For some companies the only thing they have that distinguishes them from their competition are trademarks. Every company, regardless of size, from mom & pop all the way to Coca Cola, have trademark assets that can be protected. Overwhelmingly businesses do not take even simple steps to protect their trademarks, which can be extraordinarily valuable. What would Coca Cola be without its enormous trademark portfolio? Just a beverage company that had no way to really distinguish itself from any other beverage companies.
A trademark is the objective symbol of the “good will” that a business has or will develop. Without the identification function performed by trademarks, buyers would have no way of returning to buy products that they have used and liked. Thus, from the business perspective when you are building a trademark or trademark portfolio it is really the good will that will define the value of the trademark. But like most things in life there is a double edge sword. There is positive good will and negative good will. Negative good will sounds silly I know, but it relates not to the absence of good will, but negative feelings. So, for example, British Petroleum is in the process of developing enormous negative good will as a result of the oil spill in the gulf of Mexico.
Trademarks perform at least four critical functions:
- Identification of the seller’s goods, which in turn allows for the goods to be distinguished them from goods sold by competitors.
- Signifying that all goods bearing the trademark come from or are controlled by a single entity, which allows consumers to build trust and familiarity with the brand.
- Signifying that all goods bearing the trademark are of an equal level of quality, which allows consumers to know if they purchase something, for example a Big Mac, at one location they can expect the same Big Mac at other McDonald’s locations regardless of geography.
- Allowing the trademark owner to engage in advertising of the goods or services being offered, thereby allowing for the building of a brand while informing and educating consumers.
Businesses need to keep in mind that it is far easier to lose brand loyalty, or engender negative good will, than it is to build it in the first place. It can take many years to build the identity you want for your business, product or service, and only a matter of minutes to irreparably lose everything and wind up worse off than when you started. This is true because when you started you were at ground zero, a catastrophe can significantly put you in the whole, as BP is now finding out.
BP is not unique in doing its level best to destroy the company. Recently Toyota had issues with their cars and at least some are questioning whether they should be purchasing a Toyota. Early sales figures suggested there wasn’t much of a blip for Toyota, and they may navigate these rocky waters without much long term harm if the problems can be isolated and do not recur. Of course, it would have been better had they not had any problems, and there will be many, like myself, who will never look at Toyota quite the same. The shine is off, particularly given that Toyota built a reputation for quality products over many years.
Perhaps no greater example of a catastrophe of branding is the Tylenol cyanide murders from 1982. Tylenol was not to blame for the murders, but it became apparent early on that Tylenol was tampered with and was the delivery mechanism for the murderer. Tylenol wrote the textbook on how to rapidly respond to crisis management in the business context, but still today those of a certain age can’t help but make this undesirable association. In fact, I bet that if you asked those of age at the time of this tragedy the first 5 things that pop into their mind when they hear Tylenol the overwhelming majority of respondents will mention the cyanide murders. I know personally this was a big deal for my family because it occurred in October 1982, and with Halloween and other crazies putting razors in apples and other evil things Halloween was never quite the same.
Still, the Tylenol problem demonstrates how a business can do nothing wrong and still suffer tremendously negative consequences. What Tylenol did when they reintroduced their product was to provide the now familiar tamper resistant packages, which make it easy to see if someone has opened the bottle previously. This helped significantly, as did other Tylenol efforts, but once your business or trademark becomes associated with something unsavory it is hard to ever wipe away the negativity entirely.
Whether you are a small business or a large business, you need to aggressively set the tone for your brand, conveying what they want to convey and making sure that they are not sending any messages, intentionally or accidentally, that will lead to the creation of negative good will. Cutting corners, like BP did, may seem like an expedient business decision. But once something goes wrong, and it inevitably does when corners are cut routinely, it will be extraordinarily difficult to undue what has been done.
To succeed effectively use trademarks, advertising campaigns that incorporate your trademarks and consumer centric philosophies, and keep reminding yourself of those companies that have had problems what that it has done to their public image. A large company can typically withstand most negative hits to their good will, for those who are smaller and have a smaller customer base, alienating customers is not an option. At least not one you are likely to recover from. Vigilance on every level is necessary.- - - - - - - - - -
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Posted in: Brand Building, Gene Quinn, IP News, IPWatchdog.com Articles, Trademark, Trademark Basics
About the Author
Gene Quinn is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.