An original brand manufacturer, or OBM, is typically a company that sells an entire product made by a single company. Selling the product of the same company under its own brand just adds a virtual
extrinsic value
In moral philosophy, instrumental and intrinsic value are the distinction between what is a ''means to an end'' and what is as an ''end in itself''. Things are deemed to have instrumental value if they help one achieve a particular end; intrinsic ...
to the product.
The term appears as a deduction from the terms
OEM and
ODM. The specific meaning of the term varies in different contexts.
The continuously increasing importance attended to products with a brand signet on it led to the application of brands to otherwise anonymous products. Sharing of
production between an anonymous producing company or manufacturer and selling through a brand owner without specific interest to produce the product by itself does not add any real value for the customer. The value of the product is seen raised with the
branding
Branding may refer to:
Physical markings
* Making a mark, typically by charring:
** Wood branding, permanently marking, by way of heat, typically of wood (also applied to plastic, cork, leather, etc.)
** Livestock branding, the marking of animals ...
by some added value in prestige and possibly some assurance of qualities relevant to the user. Hence the product may be sold in the market with or without the branding, however the brand owner tries to increase sales in the identical quality just with the comparative
competitive advantage of the branding.
As
consumption is driven by some imagination of needs and not just by real needs, the importance of the branding may increase with the differential of some individual need reception compared to any
rational arguments on needs.
Competition philosophy by Dick Johnson
/ref> Such differential is created with branding a product through adding some extrinsic value with a brand signet and advertising for sales of such product under the given brand. Hence OBM strategies allow sales operations
Sales operations is a set of business activities and processes that help a sales organization run effectively, efficiently and in support of business strategies and objectives. Sales operations may also be referred to as sales, sales support, or ...
to follow changes in market demands without investing in production facilities themselves, very similar to OEM and ODM strategies.
References
Brands
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