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UL INVESTIGATION ABOUT THE BRAZILIAN MARKET

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  • CONSUMERS

    MANUFACTURERS

    MANUFACTURERS

    THE PRODUCT MINDSET 2013 BRAZIL REPORT

  • 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.

    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.

    THE PRODUCT MINDSET 2013

    THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 2

  • THE BRAZIL REPORT

    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

    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.

    AUDIENCES

    Director-level executives specializing in management, research and development,

    marketing and sales, quality control, sustainability, product management or design

    CONSUMERS

    A representative mix of age, gender, education and income

    MANUFACTURERS

    306 - BRAZIL 302 - BRAZIL

    1,521 - GLOBAL 1,528 - GLOBAL

    TABLE OF CONTENTS

    CONTEXT 4

    FINDINGS 7

    RANKINGS 16

    MORE PRODUCT MINDSET 19

    ACKNOWLEDGMENTS & METHODOLOGY 20

    THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 3

  • BRAZIL: CONTEXT

    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.

    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

    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.

    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.

    THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 4

  • CONTEXT

    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

    Significantly fewer Brazilian manufacturers operate globally, but the vast majority see the benefit of it

    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

    SAY: They operate multinationally, significantly below the current global level (78%)

    AGREE: Global sourcing is a means to improve product quality, which is significantlyabove the global average (78%)

    64% 89%

    Percentage of manufacturers that operate multinationally in the following areas:

    62% | DISTRIBUTION/SALES

    52% | SOURCING

    42% | MARKETING/PROMOTION

    37% | MANUFACTURING

    Significantly more Brazilian manufacturers than the global average (48%) state they will increase global sourcing over the next five years...

    ...and they are 56% more likely than global manufacturers to source from new countries

    57% 39%THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 5

  • BRAZIL: MOODBrazilian consumers feel better about product quality but still want to see more regulation of manufacturers

    CONTEXT

    Brazilian consumers believe product quality is better than it was five years ago...

    EMERGING

    DEVELOPED 50%

    61%

    79%

    59%

    88%

    Similar to manufacturers around the world, those in Brazil already feel stringently regulated...

    88% 83% 86% 86%

    87%

    53%

    DEVELOPED EMERGING

    63% 79% 81% 92%

    ...but the vast majority of them desire more stringent governmental regulation

    Cost Ethical SourcingEnv. Friendly ManufacturingEnv. Friendly ProductsHealth Impact

    94%...but they are significantly more likely to see a need for improvement across 13 business success measures

    13 measures:InnovationPerformance Quality Reliability Safety

    Speed to Market Traceability Transparency

    THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 6

  • BRAZIL: FINDINGS

    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

    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.

    THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 7

  • 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

    relative to their competitiveness

    BRAZIL STANDS APART

    see a need for improvement64%

    CHINA | 41%

    INDIA | 40%

    USA | 35%

    GERMANY | 42%

    THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 8

  • 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

    commitment to environmentally friendly products and manufacturing procedures

    #1RANK

    MOST IMPORTANT

    RISING PRIORITY

    #2RANK

    MOST IMPORTANT

    RISING PRIORITY

    48% of Brazilian consumers 26% more than in other countries dont think manufacturers are doing enough in terms of environmentally

    friendly manufacturing procedures or products

    THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 9

  • BRAZIL THINKS ENVIRONMENTOnly in Brazil do consumers see the environment as the most

    important impact of environmental products

    CONSUMERS AGREE: Impact to human health is more

    important than the impact on the environment

    INDIA | 60%

    USA | 64%

    CHINA | 79%

    GERMANY | 62%

    59%BRAZILIAN CONSUMERS AGREE:

    Impact on the environment is more important than the impact to human health

    THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 10

  • BRAZIL WANTS TRANSPARENCYGaining visibility into all aspects of the supply chain is a Rising Priority that is more important in Brazil

    +30%

    87%YET

    BRAZILIAN CONSUMERS: Are significantly more likely than their global peers to agree that manufacturers do not provide sufficient

    transparency into their supply chains

    BRAZILIAN MANUFACTURERS AGREE: Internal and external stakeholders are increasinglydemanding supply chain transparency, which makes them significantly more likely than their counterparts

    in other countries to agree

    THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 11

  • 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

    world there is a sizable gap in consumer confidence

    93%VS.

    53%BRAZILIAN MANUFACTURERS BELIEVE: Product quality is important, making it their No. 1 overall consideration

    BRAZILIAN CONSUMERS BELIEVE: Manufacturers use the lowest-cost materials

    in their products regardless of quality

    THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 12

  • Cost/Price is a critical consideration for Brazilian manufacturers on par with those in the developed economies and significantly more

    important than it is to manufacturers in the other emerging economies

    BRAZIL FOCUSES ON COSTDEVELOPEDEM

    ERGING

    79% 85%92% 93% 95%

    THE PRODUCT MINDSET 2013 - BRAZIL COUNTRY REPORT | 13

  • Outsourcing/Country of Origin, which takes into account where products are made, is an area of growing awareness where there is

    significant alignment between Brazilian manufacturers and