The Product Mindset Brazilian Market

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UL INVESTIGATION ABOUT THE BRAZILIAN MARKET

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<ul><li><p>CONSUMERS</p><p>MANUFACTURERS</p><p>MANUFACTURERS</p><p>THE PRODUCT MINDSET 2013 BRAZIL REPORT</p></li><li><p>The Product Mindset is an annual study created to better understand manufacturer and consumer concerns and priorities about the products they make, sell, buy and use. Now in its third year, the study is broader in scope and more nuanced in its findings. With Brazil added in 2013, this years study covers four continents and defines the collective mindset based on data from five of the worlds top 10 largest economies. The 2013 study has also been expanded to further explore emerging issues related to the supply chain and human health, both of which yield interesting findings relative to Brazil. We hope you find this report informative and thought provoking.</p><p>UL is a premier global independent safety science company with more than 118 years of history. Building on our product safety heritage, we created The Product Mindset to help businesses better understand the growing concerns and priorities of your diverse constituents and peers. The studys insights can provide a platform for you to consider how you think, plan and deliver in todays complex product ecosystem.</p><p>THE PRODUCT MINDSET 2013</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 2</p></li><li><p>THE BRAZIL REPORT</p><p>This report focuses specifically on the context, findings and rankings that define the mindset in Brazil, highlighting the areas where Brazilian manufacturers or consumers differ significantly from their peers in China, Germany, India and </p><p>the U.S. This report should be viewed as complementary to The Product Mindset 2013 full report, which contains the complete set of key global findings.</p><p>AUDIENCES</p><p>Director-level executives specializing in management, research and development, </p><p>marketing and sales, quality control, sustainability, product management or design</p><p>CONSUMERS</p><p>A representative mix of age, gender, education and income</p><p>MANUFACTURERS</p><p>306 - BRAZIL 302 - BRAZIL</p><p>1,521 - GLOBAL 1,528 - GLOBAL</p><p>TABLE OF CONTENTS</p><p>CONTEXT 4 </p><p>FINDINGS 7 </p><p>RANKINGS 16 </p><p>MORE PRODUCT MINDSET 19</p><p>ACKNOWLEDGMENTS &amp; METHODOLOGY 20</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 3</p></li><li><p>BRAZIL: CONTEXT</p><p>Despite Brazils advancement and worldwide recognition, the mood in the country appears to reflect a more restrained optimism. Brazils economic growth outpaced the global average by more than three times during the early years of the economic crisis (2008-2010) but has slowed the past two years.1 Brazil is now the seventh-largest economy in the world2 and will celebrate the 2014 World Cup and 2016 Olympic Games, making it the powerful focus of the global stage. </p><p>Today, Brazilian manufacturers exhibit a more realistic outlook. They are significantly less global in their sourcing than manufacturers are in developed economies, but their industries are fast becoming </p><p>more complex. A point of difference is that manufacturers in Brazil are much more open than their global counterparts in expressing a need for across-the-board business improvements. </p><p>Consumers are positive about the improving product quality in Brazil although less so than consumers in other emerging economies. Additionally, the vast majority of Brazilian consumers desire more stringent governmental regulation of manufacturers. This may be linked to the serious concerns these consumers express about the environment and to their overall growing sophistication.</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 4</p></li><li><p>CONTEXT</p><p>BRAZIL: GLOBALIZATIONBrazil is less globalized than developed nations today, particularly relative to sourcing, which translates into less complexity; however, there are signs that Brazil is rapidly becoming more global and complex</p><p>Significantly fewer Brazilian manufacturers operate globally, but the vast majority see the benefit of it</p><p>Distribution/Sales is Brazilian manufacturers most global function today, which is on par with the global average (61%) globally, sourcing is the most common multinational function (70% of manufacturers), and here Brazil lags</p><p>SAY: They operate multinationally, significantly below the current global level (78%)</p><p>AGREE: Global sourcing is a means to improve product quality, which is significantlyabove the global average (78%)</p><p>64% 89%</p><p>Percentage of manufacturers that operate multinationally in the following areas:</p><p>62% | DISTRIBUTION/SALES</p><p>52% | SOURCING</p><p>42% | MARKETING/PROMOTION</p><p>37% | MANUFACTURING</p><p>Significantly more Brazilian manufacturers than the global average (48%) state they will increase global sourcing over the next five years...</p><p>...and they are 56% more likely than global manufacturers to source from new countries</p><p>57% 39%THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 5</p></li><li><p>BRAZIL: MOODBrazilian consumers feel better about product quality but still want to see more regulation of manufacturers</p><p>CONTEXT</p><p>Brazilian consumers believe product quality is better than it was five years ago...</p><p>EMERGING</p><p>DEVELOPED 50%</p><p>61% </p><p>79% </p><p>59%</p><p>88% </p><p>Similar to manufacturers around the world, those in Brazil already feel stringently regulated...</p><p>88% 83% 86% 86% </p><p>87% </p><p>53%</p><p>DEVELOPED EMERGING</p><p>63% 79% 81% 92%</p><p>...but the vast majority of them desire more stringent governmental regulation</p><p>Cost Ethical SourcingEnv. Friendly ManufacturingEnv. Friendly ProductsHealth Impact</p><p>94%...but they are significantly more likely to see a need for improvement across 13 business success measures</p><p>13 measures:InnovationPerformance Quality Reliability Safety</p><p>Speed to Market Traceability Transparency</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 6</p></li><li><p>BRAZIL: FINDINGS</p><p>The findings identify the key considerations where Brazil stands apart from China, Germany, India and the U.S. Manufacturer improvements, the environment, the impact of environmental products, Quality, supply chain Transparency, Country of Origin and the Health Impact </p><p>of products are all areas where Brazilian manufacturers and consumers differ from their peers. Highlighting these differences helps us understand what is distinctive about the Brazilian mindset.</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 7</p></li><li><p>Across 13 business success factors, Brazilian manufacturers express a far greater need for improvement than do manufacturers in other countries, which may reflect a higher degree of openness about their issues, pessimism about their prospects or need </p><p>relative to their competitiveness</p><p>BRAZIL STANDS APART</p><p>see a need for improvement64%</p><p>CHINA | 41%</p><p>INDIA | 40%</p><p>USA | 35%</p><p>GERMANY | 42%</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 8</p></li><li><p>BRAZIL DESIRES PROGRESSThe environment has continued to advance as a priority in Brazil; however, consumers seem to doubt the intentions of manufacturers in terms of their </p><p>commitment to environmentally friendly products and manufacturing procedures</p><p>#1RANK</p><p>MOST IMPORTANT </p><p>RISING PRIORITY</p><p>#2RANK</p><p>MOST IMPORTANT </p><p>RISING PRIORITY</p><p>48% of Brazilian consumers 26% more than in other countries dont think manufacturers are doing enough in terms of environmentally </p><p>friendly manufacturing procedures or products</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 9</p></li><li><p>BRAZIL THINKS ENVIRONMENTOnly in Brazil do consumers see the environment as the most </p><p>important impact of environmental products</p><p>CONSUMERS AGREE: Impact to human health is more </p><p>important than the impact on the environment</p><p>INDIA | 60%</p><p>USA | 64%</p><p>CHINA | 79%</p><p>GERMANY | 62%</p><p>59%BRAZILIAN CONSUMERS AGREE: </p><p> Impact on the environment is more important than the impact to human health</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 10</p></li><li><p>BRAZIL WANTS TRANSPARENCYGaining visibility into all aspects of the supply chain is a Rising Priority that is more important in Brazil</p><p>+30%</p><p>87%YET</p><p>BRAZILIAN CONSUMERS: Are significantly more likely than their global peers to agree that manufacturers do not provide sufficient </p><p>transparency into their supply chains</p><p>BRAZILIAN MANUFACTURERS AGREE: Internal and external stakeholders are increasinglydemanding supply chain transparency, which makes them significantly more likely than their counterparts </p><p>in other countries to agree</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 11</p></li><li><p>BRAZIL WANTS REAL QUALITYAlthough it is the most important manufacturer and consumer priority in Brazil, Quality appears to be an area where as in the rest of the </p><p>world there is a sizable gap in consumer confidence</p><p>93%VS.</p><p>53%BRAZILIAN MANUFACTURERS BELIEVE: Product quality is important, making it their No. 1 overall consideration</p><p>BRAZILIAN CONSUMERS BELIEVE: Manufacturers use the lowest-cost materials </p><p>in their products regardless of quality</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 12</p></li><li><p>Cost/Price is a critical consideration for Brazilian manufacturers on par with those in the developed economies and significantly more </p><p>important than it is to manufacturers in the other emerging economies </p><p>BRAZIL FOCUSES ON COSTDEVELOPEDEM</p><p>ERGING</p><p>79% 85%92% 93% 95%</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 13</p></li><li><p>Outsourcing/Country of Origin, which takes into account where products are made, is an area of growing awareness where there is </p><p>significant alignment between Brazilian manufacturers and consumers</p><p>BRAZIL AGREES ABOUT ORIGIN</p><p>of both groups agree that consumers are aware of the Country of Origin, which is significantly higher than the global averages </p><p>for manufacturers and consumers</p><p>78 %</p><p>AND </p><p>82% of manufacturers and 67% of consumers believe that its important to know the Country of Origin</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 14</p></li><li><p>BRAZILS HEALTH IMPACT GAPIn Brazil, consumers see a critical need to improve the Health Impact of products, but manufacturers dont see this as an improvement priority</p><p>#6 </p><p>#1 2 </p><p>1 </p><p>3 </p><p>2 </p><p>4 </p><p>3 </p><p>5 </p><p>4 </p><p>6 </p><p>5 </p><p>VS.</p><p>RISING PRIORITYFOR IMPROVEMENT</p><p>RISING PRIORITYFOR IMPROVEMENT</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 15</p></li><li><p>BRAZIL: RANKINGS</p><p>This year, our research revealed insights that resulted in a new way to classify the complex and growing considerations facing manufacturers and consumers today. We divided them into two categories to compare like-minded issues. The Fundamentals are the most important factors driving behavior, including considerations such as quality and product safety. The </p><p>Rising Priorities are newer factors that are becoming increasingly critical in todays marketplace, including supply chain transparency and making environmentally friendly products. The Rankings highlight both what Brazilian manufacturers and consumers prioritize and how their priorities differ from those of their peers around the world.</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 16</p></li><li><p>1 3 52 4 6 71 3 52 4 6 7</p><p>BRAZIL: FUNDAMENTALSThe Fundamentals are the essential considerations that are the primary </p><p>drivers of manufacturer success and consumer choice</p><p>FUNDAMENTALS</p><p>IMPORTANCE: (PRIMARY DRIVER OF SUCCESS/CHOICE)</p><p>IMPROVEMENT: (AREA MOST IN NEED OF </p><p>ENHANCEMENT)</p><p>Quality</p><p>Cost/Price</p><p>Innovation</p><p>Reliability</p><p>Product Safety</p><p>Performance</p><p>Speed to Market/Newest Features</p><p>RANKINGS</p><p> most to least most to least</p><p>global average brazil</p><p>In terms of how Brazilians rank the Importance of the Fundamentals, manufacturers and consumers are more closely aligned than are their global counterparts.</p><p> Cost/Price is a more important consideration to both Brazilian manufacturers and consumers than it is to the rest of the world.</p><p> Innovation is not as important to Brazilian manufacturers as it is to their global peers.</p><p> Performance is not as important to Brazilian consumers as Reliability, which is the opposite of how global consumers prioritize these considerations. </p><p>OBSERVATIONS</p><p>Brazilian manufacturers and consumers are closely aligned on Improvement, but there are two key differences relative to their global peers:</p><p> Brazilian consumers place greater emphasis on improving Cost/Price, which reflects the overall importance of this consideration in Brazil.</p><p> Brazilian manufacturers and consumers place much less emphasis on Product Safety than do their global peers.</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 17</p></li><li><p>BRAZIL: RISING PRIORITIESThe Rising Priorities are emerging considerations that are increasingly </p><p>important to both manufacturers and consumers</p><p>RANKINGS</p><p>global average brazil</p><p>1 3 52 4 6 7</p><p>RISING PRIORITIES</p><p>1 3 52 4 6 7</p><p>Environmentally Friendly Manufacturing</p><p>Health Impact</p><p>Environmentally Friendly Products</p><p>Transparency</p><p>Outsourcing/Country of Origin</p><p>Traceability</p><p>Ethical Sourcing</p><p>N/A</p><p>N/A</p><p>N/A</p><p>N/A</p><p>IMPORTANCE (PRIMARY DRIVER OF SUCCESS/CHOICE)</p><p>IMPROVEMENT: (AREA MOST IN NEED OF </p><p>ENHANCEMENT) most to least most to least</p><p>N/A</p><p>N/A</p><p>N/A</p><p>N/A</p><p>OBSERVATIONS</p><p>Relative to Importance, Brazilians closely mirror the rest of the world in their rankings of Rising Priorities.</p><p>In terms of Brazilian Improvement priorities, however, there are a number of substantial differences:</p><p> There are large gaps between Brazilian manufacturers and consumers in Health Impact and Environmentally Friendly Products because Brazilian manufacturers do not prioritize the Improvement of either consideration.</p><p> Brazilian manufacturers prioritize Outsourcing/Country of Origin, Traceability and Ethical Sourcing much more than do their global peers.</p><p> Brazilian consumers see Improvement in Traceability and Ethical Sourcing as low priorities, which is consistent with their global counterparts. This creates gaps with Brazilian manufacturers who emphasize Improvement in these areas over Health Impact and Environmentally Friendly Products, which are much more important to consumers.</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 18</p></li><li><p>MORE PRODUCT MINDSETThis year, we have made the results of The Product Mindset more interactive. An online data visualizer will enable you </p><p>to explore and compare the information in meaningful ways. We will also field questions and comments from our many subscribers around the world and engage in dialogue through social media channels.</p><p>Visit: www.ul.com/productmindsetEmail: productmindset@ul.com</p><p>Call: +1 847.664.2226</p><p>PARTICIPATE</p><p>FOLLOW, SHARE AND ENGAGE</p><p>FURTHER INFORMATION</p><p>FACEBOOK TWITTER</p><p>LINKEDINYOUTUBE</p><p>IMMERSE YOURSELF IN THE DATA</p><p>EXPLORE</p><p>REVIEW THE STUDY AND COUNTRY REPORTS EXPLORE THE STUDY AT A GLANCE</p><p>VISIT</p><p>u.s.</p><p>indiagermany</p><p>china brazil</p><p>DOWNLOAD</p><p>CONSUMERS</p><p>MANUFACTURERSTHE PRODUCT MINDSET 2013 U.S. REPORT</p><p>MANUFACTURERSCONSUMERS</p><p>MANUFACTURERSTHE PRODUCT MINDSET 2013 INDIA REPORT</p><p>MANUFACTURERSCONSUMERS</p><p>MANUFACTURERS</p><p>MANUFACTURERS</p><p>THE PRODUCT MINDSET 2013 GERMANY REPORT</p><p>CONSUMERS</p><p>MANUFACTURERSTHE PRODUCT MINDSET 2013 CHINA REPORT</p><p>MANUFACTURERSCONSUMERS</p><p>MANUFACTURERS</p><p>MANUFACTURERS</p><p>THE PRODUCT MINDSET 2013 BRAZIL REPORT</p><p>THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 19</p></li><li><p>ACKNOWLEDGMENTS</p><p>EXECUTIVE EDITORSuzanne Lavin, Vice President, Corporate Marketing</p><p>This study was concepted and created in partnership with</p><p>METHODOLOGY</p><p>SOURCES</p><p>During the winter of 2012 and spring of 2013, UL employed an independent research firm, ORC International, to conduct a global quantitative survey among 1,528 co...</p></li></ul>