Patriotism is a powerful marketing tool, but use it with caution
Before putting Made in America on your products, be careful. You may think your products qualify, but they may not, according to new standards set by the Federal Trade Commission.
In recent years, the commission has begun to crack down on manufacturers claiming their products are made in America when they are made overseas. In some cases, companies have faced huge penalties for not complying with FTC rules.
According to the FTC: “Made in the USA means that ‘substantially all’ of the product was made in America. In other words, all major parts, processing and labor that goes into the product must be of American origin. The products must not contain any – or must contain only negligible foreign content. “
This is the definition of an “unqualified claim”. The FTC has also established a “qualified claim”, which must include a disclaimer, such as “Made in the USA with US and imported components”.
In addition to labels, the FTC prohibits manufacturers from making false, misleading, or unsubstantiated claims about country of origin in marketing materials for any product or service. (See Made in the USA: Ask the Expert for a more detailed explanation.)
“Labelling your product as Made in the USA can be an important product attribute for some consumers and retailers,” says Ryan Trainer, president of the International Sleep Products Association. “But the rules that govern when you can use that label can be tricky. It is important that bedding and component manufacturers know the rules and clearly communicate these requirements to all levels of company management, from those involved in sourcing inputs through to product manufacturing and marketing. . Recent experience shows that mattress manufacturers who disregard this advice can break these rules and incur costly monetary penalties.
For example, late last year, the FTC alleged that a mattress company repeatedly made false claims that its products were “proudly made with premium materials that are 100% made in the States.” -United”. In fact, the FTC found that all or a significant portion of the mattresses were made from foreign materials and were still finished overseas.
Under a consent order, the company must pay $753,000, notify customers of the false claims, retain certain records and file compliance reports with the FTC for the next 20 years. The lawsuit follows a 2018 settlement between the FTC and the same company involving similar “Made in the USA” claims.
Do consumers really care?
Yes, they care more than ever that a product is made in America. The spread of Covid-19 has caused a massive global supply chain impasse, creating the perception that if a consumer wants certain goods to be delivered in a timely manner – particularly furniture, for example – they better have them. are made in America.
The Made in USA label symbolizes traditional, positive ideals: high quality and support for American businesses and jobs. With the spread of the virus, some consumers have naturally shifted to purchasing products made in the United States.
According to the non-profit group MadeinAmerica.org: “At no time in our history has ‘Made in America’ been more important to the health and stability of our country, our communities and our families. Twenty years of offshore manufacturing have shown that the US supply chain is weak enough to respond to a crisis like the Covid-19 pandemic. Increasing domestic manufacturing and buying American-made products energizes and revitalizes jobs across our country.
In an August 2020 survey by the Better Sleep Council, the consumer education arm of ISPA, three in 10 consumers said that a mattress made in the United States would be an important feature they would consider when buying a new mattress. In the “reputation” portion of the survey, 30% considered being in America important, far more than the 17% who considered brand name important. (The BSC conducted this online survey in August 2020 with a national sample of 1,003 respondents who participate in mattress purchasing decisions.)
Handle “America” with care
Marketers recognized the power of using the word “America” as early as 1941, when the first television commercial aired before a Brooklyn Dodgers and Philadelphia Phillies baseball game. The 10-second spot (which costs just $9) read, “America runs on Bulova time.”
Using the word “America” still works. “Where a brand can make emotional connections with a value as powerful as ‘patriotism’, consumers will engage more strongly, believe more in the brand, and behave more positively towards the brand. … In most cases cases, six times more,” according to Robert Passikoff, president of Brand Keys, a New York-based customer engagement and loyalty research consultancy.
The good news is that even if your product is not made in America under the FTC rule for unqualified claims, you can still make a qualified claim. For example, an iPhone or iPad label might say it’s “Designed by Apple in California.” Assembled in China.”
According to the FTC, a qualified claim “describes the extent, amount, or type of domestic content or processing in a product; this indicates that the product is not entirely of domestic origin. A label may say “60% U.S. content” or “Made in the USA from U.S. and imported parts.”
Still, the FTC warns to avoid qualified claims unless the product contains a significant amount of US content or US processing. Qualified claims must be as true and substantiated as an unqualified claim that the product is “substantially all” manufactured and purchased in the United States.
Perhaps the best policy when considering a claim made in America is to consult an attorney. Cleveland-based law firm Cavitch, Familo & Durkin sums it up nicely: “Failure to comply with laws governing a country of origin claim can result in fines, regulatory and litigation costs and impair the proper will of a company. … With product content and component costs constantly changing, companies must regularly review their product information to ensure that the products are truly “Made in the USA.”