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Forums Home > Marketing & Communications > Ask an Expert > Price Value Difference for US Product

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Marketing & Communications cvjac@comcast.n... Joined: April 2013 Posts: 1 Location:	Posted: May 15, 2013 11:02 PM What is the best way to position the fact that a "consumer" product is made by a US company and is produced in the US? What is the reasonable price delta that a knowledgeable consumer will pay to keep the jobs in the community, assuming comparable quality?
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Marketing & Communications Lisa Woods Joined: April 2012 Posts: 17 Location:	Posted: May 16, 2013 12:22 AM RE: Price Value Difference for US Product Great question, and something that resonates these days as a marketing strategy. There are a lot of variables when it comes to market pricing based on the type of 'consumer' product you are producing. There was a study conducted by the Boston Consulting Group recently that found certain products such as baby food, electronics, appliances & apparel could command an additional 10-60% price differential if made in the USA. These are not commodity products, and that is the question you have to answer for yourself. Not knowing what the product is you are producing...are their differentiating factors in product design, quality & service that bring piece of mind to consumers knowing that it is made here? In your question you said comparable quality. There is an implied quality differential for certain items based on perceived quality/safety even if the production is 'compatible'. In the case of baby food for example a consumer may feel more comfortable purchasing a USA product for piece of mind even though actual quality is comparable; the perceived risk out ways the price. This is the same for high ticket consumer goods where service issues could come into play. (they pay a higher price as a type of insurance) If you can market those factors along with labeling it "Made in the USA" then you have created the differential you need to command a premium. The market is looking for this and you can justify up to a 60% premium. If your consumer product is along the lines of a lower priced commodity where you can't differentiate it other than the 'Made In The USA' label, the 10% range is probably more realistic. These are two extremes in price. My suggestion is to itemize what makes your product different & more secure for the customer. The more you can define that value, the higher price you can charge within the range. Test your pricing. Before you launch it, do a geographic or local price test to see if you can get a larger premium. Then roll it out once you have found the optimal price point. Just be sure to market your value proposition along with the production location. Good luck! Lisa Woods
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