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What's the deal? Do you see these things in the US ?





pll
Hey !! I hope somebody will be able to help me on this subject. I don't understand, why here in canada tons of companies will have tons of sub-brands in their line-up here's some example.

If we take the telecommunications market in canada we have 3 big owners :

-Bell
-Telus
-Rogers

Followed by their sub-brands (which can also be called ''MVNO'') :
Bell owns ; Solo Mobile and Virgin Mobile
Telus owns a company called ''koodo''
Rogers owns ; Fido, Chatr
Sure we can make this comparison with tons of other domains ; Clothing, Food, Electronics and more!

First : here's are my questions :
1. Why does a company feel the need to buy another brand and another image about his business ?
2. Do you see this kind of behaviour in the US?
Here's my look about it:
I know that the image of a company is really important so if a company doesn't fit the image of potential customers it will try to get it by another way (like opening under a new name) but I can't understand how it can be profitable for a company? Does the customer really only looks on the ''image'' of a brand?
From what I can see it seems to work ... I just saw a ''best buy'' store opning right in the same building as a ''future shop'' IT'S THE SAME COMPANY so what's the strategy behind it?

I find it hard to understand and I'd like to have more info about this kind of marketing.
ocalhoun
There are three main reasons a company might have several different brands:

A) The company bought another company, but doesn't want to lose that company's loyal customers.
(If the Ford Motor Company bought the Mopar group, they would still produce cars with the Chrystler, Dodge, and Jeep brands, because there are people loyal to those brands... particularly Jeep.)

B) The company might want to have an upscale brand and an economy brand... But they don't want the economy brand giving their upscale brand a bad name. (The Whirlpool appliance company also produces the Roper brand, which is cheaper, but not as well made. If both were made under the same brand name, people who bought the cheap version would form the opinion that all Whirlpools were cheaply made.)

C) They might want different brands to appeal differently to separate demographics. (Ford produces Mazda for people who want an 'import'... Toyota produces Lexus for those who want luxury, as well as Scion for young people who want to be cool.)


pll wrote:
Does the customer really only looks on the ''image'' of a brand?

Yes. Yes they do.
That's why people buy I-pads, and why people will pay more for a Cadillac than for a Chevrolet that is functionally identical.
Even knowledgeable people often fall for it, but many people are too stupid to realize that one company might sell products under multiple brand names, sometimes even the exact same product under multiple brands.
standready
pll wrote:

1. Why does a company feel the need to buy another brand and another image about his business ?
2. Do you see this kind of behaviour in the US?


Answer 2 first: Yes. as ocalhoun pointed out, upscale brand, mid-level brand and economy brand. Many people don't realize that product is made by one company and possibly all three being produced on the same production line.

Answering 1: Sometime this is buying a competitor, other times it is to expand into another product area. Go to a company's website and find the "investor's relations". Look at the SCC filings. So many times you will find the company is owned by another.
deanhills
pll wrote:
First : here's are my questions :
1. Why does a company feel the need to buy another brand and another image about his business ?
2. Do you see this kind of behaviour in the US?
Here's my look about it:
I know that the image of a company is really important so if a company doesn't fit the image of potential customers it will try to get it by another way (like opening under a new name) but I can't understand how it can be profitable for a company? Does the customer really only looks on the ''image'' of a brand?
From what I can see it seems to work ... I just saw a ''best buy'' store opning right in the same building as a ''future shop'' IT'S THE SAME COMPANY so what's the strategy behind it?

I find it hard to understand and I'd like to have more info about this kind of marketing.
I sometimes wonder whether it has something to do with accounting instead. Like diversifying investments. If one is in trouble, then the other one bails the former one out. Also having so many subsidiaries may have tax benefits as well.
dwxco
I think its less with accounting and more with marketing, and trying to have a product line that appeals to as large a group as possible. Also, by offering multiple product lines, people can move up and down the product line while remaining a loyal customer.

deanhills wrote:
pll wrote:
First : here's are my questions :
1. Why does a company feel the need to buy another brand and another image about his business ?
2. Do you see this kind of behaviour in the US?
Here's my look about it:
I know that the image of a company is really important so if a company doesn't fit the image of potential customers it will try to get it by another way (like opening under a new name) but I can't understand how it can be profitable for a company? Does the customer really only looks on the ''image'' of a brand?
From what I can see it seems to work ... I just saw a ''best buy'' store opning right in the same building as a ''future shop'' IT'S THE SAME COMPANY so what's the strategy behind it?

I find it hard to understand and I'd like to have more info about this kind of marketing.
I sometimes wonder whether it has something to do with accounting instead. Like diversifying investments. If one is in trouble, then the other one bails the former one out. Also having so many subsidiaries may have tax benefits as well.
timothymartin
It's all about the bottom line. And it's a numbers game. If a company sells more it makes more. And if they have more to sell then they have more that people can buy. And diversifying product among different locations increases awareness and increases the potential for it getting bought.
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