Sony, Nike, Gucci, BT, Microsoft, Ford, Armani… and so on, names we come across in daily life, these are top “manufacturer brands”, then there are Tesco, Next, M&S, GAP, Burberry, Virgin etc, these are top “retail brands”.
Most of us are very familiar with these brands as we have seen them around for a long time and have grown to trust them, we know who they are and what to expect from their products.
It is also common practice for people to become brand loyal too, i.e. you try and like the products of a brand and then stick to that brand, or buy a product like a Fuji digital camera and use a Fuji memory card to go with it.
In fact, the brands actively encourage brand loyalty e.g. if you buy an Epson printer, the company’s literature will encourage the use of Epson ink cartridges.
Many people are then surprised, to learn that their famous brand camera, watch, car, clothing, computer etc, is not actually made by the company whose name appears on the product, but by another company they perhaps have never heard of.
This company is known as the OEM (Original Equipment Manufacturer) being the actual manufacturer of the product which is sold under it’s own brand, or the brand of another company, often using that company’s design, specifications etc.
Some OEM relationships are public knowledge e.g. Tesco do not produce instant coffee, so, an instant coffee producer makes Tesco instant coffee.
Other OEM relationships are less obvious e.g. BT fax machines are mostly made by Olivetti, early Hewlett Packard digital cameras were made by Pentax and 70% of the notebook computers sold in the world (Dell, Compaq, HP, Apple, IBM, Sony etc.) are made by Quanta Computers in Taiwan and MG City Rover is made by Tata, the largest car manufacturer in India.
Many OEM relationships are well-kept secrets or at least kept discrete and known only to industry insiders e.g. Dell and Lexmark, from 2002 Lexmark produce Dell inkjet printers, laser printers and related print cartridges. Sony and Sandisk jointly develop and produce Memory Stick cards, which are sold under both brands etc.