Sunday, October 08, 2006

Seagate and their Dual-Brand Strategy

In the business of computer hard drives, Seagate recently acquired competitor Maxtor. Maxtor drives are lower-priced than Seagate drives. Rather than bring Maxtor drives under the Seagate brand umbrella, Seagate chose to maintain a dual-brand strategy.

It would have been a mistake to apply the Seagate brand name to Maxtor drives. "Seagate" stands for "speed" in the mind of the consumer. "Maxtor" stands for "capacity on the cheap". People who buy Seagates want high performance drives. People who buy Maxtor drives do so because they want lots of disk space for a low price.

If Seagate were to have combined the brands, the combined brand would have had no focus, and no clear meaning in the mind of the consumer. It would have thereby undermined their ability to sell the higher-priced Seagate models.

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