Brand Equity: What You Need to Know to Grow
- By Kristie Barge
- Jul 01, 2010
Substituting high quality OEM-alternative remanufactured laser toner for OEM toner generates cost savings without adversely impacting machine performance or the quality of the final print. According to a recent report from Lyra Research, Inc., at least 80 percent of businesses currently using remanufactured laser toner find that their performance is equal to or better than OEM performance. However, when it comes to maintaining market share, OEMs remain at the forefront.
What OEMs often have that alternative remanufacturers do not have is called brand equity. Simply put, weak or strong brand equity is measured in relation to the outcome of a company's marketing efforts on public perception. OEMs generally maintain strong brand equity with influential marketing campaigns supported by very large portions of companies' sales revenues. The enormity of sales revenues indicates marketing allocations upward of $5 billion for the larger OEMs.
But this is a worldwide recession!
The economic decline presented new opportunities for alternative remanufacturers because many businesses began to purchase alternative toner cartridges to save money. But the OEMs promoted a wide-ranging assault on the toner remanufacturing industry’s reputation by simultaneously limiting the number of alternative remanufacturers on the market and jeopardizing the
credibility of the remaining few.
In the wake of the first waves of economic downturn, successful OEMs launched acquisition campaigns and bought businesses either directly related or indirectly related to toner cartridge remanufacturing. For example, since February 2008, HP has absorbed at least nine different computer software, wireless networking and printer peripheral manufacturing companies. The OEMs have also done well to respond to changes in consumer and business behavior. In general, people spend more time online than they do interacting with other media. In early 2008, Intel, Dell, Sony and HP announced substantial reallocations of budget for online, viral and interactive marketing activities. Activities included new e-commerce programs, paid advertising, SEO, affiliates programs, blogs, videos, live chat, Facebook and Twitter pages. OEM affiliates programs have greatly undermined remanufacturers by expanding the sales capacity of OEMs.
The competition unites
OEMs have joined forces together to combat the potential loss of market share presented by remanufacturers. The Imaging Supplies Council (ISC) works tirelessly on behalf of its trade members (Brother, Canon, Epson, HP, Lexmark, OKI, Samsung, Toshiba and Xerox) to protect member's customers from misrepresented products and services. Programs such as "When In Doubt, Check It Out" have led to the identification of relatively few suspect alternative remanufacturing operations. Leveraging their shared resources and combined brand equity, the OEMs have been able to use ISC programs to seriously weaken the honest alternative remanufacturer by implying that if it’s not OEM, it’s inferior or worse -- counterfeit.
And so it goes
Unfortunately, this claim has been strengthened by additional factors. The OEMs emergence onto the online scene inadvertently paved the way for e-commerce scam operations. Initially the most prevalent type of e-commerce scam operation (called phishing) was directed at capturing OEM customers' personal information. Phishing is usually accomplished by e-mailing or instant messaging an unsuspecting party and asking him/her to enter details at a fake website that is almost identical to the legitimate website.
Phishing sites were modeled after OEM e-commerce sites for the sole purpose of appearing legitimate. Almost concurrently, another form of e-commerce scam hit the scene. Scam artists set up websites that were meant to look like legitimate e-commerce sites. The scam artists in this category prefer to mimic alternative sites in order to legitimize selling at lower price points. These sites routinely
accept a low number of initial orders, source and ship very low quality product and then disappear, leaving resellers and end-users alike extremely frustrated.
The onset of these scams threatened the authority of remanufacturers in two ways. First, OEMs launched an attack on "counterfeiting claiming that phishing sites are in fact an infringement on intellectual property rights and laws. While phishing is (and ought to be) illegal, the downside is that the OEMs' campaign against counterfeiters is indiscriminate. Additionally, the very existence of e-commerce scams in the second category bolstered support for the OEM anti-counterfeiting campaign.
You CAN compete!
The ultimate obstacle for remanufacturers trying to gain and maintain market share is the perception of poor quality.
The good news is that alternative remanufacturers have done well to mimic some of the OEMs' best practices. Industry advocacy groups such as the International Imaging Technology Council have made great strides to combat the negative perception of remanufactured toner cartridges. Standardized testing methods have given remanufacturers a solid case for disputing the OEM claim that remanufactured products are inferior.
Albeit, many successful OEMs have budgets that far exceed the revenues a small-to-medium sized business can achieve in a decade, the same practices can be made applicable to any size business.
Commoditize your image by creating a brand.
The goal of branding is to make your company its image and its products and services easy for potential customers to identify and ultimately desire (or purchase!). Think about what makes your company unique. Use your unique points of difference to springboard into creating a brand that truly represents you. Make sure to infuse your marketing material with your new branding. Your website, company blogs, online and print advertisements, printed collateral and company letterhead must maintain a consistent look and feel.
Expand your brand.
Think about ways to be collaborative. Co-branding and partnerships are great ways to leverage shared resources to produce a mutually desirable result. Don¹t be afraid to explore co-branding opportunities or partnerships outside of the industry. You may also want to consider charitable contributions or sponsorship opportunities. No matter whom you choose to partner with, be sure to exploit the activity as instrumental to your brand.
Connect with and engage consumers online.
It¹s not about what you say. It's all about what they say about you. Today, the majority of people understand that advertisements are paid for by the company selling the product. A creative advertisement may not be enough to inspire interest in your products or services. Your customers use search engines, read articles and blogs and use social media because they want to know what other people have to say about your products, your business and the competition. The secret to successful online marketing is to connect with the bloggers and social media users who are commenting on the industry or perhaps your products. Find out what others are saying about you. Most
importantly, join the conversation! Think about creating your own company blog or commenting on an already established one. An up-side benefit to joining the conversation is expanding your SEO (search engine optimization) capability. Search engines love creative content, so blogs and inbound links to others' blogs are also a great way to help stimulate better organic search rankings.
Leverage shared resources to combat industry-wide issues.
Think about ways to increase the scope of activity focused on industry-wide issues. Why not consider co-branding an advertisement about the quality of OEM-alternative products and placing it outside of the traditional sphere? Think about exposing new audiences to alternative versus focusing on selling new products to seasoned industry professionals.
You SHOULD compete!
While competing against OEM giants may seem an insufferable task, keep in mind what remanufacturers are really up against. You don’t need to make broad changes that will significantly change internal operations. You simply need to share the truth publicly and without trepidation.
Your biggest challenge is changing the customer's perception. The truth is on your side: substituting high-quality alternatives for OEM products creates cost savings without damaging the printer or the final print. Even on a tight budget, you can contend for an increase in market share. Take the time to think about your company and what you do best. Turn your core competencies into a readily identifiable brand story. Publicize that story using a blend of traditional and “out of the box” marketing outreach. Borrow ideas from the OEMs. Borrow ideas from each other. Just don't give up!
Contact Kristie Barge at KristieB@ilglaser.com.
This article originally appeared in the July 2010 issue of Recharger.