Are Big Box Suppliers Destroying Their Brand Equuity?

I’m not the branding guy at CMG, which may account for my puzzlement.  Nonetheless: I had a conservation the other day the gist of which was that major manufacturers (DeWalt, John Deere, etc.) are 1) selling different models to Home Depot than are available through their traditional dealers (no surprise there), 2) these big box-specific models — which have the manufacturers’ brand name on them — are of lesser quality than their their traditional dealer network’s models (mild surprise here), and 3) the after-sales support and parts availability of these branded models is really poor (much surprise here).

Now I realize that margins are thinner when you sell to Home Depot compared to when you sell to your traditional channel, and something’s got to give.  But how does this practice (particularly elements 2 and 3 above) NOT destroy these manufacturers’ brand equity?  I can think of three explanations.

1) They are in fact destroying their brand equity because they failed to completely think this through.

2) They are pursuing short-term profits at the expense of brand equity.

3) Their analysis reveals to them that selling shoddy products to big box-class customers (homeowners rather than contractors or professionals in this case) has no effect on their brand equity, possibly because most homeowners don’t use the products hard enough to break them very often.

Anyone have better insight?

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One Response to Are Big Box Suppliers Destroying Their Brand Equuity?

  1. Interesting post… I mostly think that #2 is correct… but it may actually be a strategic choice to place big box sales distribution over long-term brand equity. On it’s face it may feel like a bad choice, but they may not have the systems in place to be profitable without the big box volume. Great brand equity without bottom-line profits could mean closed doors. Committing to having and sustaining a great brand means aligning an entire organization to that brand… no small feat.

    Stepping outside of the retail world for a moment, look at the major airlines. There is only one major airline with true brand equity… Southwest. They have made a strategic choice to be different from the rest of the industry. They do not work with ticket resellers like Travelocity, they don’t have business rewards programs, they don’t have routes to every city in the nation, they don’t have lots of different aircraft types… In other words, they have a complete systemic committment to their core brand to provide affordable, on time, flyer-focused air travel. I don’t know their brand statement per se… but I bet I just got close.

    So are DeWalt, John Dear, etc. eroding their brand equity by distributing lower quality products through the big boxes? Probably. But they may not have the leadership, organizational structure, information systems, manufacturing systems, and collective vision to do it any other way…

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