Featured Research

from universities, journals, and other organizations

Battle Of The Brands: Branded Components Changing Industry Structures

Date:
August 19, 2009
Source:
University of Minnesota
Summary:
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," say researchers.

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 Journal of Marketing Research. Various technologies that provide benefits like fuel efficiency, 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 brand 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.


Story Source:

The above story is based on materials provided by University of Minnesota. Note: Materials may be edited for content and length.


Cite This Page:

University of Minnesota. "Battle Of The Brands: Branded Components Changing Industry Structures." ScienceDaily. ScienceDaily, 19 August 2009. <www.sciencedaily.com/releases/2009/08/090819113449.htm>.
University of Minnesota. (2009, August 19). Battle Of The Brands: Branded Components Changing Industry Structures. ScienceDaily. Retrieved July 30, 2014 from www.sciencedaily.com/releases/2009/08/090819113449.htm
University of Minnesota. "Battle Of The Brands: Branded Components Changing Industry Structures." ScienceDaily. www.sciencedaily.com/releases/2009/08/090819113449.htm (accessed July 30, 2014).

Share This




More Science & Society News

Wednesday, July 30, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Britain Testing Driverless Cars on Roadways

Britain Testing Driverless Cars on Roadways

AP (July 30, 2014) British officials said on Wednesday that driverless cars will be tested on roads in as many as three cities in a trial program set to begin in January. Officials said the tests will last up to three years. (July 30) Video provided by AP
Powered by NewsLook.com
Health Insurers' Profits Slide

Health Insurers' Profits Slide

Reuters - Business Video Online (July 30, 2014) Obamacare-related costs were said to be behind the profit plunge at Wellpoint and Humana, but Wellpoint sees the new exchanges boosting its earnings for the full year. Fred Katayama reports. Video provided by Reuters
Powered by NewsLook.com
China's Drone King Says the Revolution Depends on Regulators

China's Drone King Says the Revolution Depends on Regulators

Reuters - Business Video Online (July 30, 2014) Comparing his current crop of drones to early personal computers, DJI founder Frank Wang says the industry is poised for a growth surge - assuming regulators in more markets clear it for takeoff. Jon Gordon reports. Video provided by Reuters
Powered by NewsLook.com
Climate Change Could Cost Billions, According To White House

Climate Change Could Cost Billions, According To White House

Newsy (July 29, 2014) A report from the White House warns not curbing greenhouse gas emissions could cost the U.S. billions. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins