Can you be a little pregnant? See, that got your attention! A lot of marketing is about getting that initial attention and then selling you the product. In our globalised word, where a product is actually made should not matter, but in some cases it can be a distinguishing feature.

Once, while shopping in Milan, I was looking for an item of clothing I could buy and that I could then proudly claim was from Milan, the fashion capital of the world. Unfortunately, most of the clothing hanging on the racks of the department stores were from anywhere in the world but Milan. However, walking down a street in the shopping district, I spotted a store that proudly displayed on its glass front, ‘Made in Milan’ (I eagerly entered the store but could not afford any of the items on display!).

How local?

The US Federal Trade Commission provides guidelines for manufacturers on labelling. The FTC says an item must be ‘all or virtually all’ made in the country to carry a ‘Made in USA’ label. It does not provide any percentage, but perhaps at least 75 per cent?

Well, it keeps a lot of lawyers in employment. The US does have a Buy America Act under which government agencies must give preference to US made products (defined as having 51 per cent local content) unless there is a significant price advantage with the foreign product.

But the US state of California does have an all or nothing rule (and is the connection to the pregnancy metaphor I used at the beginning). It requires that 100 per cent of the item must be made domestically to carry the ‘Made in USA’ label, and so the state has become a haven for those wanting to sue manufacturers who sell their products in California with the USA- made label. Companies with even 90 per cent local production have been hauled up under false advertising charges. This is ironical at a time when the nation wants to reverse its job losses due to outsourcing. If a manufacturer wants to stay in the country and selectively outsource, he can be in trouble.

Getting the stamp

Sometimes the brand image of a country would have to compete with the brand image of the company for your attention. In the early years, consumers were reluctant to buy sophisticated electronics products that were made in China.

Then, as well known manufacturers moved there, one felt that one could trust the brand, say Sony, although made in China. Thus, Apple cleverly puts ‘Designed by Apple in California Assembled in China’ on its phones. Apple has to be different!

The North Atlantic Free Trade Agreement or NAFTA which covers Canada, US and Mexico has an entire chapter to discuss how to figure out the nationality of a product. This becomes important since some products have exemptions and subsidies, and manufacturers need to complete a Certificate of Origin to take advantage of the exemption.

The rules go into great detail about items used in manufacture that are from outside the NAFTA area, and what value to use. It is enough to make the most hardened production engineer cry.

Prime Minister Narendra Modi is now pushing a ‘Make in India’ platform. He does not mind what you sell where but wants you to bring the manufacturing jobs to India. There are several items where costs of manufacture trump any buyer preferences, but for some consumers, location does matter.

The writer is a professor at Suffolk University, Boston, and Jindal Global Business School, Delhi NCR

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