Just in!
Luxottica was up 8% in the first Qt with independents.
March was 2 Million $ more than any other month EVER. (EVER)
Why?
Brands
Just in!
Luxottica was up 8% in the first Qt with independents.
March was 2 Million $ more than any other month EVER. (EVER)
Why?
Brands
Mike,
We love you.
You and Rep stop beating the brands drum. It's way overrated.
I see where I can get John Deere frames, now.
If sales are up 8% with independents, I think independents are 8% more stupid than they were last year.
I have to disagree with the stupid comment. Let me first say I own no designer jeans or hand bags and I doubt many in my area are buying Liz claiborne clothes or shopping at Sax 5 ave but I have a very diverse selection of frames and with out a doubt the brands sell better. With any optician and any given pt combination, and let me tell ya it burns me, but its the truth. In our area people are drawn towards brands. Maybe it because its the one branded thing they can afford. I am not in a huge metropolis and we are not ritzy people but by far the brands fly and the other stuff sits, and frankly why not if you can get a good brand...Originally Posted by drk
Don't misconstrue that with a love for Luxottica, I dont love them or any other large optical power like Essilor and the likes, they all sell to chains cheaper and with better service but the truth hurts and we still have to buy from the big dogs, or medium ones any way.
Last edited by cinders831; 04-02-2005 at 09:38 AM.
I'm an independant and have to confess that I am weakening after dropping Lux product back when the Lux/lenscrafters merger happened. No anger or rage, like shipping all product back 10 years ago, but sold off product back then without re-order.
I was more concerned about being a test market or information source for the competition, my piddly Lux account was barely a financial blip on their screen.
I'm weakening towards RayBan. Lux seems to have turned the line around, making it desireable/upscale again. They no longer are in Walmart.
So to give Lux a little credit, they don't seem to dump their discontinued product at the BJs/Walmarts. Thus they keep perceived value of their branded product.
Harry
(countdown started until Rayban rep shows up in my office vis optiboard moles, but I already overbought other lines at Vision Expo)
Harry888,
I'm Not you rep for Ray-Ban. But I have Vittadini- Brooks Brothers AG and Donna Karen. I won't bother you if your not inerested! Private message if you are.
I can call your Ray-Ban rep if you want also
As far as using you for info. That is what demographics are for. Lenscrafters opens in malls.
Good Luck
Last edited by Mikef; 04-02-2005 at 12:34 PM.
Drk,
Last time I check Luxottica did not sell John Deere.
I have found that most of my "Stupid Customers" do quiet well! They also feel they can do a better job than most chains and they sell service and let the customer buy product.
Last edited by Mikef; 04-02-2005 at 12:34 PM.
Also Drk,
When you start to see John Deere and Pepsi that proves the point ever further.
Companies are trying to get any brand they can because no names no sell!
Mike,
The point is, a name is a name is a name. If you are a frame distributor, buy some lower-priced China stuff, import it, label it, buy a name from someone, stamp some generic cases, get some POP and distribute away.
Names/brands are very easy to come by. I guarantee you that the Donna Karan you carry will sell because it's good quality, good-looking stuff (I've seen it). The name is window dressing.
How else can you explain our ability to sell Flexon frames out the ying-yang? Or Lafont? Or Silhouette? Those brands are "optical only" brands, unknown to your average customer on the street.
I want to barf thinking about how many people think that Gucci design house designed their glasses, or Ralph Lauren himself, or Donna Karan. These people "do" clothing and sheets, towels, interior paint, etc., and now glasses. Very busy people! Very knowledgeable, too, I assume.
Fact is, there are true "optical brands", and there are Luxottica elves and Safilo elves cranking out the same design over and over in one collection after another of their collections, with MAYBE some modicum of input about overall image from "the designers".
Sophisticated optical consumers (although a small percentage) know the brands that are real optical brands; brands that stand for a unique design.
So, while you would like to think your very nice "Donna Karan's" sell because of brand, you could make them "Martha Stewart's" and still sell them. People are less sophisticated than you are giving them credit for.
So stop with the phony brand stuff.
Not every customer wants a brand. But every year more and more brand name frames are selling. I started with Luxottica and I just had AG. Now I have 3 brands. Guess what! They all sell better and they do more every year.
All the major companies core brands are on the decline Safilo, Marchon, Charmant, Viva and Luxottica. Multimillion dollar companies are expanding brands because that is what the consumer wants - BRANDS.
I guess the numbers lie!
P.S. How much do Silhouette and Lafont frames cost. About the same or more than most brands. So the customer should pay more and not even get a brand?
Last edited by Mikef; 04-02-2005 at 03:00 PM.
Brand Names
by Benjamin Klein
Consumers always have incomplete information about product availability, quality, and alternative prices. Such "imperfect information" leads them to rely on brand names, which lessen the costs of acquiring product information. By relying on brand names and the company reputations associated with them, consumers can make reasonable purchases without searching or investigating products each time they buy.
Many economists have lamented the fact that consumers put so much reliance on brand names. The problem, as these economists see it, is that this consumer reliance gives companies with established brand names "market power" over the price they can charge. When companies "differentiate" their products with unique brand names and associated advertising and promotional campaigns, they can charge more than others for what these economists claim are "truly" identical products. Brand names lead consumers to make what these economists consider to be artificial distinctions between different products. Companies with respected brand names, therefore, can increase prices without losing significant sales.
The claim that brand names lead to unnecessarily high prices is often based on a comparison between the real world and a world of "perfect" consumer information, where every company in an industry is assumed to sell identical, unbranded ("homogeneous") products. These are the assumptions made in the model of "perfect competition," a simplifying construct sometimes employed by economists. Although imperfect information is completely natural and unavoidable, many economists find the unattainable ideal of perfect competition to be a desirable yardstick for policy. That is because under perfect competition no company has any power at all over the prices it charges. If a company raised its price even one cent above the market price, it would not sell anything. With perfect competition, therefore, no consumer would knowingly pay even one cent more for an identical product that could be obtained elsewhere at a lower price. Not surprisingly, the assumption that homogeneous products are the ideal leads to the incorrect implication that brand names that differentiate products decrease consumer welfare. That, in turn, leads to the policy, advocated by Harvard economist Edward H. Chamberlin in 1956, that trademarks should not be enforced.
More and more of the economics profession, however, has come to recognize the problem with assuming that brand name products are identical. One cannot understand the economic purpose served by brand names without dropping the assumption that we live in a world of perfect information where consumers are omniscient. Consumers, in fact, are not fully informed, and they know they are not. Therefore, they value company reputations—and they are willing to pay more for a product whose producer has a reputation for consistently supplying quality. By doing so, consumers are not acting irrationally. They are simply trying to protect themselves without having to devote huge amounts of time to learning all the details about each company's product. Reputations, and the brand names that go with them, are an efficient source of information for consumers.
Because consumers rely on and pay for reputations, companies have incentives to establish reputations by maintaining and improving the quality of their products. This incentive would be lost if all companies were required by law to sell indistinguishable, homogeneous products. If consumers could not identify the companies that produced the products they bought, individual companies would have no incentive to improve the quality of their products; in fact, each company would have an incentive to decrease the quality of its products. Economist Marshall Goldman has pointed out that this is exactly what occurred in the Soviet Union when brand names were eliminated after the 1917 communist revolution. That is why firms in the Soviet Union were required to identify their output with "production marks." When consumers cannot identify the company that produced what they buy, they have no recourse when they receive a product of low quality. Not only do consumers have no legal recourse, but more important, they have no economic recourse. Without brand names consumers do not know from current purchase experiences which products to buy—and which ones not to buy—in the future.
This repeat-purchase mechanism, where good past performance and a good reputation are rewarded with future profitable sales, and where poor performance is punished with the withdrawal of future profitable sales, provides companies with the incentive to perform in the marketplace. As a result, companies with superior reputations, representing good past performance and the likelihood of future profitable sales, have something to lose if they perform poorly. Their valuable brand names are a form of collateral that is at stake with every sale.
Consider, for example, the cost imposed upon Perrier in 1990 when it was discovered that the benzene used to clean its bottling machinery had contaminated some of its product. Perrier experienced a significant decrease in demand and had to spend large amounts of money on increased advertising, free samples, and other marketing and promotional expenditures in an attempt to recover its market share. Another recent newsworthy example was the image damage, lost sales, and greatly reduced profits suffered by Beech-Nut, the baby food company, when it was discovered in 1982 that its "apple juice" consisted of water, sugar, and flavoring. If brand names were not present in these cases, the large economic punishment imposed on the nonperforming companies would have been lost.
Because companies with valuable brand names that fail to perform have more to lose than companies without valuable brand names, consumers who buy brand name products are necessarily paying for something. They are buying the added assurance that the brand name company will have an increased incentive to take the necessary measures to protect its reputation for quality. For example, an established, profitable company such as Campbell's, with its huge share of canned soup sales, has more to lose if botulism is found in its product than a small marginal company such as Bon Vivant, which went bankrupt after botulism in its canned soup caused a death in 1971. Clearly, Campbell's has a higher stake in avoiding any occurrence of botulism in its product than did Bon Vivant. When consumers buy a brand name product, they are buying increased confidence and reliability.
Can the same be said for purchases of a "standardized" product such as aspirin, where most companies purchase the basic ingredient, acetylsalicylic acid, from the same manufacturer? If consumers are not ignorant or irrational, why would they buy an advertised, brand name product when they could get the exact same non-brand-name product at a lower price? The answer is that all aspirin is not exactly the same. Aspirins are not chemically equivalent. The filler ingredients, dissolve rate, and shelf life may differ from brand to brand. But more important, the higher-priced brand and the lower-priced "nonbrand" aspirins are not economically equivalent. In fact, to producers and consumers the products are necessarily different.
As the Perrier example vividly illustrates, even for a "simple" product, we live in an imperfect world where there is always a probability that something can go wrong. Because of the existence of a valuable brand name, the company selling the brand name aspirin has more to lose if something does go wrong. The company, therefore, has a greater economic incentive to take precautions. This added quality assurance is one of the things consumers of the brand name product are purchasing when they knowingly pay the higher price.
The question, then, becomes not whether consumers are totally irrational when they pay the higher price for a brand name product, but whether they are paying too much for quality assurance. All consumers pay something for brand name assurance; it is merely the amount that consumers pay that varies across products. Even people who say "all aspirin is alike" spend some money on brand name assurance. They do not buy "nonbrand" aspirin off the back of a pickup truck at a swap meet. Instead, they may buy "lower" brand name aspirin, such as aspirin carrying the brand of a chain drugstore. Further, it is significant that consumers buy a much smaller share of such "lower" brand name aspirin in the children's aspirin segment of the market than in the adult segment. Many people decide, as evidenced by their behavior, that although they are willing to purchase less brand name assurance for themselves, they want the higher-quality assurance for their children.
Finally, it is important to recognize that brand names even operate in marketplaces where the government sets product quality standards. The obvious question is: why not rely entirely on government standards to assure company performance? There are two main answers. First, government standards often cannot easily capture some elements of performance. For example, although the government may grade agricultural commodities, such as vegetables, for color, size, and so on, they cannot define and grade characteristics such as taste that are quite important to consumers. Second, government agencies that rate and assure quality are far from perfect. For example, in 1989 the Food and Drug Administration found that several generic drug companies had faked or altered test results submitted to the FDA to get their drugs approved and that three FDA employees admitted accepting gifts from these generic companies. To assure the quality of the products they buy, consumers are right to rely not just on government standards, but also on brand names.
About the Author
Benjamin Klein is an economics professor at the University of California in Los Angeles and is president of Economic Analysis Corporation.
They all do it ...................
That is exactly what they are all doing. I am glad that you people are finally waking up to the fact.
Keep in mind that a "designer label" is not the same thing as a "brand name," though it is obviously a special case of it. Mike's article is all about the value of branding, not about the value of licensing designer labels. Kleenex and Coke, for instance, are brand names, while Kenneth Cole is a designer label. The purchase motivation behind buying a Sony television is generally very different than the motivation behind wearing the latest sweater from DKNY. Moreover, people are more likely to have articles from a variety of designer labels while restricting their purchases to specific brands that they trust.
Effective branding generally requires many years to develop and often inspires consumer loyalty; the purchase decision becomes easier because we already know and respect the reputation of the brand's products. It is not a fleeting decision based only on what's in vogue or on cover of the latest teen magazine. Designer labels frequently have much less consumer awareness, often appealing to a relatively narrow demographic, and do not inspire the same kind of loyalty. Unless, of course, the label has already established effective branding for itself. (Levis comes to mind, though some may not consider this a "designer" label per se.)
Best regards,
Darryl
Brands are a good thing, as an independent we do have choices on what I could offer to the patients. I won’t want to be the one to feed and contribute to the success of my competition. Luxotica wants it all and they are playing dirty. Just last week I have a long time patient that was not given a choice because of her insurance for an Eye Care Provider, unfortunately we as independent is shot out. Now where is the logic on this? They are the Frame Manufacturer, Outlet retailer, and now they are telling the consumer to where they could be service for their eye care needs. And this is healthy in the market place? The FTC need to break it apart.
rey
A blue jean manufacturer I know used to make and sell jeans to K-Mart for $ 9.50 and K-Mart would resell at $ 19.00.
Then he would attach a Christian Dior label to the same jeans and sell them to speciality boutiques for $ 60.00 who then woul resell them for $ 15.00.
Do you actually believe that similar cases do not exist in the optical trade?
Darryl,
Everything is a brand name. Coke, Ray-Ban, Sony, Brooks Brothers, Kodak, Armani.
It's all the same. It's the power of that brand that matters.
Your store is brand name.
drk said:
The point is, a name is a name is a name. If you are a frame distributor, buy some lower-priced China stuff, import it, label it, buy a name from someone, stamp some generic cases, get some POP and distribute away.
So that is how Polo and DKNY do it! I think I will try that. Lets see Jediron 1 frame, have to find a labeler and case, ah to heck with this I will just get a cheap China frame with a sign that says: " The NEW Jediron 1 frame just in from a far far away place" :hammer:
eyecare4U]Brands are a good thing, as an independent we do have choices on what I could offer to the patients. I won’t want to be the one to feed and contribute to the success of my competition. Luxotica wants it all and they are playing dirty. Just last week I have a long time patient that was not given a choice because of her insurance for an Eye Care Provider, unfortunately we as independent is shot out. Now where is the logic on this? They are the Frame Manufacturer, Outlet retailer, and now they are telling the consumer to where they could be service for their eye care needs. And this is healthy in the market place? The FTC need to break it apart.
[/QUOTE]
On another thread we have had this same conversation. It is a conflict of interest but apparently not so great that it could stop them from absorbing Cole Vision and from what I heard they are now looking for a lens lab to buy. Heard anything about this Pete?
My point was that not all brand names are designer labels and that your article deals with branding, not the power of having a particular designer's signature on something. While Brooks Brothers is a brand name, Coke is not a designer label.
The post by DRK that you replied to with this article mostly applied to the licensing of designer labels. Strong branding is often built around a particular product or family of products, and doesn't communicate well to other products. Even a diehard Coke drinker probably wouldn't be interested in a television set made by Coca-Cola. "Ford" apparel advertises its line of automobiles, not its sense of fashion. On the other hand, people often license a designer's label for just about anything, from E. Bauer special edition autos to Ralph Lauren paints. You are probably going to purchase something with Lauren's label on it (including eyewear) because you appreciate his taste, particularly as a clothing designer, not because you value the "Ralph Lauren" brand of paints, which has yet to establish itself.
Best regards,
Darryl
OH!
I understand! But you do feel designer labels communicate well in Optical?
Not that I'm an expert on frame sales, but I suspect that designer labels are probably one of the few familiar notions that consumers can actually readily latch on to with eyewear. They may not understand what a "progressive lens" is, but they certainly know who Calvin Klein is. Of course, this could be because the industry has generally done a poor job of establishing effective branding. Consequently, as a selling tool, designer labels will certainly command higher price points and better profit margins. In a way, you're basically relying on a brand that someone else has established.
Ray-Ban (a brand name, but not a designer label) is one of the few good examples of an eyewear brand that has produced some effective brand marketing. Other non-prescription, sport/sun-lens brands -- including Oakley -- have done a good job, as well. However, how many consumers are familiar with the Berdel or Safilo brands? As a matter of fact, I wonder if frame manufacturers' constant reliance on designer label licensing -- as opposed to establishing their own consumer brand awareness -- hasn't ultimately been more of a crutch for them..?
Best regards,
Darryl
to MikeF!
You said P.S. How much do Silhouette and Lafont frames cost. About the same or more than most brands. So the customer should pay more and not even get a brand?
I think that Silhouette and Lafont earned their price by making quality stuff and amazing design for a number of years.
Yes nobody was asking for Silhouettes frames 5 yaers ago but they do now .
they earned it.
Now Lux is just purchasing labels and I am sory if you think i am wrong but their quality went down a lot.
You sold their core line!
Those frames were indestructuble!
But they were actualy MADE in Italy!
Brand names replaced by labels....................
Darryl you are totally right. It used to be Marwitz, Metzler, Nigura, L'Amy, ESSILOR, AO, Bausch&Lomb, Rodenstock, Safilo, Sferolflex, Ratti, Luxottica, Anger Optyl, Silhouette who commanded the optical frame market.
Anger started the craze of labelling in the late 60's, with his injected OPTYL frames, that were made in Canada and Ireland and finished in Germany and Austria and then sold as Christian Dior frames. Soon after, many of the above companies made deals with other designers and labelled some of their products with those names instead of their own brand name. It became a chain reaction and the downfall of many of these companies as lots of them have gone out of business or have been gobbled up by their competitors.
The labelling habit allowed them to purchase from sources in Japan (cheap at the time) then from Korea and the HongKong and Taiwan and today from China. This new trend became much more profitable than producing them in their own factories and therefore their own in house made high quality brand frames started to disapear.
A line of frames today is not made anymore by one brand name manufacturer but can come from 50 different sources and is just labelled whatever name they choose give it. The retail market and the public have fallen for and accepted this practice which is the result of smart marketing and much higher profit and a much kower quality in general than what used to be 20 to 30 years ago.
It's form Vs function. Designer labels are about form. It's about an image that the wearer wants to portray. Branding is about function. A brand has performed in a way that has given them an reputation for quality (good or bad - remember the Yugo?).
BTW, how does this sound? "Now, Mrs. Jones, I have this designer frame, or I can sell you this non-designer frame, that is better quality and looks almost exactly the same, for 20% less. Which would you like?"
Good argument...................
You just posted a perfect selling argument.
The German opticians associations president opened a second floor store as branch office in 1959. 2nd floor stores then in the late 50s were considered as cut price outfits and could not obtain brand name products, so ZEISS refused to sell him and cut off supplies.
His sales pitch used to be: "Would you like to have a ZEISS lens or something better"
I am just off the phone with a friend in our field who related a story about another multinational eyewear manufacturer.
This famous eyewear manufacturer (I won't mention names) has offices globally where it has either 100% or majority shares in all the locations. Rather than work as a cohesive company maintaining support globally, the parent company treats each location as independent and are completely hands off in trying to help an account with a serious issue not being addressed in their region. Perhaps this is just one company's trait but it does make one think about who we conduct business with. Perhaps I am too narrow in my expectations but I have always believed that how a company treats you and your business is a reflection from the top person.
I do recall the time when many of these big companies were much smaller, much friendlier, and much more attentive to their customers needs. Back then we were eyecare professionals and these companies treated us as such. At some point many of these companies bypassed us and pushed us out of their equation by marketing to our patients/customers directly and "forcing" us to buy in to their expensive marketing blitz.
Listening to my friends frustrating experience as well as reading and listening to many others on here just solidifies my belief in creating your own brands, importing overseas branded/non-branded eyewear and staying clear of the multinationals trying to direct/control you, your profession, your patients and your income.
Doc
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