I’ve read a few different articles on this recently. I have also had discussions with a few people in regards to products and name brands. I’d say that in all cases what you name something your selling is very important. This gives your product or service an identity that hopefully the consumer will identify with. But does a name brand always represent what a company would like us to think it does? Most consumer electronic manufacturing is outsourced. Very few companies if any have their own manufacturing facilities nowadays. They pay someone else to manufacture the goods and slap the name brand on that product. The television market has seen one or two of these unknown companies develop their own name brand the past few years. My question is this – how do we know a name brand is true quality when it could be produced at the same factory as a lesser respected brand?
Another example of this would be the recent pet food recall. The general public may not have been aware that many food companies are outsourcing production as well. Unless you have watched a few episodes of How’s It Made you might not be aware of that. So now that we know different pet food brands are all made at the same facility. How can we truly determine the value of the name brand? Are the basic ingredients all that different for each product? They can’t be all that different because this would slow production runs. Logic would dictate that each separate product line would run on it’s own not mixed with another. Yet couldn’t residue from one product still be present when the other is being manufactured on the same line?
Many people make purchase decisions based upon brand and the quality judgment they have made about that brand. In many cases brand choices are made in direct relation to marketing the consumer has been exposed to. Now what I have to ask is should some of that marketing be considered fraudulent if the basic ingredients or components aren’t actually different in each product? And these products are being produced in the same factory. How can you really state legally that your product is better than the competition? Especially if the competition is made in the same outsourced manufacturing facility.
An example of how outsourcing product manufacturing can hurt a name brand is my Ultra Hydra MP3 Player. This MP3 unit isn’t produced by Ultra. It is outsourced to another company SigmaTel. At least in the Ultra help forum one Ultra employee is up front about that. Now here is where the problem comes into play. There have been some customer problems in regards to this MP3 player. The general consensus is that a firmware update would resolve the issues being seen. However since Ultra doesn’t manufacture this unit or develop the firmware for it. They have to contact SigmaTel to resolve the problem with the hardware Ultra has just put their name on. It is their name brand that is suffering damage. But they must rely upon another company to resolve the situation for them. SigmaTel may not see this as a high priority. Maybe they are filling orders for a newer model or another customer. So reworking the firmware for the Ultra MP3 player may not be high on their list. If Ultra owned the manufacturing facility and produced it’s own products. The company would be in a better position to do damage control.
Granted owning your own manufacturing facilities and employing all the workers needed to do the job may not be as cost effective compared to outsourcing the production. However in my opinion your taking a risk with your brand name when doing this. If your company is the one producing the product from the ground up. Your in control of quality and it’s easier to address problems when they arise. When your entrusting someone else with your brand name you risk having it tarnished. A good case in point would be the pet food companies mentioned above. They didn’t control the manufacturing process of their product. These companies had no real quality control over the product with their name on it. Not to mention that many consumers have now learned something they may not have known. That these products weren’t being produced at company owned facilities. The products that are marketed as having so much difference are being made at the same place.
In the end that may not hurt sales as much as it should. Maybe I’m not giving the average consumer enough credit. It could be that most people don’t really care. Is it the mentality of just give me something that looks nice and is cheap? Do not enough people care where their products are being made? Are the majority of people even aware that most toys, clothes and consumer electronics are made in a country that supposedly hates everything America says it stands for? A sworn enemy of our country is who we get the majority of our every day products from. We are all guilty of this. It would be almost impossible not to be nowadays. So once again I ask where is the true quality difference? Why is the American consumer not being made aware of the situation? It’s not fraud to represent that a product is different when it truly may not be? Especially when it is produced in the same factory as the competition it claims to be better than?
Product outsourcing has been going on for years. It won’t stop any time soon. If anything it will continue to grow. The last two cars my household owned have been a product of a mutual production agreement. Neither car as far as I’m aware was made at an actual General Motors plant. Both were made outside of the United States. These vehicles however have the Chevrolet ( Chevy ) name on them. Our old Metro was at one time called a Geo. I think the terms of the deal with GM stated that in the later part of the agreement the name would change. The Aveo we own now is a product of South Korea. As are many other consumer goods.
Apex is another example of a company that became very successful by selling consumer products manufactured not by them put placing their name on them. The company started basically as an importer. This is exactly how many companies are today. You no longer have traditional manufacturing companies. Most that claim to be making the product they sell aren’t.