—Jason Voiovich, Ecra Creative Group
I have to admit, I was not prepared.
Over the course of five business days last week, I had three separate clients asked my opinion – in one form or another – regarding marketing their products as "made in the USA." I guess everything old is new again. As I watched my father work with manufacturing clients in the early 1980s, he ran into the same strong urge to tout products as "American made".
In each case, the client was a US-based manufacturer facing stiff and growing competition from overseas firms and conglomerates.
The question was simple: Do you think it makes sense to "push" the domestic origin of our products? How can we phrase it? What are the risks? How are others handling it?
We’ll get back to the first three questions in a moment, but there’s no shortage of American-origin-focused promotion going on in the market right now. The most significant is the latest campaign for the 2011 Jeep Cherokee.
Watch the Jeep "Manifesto"
Of course, this is a prime example of "feel good" advertising, but it speaks to the best aspect of the "American" strategy – the innovation, ingenuity, and can-do spirit of the American people. That stands in stark contrast to "flag waving" patriotic themes, where their is little connection to a benefit to the buyer, other than simply a feeling of affinity. Sorry, but competition is too stiff these days for that type of appeal to work.
The Jeep campaign is effective because it ties those positive attributes to the design and construction of the vehicle itself. And all of that is left to the voice-over – not a "waving flag" in sight. Instead, the visuals focus on classic American craftsman themes, the rich leather interior (darn nice, for a Jeep, by the way), driving through what appears to be a "classic" American forest. The concepts all work together to form a powerful sense of pride and excitement at a time when Chrysler (and the rest of us) really can use it.
Pundits in my industry point to research that shows these ads appeal to a certain demographic far more than others – those who want to support local jobs in the recession, those who fear globalization, and those who feel a more powerful visceral attachment to their country. I can buy that, but we saw plenty of flag-waving advertising trash in the late 1970s and early 1980s, and that didn’t stop millions of manufacturing jobs from heading overseas.
The reality of the global market underscores the opportunity – and the risk – of an American origin claim.
Before we go any farther, we need a brief regulatory detour. I wouldn’t do so if it weren’t critical to the situation, so bear with me.
Inside the bowels of the FTC is a little-understood write up on "origin claims". In other words, if you plan to market your product using the words "Made in the USA" or some variant, it must meet certain criteria. A brief sample of the key portions of the provision:
The Standard For Unqualified Made In USA Claims
What is the standard for a product to be called Made in USA without qualification?
For a product to be called Made in USA, or claimed to be of domestic origin without qualifications or limits on the claim, the product must be "all or virtually all" made in the U.S. The term "United States," as referred to in the Enforcement Policy Statement, includes the 50 states, the District of Columbia, and the U.S. territories and possessions.
What does "all or virtually all" mean?
"All or virtually all" means that all significant parts and processing that go into the product must be of U.S. origin. That is, the product should contain no — or negligible — foreign content.
What substantiation is required for a Made in USA claim?
When a manufacturer or marketer makes an unqualified claim that a product is Made in USA, it should have — and rely on — a "reasonable basis" to support the claim at the time it is made. This means a manufacturer or marketer needs competent and reliable evidence to back up the claim that its product is "all or virtually all" made in the U.S.
What factors does the Commission consider to determine whether a product is "all or virtually all" made in the U.S.?
The product’s final assembly or processing must take place in the U.S. The Commission then considers other factors, including how much of the product’s total manufacturing costs can be assigned to U.S. parts and processing, and how far removed any foreign content is from the finished product. In some instances, only a small portion of the total manufacturing costs are attributable to foreign processing, but that processing represents a significant amount of the product’s overall processing. The same could be true for some foreign parts. In these cases, the foreign content (processing or parts) is more than negligible, and, as a result, unqualified claims are inappropriate.
And there’s much more to it than this.
Needless to say, although getting the okay ahead of time is not required, anyone thinking about making an origin claim should get a legal opinion before moving forward, especially if manufacturing and sourcing channels are complicated.
For my part, I think the issue really isn’t about the regulatory environment or the "legality" of the claim as much as it is about the potential affect on the audience you want to reach.
You’ll notice the Jeep ad never explicitly mentioned "made in the USA" (which i am not sure it really could…), but nonetheless invoked the same spirit and feelings. The more important consideration then, becomes "What will your buyer respond to?" Or more importantly, will enough of them respond positively and consider your claim a legitimate differentiator?
To that end, my clients can take a lesson from Jeep. It wasn’t enough that the new product was "American made", but rather that the new product is innovative, well-crafted, and durable. In other words, the stars and stripes weren’t enough. They were just the start.