Brand management - Chapter 1: What is a brand & why do brands matter?
1. Defining brands
Adidas vs. Nike: the race of the iconic sports brands
- Germany’s Adidas and America’s Nike have been battling for leadership in the global sportswear market
- After decades in which it looked as if Adidas would never be able to catch up with Nike, the financial
year 2025 has shown that business can turn on a dime: While Nike’s sales declined by 12%, Adidas’
sales increased by 13%.
- Throughout the course, we will be looking at these two brands from time to time, as their branding
activities are great examples of how companies can build (and damage) strong brands.
- Stock market development of the two companies in the pas two years
• Adidas AG shows a strong upward trend in 2/2024–2/2025, followed by a clear decline in
2/2025–2/2026. This suggests a period of recovery or optimism that later turned into a correction
or weaker expectations.
• Nike, Inc. already displays a downward trend in 2/2024–2/2025, but in 2/2025–2/2026 the share
price appears to stabilize, fluctuating around a lower level. This may indicate that much of the
negative sentiment was priced in earlier.
• Comparison: Adidas appears more volatile during this period, with a sharp rise followed by a
significant drop, while Nike shows a more gradual and consistent price movement.
• Interpretation: Investors may be reacting more strongly to news, expectations, or earnings at
Adidas, whereas Nike, as a more established player, shows a more defensive stock pattern.
• In short, Adidas shows higher growth potential but also higher risk, while Nike appears more
stable but with fewer strong recovery moments during this period.
➔ Nike is still a valuable brand (still worth $33,7B), but Adidas is catching up ($17,4B) due through
de decline of Nike but the increase of Adidas
The origins of branding
Product-centred definition
(EUIPO = new organisations that deals with brands and trade marks)
“A (…) 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.” (Council Regulation (EC) No 207/2009 of 26 February 2009)
• A trade mark is a sign used to identify goods/services
• It idenitfies one seller’s goods or services as distinct from those other sellers
• A trade mark can be protected by registration (EU trade mark)
,Types of trade marks that can be registered
„A word mark consists exclusively of words or letters,
numerals, other standard typographic characters or a
Word mark combination there of that can be typed.“
- Just words no figurative components
„It is a trade mark where non- standard characters,
stylisation or layout, or a graphic feature or a colour
Figurative mark are used, including marks that consist exclusively of
figurative elements.“
- Only a logo or image/figure (no text)
„A figurative mark consisting of a combination of
Figurative mark with
verbal and figurative elements.“
letters
- Combination of the two above
„A shape mark consists of, or extends to, a three-
dimensional shape. It can include containers,
Shape mark
packaging, the product itself or its appearance.“
- The shape is the most important feature
„A pattern mark consists exclusively of a set of
elements which are repeated regularly.“
Pattern mark
- Brand that works with a specific pattern
„A colour single mark is just that – a trade mark which
consists exclusively of a single colour (without
Colour single mark
contours).“
- Excist through one colour only (no differencese)
- EU file information for adidas word mark
• Adidas requested a trade mark on the word ‘adidas’
Asked: 2001
Long process
• Research: analytical view of influencers
Creation of measurements of how many brands are being promote on their profiles
- Brand list necessary
- Many brands make trade marks in many different categories who are less
common/likely for that product or brand
• They never know what the future holds to they do this just in case
- Trade marks must be distinctive and must not describe what is sold
• Not distinctive
Consumers should be able to recognize your sign for what it is, for example as an indicator
of origin. It should distinguish you from other companies in the marketplace so
that you can protect and build your brand identity and value
• Too descriptive
In this case, consumers will not see the bottle as distinctive, and the word ‘wine’ simply
describes the content of the bottle. They will see it as a product description.
,- Trade mark registration gone wrong – professors 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).
- 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”.
= Also known as brand dilution or genericization, it is a process in trademark law in which a brand
name becomes so popular and widely used that it loses its unique source-identifying function and
turns into a generic term for an entire product category.
Examples: Asprin (in the US), escalator, thermos, yo-yo, corn flakes, Walkman (Austria)
• Ways to protect the brand against genericide
Emphasizing trade mark status – registred trade mark
Use category advertising (e.g., for diamonds by De Beers)
- Advertising that promotes an entire product category, rather than a specific brand.
- Why?
• To increase overall demand for a product category
• To educate consumers about the value or meaning of a product
• To expand the market, which indirectly benefits leading brands in that category
Types of trademark threaths
Threat Definition Example Share of all
threats *
“Unauthorized use of an identical brand name or brand
elements on products/ services in the same category to
Brand falsely claim affiliation with that brand or capitalize on its
38,7%
misappropriation equity.”
- When a brand is to known and you can’t make a
differentiation between the two
”The practice of manufacturing, importing/ exporting,
distributing, selling or otherwise dealing in goods ... under
Counterfeiting a trademark that is identical to or indistinguishable from a 31,1%
registered trademark, without the approval or oversight of
the registered trademark owner”
“Using a confusingly similar brand name, package (trade
Brand imitation
dress), logo, or slogan on a product or service in the same 17%
(copycats)
industry.”
* other threats with low occurrence (< 6%) are cross-industry brand misappropriation, false advertising, gray markets and cross-industry imitation
, Customer-centred definition 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 – the concept of the brand)
• Hearts (what they feel – how their feelings are about the brand)
- Brands identify the products/services of one seller and ...
- ... differentiate them from products/services of competitors.
Brands vs. products
Product = Anything that can be offered to a market and that satisfies a certain need
Brand = Creates competitive advantage by differentiating a product from competing products that satisfy
the same need
- The added value that the brand endows to a product based on past marketing activities for that brand
- Competitive advantage can be related to product performance or to non-product-related means (i.e.,
image associations surrounding the product)
Brands influence consumers’ perceptions and preferences
- Research: blindfolded and seeing what they are drinking
• Brand name affects our opinions
• Brandname Coca Cola!
Brands influence consumers’ objective performance: the brand placebo effect
- Research: golf-putting with different sticks
• Group with the Nike-putter did better than all the
other groups
Link with Nike as a good sports brand
• But putter was in every situation the same
Thinking you have a better product, will lead
to better performances
Brand functions
Overview of consumer benefits
Why do we think brands are important?
- Reduction of consumption risk
• Assessing product quality in advance is error-prone if experience and credence qualities are
involved, which results in consumption risk
Credence quality refers to characteristics of products or services that consumers find
difficult or impossible to evaluate, even after purchase or use. These are aspects that
require trust in the provider, such as medical treatments, repair services, or complex
financial services. Even after experiencing the product or service, consumers cannot easily
determine whether it was good or bad.
- Example: a doctor’s visit
You may feel better after the visit, but you cannot be sure whether the doctor made
the correct diagnosis. This is because you usually lack the scientific or professional
knowledge needed to properly assess the doctor’s decisions and statements.
• Brands can function as proxies of product quality and thus reduce risk
1. Defining brands
Adidas vs. Nike: the race of the iconic sports brands
- Germany’s Adidas and America’s Nike have been battling for leadership in the global sportswear market
- After decades in which it looked as if Adidas would never be able to catch up with Nike, the financial
year 2025 has shown that business can turn on a dime: While Nike’s sales declined by 12%, Adidas’
sales increased by 13%.
- Throughout the course, we will be looking at these two brands from time to time, as their branding
activities are great examples of how companies can build (and damage) strong brands.
- Stock market development of the two companies in the pas two years
• Adidas AG shows a strong upward trend in 2/2024–2/2025, followed by a clear decline in
2/2025–2/2026. This suggests a period of recovery or optimism that later turned into a correction
or weaker expectations.
• Nike, Inc. already displays a downward trend in 2/2024–2/2025, but in 2/2025–2/2026 the share
price appears to stabilize, fluctuating around a lower level. This may indicate that much of the
negative sentiment was priced in earlier.
• Comparison: Adidas appears more volatile during this period, with a sharp rise followed by a
significant drop, while Nike shows a more gradual and consistent price movement.
• Interpretation: Investors may be reacting more strongly to news, expectations, or earnings at
Adidas, whereas Nike, as a more established player, shows a more defensive stock pattern.
• In short, Adidas shows higher growth potential but also higher risk, while Nike appears more
stable but with fewer strong recovery moments during this period.
➔ Nike is still a valuable brand (still worth $33,7B), but Adidas is catching up ($17,4B) due through
de decline of Nike but the increase of Adidas
The origins of branding
Product-centred definition
(EUIPO = new organisations that deals with brands and trade marks)
“A (…) 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.” (Council Regulation (EC) No 207/2009 of 26 February 2009)
• A trade mark is a sign used to identify goods/services
• It idenitfies one seller’s goods or services as distinct from those other sellers
• A trade mark can be protected by registration (EU trade mark)
,Types of trade marks that can be registered
„A word mark consists exclusively of words or letters,
numerals, other standard typographic characters or a
Word mark combination there of that can be typed.“
- Just words no figurative components
„It is a trade mark where non- standard characters,
stylisation or layout, or a graphic feature or a colour
Figurative mark are used, including marks that consist exclusively of
figurative elements.“
- Only a logo or image/figure (no text)
„A figurative mark consisting of a combination of
Figurative mark with
verbal and figurative elements.“
letters
- Combination of the two above
„A shape mark consists of, or extends to, a three-
dimensional shape. It can include containers,
Shape mark
packaging, the product itself or its appearance.“
- The shape is the most important feature
„A pattern mark consists exclusively of a set of
elements which are repeated regularly.“
Pattern mark
- Brand that works with a specific pattern
„A colour single mark is just that – a trade mark which
consists exclusively of a single colour (without
Colour single mark
contours).“
- Excist through one colour only (no differencese)
- EU file information for adidas word mark
• Adidas requested a trade mark on the word ‘adidas’
Asked: 2001
Long process
• Research: analytical view of influencers
Creation of measurements of how many brands are being promote on their profiles
- Brand list necessary
- Many brands make trade marks in many different categories who are less
common/likely for that product or brand
• They never know what the future holds to they do this just in case
- Trade marks must be distinctive and must not describe what is sold
• Not distinctive
Consumers should be able to recognize your sign for what it is, for example as an indicator
of origin. It should distinguish you from other companies in the marketplace so
that you can protect and build your brand identity and value
• Too descriptive
In this case, consumers will not see the bottle as distinctive, and the word ‘wine’ simply
describes the content of the bottle. They will see it as a product description.
,- Trade mark registration gone wrong – professors 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).
- 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”.
= Also known as brand dilution or genericization, it is a process in trademark law in which a brand
name becomes so popular and widely used that it loses its unique source-identifying function and
turns into a generic term for an entire product category.
Examples: Asprin (in the US), escalator, thermos, yo-yo, corn flakes, Walkman (Austria)
• Ways to protect the brand against genericide
Emphasizing trade mark status – registred trade mark
Use category advertising (e.g., for diamonds by De Beers)
- Advertising that promotes an entire product category, rather than a specific brand.
- Why?
• To increase overall demand for a product category
• To educate consumers about the value or meaning of a product
• To expand the market, which indirectly benefits leading brands in that category
Types of trademark threaths
Threat Definition Example Share of all
threats *
“Unauthorized use of an identical brand name or brand
elements on products/ services in the same category to
Brand falsely claim affiliation with that brand or capitalize on its
38,7%
misappropriation equity.”
- When a brand is to known and you can’t make a
differentiation between the two
”The practice of manufacturing, importing/ exporting,
distributing, selling or otherwise dealing in goods ... under
Counterfeiting a trademark that is identical to or indistinguishable from a 31,1%
registered trademark, without the approval or oversight of
the registered trademark owner”
“Using a confusingly similar brand name, package (trade
Brand imitation
dress), logo, or slogan on a product or service in the same 17%
(copycats)
industry.”
* other threats with low occurrence (< 6%) are cross-industry brand misappropriation, false advertising, gray markets and cross-industry imitation
, Customer-centred definition 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 – the concept of the brand)
• Hearts (what they feel – how their feelings are about the brand)
- Brands identify the products/services of one seller and ...
- ... differentiate them from products/services of competitors.
Brands vs. products
Product = Anything that can be offered to a market and that satisfies a certain need
Brand = Creates competitive advantage by differentiating a product from competing products that satisfy
the same need
- The added value that the brand endows to a product based on past marketing activities for that brand
- Competitive advantage can be related to product performance or to non-product-related means (i.e.,
image associations surrounding the product)
Brands influence consumers’ perceptions and preferences
- Research: blindfolded and seeing what they are drinking
• Brand name affects our opinions
• Brandname Coca Cola!
Brands influence consumers’ objective performance: the brand placebo effect
- Research: golf-putting with different sticks
• Group with the Nike-putter did better than all the
other groups
Link with Nike as a good sports brand
• But putter was in every situation the same
Thinking you have a better product, will lead
to better performances
Brand functions
Overview of consumer benefits
Why do we think brands are important?
- Reduction of consumption risk
• Assessing product quality in advance is error-prone if experience and credence qualities are
involved, which results in consumption risk
Credence quality refers to characteristics of products or services that consumers find
difficult or impossible to evaluate, even after purchase or use. These are aspects that
require trust in the provider, such as medical treatments, repair services, or complex
financial services. Even after experiencing the product or service, consumers cannot easily
determine whether it was good or bad.
- Example: a doctor’s visit
You may feel better after the visit, but you cannot be sure whether the doctor made
the correct diagnosis. This is because you usually lack the scientific or professional
knowledge needed to properly assess the doctor’s decisions and statements.
• Brands can function as proxies of product quality and thus reduce risk
