What’s in a name?
Sony, Nike, Gucci, BT, Microsoft, Ford, Armani and so on, the names that we meet in everyday life, these are the top manufacturer brands, then there are Tesco, Next, M&S, GAP, Burberry, Virgin etc. , this is a top retail brand. Most of us are very familiar with these brands because we have seen them for a long time and have grown to trust them, we know who they are and what is expected from their products.
It is also a common practice for people to become loyal brands too, i.e. you try and like a product from a brand and then keep using that brand, or buy a product such as a Fuji digital camera and use a Fuji memory card to use it. In fact, the brand is actively encouraging brand loyalty, e.g. if you buy an Epson printer, company literature will encourage the use of Epson ink cartridges.
Many people are then shocked, knowing that their famous brand cameras, watches, cars, clothes, computers etc., are actually not made by companies whose names appear on products, but by other companies that they may not have heard of. This company is known as an OEM (Original Equipment Manufacturer) as the actual manufacturer of products sold under its own brand name, or another company’s brand, often using company designs, specifications, etc.
Some OEM relationships are general knowledge, e.g. Tesco does not produce instant coffee, so, producers of instant coffee make Tesco instant coffee. Other OEM relationships are unclear, e.g. BT fax machines are mostly made by Olivetti, early Hewlett Packard digital cameras made by Pentax and 70% of notebook computers sold worldwide (Dell, Compaq, HP, Apple, IBM, Sony etc.) 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 separate and only known by industry insiders, e.g. Dell and Lexmark, starting in 2002 Lexmark manufactures 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, that’s a good thing for consumers because this joint collaboration drastically reduces new product development and production costs, ultimately this savings means lower product prices for all of us. However, keep in mind, that a more expensive brand may not always be a better product, or even different from a product with a lower price.
For our part at Mouse2House, we actively offer big brand products as well as alternative brands that we have found in our experience to represent good or better value.