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It is similar to rent seeking behavior: create a super high quality product with a strong brand name. Then once it gets popular, switch to a cheap product but k
by IgorPartola 4y ago
It is similar to rent seeking behavior: create a super high quality product with a strong brand name. Then once it gets popular, switch to a cheap product but keep the same brand name. Keep price the same, lower your costs, get more $$.
Part of the problem is also that knock off manufacturing is now quick and pretty good. Snap-On initially had a huge lead on the market because (a) they invented something new and (b) nobody could quickly replicate what they had. Now if they come out with a new type of wrench within a year others will copy the design at a fraction of the cost and it will be almost as good. In most cases it will be way better value for the money.
- reaperducer 4y agoIt started many decades ago, when low-rent importers and manufacturers bought the rights to out-of-business brand names, then started slapping them on all kinds of cheap junk and advertising them on TV. Even though it had its own store at the Mall of America, "As Seen On TV" is a red flag, not a badge of honor. Think Crosley record players, or different anti-itch powders, and such. Some managed to be just-good-enough to crawl back into becoming a real brand with real manufacturing. But some remained just junk, only to disappear again. Or, in other cases, the manufacturer of cheap Chinese junk will contract with a well-known American brand to put their brand on the junk and offer it as a discount to the American company's existing customers. Readers' Digest clock radios is a good example. Looking through Goodwill will reveal dozens of these brands, and their junk just before it hits the landfill.