Buy Moon Shoes
Group Buying Direct: Beating the Brands
Branding Things You Don't MakeAs major corporations have outsourced production to offshore production centers acting as subcontractors, individuals and entrepreneurs have an opportunity to use group buying strategies to buy direct from manufacturers to save money and develop there own brands.
.png)
Branding Things You Don't Make!
Until recently, corporations believed branding to be secondary to the production of goods. In the mid 1980's, this view was modified when management theorists suggested that corporations primarily produce brands as opposed to products. This shift may be seen as a natural outcome of a world where mass production created the means to produce goods that were virtually indistinguishable from one another. As a result, effective branding became necessary to keep mass produced items from becoming commoditized. Commoditization of production, it is well known, was the surest means to destroy pricing power and profit levels. Branding was the best defense to keep companies from competing on price and quality alone.Phil Knight, founder and CEO of Nike Corporation has been widely seen as a leader in the branding movement of companies. Knight believed that their core focus was marketing and product development and believed that manufacturing had become incidental to the process of the production of goods. Who made a product was no longer important. The important part of a product was the presentation, packaging, marketing and sales. In the mid 1980's and 1990's, no one was better at packaging and presenting their product than Nike.
As more companies shifted their focus to the production of brands and not products, outsourcing production to contractors in low wage countries was rapidly accomplished. The shift toward low wage production facilities combined with an increased emphasis on marketing and brand management. This coupling enabled traditional markups between the cost of factory production and retail prices to soar. Labor in countries like China, Vietnam, and Indonesia were so low they become almost a non factor in the total retail price of the product. The lower cost of labor allowed for more money to be spent on advertising, brand management, and celebrity endorsements.
To better market and brand products, advertising and marketing budgets exploded. Sports apparel companies like Nike increasing paid large sums to highly visible professional athletes to endorse their products. In 1992, Nike made headlines when it was revealed that the $20 million paid to Michael Jordan to endorse their trainers was more than the entire work-force of 30, 000 persons employed by its subcontractors in Indonesia to produce them. News of this became a public relations problem for Nike, who by then was one of the most successful global brands and top selling athletic apparel maker.Against rising criticism, Nike made some adjustments, raising wages in Indonesia by 25 to 30% and eventually moving all production to Vietnam. Nonetheless, the Nike model has both endured and proliferated, with nearly all major brands moving production to Asia or Latin America. During this process, social activists were quick to bemoan the disparate wages paid to factory workers in the developing world, missing the fact that wages paid to sales and customer service personnel at big box retailers faired hardly better. At just above minimum wage, their income failed to provide a living wage for them as well.
Yet economists and management theorists alike came to defend the concept of branding goods as a way to solve "information asymmetries." Meanwhile, savvy consumers began to observe something different. They understood that most mass produced goods now came from factories in the developing world, primarily represented by China. As a result, whether it is a Mattel Toy from Wal-Mart, a Nike shoe from Footlocker or a Moen faucet at Home Depot, these brands, in the minds of smart consumers, don't command the edge that the used to. In the new world of offshore outsourcing of production, the real information asymmetry was no longer solved by brands but is further confused by them.In this new paradigm branded objects increasingly are not what they purport themselves to be. For example, the label of a famous Italian designer may in fact be more the result of the hard work of Chinese seamstress or carpenter than the vision of the cultured craftsman from Italy. Made in China and in other low wage countries by subcontractors, these brands, through powerful ad campaigns that often include sponsorships, celebrity endorsements, and slick New York ad agencies, have distanced themselves from the real labor and production. In realty, to know the product, I need to know about the factory floor and not the advertisement.
Again, scandals have erupted, with tainted food production found in name brand packages originating from China and lead based paint found in toys sold by Mattel. These asymmetries underscore a new crisis within the production of branded items coming from contractors that are not controlled by the corporations that employ them.Nevertheless, renewed controversies over brands may modify conditions but will not overthrow the concept and power. To be sure, generic and private label products will continue to have their place and likely fair better in recessions than in growth periods. But branded products will remain because, when effective, they solve not only information asymmetries but provide a social currency and powerful referent between consumers that interact with one another.
Branded goods conveyed through unique specifications, developmental series, icons and logos, combine to constitute a new, separate and universal language. Brands convey status, identity, and "cool, " replacing, on many levels, previous forms of social discrimination contained within caste and class distinctions. Brands, no longer signified with local production with names proudly displayed on brick factory walls, have turned to increasingly to lifestyles fantasies and "cool." Cool, in fact, has become so important, global brands have employed cool hunters to comb the urban landscape for signals and inspiration of "cool" to guide them, altering the traditional relationship of fashion and the public.In the past, stylistic changes emerged from the minds of manufacturers, both anticipating and responding to the changing tastes of the wealthy and elite. Today, these changes are more likely to emerge from trendsetting lower, middle income and even impoverished teens and young adults in urban centers in the United States and around the world.
Despite problems with brands, branded businesses will flourish and remain. But the changing nature of production and consumption (via collaboration) exposes a terrible flaw within the transnational corporation outsourcing model maintained by large corporations.Beating the Brands
I believe corporations that do not control the means of production have produced short term benefits and created, ultimately, a more fundamental error. By "not making anything, " they have exposed themselves. As a result, they are vulnerable not only to the changing tastes of the consumer but from the inevitability of several strategies to diminish their importance and, in some cases, defeat them.1) Entrepreneurs, professional athletes, celebrities and designers will increasingly develop there own signature lines, fragmenting the marketplace to compete directly with the bigger, global superbrands. There are a plethora of examples here, from Sean Jean clothing to Martha Stewart, creating brand extensions with products, capitalizing on their already powerful names. More recently, Stephan Marbury, along Barry University Sportswear, created a $15.00 basketball shoe that effectively combines low cost offshore labor and the power of celebrity branding. Marbury has simultaneous used his celebrity endorsing power for his own objectives while exposing the pricing power (and profit margins) of his superbrand competitors.
2) Manufactures themselves will market similar or same items directly to small businesses and consumers (this is happening at www.alibaba.com , www.dhgate.com , www.buychinadirect.com, etc). Over time, more obscure manufacturers will hire Western ad agencies to manufacture "cool" or brand, and deliver to created integrated production and distribution operations. If this process is successful and pervasive, western brands will shrink as a force in the marketplace and possibly disappear altogether. This will occur as Asian consumers become both a larger and more affluent marketplace. Recent and continued dollar devaluation and eventually realignment of the Euro will call for the inevitable rebalancing of trade between producing and consuming nations. As this shift occurs, America, from necessity, may rediscover production.3) Powerful consumer buying groups will emerge, bypassing global superbrands and their big box retail distribution partners. Entrepreneurial efforts by designers, athletes and celebrities will also be bypassed, as these buying groups solve the information asymmetries by sourcing the best contract manufacturers to produce their products. Additionally, as consumption evolves, consumers are more likely to resist the authority of corporate lifestyle and celebrity marketing campaigns to mark their products for them. From these groups branded products will emerge, with both individual and community signatures, fulfilling the social function vacated by global superbrands. Celebrities (representing a wider range of individuals and role types) and athletes may again be re-employed, this time as paid (at reduced levels) spokespersons for buying groups and not global superbrands.
Previous online efforts failed because they attempted to purchase branded, low margin items already bought in bulk by major, big box buying clubs and retailers. This group buying initiative is different in that consumers may source manufacturers in Asia and elsewhere directly, bypassing big box retailers and global superbrands entirely. In specific instances, where branded items may be purchased in bulk from cheaper sources, and effective group buying system can facilitate these transactions.
Savings for consumers are achieved by several means:
- Through volume. Many overseas manufacturers have minimum order requirements that require buying groups to be initiated at all. Quantity breaks are available for larger orders and are displayed on websites that represent contract manufacturers.
- Through savings in shipping charges. Since these goods are traveling farther, shipping costs represent a larger portion of costs than traditional shipping from etailing sites based in the United States like Amazon.
- Through direct sourcing. Many large scale overseas manufacturers do not make small scale purchases available to consumers or small businesses. Firms will locate those entities for pricing and aggregate enough demand to qualify as a buyer.
Consumers will not only save money on popular brand names buying direct and in groups, but they will also have the power to design and distribute their own lines of shoes and clothing. No longer will consumers be so dependant on Madison Avenue advertising firms, Tommy Hilfiger, Phil Knight or Russell or Kimora Lee -Simmons to tell them what is cool. Consumers, united, will have the power previously denied to them through the current production strategies: that is the make and influence product design and development and create, ultimately, their own brands. Nike Vs. Main Street PresentationNike.2
Levi's recently announced an open, online design challenge for the general public. People all over the USA had the chance to redesign the iconic 501. If they win, their design will be produced and sold by Levi's on www.levi.com, along with winning a $501.00 gift certificate redeemable on levi.com. $501.00 is better than nothing. And the chance to participate is better than not being able to. But why didn't Levi offer a percentage of sales, like a professional designer would make?
I do not maintain that the process of group, cooperative or collaborative consumption will change our social system whose chief currency today is a status system of objects. The status of objects will remain and will still likely evolve in a rapid succession. However, I do maintain that the group buying process that propose here will assist in restoring community participation and a co-creation of products from vital areas of society that most need it. This co-creation will help narrow the gap between production and consumption that today is filled by intermediaries whose chief job today appears to be the projection of lifestyle fantasies and the further inflation of athletes and entertainers to the position of deities. Within the current mode of consumption, our goal is to eliminate transaction costs borne by consumers that result from product branding that too often results inessential information about product differences.
And perhaps as important, buyers, by avoiding the products branded by superbrand corporations, avoid the further contribution of mind boggling salaries of CEO's and their celebrity product endorsers. This strategy is not an alternative to globalism but it is a community based globalism and not a Wal-Mart, Target, and Best Buy, Nike athletic shoe kind of globalism. The type of globalism described here promises more evenly distribute the benefits of globalised, outsourced production.For the hungry and risk adverse entrepreneurs today, Frank Lucas (American Gangster) has been mythologized as a powerful example and precursor to the programmatic vulnerability of global brands today that have outsourced production. Mr. Lucas's trip to Asia to establish a direct connection to Asian heroin production is a metaphor for a likely journey aspiring entrepreneurs of fashion and merchandising will soon make in the future.
Frank Lucas bought direct and established his own brand of heroin. Because he eliminated layers of marketing and sales, he was able to distribute a more powerful product, supplanting much of his competition. In this instance, he turned the tables on Mafia drug lords, as they soon were buying from him and not the reverse, as tradition had implied.A similar situation confronts young men and women in urban centers today. The product in question this time thankfully is not narcotics, but athletic shoes, shirts, baggy pants, and numerous other items. Students, teenagers, and underemployed young men and women in urban centers across the country are both large consumers of fashionable consumer products and innovators of numerous fashion trends. Yet they themselves remain abstracted from production and exist only as signifiers of production to participate only as consumers, overpaying for items they oftentimes inspired to create.
In final analysis, direct group buying from the very same offshore production center that branded multinational corporations maintain as their source of goods may effectively destabilize existing relations of production and consumption. As important, community direct group buying will allow alternative branding strategies to flourish. Communities (both online and offline) and individual consumers will be able to more efficiently design and brand their own products.
Links to related articles posted by author:Group Buying Direct: Power in Numbers Group Buy Housing Empowering Collective Action through Tipping Points GREENMAIL: An Alternative Approach to Ethical Investments
__________________
* Written, May 2008
* Published, Google Knol, July 28, 2008
Start writing here.
|
|
this is why you should buy Moon Shoes
Moon shoes infomercial
2012 All-Terrain Atlas, MSR, Tubbs Snowshoes Comparison Video - by ORS Snowsh
Next page: Invicta Womens Pro Diver Two Tone Watch
Buy Moon Shoes News
Remembering Carlos Fuentes - Examiner.com
16 May 2012 at 2:22pm Examiner.com I was always going to be a writer; as a child, my favorite Christmas gift from my parents was a typewriter. I sold my comics to the other kids beginning in the first grade, started writing short stories as a boy, completed a hilariously bad science ... and more » |
Read more...
Stars Add Glitter to Jeweler's Designs - New York Times
16 May 2012 at 8:46am New York Times In 2008, Ms. Jolie asked the jeweler to help her design a pendant bearing a hidden message as a Christmas gift for Mr. Pitt, setting the stage for a co-designed collection inspired by ancient tablets. ?We studied all different kinds of tablets ? old ... |
Read more...
Comic ideas stretched to absurd proportions - This is Bristol
12 May 2012 at 1:06am This is Bristol It's when Gilbert elaborates on the kernel of a comic idea and stretches it to absurd proportions that the show flies highest. An unwanted Christmas gift of a computerised toothbrush which prompts a disaster of national proportions and "suicidal" ... |
Read more...
From cowgirl to dominatrix, the most fun you can have for $100 - Royal Gazette
8 May 2012 at 6:25am Royal Gazette She said her latest book is the result of a Christmas gift she gave her husband of 29 years, Paul. ?I just couldn't give him another book, another CD, another tie; pair of pyjamas. I just couldn't get excited about getting him anything, ... |
Read more...
