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> Hwat went wrong in the market? If you're the CEO of a company, licensing out your brand seems like free money, in the short term. If you're a well known int

> Hwat went wrong in the market? If you're the CEO of a company, licensing out your brand seems like free money, in the short term. If you're a well known international brand of backhoes, and somebody offers you $x00k/year to put your logo on their line of disposable batteries? No cost to you, no effort needed on your part, it's pure profit. It's only in the medium term you run into problems - if they're shitty batteries, that might damage your reputation and harm your backhoe sales. Or even if they're perfectly good batteries, having your name on consumer-grade disposable items might be a poor association if your main business is all about industrial multi-decade-life products. Oh, some CEOs would resist the siren song of free money. But others will ignore the 'fuzzy marketing mumbo-jumbo' about 'brand reputation' and comfort themselves with the assumption their customers are sophisticated enough to know the batteries don't reflect on the backhoes. Nobody expects Harley-Davidson baseball caps to be made in a Harley-Davidson factory, after all! And if you've moved jobs before the reputation impact shows up on the bottom line, it'll look like you did a great job.

wmeredith 4y ago
This is called cashing out brand equity. Your brand is worth something as a signal. You can cash in on that. If you do it poorly, though, it reduces brand equity. If you do it well, then it is in fact free money other than the time spent on due diligence researching your contractors. An example of someone currently doing that well is Kirkland house brands at Costco. They are universally known for being an incredible value and just as good or superior to the name brand stuff on the shelf next to them. An example of someone currently doing it poorly is Pendleton, who is known for making wool blankets that cost $500 and last generations. They have been putting their name all over $20 plastic fleece blankets in the last year or so.
- kyleee 4y ago
  ironically selling the crappy blankets at Costco

wmeredith 4y ago

This is called cashing out brand equity. Your brand is worth something as a signal. You can cash in on that. If you do it poorly, though, it reduces brand equity. If you do it well, then it is in fact free money other than the time spent on due diligence researching your contractors. An example of someone currently doing that well is Kirkland house brands at Costco. They are universally known for being an incredible value and just as good or superior to the name brand stuff on the shelf next to them. An example of someone currently doing it poorly is Pendleton, who is known for making wool blankets that cost $500 and last generations. They have been putting their name all over $20 plastic fleece blankets in the last year or so.

kyleee 4y ago
ironically selling the crappy blankets at Costco