Own brand or focus on OEM?

We are a small and medium-sized enterprise and we are facing the problem of how to build our brand. Because having a strong brand can have a competitive advantage in the market, or have better profit margins. However, building an international brand is a long-term and gradual process. In addition to continuous investment and huge budget, it also requires the overall planning of the enterprise, which requires the participation of professionals.

All along, in the process of doing OEM business, we have learned the essence of some advanced management experience and technology research and development, and completed the original accumulation of capital. It has also established a certain reputation in the industry and has some channels to promote itself.

Since our products are mainly CD boxes, there are not many well-known brands in the world for this small product, so we are ready to create our own brand in the niche market. The main way is to play our own brand through world-renowned media and exhibitions---Magicase. Under the same quality, our brand is cheaper than the brand after OEM.

Moderator's point of view: OEM and building a brand are not contradictory. OEM is actually a process of creating a brand. In the early stage of enterprise development, it focused on OEM business, "borrowing chickens to make eggs", and after accumulating scale and strength, more efforts were made in brand building. Not every business needs to rush into branding.

More than 40 netizens expressed their opinions and published splendid reports on whether companies focus on OEM or brand creation, the pros and cons of OEM, and how Chinese companies create their own brands. content. Most netizens believe that brand is an indispensable intangible asset of an enterprise and the source of enterprise's competitive advantage. OEM and self-created brands do not contradict each other, and there is no need to divide them into two stages.

OEM's Pros and Cons

When there is no better way to win the market, OEM is a quick way to gain market share, but OEM also means transferring part of your own profits to the brand owner By. That is, OEMs can make profits for themselves, but cannot make their own brands develop. This is how Ziqing netizens view the gains and losses of OEMs.

All speakers agreed to open their own market by OEM. De Ge, a netizen from a Shenzhen Information Technology Co., Ltd., introduced: When the brand and capital of the enterprise cannot compete with the famous brand enterprises, they can grow up through OEM. There was once a clothing company that survived by doing OEM for a brand company in the first year. During this year, they quietly figured out the market situation of the brand company. When the cooperation period expired in the second year, they also did the same. Market rental counters listed, the same style, the same quality products, the price is several percent lower than the brand products, which quickly occupied the market.

OEMs also need strength and can accumulate strength. Netizen Jbduan introduced that one of his classmates worked for a company in Baoan, Shenzhen that not many people knew about. The company's monthly salary was more than 30 million yuan, and the employees engaged in technical work had an annual salary of more than 200,000 yuan. But this is a factory that has been focusing on OEM business for decades, and has not created any own brand. I don't know how many "brand" owners in China can have such strength.

The benefit of OEM is that it can increase profit opportunities and improve the company's own manufacturing capabilities. But being too addicted to OEM is not necessarily a good thing. The home appliance industry is an example. For example, a Cocl-gong netizen said that an international brand entrusted a domestic manufacturer to make air conditioners, window machines and mobile air conditioners at cost prices, and domestic manufacturers hardly make a penny, so if there is no export tax rebate, who would dare to do it? This shows that the profits in the high-end market are completely occupied by brands in other countries. It's like "give all the chicken to others, eat the chicken ribs yourself"! Therefore, Cocl-gong suggested that domestic home appliance companies should try their best to shift from OEM to ODM.

Incubating brands in OEM business

We believe that from OEM to creating a company's own brand is the dream of every entrepreneur, and many people are tirelessly exploring and practicing. To incubate your own brand from the OEM business, you need to consider many factors:

It depends on the industry situation. If there is already a strong brand or leading brand in the industry, and the market capacity of the product is large, then it is very easy for the latecomer to become a brand. Difficult, it is better to be an OEM. If there is no leading brand in the industry and the product is in the market development stage, it is easier to make a brand.

Depending on the stage of enterprise development If it is survival, then OEM is a very effective and practical method. If it is development, then it must have its own products and brands. Brands are the magic weapon of their own enterprises in the market competition.

It is a long-term and arduous activity to create a brand according to the research and development capabilities of the enterprise. The first product should have its own characteristics, and the second product must be able to continuously improve or launch new products, all of which depend on the company's R & D capabilities.

According to the characteristics of the product, the positioning of the brand should be clearly defined, and you can have both. This is the view of eSigma netizens. As a manufacturer of CD boxes, consumers are not very loyal to the manufacturer's brand, but if you do OEM business and use a relatively well-known brand, the effect will be different. eSigma believes that when creating an own brand, it is necessary to determine who the brand appeals to. As a manufacturer of CD boxes, the target of the brand's appeal is the manufacturers of CDs. It is also a way to expand the brand by marking its own brand on the CD boxes sold by various record companies and software companies. Therefore, while focusing on the OEM business, it should expand its own brand in the industry and increase its popularity. Isn't this a win-win?

The life of the brand comes from the advantages of the enterprise

How does the enterprise establish its own advantages and give life to the brand in the process of development? Netizen Lao Dai believes that "the advantages of technology and channels are the most critical". He elaborated that the market value of a product mainly includes the value of the product itself and the value of the brand. When the profit of a strong enterprise comes from the value of the brand, the focus of the enterprise will naturally tend to the market extension of the brand, and the value of the product itself can be guaranteed by OEM.

If a domestic OEM company wants to create its own brand, Lao Dai agrees with what Mr. Wang Jianqiang emphasized, seizing the niche market, there may be more opportunities in the field where there are not many well-known brands. The advantage of a real brand enterprise lies in the advantages of technology and channels. While OEM dishwashers for Siemens, Little Swan Group also produces its own brand dishwashers with Siemens technology. Large domestic enterprises with certain technology digestibility can often successfully establish their own technological advantages in this way.

Technical barriers can often be broken through, and the most difficult breakthrough may lie in sales channels. This is also the reason why some domestic brand enterprises are only limited to the domestic market and regional market, but cannot enter the international market.

No matter how good the product is, if there is no channel to open the international market, the advantages of the brand will not be reflected. In the short term, OEM will become the main way of survival for domestic manufacturing enterprises. Only after mastering the technology and channels, can self-owned brands become the mainstream.

Challenges of running a brand

When creating a brand by yourself, while seeing higher profits, you must also see an increase in corporate investment risk. Netizen Ray believes that companies must invest in brand building, management, maintenance and promotion, and they need to be cautious when creating their own brands.

It can be seen from the situation expressed by the host that the host's company has performed profit-making in order to create and promote its own brand, which is also a risk.

Making a product and owning a brand are almost entirely different businesses. Jbduan believes that it is easy for a shoe-making company to beat another shoe-making company, but how difficult it is to beat Nike! On the contrary, if Nike does not invest in the construction of shoe factories to produce Nike shoes through acquisitions and mergers, I am afraid that the Nike brand will not be guaranteed.

An information technology company has been an OEM for more than 10 years and started to launch its own brand a year ago. Joe from this company introduced the following experience:

1) Do not conflict with OEM partners for private label products, otherwise there is no reason to let you OEM. Their principle is to provide a full range of products for existing commercial customers, including foreign brand products that they OEM and represent, as well as their own brand products that complement their advantages, so they complement each other, the market interests are consistent, and the cooperative relationship is maintained. has been good.

2) Solve the problem of cultural conflict. Manufacturing and marketing are two completely different business cultures, and if they are not handled properly, the "internal organs" will be damaged. Their solution is to split the group into two major professional companies. The manufacturing system and the marketing service R&D system operate independently and serve each other as customers.

3) Manufacturing itself is a brand, and publicizing the scale and strength of manufacturing is a successful way to intervene in brand promotion. However, the manufacturing brand is different from its own brand. With the deepening of public relations promotion, it is necessary to pay attention to the relationship between brand attributes and publicity methods. A brand is not just made, it contains a series of definitions, such as understanding of value, understanding of customers, commitment to society, the experience and feeling it brings to customers, the way a business behaves and so on.

4) The last point, which is very important, is that it must be supported by a very strong capital flow. Because the key to own brand lies in marketing, the occupation of funds by marketing is completely different from that of manufacturing. If the risk control and capital flow of capital flow are not handled properly, a series of problems will occur, and your product development progress, the logistics system of the manufacturing base, the progress of high investment in marketing, etc. will all be implicated.

Organized by Frank Deng. See the CEConlines website for more discussion.