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.
Keywords
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
Publisher
:Emerald Group Publishing Limited
Copyright © 2008, Emerald Group Publishing Limited