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What's In A Name?
by: Iggy Quazi
Sony, Nike, Gucci, BT, Microsoft, Ford, Armani… and so on, names we
come across in daily life, these are top “manufacturer brands”,
then there are Tesco, Next, M&S, GAP, Burberry, Virgin etc, these are
top “retail brands”. Most of us are very familiar with these brands
as we have seen them around for a long time and have grown to trust them,
we know who they are and what to expect from their products.
It is also common practice for people to become brand loyal too, i.e. you
try and like the products of a brand and then stick to that brand, or buy
a product like a Fuji digital camera and use a Fuji memory card to go with
it. In fact, the brands actively encourage brand loyalty e.g. if you buy
an Epson printer, the company’s literature will encourage the use of
Epson ink cartridges.
Many people are then surprised, to learn that their famous brand camera,
watch, car, clothing, computer etc, is not actually made by the company whose
name appears on the product, but by another company they perhaps have never
heard of. This company is known as the OEM (Original Equipment Manufacturer)
being the actual manufacturer of the product which is sold under it’s
own brand, or the brand of another company, often using that company’s
design, specifications etc.
Some OEM relationships are public knowledge e.g. Tesco do not produce instant
coffee, so, an instant coffee producer makes Tesco instant coffee. Other
OEM relationships are less obvious e.g. BT fax machines are mostly made by
Olivetti, early Hewlett Packard digital cameras were made by Pentax and 70%
of the notebook computers sold in the world (Dell, Compaq, HP, Apple, IBM,
Sony etc.) are made by Quanta Computers in Taiwan and MG City Rover is made
by Tata, the largest car manufacturer in India.
Many OEM relationships are well-kept secrets or at least kept discrete and
known only to industry insiders e.g. Dell and Lexmark, from 2002 Lexmark
produce Dell inkjet printers, laser printers and related print cartridges.
Sony and Sandisk jointly develop and produce Memory Stick cards, which are
sold under both brands etc.
So, is this a good or bad thing? Well, it’s a good thing for the consumer
because these joint collaborations drastically reduce new product development
and production costs, ultimately this saving translates into lower prices
of products for all of us. However, it is worth bearing in mind, that a more
expensive brand may not necessarily be a better product, or even any different
to a lower priced product.
For our part at Mouse2House, we actively offer major brand products as well
as alternative brands that in our experience we have found to represent good
or better value.
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