A Mercedes-Benz made in Germany,
is quite different from the same model being assembled in South
Africa, or in Malaysia, or in Vietnam.
Similarly, a vehicle designed by Mercedes-Benz and built by
Ssangyoung in South Korea, may have all the hallmarks of
Mercedes-Benz, and even bear the same trade marque; unfortunately
the ride is different, and the engine performance is not as smooth
as the real thing in the real Mercedes-Benz.
OEM products are different from House Brands - both products are
manufactured according to some production specification.
How are House Brands able to sell at much lower costs than the
better known brands that spend more on marketing ?
The obvious savings achieved by House Brands product is that it
does not need to spend as much on advertising and marketing.
However, at the end of the day, the House Brands can achieve lower
costs either through a bigger volume of guaranteed purchase, or
that the lower costs are achieved by tweaking the contents of the
products, so as to make the product lower.
Even business such as NTUC Fairprice - that is supposed to serve
Social Objective of ''keeping prices'' stable and costs low - will
have to justify their continued existence via the ''Bottom
Line''.
How else does one explain for the bumper cash reserves that allow
NTUC to build a spanking new office tower block in the heart of the
prime district in downtown Singapore ?
Even NTUC Fairprice cannot be in the supermarket business for any
simple altruistic reason only.
