User communities have considerable potential to build their own brands.
Strong brands are often seen as an important corporate asset. But what happens when user communities—connected by the Internet—start to create their own brands? That question was explored in an intriguing August 2008 working paper, “Costless Creation of Strong Brands by User Communities: Implications for Producer-Owned Brands,” by Johann Fueller, an assistant professor at the University of Innsbruck School of Management, and Eric von Hippel, the T. Wilson Professor of Management at the MIT Sloan School of Management. Their findings suggest that companies with traditional brands would be wise to pay attention to this emerging arena.
The researchers surveyed 216 members of Outdoorseiten.net (ODS), a community of 8,300 German, Austrian and Swiss hikers, about their brand preferences—and found that ODS members showed significant interest in buying hiking products displaying the club’s ODS logo. For example, when members of the ODS community were asked whether they would prefer to buy a backpack from their favorite commercial manufacturer or one that was of equal quality and price but instead had the ODS logo, 34% preferred the ODS product and an additional 17.7% viewed the two brands as equally attractive. (The rest preferred their favorite commercial brand.)
Because many backpack manufacturers outsource manufacturing, it would be quite feasible for hiking communities to develop their own branded products and have them manufactured. Without much need to incur marketing costs, such products could pose substantial competition to traditional for-profit brands.