Which Brand - Vendors or Resellers?

By on

This article appeared in the 30 April, 2007 issue of CRN magazine.

Subscribe now

Which Brand - Vendors or Resellers?
Vendors OF IT AND consumer electronics (CE) equipment spend enormous amounts on brand recognition. But most of them rely on resellers for
actual sales.

Those resellers are also interested in building their own brands.
This has the potential for conflict.

Do consumers buy on the manufacturer’s brand, or on the reseller’s?

Does this preference differ by product type, or by the demographic of the consumer?

There has been remarkably little research done on this subject in Australia. We surveyed more than 3000 Australian consumers about their usage of digital technologies.

One group of questions asked about supplier preferences for 17 different product categories, –“Which supplier(s) would you prefer if you were in the market for the following product?”

We did not ask “which vendor” or “which brand?” Also, we did not prompt any responses – all answers were open-ended and relied on the respondent’s knowledge of players in that product category.

This meant that we got a mixture of brand names and reseller names in each category. The proportion of respondents who nominated a reseller rather than a brand name varied by category, but not by a great deal – it ranged from about a quarter (24.1 percent) to about a third (34.0 percent).

The chart shows the responses for 11 different IT and consumer electronics product categories. Printers had highest brand loyalty, followed by laptops and PCs.

“Highest brand loyalty is for printers, followed by laptops and PCs.”

Lowest is for mobile phones and portable music players.

Generally speaking, consumer electronics categories have the lowest brand loyalty, and IT products the highest. In other words, people are more likely to go to a particular reseller and buy any product for consumer electronics, and more likely to enter a shop or visit online stores with a particular brand name in mind for IT products. But the difference is not huge – two thirds to three quarters of consumers find the vendor brand more significant than the reseller brand.

For mobile phones, most reseller preferences were for carriers, rather than mobile phone shops, showing the importance of carrier retail stores in this market.

In virtually every case, younger consumers are more likely than older ones to favour vendor brands over reseller brands. Again the differences are not great, but consistent. Vendor loyalty is also highest among the better educated, among males, and in Sydney and Melbourne. There is little significant difference by income.

By far the most frequently mentioned reseller in every relevant category was Harvey Norman. It came in third overall (behind Dell and HP) in PCs and laptops, and finished as high as second in the consumer electronics categories, (consistently topped by Sony).

Growth rates in virtually all categories are very high – digital technology is booming. And to up to one in three consumers, the reseller’s brand is more significant than the vendor’s. A summary of the Connected Home in 2007 is available at www.connectionresearch.com.au

By Graeme Philipson, research director at Connection Research
Got a news tip for our journalists? Share it with us anonymously here.
Tags:

Most Read Articles

Log In

Email:
Password:
  |  Forgot your password?