Branded in Hong Kong
A harbinger of things to come...what's a brand worth? NEC has some insight into that question. They've recently discovered the knock-off de tuti knock-off, even for Hong Kong--an entire fake NEC brand. A group of enterprising pirates were selling fake NEC appliances, but in a big way. They had contracted with over 50 electronics factories to build copies of NEC products and lashed together a consumer distribution network to sell them. Police raids found that the cloned company had been giving out fake NEC business cards and collateral sales material, had commissioned R&D studies and even produced official-looking documents granting distributors exclusive rights.
Interestingly enough, the copies were of high quality.
So, what's a brand worth? Obviously enough to do all that. The pirates had done all of the corporate heavy lifting themselves; they'd contracted with factories, built distribution networks, established a channel strategy, even launched research efforts for future products.
If they'd changed the designs a little and called it, say, "Daves", instead of "NEC", they'd have had a real company and it would have been legit. Yet it was worth it to them to take the risk, knowing that they'd get caught eventually. Why?
Brands are big bucks. This case illustrates why. That last little touch on electronics manufacturing...gluing the little logo on the case, is the most valuable piece of the pie. The brand adds more value and increases the price point more than better design, cheaper distribution, or in fact any other single part of the process.
Posted on May 02, 2006
