Nav: Home

Battle of the brands: U of M 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 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.
-end-
George John is the General Mills-Gerot Chair in Marketing and Chair of the Carlson School Marketing Department. His research and opinions have been featured in Forbes, USA Today, The Boston Globe, The Star Tribune, and other outlets. More information on Professor John and a copy of the article can be found at www.carlsonschool.umn.edu/marketinginstitute/gjohn.

The Institute for Research in Marketing is part of the Carlson School of Management at the University of Minnesota. Established in 2005, the Institute fosters innovative, rigorous research that improves the science and practice of marketing. More information can be found at www.carlsonschool.umn.edu/marketinginstitute.

University of Minnesota

Related Added Benefit Articles:

Pembrolizumab in metastatic NSCLC: Now added benefit for subpopulations
After a methodological uncertainty has been resolved, the analyses on overall survival are now usable.
No evidence of added benefit for most new drugs, say researchers
More than half of new drugs entering the German healthcare system have not been shown to add benefit, argue researchers in The BMJ today.
Melanoma: dabrafenib and trametinib have added benefit
This combination showed advantages in survival and recurrence. An added benefit was not proven for another combination used in advanced disease.
Dupilumab for neurodermatitis: Indication of an added benefit in adults
The first neurodermatitis drug undergoing the AMNOG procedure provides better symptom relief and has clear advantages particularly in the quality of life.
Bronchial carcinoma: Added benefit of crizotinib not proven
The dossier contains no data or no suitable data on ROS1-positive, advanced non-small cell lung cancer.
More Added Benefit News and Added Benefit Current Events

Best Science Podcasts 2019

We have hand picked the best science podcasts for 2019. Sit back and enjoy new science podcasts updated daily from your favorite science news services and scientists.
Now Playing: TED Radio Hour

Rethinking Anger
Anger is universal and complex: it can be quiet, festering, justified, vengeful, and destructive. This hour, TED speakers explore the many sides of anger, why we need it, and who's allowed to feel it. Guests include psychologists Ryan Martin and Russell Kolts, writer Soraya Chemaly, former talk radio host Lisa Fritsch, and business professor Dan Moshavi.
Now Playing: Science for the People

#537 Science Journalism, Hold the Hype
Everyone's seen a piece of science getting over-exaggerated in the media. Most people would be quick to blame journalists and big media for getting in wrong. In many cases, you'd be right. But there's other sources of hype in science journalism. and one of them can be found in the humble, and little-known press release. We're talking with Chris Chambers about doing science about science journalism, and where the hype creeps in. Related links: The association between exaggeration in health related science news and academic press releases: retrospective observational study Claims of causality in health news: a randomised trial This...