What’s in a ‘brand name’?

Experts still talk about the ‘P’ fabric company’s failed launch of a high class T - shirt line a few years ago. The company planned to sell shirts made of high grade fabric and materials imported from world-famous producers.

The company’s new line of tee shirts went on the market at 499,000 dong per unit, advertised as a world-standard product of Vietnam’s garment industry. However, contrary to all predictions, the beautifully-made T - shirts were being offered on sale a year later at many shops for only 100,000 dong.

Experts agreed that the T - shirt was as fine as well-known foreign-made brands. However, Vietnamese consumers still preferred the foreign-made T - shirts. They preferred to pay high for the well-known brand names.

Vietnamese consumers with money to spend purchase Pierre Cardin shirts, because they are convinced that ‘Pierre Cardin’ means a high class product. Meanwhile, the ‘F’ brand name was just a new domestic brand name on the market, without ‘power’ to persuade consumers to part with a big sum of money to purchase the products.

Similarly, dress shirts made by Nha Be, Agtex 28 or Sanding, though highly rated by many experts, are not a top choice of people when they seek to buy luxury products. At the Tet holidays or other special days, people still prefer to buy ‘An Phuoc’ or ‘Viet Tien’ brand name dress shirts to give to relatives as gifts.

Nguyen Thi Lan, the owner of a trading company in HCM City, explained why consumers favour the products with well known brand names. “If you purchase goods with well known brand names, you do not have to worry about their quality,” she said. “Further, because the producers have wide distribution network, you can contact them easily if you want to make an exchange.”

Vietnam’s garment companies have learned modern production techniques and production management by producing for global brand name vendors like Hugo Boss, Ralph Lauren or Pierre Cardin. The big Vietnamese companies have modern equipment worth millions of dollar which allows them to organize modern production lines able to make goods for the global market. However, these strengths still haven’t garment producers to build up strong brand names on the domestic market.

Many companies use their experience of making products for export to design products for domestic sale. However, this does not help the companies build up their business – Vietnam’s consumers typically will only buy Vietnam-origin products offered at medium price levels. It is because the products, even if of high quality, do not have high class brand names.

Strong distribution network and good designs needed

According to Phan Van Kiet, a senior manager of the Viet Tien Garment Company, the biggest problems of Vietnam’s garment companies are the lack of perseverence in investment and a far-sighted investment strategy. These weak points can be seen clearly in the distribution network and design.

Kiet said that most companies want to profit immediately from all shops and from products of all brand names. To develop a new line of products and distribution network, however, companies need to invest much money on promotion and wait for the opportunities to come, accepting that they may take losses for one or two, or even three or four years.

A consultant on brand name development offered that for almost all world-scale fashion companies rely on leading designers to work for them. Vietnamese companies do not have famous designers, though some companies once hired designers who once won international prizes. However, those designers, though creative, did not have a good understanding about the market and consumer taste.

Experts observe that Vietnamese garment manufacturers vacillate between making an effort to develop the domestic market or seeking to produce for foreign customers under foreign labels. The lack of consistent strategies to conquer the home market, they say, is a reason that domestic brand names fail.