Corporations are always striving to have strong brands. But what happens when Internet communities start creating their own brands? Johann Fueller, of the University of Innsbruck School of Management, and Eric von Hippel, of MIT's Sloan School of Management, explored that scenario, and their results suggest that companies with traditional brands should be paying attention to this emerging trend.
Fueller and von Hippel surveyed 216 members of Outdoorseiten.net, a community of 8,300 German, Austrian and Swiss hikers about their brand preferences, and they found that these people were very interested in buying hiking products that displayed their club's logo. For instance, the researchers asked the group whether they'd prefer to buy backpacks from their favorite commercial manufacturer or backpacks of equal quality and price displaying the ODS logo. Thirty-four percent preferred the ODS product and an additional 17.7% found the two brands equally attractive. Fueller found the community members' interest in the ODS brand a little surprising. He and von Hippel also point out that because many backpack manufacturers outsource their manufacturing, hiking communities could quite easily develop their own branded products and have them manufactured. These products wouldn't require marketing costs and could -- hypothetically -- pose substantial competition to traditional for-profit brands.
In fact, the researchers believe that user communities could potentially create strong brands at low cost. In some arenas, communities already have. Fueller points to Apache open-source software as an example of a community-created strong brand. And in hiking, ODS has already codeveloped and cobranded a tent with a commercial manufacturer.
That trend isn't entirely bad news for corporate brands. Fueller and von Hippel's research also suggests that as user-generated brands emerge, commercial brand owners have new opportunities to collaborate with these communities and create cobranded products. In one experiment, Fueller and von Hippel asked ODS members to choose the most appealing tent among the following four options: one that is ODS branded, one from their favorite commercial brand, one unbranded or one codeveloped and cobranded by the respondent's favorite commercial brand and ODS. All four tents had the same design, and all were equal in quality and price.
An overwhelming majority -- 78.2% -- of respondents opted for the cobranded tent. The researchers concluded that the commercial brands and community brands must have complementary attributes. And further research bore that out: The community members associated ODS with traits such as friendship and fun, but associated their favorite commercial brands with attributes such as quality and product design.
Fueller and von Hippel conducted their survey online at the ODS Web site, so the survey may have more committed club members -- likely to spend time on the site -- than participants. That, and the researchers found that the respondents who preferred the ODS brand are, on average, those who are more active in the ODS community.
Still, Fueller believes that traditional brand holders should consider the possibility that, in the future, community brands may become fierce competition. Even while any community brand may attract only a small portion of a market, if many user communities start creating brands, the result could be significant.
This article is adapted from “Do-It-Yourself Brand Creation,” by Martha E. Mangelsdorf, which appeared in the Spring 2009 issue of MIT Sloan Management Review. The complete article is available at http://sloanreview.mit.edu/smr/.