Battle of the brands: Research finds branded components changing industry structures

August 19, 2009

Back in the day, planes, trains and automobiles all sported one brand name. If you bought a Boeing, you got, nose to tail, a Boeing. These days, however, complex industrial equipment is starting to look like NASCAR vehicles festooned with logos. Why does it matter? "When component brands become powerful it changes the industry," says George John, Marketing Department Chair at the University of Minnesota's Carlson School of Management. "What becomes more important, the product brand or the component? The Dodge truck or its Cummins engine?"

John and co-author Mrinal Ghosh (University of Arizona) investigate component branding in a forthcoming study in the . Various technologies that provide benefits like , higher download speeds and better safety ratings all arise from component branding. But the innovation that makes these products superior often doesn't come from the primary brand, it comes from the component brand. To assure the makers of component technologies that the partnership will endure for long enough to make their investment worthwhile, visible acknowledgments of the added benefit - and which company brought the consumer that added benefit - have become common.

On 30% of the industrial products in their sample, everyday users will see at least one brand displayed in addition to the primary brand. No longer are they using a Dell computer, they're using a Dell with Intel Inside. "The component brand name, right there on a product, is, in a way, insurance that the company won't be dropped for a newer, cheaper, competitor next year," says John. "The co-branding is enough of a deterrent that the product won't switch to a different supplier. This gives the component maker the ability to put effort and resources into developing the product," says John.

Beyond simple consumer curiosity, this shift to visibly branded components should be noted by policy makers and regulators. "When an industry changes from a vertical structure with dominant primary brands to a horizontal structure with dominant component brands, suppliers become more powerful. And if the industry is in trouble, who gets bailed out? Detroit Diesel or GM? Cummins or Dodge? The right answers must depend on a deep understanding of who offers the real value," notes John.

More information: More information on Professor John and a copy of the article can be found at www.carlsonschool.umn.edu/marketinginstitute/gjohn .

Source: University of Minnesota (news : web)

Explore further: I'm sticking with my brand: Loyal customers perceive competitor ads differently

Related Stories

Brands picked for narcissistic reasons

November 14, 2005

French researchers say we pick certain brand names for an entirely narcissistic reason: they contain letters of the alphabet that are in our own name.

Branding is another headache for SBC, AT&T

September 3, 2005

As rumors fly that SBC plans to drop its brand and adopt AT&T's name when the two companies complete their merger, experts are mixed on whether or not they are doing the right thing. BusinessWeek Magazine is reporting this ...

Brand ID: Is a car masculine or feminine?

July 19, 2005

Languages affect brand perception and the English and Spanish gender system presents specific problems, such as whether a car is masculine or feminine.

Trailblazers don't always come out ahead

January 23, 2008

It’s not always best to be first, finds a new study from the Journal of Consumer Research. Researchers from Purdue, Indiana University, and UConn examine how consumers will evaluate new products when they are released by ...

Recommended for you

Metacognition training boosts gen chem exam scores

October 20, 2017

It's a lesson in scholastic humility: You waltz into an exam, confident that you've got a good enough grip on the class material to swing an 80 percent or so, maybe a 90 if some of the questions go your way.

Scientists see order in complex patterns of river deltas

October 19, 2017

River deltas, with their intricate networks of waterways, coastal barrier islands, wetlands and estuaries, often appear to have been formed by random processes, but scientists at the University of California, Irvine and other ...

Six degrees of separation: Why it is a small world after all

October 19, 2017

It's a small world after all - and now science has explained why. A study conducted by the University of Leicester and KU Leuven, Belgium, examined how small worlds emerge spontaneously in all kinds of networks, including ...

Ancient DNA offers new view on saber-toothed cats' past

October 19, 2017

Researchers who've analyzed the complete mitochondrial genomes from ancient samples representing two species of saber-toothed cats have a new take on the animals' history over the last 50,000 years. The data suggest that ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.