Famous brands decoupled from ownership?

[Spehro Pefhany]

For many years, companies have bought brand-named items from other
manufacturers and sold them as their own.

I've noticed two cases recently where major companies have sold lines
and given the puchasers the right to use the old brand name for a
significant length of time after the deal closes-- IBM and the Chinese
computer company Lenovo, and more recently Siemens and the Taiwan
company BenQ wrt their cellphone business.

In both cases, the lesser-known Asian companies will be making and
selling merchandise with the better-known western brand name, for some
years after the purchase closes.

Has this been going on for a while and I'm just noticing it now?



Best regards,
Spehro Pefhany
--
"it's the network..." "The Journey is the reward"
speff@interlog.com Info for manufacturers: http://www.trexon.com
Embedded software/hardware/analog Info for designers: http://www.speff.com

 

[legg]

On Wed, 08 Jun 2005 00:12:50 -0400, Spehro Pefhany
<speffSNIP@interlogDOTyou.knowwhat> wrote:

For many years, companies have bought brand-named items from other
manufacturers and sold them as their own.

I've noticed two cases recently where major companies have sold lines
and given the puchasers the right to use the old brand name for a
significant length of time after the deal closes-- IBM and the Chinese
computer company Lenovo, and more recently Siemens and the Taiwan
company BenQ wrt their cellphone business.

In both cases, the lesser-known Asian companies will be making and
selling merchandise with the better-known western brand name, for some
years after the purchase closes.

Has this been going on for a while and I'm just noticing it now?

More likely in consumer commodities like automotive, electronic, rag
trade, insurance, hardware and even grocery items. Advertising and
marketing is a big ticket item for small organizations devoted to
mfring and production. It's also relatively cheaper to sell to larger
customers. Big brand names offer production scales that justify the
cost of the value-added label.

Those are the carrots.

Large companies like to shed the grunt work, with all their messy
details, like employees, tooling, inventory, cash flow, overhead,
infrastructure, R&D .........

It can also be a form of cash-free ownership - the large customer
tends to own your ass, without the trouble of an actual take-over. If
they shave you right, then there's little profit at the small end and
little defense against slow remuneration. If they haven't done it
right - they either end up having to buy you, or find another ass.

Them's the sticks.

The Asian or off-shore aspect is just another twist.

RL

 

[Guy Macon]

Spehro Pefhany wrote:

For many years, companies have bought brand-named items from other
manufacturers and sold them as their own.

I've noticed two cases recently where major companies have sold lines
and given the puchasers the right to use the old brand name for a
significant length of time after the deal closes-- IBM and the Chinese
computer company Lenovo, and more recently Siemens and the Taiwan
company BenQ wrt their cellphone business.

In both cases, the lesser-known Asian companies will be making and
selling merchandise with the better-known western brand name, for some
years after the purchase closes.

Has this been going on for a while and I'm just noticing it now?

A lot of folks got fooled when they signed up with "AT&T Wireless",
only to find that it wasn't really AT&T when the name changed to
"Cingular Wireless" and another "AT&T Wireless" (this one really
was AT&T) sprang up.

 

[Spehro Pefhany]

On 8 Jun 2005 01:27:29 -0700, the renowned "PeteS"
<ps@fleetwoodmobile.com> wrote:

Interestingly, precisely the opposite has been happening in the
electric / electronic component sector or some time.

Motorola (semiconductor products sector) first spun off the
non-processor/dsp stuff (analog, LSI, MSI etc) into On Semi, then
eventually spun off the rest into Freescale. So the parts I need have
new names (although it's the same part that's been made for years by
Mot) but still (amusingly) have the classic MC prefix.

Hitachi ( I believe) spun off it's memory division to Renesas (but
again retains the classic mfr prefix on the parts).

Renesas is a Hitachi-Mitsubishi thing to make micros and other semis.
Seems Hitachi has majority ownership, maybe because Mitsubishi wasn't
in as strong a position in micros. Powerex is another of these joint
ventures of apparent competitors- GE, Westinghouse (who cashed out)
and Mitsubishi. Consider also the LCD panel venture LG-Philips
(involving Korean giant LG)

There are more, I am sure.

I guess the brand name stays with the consumer division (even if the
consumer division is sold) and the new names apply in more niche /
specific markets.

It seems odd, and perhaps unwise, for a company to sell use of its
name on a consumer product (and thus a very visible part of its
reputation) to an entity out of its control.

Probably just my old-fashioned ideas. Why couldn't the owners of a
well-known consumer brand name just sell (or rent) the rights to that
name and distribution channels to whoever they wanted? Say, instead of
GE buying branded clock radios from a supplier in China, just allow
that supplier to sell "GE" branded clock radios directly to Wal*Mart?



Best regards,
Spehro Pefhany
--
"it's the network..." "The Journey is the reward"
speff@interlog.com Info for manufacturers: http://www.trexon.com
Embedded software/hardware/analog Info for designers: http://www.speff.com

 

[Steve Sousa]

"Spehro Pefhany" <speffSNIP@interlogDOTyou.knowwhat> wrote in message
news:afkda1lo6vjtcccqadh1drlqf8v45pnpm8@4ax.com...

Probably just my old-fashioned ideas. Why couldn't the owners of a
well-known consumer brand name just sell (or rent) the rights to that
name and distribution channels to whoever they wanted? Say, instead of
GE buying branded clock radios from a supplier in China, just allow
that supplier to sell "GE" branded clock radios directly to Wal*Mart?

Because they could never be shure of how many clock radios were actually
sold to wal*mart ?

--
Steve Sousa

 

[Spehro Pefhany]

On Wed, 8 Jun 2005 14:30:48 +0100, the renowned "Steve Sousa"
<etsteve@yahoo.com> wrote:

"Spehro Pefhany" <speffSNIP@interlogDOTyou.knowwhat> wrote in message
news:afkda1lo6vjtcccqadh1drlqf8v45pnpm8@4ax.com...
Probably just my old-fashioned ideas. Why couldn't the owners of a
well-known consumer brand name just sell (or rent) the rights to that
name and distribution channels to whoever they wanted? Say, instead of
GE buying branded clock radios from a supplier in China, just allow
that supplier to sell "GE" branded clock radios directly to Wal*Mart?

Because they could never be shure of how many clock radios were actually
sold to wal*mart ?

Why would they (necessarily) care? Just negotiate a fixed price.
There's only so much money in the global market for clock radios, and
their brand is only worth so much in that space.


Best regards,
Spehro Pefhany
--
"it's the network..." "The Journey is the reward"
speff@interlog.com Info for manufacturers: http://www.trexon.com
Embedded software/hardware/analog Info for designers: http://www.speff.com

 

[Joerg]

Hello Spehro,

For many years, companies have bought brand-named items from other
manufacturers and sold them as their own.

That can be ok, provided the bought designs are properly vetted in terms
of quality.

I've noticed two cases recently where major companies have sold lines
and given the puchasers the right to use the old brand name for a
significant length of time after the deal closes-- IBM and the Chinese
computer company Lenovo, and more recently Siemens and the Taiwan
company BenQ wrt their cellphone business.

That is risky business. Not many people may know the Lenovo brand. But
if a company sells the rights to a name that had a strong affinity to
them in the eyes of consumers it can backfire. For example if quality
tanks then consumers might think it was still XYZ Corporation's product
line. Subsequently they might shun all sorts of other XYZ Corporation
products.

Sometimes I have the impression it is either board room short
sightedness or they could not make it work on their own and totally gave
up. In Europe all this started about 20 years ago but there it was more
about brand names of companies that were failing. Probably last ditch
efforts by the liquidators to make a buck.

Regards, Joerg

http://www.analogconsultants.com

 

[Jim Thompson]

On Wed, 08 Jun 2005 17:38:54 GMT, Joerg
<notthisjoergsch@removethispacbell.net> wrote:

Hello Spehro,

For many years, companies have bought brand-named items from other
manufacturers and sold them as their own.

That can be ok, provided the bought designs are properly vetted in terms
of quality.

I've noticed two cases recently where major companies have sold lines
and given the puchasers the right to use the old brand name for a
significant length of time after the deal closes-- IBM and the Chinese
computer company Lenovo, and more recently Siemens and the Taiwan
company BenQ wrt their cellphone business.

That is risky business. Not many people may know the Lenovo brand. But
if a company sells the rights to a name that had a strong affinity to
them in the eyes of consumers it can backfire. For example if quality
tanks then consumers might think it was still XYZ Corporation's product
line. Subsequently they might shun all sorts of other XYZ Corporation
products.

Sometimes I have the impression it is either board room short
sightedness or they could not make it work on their own and totally gave
up. In Europe all this started about 20 years ago but there it was more
about brand names of companies that were failing. Probably last ditch
efforts by the liquidators to make a buck.

Regards, Joerg

http://www.analogconsultants.com

Remember Motorola Quasar? Caused me to stop buying anything Motorola.

...Jim Thompson
--
| James E.Thompson, P.E. | mens |
| Analog Innovations, Inc. | et |
| Analog/Mixed-Signal ASIC's and Discrete Systems | manus |
| Phoenix, Arizona Voice480)460-2350 | |
| E-mail Address at Website Fax480)460-2142 | Brass Rat |
| http://www.analog-innovations.com | 1962 |

I love to cook with wine. Sometimes I even put it in the food.

 

[Joerg]

Hello Jim,

Remember Motorola Quasar? Caused me to stop buying anything Motorola.

Wasn't that the TV brand where failure rates dropped dramatically after
it was sold to Matsushita? Then came Six Sigma and all that, but what
good does it do if such efforts often don't make it into engineering?

According to today's newspaper a major car manufacturer is now in a
similar predicament. That was pretty sad news, considering that it could
have been avoided if they had been as innovative as companies like
Toyota. One clear indicator would have been to look at which brands
engineers drive. Taking a look at what's in your garage and in ours, the
picture is quite clear. They could have seen it coming decades ago.

Regards, Joerg

http://www.analogconsultants.com

 

[Jim Thompson]

On Wed, 08 Jun 2005 18:45:44 GMT, Joerg
<notthisjoergsch@removethispacbell.net> wrote:

Hello Jim,

Remember Motorola Quasar? Caused me to stop buying anything Motorola.

Wasn't that the TV brand where failure rates dropped dramatically after
it was sold to Matsushita? Then came Six Sigma and all that, but what
good does it do if such efforts often don't make it into engineering?

According to today's newspaper a major car manufacturer is now in a
similar predicament. That was pretty sad news, considering that it could
have been avoided if they had been as innovative as companies like
Toyota. One clear indicator would have been to look at which brands
engineers drive. Taking a look at what's in your garage and in ours, the
picture is quite clear. They could have seen it coming decades ago.

Regards, Joerg

http://www.analogconsultants.com

Yep. I haven't owned an American-made brand since 1977 (FORD, fix or
repair daily , although, IIRC, my Nissan Frontier pickup hails from
Tennessee.

...Jim Thompson
--
| James E.Thompson, P.E. | mens |
| Analog Innovations, Inc. | et |
| Analog/Mixed-Signal ASIC's and Discrete Systems | manus |
| Phoenix, Arizona Voice480)460-2350 | |
| E-mail Address at Website Fax480)460-2142 | Brass Rat |
| http://www.analog-innovations.com | 1962 |

I love to cook with wine. Sometimes I even put it in the food.

 

[Rich Grise]

On Wed, 08 Jun 2005 07:50:38 -0400, Spehro Pefhany wrote:
....

It seems odd, and perhaps unwise, for a company to sell use of its
name on a consumer product (and thus a very visible part of its
reputation) to an entity out of its control.

Probably just my old-fashioned ideas. Why couldn't the owners of a
well-known consumer brand name just sell (or rent) the rights to that
name and distribution channels to whoever they wanted? Say, instead of
GE buying branded clock radios from a supplier in China, just allow
that supplier to sell "GE" branded clock radios directly to Wal*Mart?

I hope I'm not blowing smoke here, but I'd had the impression that
that's what they already do - much like a "franchise". IOW, you could
open a fast-food joint, and apply to McDonalds (for example) for
"franchise" status, and they'll inspect you to death, (they have
incredibly strict standards), and if they grant the franchise, you'd
better continue to meet those standards if you want to continue to enjoy
the status concomitant with the name.

And if some Asian chip maker finds that they can make chips "as good
as" the big name chips, it seems to my mind that all they'd have to
do is continue to meet the spec of the big name, and why not? I'd
certainly be happy to sell Grise Left-Hand Opening Microwave Ovens
to, say, Goldstar, or Hotpoint, or Amana, and would take pride in
ISO9000 compliance, which, in essence, says, "Meet the Customer's
Spec."

So, if I was a biggie (which brings us to the realm of fantasy),
I would only authorize it if my subcontractor could guarantee to
produce products that don't impugn my good name.

But when I, as a consumer, go buy a TV or hand drill or car,
what do I care who built it, if the quality of the product is as
good or better than the quality of the products that gave the
biggie their good name in the first place?

And we all know that there's some no-name stuff that beats the
brand names right out of the water. ;-)

Cheers!
Rich

 

[Rich Grise]

On Wed, 08 Jun 2005 11:58:17 -0700, Jim Thompson wrote:

On Wed, 08 Jun 2005 18:45:44 GMT, Joerg
notthisjoergsch@removethispacbell.net> wrote:

Hello Jim,
[who apparently wrote:]
Remember Motorola Quasar? Caused me to stop buying anything Motorola.

Wasn't that the TV brand where failure rates dropped dramatically after
it was sold to Matsushita? Then came Six Sigma and all that, but what
good does it do if such efforts often don't make it into engineering?

According to today's newspaper a major car manufacturer is now in a
similar predicament. That was pretty sad news, considering that it could
have been avoided if they had been as innovative as companies like
Toyota. One clear indicator would have been to look at which brands
engineers drive. Taking a look at what's in your garage and in ours, the
picture is quite clear. They could have seen it coming decades ago.

Yep. I haven't owned an American-made brand since 1977 (FORD, fix or
repair daily , although, IIRC, my Nissan Frontier pickup hails from
Tennessee.

I and my family of record have always had really good luck with Fords.
us Ford-lovers also say, "For Orphans, Retards, and Dinks," with a
twinkle in our eye, and then laugh up our sleeves at the Chevvies and
Dodges in the shop to the tune of a thousand bucks a repair. ;-)

<alcohol- and dental-anaesthesia-induced reminiscence>
But I also had a Plymouth Gran Fury which served me spectacularly well.
Bought it in Oceanside, CA for $500.00 in the early 1990's, lived in
it for a couple of years when Vesta Manufacturing tanked, and then
drove it to Minneapolis one winter (I know - every time I've commuted
from CA to MN it's been exactly the wrong direction - on the way
through Liberal, KS (home of Dorothy - see
http://www.cityofliberal.com/thingstodo/attractions/dorothy.html )
I had to buy a hat and coat because it had just started snowing.
I said to the girl in the coat and hat store, "Toto, I don't think
we're in San Diego any more."

But back to Fords:
Between school and joining the Air Force, I had a Pinto - amazingly
serviceable(sp?) car, and as fun to drive as a pregnant roller skate.
When I went off to war, I sold it to My Brother the Musician for a song,
(eww - pun unintended, but noted), and some years later he recounted the
time when he and one of his druggie friends swapped out the engine almost
with their bare hands when it siezed up because he forgot to put oil in it.

Ach, I reminisce
</alcohol- and dental-anaesthesia-induced reminiscence>

Thanks!
Rich

 

[Rich Grise]

On Wed, 08 Jun 2005 19:03:19 +0000, Joerg wrote:

Hello Jim,

Yep. I haven't owned an American-made brand since 1977 (FORD, fix or
repair daily , although, IIRC, my Nissan Frontier pickup hails from
Tennessee.

Our Toyota was built in Fremont, CA. It is mostly a matter of how a
plant is run, not so much where it is located. But most of all it is in
the engineering. When I look under the hood of the Toyota I see order.
Everything is nicely bolted down, nothing flops around. That isn't the
case with other similar cars.

What amazes me is the way they fit all that stuff in there with
hardly room to get a socket wrench in to change the spark plugs.
Gives new meaning to the term "Packaging Engineer". ;-)

Cheers!
Rich

 

[Joerg]

Hello Rich,

What amazes me is the way they fit all that stuff in there with
hardly room to get a socket wrench in to change the spark plugs.
Gives new meaning to the term "Packaging Engineer". ;-)

Indeed. Changing the oil filter on the Toyota is an exercise in
contortionism. Have you ever looked under the hood of the six liter
Mercedes-S?

Regards, Joerg

http://www.analogconsultants.com

 

[Joerg]

Hello Jim,

Yep. I haven't owned an American-made brand since 1977 (FORD, fix or
repair daily , although, IIRC, my Nissan Frontier pickup hails from
Tennessee.

Our Toyota was built in Fremont, CA. It is mostly a matter of how a
plant is run, not so much where it is located. But most of all it is in
the engineering. When I look under the hood of the Toyota I see order.
Everything is nicely bolted down, nothing flops around. That isn't the
case with other similar cars.

Regards, Joerg

http://www.analogconsultants.com