Cuisinart. Black and Decker. Maytag. These sound like brand names you can trust. But what's in a brand name these days? Is the lonely Maytag repairman twiddling his thumbs waiting for a call because his company's products are of the highest quality? Or is it because none of the products is actually made, or serviced by Maytag, or even covered under a Maytag warranty?
I've noticed an increasing trend over the past ten or so years, for companies that have built up a solid reputation for their brand, sometimes over the course of decades or even a century, to try to cash in on that reputation by sticking their brand on other people's products. Sears has been a master at using the Kenmore brand to sell a great number of products made by many different manufacturers; as far as I know, Sears doesn't really make much of anything themselves. But this new breed of brand-name selling is different. A company like Sears still provides service for the products that they sell, and presumably they're very careful what products they decide to brand and sell. The new breed isn't putting their stamp of approval on someone else's products and then selling them. It is selling the brand itself, so someone else can take advantage of the brand's reputation.
I found this out a few years back when my Black and Decker bread maker ran into trouble after a few too many loaves of whole wheat bread. The paddle started slipping on the paddle axle, so the bread would not mix properly. I needed a new paddle, and called the Black and Decker company. To my surprise, I discovered that Black and Decker, the reputable manufacturer or reseller of so many common household tools, not only did not manufacture Black and Decker kitchen appliances, but in fact didn't sell them either. They had licensed their brand to someone else.
The Applica Consumer Products company sells bread makers, can openers, food processors and other products that carry the Black and Decker brand name. At some point in the past these appliances may have actually been sold through Black and Decker itself. But at least through the end of 2010, Applica is paying a minimum of .5 million per year to Black and Decker for the right to stick that trusted brand name on products that are now sold and serviced exclusively by Applica.
This practice has obvious attractiveness to popular brands looking for extra cash to improve their income statement. A .5 million per year cash infusion with absolutely no expenses (except perhaps a bit of legal effort) can make a company seem much more profitable than an equivalent infusion of cash from actual product sales, where cost of goods sold and other expenses need to be deducted. This is a great deal for the owner of the brand and the licensee - cash for the one, reputation for the other. Unfortunately it's not always so good for the consumer.
In the Black and Decker case the problem for consumers is that you are buying a brand based in part on your trust of that brand, but the home appliance you are buying actually has nothing to do with the company that built a reputation on that brand. In other words, you think you are buying quality because of the name, but there is absolutely no guarantee that that is the case. As I discovered when I finally had to throw out my original Black and Decker, the replacement "Black and Decker" bread maker did not live up to the same reasonably high standards. In other words, a company buys the license to a brand for its quality reputation, and then sometimes squanders that reputation.
Another highly reputable brand that sold its name to an inferior product line is the Maytag Corporation. Maytag licensed its trademark to Fedders Corporation to sell room air conditioners, after Fedders had run into financial trouble while branching from such units, which were its specialty, into the less lucrative commercial HVAC space. Fedders needed to boost sales fast, and adding an entire new product line with the Maytag name behind it was an obvious fix. This helped for a while, but unfortunately Fedders had sown the seeds of its own destruction by taking quality shortcuts and offshoring more and more of the component manufacturer, and eventually the machine assembly, of its small air conditioners. The end result was that air conditioners with the Maytag brand became increasingly fraught with quality problems, and people who actually read up on products before buying discovered that these were not a good product to buy.
Fedders suffered from this, as well as from a string of unseasonably cool summers, and filed for bankruptcy in 2007. Imagine the surprise of disgruntled "Maytag" customers who called Maytag for warranty support on their units, only to discover that Maytag had nothing to do with the products and did not stand behind their own brand name in the case of the products made by Fedders.
This is why it is so important to do your research on any product before you buy it. Cuisinart made excellent food processors until they filed for bankruptcy in 1989; the company that bought them, Connair, continues to make the same food processor, and in my experience the quality of the new units is at least good, if not as outstanding as the original. But Cuisinart also sells a whole range of other home appliances such as coffee makers and bread makers. Do these live up to our expectations of the Cuisinart brand? My experience with a Cuisinart bread maker was certainly not in line with my hopes for the name. It made heavy burnt bricks of bread and I returned it to the store in a week! (That's when I bought my second Black and Decker, which wasn't that much better.)
So do a search for reviews of the products you're planning to buy, before you put down your money. It's not a bad idea to include the words 'trademark' and 'license' along with the brand name in an Internet search, when trying to learn more about the product you're after. You might discover that the brand you are buying is a name, and nothing more.
A rose by any other name may smell as sweet - but a dandelion that's been rebranded a rose, under a licensing agreement worth several million dollars a year, isn't a great addition to your flower garden.
No comments:
Post a Comment