First in a series.
Every entrepreneur knows the importance of establishing a strong
brand for a new business or product line.
"Brand" is a somewhat nebulous concept. It's been
defined as the complete set of mental and emotional associations
that consumers have with you and your products: not just
who you are and what you sell, but what they think and how they
feel about who you are and what you sell.
"Brand identity," in turn, is the visual and verbal
expression of a brand communicated by names, slogans, logos, and
the like. It's what triggers those mental and emotional
associations.
Here's an example. What comes to mind when you see this
symbol?
Cars, of course. Specifically, Mercedes Benzes. But other things
probably come to mind as well, such as: Quality. Performance.
Engineering. Luxury. When everything is working as it should,
people don't want to just own the product, they also want to
take on the brand identity. They don't just want the car, they
want the logo on the hood – along with everything the logo
symbolizes.
So here's the first thing every entrepreneur needs to know:
Trademarks are the primary means by which we harness the
power, and capture the value, of brand identity. Names,
slogans, and logos that have been thoughtfully created capture
brand identity more effectively than those that haven't. And
those that are properly protected and enforced are capable of
guarding against "brand identity theft" more effectively
than those that aren't.
The dollars-and-cents value of trademarks can be
enormous. Consider this: start with the market value of a
successful company – the amount that a buyer would be willing
to pay for it. Now subtract the value of the tangible assets:
product inventory, machinery, buildings, everything down to the
desks, computers, and paper clips. What's left is the value of
the company's intangible assets: know-how, reputation, good
will in the marketplace. Much of that intangible value can
only be captured, for practical purposes, by
trademarks.
The economic value of those intangible assets can be significant.
If you can buy a soft drink company that comes with good recipes,
modern manufacturing facilities, and efficient distribution
channels, that's good. Even better is to buy one that also
comes with this trademark:
The economic value of trademarks is especially important
when the time comes to sell, expand, or franchise a
business. Trademarks are the vehicles by which the
intangible values of brand identity are priced, transferred, or
otherwise exploited.
I tell clients that my goals in helping them build a brand
identity, and a trademark portfolio, are the same as their
marketing department's goals:
- First, to select names, slogans, and symbols that stand out in consumers' minds as belonging to us – and only to us.
- Second, to establish and protect those marks so that they consistently convey our brand identity – and nobody else's – wherever we're doing business.
- Third, to do it all in a way that is cost-effective and that adds value to the enterprise.
There are a handful of key principles that make all this happen. The first is simply grasping the importance of brand identity, and recognizing the crucial role that trademarks play in creating and sustaining it. We'll talk about others in future editions of Brandmarking.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
