The problem with creating phantom brands

08Apr09

Through pure luck, I recently discovered that one of our competitors is operating more than one website for essentially the same product of theirs. The positioning of the two websites is slightly different, but the product is the same. In fact, they even use a very similar name for the second “company”, which is little more than a front they created for marketing reasons.

I know that consumer product companies have done this for years. To better capture market share, they’ll regularly create two or three brands that are essentially the same product. As the logic goes, the more shelf space they take up, the more likely consumers are to pick up an item from their extended product family.

But there’s one big difference between these two scenarios. In the case of consumer product makers, the company info on the package or ad or website clearly indicates who the parent company is. A curious buyer can easily tell who makes what. But in the case of our competitor, they’ve gone to great lengths to obscure the common ownership. There’s no actual corporation listed in the contact page of the second website, it’s using a private domain name registration, and the names of their key people are nowhere to be found.

To me, this is bordering on fraud, and it’s probably against the guidelines of third parties like the Better Business Bureau too. It’s also a warning sign to potential customers: here’s a company that wants you to pay thousands of dollars for their products — through an e-commerce site, in fact. Yet they’re afraid to let you know their actual company name, lest you figure out that they sell the product under other brand names, too. This seems like a basic violation of the customer’s trust and an insult to their intelligence. I can only hope the market feels the same way.



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