Chapter 1: Regional Overview

1.6 Advantages and Disadvantages of Local and Foreign Suppliers

Purchasing Preferences

The country of origin (domestic vs. foreign) of a particular environmental technology clearly is not a significant issue among buyers when making a purchasing decision. Most experts rely on the best technology or best-practice criteria when making such a decision. Where foreign technologies are purchased, preference is given to buying from in-country offices instead of ordering through an overseas office.

Product quality and reliability, warranty conditions, availability of after-sales service, lowest possible costs outlay in achieving the required standards, previous experience with suppliers and good references are determining factors when making purchasing choices. Additionally, preferential credit or financing schemes from the supplier significantly increases the chances of product sale.

Strengths of Local and Foreign Technologies

By far the highest proportion of respondents indicated low price as the biggest strength of local technologies compared to foreign products (70-80 percent). Other significant advantages include the ability to customize and adapt technologies to local needs (60-70 percent), and that they are user-friendly and easy to operate (30-50 percent).

The majority of respondents indicated high product quality (60-70 percent) as the greatest advantage of foreign technologies, followed by their user-friendliness and ease of operation (60 percent), besides the reliability and durability of products (50 percent). Interestingly, up to half the respondents also cited good value for the money as an advantage of foreign technologies.

An additional strength of foreign environmental technology providers is that they are capable of meeting the specialized technical demands of consumers.

Barriers to Buying Local and Foreign Technologies

The lack of product information (50-60 percent) and supplier information (40-50 percent) were mentioned as significant obstacles to purchasing local products. Local products also tend to be considered adequate in the short term in meeting minimal environmental requirements, but become quickly outdated due to changing regulations.

While virtually all respondents indicated that foreign technologies were "too expensive" (65-70 percent), this was often offset by the quality of the product, the conditions of the warranty and the after-sales service. In some cases, foreign suppliers producing highly sophisticated technologies not available on the domestic market have carved out a market niche for themselves.

Import restrictions and high customs duties were mentioned by up to 30 percent of the respondents as further barriers to purchasing foreign environmental technologies, although this problem is expected to decrease in the near future, at least with regard to products from the EU.

Other significant barriers included the lack of reliable product information (40-50 percent) and the scarcity of information concerning suppliers (40 percent).


REC * PUBLICATIONS * ENVIRONMENTAL TECHNOLOGY MARKET - BALTICS * REGIONAL OVERVIEW

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