Where did you come from and does it matter?

This weekend, Clay Shirky wrote on Twitter:

Nokia products say “Made in China” on the back. Chinese-made Nokia-knockoffs say “Made in Finland.”

Interesting point, isn’t it? Let’s ignore for the purpose of this post that my Nokia N97 actually says “Made in Finland” inside it (although given my publicly declared love for it, I have cause to wonder if it really is a Chinese-made-knockoff in which case Vodafone is in real trouble!). I have made interesting discoveries about some of my stuff since this tweet appeared. My kettle doesn’t say where it was manufactured; two pairs of American branded shoes are Made-in-China while two other pairs of Italian shoes are Made-in-Italy; the English brand of lotions says Made-in-England while the French cast iron pots are variously Made-in-France, Made-in-Thailand and Made-in-USA.

What do these “Made-in-X” labels mean anymore? Do they mean anything any more at all?

In some industries, such as automotives, the supply chain is componentised (sic!) and truly globalised (pdf link) to such an extent that only the brand is ever owned by an entity whose national identity can be named. In others, the lax labelling laws mean that products made in China and finished in a European country can sell at huge prices as “Made-in-EuropeanCountry” products. Rights to some otherwise unrelated and disparate brands, for specific product categories, such as eye wear, have been licensed out to specialists who maintain the brand’s identity but the consumer may not quite know (or care) where her sunglasses were manufactured.

What is clear is that it doesn’t matter where the product comes from but it sure matters where the brand comes from. Many strategies are emerging by which brand owners are outdoing or trying to contain competition.

Champagne or sparkling wine: Legal protection

In Europe, several regimes are enshrined in EU Law to protect the names of regional foods. These include Protected Designation of Origin (PDO), Protected Geographical Indication (PGI) and Traditional Speciality Guaranteed (TSG) labels. Foods that can only be labelled as such if they come from the designated locations include Parmigiano-Reggiano, Melton Mowbray pork pies, and Camembert de Normandie. Of course, sparkling wines can only be called Champagne if they come from the eponymous French region and this privilege is protected by the Treaty of Madrid. Indeed Mumm made and bottled in France is champagne while Mumm from Napa Valley in the USA is sparkling wine!

Bespoke or custom-made: Consumer education

Indeed not all products can fight for such protected status. So they seek to rely upon the key attributes of their brand and to promote them. In the now well-known Sartoriani v. Savile Row row,the Advertising Standards Agency ruled that although Sartoriani did not make its suit entirely by hand and did some cutting abroad, it was allowable to let them use the term “bespoke” in their advertising. Sartoriani’s products do not all match the 21 characteristics of a Savile Row suit but it may be ok for some. Savile Row’s name is synonymous with “bespoke” for many and Savile Row Bespoke Association continues to reiterate its commitment to high standards of craftsmanship.

All examples so far have been about consumer goods. What about technology-led businesses?

Value appropriation: knowing what matters and claiming it

All Apple products – whether a weather-beaten Powerbook, a bright new Macbook Pro or an ordinary iPod – say the following at the bottom:

Designed by Apple in California. Assembled in China.

To the Apple consumer, the whole Apple legend matters and Apple knows how to appropriate it cleverly. Apple is a California company in many respects – innovative and iconoclastic. Apple is also known for its design coups from the iMac to the iPod. For a technology-led business, such as Apple, design and engineering excellence matters, über alles. And Apple knows it. The manufacturing information label on Apple products says it just right. It makes it clear who creates the value and claims it. That the products are assembled in China almost does not matter.

Except that there is a twist in this story. Which is worth pointing out as many of my clients are British technology-led businesses.

The designer of Apple’s recent bestsellers – the Powerbook G4 (on which I write this post), the iMac, the Macbook, the Macbook Pro, the iPod and the iPhone is British, a man named Jonathan Ive.

Then another thing happened yesterday just as Clay Shirky’s tweet appeared. For the second year in a row, a British man, Jenson Button, won the Formula 1 Drivers’ Championship. A British team, Brawn GP, also won the Formula 1 Constructors’ Championship. Yes, there is a touch of globalisation there too – with a French head of aerodynamics, a Brazilian driver, a German engine powering the cars – but the team achieved the near-impossible give its difficult beginnings for the 2009 season. Or as Doug Ellison told Lord Drayson, our Minister For Science and Innovation:

And a British engine even if it says Merc on the badge, designed and built in Northamptonshire. A VERY British championship.

So what’s in it for technology-led businesses?

  • Great engineering and design skill;
  • Recognition of the value of your skill and your brand;
  • Appropriation of that value; and where necessary,
  • Leveraging the value of the technological excellence of another, probably unrelated sector with whom you may share a common, positive characteristic.

If as the leader of a technology-led business, you focus on these strategic building blocks, then it doesn’t matter where the product comes from, just who owns the brand.

And your being a British technology business may just work in your favour too.

Related reading:

The dilemma of Savile Row brands

6 thoughts on “Where did you come from and does it matter?

  1. Buying local is a huge thing here, and that means not just Made in USA, but made/grown/sold here in Oregon. Not everything is made here, though, so often we end up supporting a local business that is selling items made elsewhere.

    @Kathleen: Thanks for your note. I think consuming local is more possible in some product categories (food being the obvious one) than in others (what if the country or town did not make any clothes or grow any cotton?). But then one comes up with this sort of info: Oregon state exports $19.4B of chemicals, high-tech stuff and agri-products to Canada and China. So how does the local population reconcile its commitment to “local” with this large chunk of exports? Just curious.

  2. This is a tough one for me since I don’t belong to one place or one sense of local. I raised the question on Twitter once re: what is “local”. I currently live in Toronto but I have spent more of my life in Boston. To which community should my “local” allegiance lie? Is it better to create jobs in the country I call home (Canada) vs the country of my birth (India)?

    In terms of whether it matters – the short answer is “yes” in the eyes of the consumer. Certain countries have certain brands and people are more willing to pay a premium for products that claim they are made from a Western country vs a country where wages are low and quality is perceived to be lower.

    The problem is, which you correctly stated in the examples above, having a label saying Made in X doesn’t actually mean it was made in that country. Or in other cases, like in Ontario, we have labels for wine that say “Cellared in Ontario” when in fact the grapes came from elsewhere. Yes, consumers should be more educated but the volume of information we’d need to research and verify is near impossible to manage.

  3. When it comes to food – yes, buying locally grown produce is much more eco-friendly than buying food imported from halfway across the world.

    But for other products, it really shouldn’t matter, and it doesn’t. Our perceptions are based on brands, and we really don’t check to see origins on known brands. Companies have quality specs which they adhere to irrespective of where the product is made.

    Ironically, the same people who proudly wear “Made in America” T shirts will have no problem buying toys made in China and kiwis from N Zealand 🙂

  4. The current globalised contxt is here to stay, and is only going to get more and more entrenched, as communications, supply chains, logistics get more sophisticated and capable of truly traversing geographical boundaries. Engagement across commercial, diplomatic and cultural levels shall converge progressively, as localied cultural and commercial systems get more au fait with operating in a globalised context. Glocalisation (globalisation + localisation) shall be the mantra to be followed.

    Within this context, i reckon it becomes less and less relevant as to the geographical origin of a product’s manufacture. However intangible service oriented considerations are a different kettle of fish. It DOES matter that an Ipod is designed at Apple’s R&D facilities, but does it matter if that R&D facility is in Silicon Valley or in Apple’s owned, staffed and operated R&D centre in Bangalore?? Does it matter if the creative energies that were previously limited to specific geographic points, are now transported across boundaries and successfully replicated? Surely there can never be any one perfect way of doing anything, there can always be a faster, more creative, less expensive, more effecient way to deliver a product or service.

    The race then begins, to absorb maximal components of the global value chain within your own control, or rather – to absorb the high value add, the less replicable, the more controllable, components, and to allow the more commoditised, ubiquitious components to become part of someone else’s meal ticket.

  5. Somwhow I always check the made-in label. I know the brand matters more, and that is logical, but somehow I still have to check. I bought some stuff in London recently which was made in bangladesh and well, it was good, but still, I was a mite disappointed reading where it was made! I do have some notions about quality depending on where a thing is made. For example if a swiss knife is made in Switzerland I tend to believe its the very best. I found a statue of ganpati at Mumbai ariport. Made me smile.

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