Oh Brother, why art thou so big?

Oh Brother, why art thou so big?

Brother appears to be doing better in Oceania than other regions of the world. The printer (and sewing machine) maker is a market leader in the New Zealand market but an also-ran in Europe.

Tim Shepheard, IDC’s associate analyst in the peripherals field, says Brother has targeted the right market in New Zealand and has maintained a strong brand name.

“Brother entered the market with typewriters and fax machines back in their day, and it has managed to keep a very strong brand name for all that time. Its fax range was especially dominant, and there is a natural progression from fax to multipurpose printer to laser.”

Michael Smith, Brother’s marketing manager, says a media-friendly strategy has helped it raise brand awareness. “I think one of the reasons for our success is that we have had a very media focused strategy. Unlike some other brands, we kept our focus on television advertising. We have had about 15 years of television advertising.”

Brother commands the number one position in laser multi-function printers (MFP) sales in New Zealand, with a market share of 24 percent in the second quarter of 2006. It sits at number two, behind Hewlett Packard, in lasers and inkjet MFPs.

In the European market in 2005, Brother was in ninth position in laser colour printers and fifth in inkjet MFPs.

Smith says brand recall and recognition has contributed to Brother’s success in this region and in New Zealand in particular.

“Our brand penetration and brand recall has been an important factor. We’re strong in the small office and home office (SOHO) space, and New Zealand is a predominantly SOHO market. Research from last year showed us that our brand recall was very high; TV advertising has worked well for us.”

Shepheard says Brother came into the market with a price-driven strategy. “Back then they competed on price, but they are not the lowest-priced brand in the market at the moment — HP and Canon are both priced below in the inkjet MFP market.”

In Oceania, Brother sits near the top in most countries for laser MFP sales. It is also first in Thailand and the Philippines, and second in the Australian and Singaporean markets.

“Its channel structure plays an important role in its success,” says Shepheard. “It goes direct to a whole raft of partners, including retail and distribution. It stays with the SOHO and SMB market and targets them continuously.”

Smith says HP has a higher brand recall than Brother in some surveys, but puts that down to HP’s other ventures. “HP might have had a higher brand recall, but I think that’s partly because they play in different markets with notebooks and services, as well as printers.”

Smith attributes some of Brother’s success to stable management and sales teams. And there is one area that it does not appear to be targeting; unlike at least one of its major competitors. “Brother seems to be concentrating on its own niche market, rather than moving towards a merger in the MFP and copier space like HP is doing,” says Shepheard.

“The company has managed to maintain its market share and it no longer has to rely solely on price.”

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Tags PrintersIDCCanonstrategyanalystbrotherHewlett-Packard



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