Chapter 1: what is a brand and why do brands matter?
1.1 Defining brands
Product-centered definition of brands
e.g. EUIPO
- “An EU trade mark may consist of any signs capable of being represented graphically,
particularly words, including personal names, designs, letters, numerals, the shape of goods
or of their packaging, provided that such signs are capable of distinguishing the goods or
services of one undertaking from those of other undertakings.”
- A trade mark is a sign used to identify goods/ services
- It identifies one seller’s goods or services as distinct form those of other sellers
- A trade mark can be protected by registration (e.g., EU trade mark)
Types of trade marks that can be registered
- Work mark: consists exclusively of words or letters, numerals, other standard typographic
characters or a combination theoref that can be typed e.g. Levi’s
- Figurative mark: trade mark where non-standard characters, stylisation or layout, or a
graphic feature or a colour are used, including marks that consist exclusively of figurative
elements e.g. Adidas
- Figurative mark with letters: combination of verbal and figurative elements
- Shape mark: consists of a three-dimensional shape. It can include containers, packaging, the
product itself or its appearance e.g. Toblerone, coca cola bottle, Ferero, Pringles
- Pattern mark: consists exclusively of a set of elements which are repeated regularly e.g. Louis
Vuitton, Burbery, Gucci
- Colour single mark: a trade mark which consists exclusively of a single colour (without
contours)
you have to file for trade marks. You have to fulfil some characteristics. There is an expiry date,
after a given time you have to extend it
trade marks: requirements
- Distinctive: consumers should be able to recognise your sigh for what it is, for example as an
indication of origin. It should distinguish you from other companies in the marketplace so
that you can protect and build your brand identity and value
- And must not describe what is sold: your trade mark should not monopolise a sign that
merely describes the goods and/ or services that you offer. Such signs should remain
available for everybody: for you and your competitors
Trademark registration gone wrong: my own experience
- In 2021, I wanted to register my initiative eDOCation, a platform that fosters the exchange
between young researchers and companies, as a trademark in Germany
- However, the ‘German Patent and Trade Mark Office’ did not accept the registration as
edocation is too close to education so that people would think it is a misspelling of the latter
word (or would not recognize the difference at all)
1
,What happens if a brand becomes generic?
- Firms might lose the right to use the trademark if consumers employ the brand name as the
product category label. This is called ‘genericide’
= generic and suicide (because the brand has done it themselves)
There is the thing between being a very strong brand that everyone knows and not
becoming genericde
- Examples: Asprin (in the US), escalator, thermos, linoleum, yo-yo, corn flakes, Walkman (in
Austria)
- Ways to protect the brand against genericide
Emphasizing trade mark status (by using the label t.m. + distinction between the
product and the brand)
Use category advertising
Types of trademark threats
- Brand misappropriation: unauthorized use of an identical brand name or brand elements on
products/ services in the same category to falsely claim affiliation with that brand or
capitalize on its equity 38.7%
- Counterfeiting: the practice of manufacturing, importing/ exporting, distributing, selling or
otherwise dealing in goods… under a trademark that is identical to or indistinguishable from
a registered trademark, without the approval or oversight of the registered trademark owner
31.1%
- Brand imitation (copy cats): using a confusingly similar brand name, package (trade dress),
logo, or slogan on a product or service in the same industry 17%
(confusing, was it now fedex or jetex? brand owner wants to confuse the consumer. Jetex
wants to appear as if they were Fedex. Similar to brand misappropriation but there they
want to benefit of the strong brand of Harley and the appropriation people have for the
brand)
other threats with low occurrence (< 6%)
- Cross-industry brand misappropriation: same as brand misappropriation but it happens in a
different category. Less severe and problematic for the brand owner
- False advertising: making statements that are false, which suggest that competitive product
is better than original product
- Grey markets: products distributed by a channel which is not identified by trade mark owner,
owner is not aware of it
- Cross-industry imitation: same as brand imitation but is used in a different category
Customer-centered definitions of brands
- The associations that consumers have with something that can be managed professionally
(e.g., a product, service, person, name, term, design, symbol, or any other feature)
- A brand resides in consumers’ minds (what they have heard and learned about it) and hearts
(what they feel, your emotions)
- Brand identify the products/ services of one seller and
- Differentiate them from products/ services of competitors
2
,So, does this mean that everything can be branded?
- Not only consumer businesses but also business to business
- You can brand regions, countries, universities (kul), entertainment products (Harry Potter,
James Bond), sport brands (fc Barcelona), personal brands (use their fame to become a
brand, also people can become brands)
Brands versus products
- Product: anything that can be offered to a market and that satisfies a certain need (very
functional, possible that there exists no brand at all)
- Brand: creates competitive advantage by differentiating a product from competing products
that satisfy the same need
- The added value that the rand endows to a product based on past marketing activities for
that brand
- Competitive advantage can be related to product performance (taste better than other
bananas) or to non-product-related means (i.e., image associations surrounding the product
that have nothing to do with functional, superiority you receive consuming the product)
Brands influence consumers’ perceptions and preferences
the brand placebo effect
- Same placebo effect you have in medicine with a pill
- You think you feel better, you imagine
3
, 1.2 Brand functions
Overview of consumer benefits
- Reduction of consumption risk
Assessing product quality in advance is error-prone if experience and credence
qualities are involved, which results in consumption risk
o Experience qualities: you can only evaluate if you have tried out the
product e.g. you go to restaurant
o Credence: you cannot evaluate it even if you have experienced the
product e.g. you go the doctor and after doctor visit you don’t know
what doctor told you has helped you or not
brands are important if there are such qualities involved
o Consumption risk = running the risk of making a mistake if you are buying the
product
use the brand to not make a mistake. Especially the case with expensive
products e.g. cars (you don’t want to make a mistake, e.g. not buying a car
that is not safe)
Brands can function as proxies of product quality and thus reduce the risk (e.g.
Mercedes, Audi)
- Reduction of search costs
Considering all consumption alternatives for a specific need causes prohibitive search
costs for consumers
Brands can provide guidance and thus reduce the set of alternative considered
relevant, which limits search costs
e.g. you go shopping and there are so many yoghurt products, which one to buy?? You
might opt to buy the one with the strongest brand you don’t have to go through the
hassle of looking at the ingredients of all the products
Especially the case with assurances. It takes much time to evaluate all the different
assurances you might use the brand that you know to limit these search costs
- Serving as a symbolic device
Brands can represent intrinsic or extrinsic values (e.g. self-expression or prestige)
Brands help consumer to communicate their self-concept (the person he or she is or
would like to be, i.e. acutal or ideal self) and differentiate themselves from other
people
Often done with luxury products. They buy them to demonstrate that they are wealthy,
that they have a certain status
Overview of brand functions for companies
4
1.1 Defining brands
Product-centered definition of brands
e.g. EUIPO
- “An EU trade mark may consist of any signs capable of being represented graphically,
particularly words, including personal names, designs, letters, numerals, the shape of goods
or of their packaging, provided that such signs are capable of distinguishing the goods or
services of one undertaking from those of other undertakings.”
- A trade mark is a sign used to identify goods/ services
- It identifies one seller’s goods or services as distinct form those of other sellers
- A trade mark can be protected by registration (e.g., EU trade mark)
Types of trade marks that can be registered
- Work mark: consists exclusively of words or letters, numerals, other standard typographic
characters or a combination theoref that can be typed e.g. Levi’s
- Figurative mark: trade mark where non-standard characters, stylisation or layout, or a
graphic feature or a colour are used, including marks that consist exclusively of figurative
elements e.g. Adidas
- Figurative mark with letters: combination of verbal and figurative elements
- Shape mark: consists of a three-dimensional shape. It can include containers, packaging, the
product itself or its appearance e.g. Toblerone, coca cola bottle, Ferero, Pringles
- Pattern mark: consists exclusively of a set of elements which are repeated regularly e.g. Louis
Vuitton, Burbery, Gucci
- Colour single mark: a trade mark which consists exclusively of a single colour (without
contours)
you have to file for trade marks. You have to fulfil some characteristics. There is an expiry date,
after a given time you have to extend it
trade marks: requirements
- Distinctive: consumers should be able to recognise your sigh for what it is, for example as an
indication of origin. It should distinguish you from other companies in the marketplace so
that you can protect and build your brand identity and value
- And must not describe what is sold: your trade mark should not monopolise a sign that
merely describes the goods and/ or services that you offer. Such signs should remain
available for everybody: for you and your competitors
Trademark registration gone wrong: my own experience
- In 2021, I wanted to register my initiative eDOCation, a platform that fosters the exchange
between young researchers and companies, as a trademark in Germany
- However, the ‘German Patent and Trade Mark Office’ did not accept the registration as
edocation is too close to education so that people would think it is a misspelling of the latter
word (or would not recognize the difference at all)
1
,What happens if a brand becomes generic?
- Firms might lose the right to use the trademark if consumers employ the brand name as the
product category label. This is called ‘genericide’
= generic and suicide (because the brand has done it themselves)
There is the thing between being a very strong brand that everyone knows and not
becoming genericde
- Examples: Asprin (in the US), escalator, thermos, linoleum, yo-yo, corn flakes, Walkman (in
Austria)
- Ways to protect the brand against genericide
Emphasizing trade mark status (by using the label t.m. + distinction between the
product and the brand)
Use category advertising
Types of trademark threats
- Brand misappropriation: unauthorized use of an identical brand name or brand elements on
products/ services in the same category to falsely claim affiliation with that brand or
capitalize on its equity 38.7%
- Counterfeiting: the practice of manufacturing, importing/ exporting, distributing, selling or
otherwise dealing in goods… under a trademark that is identical to or indistinguishable from
a registered trademark, without the approval or oversight of the registered trademark owner
31.1%
- Brand imitation (copy cats): using a confusingly similar brand name, package (trade dress),
logo, or slogan on a product or service in the same industry 17%
(confusing, was it now fedex or jetex? brand owner wants to confuse the consumer. Jetex
wants to appear as if they were Fedex. Similar to brand misappropriation but there they
want to benefit of the strong brand of Harley and the appropriation people have for the
brand)
other threats with low occurrence (< 6%)
- Cross-industry brand misappropriation: same as brand misappropriation but it happens in a
different category. Less severe and problematic for the brand owner
- False advertising: making statements that are false, which suggest that competitive product
is better than original product
- Grey markets: products distributed by a channel which is not identified by trade mark owner,
owner is not aware of it
- Cross-industry imitation: same as brand imitation but is used in a different category
Customer-centered definitions of brands
- The associations that consumers have with something that can be managed professionally
(e.g., a product, service, person, name, term, design, symbol, or any other feature)
- A brand resides in consumers’ minds (what they have heard and learned about it) and hearts
(what they feel, your emotions)
- Brand identify the products/ services of one seller and
- Differentiate them from products/ services of competitors
2
,So, does this mean that everything can be branded?
- Not only consumer businesses but also business to business
- You can brand regions, countries, universities (kul), entertainment products (Harry Potter,
James Bond), sport brands (fc Barcelona), personal brands (use their fame to become a
brand, also people can become brands)
Brands versus products
- Product: anything that can be offered to a market and that satisfies a certain need (very
functional, possible that there exists no brand at all)
- Brand: creates competitive advantage by differentiating a product from competing products
that satisfy the same need
- The added value that the rand endows to a product based on past marketing activities for
that brand
- Competitive advantage can be related to product performance (taste better than other
bananas) or to non-product-related means (i.e., image associations surrounding the product
that have nothing to do with functional, superiority you receive consuming the product)
Brands influence consumers’ perceptions and preferences
the brand placebo effect
- Same placebo effect you have in medicine with a pill
- You think you feel better, you imagine
3
, 1.2 Brand functions
Overview of consumer benefits
- Reduction of consumption risk
Assessing product quality in advance is error-prone if experience and credence
qualities are involved, which results in consumption risk
o Experience qualities: you can only evaluate if you have tried out the
product e.g. you go to restaurant
o Credence: you cannot evaluate it even if you have experienced the
product e.g. you go the doctor and after doctor visit you don’t know
what doctor told you has helped you or not
brands are important if there are such qualities involved
o Consumption risk = running the risk of making a mistake if you are buying the
product
use the brand to not make a mistake. Especially the case with expensive
products e.g. cars (you don’t want to make a mistake, e.g. not buying a car
that is not safe)
Brands can function as proxies of product quality and thus reduce the risk (e.g.
Mercedes, Audi)
- Reduction of search costs
Considering all consumption alternatives for a specific need causes prohibitive search
costs for consumers
Brands can provide guidance and thus reduce the set of alternative considered
relevant, which limits search costs
e.g. you go shopping and there are so many yoghurt products, which one to buy?? You
might opt to buy the one with the strongest brand you don’t have to go through the
hassle of looking at the ingredients of all the products
Especially the case with assurances. It takes much time to evaluate all the different
assurances you might use the brand that you know to limit these search costs
- Serving as a symbolic device
Brands can represent intrinsic or extrinsic values (e.g. self-expression or prestige)
Brands help consumer to communicate their self-concept (the person he or she is or
would like to be, i.e. acutal or ideal self) and differentiate themselves from other
people
Often done with luxury products. They buy them to demonstrate that they are wealthy,
that they have a certain status
Overview of brand functions for companies
4
