What I find odd are the companies that choose to continually dilute their brand by white labelling their product, in effect providing the perception of multiple small competitors in one very limited market place.
The effect of such white labelling to me on such a product is quite clear: the customer is unaware of what is truly an original safety-tested product and what is actually a knock off, made in an environment with questionable quality control, of questionable origin, and ultimately of uncertain safety standards.
This white labelling, especially in this industry, can result in serious injury to unsuspecting users of the product.
On a related note, these same companies that do such white labelling do little to build their own brand and often do little to protect what brand they do have.
Brand dilution can happen in any market, in any number of ways, and ultimately reduces goodwill associated with a brand. This is the very goodwill that can be "sold" in the event of a purchase and can find its way quite literally onto a company's balance sheet.
What is dilution? It has its roots in trademark law. However, in layman’s terms, it is basically anything that takes a mark, which is designed to make a consumer's job in product selection easier by representing the brand, and permits sloppy and inconsistent use and enforcement, through its sales channel or otherwise.
In my fifteen plus year marketing career, I’ve seen it across all industries and it is especially rampant in small, rapidly growing businesses.
Lessons to learn: know your market.
- Consider the true cost/benefit of white labelling vs. growing your own brand.
- White labelling is not bad in all circumstances, just think carefully before proceeding, especially in a smaller market or where safety is paramount.
- Do your best to protect your brand consistently through all channels and keep evidence of such to avoid dilution.