The Power of Branding: Creating Recognition and Loyalty

1. WIPO-ARIPONational Seminar on Intellectual Propertyfor the Competitiveness of Small and Medium-Size Enterprises (SMEs) Harare, February 7 to 9, 2007

2. Getting Noticed: The Role of Trademarks, Geographical Indications and Industrial Designs SMEs Division WIPO

3. Does a name really matter? • In 1969 while speaking at a small scientific conference, Sir Roger Penrose, a Cambridge physicist announced his discovery of what he called a "gravitationally totally collapsed object.” Nothing happened. • Months later, he changed his description to a "Black Hole" and the news of his discovery raced around the world. Today, the term Black Hole is a part of the world's working vocabulary. • We cannot understand, or maybe we do not care about a collapsed object. But a Black Hole is something very different. It is provocative, intriguing, exciting and conceptual. Most important, it is believable. (quoted from Lexicon Branding, Inc.)

4. Concept of Branding • Getting people to recognize your name • A brand is a company image as seen by the customer • Good branding means getting people to recognize you first • A brand means you have an effective logo with which customers can identify • A brand is what differentiates you from your competitors • Good advertising attracts customers

5. Branding is sending a message • Think of it this way: marketing is a conversation. The brand name initiates the conversation which will develop multiple concepts and criteria, namely: • Vision, mission, message, service, package, image, differentiation, understanding the customer, advertising, logoname recognition, customer service, internal training, team work, investment

6. Branding matters “Consumers are starved for time and overwhelmed by the choices available to them. They want strong brands that simplify their decision making and reduce their risks” Kevin Lane Keller, Tuck School of Business

7. Purpose of Branding • Gives a business/enterprise a significant edge over the competition. • Makes the customer view a business/enterprise as the only solution to their need or problem. • A strong brand engenders feelings of trust, reliability, loyalty and recognition in the customer’s mind. • Through its brand image an enterprise will attract and retain customer loyalty for its goods and services and increase the value of its business.

8. Successful Branding • Developing a brand part and parcel of every strategic business plan. • Target what customers care about: articulate precise values and qualities that are relevant and of direct interest. • Emphasize features that are both important to consumer and quite differentiated from competitors. • Sell the brand outside and inside: Motivate employees to identify with brand, communicating the brand image at all levels of operation. • Intellectual Property Rights such as trademarks and industrial designs important tools for branding.

9. Plan to Brand • Developing a brand is a milestone in the preparation of every strategic business plan. • Trademarks • Industrial Designs • Geographical Indications 3 IP Rights crucial to successful branding

10. Trademarks

11. What is a Trademark (TM)? • “A sign capable of distinguishing the goods or services produced or provided by one enterprise from those of other enterprises”

12. Any Distinctive Words, Letters, Numerals, Pictures, Shapes, Colors, Logotypes, LabelsIn some countries: sounds, smells and three-dimensional marks • Examples:

13. Types of TMs • Trade marks: to distinguish goods • Service marks: to distinguish services • Collective marks: to distinguish goods or services by members of an association • Certification marks • Well-known marks: benefit from stronger protection • Tradename vs Trademark

14. The Function of a TM • Allows companies to differentiate their products. • Ensures consumers can distinguish between products. • Promotes customer loyalty/ reputation / image of company. • Secures investment in marketing effort. • Exclusive rights obtained through registration prevent others from marketing products under same or confusingly similar mark. • Registered marks may be licensed or basis for franchising.

15. The Value of TMs • A marketing tool • Source of revenue through licensing • Crucial component of franchising agreements • May be useful for obtaining finance • A valuable business asset

16. Value of TMs in 2004 (*) • 1 Coca Cola 67,394 • 2 Microsoft 61,372 • 3 IBM 53,791 • 4 GE 44,111 • 5 Intel 33,499 • 6 Disney 27,113 • 7 McDonald’s 25,001 • 8 Nokia 24,041 * ($ Millions) Source: Interbrand

17. Things to rememberin selecting a TM • Naturally distinctive • Coined or fanciful words: “Kodak” • Arbitrary marks: “Apple” for computers • Easy to memorize and pronounce • Fits product or image of the business • Not identical or confusingly similar to existing TM • Has a positive connotation in all languages • Suitable for export markets • Corresponding domain name available

18. A few more important points • TM must be distinctive: not generic, descriptive, deceptive or contrary to public order or morality. • TM is a territorial right. • TM must be registered (protection through use weak and only in some countries). • TM must not be confusingly similar to other trademark for similar or identical goods (trademark search critical). • TM cannot be confusingly similar to a Geographical indication. • It is the responsibility of the TM owner to identify TM infringement and take action against infringers.

19. Protecting through registration • Exclusive rights prevent others from marketing products under same or confusingly similar mark • Secures investment in marketing effort • Promotes customer loyalty/ reputation / image of company • Provides coverage in relevant markets where business operates • Registered marks may be licensed or basis franchising agreements

20. Registration steps • The applicant • Application form, contact details, graphic illustration of mark, description of goods, fees • The trademark office • Formal examination • Substantive examination • Publication and opposition • Registration certificate valid for 10 years • Renewal

21. Keep in mind • The time it takes to register a TM • The costs associated with TM protection • The need for a trademark search • A trademark agent may be required • Protecting at home and abroad • Renewing your registration

22. Protection at home and abroad • The national route • Each country where you seek protection • The regional route • Countries members of a regional trademark system: African Regional Industrial Property Office; Benelux TM office; Office for Harmonization of the Internal Market of the EU; Organisation Africaine de la Propriété Intellectuelle • The international route • The Madrid System administered by WIPO (80 member countries)

23. The Nike’s case • This case reflects the popularity of a well-known TM. • The “Swoosh” is the well known symbol of Nike. • Originally Nike’s logo included also the shoemaker’s name • At the end of the nineties, the Nike’s name disappeared • The swoosh remained as the main identification symbol of the shoemaker • Today there is no need to include the brand into this logo since the recognition of a simple swoosh automatically bring our attention to Nike

24. The “Swoosh”

25. IP & Marketing Trademarks • Collective marks • Certification marks • GIs Individual marketing Joint marketing

26. Collective Trademarks

27. What is a collective mark? • Sign ‘capable of distinguishing the origin or any other common characteristics, including the quality’ of the goods/services of different enterprises which use the sign under the control of the registered owner. • Typically, the owner of collective mark is an association of which those producers are members • Registered as such in trademarks registry

28. How does a collective mark work? • Regulation of use • persons authorized to use • criteria for membership • conditions of use • e.g. particular features/qualities of the products • sanctions against misuse • Authorization to use • membership • application or automatic • comply with the rules • Control

29. Thus, function of collective mark is to INFORM the customers : • About the origin of the products • e.g. Café de Colombia with its label of Juan Valdez • About a level of quality or accuracy, geographical origin, or other featuresset by the association.

30. Benefits for SMEs 1.Economies of scale (registration cost, advertising campaign, enforcement, etc.) 2.Reputation acquired on the basis of common origin or other characteristics of the products made by different producers/traders 3. May facilitate cooperation amongst local producers/traders 4. Creation of collective mark hand in hand with development of certain standards and criteria (rules) and common strategy  collective marks can become powerful tool for local development  harmonization of products/services, enhancement of quality

31. Case Study: “Interflora” • To buy, order and send flowers at almost anywhere in the world • > 70.000 florists in 150 countries • Emblem : Mercurio with flowers in hand • Slogan: “Say it with flowers" • Guarantees freshness, flower quality and value of every Interflora relay order

32. Case Study (2): Melinda • Used by 5,200 appleproducers of the Valle del Nocein Northern Italy • Over half of them have less thanone hectare • Strict rules not only on the product but also on production techniques and packaging of the product • Important market share in Europe and beyond

33. Certification Marks

34. What is a certification mark? • Sign indicating that the goods/services have been certifiedby an independent body in relation to one or more characteristics • composition, manner of manufacture, quality, origin, material, accuracy, etc. • Owner is usually anindependententerprise, institution, governmental entity, etc. that is competentto certify the products concerned

35. How does certification mark work? • Regulations of use • quality, composition or other characteristics of the goods/services • control measures • sanctions • Authorization to use • anyone who meets with the prescribed standards • not confined to membership • generally: licence agreement (fee) • owner not allowed to use • Control

36. Benefits for SMEs • Guarantee for consumers of certain quality • Benefit from the confidence that consumers place in users of certification mark • Strengthen reputation

37. For example, certify that:  Product is handmade  Certain ecological requirements have been respected in the production procedure No children were employed in the production process  Products have been produced in specific geographical region  Products are made 100% of recyclable materials  Products are made by indigenous group

38. Case Study: “RUGMARK” • Global non-profit organization working to end child labor and offer educational opportunities for children in India, Nepal and Pakistan • RUGMARK label is assurance that no illegal child labor was employed in the manufacture of a carpet or rug

39. “RUGMARK” • To be certified by RUGMARK, carpet-manufacturers sign legally binding contract to: • Produce carpets without illegal child labor • Register all looms with the RUGMARK Foundation • Allow access to looms for unannounced inspections • Carpet looms are monitored regularly by RUGMARK • Each labeled carpet is individually numbered  enables origin to be traced back to the loom on which was produced  also protects against counterfeit labels

40. Geographical Indications(GIs)

41. What is a GI? “indications which identify a good as originating in a country, region or locality where a given quality, reputation or other characteristic is essentially attributable to its geographical origin.” • Used mainly for wines, spirits, cheese and other food products • Different countries protect them in different ways • Common examples: Champagne, Roquefort, Chianti, Parma ham, etc. • There must be a clear link with the territory

42. How does a GI work? • Authorization to use • Each enterprise located in the area has right to use • For products originating from that area LINK • Possibly subject to certain quality requirements • Link between product and place • Place where product is produced (industrial products, crafts) • Place where product is extracted (clay, salt) • Place where product is elaborated (liquor,cheese)

43. Typical examples: • Agricultural products that have qualities that derive from their place of production and are influenced by specific local factors, such as climate, type of soil, altitude, etc • E.g. wine, champagne, cognac, port, sherry, whiskey • E.g. cheese, yoghurt • E.g. olive oil, ham, potatoes, honey, rice

44. More examples: • Also: handicraftsand medium-tech goods • E.g. ‘Hereke’ (Turkey) for carpets • E.g. ‘Limoges’ (France) for porcelain • E.g. ‘Swiss’ for watches • E.g. ‘Arita’ (Japan) for ceramics

45. Case Study: Tequila • In 1977 el Tequila was registered as an appellation of origin in Mexico. • Internationally registered through the Lisbon Agreement and through mutual recognition with the USA, EU among others. • - In 1994 the Tequila Regulator Council was founded. • - Only the producers from 5 Mexican States where a • specific variety of “agave”grows are entitled to • produce “Tequila”. • - In 2006, 242.6million liters of Tequila were produced, • giving employment to 36,000 people.

46. Case Study (2): “Talavera de Puebla” • Considered to be one of the finest ceramics in Mexico • Handmade and painted by hand • Historical linked with the Spain settler since XVI century • Typical are the geometric designs in blue color painted on a white background • The design and colours of the artwork are created following traditional rules and know-how

47. How is a GI protected? • National • Regional • International

48. Protection on national level • Specific title of protection • Registration with IP office (Russia) • Decree (France) • Special laws for the protection of GIs (India) • Certification marks or collective marks • Certification: e.g. in the U.S.A.: Darjeeling, Swiss, Stilton • Collective: e.g. Japan; agricultural label in France • Passing-off,Unfair Competition, Consumer Protection laws • If reputation + misleading • Passing off: e.g. Scotch whisky – Peter Scot in India • Consumer protection: e.g. ‘made in Japan’; Egyptian cotton

49. Protection on international level • No legally binding international register for all GIs • Bilateral agreements • e.g. EU-Australia for wine names • International treaties • e.g. TRIPS, Lisbon

50. International treaties • TRIPS: • minimum standard of protection for WTO members • if misleading or act of unfair competition • enhanced level of protection for wines and spirits • no protection if GI is generic term for the goods in the member state • Lisbon: • international registration system • member countries must prohibit imitations, including terms like “type” or “kind” • cannot become generic, as long as protected country of origin