Brand Authenticity: Manufacturing site matters

Posted by Oliver Koll on Aug 13, 2014


Many global brands are shifting production to sites in countries with lower manufacturing costs or share production between different sites. This may result in loss of brand equity. A recent study** examined the impact of manufacturing at the brand’s original location (e.g. Godiva in Belgium, Guinness in Dublin, Kinder in Alba) and uncovered a substantial loss in perceived value and a significant drop in willingness-to-pay for consumers who learned that the production site was not the brand’s origin.

If brands are still manufacturing at their original location, they should exploit this effect: Consumers believe in higher levels of, the spirit of the founder or more experience by the workers. For more information click here.

** George E. Newman & Ravi Dhar. Authenticity is Contagious: Brand Essence and the Original Source of Production. Journal of Marketing Research, 2014.