17_1835_Trademarks Advt and Brand Mgt Chap 1

8/6/2019 17_1835_Trademarks Advt and Brand Mgt Chap 1

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CHAPTER1

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 is derived fromthe word brandr, a word used by early Norse tribesmen meaning to burn, as in branding livestockto declare ownership. Ancient people around the world used marks to identify and classify objects

for some of the same reasons that motivate the use of trademarks today. Although protectingtrademarks is a relatively recent legal development, trademark precursors predate written historyand even writing itself.

The first marks generally protected personal property from the 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 Protection2

the owner of the marked animals. Cave paintings in south-western Europe from the Stone Ageand Early Bronze Age depict branded cattle, as do Egyptian wall paintings and tombstones datingback 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 heraldicdevices are other types of ownership and identification marks that might be traced back to this age-old practice.1

In the Indian context, this steatite sculpture popularly known as the Priest King is one of theearliest 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 wouldhave been somewhat realistic in appearance. The robe may have been navy or green with trefoilpatterns filled with red pigment with white borders. The back of the head was flattened, possibly inorder to affix a horned headdress as a symbol of sacred authority (Plate 1.1).

PLATE 1.2: Carved Seals of the Indus Civilisation

1 J Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, 2001; Mollerup, Marks of

Excellence: The History and Taxonomy of Trademarks, 1997; Preserving History: Trademark Timeline,

82 Trademark Rep. 1021 (1992); Peter Wilbur, International Trademark Design: A Handbook of Marks of

Identity, 1979; Sidney A. Diamond, The Historical Development of Trademarks, 65 Trademark

Rep. 265, 1975.

The intricately carved seals of the Indus Civilisation were probably used in trade. Typicallysquare with each side measuring from two to five centimetres, the obverse of most seals was

engraved with mythical scenes or animals and an average of five Indus script signs. The squareseals also had a small boss on the back through which a string or a cord had been passed, allowingthem to be worn or otherwise secured. While the Indus script remains undeciphered, approximately400 signs have been identified so far in what was probably a logo-syllabic writing system in whichthe signs were read from right to left (Plates 1.2 and 1.3).


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The Structure of a Brand 3

QUALITY ASSURANCE: THE FIRST SIGNS

However, branding was by no means the only trademark forerunner prevalent in Egypt or the restof the ancient world. Quarry marks and stonecutters signs have been discovered on materials usedin Egyptian buildings as much as 6,000 years ago. These marks and similar markings on ancientbuildings in Greece, Israel, Syria, and Turkey seem to have more closely resembled moderntrademarks in terms of their function. Quarry marks indicated the source of the stones used inbuildings, 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, trademarksproliferated in several ancient civilisations. Some items continued to bear marks with a more personalor historical rather than strictly commercial significance. Bricks and tiles from Mesopotamia andEgypt bore inscriptions indicating the name of the monarch who had commissioned the structure orwho held power during the time of its construction. In contrast, Roman builders stamped theirbricks 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 with the rise of guilds in Europe and Japan. Members of industry-

specific guilds were required to use a prescribed production mark, both to assist in fixingresponsibility for poor-quality merchandise and to help the guilds in enforcing territorial tradeboundaries. State-sanctioned monopolies also performed quality-assurance functions; in fact, the

marking systems they developed often outlasted the monopolies themselves. The hallmarks usedby 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.

Source: 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.

PLATE 1.3: Seals of the Indian Valley Civilisation


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ORIGINS

Similarly, indicating the origin of manufactured goods took on an expanded importance as tradeincreased and purchasers were less and less likely to interact with the artisans who had made the

things they bought. A source mark imprinted on the object itself helped consumers to remember themakers of goods that had previously proven satisfactory. Pottery was one of the first products to bemarked in this fashion. Chinese, Indian, Greek, and Roman pottery often bore the mark of the

potter who had made the piece, as well as marks conveying the same sort of information aboutownership, source of materials, and historical period that was stamped on other items produced inthese cultures.

Some of the earliest examples of marked pottery appeared in China 4,0005,000 years ago.Marks placed on Greek vases could denote not only the makers of the pieces but also the merchantwho 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 centuriesof 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 DEATHOFA MARK

One brand name that seemed to commonly appear on a very ordinary type of clay oil lamp, duringthe first three centuries of the Roman Empire, was the FORTIS. Lamps bearing this mark weredispersed 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 trademarkpractice. The success of this particular brand name could suggest that the producer of these lampshad an extensive distribution system or opened workshops in many different regions. On the otherhand, the spread of the name could have been due to widespread copying and counterfeiting by

producers seeking to capitalise on the goodwill built up by a successful manufacturer. Finally, thesheer number of artefacts bearing this name could mean that the FORTIS mark became a genericterm for this kind of lamp illustrating that the problems confronting todays trademark ownersare as old as trademarks themselves.

The Nature of a Brand

The phenomenal growth in the wealth and cultural influence of multinational corporations over thepast 20 years can arguably be attributed to the development of the modern concept of branding.Indeed, branding has become an integral part of business today across a wide range of industrysectors 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 brandswhereas lawyers tend to refer to trademarks but what is the difference? Is a brand the same as atrademark? 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 anothername or is there more to it than mere semantics? Is a brand a new phenomenon or is it simply anew name applied to an existing concept?


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This chapter seeks to explore questions such as these in greater detail for the benefit of thelegal community. Relying upon traditional marketing theory the chapter begins with a brief analysisof what is meant by the term product before moving on to consider what constitutes a brand.

From this discussion the formulation of a number of propositions follow concerning the nature andfunction of a brand and its distinction from trademarks and products. To understand how and whybrands evolved to the point of being revered icons of the modern age and as significant financialassets in their own right we will look very briefly at the historical development of the consumersociety during the past 100 years. We will see that brands are recent phenomena whose roots can

be traced back to the end of the 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 thecommercial significance of certain issues relating to brands can be appreciated and to define theterminology central to an understanding of the issues of what constitutes a brand and how brandscan be protected by means of Intellectual Property (IP) laws. The principle question with which

this book is concerned is whether a brand today is comprehensively protected by law from imitation,and if not, whether protection should be extended, and if so, how.

The Constitution of a Product

We begin our analysis of what constitutes a brand by considering what a product is. It is importantto clarify what we mean by the term product because the two words, brand and product, aresometimes used interchangeably as if there is no distinction between them. In this book it is importantto appreciate that the terms are not considered to be synonymous. On the contrary, as well be seen

below, an important distinction can, and should, be drawn between them.A leading marketing textbook defines a product2 as anything that is offered to a market for

attention, acquisition, use or consumption and that might satisfy a want or need. Products includemore than just tangible goods. Broadly, defined products include physical objects, services, persons,places, organisations, ideas and mixtures of these 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 ofa product will be limited to physical objects as opposed to intangible services, organisations orideas. Such products can be considered as comprising three distinct levels which are shown in

Figure 1.1.3 At the most basic level is what is known as the core product or what might bedescribed as the product concept, the basic idea behind the product and in relation to which theremay be different ways of implementation. This is the heart of the product and can be identified byasking the question, what is the consumer actually buying? From a consumer perspective the questionmight be considered as, what is the core benefit of buying the product? By way of illustration, thecore product in relation to say a Philishave electric razor is an electric razor incorporating aflexible bead. From a consumer perspective, the core benefit could be described as a quick, close,comfortable shave.

2 Kotler et al., p. 516.3 Ibid.


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The second level of a product can be described as the actual product. This includes thepackaging, 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 combinedwith these additional elements to create 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. Inaddition to the actual product the manufacturer may provide additional customer services such asan after sales service, guarantee product insurance, a helpline and so on. To return to the exampleof the Philishave razor, these intangible benefits aim to provide the consumer with a completemeans of obtaining a quick, close, comfortable shave, consistently. Whereas the core product isessentially 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 actuallybuying, in another sense, when a consumer buys a product such as an electric shaver from adepartment 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 asaspects of the augmented product can vary. For example, if the product is purchased from a marketstall, 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 thatdifferent actual products may provide the same core benefit and to distinguish between the

CoreBenef i t

Feature

Design

COREPRODUCT

AUGMENTEDPRODUCT

ACTUALPRODUCT

Warranty

GuaranteeInstallation

Credi t

Quality

BrandName

Del iveryPackaging

AfterSales Service

FIGURE 1.1: Levels of a Product

Source: Kotler, Armstrong, Saunders and Wong, Principles of Marketing, 1999, p. 516.


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manufacturers view of the product and the consumers perspective of what he/she is buying.4 Aswe will see the role of marketing is to present the actual product in terms of the core benefits thatconsumers seek. Although the core product may be the result of consumer responses to market

research, once the actual product has been launched and promoted through advertising it is possiblethat the core benefit may change. Consumers may attach particular significance to the actual productas a result of societal values attributed to the product associated with ownership. For example, aFilofax personal organiser may offer the core benefit of a more organised way of life but consumersmay regard the core benefit as a status symbol, either because the advertising used to promote the

actual product positions 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.

For the purposes of this book we will need to refer on occasions to the actual product withoutthe brand name, logo or any packaging and we will therefore refer to this as the nakedproduct. References to the term product in the remainder of the book will be to articles in ageneral sense.5

WHATISA BRAND?

According to Rita Clifton, CEO of Interbrand Newell and Sorrell a leading specialist brandconsultancy firm a brand is: a mixture of tangible and intangible attributed, symbolised in atrademark, which, if properly managed, creates influence and generates value.6

This definition truly captures the essence of a brand, and highlights the importance of brandmanagement. Branding is about creating value, both for customers, and for the company. Thisvalue stems from the products and services that companies create and bring to the market, but

extends further to encompass added values derived from factors such as the brand-customerrelationship, 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 ofexpectation, and a promise. It is a companys promise to consistently deliver a specific set offeatures, benefits, and services to customers.

Brands are richly endowed entities. They start life as ideas, making their way into planning andstrategy documents, yet ultimately reside as consumer perceptions. For some companies, brandsare their most valuable asset. The space a brand occupies inside a customers head can create amental patent, which grows out of the cumulative memory and the experiences customers have of

products or services. As such, brand-building is about creating value through the provision of acompelling and consistent customer experience that satisfies customers and keeps them comingback.

4 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 personal organiser.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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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 immediatelytransmits 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 atmosphereof community13 and by the sheer excellence of its conjured image inspires others to reach higher

FIGURE 1.2: A Brand is more than a Product or Service

Source: Adapted from David Aaker, Building Strong Brands, 1996, p. 74.

07 Larry Light, Address at the International Trademark Association Annual Meeting, 1 May 2000.08 Shirley Young, Brand Equity, Executive Speaker, 10 December 1989, When you become familiar

with a brand, like a person, it becomes an old friend. It is 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 Erich Joachimsthaler, Brand Leadership, 2000, pp. 48-49.12 Lynn B Upshaw and Earl L 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 help them communicate that definition to others.

Keller, supra note 3 at 8, paraphrasing Daniel Boorstein.

Organisat ionalAssociat ions

Scope

Attributes

Quality

Uses

BrandPersonal i ty

Symbols

EmotionalBenefits

Brand-CustomerRelat ionshipsSelf-Expressive

Benefits

UserImagery

Countryof Origin

Product or Service

Brand


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levels.14 A perfect brand is a holistic experience in which the sum exceeds individual values 15 andas a corollary, a perfect brand is instantly recalled by all who matter, 16 is the quintessence ofauthenticity,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 identifyingthe characteristics of a brand, preferring instead to focus upon some of the effects that successfulbranding can engender. For example the authors of one marketing book19 described a brand as:. . . a product or service made distinctive by its positioning relative to the competition and by itspersonality.

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 distinctiveas 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 ofa trademark, which source identification and differentiation as the two key objectives. At the otherextreme, brands are defined in terms of intangible values primarily directed at the relationshipbetween the consumer and the manufacturer. In part this diversity of opinion as to what constitutesa brand can be explained in terms of the evolution of the brand concept. Thus, more establisheddefinitions, tend to be based more on the physical attributed associated with a brand, whereas the

definitions used by more contemporary writers emphasise intangible values. In order to demonstratethis change in approach we will now look at a number of definitions of a brand, with a view to dis-

tilling a working definition that can be used throughout this book to evaluate what level of protectionis currently afforded to branded 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 whichdescribes a brand21 as: A name, term, sign, symbol, or design, or combination of these, intended toidentify the goods or services of one seller or group of sellers and to differentiate them from thoseof competitors.

14 Jerre B Swann, Sr., David A Aaker, and Matt Reback, Trademarks and Marketing, 91 TMR 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 and Cowking, Branding in Action, 1993, p. 1.20 See Nilson, Value Added Marketing, 1992, p. 19.21 Kotler et al., p. 517.


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Of the marketing definitions this is the closet to the legal definition of a trademark as set out insection 6 of the Trade Marks Act 1999 which states trademark has the meaning given bysection 17.

Section 17 states What is a trademark? A trademark is a sign used, or intended to be used, todistinguish goods or services dealt with or provided in the course of trade by a person from goodsor 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 to be 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 can lie in the name, symbol, logo or packaging ofthe brand. According to Aaker, the requirement of distinctiveness serves two purposes, first, it actsas a means of 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 one provider from those of a

competitor (i.e. a differentiation function). Indeed Aaker goes on to state that the brand is the onlydistinguishing element between two otherwise identical articles, thus emphasising the function ofdifferentiation. 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 be termed the inputperspective, that is, from the perspective of brands as manufacturers creations. Equally, bothdefinitions take account of the legal role fulfilled by a trademark.

By way of contrast, John Murphy, the founder of Interbrand, a consultancy working exclusivelyin the field of branding, has sought to explain what constitutes a brand in terms of both themanufactures input and the consumers output perspectives23:

. . . the ways in which branded products or services are distinguished from one another 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 increasinglysubtle, 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 mix of 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 actualproduct); in his view it includes a mix of values both tangible and intangible. Indeed, he goes onto identify the components of a brand as comprising24: . . . the product itself, the packaging, thebrand name, the promotion, the advertising and the overall presentation. The brand is, therefore,

the synthesis of all these elements, physical, aesthetic, rational, and emotional.

22 David Aaker, Managing Brand Equity, 1991, p. 7.23 Murphy (ed.), Branding: A Key Marketing Tool, 1987, p. 1.24 Ibid., p. 3.


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Murphys definition is thus much wider than Aakers or even that expressed by Hankinson andCowking because he suggests that it is more than the physical embodiment of the name, logo orpackaging (which in themselves form part of the actual product). Murphy argues that the brand

also, somehow, encompasses the marketing and promotional activity and the overall presentationthat 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 cannot be explained by the weight of their advertising or someinherent 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 by the consumer. (Emphasis added)

Thus, there is according to both Murphy and Arnold, something over and above the nature of anactual product that a consumer associates with a brand which influences the consumers purchasingdecision. Like the augmented product, a brand is said to comprise both tangible and intangibleelements.

Amber, a marketing academic, describes a brand in simple terms as comprising26

A product plusadded values. . . . A brand is a bundle of functional, economic and psychological benefits for theend user, more simply known as quality, price and image.

This perceived quality or added value as it is sometimes termed, is a nebulous concept. It canbe based upon the packaging style or the appearance of the product, the advertising used, the beliefthat the brand is effective (as in the case of pharmaceutical products), the sort of people who usethe 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 emotionalbrand value, concern for the environment. The importance of these added values leads Arnold to

suggest that28: Branding is about the way people 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 ofTotal Branding, explains

29

: If you think of abrand only as a mark denoting ownership you can slap it on anything and many brand ownersstill do. But this is to use branding in its crudest and simplest form. It is to use branding in thesame 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, by contract, is to understand something whichis absolutely crucial in the successful development of brands today and that brands do not exist, inany 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 emotional or intangible aspects of a

brand to consumers. Nilson30 asserts that in reaching a purchasing decision the consumer is firstand foremost concerned about acquiring a product, and is not concerned about emotional or intangible

25 Arnold, The Handbook of Brand Management, 1993, p. 14.26 Building Brand Relationships, 4 December 1995.27 Jones, Whats in a Name?, p. 30.28 Arnold, p. 20.29 Total Branding by Design, 1994, p. 18.30 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 acquirea product; the brand is there to serve as a means of identifying the manufacturer. The values of thebrand will reflect on the product, but one 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 particularproduct to satisfy a perceived need, buying behaviour is complex and is influenced by many factors. 31

In some circumstances the physical features of a product will be the most important factor forconsumers, but in other situations intangible factors 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. Theextent to which intangible factors help determine the purchasing decision will vary according to thenature of the consumer, the nature of the product, the channels through which the product is marketed,and the level of advertising associated with the product.

Leslie de Chernatony, a marketing academic and frequent 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 interestbecause it confirms the divergence of views as to what is the nature of a brand? Based on an initialreview of literature, de Chernatony identified nine main themes used in defining the concept of abrand. 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 materialquoted above. The idea of a brand changing as part of a natural process, however, is a conceptdeveloped by de Chernatony himself34 in which he sees brands as evolving from a manufacturersinput to a consumers output perspective. In other words, when brands are launched the emphasis

is upon the manufacturers perspective of the brand as a form of legal identification, a logo, etc.,but as a brand develops over time and is promoted by means of extensive advertising, the brand

becomes embed with advertising imagery and positive associations (especially associations of qualityas a result of consumer experience, promotional activity, reputation and so on) such that the emphasismoves towards a consumer perspective of a brand expressed in terms of images, relationships,experience, and added values. De Chernatony, therefore, suggests that the various views whatconstitutes a brand should not be considered as contradictory, but rather as evolutionary. Such anunderstanding is helpful in explaining how established brands have greater symbolic value (andindeed, increased financial value) than new brands, which have not had the benefit of extensive

promotional campaigns or customer experience.

31 Chisnall, Consumer Behaviour, 1995, p. 11.32 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 seminar Berline, 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.


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

Such an analysis is considerably broader than the traditional definition of a brand with which westarted (the AMA definition) but as de Chernatony observes the AMAs perspective of brands aslogos is far less appropriate in todays environment. De Chernatony thus endorses the view that thenature 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 brand to the consumer

but, for the purposes of a legal assessment and analysis his definition is too nebulous to be ofpractical assistance to us, not only in terms of defining a brand but also in deciding how such abrand can and should be legally protected. De Chernatonys definition is also far removed from thenature 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 term which can be objectivelyscrutinised and supported evidentially, not one that is wholly reliant on consumer perceptions.Although the AMA definition would fulfil these criteria it fails to take account of the current roleof intangible factors, such as the images portrayed through advertising, in the overall concept of abrand. Thus, for the purposes of this book we need to find a balance between, the definition of abrand suggested by the AMA and the de Chernatonys definition. Marketeers tend to concur withthe view that brands developed from the legal concept of trademarks which were used primarily toindicate the manufacturing origin of the goods to which the marks were applied. Such trademarkswould include the 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, therefore be accurateto 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 product shape. As Murphy and Arnold point out, with thegrowth of advertising, developments in technology, and the emergence of affluent societies,manufacturers, or rather consumers have tended to place greater emphasis on psychological intangiblefactors in reaching their purchasing decisions rather than rational considerations. Therefore, for thepurposes of this book the brand paradigm will be regarded as comprising a synthesis of thesephysical and aesthetic features and as far as possible the emotional effects. Our definition is thuscloser 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 advertisingand promotional material. In some cases the brand might also symbolise a philosophy with whichthe producer of the brand name has become associated (as in the case of the Body Shop with itsethos 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 brandsthe 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 areflection of the market to which the product is directed or a lack of advertising and promotionalsupport. 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 valuesassociated 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. Not all products may beregarded as brands. Thus, the terms brand used in subsequent chapters should be understood torefer to this broader concept of an actual products together with the intangible elements that are

associated with it.As de Chernatony concludes brands exist because they are of value to consumers. . . . Brandsact as shorthand, in consumers minds, of the set of functional and emotional associations of trust,so that they do not have to think much about their purchase decisions.

The more complex product, the greater reliance consumers appear to place on the symbolic

value of security, value afforded by an established brand name. In this way brands (especially thevocal 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 shorthandreference that sums up the consumers perception not just of the augmented product of which thebrand name is part but also what the business responsible for that name stands for, especially if thebrand name is the corporate name.

One implication of this understanding of brands as a shorthand in consumers minds, is that if anew brand can successfully imitate an established brand, such that the consumer associates the setof functional and emotional values of trust, originally created in connection with the establishedbrand, with the new brand, then it can be seen that the new brand will obtain a significant advantageat the cost of the established brand, whose sales will be diminished as a consequence.35 The nextchapter analyses how the various elements of a brand may be protected against such imitationunder the existing framework of IP laws, and in subsequent chapters we will consider the effectivenessof such protection. Before turning to consider these issues, however, we first need to consider thenature of a brand and the distinction between marketing and branding, and also to consider briefly

the evolution of brands.

THE NATUREOF BRANDS

Brands are made up of many layers and dimensions. In this introductory chapter, these layers areunravelled to reveal the nature of brands and their reason for existence. The chapter proceeds todescribe the influence of brands on the buying process, and the importance of customer satisfactionand brand loyalty. The concept of brand equity is outlined, explaining the value of brands, both tocustomers, 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 a term 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 tosimply as branding. In aggregating the three elements into one buzzword, the subtitles have beenlost.

Good branding strategies address each of the three elements. A brands personality should bedefined only once. Every move the company makes should be consistent with that personality. And

35 This assumes that the second comer passes on to the consumer the benefit of the cost saving achieved

by free riding on the back of the established brand. This point is discussed further in Chapter 8.


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its hard, if not impossible, to change a brands personality. A brands strategy can change, thoughnot very often. Its the execution of the brand strategy that changes over and over. For example,each piece of communication is an execution of the 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 customerperceptions: differentiation, relevancy, esteem, and knowledge. The first aspect of a brands success

is its ability to differentiate. It seems that new brands ought to be different: Snapple, Yahoo! andStarbucks all entered the market with brands that scored high on the differentiation scale.

Even as brands mature, they need to adequately differentiate themselves from the competition.The Young and Rubicam Brand Asset Valuator claims to be able to predict a brands decline basedon low differentiation scores.

The Common Thread

A brand needs a common thread that weaves it together. For IBM its the blue frame of TV andprint ads. For Gatorade its the association with sports, for Absolut vodka its the shape of thebottle.

THE LAYERSOFA 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 the most basic level, customers buy products to meet certain functional needs. However, mostproducts and services cannot survive on functionality alone as this is usually matched in time. Themost 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 themfrom those of competitors.36 Essentially, this should support the offerings performance anddifferentiate the brand from those of competitors.

The Augmented Brand

Successful companies seek a competitive edge through the enlargement of the core product or

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


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service, with supplementary products and services (e.g. information, quick delivery) that enhancethe customers total purchasing and use experience. These products and service add value andmake 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 of branding becausethey are the most prevalent, and because they most readily come to mind when consumers areasked to recall brands.

FIGURE 1.3: Layers of a Brand

Source: Adapted from Levitt, Marketing success through differentiation of anything, Harvard Business

Review, JanuaryFebruary, 1980, p. 86.

Quality

P R O D U C TO R

SERVICE

BASICBRAND

AUGMENTEDBRAND

POTENTIALBRAND

Features

Credi tand

Terms

Guarantees

Packaging

Del iveryand

Installation

Design

Name

Service

Core Produ ct or ServiceBasic BrandAugmented BrandPotent ial Brand


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Service brands (intangible) are much less numerous than their product counter parts. Intangibleservices are much less numerous than their product counterparts. Intangible services are also morechallenging to package and sell to consumers who often have difficulty conceptualising, preferring

things they can see and touch. Certain service brands, such as in retailing, actually sell products,but the brand itself is the stores, not the product it sells Westside Stores, Jet Airways, andAmazon.com are examples. In fact, this is the case with all Internet companies, as they essentiallyperform 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 customersunderlying buying behaviour and the buying process. The buying process consists of five stages aselaborated in Figure 1.4:

Need Information Evaluation of Purchase Post-Purchase

Recognition Search Alternatives Decision Behaviour

FIGURE 1.4: Five-Stage Model of the Buying Process

Source: 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 an internal or anexternal stimuli (advertisements). Once aroused, a consumer will be inclined to search for moreinformation, either through heightened attention or through an active information search. Throughgathering information, the consumer learns about competing brands, and evaluates them in termsof the degree to which their benefits and bundle of attributes satisfy their needs. Consumers differas to which product/service attributes they see as important, and pay the most attention to the

brands that will deliver the sought benefits. Therefore, it is critical to understand what attributesconsumers value.

Consumers develop a set of brand beliefs about the attributes of competing brands. These brandbeliefs make up the brand image. These beliefs depend on their previous experiences with thebrand, and the effect to selective perception, selective distortion, and selective retention. In theevaluation stage, the consumer forms preference among brands and may form a purchase intentionto buy the brand they prefer. However, two factors can intervene between the purchase intentionand 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 influencethe consumers purchase intent or vice versa. A consumers decision to modify, postpone, or avoida purchase decision is heavily influence by perceived risk. Expensive purchases involve some risk

taking. A consumer tries to deal with this by gathering information from friends, and a preferencefor recognised brands they can trust.

After a consumer has actually purchased the product or service, they will evaluate their level ofsatisfaction the customer will be highly satisfied, somewhat satisfied, or dissatisfied with thepurchase decision. Satisfaction depends on how closely the brands perceived performance matchesthe customers expectations. If perceived performance and quality exceed their expectations then


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they are satisfied, even delighted. If performance falls below their expectations, they will bedissatisfied, and look for alternative brands in the future.

Customers expectations are particularly important when dealing with services, and especiallyimportant when dealing with purchases made through the Internet, as these 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, andcommunication.

The level of customer satisfaction will influence whether they will buy the brand again and talkfavourably or unfavourably about it to others. Highly satisfied and loyal customers tend to movedirectly from the need recognition stage to the purchase decision, locking out potential competitors.Customer satisfaction and loyalty are 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 ofthe satisfaction scale tend to have intense feelings about a brand and its products/services. Thecustomers at the bottom end of the scale are terrorists those who actively attack the brandtelling others not to buy from the company. At the opposite end of the satisfaction spectrum areapostles customers who are satisfied and loyal, and talk favourably about the brand(Figure 1.6).

Loyalty is derived when customers are continuously satisfied over time. This satisfactionencompasses the whole experience and not just a companys products or service. Customers that

are passionately or emotionally loyal are those that have built trust in a company, and believe thatit will always act in their best interest. Trust is critical for a brands success. Some traditionalcompanies identified as having established a strong trust relationship with their customers which

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

Attributes ofOthers

(Word of Mouth)

UnexpectedSituational

Factors

Evaluat ionof

Alternatives

PurchaseIntention

PurchaseDecision

FIGURE 1.5: Steps between Evaluation Alternatives and Purchase Decision

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

p. 194.


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include: Disney, Federal Express, Hewlett-Packard, Johnson & Johnson, Saturn, SouthwestAirlines, 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 premium prices 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 main ways. Firstly, emotional

loyalty is born out of a consumers personal relationship with a brand. This relationship can actuallystart through the satisfaction of a 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 Cokeconsumers felt betrayed when Coca-Cola decided to change their formula in 1985.

38 Hart, and Johnson, Growing the Trust Relationship, Marketing Management Journal, Spring 1999.39 Peppers, and Rogers, The One to One Future.

CompletelyDissatisfied

CompletelySatisfied

Highly Competitive Zone

Commodity

Consumer Indifference

Many Substitutes

Low Switching Costs

Non Competitive Zone

Regulated

Proprietary Technology

Few Substitutes

High Switching Costs

Low

HighHostages Apestles

Terrorists Mercenaries

FIGURE 1.6: The Satisfaction-Loyalty Relationship and the Impact of Competitive Environment

Source: Jones and Sasser, Why Satisfied Customers Defect, Harvard Business Review, Nov.Dec. 1995,p. 91.


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Emotional loyalty can be also created through the formation of a strong user community aroundthe brand. The consumer reaches emotional loyalty when membership in the brands user communitybecomes an end in itself. In this way, the brand becomes a link for people for whom fulfilling

similar aspirations is a major life theme (e.g. Harley-Davidson motorcycle clubs). There is alsoclear 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) andFortunecity.com. Some established brands are successfully developing online communities aroundthem such asDisney 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-waycommitment with the brand, which goes well beyond the satisfaction of a specific end.

FIGURE 1.7: Creating Emotional Loyalty

Source: Fournier, S., Consumers and Their Brands: Developing Relationship Theory in Consumer

Research, Journal of Consumer Research, March 1988, pp. 34373.

Satisfying customers and building loyalty (creating apostles) is the ultimate objective behindbuilding a brand, and understanding the needs and buying process of the 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 Brand Brand

Brand Awareness Acceptability Preference Loyalty

FIGURE 1.8: Brand Progression

At one extreme, there are brands that are unknown by most buyers. Some brands have a fairlyhigh degree of brand awareness (measured by brand recall and recognition). Beyond this, there arebrands that customers perceive as acceptable and would not resist buying. A stronger brand enjoys

40 McWilliam, Building Stronger Brands through Online Communities, Sloan Management Review,

Spring 2000.

Congruencewith

Li fe Themes

Accompl ishmentof Life

Projects

Resolut iono f

Current Concern

Personal

Relationship withthe Brand

UserCommuni ty

BrandSpecification

EmotionalLoyal ty

Comm uni ty asan E nd in I tsel f


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a high degree of brand preference. However, a power brand tends to have a high degree of brandloyalty, whereby customers would be unwilling to substitute it with competitors offers.

A strong brand is said to have high brand equity, which is the 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 aproduct or service.41

The major brand assets are brand loyalty, brand awareness, perceived quality, strong brandassociations, and other assets such as patents, trademarks, and relationships with distributors and

strategic partners. The benefits of each are outlined in Figure 1.9.

FIGURE 1.9: Brand Equity

Source: David Aaker, Managing Brand Equity: Capitalising on the Value of a Brand Name, 1991.

41 Aaker, Managing Brand Equity: Capitalising on the Value of a Brand Name, Free Press, New York,

1991.42 Kapferer, Strategic Brand Management, 1992.

Brand Loyalty

Brand Awareness

Perceived Quality

Brand Associations

Other ProprietaryBrand Assets

Reduced marketing costs Trade average Attracting new customer

Create awarenessResemblances

Time to respond to

competitive threats Anchor to which other

associations can beattached

Familiarity/linking Signal of substance

commitment Brand to be considered

Reason to buy Differentiate/position Price Channel member Exceptions

Help process/retrieveinformation Reason-to-buy Create positive attitude/

feeling Extensions

Competitive Advantage

Provides value to the customer by enhancing:

Interpretation and processing of information Confidence and trust in the purchase dicision User satisfaction

Provides values to the firm by enhancing: Efficiency and effectiveness of marketing programs Brand loyalty

Prices/margins Brand extensions Trade leverage Competitive advantage

}}

THE VALUEOF BRANDSTO CUSTOMERS

According to Jean-Noel Kapferer (1992),42 brands perform several functions that add value andcustomer benefits:


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Identification To be clearly seen, to make sense of the offer, to quickly identify sought afterproducts.

Practically To save time and energy through identical repurchasing and loyalty.

Guarantee To be sure of finding the same quality no matter where or when you buy the productor service. Opinion To be sure of buying the 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 its relationship with

society.

THE VALUEOF BRANDSTO COMPANIES

Brands create value for companies, in the following ways:

Brands, Market Share and Profits Typically a brand leader obtains twice the market share ofthe number two 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 volumeleads to economies of scale in development, production and marketing, and premium pricingincreases revenue.

The Value of Niche Brands Dominating a niche market is usually more profitable than beingfifth in a large market.

Brand Loyalty and Beliefs Strong brands are more attractive to investors. Brand loyalty alsoreduces marketing 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, brand leaders can exploit their superiority in the market (e.g. Coca-Cola the realthing).

Avenues for Growth The product life cycle applies to products, not brands. Companies canmaintain a brand while modifying the underlying product to account for new technology, fashionor 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 howaccurate 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 consistentoffering and customer experience that will satisfy customers and keep them coming back. When acompany creates this type of customer preference 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 andprovides the basis for future growth.The next chapter describes the process of how brands are built, the tools that are used, and the

characteristic of successful brands.

BUILDING BRANDS

Building a strong brand is a complex task. This chapter spells out the traditional brand-buildingprocess, highlighting important factors that contribute to the success of each step along the way.The major characteristics of successful brands are also reviewed.

Overview of the Brand-building Process

The 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 developedproperly, it should provide a satisfactory experience and lead to a willingness to buy again. Toentice trial and repeat purchase requires triggering mechanisms, which are created through advertising,promotion, selling, public relations, and direct marketing. The company needs to communicate thevalues 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 potentialcustomer would find compelling and interesting. In order to do this, a company must develop astrong understanding of who their potential customers are, what they value and how the productsor devices should be optimised or configured to deliver this value. The value proposition must becontinuously re-evaluated to respond to changes in the marketplace (Figure 1.10).

FIGURE 1.10: Defining the Value Proposition

Who is your

customer?

What is the

optimal productor service

offering that

delivers thisvalue?

What does yourcustomer

value?


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Central to this value proposition, a brand must deliver a quality product or service that meets thefunctional needs of customers and differentiates itself from competitors. It should seek to augmentits basic appeal with added value through the provision of additional products or services to delight

customers. In this way, the brand can elicit feelings of confidence that it is of higher quality thancompetitors. As such, a compelling value proposition is the combination of an effective product orservice (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 agood product or service, it is impossible to build a successful brand. Similarly, unless differentiationand 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 values, which are additional to those based upon real performance. The large

number of decision, the pace of technical change, the number of competing alternatives, and thelarge variety of advertising and selling messages, mean that buyers look for short cuts. Reputablebrand names provide confidence and allow customers to cut through the risks and complexity ofchoice.

Added values also occur when brands are bought for emotional reasons to satisfy other needsbesides functional needs. People use brands to express their lifestyles, interests, values or wealth.Customers chose brands, which they perceive as meeting their needs. In todays affluent 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 about satisfying basic physical and economic needs.44 Brand valuesderive from five major sources.45

Experience of Use If a brand provides good service over time, it acquires added values offamiliarity and proven reliability. User Associations Brands frequently acquire an image from the type of people who are seen

as using them. Advertising and sponsorship are often used to convey images of prestige orsuccess by associating the brand with glamorous personalities.

Belief in Efficacy In many cases, if customers have faith that a brand will work, it is morelikely 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 comparativeevaluations and rankings from consumer associations, industry endorsements, and newspapereditorials.

Brand Appearance The design, layout and appearance of the brand can clearly affect preferenceby offering cues to quality.

Manufacturers Name and Reputation In many situations a strong company name (e.g. Coca-Cola, Gillette, Sony,Hewlett-Packard, Kelloggs) attached to a new product will transfer positiveassociations, providing confidence and incentive to trial.

44 Doyle, Marketing Management and Strategy, 2nd edn., 1998, p. 169.45 Jones, Whats in a 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 brand through its name, features, visual appearance,and advertising. This may be different from the brand image, which depends on how the target

market perceives the brand. A company should seek to differentiate its brand through developing adistinctive identity. Jean-Noel Kapferer (1992) identified three levels of a brand identity46

(Figure 1.11):

FIGURE 1.11: Kapferers Brand Identity Prism

Source: Adapted from Jean-Noel Kapferer, Strategic Brand Management, Free Press, New York, 1992.

46 Kapferer, Strategic Brand Management, 1992.

Rela tionship Cu ltu re

Personal i ty

Sel f - imageReflection

Physique

Picture of Recipient

Picture of Sende r

Ex

ternalisation

In

terna

lisation

The Brand Core The fundamental or genetic code of the brand, which remains fixed overtime.

The Brand Style Articulates the brand core in terms of the culture it conveys, its personality,

and its image or self-projection. The Brand Theme The way the brand communicates through is advertising, press releases,

packaging, etc. Themes include the physical appearance (logo, colour scheme, and visualappearance), 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 culturaldifferences from one country to another. However the brand style and core tend to be less flexible.

The brand prism enables management to understand the brand, its strengths and opportunities. It

also helps in developing the brand strategy and the formulation of a distinctive positioning in themarket. 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 lineand brand extensions. Finally, understanding the brands core and style helps set the perimeters ofbrand extensions how far the brand can be meaningfully stretched to other products and marketsegments.


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Developing the Framework and Communicating the Value Proposition

Once the value proposition is clearly defined, the company must ensure that it develops theappropriate structure, system, strategy (partnerships and alliances) skills, management style culture

and staff needed to support, deliver, and reinforce this value proposition. The value propositionmust then be articulated in terms of the marketing mix often referred to as the 4Ps Productand service features, Price, Promotion, and Place (distribution strategy).

The value proposition must be communicated to entice customers to try the product/service. Ifthe offering is developed properly, it should lead to satisfaction and repurchase. Before potentialcustomers can buy a product/service, they must learn about it. This learning is called the adoptionprocess.47

Awareness Interest Evaluation Trial Adoption

FIGURE 1.12: Innovation-Adoption-Model

Source: 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, featuresand advantages.

Evaluation Customers consider whether the product/service will meet their particular needs.Personal sources such as word-of-mouth from friends, colleagues and opinion leaders becomeimportant influences at this stage.

Trial The customer tries the product/service for the first time and decides whether to adopt

on the 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, and public relations/publicity to move customers through the

adoption process. Advertising and public relations can be effective in generating awareness andinterest. Sales promotions and sampling are often used for encouraging evaluation and trial.

It is beneficial for companies to accelerate the adoption process before competitors emulate thebenefits they offer. Enticing customers to purchase again and adopt the brand not only requires asuccessful 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 focuseson establishing a long-term, multi-transaction relationship, when each trusts the other to deal fairlyand 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 customersneeds and wants. This information is a key competitive advantage, allowing companies tocommunicate regularly with their customers and customise their interaction. In this way, companies

can increase buyers satisfaction, making them less likely to switch to a competitor. Customerservice is an important element of this relationship. Berry and Parasuraman (1991) identified threecustomer relationship-building approaches.48

Financial Benefits Such as airline frequent flyer 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 ofbrand values. If the quality of the experiences deteriorates, or if the brand is surpassed bysuperior offers from competitors, then its position will be undermined.

First-Mover Advantage Being first into the market does not necessarily means success, but itmakes the task easier. It is easier to capture a share of the consumers mind and build acustomer base, when the brand has no competitors to rival its position.

Unique Positioning Concept If the brand is not the innovator, it must have a unique positioning

concept a segmentation scheme, value proposition or augmented brand, which will add valueand distinguish it from competition.

Strong Communications Programme A successful brand requires an effective selling,advertising or promotional campaign, which will communicate the brands existence, its functionand 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, brands were not built quickly. It took years to build-upthe added values, and establish a trusting relationship.

Building strong brands stems from the creation of a compelling value proposition. Once theframework 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 buildtrust in the brand through satisfaction of use and experience, companies have the opportunity tostart building relations with their customers, strengthening the brand further, and making it moredifficult for competitors to emulate. The Internet provides the opportunity for companies to create

48 Berry, and Parasuraman, Marketing Services: Competing Through Quality, 1991, pp. 13642.49 Doyle, Marketing Management & Strategy, 1998, 2nd edn., pp. 176-77.


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a compelling value propositions never before possible, while providing new tools for promotion,interaction and relationship building. As a result, it has profound impact on the traditional brand-building process. As such, the next chapter explores the characteristics of the Internet, and its

impact on the business and competitive environment.

THE ANATOMYOFA 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 inFigure 1.13.

FIGURE 1.13: Constituents of a Brand

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

According to Arnold, the essence of a brand is a single, simple value, easily understood andvalued 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 its market. According to Arnold, it is towards thispersonality or essence that customers direct their loyalty, and which is often the elusive emotionalelement of a 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 can be seen that fundamental characteristic of the core product (i.e. the actualstrength and flavour of the cigarette), is only one of the benefits identified. Other benefits derivefrom the advertising and imagery associated with the promotion of the brand. The attributes havedeveloped from physical aspects of the packaging and product presentation, and include key aspects

50 Arnold, p. 27.

Essence

Benefits

Attributes


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of marketing and promotional material that have remained constant over the life of the brand; suchattributes 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 runningthrough 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 mustbe a blend of complementary physical, rational and emotional appeals. The blend must be distinctiveand 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 theMarlboro brand and is cited as one of the reasons that consumers are attracted to it.The Marlboro cigarette itself, has a strong flavour (a functional attribute) and the strength andindependence of the cowboy image originally used in advertising from the basis of the emotionalattributes. The red and white colour of the packaging reinforces the essence of the attributes of thebrand since they are strong, bold, contrasting colours; the same is true of the mountain sceneryused 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 andCowking definition referred to. Consistency in all forms of packaging and promotion is animportant aspect of maintaining a clear and distinctive personality, if consumer confusion is to beavoided.

51 Arnold, p. 27.

Mascul ine

Strengthand

Independence

Contemporary BrownFilter

Red LeafGraphic

MarlboroCountry

Strength andFlavourof Brand

Red andWhitePackaging

MarlboroM an(Cowboy)

UserImagery-Boldness

andIndependence

Senseo fFreedomandStrength

FIGURE 1.14: Brand PersonalityMarlboro Cigarettes

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


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It is submitted that one of the reasons why the Marlboro brand is strong and successful isbecause the brand does not depend entirely upon the name or logo as a means of distinguishing thecore product from competing products. Indeed, the whole pack together with the advertising is used

to support the brand. It encapsulates the essence of the brand, namely, strength and independence.Once a brand has become established in the marketplace the brand attributes can become powerfulsymbols evoking the brand personality. Competitors may seek to emulate the brand personality bycreating similar new brands of their own, often imitating the physical brand attributes associatedwith 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 considerthe position concerning look-alike products where, this time, retailers have tried to emulate thepersonality of branded products by adopting similar brand names and packaging with a view toattract consumers who might otherwise buy the branded product. In such situations it is importantto appreciate that those responsible for imitating brands do not simply use a confusing brand namebut also endeavours to 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.

BRANDINGAND MARKETING

Marketing may be said by marketeers to involve a social and managerial position by whichindividuals and groups obtain what they need and what through creating exchanging products andvalue with other.53 Traditionally, marketing has not sought to create needs or wants.54 These areassumed 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 andto 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 valueproduct to meet consumer expectations and 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,

52Cadbury Schweppes Pty Ltd v. The Pub Squash Co Ltd(1981) RPC 429.53 Kotler et al., p. 10.54 A human need is a state of left deprivation. Humans have many complex needs including the basic

physical need for shelter, clothing, food, safety, warmth, social needs of belongings and affection, and

personal needs for knowledge and self-expression. These needs are not invented or created by marketeers;

they are 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.


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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, so risks have to be taken. This is particularly so over

qualities that cannot properly 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 in place 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 the unknown 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 involves taking a risk. Toreduce this risk the consumer may rely upon information about the actual product conveyed throughadvertising material. This material may explain whether the product will be suitable for the purposethe consumer has in mind. The consumer may still be unsure of the suitability of the product(especially 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 the suitability 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 whatothers in the same situation believe. In each case the purchaser will be seeking to reduce or minimisethe risk involved in the purchasing decision. At each stage, the marketing of the product can influencethe consumers decision-making process whether it be through the provision of factual informationconcerning physical characteristics and qualities of the product, through after sales service or productaugmentation or from the added values associated with a particular brand communicated throughuse of particular advertising imagery concerning the social status of cache of the product and itseffectiveness.58 The purpose of marketing is to communicate with the consumer about the product

to inform, reassure, and persuade the consumer to buy the product. In short, the aim of themarketing function is to reduce the risks taken by the consumer and to promote sales. Where therisks 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 function is to promote continuedloyalty to the brand, and no increase in the frequency with which the brand is purchased.Arnold distinguishes the marketing role from that 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

Documents

17_1835_Trademarks Advt and Brand Mgt Chap 1