Wednesday, July 6, 2011
informational complementarities of production
I've had recent occasion to discover that there are certain brands of baby-good manufacturers that produce a number of different items for babies — my wife could tell you the names of some of the brands. These different items often seem to have relatively little in common other than being small consumer-grade manufactured items; it's not clear where a single company would have a production efficiency in producing this set of goods and why e.g. Black and Decker couldn't just as logically produce a stroller. (Perhaps there's some valuable cross-product knowledge about the range of shapes and sizes of babies bodies.) What seems, based only on anecdotal evidence and my own speculation, to drive this more is the reputational complementarity; it would, in fact, not surprise me to learn that the items are produced by third parties and rebranded. A new mother who studies up on products and develops a sense that a brand of one product is good can transfer that impression to other products under the same brand name.