6918384 Trade Marks Advertising and Brand Management

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CHAPTER

1

THE STRUCTURE OF A BRAND

Historical Trademarks: An Introduction to the History of Branding

Branding has a long history, both in India and around the world. The word brand isderived from the word brandr, a word used by early Norse tribesmen meaning to burn, as in branding livestock to declare ownership. Ancient people around the world used marks to identify and classify objects for some of the same reasons thatmotivate the use of trademarks today. Although protecting trademarks is a relatively recent legal development, trademark precursors predate written history andeven writing itself. The first marks generally protected personal property fromthe threat of actual theft and loss. Livestock branding is the oldest type of marking, with small graphic designs serving to designate

PLATE 1.1: Priest King and Its Discovery


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Trademarks, Advertising and Brand Protection

the owner of the marked animals. Cave paintings in south-western Europe from theStone Age and Early Bronze Age depict branded cattle, as do Egyptian wall paintings and tombstones dating back almost 4,000 years. Branding, which continues to

this day, especially in the American west, has always been an important tool for designating ownership of animals. Monograms and heraldic devices are other types of ownership and identification marks that might be traced back to this ageold practice.1 In the Indian context, this steatite sculpture popularly known as the Priest King is one of the earliest available signs (or marks). It probably represents a person of very high rank judging from the elaborate clothing and ornamentation. The eyes originally contained shell inlay and would have been somewhatrealistic in appearance. The robe may have been navy or green with trefoil patterns filled with red pigment with white borders. The back of the head was flattened, possibly in order to affix a horned headdress as a symbol of sacred authority (Plate 1.1).

PLATE 1.2: Carved Seals of the Indus Civilisation

The intricately carved seals of the Indus Civilisation were probably used in trade. Typically square with each side measuring from two to five centimetres, theobverse of most seals was engraved with mythical scenes or animals and an average of five Indus script signs. The square seals also had a small boss on the backthrough which a string or a cord had been passed, allowing them to be worn or otherwise secured. While the Indus script remains undeciphered, approximately 400signs have been identified so far in what was probably a logo-syllabic writingsystem in which the signs were read from right to left (Plates 1.2 and 1.3).J Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, 2001; Mollerup, Marks of Excellence: The History and Taxonomy of Trademarks, 1997; PreservingHistory: Trademark Timeline, 82 Trademark Rep. 1021 (1992); Peter Wilbur, Intern

ational Trademark Design: A Handbook of Marks of Identity, 1979; Sidney A. Diamond, The Historical Development of Trademarks, 65 Trademark Rep. 265, 1975.1


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The Structure of a Brand

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PLATE 1.3: Seals of the Indian Valley CivilisationSource: Hideo Kondo (Tokai University, Japan, and Supervisor of the Indus Civilisation Exhibition). The 75th anniversary of NHK (Japan Broadcasting Corporation)

The Indus Civilisation Exhibition at Tokyo and Nagoya, Japan. Tokyo Metropolitan Museum, 5 August 2000 to 3 December 2000.

QUALITY ASSURANCE: THE FIRST SIGNS However, branding was by no means the only trademark forerunner prevalent in Egypt or the rest of the ancient world. Quarry marks and stonecutters signs have been discovered on materials used in Egyptian buildings as much as 6,000 years ago. These marks and similar markings on ancient buildings in Greece, Israel, Syria, and Turkey seem to have more closely resembledmodern trademarks in terms of their function. Quarry marks indicated the sourceof the stones used in buildings, and stonecutters signs, which might be either painted on or carved into the stone, helped workers, prove their claims to wages.Medieval stonemasons in Germany developed a very elaborate system for crafting

individualised marks that identified their work, but the purposes underlying themarkings were the same. As people began to make more sophisticated goods and engage in far-flung commerce, trademarks proliferated in several ancient civilisations. Some items continued to bear marks with a more personal or historical rather than strictly commercial significance. Bricks and tiles from Mesopotamia andEgypt bore inscriptions indicating the name of the monarch who had commissionedthe structure or who held power during the time of its construction. In contrast, Roman builders stamped their bricks and tiles to indicate the source of the raw materials used or to identify the person who either made the object or built the house in which it was used. The practice of marking goods to ensure the quality of materials and craftsmanship continued and grew during the Middle Ages withthe rise of guilds in Europe and Japan. Members of industryspecific guilds wererequired to use a prescribed production mark, both to assist in fixing responsi

bility for poor-quality merchandise and to help the guilds in enforcing territorial trade boundaries. State-sanctioned monopolies also performed quality-assurance functions; in fact, the marking systems they developed often outlasted the monopolies themselves. The hallmarks used by the Goldsmith Company in Medieval England, to attest to the purity of metal items inspected, are used to this day by those responsible for examining objects made of gold, silver, and platinum.


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ORIGINS Similarly, indicating the origin of manufactured goods took on an expanded importance as trade increased and purchasers were less and less likely to interact with the artisans who had made the things they bought. A source mark impri

nted on the object itself helped consumers to remember the makers of goods thathad previously proven satisfactory. Pottery was one of the first products to bemarked in this fashion. Chinese, Indian, Greek, and Roman pottery often bore themark of the potter who had made the piece, as well as marks conveying the samesort of information about ownership, source of materials, and historical periodthat was stamped on other items produced in these cultures. Some of the earliestexamples of marked pottery appeared in China 4,0005,000 years ago. Marks placedon Greek vases could denote not only the makers of the pieces but also the merchant who bought the items wholesale and then sold them to others in the marketplace. Archaeologists have identified roughly 1,000 different Roman potters marks in use during the first three centuries of the Roman Empire, which would seem to indicate that a large number of individuals were each producing a relatively small

number of goods. GENERICIDE: THE DEATHOF A

MARK

One brand name that seemed to commonly appear on a very ordinary type of clay oil lamp, during the first three centuries of the Roman Empire, was the FORTIS. Lamps bearing this mark were dispersed throughout territories in present-day England, France, Germany, Holland, and Spain. This points to a possible use of the mark in a manner more closely approximating modern trademark practice. The successof this particular brand name could suggest that the producer of these lamps had an extensive distribution system or opened workshops in many different regions. On the other hand, the spread of the name could have been due to widespread co

pying and counterfeiting by producers seeking to capitalise on the goodwill built up by a successful manufacturer. Finally, the sheer number of artefacts bearing this name could mean that the FORTIS mark became a generic term for this kindof lamp illustrating that the problems confronting todays trademark owners are asold as trademarks themselves.

The Nature of a BrandThe phenomenal growth in the wealth and cultural influence of multinational corporations over the past 20 years can arguably be attributed to the development ofthe modern concept of branding. Indeed, branding has become an integral part ofbusiness today across a wide range of industry sectors from consumer goods to financial services, legal services, charities and even to politics, but what exactly is a brand? Is it the same as a product? Marketeers constantly refer to their brands whereas lawyers tend to refer to trademarks but what is the difference?Is a brand the same as a trademark? Marketing consultants and authors of marketing textbooks no longer appear to discuss marketing per se but focus instead upon successful branding. Is it the same process by another name or is there more to it than mere semantics? Is a brand a new phenomenon or is it simply a new nameapplied to an existing concept?


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This chapter seeks to explore questions such as these in greater detail for thebenefit of the legal community. Relying upon traditional marketing theory the chapter begins with a brief analysis of what is meant by the term product before mov

ing on to consider what constitutes a brand. From this discussion the formulation of a number of propositions follow concerning the nature and function of a brand and its distinction from trademarks and products. To understand how and why brands evolved to the point of being revered icons of the modern age and as significant financial assets in their own right we will look very briefly at the historical development of the consumer society during the past 100 years. We will see that brands are recent phenomena whose roots can be traced back to the end ofthe nineteenth century. Many of the issues raised in this chapter will be discussed in greater detail in subsequent chapters. This chapter aims to explore the nature of a brand from a marketing perspective so that the commercial significance of certain issues relating to brands can be appreciated and to define the terminology central to an understanding of the issues of what constitutes a brand an

d how brands can be protected by means of Intellectual Property (IP) laws. The principle question with which this book is concerned is whether a brand today iscomprehensively protected by law from imitation, and if not, whether protectionshould be extended, and if so, how.

The Constitution of a ProductWe begin our analysis of what constitutes a brand by considering what a productis. It is important to clarify what we mean by the term product because the two words, brand and product, are sometimes used interchangeably as if there is no distinction between them. In this book it is important to appreciate that the termsare not considered to be synonymous. On the contrary, as well be seen below, animportant distinction can, and should, be drawn between them. A leading marketing textbook defines a product2 as anything that is offered to a market for attent

ion, acquisition, use or consumption and that might satisfy a want or need. Products include more than just tangible goods. Broadly, defined products include physical objects, services, persons, places, organisations, ideas and mixtures ofthese entities. While concurring with the view that, in its broadest sense, a product could include persons, places, organisations and ideas for the sake of simplicity. In the context of this book the notion of a product will be limited to physical objects as opposed to intangible services, organisations or ideas. Such products can be considered as comprising three distinct levels which are shown inFigure 1.1.3 At the most basic level is what is known as the core product or whatmight be described as the product concept, the basic idea behind the product andin relation to which there may be different ways of implementation. This is theheart of the product and can be identified by asking the question, what is theconsumer actually buying? From a consumer perspective the question might be considered as, what is the core benefit of buying the product? By way of illustration, the core product in relation to say a Philishave electric razor is an electric razor incorporating a flexible bead. From a consumer perspective, the core benefit could be described as a quick, close, comfortable shave.2 3

Kotler et al., p. 516. Ibid.


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Trademarks, Advertising and Brand ProtectionA fte r S a le s S ervice AUGM ENTED PRODUCT

D e live ry B ra nd Name

P a cka ging

Fe ature

C o re B e ne fit Q ua lity D e sign C re dit W a rran ty

CORE PRODUCT

G ua ra ntee

ACTUAL PRODUCT In sta llation

FIGURE 1.1: Levels of a ProductSource: Kotler, Armstrong, Saunders and Wong, Principles of Marketing, 1999, p.516.

The second level of a product can be described as the actual product. This includes the packaging, the product name or brand name, logo, colour, quality level, the features of the product, its design and shape as a specific manifestation of the core product. The core product is combined with these additional elements tocreate an actual product consistent with the core benefit that will satisfy consumer needs. The third level in our analysis of a product is the augmented product.In addition to the actual product the manufacturer may provide additional customer services such as an after sales service, guarantee product insurance, a helpline and so on. To return to the example of the Philishave razor, these intangib

le benefits aim to provide the consumer with a complete means of obtaining a quick, close, comfortable shave, consistently. Whereas the core product is essentially tangible, the augmented product can include both tangible and intangible elements. Thus, whilst in one sense it is true to say that a product is what the consumer is actually buying, in another sense, when a consumer buys a product such as an electric shaver from a department store, what the consumer actually takes away is dependent upon the brand of electric shaver purchased since features of the actual product can vary from one brand to another just as aspects of the augmented product can vary. For example, if the product is purchased from a market stall, the purchaser may not obtain the benefits of any product warranty, guarantee or credit facility, and so buys only the actual product. The point of differentiating between these different levels of a product is to emphasise that different actual products may provide the same core benefit and to distinguish betweenthe


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manufacturers view of the product and the consumers perspective of what he/she isbuying.4 As we will see the role of marketing is to present the actual product in terms of the core benefits that consumers seek. Although the core product may

be the result of consumer responses to market research, once the actual producthas been launched and promoted through advertising it is possible that the corebenefit may change. Consumers may attach particular significance to the actual product as a result of societal values attributed to the product associated withownership. For example, a Filofax personal organiser may offer the core benefitof a more organised way of life but consumers may regard the core benefit as a status symbol, either because the advertising used to promote the actual productpositions it as an article possessed by members of a particular social group or,because the article is in fact used by people of a certain social standing. Forthe purposes of this book we will need to refer on occasions to the actual product without the brand name, logo or any packaging and we will therefore refer tothis as the naked product. References to the term product in the remainder of the b

ook will be to articles in a general sense.5 WHATIS A

BRAND?

According to Rita Clifton, CEO of Interbrand Newell and Sorrell a leading specialist brand consultancy firm a brand is: a mixture of tangible and intangible attributed, symbolised in a trademark, which, if properly managed, creates influenceand generates value.6 This definition truly captures the essence of a brand, andhighlights the importance of brand management. Branding is about creating value,both for customers, and for the company. This value stems from the products andservices that companies create and bring to the market, but extends further to encompass added values derived from factors such as the brand-customer relationsh

ip, the brands emotional benefits, and its self-expressive benefits (Figure 1.2).Other common descriptions of a brand include a relationship, a reputation, a set oexpectation, and a promise. It is a companys promise to consistently deliver a specific set of features, benefits, and services to customers. Brands are richly endowed entities. They start life as ideas, making their way into planning and strategy documents, yet ultimately reside as consumer perceptions. For some companies, brands are their most valuable asset. The space a brand occupies inside a customers head can create a mental patent, which grows out of the cumulative memory andthe experiences customers have of products or services. As such, brand-buildingis about creating value through the provision of a compelling and consistent customer experience that satisfies customers and keeps them coming back.

Just how diverse the two perspectives are may depend on the social significant of the product as suggested in the example below relating to the Filofax personalorganiser. 5 For simplicity all future references in this chapter will be to goods but in most cases the principles discussed will apply equally to services unless specified. 6 R Clifton, and Maughan, E, The Future of Brands, 2000, p. vii.

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O rg an isatio na l A ssocia tio n s

B ra nd P e rson ality

S co pe C o un try o f O rigin A ttribu te s Q u ality U ses U ser Im a ge ry Em o tio na l B e ne fits B ra nd -C u stom er R e la tio nsh ips S ym bo ls P rodu ct o r S e rvice B ra nd

S e lf-E xp re ssive B e ne fits

FIGURE 1.2: A Brand is more than a Product or ServiceSource: Adapted from David Aaker, Building Strong Brands, 1996, p. 74.

THE PERFECT BRAND A perfect brand embodies a promise of quality; it is a trustmark, not a mere trademark.7 The enunciation of a perfect brands name triggers warm

and personal associations,8 immediately transmits a plethora of positive traits,9 eases any sense of uncertainty,10 satiates emotional needs,11 vicariously affords an opportunity to say something affirmative about oneself12 creates an atmosphere of community13 and by the sheer excellence of its conjured image inspiresothers to reach higherLarry Light, Address at the International Trademark Association Annual Meeting,1 May 2000. Shirley Young, Brand Equity, Executive Speaker, 10 December 1989, When you become familiar with a brand, like a person, it becomes an old friend. Itis special. We know what a friend is like. We know what to expect of him or her.We have shared experiences that build our friendship. Brands without a personality tend [not] to be recalled. David A Aaker, Building Strong Brands, 1996, p. 203.09 Kevin Lane Keller, Strategic Brand Management, 1998, p. 311. 10 Jean-Noel Kapferer, Strategic Brand Management, 26, 2nd edn., 1997. 11 David A Aaker and Eri

ch Joachimsthaler, Brand Leadership, 2000, pp. 48-49. 12 Lynn B Upshaw and EarlL Taylor, The Masterbrand Mandate, 2000, 38 (we are known by the brands we keep). 13 For many people, brands serve the function that fraternal, religious and service organisations use to serve-to help people define who they are and then helpthem communicate that definition to others. Keller, supra note 3 at 8, paraphrasing Daniel Boorstein.08 07


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levels.14 A perfect brand is a holistic experience in which the sum exceeds individual values15 and as a corollary, a perfect brand is instantly recalled by allwho matter,16 is the quintessence of authenticity,17 and possesses a measure of

relational equity that drafts the physical and mental assets associated with lesser brands.18 BRANDS: TOWARDSA

DEFINITION

A survey of marketing books quickly reveals that there is no universally accepted definition of a brand. Writers concur with the view that brands exist but appear to have great difficulty identifying the characteristics of a brand, preferring instead to focus upon some of the effects that successful branding can engender. For example the authors of one marketing book19 described a brand as: . . . aproduct or service made distinctive by its positioning relative to the competit

ion and by its personality. A prerequisite to understanding this definition is knowledge of what is meant by the term personality as far as a brand is concerned. All that the statement reveals is that a brand is distinctive as against competing products and/or services. The different definitions of a brand used by marketeers can be regarded as falling within a spectrum with, at the one extreme, brands defined in principally physical terms akin to definition of a trademark, whichsource identification and differentiation as the two key objectives. At the other extreme, brands are defined in terms of intangible values primarily directedat the relationship between the consumer and the manufacturer. In part this diversity of opinion as to what constitutes a brand can be explained in terms of theevolution of the brand concept. Thus, more established definitions, tend to bebased more on the physical attributed associated with a brand, whereas the definitions used by more contemporary writers emphasise intangible values. In order t

o demonstrate this change in approach we will now look at a number of definitions of a brand, with a view to distilling a working definition that can be used throughout this book to evaluate what level of protection is currently afforded tobranded products and to assess whether additional protection is required. Philip Kotler, considered by some to be the prophet of modern marketing,20 bases his definition of a brand on that of the traditional 1960 American Marketing Association (AMA) definition which describes a brand21 as: A name, term, sign, symbol, ordesign, or combination of these, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.Jerre B Swann, Sr., David A Aaker, and Matt Reback, Trademarks and Marketing, 91TMR 787, 2001, 801. 15 Bernd H. Schmitt, Experiential Marketing, 1999. 16 A string brand position means having a unique, credible, sustainable, fitting, and valued place in customers minds. Scott M Davis, Brand Asset Management, 2000, 3. 17 Aaker and Joachimsthaler. 18 Aaker, Managing Brand Equity, 1991. 19 Hankinson andCowking, Branding in Action, 1993, p. 1. 20 See Nilson, Value Added Marketing,1992, p. 19. 21 Kotler et al., p. 517.14


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Of the marketing definitions this is the closet to the legal definition of a trademark as set out in section 6 of the Trade Marks Act 1999 which states trademark has the meaning given by section 17. Section 17 states What is a trademark? A t

rademark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person. David Aaker,22 another acknowledged marketing specialist, defines a brand in a similar manner: A brand . . . signals to the consumer the source of the product, and protects the customer and the producer from competitors who would attempt to provide products that appear tobe identical. From both the AMA definition and Aakers interpretation of it, we see that one of the essential requirements of a brand is distinctiveness which canlie in the name, symbol, logo or packaging of the brand. According to Aaker, the requirement of distinctiveness serves two purposes, first, it acts as a meansof identifying the source of the product (i.e. it serves as an indication of origin function) and secondly, it acts as a means of differentiating the goods of o

ne provider from those of a competitor (i.e. a differentiation function). IndeedAaker goes on to state that the brand is the only distinguishing element between two otherwise identical articles, thus emphasising the function of differentiation. Both the AMAs and Aakers definition seek to emphasis the tangible aspects ofbrands (i.e. the product, brand name, logo, packaging , etc.), from what may betermed the input perspective, that is, from the perspective of brands as manufacturers creations. Equally, both definitions take account of the legal role fulfilled by a trademark. By way of contrast, John Murphy, the founder of Interbrand, aconsultancy working exclusively in the field of branding, has sought to explainwhat constitutes a brand in terms of both the manufactures input and the consumers output perspectives23:. . . the ways in which branded products or services are distinguished from oneanother have increasingly come to embrace non-tangible factors, as well as such

real factors as size, shape, make-up and price. The brand qualities which consumers rely upon in making a choice between brands have become increasingly subtle,and at times fickle. Cigarette A may be virtually indistinguishable from cigarette B yet outsell it ten to one; a fragrance costing $ 10 a bottle may be outsold by another fragrance with very similar physical characteristics but which sells at $ 50 a bottle. . . . Thus modern, sophisticated branding is now concerned increasingly with a brands gestalt, with assembling together and maintaining a mixof values, both tangible and intangible, which are relevant to consumers and which meaningfully and appropriately distinguish one suppliers brand from that of another.

Murphy thus suggests that a brand is more than the physical aspects of a product(the actual product); in his view it includes a mix of values both tangible andintangible. Indeed, he goes on to identify the components of a brand as comprising24: . . . the product itself, the packaging, the brand name, the promotion, theadvertising and the overall presentation. The brand is, therefore, the synthesisof all these elements, physical, aesthetic, rational, and emotional.

22 23 24

David Aaker, Managing Brand Equity, 1991, p. 7. Murphy (ed.), Branding: A Key Marketing Tool, 1987, p. 1. Ibid., p. 3.


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Murphys definition is thus much wider than Aakers or even that expressed by Hankinson and Cowking because he suggests that it is more than the physical embodimentof the name, logo or packaging (which in themselves form part of the actual pro

duct). Murphy argues that the brand also, somehow, encompasses the marketing andpromotional activity and the overall presentation that surrounds and sustains sales of the actual product. David Arnold goes one step further, observing that25: The top 10 brands . . . are virtually all leaders in their markets. This cannotbe explained by the weight of their advertising or some inherent product superiority, or the catchiness of their name, even though they all score well on these counts. Research suggests that the real key to maker leadership is superior perceived quality. Not inherent product quality; only the perception of the quality bythe consumer. (Emphasis added) Thus, there is according to both Murphy and Arnold, something over and above the nature of an actual product that a consumer associates with a brand which influences the consumers purchasing decision. Like theaugmented product, a brand is said to comprise both tangible and intangible ele

ments. Amber, a marketing academic, describes a brand in simple terms as comprising26 A product plus added values. . . . A brand is a bundle of functional, economic and psychological benefits for the end user, more simply known as quality, price and image. This perceived quality or added value as it is sometimes termed, is anebulous concept. It can be based upon the packaging style or the appearance ofthe product, the advertising used, the belief that the brand is effective (as in the case of pharmaceutical products), the sort of people who use the brand (e.g. its social status) or the experience of the brand (e.g. where it has been used before).27 The value may be actual or emotional: for example, The Body Shop emphasises, as an emotional brand value, concern for the environment. The importance of these added values leads Arnold to suggest that28: Branding is about the waypeople perceive and not about the product isolation. Arnold is not alone in acknowledging the importance of the partial intangible nature of brands. As Southgate

, an advertising executive and author of Total Branding, explains29: If you thinkof a brand only as a mark denoting ownership you can slap it on anything and many brand owners still do. But this is to use branding in its crudest and simplest form. It is to use branding in the same way as the Wild West ranchers used it,simply to say this is mine. To think of a brand as a set of intangible values, bycontract, is to understand something which is absolutely crucial in the successful development of brands today and that brands do not exist, in any meaningful sense, in the factory or even in the marketing department. They exist in the consumers mind. Not all marketeers agree, however, as to the importance of emotionalor intangible aspects of a brand to consumers. Nilson30 asserts that in reachinga purchasing decision the consumer is first and foremost concerned about acquiring a product, and is not concerned about emotional or intangible25 26 27 28 29 30

Arnold, The Handbook of Brand Management, 1993, p. 14. Building Brand Relationships, 4 December 1995. Jones, Whats in a Name?, p. 30. Arnold, p. 20. Total Branding by Design, 1994, p. 18. Nilson, Value Added Marketing, 1992, p. 114.


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aspects of a brand. In his view: The physical purchasing action is caused by a decision to acquire a product; the brand is there to serve as a means of identifying the manufacturer. The values of the brand will reflect on the product, but on

e must not forget that it is the product that is bought. Whilst it is true that purchasing decisions are often motivated by the desire to acquire a particular product to satisfy a perceived need, buying behaviour is complex and is influencedby many factors.31 In some circumstances the physical features of a product will be the most important factor for consumers, but in other situations intangiblefactors may have an important role.32 For example, when purchasing a car or technical equipment, the consumer may place special emphasis on the image associated with the particular make or style in question, its reliability or social status. The extent to which intangible factors help determine the purchasing decisionwill vary according to the nature of the consumer, the nature of the product, the channels through which the product is marketed, and the level of advertisingassociated with the product. Leslie de Chernatony, a marketing academic and freq

uent writer on issues relating to branding, conducted a survey of leading edge brand consultants to determine what they understood by the term brand both from a manufacturer and a consumer perspective.33 The study is of interest because it confirms the divergence of views as to what is the nature of a brand? Based on an initial review of literature, de Chernatony identified nine main themes used in defining the concept of a brand. These include: (i) a legal instrument (ii) a logo, (iii) a company (iv) an identify system, (v) an image in consumers minds, (vi)a personality, (vii) a relationship, (viii) as adding value, and (ix) as an evolving entity. We have already seen examples of most of these themes in the material quoted above. The idea of a brand changing as part of a natural process, however, is a concept developed by de Chernatony himself 34 in which he sees brandsas evolving from a manufacturers input to a consumers output perspective. In otherwords, when brands are launched the emphasis is upon the manufacturers perspecti

ve of the brand as a form of legal identification, a logo, etc., but as a branddevelops over time and is promoted by means of extensive advertising, the brandbecomes embed with advertising imagery and positive associations (especially associations of quality as a result of consumer experience, promotional activity, reputation and so on) such that the emphasis moves towards a consumer perspectiveof a brand expressed in terms of images, relationships, experience, and added values. De Chernatony, therefore, suggests that the various views what constitutes a brand should not be considered as contradictory, but rather as evolutionary.Such an understanding is helpful in explaining how established brands have greater symbolic value (and indeed, increased financial value) than new brands, which have not had the benefit of extensive promotional campaigns or customer experience.Chisnall, Consumer Behaviour, 1995, p. 11. Franzen and Hoogerbruuge, The Functions of the Brand 1995 (unpublished). 33 De Chernatony, DallOlmo Riley, The Chasm between Managers and Consumers Views of Brands; The Experts Perspectives 1997, 5 Journal of Strategic Marketing, pp. 89104 at 89; The Big Brand Challenge Esomar seminarBerline, 911 October 1996, volume 203. See also De Chernatony, 2 McDonald, Creating Powerful Brands, 1998. 34 Categorising Brands: Evolutionary Processes Underpinned by Two Key Dimensions (1993) 9 Journal of Marketing Management, pp. 17388. This evolutionary approach has also been endorsed by Goodyear Ed Brin, Hague, Vangelder, A Handbook of Market Research Techniques, 1990, pp. 22948.32 31


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De Chernatonys survey concluded that brand consultants did not have a single definition of a brand but rather regarded the concept of a brand as: a link between the firms marketing activities consumer perceptions of functional and emotional el

ements. Such an analysis is considerably broader than the traditional definitionof a brand with which we started (the AMA definition) but as de Chernatony observes the AMAs perspective of brands as logos is far less appropriate in todays environment. De Chernatony thus endorses the view that the nature of the brand paradigm has changed since the AMAs definition was originally propounded. Changes in,amongst other things, the retail environment have given rise to changes in the role of the brand and thus a different explanation of the brand paradigm is needed. De Chernatonys analysis may be an accurate portrayal of the concept of a brandto the consumer but, for the purposes of a legal assessment and analysis his definition is too nebulous to be of practical assistance to us, not only in termsof defining a brand but also in deciding how such a brand can and should be legally protected. De Chernatonys definition is also far removed from the nature of a

product relying as it does purely on consumer perception. For the purposes of our consideration of the legal protection of a brand we need a more limited termwhich can be objectively scrutinised and supported evidentially, not one that iswholly reliant on consumer perceptions. Although the AMA definition would fulfil these criteria it fails to take account of the current role of intangible factors, such as the images portrayed through advertising, in the overall concept ofa brand. Thus, for the purposes of this book we need to find a balance between,the definition of a brand suggested by the AMA and the de Chernatonys definition. Marketeers tend to concur with the view that brands developed from the legal concept of trademarks which were used primarily to indicate the manufacturing origin of the goods to which the marks were applied. Such trademarks would includethe name, logo or aspects of the packaging of the product. In some cases even the shape of the product became synonymous with a particular source. It would, the

refore be accurate to say that a brand comprises, at the very least the actual product, that is the name, logo, and packaging of the goods, and also the productshape. As Murphy and Arnold point out, with the growth of advertising, developments in technology, and the emergence of affluent societies, manufacturers, or rather consumers have tended to place greater emphasis on psychological intangible factors in reaching their purchasing decisions rather than rational considerations. Therefore, for the purposes of this book the brand paradigm will be regarded as comprising a synthesis of these physical and aesthetic features and as faras possible the emotional effects. Our definition is thus closer to that postulated by Murphy. Thus, in addition to the actual product and its overall presentation, our definition of a brand can be said to encompass the imagery used in advertising and promotional material. In some cases the brand might also symbolisea philosophy with which the producer of the brand name has become associated (asin the case of the Body Shop with its ethos of ethical trading), depending on how the brand has been positioned. It is important to note that not all brands have developed to the same degree. For some brands the emphasis may be upon physical characteristics whereas other may depend more upon intangible aspects (perhaps as a result of the stage of development of the brand in question) or perhaps as a reflection of the market to which the product is directed or a lack of advertising and promotional support. Whatever the reason, it is important to distinguish between products (that is actual products) or nascent brands which do not attain full brand status, because they have no intangible values associated with them but are purchased for their physical characteristics only, and true brands


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which offer not only tangible but also intangible benefits to the consumer. Notall products may be regarded as brands. Thus, the terms brand used in subsequentchapters should be understood to refer to this broader concept of an actual pro

ducts together with the intangible elements that are associated with it. As de Chernatony concludes brands exist because they are of value to consumers. . . . Brands act as shorthand, in consumers minds, of the set of functional and emotionalassociations of trust, so that they do not have to think much about their purchase decisions. The more complex product, the greater reliance consumers appear toplace on the symbolic value of security, value afforded by an established brandname. In this way brands (especially the vocal aspect of the brand, the brand name) become guarantees of consumer expectations, repositories, for information and symbols of past experience that a consumer has of a brand, and thus a shorthand reference that sums up the consumers perception not just of the augmented product of which the brand name is part but also what the business responsible for that name stands for, especially if the brand name is the corporate name. One imp

lication of this understanding of brands as a shorthand in consumers minds, is that if a new brand can successfully imitate an established brand, such that the consumer associates the set of functional and emotional values of trust, originally created in connection with the established brand, with the new brand, then itcan be seen that the new brand will obtain a significant advantage at the costof the established brand, whose sales will be diminished as a consequence.35 Thenext chapter analyses how the various elements of a brand may be protected against such imitation under the existing framework of IP laws, and in subsequent chapters we will consider the effectiveness of such protection. Before turning toconsider these issues, however, we first need to consider the nature of a brandand the distinction between marketing and branding, and also to consider brieflythe evolution of brands. THE NATUREOF

BRANDS

Brands are made up of many layers and dimensions. In this introductory chapter,these layers are unravelled to reveal the nature of brands and their reason forexistence. The chapter proceeds to describe the influence of brands on the buying process, and the importance of customer satisfaction and brand loyalty. The concept of brand equity is outlined, explaining the value of brands, both to customers, and to companies. These concepts are central to brands and brand-building,whether online or offline, and they form the backbone of this text. Branding is aterm of jargon. And worse, it is used so commonly that many marketeers have forgotten what it really means. Historically, branding consisted of three elements:personality, strategy, and execution. Lately, however, these three elements have been lumped together and referred to simply as branding. In aggregating the three elements into one buzzword, the subtitles have been lost. Good branding strategies address each of the three elements. A brands personality should be defined only once. Every move the company makes should be consistent with that personality. AndThis assumes that the second comer passes on to the consumer the benefit of thecost saving achieved by free riding on the back of the established brand. This point is discussed further in Chapter 8.35


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its hard, if not impossible, to change a brands personality. A brands strategy canchange, though not very often. Its the execution of the brand strategy that changes over and over. For example, each piece of communication is an execution of th

e brand. But each execution should be part of the strategy and consistent with the personality. So the first step in building your strong brand is knowing the difference between execution, strategy, and personality. According to the Young and Rubicam Brand Asset Valuator, brands are built on four key customer perceptions: differentiation, relevancy, esteem, and knowledge. The first aspect of a brands success is its ability to differentiate. It seems that new brands ought to bedifferent: Snapple, Yahoo! and Starbucks all entered the market with brands that scored high on the differentiation scale. Even as brands mature, they need toadequately differentiate themselves from the competition. The Young and RubicamBrand Asset Valuator claims to be able to predict a brands decline based on low differentiation scores. The Common Thread A brand needs a common thread that weaves it together. For IBM its the blue frame of TV and print ads. For Gatorade its t

he association with sports, for Absolut vodka its the shape of the bottle. THE LAYERSOF A

BRAND

Brands are made up of four layers the core product or service, the basic brand,the augmented brand and the potential brand (Figure 1.3). Product/Service At themost basic level, customers buy products to meet certain functional needs. However, most products and services cannot survive on functionality alone as this isusually matched in time. The most common barrier to competition is building a brand. The Basic Brand The basic brand consists of the name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services

of one seller or group of sellers and to differentiate them from those of competitors.36 Essentially, this should support the offerings performance and differentiate the brand from those of competitors. The Augmented Brand Successful companies seek a competitive edge through the enlargement of the core product or36

Kotler, Marketing Management Analysis, Planning, Implementation, and Control, 8th edn., 1996.


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Trademarks, Advertising and Brand ProtectionP O T E N TIA L BRA ND AUGM ENTED BRA ND B A S IC BRA ND Name S e rvice D e signPRODUC T OR S E R V IC E Fe ature s P a cka ging G ua ra nte e s D e live ry and In sta llation Q u ality C re dit a nd Term s

C o re P rod u ct or S ervice B a sic B ra nd A u gm e nte d B ra nd P o te ntial B ra nd

FIGURE 1.3: Layers of a BrandSource: Adapted from Levitt, Marketing success through differentiation of anything, Harvard Business Review, JanuaryFebruary, 1980, p. 86.

service, with supplementary products and services (e.g. information, quick delivery) that enhance the customers total purchasing and use experience. These products and service add value and make the offering much more difficult for competitors to emulate. The Potential Brand A brand achieves its potential when added values are so great that customers will not willingly accept substitutes, even when

the alternatives are substantially cheaper or more readily available (e.g. Coca-Cola, Kodak, Levis). PRODUCTAND

SERVICE BRANDS

Product brands are the original brand carriers. They are the historical core ofbranding because they are the most prevalent, and because they most readily cometo mind when consumers are asked to recall brands.


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Service brands (intangible) are much less numerous than their product counter parts. Intangible services are much less numerous than their product counterparts.Intangible services are also more challenging to package and sell to consumers wh

o often have difficulty conceptualising, preferring things they can see and touch. Certain service brands, such as in retailing, actually sell products, but thebrand itself is the stores, not the product it sells Westside Stores, Jet Airways, and Amazon.com are examples. In fact, this is the case with all Internet companies, as they essentially perform the function of a virtual intermediary or infomediary, and are intangible. BRANDING AND THE BUYING PROCESS In order to understand the context and the role of brands, it is important to clarify customers underlying buying behaviour and the buying process. The buying process consists of five stages as elaborated in Figure 1.4:Need Recognition Information Search Evaluation of Alternatives Purchase DecisionPost-Purchase Behaviour

FIGURE 1.4: Five-Stage Model of the Buying ProcessSource: P Kotler, Marketing Management Analysis, Planning, Implementation, and Control, 8th edn., 1996, p. 194.

The process starts when the buyer recognises a need. This can be triggered by aninternal or an external stimuli (advertisements). Once aroused, a consumer willbe inclined to search for more information, either through heightened attentionor through an active information search. Through gathering information, the consumer learns about competing brands, and evaluates them in terms of the degree to which their benefits and bundle of attributes satisfy their needs. Consumers differ as to which product/service attributes they see as important, and pay themost attention to the brands that will deliver the sought benefits. Therefore, it is critical to understand what attributes consumers value. Consumers develop a

set of brand beliefs about the attributes of competing brands. These brand beliefs make up the brand image. These beliefs depend on their previous experiences with the brand, and the effect to selective perception, selective distortion, andselective retention. In the evaluation stage, the consumer forms preference among brands and may form a purchase intention to buy the brand they prefer. However, two factors can intervene between the purchase intention and the purchase decision attitudes of other, and unexpected situational factors (Figure 1.5). If other people have had a negative experience with the brand, their negative attitude may influence the consumers purchase intent or vice versa. A consumers decisionto modify, postpone, or avoid a purchase decision is heavily influence by perceived risk. Expensive purchases involve some risk taking. A consumer tries to dealwith this by gathering information from friends, and a preference for recognised brands they can trust. After a consumer has actually purchased the product orservice, they will evaluate their level of satisfaction the customer will be highly satisfied, somewhat satisfied, or dissatisfied with the purchase decision. Satisfaction depends on how closely the brands perceived performance matches the customers expectations. If perceived performance and quality exceed their expectations then


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Trademarks, Advertising and Brand ProtectionA ttrib utes o f O th ers (W ord o f M o uth) E valua tion of A lterna tive s

P u rcha se In te ntion

P u rcha se D e cision

U n expe cted S itua tion al Fa ctors

FIGURE 1.5: Steps between Evaluation Alternatives and Purchase DecisionSource: Kotler, Marketing Management Analysis, Planning, Implementation and Control, 8th edn., 1996, p. 194.

they are satisfied, even delighted. If performance falls below their expectations, they will be dissatisfied, and look for alternative brands in the future. Customers expectations are particularly important when dealing with services, and especially important when dealing with purchases made through the Internet, as the

se services are intangible, and therefore, customers make decisions purely on the basis of their expectations. These expectations are formed through a combination of past experience, word-of-mouth, advertising, and communication. The levelof customer satisfaction will influence whether they will buy the brand again and talk favourably or unfavourably about it to others. Highly satisfied and loyalcustomers tend to move directly from the need recognition stage to the purchasedecision, locking out potential competitors. Customer satisfaction and loyaltyare essential to creating successful brands. The Importance of Customer Satisfaction and Loyalty According to Thomas Jones and Earl Sasser (1995),37 customers at the lowest and highest ends of the satisfaction scale tend to have intense feelings about a brand and its products/services. The customers at the bottom end of the scale are terrorists those who actively attack the brand telling others notto buy from the company. At the opposite end of the satisfaction spectrum are apo

stles customers who are satisfied and loyal, and talk favourably about the brand(Figure 1.6). Loyalty is derived when customers are continuously satisfied overtime. This satisfaction encompasses the whole experience and not just a companysproducts or service. Customers that are passionately or emotionally loyal are those that have built trust in a company, and believe that it will always act in their best interest. Trust is critical for a brands success. Some traditional companies identified as having established a strong trust relationship with their customers which37

Why Satisfied Customers Defect, Harvard Business Review, Nov.Dec. 1995.


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The Structure of a BrandHigh Hostages Apestles

19

Non Competitive Zone Regulated Proprietary Technology Few Substitutes High Switching Costs

Highly Competitive Zone Commodity Consumer Indifference Many Substitutes Low Switching Costs

Low

Terrorists

Mercenaries Completely Satisfied

Completely Dissatisfied

FIGURE 1.6: The Satisfaction-Loyalty Relationship and the Impact of CompetitiveEnvironmentSource: Jones and Sasser, Why Satisfied Customers Defect, Harvard Business Review,Nov.Dec. 1995, p. 91.

include: Disney, Federal Express, Hewlett-Packard, Johnson & Johnson, Saturn, Southwest Airlines, and Xerox.38 Loyal customers are assets. The benefits of strong customer relationships are: The average cost of acquiring a new customer is five times more than it costs to retain and existing one;39 Loyal customers tend to spend more; Regular customers tend to place frequent, consistent orders; Satisfied customers are the best advertisement they provide good word-of-mouth, and are the best salespeople for the product/service; They are willing to pay premiumprices to a supplier they know and trust; Gaining market entry or share becomes

very difficult for competitors; It is easier to communicate with them on a regular basis. Emotional Loyalty. Emotional loyalty can be brought about in two mainways. Firstly, emotional loyalty is born out of a consumers personal relationship with a brand. This relationship can actually start through the satisfaction ofa functional need or expressiveness (self-image) need. Consumers cross the threshold from a mere brand relationship into emotional loyalty when they animate thebrand, giving quasi-human qualities and relate to it as they would to humans consider how Coke consumers felt betrayed when Coca-Cola decided to change their formula in 1985.38 39

Hart, and Johnson, Growing the Trust Relationship, Marketing Management Journal, Spring 1999. Peppers, and Rogers, The One to One Future.


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Emotional loyalty can be also created through the formation of a strong user community around the brand. The consumer reaches emotional loyalty when membershipin the brands user community becomes an end in itself. In this way, the brand bec

omes a link for people for whom fulfilling similar aspirations is a major life theme (e.g. Harley-Davidson motorcycle clubs). There is also clear evidence of this on the Internet, with the emergence of community brands40 such as Geocities (home of more than 3 million community members living in 41 neighbourhoods) and Fortunecity.com. Some established brands are successfully developing online communitiesaround them such as Disney and Pentax (where professional and aspiring photographers can exchange tips and information on techniques and equipment). Emotional loyalty leads to a deeper, almost irreplaceable bond as well as potentially to the negative feelings of betrayal. Emotionally loyal customers build a sense of trust and two-way commitment with the brand, which goes well beyond the satisfaction of a specific end.C o ng rue nce w ith L ife T he m es A ccom plishm e nt o f L ife P ro je cts R

e so lu tio n of C u rren t C on ce rn U ser C o m m u nity C o m m u nity as an E nd in Itself P e rson al R e la tio nsh ip w ith th e B ran d

B ra nd Spe cifica tio n E m o tio na l L oyalty

FIGURE 1.7: Creating Emotional LoyaltySource: Fournier, S., Consumers and Their Brands: Developing Relationship Theoryin Consumer Research, Journal of Consumer Research, March 1988, pp. 34373.

Satisfying customers and building loyalty (creating apostles) is the ultimate objective behind building a brand, and understanding the needs and buying process ofthe target market is essential (Figure 1.7). THE CONCEPTOF

BRAND EQUITY

Brands vary in the amount of power and value they have in the marketplace (Figure 1.8).Unknown Brand Brand Awareness Brand Acceptability Brand Preference Brand Loyalty

FIGURE 1.8: Brand Progression

At one extreme, there are brands that are unknown by most buyers. Some brands have a fairly high degree of brand awareness (measured by brand recall and recognition). Beyond this, there are brands that customers perceive as acceptable and would not resist buying. A stronger brand enjoysMcWilliam, Building Stronger Brands through Online Communities, Sloan Management Review, Spring 2000.40


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a high degree of brand preference. However, a power brand tends to have a high degree of brand loyalty, whereby customers would be unwilling to substitute it withcompetitors offers. A strong brand is said to have high brand equity, which is t

he value of the brand over and above its commodity value. According to David Aaker (1991), brand equity is a set of assets (and liabilities) linked to a brands name and symbol that adds to (or subtracts from) the value provided by a product or service.41 The major brand assets are brand loyalty, brand awareness, perceivedquality, strong brand associations, and other assets such as patents, trademarks, and relationships with distributors and strategic partners. The benefits of each are outlined in Figure 1.9.Brand Loyalty Reduced marketing costs Trade average Attracting new customer Create awareness Resemblances Time to respond to competitive threats Anchor to whichother associations can be attached Familiarity/linking Signal of substance commitment Brand to be considered Reason to buy Differentiate/position Price Channelmember Exceptions Help process/retrieve information Reason-to-buy Create positi

ve attitude/ feeling Extensions Competitive Advantage

Brand Awareness

Perceived Quality

}}

Provides value to the customer by enhancing: Interpretation and processing of information Confidence and trust in the purchase dicision User satisfaction

Brand Associations Other Proprietary Brand Assets

Provides values to the firm by enhancing: Efficiency and effectiveness of marketing programs Brand loyalty Prices/margins Brand extensions Trade leverage Competitive advantage

FIGURE 1.9: Brand EquitySource: David Aaker, Managing Brand Equity: Capitalising on the Value of a BrandName, 1991.

THE VALUE

OF

BRANDS

TO

CUSTOMERS

According to Jean-Noel Kapferer (1992),42 brands perform several functions thatadd value and customer benefits:Aaker, Managing Brand Equity: Capitalising on the Value of a Brand Name, Free Press, New York, 1991. 42 Kapferer, Strategic Brand Management, 1992.41


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Identification To be clearly seen, to make sense of the offer, to quickly identify sought after products. Practically To save time and energy through identicalrepurchasing and loyalty. Guarantee To be sure of finding the same quality no ma

tter where or when you buy the product or service. Opinion To be sure of buyingthe best product in the category, the best performer for a particular purpose. Characterisation To have confirmation of your self-image or the image that you present to others. Continuity Satisfaction brought about through familiarity and intimacy with the brand that you have been consuming for years. Hedonistic Satisfaction lined to the attractiveness of the brand, to its logo, to its communication. Ethical Satisfaction linked to the responsible behaviour of the brand in itsrelationship with society. THE VALUEOF

BRANDS

TO

COMPANIES

Brands create value for companies, in the following ways: Brands, Market Share and Profits Typically a brand leader obtains twice the market share of the numbertwo brand, and the number two twice the share of the number three.43 Brand Leverage The brand leader benefits from two main leverage effects Higher volume leads to economies of scale in development, production and marketing, and premium pricing increases revenue. The Value of Niche Brands Dominating a niche market isusually more profitable than being fifth in a large market. Brand Loyalty and Beliefs Strong brands are more attractive to investors. Brand loyalty also reducesmarketing costs and enables firms to override occasional problems (e.g. Johnson

& Johnson with Tylenol). The Brand Barrier Brand leaders usually have the financial strength to fend off competitors. Potential competitors are usually reluctant to enter the market if existing brands satisfy customers. In addition, brandleaders can exploit their superiority in the market (e.g. Coca-Cola the real thing). Avenues for Growth The product life cycle applies to products, not brands. Companies can maintain a brand while modifying the underlying product to account for new technology, fashion or prevailing market conditions. The brand can also be used to penetrate new markets. Motivating Stakeholders Companies with strong brands attract good recruits. They also tend to elicit community support. In trying to estimate the monetary value of brands, companies such as Interbrand, and Young & Rubicam have created complex formulas, but there remains an ongoing controversy about how accurate and meaningful these measures are.43

Worcester, and Downham, Consumer Market Research Handbook, 3rd edn., 1986.


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Branding is essentially about creating value through the provision of a compelling and consistent offering and customer experience that will satisfy customers and keep them coming back. When a company creates this type of customer preferenc

e and loyalty, it can build a strong market share, maintain good price levels and generate strong cash flows. This in turn, drives up share price and provides the basis for future growth. The next chapter describes the process of how brandsare built, the tools that are used, and the characteristic of successful brands. BUILDING BRANDS Building a strong brand is a complex task. This chapter spellsout the traditional brand-building process, highlighting important factors thatcontribute to the success of each step along the way. The major characteristicsof successful brands are also reviewed. Overview of the Brand-building ProcessThe brand-building process starts with the development of a strong value proposition. Once this has been established, the next step is to get customers to try the brand. If the offering is developed properly, it should provide a satisfactory experience and lead to a willingness to buy again. To entice trial and repeat

purchase requires triggering mechanisms, which are created through advertising,promotion, selling, public relations, and direct marketing. The company needs tocommunicate the values of the brand and then reinforce brand associations to start the wheel of usage and experience, and keep it turning. Through the combination of the stimulus of consistent communications and satisfactory usage and experience, brand awareness, confidence, and brand equity are built. The Value Proposition Brand building starts with a clearly defined value proposition a strong offer that a potential customer would find compelling and interesting. In order to do this, a company must develop a strong understanding of who their potentialcustomers are, what they value and how the products or devices should be optimised or configured to deliver this value. The value proposition must be continuously re-evaluated to respond to changes in the marketplace (Figure 1.10).Who is your customer? What is the optimal product or service offering that deliv

ers this value?

What does your customer value?

FIGURE 1.10: Defining the Value Proposition


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Central to this value proposition, a brand must deliver a quality product or service that meets the functional needs of customers and differentiates itself fromcompetitors. It should seek to augment its basic appeal with added value throug

h the provision of additional products or services to delight customers. In thisway, the brand can elicit feelings of confidence that it is of higher quality than competitors. As such, a compelling value proposition is the combination of aneffective product or service (P), a distinctive brand identity (I), and added value (AV).BRAND = P I AV

These three characteristics are multiplicative rather than additive each is essential. Without a good product or service, it is impossible to build a successfulbrand. Similarly, unless differentiation and awareness can be developed, it will never attract a strong client base. Added Value. Added value is at the heart of building successful brands. Most buying decisions are influenced by brand valu

es, which are additional to those based upon real performance. The large numberof decision, the pace of technical change, the number of competing alternatives,and the large variety of advertising and selling messages, mean that buyers look for short cuts. Reputable brand names provide confidence and allow customers to cut through the risks and complexity of choice. Added values also occur when brands are bought for emotional reasons to satisfy other needs besides functionalneeds. People use brands to express their lifestyles, interests, values or wealth. Customers chose brands, which they perceive as meeting their needs. In todaysaffluent society, these needs are as likely to be about satisfying self-actualisation or esteem needs, or to gain a sense of belonging, as they are to be aboutsatisfying basic physical and economic needs.44 Brand values derive from five major sources.45 Experience of Use If a brand provides good service over time, itacquires added values of familiarity and proven reliability. User Associations

Brands frequently acquire an image from the type of people who are seen as usingthem. Advertising and sponsorship are often used to convey images of prestige or success by associating the brand with glamorous personalities. Belief in Efficacy In many cases, if customers have faith that a brand will work, it is more likely to work effectively for them. For pharmaceuticals, cosmetics, and high-tech, products, faith in brand generates satisfaction in use. Beliefs in efficacy can be created by comparative evaluations and rankings from consumer associations,industry endorsements, and newspaper editorials. Brand Appearance The design, layout and appearance of the brand can clearly affect preference by offering cuesto quality. Manufacturers Name and Reputation In many situations a strong company name (e.g. CocaCola, Gillette, Sony, Hewlett-Packard, Kelloggs) attached to a new product will transfer positive associations, providing confidence and incentive to trial.44 45

Doyle, Marketing Management and Strategy, 2nd edn., 1998, p. 169. Jones, Whats ina Name? Advertising and the Concept of Brands, Gower Publishing Co., 1986.


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DISTINCTIVE BRAND IDENTITY A brand identity is the message sent out by the brandthrough its name, features, visual appearance, and advertising. This may be different from the brand image, which depends on how the target market perceives th

e brand. A company should seek to differentiate its brand through developing a distinctive identity. Jean-Noel Kapferer (1992) identified three levels of a brand identity46 (Figure 1.11):P icture o f S e nd e r P h ysiqu e E xtern alisation P e rson ality In te rna lisa tio n

R e la tio nsh ip

C u ltu re

R e fle ctio n

S e lf-im ag e

P icture o f R e cipien t

FIGURE 1.11: Kapferers Brand Identity PrismSource: Adapted from Jean-Noel Kapferer, Strategic Brand Management, Free Press, New York, 1992.

The Brand Core The fundamental or genetic code of the brand, which remains fixedovertime. The Brand Style Articulates the brand core in terms of the culture itconveys, its personality, and its image or self-projection. The Brand Theme Theway the brand communicates through is advertising, press releases, packaging, etc. Themes include the physical appearance (logo, colour scheme, and visual appe

arance), its reflection (e.g. type of spokesperson/customer image used to advertise the brand), and the relationship expressed (e.g. glamour, prestige, friendly). Brand themes are the most flexible element and will tend to change with fashion, style or cultural differences from one country to another. However the brandstyle and core tend to be less flexible. The brand prism enables management tounderstand the brand, its strengths and opportunities. It also helps in developing the brand strategy and the formulation of a distinctive positioning in the market. It also facilitates consistency in the message being transmitted through presentation (e.g. website design, structure and ease of use), advertising, below-the-line activities, and through line and brand extensions. Finally, understanding the brands core and style helps set the perimeters of brand extensions how far the brand can be meaningfully stretched to other products and market segments.46

Kapferer, Strategic Brand Management, 1992.


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Developing the Framework and Communicating the Value Proposition Once the valueproposition is clearly defined, the company must ensure that it develops the appropriate structure, system, strategy (partnerships and alliances) skills, manage

ment style culture and staff needed to support, deliver, and reinforce this value proposition. The value proposition must then be articulated in terms of the marketing mix often referred to as the 4Ps Product and service features, Price, Promotion, and Place (distribution strategy). The value proposition must be communicated to entice customers to try the product/service. If the offering is developedproperly, it should lead to satisfaction and repurchase. Before potential customers can buy a product/service, they must learn about it. This learning is calledthe adoption process.47Awareness Interest Evaluation Trial Adoption

FIGURE 1.12: Innovation-Adoption-ModelSource: Rogers, Diffusion of Innovation, 1962, pp. 7986.

The Diffusion of Innovation-Adoption Model consists of: Awareness The company has to create awareness of the brand, and its products/services. Advertising and public relations are common tools for achieving awareness. Interest Customers need to be stimulated to seek information about the brands uses, features and advantages. Evaluation Customers consider whether the product/service will meet theirparticular needs. Personal sources such as word-of-mouth from friends, colleagues and opinion leaders become important influences at this stage. Trial The customer tries the product/service for the first time and decides whether to adopt onthe basis of their expectations, and the product/services perceived performance. Adoption The customer is satisfied and decides to make regular use of the product/service (Figure 1.12). Traditionally, companies have used the tools of the promotion mix advertising, direct marketing, sales promotion, personal selling, an

d public relations/publicity to move customers through the adoption process. Advertising and public relations can be effective in generating awareness and interest. Sales promotions and sampling are often used for encouraging evaluation andtrial. It is beneficial for companies to accelerate the adoption process beforecompetitors emulate the benefits they offer. Enticing customers to purchase again and adopt the brand not only requires a successful trial experience, but enhanced customer interaction through relationship building. Building Customer Relationships. Building relationships with customers extends beyond a single transaction. This is often referred to as Customer Relationship Management (CRM). This focuses on establishing a long-term, multi-transaction relationship, when each trusts the other to deal fairly and reliably.47

Rogers, Diffusion of Innovation, 1962, pp. 7986.


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Over time, this process enables an exchange of information, providing insight into customers needs and wants. This information is a key competitive advantage, allowing companies to communicate regularly with their customers and customise the

ir interaction. In this way, companies can increase buyers satisfaction, making them less likely to switch to a competitor. Customer service is an important element of this relationship. Berry and Parasuraman (1991) identified three customerrelationship-building approaches.48 Financial Benefits Such as airline frequentflyer programmes, and loyalty/discount cards. Social Benefits By learning customers individual needs and wants and individualising and customising service and contact with the customer. Structural Ties For example, the company may supply customers with special equipments or tools (e.g. Internet linkages, software) to help customers interact with the company. Through building relationships with customers, companies can increase the value of each customer, while strengthening the position and value of the brand. CHARACTERISTICSOF

SUCCESSFUL BRANDS

Several factors contributing to the success of brands have been identified,49 including: A Quality Product/Service Experience Satisfactory experience is the major determinant of brand values. If the quality of the experiences deteriorates,or if the brand is surpassed by superior offers from competitors, then its position will be undermined. First-Mover Advantage Being first into the market does not necessarily means success, but it makes the task easier. It is easier to capture a share of the consumers mind and build a customer base, when the brand has no competitors to rival its position. Unique Positioning Concept If the brand isnot the innovator, it must have a unique positioning concept a segmentation scheme, value proposition or augmented brand, which will add value and distinguish i

t from competition. Strong Communications Programme A successful brand requiresan effective selling, advertising or promotional campaign, which will communicate the brands existence, its function and psychological value, trigger trial and reinforce commitment to it. Without building awareness, comprehension and intention to buy, the brand is meaningless. Time and Consistency Traditionally, brandswere not built quickly. It took years to build-up the added values, and establish a trusting relationship. Building strong brands stems from the creation of a compelling value proposition. Once the framework has been established and the organisation configured to provide this proposition, companies must actively communicate it to the target audience to entice trial. As customers build trust in thebrand through satisfaction of use and experience, companies have the opportunity to start building relations with their customers, strengthening the brand further, and making it more difficult for competitors to emulate. The Internet provides the opportunity for companies to create48 49

Berry, and Parasuraman, Marketing Services: Competing Through Quality, 1991, pp.13642. Doyle, Marketing Management & Strategy, 1998, 2nd edn., pp. 176-77.


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a compelling value propositions never before possible, while providing new toolsfor promotion, interaction and relationship building. As a result, it has profound impact on the traditional brandbuilding process. As such, the next chapter e

xplores the characteristics of the Internet, and its impact on the business andcompetitive environment. THE ANATOMYOF A

BRAND

In his analysis of the interrelation between the various elements of a brand, Arnold divides a brand into three constituent parts: essence, benefits, and attributes. These can be illustrated as shown in Figure 1.13.A ttrib utes B e ne fits

E ssen ce

FIGURE 1.13: Constituents of a BrandSource: Arnold, The Handbook of Brand Management, 1993.

According to Arnold, the essence of a brand is a single, simple value, easily understood and valued by consumers.50 The essence of a brand is sometimes also referred to as brand personality and is said to be distinctive of the brand within itsmarket. According to Arnold, it is towards this personality or essence that customers direct their loyalty, and which is often the elusive emotional element ofa brand. The benefits are those aspects of the brand that seek to satisfy consumer wants and needs. The attributes are key physical characteristics of the brand, its packaging and advertising themes. To see how these elements of essence, benefits and attributes blend together we will consider briefly how these terms might

apply to the Marlboro brand of cigarettes (Figure 1.14). From the figure it canbe seen that fundamental characteristic of the core product (i.e. the actual strength and flavour of the cigarette), is only one of the benefits identified. Other benefits derive from the advertising and imagery associated with the promotion of the brand. The attributes have developed from physical aspects of the packaging and product presentation, and include key aspects50

Arnold, p. 27.


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R e d L e af G ra ph ic M asculine

Red and W h ite P a cka ging

M arlbo ro M an (C o w bo y) U ser Im a ge ryB o ld ne ss a nd In de pe nde nceM arlbo ro C o un try

Stre ng th a nd In de pe nde nce

Stre ng th an d Flavo ur S e nse o f B ra nd of Fre e do m a nd Stre ng th B row n Filte r

C o nte m po rary

FIGURE 1.14: Brand Personality Marlboro Cigarettes

Source: Arnold, The Handbook of Brand Management, 1993.

of marketing and promotional material that have remained constant over the lifeof the brand; such attributes are often referred to as brand property. Like Murphy, Arnold stresses that a brand is a synthesis of the product, packaging, advertising, and marketing in addition to the name and logo. To be successful, he argues the theme running through these aspects should be simple, strong and attractive to consumers in the sense of providing benefits (both tangible and intangible)to the consumer, and they must be consistent. A brand must be a blend of complementary physical, rational and emotional appeals. The blend must be distinctive and result in a clear personality which will offer benefits of value to consumers.51 The essence of strength and independence is the theme which pervades all promotional activity relating to the Marlboro brand and is cited as one of the reaso

ns that consumers are attracted to it. The Marlboro cigarette itself, has a strong flavour (a functional attribute) and the strength and independence of the cowboy image originally used in advertising from the basis of the emotional attributes. The red and white colour of the packaging reinforces the essence of the attributes of the brand since they are strong, bold, contrasting colours; the sameis true of the mountain scenery used in many of the advertisements. The result is a clear and distinctive personality of strength and independence. This personality is distinct from those of competing brands of cigarettes such as Silk Cut,Benson & Hedges, and JPS and thus the brand satisfies the Hankinson and Cowkingdefinition referred to. Consistency in all forms of packaging and promotion is an important aspect of maintaining a clear and distinctive personality, if consumer confusion is to be avoided.51

Arnold, p. 27.


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It is submitted that one of the reasons why the Marlboro brand is strong and successful is because the brand does not depend entirely upon the name or logo as ameans of distinguishing the core product from competing products. Indeed, the w

hole pack together with the advertising is used to support the brand. It encapsulates the essence of the brand, namely, strength and independence. Once a brandhas become established in the marketplace the brand attributes can become powerful symbols evoking the brand personality. Competitors may seek to emulate the brand personality by creating similar new brands of their own, often imitating thephysical brand attributes associated with the successful brands packaging and advertising themes. The Pub Squash case52 is just one example of such case and this will be considered in more detail later in the text. We will consider the position concerning look-alike products where, this time, retailers have tried to emulate the personality of branded products by adopting similar brand names and packaging with a view to attract consumers who might otherwise buy the branded product. In such situations it is important to appreciate that those responsible fo

r imitating brands do not simply use a confusing brand name but also endeavoursto imitate the imagery and personality associated with the established brand, and in particular (as far as this is possible) the association of trust established with the consumer. How this is achieved will be discussed further. BRANDING AND MARKETING Marketing may be said by marketeers to involve a social and managerial position by which individuals and groups obtain what they need and what through creating exchanging products and value with other.53 Traditionally, marketinghas not sought to create needs or wants.54 These are assumed by marketing theory which exist already in our society.55 What classical marketing seeks to do is to identify these consumer needs, and wants, to create products that satisfy those needs and to communicate the availability of products that would satisfy such wants to consumers through effective use of promotional material and product positioning, that is, offering the right value product to meet consumer expectations an

d so satisfy consumer demands.It is a basic assumption in a competitive economy that the consumer benefits from being able to choose among a wide range in quality and price of goods and services. But once a range of alternatives is offered,

Cadbury Schweppes Pty Ltd v. The Pub Squash Co Ltd (1981) RPC 429. Kotler et al., p. 10. 54 A human need is a state of left deprivation. Humans have many complexneeds including the basic physical need for shelter, clothing, food, safety, warmth, social needs of belongings and affection, and personal needs for knowledgeand self-expression. These needs are not invented or created by marketeers; theyare part of human make-up. Human wants can be described in terms of objects that satisfy needs, they can, therefore, be shaped by culture and personality. As society evolves the wants of its members expand. (Kotler et al., p.10.) 55 In Packards, The Hidden Persuaders, Puffin, London, 1960, the author sought to highlight the techniques of persuasion through the unconscious, used by marketing companies in the USA in the 1950s and 1960s. The marketeers referred to were not creating needs as such but rather exploiting, means of promoting the sale of new products.53

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he can choose rationally only if he knows the relevant differences. Acquiring all the appropriate information is in many cases too time-consuming and costly, sorisks have to be taken. This is particularly so over qualities that cannot prop

erly be checked or tested before purchase, but have to be taken on trust. How willing a particular purchaser is to take the risk of buying something unknown inplace of something known will depend on many factors: for instance, how satisfied he is with the known, and how serious the consequences will be for him if theunknown turns out unsatisfactory. It is one thing to experiment with a washing powder, but another with a drug. . . .56

As this writer makes clear, purchasing a new product for the first time involvestaking a risk. To reduce this risk the consumer may rely upon information aboutthe actual product conveyed through advertising material. This material may explain whether the product will be suitable for the purpose the consumer has in mind. The consumer may still be unsure of the suitability of the product (especial

ly if the item is expensive) and may be reassured by the use of a well-known brand name, make or manufacture. The consumer may still be in some doubt as to thesuitability of the product and may look to other using it for reassurance of reliability and quality. As one writer noted57 few people are prepared to trust their own judgement totally in isolation without some reference to what others in the same situation believe. In each case the purchaser will be seeking to reduceor minimise the risk involved in the purchasing decision. At each stage, the marketing of the product can influence the consumers decision-making process whetherit be through the provision of factual information concerning physical characteristics and qualities of the product, through after sales service or product augmentation or from the added values associated with a particular brand communicatedthrough use of particular advertising imagery concerning the social status of cache of the product and its effectiveness.58 The purpose of marketing is to comm

unicate with the consumer about the product to inform, reassure, and persuade the consumer to buy the product. In short, the aim of the marketing function is toreduce the risks taken by the consumer and to promote sales. Where the risks associated with purchasing many branded items, such as everyday consumer goods like food, soap, washing power, etc., may be low, the aim of the marketing functionis to promote continued loyalty to the brand, and no increase in the frequencywith which the brand is purchased. Arnold distinguishes the marketing role fromthat of branding by reference to demand:Branding is . . . inextricably linked with the central principles of marketing.Marketing is about understanding two levels of demand: needs, which define the boundaries and the critical success factors of a market; and wants, the extras which are valued by consumers and are used by them to differentiate between alternative products. Branding is concerned primarily with this second level, where customer perceptions from the basis of the relationship between customer and product.59

Murphy agrees that branding is primarily concerned with differentiation and thatbranding focuses upon the relationship between the product and the consumer, and thus he does not distinguish branding from marketing on the basis that the former is much narrower in scope.56 57 58 59

Cornish, p. 613. D Cowley, Understanding Brands, 1996, p. 27. Jones, p. 30. Arnold, p. 23.


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Branding consists of the development and maintenance of sets of product attributes and values which are appropriate, distinctive, protectable and coherent. Marketing is a broader function which includes branding and concerns the development

and implementation of strategies for moving products from the producer to the consumer in a profitable fashion. Advertising is a narrower function within marketing which is concerned with the use of media to inform

6918384 Trade Marks Advertising and Brand Management

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