The implications of platform sharing on brand value

Abstract

Purpose

The paper seeks to examine empirically the potential dilution and enhancement of brands that share product platforms with other brands.

Design/methodology/approach

Study 1 uses two real platform‐sharing examples from the automobile and consumer electronics industries in an experimental setting. Study 2 uses conjoint analysis in the same two industries to study the impact of platform‐sharing on preference and willingness to pay for a unique brand.

Findings

Study 1 finds that sharing a platform with an upscale brand is preferable to sharing with a downscale brand, although results are mixed on whether a unique‐to‐brand platform is preferred to sharing with an upscale brand. Study 2 finds that unique‐to‐brand platforms are preferred to any type of platform sharing, and calculates that this preference is worth about 6‐10 per cent of the product's retail price.

Research limitations/implications

Both studies use student samples, although all product classes and brands tested are popular with this demographic, which is a key target market for the tested industries.

Practical implications

Platform sharing is an increasingly popular product development strategy that offers great cost savings in product design, manufacturing and servicing. The findings suggest that managers also need to carefully consider the potential cost to a brand's equity when calculating the financial implications of platform sharing.

Originality/value

This paper brings together two areas that are usually not studied together, i.e. product development and brand equity management, and finds that choices made in the former can have important implications for the latter.

Citation

Olson, E.L. (2008), "The implications of platform sharing on brand value", Journal of Product & Brand Management, Vol. 17 No. 4, pp. 244-253. https://doi.org/10.1108/10610420810887590