Entry 13. 20501036

LG Wears Prada!

In the movie, Devil wears Prada, they represents women fanaticize on fancy and luxurious clothes or items. But the notion is not only limited on fashion business but also electronic goods industry too.

When we look back on the past time, company who wanted to get a better brand image, they usually lunch a new brand like Lexus of Toyota, Zipel of Samsung electronics’ refrigerator brand, Pavv in Samsung’s PDP TV brand. However, lunching new brand only to get separated brand perception with the original brand takes a lot of cost. So electricity companies find better and easier way to improve their brand image. That was joint venture with another company's brand which has power. Also there is couple of types of joint venture.

First, only borrow their brand name.

LG-IBM was the case. It produced by LG but they use IBM logo. Another case is Samsung Home plus. Tesco owning more than 94% of home plus. Tesco barrowed Samsung’s brand image (so they could reduce anti-foreign company mood).

Second, Use other luxury fashion designers brand’s design and reputation.

The reason they borrow other designers clothes brands' is the trend changes rapidly and build their own company for target need a lot of cost and risk. Because of The mobile market become like fashion market, customer became more consider about brand and design; of course, function would be the priority reason when they choose electronic goods. However, it is hard to compare which one has better performance, because they contain a lot of function in one product nowadays. Also people became less sensitive on the price. Prada phone, LG and Prada design and promote together, became one of most successes item in LG’s history with 800,000 cumulative sales even though it price over 700 ERUO.

Benefit of designers brands

Prada can be number one brand power Handbag Company but it’s almost impossible to be a top sales company, because they do not mess produce. They even use demarketing to keep the brand value. However, when they met LG, because of its characteristic as electricity, they could make win-win situation.

Other examples: Samsung-Armani phone and TV, Swarovski-Phillips USB drive, ASUS-Laborghini notebook computer

Beware

While many fashion brands making profit from licensing with other company, some company lose their brand value because of imprudent licensing like Pierre Cardin, Yves saint Laurent and Christian Dior.

http://news.naver.com/main/read.nhn?mode=LSD&mid=sec&sid1=101&oid=001&aid=0002087133
http://bizi.tistory.com/entry/pradaphone-5
http://news.mk.co.kr/outside/view.php?year=2008&no=234297
http://www.hankyung.com/news/app/newsview.php?aid=2008060483931&sid=01040201&nid=000&ltype=1
http://news.chosun.com/site/data/html_dir/2008/05/23/2008052300843.html

* Sources are just reference. This article worked by me.