It is a fact that multi-brand groups owned by one parent company can diversify their marketing costs and the risks through economies of advertisements, IT, distribution, raw materials, production etc. A house of established brands reduces one company’s exposure to the unknown future and the fickleness of the fashion industry. This is why, today the size of the parent company matters. Bigger companies can invest more in marketing, which is very important in an industry built on image and brand awareness.
Today globalization is placing fresh demands on established brands, which could cause old marketing strategies to fail. It is predicted that by 2014 about one-quarter of branded goods and their licensing partners revenue will come from Chinese consumers. But to do well in China the same rules apply as to the price of marketing and the investment of advertising and promotion. Marketing of branded products require established bank accounts that can cushion possible failures. They provide the floatation of cash for expansion. Going public also gives a newly branded label the protection and guidance they need to survive through the financial disciplines.
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