An Overview of a Platform's Brand Resilience in the Face of Brand Risk and Crisis

Document Type : Original Article

Author

Ph.D. Candidate, Department of Media Management, Faculty of Management, University of Tehran, Tehran, Iran.

Abstract

Objective
The business model of the platform has been considered by many researchers in recent years, with some arguing it has already given rise to the entry of humans into the era of "platform life". This age is the product of a change under which traditional businesses have become platform businesses and the transition from product production to service delivery has taken place in the form of platforms. Platform business models are based on the logic of value exchange between several groups of stakeholders such as consumers, service providers, advertisers and third parties and have experienced significant growth in recent years. Some business researchers have attributed the growth of platforms to the emotional interaction of consumers with the brand of platforms. Accordingly, the issue of brand management in platform businesses has become a fundamental issue. However, the brand management of platforms faces major challenges. Part of these challenges stems from the fragility of customer relationships with these brands and brand risk. But the biggest challenge is the brand paradox mode. According to the "brand paradox mode", when the equity of a brand increases, the possibility of the brand being exposed to risk also increases. In such a case, brand risk can become a major crisis for the brand. A brand crisis can bring about serious challenges such as the devaluation of the brand, reduction of positive associations or reinforcement of negative associations in the minds of customers, and the inability to maintain the brand's existence and consequent closure of the platform business. Therefore, what is important in platform management of the brand is the issue of "brand resilience". The resilience of brand is capable of withstanding the risks that have turned into a crisis, recovering the brand if affected by the crisis, and even growing the brand in a critical situation. There is ample evidence that the platform's brand is generally failing, fragile, and vulnerable in the face of crises. This means that the brand position is shaky and is overshadowed at the cognitive, emotional and, behavioural levels. This is due to the confusion in the face of brand risks and crises and how to build a resilient platform brand. This study on understanding a platform's brand resilience targets a research gap and seeks to help the theoretical literature with a conceptual approach.
Research Methodology
This study is written as a conceptual article with a descriptive approach. In a concept paper, unlike an empirical paper, arguments are not derived from data in a conventional way, but the formation of arguments is based on a combination of documents in the form of concepts and theories that have already been developed. In such articles, the ability to distinguish between the theories used as data and the theories present in the role of the theoretical framework of the research is necessary and, of course, difficult. However, to distinguish this difference, it is helpful to differentiate "method theory" and "domain theory."Domain theory" is a set of knowledge about an important topic in a field of research, and "method theory" is a meta-level conceptual system for studying the substantive issue(s) of the domain theory at hand. Therefore, to examine the concept studied in this research, a distinction has been formed between method theory and field theory. The approach of this research in developing the concept of the resilience of platform brands is based on a type of research design of conceptual articles called "theoretical composition". The main purpose of this approach is to create a conceptual integration between the various currents of previous research and to connect previously unrelated and incompatible pieces in a new format and a new perspective. In "theory combination", phenomena that have already been studied in a non-structural and scattered way are explained in a more coherent format with a conceptual basis. In this study, the central phenomena of platform business, branding, business crisis and resilience in the face of business crisis are dealt with under a concept called platform brand resilience and are studied as a coherent phenomenon. The starting point in "theory combination" as a type of concept paper is a phenomenon or concept that is practically examined by domain theory and method theory, and in this article, the concepts of platform, brand, resilience, brand crisis and brand risk are viewed as the starting point.
Findings
The starting point for combining theory in this paper is to explain the concept of platform. This article describes the platform as a business based on the ability to create value-creating interactions between consumers and foreign producers. It also uses the customer-centric brand equity approach as the basis for the study. According to this approach, brands are a collection of consumer experiences that are formed in interaction with the product, so they can be considered as a set of associations in the minds of consumers. Basically, in this article, brand resilience is understood in relation to brand equity, so it can be said that if there is no "brand value", there is no inherent "brand risk" and, of course, resilience will not make sense. According to the method theory in this research, a brand is threatened by 6 types of risk, including 1) value risk 2) market risk 3) reputation risk 4) identity risk 5) status risk and 6) presence risk. Platform brands may also experience these six types of risks. However this research shows that building resilient platform brands is difficult due to three factors: 1) the transformation of value chain logic into a value network on platforms 2) the active consumer effect on the brand and 3) fierce competition in the platform ecosystem. The first factor indicates that most of the value creation and brand building takes place outside the control of the platform. Thus, the performance of a platform is influenced by the performance and behaviour of all its partners (suppliers, shareholders, distributors, retailers and customers). Accordingly, many of the risks associated with the value creation and exchange process occur on the platform while the platform is not able to properly manage them. The second factor in the platform ecosystem that makes it difficult to build and manage platform brands is the active action of platform brand consumers in creating business experiences and the role of knowledgeable, networked, capable and active consumers in creating and destroying brand value. This role of the consumer can also be examined in the form of brand co-creation theory and an organic approach to the brand. According to the logic of brand co-creation, it is argued that brands are organic beings because they are created alongside different stakeholders and many parts of the manufacturing process are beyond the control of the organization/firm. The third factor also shows that platforms in the valley of intense competition, experience the "Red Queen" effect. This effect reinforces the tendency to adapt, evolve, constantly reproduce, and strive to eliminate the competitor. In such a case, the tendency to monopolize, merge and develop the brand and brand alliance increases, and this creates a crisis for growing brands. This research also shows how the evolution of platforms is related to their brand resilience. The present study features four types of problems facing brands during the evolution of platforms, including the "Red Queen effect", "Chicken and egg problem", "Penguin problem", and "Emergence".
Discussion & Conclusion
Brand risk and crisis is a threat to the sustainability of businesses with platforms more exposed to brand risks and crises due to their special nature. Naturally, brand risk and crisis are able to change the brand performance of the platform on a cognitive, emotional and behavioral level, so risk management and brand crises are of undeniable importance. However, this article shows that platform brand resilience has been neglected in business research. This paper considers three main orientations including a) change in markets from consumers to producers b) change in competitive advantage from resources to ecosystem and c) change in value creation from processes to interactions as major factors influencing the challenges of platform businesses branding. This article points out that platform brands, like other brands, are affected by internal and external factors of brand dilution, which affect the current brand network by adding negative and unpleasant associations to the association network. This article concludes that weakening the brand has consequences such as reducing the intention to buy the product or increasing the likelihood of negative word of mouth about the brand and brand failure. The resilience of a platform brand, despite its own difficulties, can be implemented in a coherent framework; This framework can be outlined in seven steps, including 1) assessing brand risks, 2) preparing the brand team to deal with the crisis, and 3) deploying brand risk warning systems, 4) repelling brand attacks, and 5) learning how to repel the attack and adapting to the procedure 6) measuring and tracking brand resilience 7) creating public support for the brand campaign.

Keywords

References

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Media Management Review
Volume 1, Issue 1
2022
Pages 102-127

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