Going in Reverse

Schultz, Don E.
July 2004
Marketing Management;Jul/Aug2004, Vol. 13 Issue 4, p10
This article focuses on the reverse branding strategy of Techtronics Industries Co. of Hong Kong, China. The company had purchased Royal Appliance Manufacturing Co. of Ohio. With the purchase of the company came the brand name, Dirt Devil, for the vacuum cleaner line. Techtronics had, for several years, been making many of the parts for the Dirt Devil product as Royal shifted its manufacturing offshore because of lower costs and more rapid manufacturing turnaround time. This venture by the Chinese into buying a well-known U.S. brand may well signal a new approach to brand development. Rather than building a brand under its own name, Techtronics simply bought a piece of the mindshare, history, and goodwill that the Dirt Devil brand had built up over the years. Clearly, what Techtronics has done is reverse engineer the branding process. That is, they bought the Dirt Devil brand and thus bought a piece of the U.S. market as well. The Chinese company bought the existing brand and is now going to put its manufacturing skills against it to build additional value in the marketplace. And it's doing it in, of all places, the U.S. Several other Chinese companies are following this same path. For example, another company that's also headquartered in Hong Kong, Moulin International Holdings Ltd., bought the licenses to a portfolio of brands including Benetton, Revlon, and Sisley. Reverse engineering in brands and branding seems to be an effective strategy, at least for the Chinese.


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