Corporate Image, Product Positioningand Brand Equity: Strategies in UsingTrademarks and Industrial Designs inMarketing and AdvertisingWIPO ASIAN REGIONAL SYMPOSIUMGuriqbal Singh JaiyaDirectorSmall and Medium-Sized Enterprises DivisionWorld Intellectual Property Organizationwww.wipo.int/sme
Corporate Image, ProductPositioning and Brand Equity TRUST and RELATIONSHIPS are thebulwark of any enterprise, be it big or small,with a global or local ambit, having a traditionalor modern management style, high tech or lowtech, leader or follower, and irrespective of itbeing a part of the old world of ‘brick andmortar’ or a rising star reliant on e-commerce
KNOWLEDGE underpins PERFORMANCE
Wolfgang Stofer, Director of BMW’sTreasury Department:“Whenever the technology becomescommoditized, we buy it from thirdparties”.
Building Trust and Relationships A Brand is a consistent, holistic pledge madeby a company, the face a company presents A Brand serves as an unmistakable symbol forproducts and services “Business card” a company proffers on thecompetitive scene to set itself apart from the rest
Trust is to BusinessWhat Trademark is to Brand Brand Equity built on the foundation of aprotected Trademark Brand/Trademark can:(a) be disposed off separately from othercompany assets (Free-standing Institutions); and(b) give rights that can be legally protected
Trademark: Legal concept Brand: Marketing concept Registration of a brand adds value as it protectsits other inherent assets Brand profile and positioning may vary over time,but trademark protection remains the same
Creating/Designing a Trademark
WHAT IS A TRADEMARK? Any sign, or any combination of signs, capableof distinguishing the goods or services of oneundertaking from those of other undertakings,shall be capable of constituting a trademark. Words including personal names, letters,numerals, figurative elements (logos),combination of colors, sounds, smells, etc Visually perceptible; 2D or 3D (shape)
(1) Defines the differential features ofa product or service: Real or Imaginary Rational or Irrational Tangible or Intangible
Definition of a Brand Contd.(2) Constitutes an image that creates apersonal experience: Own Third party Imaginary
Definition of a Brand Contd.(3) With conscious and unconscious contents thatthe consumer projects and deposits on it;(4) Constitutes part of and builds up his/her identity;(5) Generates certain perceptions, attitudes andbehaviors and enables fulfillment in their lives
Brand Identity Mind share (cognitive level)Heart Share (Emotional relationship)Buying intention shareSelf share (self-expression and selfdesign) Legend Share (cultural-sociologicalproposition; legendary; mythological)
Role of Brands: For the Company
Role of Brands: For the Company Real and marketable asset Higher profit margin (Price Premium) Incremental cash flow Reduces cash flow sustainability risk
Role of Brands: For the Company Accelerates speed of cash flow Increases bonding and customer loyalty Increased market share Entry barrier Limits growth of competitors
Role of Brands: For the Company Requires lower investment levels Better negotiating position with trade andother suppliers Facilitates higher product availability(better distribution coverage) Dealers order what customers explicitly request
Role of Brands: For the Company Extends products’ life cycle Allows lower cost brand extensions Can be the basis for international expansion Provides legal protection; licensing; franchising Buffer to survive market or product problems
Role of Brands: For the Company Value of Brands is a key determinant ofenterprise value and stock market capitalization Financial markets reward consistently focussedbrand strategies Brand management a vital ingredient for success incorporate strategy
Brand Building Requires Time and Money; Brand Nourishing Should be a Continuous Process; Higher Profile/Exposure, Greater its Vulnerability; Can be Target of Counterfeiting/Criminal Activities;
Time required.“It took seven years of marketing before carbuyers began to recognize that the BMWbrand was distinctive”: Jorg Zintzmeyer,board member of Interbrand, p 33 ofFORBES Global, July 22, 2002 in “The bestdriven brand” by Nigel Hollway
Morgan Stanley’s Pettis Report on therelationship of corporate brandstrategy and stock price shows that . “Smart strategies can result in stock priceappreciation by 2 to 9%” “Positive Correlation between corporateimprovements in brand strategy programs and apositive stock market return Starbucks: P/E ratio of 47!
Aaker and Jacobson’s researchpaper entitled “The Financialinformation Content of PerceivedQuality” demonstrates that.“Brand building for 34 major U.S. corporationdid positively pay off where it really counts inour system- for the shareholder. Not only isstock market return positively related to ROI,but to changes in brand strategy programs aswell”
COMMON MISTAKESofHigh Technology Industries contd.
Brand/Trademark Contd. In highly competitive markets brands disappearmuch faster than their trademarks protectionperiod, or are adapted to protect a differentproduct over time; In many countries, to enforce trademark rights,the owner of the trademark has to provideevidence or proof of use of the mark inrelation to the goods or services specified inthe trademark register, aside from proof ofinfringement.
Creating a New or Stronger Image.
Positioning.VOLVO SAFETYUNIQUE VALUE PROPOSITION
COMMON MISTAKESofHigh Technology Industries
Proactive Protection Program Trademark Search/Investigation Domain Name Investigation/Internet Search Counterfeiting Investigation Grey Market Investigation Market Evaluation
Proactive Protection Program contd. Market Evaluation Factory/License audits Consumer Agency Audit Human Rights Audit
Value of Strong Brand
Value of Strong Brand Contd.
Value of Strong Brand Contd.
Top Luxury Brands (FutureBrand)Four Measures of Brand Quality(1) Degree of control of distribution channel(2) Effectiveness of marketing(3) Media visibility(4) Influence of brand on purchase decision
Top Luxury Brands 7.126.8
Value of a Premium BrandPremium autos have a higher resale value,stronger brand loyalty and bigger profitmargins than mass-produced cars. This inturn enables the premium car makers tospend more on Research and Development(R & D) to make better, more advancedcars with a powerful brand image.
Drivers and Indicators of Brand Strength DRIVERSPerceived QualityBrand KnowledgeBrand PositioningBrand Identity INDICATORSWillingness to pay aprice premiumAcceptance of brandextensionsBrand loyaltyBrand’s futureprospects
Value of a Brand Brand EquityA Company’s Most Important Asset;Like the Reputation of a Person!!!
Brand Equity (Aaker) Name Awareness (precondition)Brand Loyalty (at the core)Perceived Quality (purpose, alternatives)Brand Associations (security, confidence,exclusivity) Other Brand Assets (Legal and institutionalbenefits; Trademark, markets, distributionchannels)
A Brand’s significance andcontribution to success expressed asa monetary value
Sale and RestructuringofCorporate Groups
House Brands: “Family” Branding, whenan existing product or service line isextended and/or where the business seeksto capitalize on the brand’s reputation ina new unrelated business area
Examples of House Brands: GENERAL ELECTRIC WOOLWORTH’S CADBURY
Multibrand Strategy Estee Lauder: Controls 50% of U.S. top-drawerproduct sales by buying up niche brands that caterto different age or affinity segment Nissan: It has a market capitalization double thatof Renault, even though Renault owns 44.4%share of Nissan and Nissan owns only 15% ofRenault. The implication is that investors viewRenault as close to worthless apart from itsownership of Nissan share. Nissan isreconstituting its technology, rebuilding its brand
Multibrand Strategy Shiseido: Mimicking the multibrand strategy ofEstee Lauder, Shiseido has some 80 brands, mostlysold inside Japan. Partnership with Limited Brands,one of world’s best retail outfits to develop a newchain of specialty stores. Shiseido manufactures theproducts for the shops called Aura Science; Limitedhandles everything else
Multibrand Strategy UNILEVER: Profits in 2001 were boosted bysale of a number of brands, part of a plan topush such core brands as ‘Dove’ soap andLipton tea while shedding other goods, such asElizabeth Arden makeup. Plans to slim theproduct portfolio to only (!) 400 brands by2004. That’s still too many, but it is fewer thanthe 900 that UNILEVER now offers
Issues that can affect brand value New inventions Adaptability to change (Management, Employees) Changes in consumer tastes Situation and trends in the economy Industry trends and brands trends Impact of technological developments
Issues that can affect brand value Impact of changes in channels of distribution Actions of competitors Evolution of costs Investments in brand image development Political, legal and regulatory environment Litigation, counterfeiting, etc
Issues that can affect brand value Cultural environment Specific events:(1) Bridgestone-Firestone and Ford’s problems,denials, product recall and mutual blaming.(2) Enron, (3) Andersen (4) Snow Brand MilkProducts (5) WorldCom (5) Xerox
Brand consistency is a key goalthat a company should achieveover time.
Major enemies of brands Under nourishing Excessive milking Excessive line extensions Excessive repositioning Excessive promotions
Other problems with a brand Negligence and lack of cultural insight andsensitivity(1) Chavrolet launched “NOVA” only to learn thatin Spanish the brand means “Does not work”!(2) Volkswagen with it “Jetta”model, which meansbad luck in Italy
Other problems with a brand contd. Negligence and lack of cultural insight andsensitivity(3) Procter & Gamble Japanese market(4) Pepsi’s Taco Bell Brand Mexico City
Other problems with a brand contd. Negligence and lack of cultural insightand sensitivity(5) Mitsubishi’s 4x4 “Pajero” vehicle InSpain and Argentina, they had to change“Pajero” to “ Montero” as it translates to:“he, who masturbates, frequently”
Other problems with a brand contd. Negligence and lack of cultural insightand sensitivity(6) Well-known Italian mineral waterbrand “Traficante” in Spanish means adrug dealer.
Other problems with a brand contd. Brands becoming Generics: Some brandsbecome so popular and successful over time thatthey become generic: Examples:(1) DuPont’s “nylon” and “rayon” brands;(2) ICI’s “cellophane”; (3) Bayer’s “Aspirin”(4) IBM’s “PC” brand; (5) Cynamid’s “Formica”
Brand Valuation Models (I) Market Approach: Based on similar orcomparable brands Cost approach or Net Book Value Cost of Reproduction or Recreation Price Premium Real Option Method Royalty Relief Economic Use or Income Approach Economic Value Added New Generation Models on the market
Brand Valuation Models (II) Business finance models (Quantitative) Psychographic/behaviorally orientedmodels (Qualitative) Composite financial/behavioral models Input/output and portfolio models(Establish a relative Brand value Index)
Importance of monetary value It serves as a corporate planning andmonitoring tool--for instance, in terms ofbudgeting brands at companies withmultiple brands. At the same time, brand value is also used asa yardstick to measure success and a basisfor compensating brand management. Thus brand value functions as an evaluationtool for the marketing concept as a whole.
Importance of monetary value Strategic brand decisions can be made bybrand management thanks particularly toongoing tracking of a company’s brandvalue and/or comparison with the brandvalue of competing brands FORD paid Euro 6,2 billion for the Jaguarbrand
Management of Brands Registration and renewal; domestic or abroadTrademark/Brand AuditAssignment (with or without the business)Licensing (Exclusive or non-exclusive;Quality Control; registered user) Franchising Managing Tax Liability (M & A; Divestiture) Insurance
Management of Brands CounterfeitingParallel ImportationDigital trademarks/domain name conflictsCo-brandingDilution or misleading useAdvertisingMarketingCopyright
Management of BrandsCorporate Restructuring Options: Forming subsidiaries Outsourcing key operations Transferring discrete operations (such asmanufacturing and product design) within thecountry or abroad Defining the scope of what is licensed(segmentation of the market; territorial oronline, range of products, services)
Management of Brands Brand core developmentBrand positioningBrand differentiationBrand penetration via the marketing mixBrand stretchingBrand strategy/brand architectureBrand transferBrand globalizationTrade marketing
"The goal of design is to sell" he said, andto drive the point home he added " theloveliest curve I know is the sales curve."- Raymond Loewy" Between two products equal in price,function and quality, the better lookingwill outsell the other."- Raymond Loewy
Design provides the overall appearance, formfactor, layout, style and balance of the product,within the context of branding expectations. The visual appearance of a product cannot beadded at a late stage in a project. It has to be fullyintegrated into the conceptual design. Thus thisrole has to be active throughout the project,making strong contributions at every design phase.
Industrial Design is defined as theprofessional service of creating anddeveloping concepts and specificationsthat optimize the function, value andappearance of products and s