Wednesday, May 4, 2011

Business Model - Exclusivity

A look around the stores nearby and we realize that most of them stock a lot of brands from various companies under one roof; while this aggregates all the different customers into one place and ensure your product gets visible; the bigger brands - stand out brands also have exclusive stores. This blog deals with this exclusive concept.

A Brand is a feeling an experience which every company wants to leave its customer with. A great brand loves to have a "cult" following; and exclusivity is one way of achieving it. The complete exclusive store which is the point of sale is generally designed to convey the theme and the philosophy behind, the staff are trained to meet, greet and direct in the Brand way. Given this experience which the customer develops a kind of loyalty (obviously is ready to pay for what he gets since (s) he believes in it) and joins the brand "cult". The best example of this cult following we see today’s time is that of the "Apple Inc" as a brand.

The exclusivity of delivery of the company product enables the company have more control over the retailers (typically a franchisee). The company also has more control on phasing out and introducing new products to reduce cannibalism. The most obvious of all these is that the brand dilution reduction!

A minor reflection on this will also help us realize that, this model also helps create situations of artificial scarcity, and give a higher negotiations power to company than the customers!

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