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Tamika Sayles

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The Threat of Generic Brands: Natural Hair-Care Companies, Black-Business Owners, and the Retail Boom

Posted: 06/29/2012 1:25 pm

While flipping through your favorite magazine you may notice an increase in advertisement featuring African-American models and celebrities who've opted to go relaxer free. Among the products advertised, you may run across many that are Black-owned.

The increase of natural hair awareness is prompting a gradual increase in Black-owned companies catering to natural hair. Black women are increasingly making efforts to manage their natural hair textures, and by doing so, they are generating a huge market for natural hair care products, which has attracted the attention of mainstream companies looking to enter the natural hair-care arena. As a result, companies that once marketed exclusively to relaxed hair (Proctor and Gamble, Revlon, etc.) are creating new products to coincide with other independent companies that cater exclusively to natural and curly hair textures.

The Black Snob's, Danielle Belton, wrote an insightful article for Clutch magazine concerning mainstream hair-care companies and their sudden shift toward the natural care market.

According to Belton,

"These companies are now followers - shifting formulas and marketing strategies to keep up with their African-American lead upstarts, who came out to dominate the market right from underneath them... Going natural is now a big and growing part of the more than $165 million black hair care mass market. Companies that focused primarily on creating hair relaxers are scrambling to capitalize on what they initially thought would be just a "fad."

I agree. But, what would happen if distributors and manufacturers created a "generic band" in an attempt to keep up with African-American companies. Will mainstream companies attempt to swallow the market by incorporating similar products?

The practice of creating a "generic brand" is fairly common in the retail industry, often frequenting the market whenever a patent expires. Generally, companies hold exclusive rights for a limited number of years before other companies can produce a generic. In most cases, patents and pending patent applications are published online, making it easily accessible to anyone looking to create a similar product. Although generic brands may not pose a significant threat to mainstream companies, it could very well be an issue for smaller more independent business owners, who may not have the resources to sue.

For example, take the ongoing rift between natural hair-care brand, Mixed Chicks and Sally's Beauty Supply. Mixed Chicks, founders Kim Etheredge and Wendy Levy, accused Sally's Beauty Supply of creating, Mixed Silk, a product strikingly similar to the Mixed Chicks conditioner. Whether or not Sally's Beauty Supply is actually at fault is still yet to be determined, but the situation lends itself to smaller independent brands who pursue huge companies based on "generic" accusations.

According to MadameNoire.com,

" In March 2011, Mixed Chicks formally filed a lawsuit against Sally Beauty Supply for trademark infringement, trade dress infringement and unfair competition claiming that the chain was selling and advertising an imitation of their product".


The decision to sue did not come easily. Here's where it got complicated:

"If a court ruled against Mixed Chicks, the two women could be forced to compensate Sally Beauty for any lost revenue. On the other hand, if Etheredge and Levy filed a lawsuit and won, they might be able to get Mixed Silk off the shelves--and collect damages for lost sales and a tarnished reputation caused by customer confusion with what Levy and Etheredge considered inferior products."

Yet, despite legal costs and an uncertain outcome, Mixed Chicks, is still thriving. According to Inc. com, "Despite the suit, Mixed Chick's business has continued to grow. The company added seven products in 2011 and is now distributed to 3,000 retail stores." This could be contributed to market power and brand loyalty among Bi-racial and African-American markets.

Inc. com states that, "Discovery can be an incredibly arduous process, and a multibillion-dollar company can bleed a small company dry. It takes time, money, and resources, and sometimes its death by a million cuts".

Fortunately, though, Black-owned companies continue to thrive. But as mainstream companies struggle to enter the natural market, will generic brands pose a threat to smaller brands?

 

Follow Tamika Sayles on Twitter: www.twitter.com/@tamiRachelle

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