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Harvey Norman to launch house brand PC

Harvey Norman to launch house brand PC

Costly problems with name brand strategy zig-zags and sudden droughts in the supply pipeline have convinced Harvey Norman to launch its own house brand PC in July.

The new PC will be a "model du jour" system designed with a marketing shelf-life of one month to keep in step with fickle consumer demand.

"We'll be buying a lot of stock up front and marketing it on a get in, get out basis," said Harvey Norman computer group manager Tony Gattari.

Manufacturers are being invited to supply systems meeting Gattari's current hot box specifications at prices that allow Harvey Norman to compete against slash and burn street prices and still leave a profit.

The house brand PC will put a safety net under Harvey Norman's branding promotions in future, Gattari said.

"We have ventured into a few relationships with manufacturers where we've lost our investment in branding when they decided to pull out of the market or change their strategies."

Not being able to rely on stable name brand supplies was also costing Harvey Norman sales due to lack of stock, he said.

Harvey Norman's house brand will be aimed at market gaps between the name brands.

Other Australian vendors, notably Dick Smith, already offer house brands, but Harvey Norman intends to operate on a larger scale, according to Gattari. "We've shied away from the concept until now, but over the past five months declining profit margins and lack of inventory have sent signals that have changed my mind."

Name brands will continue to dominate Harvey Norman's shelves, and its current PC suppliers - including IBM, Hewlett-Packard, Compaq, Mitac, Acer and NEC - will be able to bid on supplying the new systems as well as offshore clone makers.

"We'll go through a tendering process and it will be about production ability and quality as well as price."

The size of the orders will be dictated by Harvey Norman's estimates of month-by-month consumer demand.

"If any model stays on the floor longer than a month, I'll start worrying," said Gattari.


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