Original Design Manufacturing (product development)
product development, or original design manufacturing, is also also referred to as “private labeling.” This is where an importer selects an already-existing product design from a factory catalog, makes a few small changes and sells it under their own brand name. Changes can include things like packaging or product bundles, colors and branding, and some limited adjustments to components or functionality
- product development doesn’t just refer to electronics though. Ever notice how most American Chinese take-out menus look the same? This is another example of product development manufacturing. A manufacturer (in this case, a printer) keeps a template on file that buyers can customize to fit their specific needs.
-
The advantage of product development is that it spares importers the need to invest millions of dollars into research and development in order to create a new product from scratch. Why reinvent the wheel when you can just improve one that already exists? And by eliminating or vastly reducing the expense of product development, importers can focus more on marketing strategies.
-
The disadvantage of product development is that it can be more difficult to differentiate your product from competitors’ products that are manufactured according to the same design. Although product development requires less start-up capital, price competition tends to be steeper, resulting in slimmer profit margins. For example, a customer looking to purchase an product development laser pointer is more likely to choose based on price than based on differences in color or brand. To really differentiate your product development product from the others on the market, while still remaining competitive price wise, can require a significant amount of creativity.
Original Equipment Manufacturing (product)
- product stands for Original Equipment Manufacturing, and refers to products that are fully designed by one company and then licensed out to a manufacturer to produce. The Apple iPhone, for example, was invented and designed by Apple, and then licensed out to Foxconn to produce. As a result, the iPhone enjoys a higher level of product differentiation because its design is only available to Apple and its licensed manufacturer.
- Many other brand name electronics and appliances are product. Custom designed clothing, as opposed to a generic garment with a custom logo, is another example of product.
- The main advantage of product is that the designer retains total creative control over the design. Whereas product development products are restricted to a predetermined design, product products can be made according to any specifications. The only limitation is the designer’s imagination (as well as budget).
- The disadvantage of product manufacturing is that it is much more resource intensive. product designers often invest millions of dollars into research and development over several years in order to create unique products. Because of this, product designers have to guard their designs as intellectual property, lest it be copied and sold by another company for a lower price.
V
VINUT
VINUT Content Team - Published October 15, 2024
Expert insights on beverages, health benefits, and global beverage industry trends. VINUT is Vietnam's leading product beverage manufacturer.
