• Lower perceived risk
• Willingness to pay a premium

…known for its precision and high-quality engineering

…Their craftsmanship is world-renowned, and we trust in its quality and quality control.

However:

Manufacturing in the preferred country was viewed very positively. But few buyers had enough knowledge of the category to know where the products they used were actually manufactured—and awareness of where competing brands were made was even lower.

• In nearly 40% of cases, buyers were incorrect about the manufacturing origin of the products they used

 

As a result, manufacturing location rarely entered the decision process in a consistent or meaningful way.

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2. Consideration Was Fragmented in a Commodity Environment.

• Firms used 4+ brands on average
• No primary supplier emerged
• Leading brand share: ~33%
• Most brands ranged between 5%–25% share

Brand choice varied from purchase to purchase, rather than following a consistent preference.

The market functioned as a commodity environment with no dominant leader or stable preference structure.