Brand management
Chapter 1: What is a brand and why do brands matter?
Defining brands
- ”A brand for a company is like a reputation for a person. You earn reputation by trying to do
hard things well.” Jeff Bezos, founder, executive chairman and former CEO of Amazon
Product-centred definition of brands
- Product-centred definition:
o = A (…) trademark may consist of any signs capable of being represented graphically,
particularly words, including personal names, designs, letters, numerals, the shape of
goods or of their packaging, provided that such signs are capable of distinguishing
the goods or services of one undertaking from those of other undertakings
- A trademark is a sign used to identify goods/services
- It identifies one seller’s goods or services as distinct from those of other sellers
- A trademark can be protected by registration (e.g., EU trademark)
Types of trade marks that can be registered
- Word mark:
o = A word mark consists exclusively of words or letters, numerals, other standard
typographic characters or a combination thereof that can be typed
o Example: Levi’s
- Figurative mark:
o = It is a trademark where nonstandard characters, stylisation or layout, or a graphic
feature or a colour are used, including marks that consist exclusively of figurative
elements
o Example: leaf of Adidas
- Figurative mark with letters:
o = A figurative mark consisting of a combination of verbal and figurative elements
o Example: Gore-Tex
- Shape mark:
o = A shape mark consists of, or extends to, a three-dimensional shape
▪ It can include containers, packaging, the product itself or its appearance
o Example: Toblerone
- Pattern mark:
o = A pattern mark consists exclusively of a set of elements which are repeated
regularly
o Example: pattern of Louis Vuitton
- Colour single mark:
o = A colour single mark is just that, a trade mark which consists exclusively of a single
colour (without contours)
o Examples:
▪ Post-it: yellow
▪ John Deere: yellow-green
▪ Victorinox: red
1
,Trade marks must be distinctive and must not describe what is sold
- In the EU and nationally, you can register for a trademark:
o Application received (examination period)
o Application published
o Opposition period
o EUTM registered and published
o EUTM expiry date: length depends on what you trademark
- Must be distinctive:
o = customers should be able to recognise your sign for what it is. It should distinguish
you from other companies in the marketplace
o Example: not a white sticker
- Must not describe what you sell:
o = your sign should not monopolise a sign that merely describes the goods/services
that you offer
o Example: not a wine called ‘wine’ or ‘wyne’
- Trademark registration gone wrong (professor’s own experience):
o In 2021, he wanted to register his initiative eDOCation, a platform that fosters the
exchange between young researchers and companies, as a trademark in Germany
o 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 recognise 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”
- Examples: Aspirin (in the US), escalator, thermos, linoleum, yo-yo, corn flakes, Walkman (in
Austria)
- Ways to protect the brand against genericide:
o Emphasizing trade mark status
o Use category advertising (e.g., for diamonds by De Beers)
- Questions:
o Which brands do you know that are used as generic terms for the product category in
your home country?
▪ Spa, Bic, Lego, Post-it, Pampers
Types of trademark threats
- Brand misappropriation:
o = unauthorised use of an identical brand name or brand elements on
products/services in the same category to falsely claim affiliation with that brand or
capitalise on its equity
▪ Give impression that it is the other brand
o Example: Harley roads (motorcycle)
o % of all threats: 38.7 %
2
, - Counterfeiting:
o = the practice of manufacturing, importing/ exporting, distributing, selling or
otherwise dealing in goods ... under a trademark that is identical to or
indistinguishable from a registered trademark, without the approval or oversight of
the registered trademark owner
o Example: fake luxury bags
o % of all threats: 31.1%
- Brand imitation/copycats:
o = using a confusingly similar brand name, package (trade dress), logo, or slogan on a
product or service in the same industry
o Example: FedEx/JetEx
o % of all threats: 17%
- Less used:
o cross-industry brand misappropriation
▪ Same as first, but in another industry
o False advertising
o Grey markets
▪ Not authorised to sell
o Cross-industry imitation:
▪ Same as last but in a different industry
Customer-centred definition of brands
- Customer-centred definition:
o = the associations that consumers have with something that can be managed
professionally
o E.g.: a product, service, person, name, term, design, symbol, or any other feature
- A brand resides in consumers’ minds (what they have heard and learned about it) and hearts
(what they feel)
o Brand is more of a mental concept
- Brands identify the products/services of one seller and ...
- ... differentiate them from products/services of competitors
- Untypical branded products/services
o Countries, universities, sports teams, influencers (human brands)
Brands versus products
- Product = anything that can be offered to a market and that satisfies a certain need
- Brand = creates a competitive advantage by differentiating a product from competing
products that satisfy the same need
o Example: normal banana VS Chiquita
- 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)
3
, Brands influence consumers’ perceptions and preferences
- Question:
o Could you think of product categories where a blind test could lead to similar results
as in the Cola case?
▪ Water from a brand VS tap water/other brand
▪ Everyday ketchup or Heinz ketchup
▪ Nutella
Brands influence consumers’ objective performance: The brand placebo effect
- Golf putting experiment with three different types of branded products
- Placebo effect = phenomenon where people report real improvement after taking a fake or
non existent treatment, called a placebo
- => Group with Nike had the lowest amount of strokes, then weak brand and then unbranded
- => People who had a Nike putter used fewer strokes, just by thinking they had a branded
product
Brand functions
Overview of consumer benefits
- 1. Reduction of consumption risk:
o Assessing product quality in advance is error-prone if experience and credence
qualities are involved, which results in consumption risk
▪ Experience qualities = you have to use it to know the quality
▪ Credence qualities = you will never know the quality for sure
o Brands can function as proxies of product quality and thus reduce risk
▪ Especially in cases where you could die (airlines)
- 2. Reduction of search costs:
o Considering all consumption alternatives for a specific need causes prohibitive search
costs for consumers
o Brands can provide guidance and thus reduce the set of alternatives considered
relevant, which limits search costs
o How many search costs depend on how complex the buying process of the product is
- 3. Serving as a symbolic device:
o Brands can represent intrinsic or extrinsic values (e.g., self-expression or prestige)
o Brands help consumers to communicate their self-concept and differentiate
themselves from other people
o Is often a costly symbol (example: Rolex)
4
Chapter 1: What is a brand and why do brands matter?
Defining brands
- ”A brand for a company is like a reputation for a person. You earn reputation by trying to do
hard things well.” Jeff Bezos, founder, executive chairman and former CEO of Amazon
Product-centred definition of brands
- Product-centred definition:
o = A (…) trademark may consist of any signs capable of being represented graphically,
particularly words, including personal names, designs, letters, numerals, the shape of
goods or of their packaging, provided that such signs are capable of distinguishing
the goods or services of one undertaking from those of other undertakings
- A trademark is a sign used to identify goods/services
- It identifies one seller’s goods or services as distinct from those of other sellers
- A trademark can be protected by registration (e.g., EU trademark)
Types of trade marks that can be registered
- Word mark:
o = A word mark consists exclusively of words or letters, numerals, other standard
typographic characters or a combination thereof that can be typed
o Example: Levi’s
- Figurative mark:
o = It is a trademark where nonstandard characters, stylisation or layout, or a graphic
feature or a colour are used, including marks that consist exclusively of figurative
elements
o Example: leaf of Adidas
- Figurative mark with letters:
o = A figurative mark consisting of a combination of verbal and figurative elements
o Example: Gore-Tex
- Shape mark:
o = A shape mark consists of, or extends to, a three-dimensional shape
▪ It can include containers, packaging, the product itself or its appearance
o Example: Toblerone
- Pattern mark:
o = A pattern mark consists exclusively of a set of elements which are repeated
regularly
o Example: pattern of Louis Vuitton
- Colour single mark:
o = A colour single mark is just that, a trade mark which consists exclusively of a single
colour (without contours)
o Examples:
▪ Post-it: yellow
▪ John Deere: yellow-green
▪ Victorinox: red
1
,Trade marks must be distinctive and must not describe what is sold
- In the EU and nationally, you can register for a trademark:
o Application received (examination period)
o Application published
o Opposition period
o EUTM registered and published
o EUTM expiry date: length depends on what you trademark
- Must be distinctive:
o = customers should be able to recognise your sign for what it is. It should distinguish
you from other companies in the marketplace
o Example: not a white sticker
- Must not describe what you sell:
o = your sign should not monopolise a sign that merely describes the goods/services
that you offer
o Example: not a wine called ‘wine’ or ‘wyne’
- Trademark registration gone wrong (professor’s own experience):
o In 2021, he wanted to register his initiative eDOCation, a platform that fosters the
exchange between young researchers and companies, as a trademark in Germany
o 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 recognise 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”
- Examples: Aspirin (in the US), escalator, thermos, linoleum, yo-yo, corn flakes, Walkman (in
Austria)
- Ways to protect the brand against genericide:
o Emphasizing trade mark status
o Use category advertising (e.g., for diamonds by De Beers)
- Questions:
o Which brands do you know that are used as generic terms for the product category in
your home country?
▪ Spa, Bic, Lego, Post-it, Pampers
Types of trademark threats
- Brand misappropriation:
o = unauthorised use of an identical brand name or brand elements on
products/services in the same category to falsely claim affiliation with that brand or
capitalise on its equity
▪ Give impression that it is the other brand
o Example: Harley roads (motorcycle)
o % of all threats: 38.7 %
2
, - Counterfeiting:
o = the practice of manufacturing, importing/ exporting, distributing, selling or
otherwise dealing in goods ... under a trademark that is identical to or
indistinguishable from a registered trademark, without the approval or oversight of
the registered trademark owner
o Example: fake luxury bags
o % of all threats: 31.1%
- Brand imitation/copycats:
o = using a confusingly similar brand name, package (trade dress), logo, or slogan on a
product or service in the same industry
o Example: FedEx/JetEx
o % of all threats: 17%
- Less used:
o cross-industry brand misappropriation
▪ Same as first, but in another industry
o False advertising
o Grey markets
▪ Not authorised to sell
o Cross-industry imitation:
▪ Same as last but in a different industry
Customer-centred definition of brands
- Customer-centred definition:
o = the associations that consumers have with something that can be managed
professionally
o E.g.: a product, service, person, name, term, design, symbol, or any other feature
- A brand resides in consumers’ minds (what they have heard and learned about it) and hearts
(what they feel)
o Brand is more of a mental concept
- Brands identify the products/services of one seller and ...
- ... differentiate them from products/services of competitors
- Untypical branded products/services
o Countries, universities, sports teams, influencers (human brands)
Brands versus products
- Product = anything that can be offered to a market and that satisfies a certain need
- Brand = creates a competitive advantage by differentiating a product from competing
products that satisfy the same need
o Example: normal banana VS Chiquita
- 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)
3
, Brands influence consumers’ perceptions and preferences
- Question:
o Could you think of product categories where a blind test could lead to similar results
as in the Cola case?
▪ Water from a brand VS tap water/other brand
▪ Everyday ketchup or Heinz ketchup
▪ Nutella
Brands influence consumers’ objective performance: The brand placebo effect
- Golf putting experiment with three different types of branded products
- Placebo effect = phenomenon where people report real improvement after taking a fake or
non existent treatment, called a placebo
- => Group with Nike had the lowest amount of strokes, then weak brand and then unbranded
- => People who had a Nike putter used fewer strokes, just by thinking they had a branded
product
Brand functions
Overview of consumer benefits
- 1. Reduction of consumption risk:
o Assessing product quality in advance is error-prone if experience and credence
qualities are involved, which results in consumption risk
▪ Experience qualities = you have to use it to know the quality
▪ Credence qualities = you will never know the quality for sure
o Brands can function as proxies of product quality and thus reduce risk
▪ Especially in cases where you could die (airlines)
- 2. Reduction of search costs:
o Considering all consumption alternatives for a specific need causes prohibitive search
costs for consumers
o Brands can provide guidance and thus reduce the set of alternatives considered
relevant, which limits search costs
o How many search costs depend on how complex the buying process of the product is
- 3. Serving as a symbolic device:
o Brands can represent intrinsic or extrinsic values (e.g., self-expression or prestige)
o Brands help consumers to communicate their self-concept and differentiate
themselves from other people
o Is often a costly symbol (example: Rolex)
4
