The Role of Trademarks, Designs and Geographical Indications in Building a Brand Image

1. The Role of Trademarks, Designs and Geographical Indications in Building a Brand Image Guriqbal Singh Jaiya Director,SMEs Division World Intellectual Property Organization (WIPO)

2. “Competitive strategy is about being different. It means deliberately choosing to perform activities differently or to perform different activities than rivals to deliver a unique mix of value.” Michael E. Porter

3. Definition • Competitive Advantage • An advantage over competitors gained by offering consumers greater value than competitors offer.

4. Competitive Strategies • How does an organization improve their competitive performance? • Must establish a competitive advantage in 3 areas: • Uniqueness: of resources & processes (Bill Gates knowledge of IBM) • Value: where products/services warrant a higher-than-average price or exceptionally low • Difficult to imitate: when products/services are hard to mimic or duplicate

5. Competitive Strategies • Basic Competitive Strategies: Porter • Overall cost leadership • Lowest production and distribution costs • Differentiation • Creating a highly differentiated product line and marketing program • Focus • Effort is focused on serving a few market segments

6. Competitive Strategies • Basic Competitive Strategies: Value Disciplines • Operational excellence • Superior value via price and convenience • Customer intimacy • Superior value by means of building strong relationships with buyers and satisfying needs • Product leadership • Superior value via product innovation

7. CORE COMPETENCES Definition Hammel and Prahalad defined core competence as a central value - creating capability of an organization/enterprise.

8. CORE COMPETENCES • Core competences are activities or processes that critically underpin an organisation competitive advantage. • They create and sustain the ability to meet the critical success factors of particular customer groups better than providers in ways that are difficult to imitate

9. CORE COMPETENCES • Core competences are distinctive capabilities that lead a company to a competitive advantage. • Features of an enterprise that cannot be readily reproduced by a competitor.

10. CORE COMPETENCES Core competences can vary through the time depending on the strategy adapted by the companies and the identification of the core competencies is the first step for a company to decide which business opportunities to pursue.

11. The Five Generic Competitive Strategies

12. Low-Cost Provider Strategies Keys to Success • Make achievement of meaningful lower costs than rivals the theme of firm’s strategy • Include features and services in productoffering that buyers consider essential • Find approaches to achieve a cost advantagein ways difficultfor rivals to copy or match Low-cost leadership means low overall costs, not just low manufacturing or production costs!

13. Differentiation Strategies Objective • Incorporate differentiating features that cause buyers to prefer firm’s product over brands of rivals • Find ways to differentiate that create value for buyers and are not easily matched or cheaply copied by rivals • Not spending more to achieve differentiationthan the price premium that can be charged Keys to Success

14. Activities, Costs, & Margins of Suppliers Internally Performed Activities, Costs, & Margins Buyer/User Value Chains Activities, Costs, & Margins of Forward Channel Allies & Strategic Partners Where to Find DifferentiationOpportunities in the Value Chain • Purchasing and procurement activities • Product R&D and product design activities • Production process / technology-related activities • Manufacturing / production activities • Distribution-related activities • Marketing, sales, and customer service activities

15. How to Achieve aDifferentiation-Based Advantage Approach 1 Incorporate product features/attributes thatlower buyer’s overall costsof using product Approach 2 Incorporate features/attributes thatraise theperformance a buyer getsout of the product Approach 3 Incorporate features/attributes thatenhance buyersatisfactionin non-economic or intangible ways Approach 4 Compete on the basis ofsuperior capabilities

16. Types of Differentiation Themes • Unique taste – Dr. Pepper • Multiple features – Microsoft Windows and Office • Wide selection and one-stop shopping – Home Depot, Amazon.com • Superior service -- FedEx, Ritz-Carlton • Spare parts availability – Caterpillar • Engineering design and performance – Mercedes, BMW • Prestige– Rolex • Product reliability – Johnson & Johnson • Quality manufacture – Michelin, Toyota • Technological leadership – 3M Corporation • Top-of-line image – Ralph Lauren, Starbucks, Chanel

17. Sustaining Differentiation:Keys to Competitive Advantage • Most appealing approaches to differentiation • Those hardest for rivals to match or imitate • Those buyers will find most appealing • Best choices to gain a longer-lasting, more profitable competitive edge • New product innovation • Technical superiority • Product quality and reliability • Comprehensive customer service • Unique competitive capabilities

18. Best-Cost Provider Strategies • Combine a strategic emphasis on low-cost with a strategic emphasis on differentiation • Make an upscale product at a lower cost • Give customers more value for the money • Deliver superior value by meeting or exceeding buyer expectations on product attributes and beating their price expectations • Be the low-cost provider of a product with good-to-excellent product attributes, then use cost advantage to under price comparable brands Objectives

19. Focus / Niche Strategies • Involve concentrated attention on a narrow piece of the total market Serve niche buyers better than rivals • Choose a market niche where buyers have distinctive preferences, special requirements, or unique needs • Develop unique capabilities to serve needs of target buyer segment Objective Keys to Success

20. Examples of Focus Strategies • Animal Planet and History Channel • Cable TV • Google • Internet search engines • Porsche • Sports cars • Cannondale • Top-of-the line mountain bikes • Enterprise Rent-a-Car • Provides rental cars to repair garage customers • Bandag • Specialist in truck tire recapping

21. Which hat is unique? Focus / Niche Strategiesand Competitive Advantage Approach 1 • Achieve lower costs than rivals inserving a well-defined buyer segment – Focused low-cost strategy Approach 2 • Offer a product appealing to uniquepreferences of a well-defined buyer segment – Focused differentiation strategy

22. Profit-based management Reduce costs Reduce compensation Replace people with technology Price to extract maximum value Sell more products Acquire lots of customers Loyalty-based management Invest in marketing assets Give superior compensation Leverage people with technology Price to reward customers Deepen customer value Acquire customers selectively Two Models of Management Source: Frederick Reichheld, The Loyalty Effect

23. Focus on Building Long-Run Marketing Assets. • Brands and brand equity • Customers and customer equity • Service quality • Stakeholder relationships • Intellectual knowledge • Corporate reputation

24. Marketing is More Important than Production! • The manufacturer of a Hugo Boss shirt gets only $12, or 10% of the final price of $120 that is paid by a customer of Saks Fifth Avenue. • The retailer gets 60% ($72) and the Brand company gets 30%, or $36. • Would you rather be the manufacturer, Brand owner, or retailer? • The manufacturer has no defense if the Brand Owner wants to switch to another manufacturer to whom he will pay $8 and keep $2 or pass it to the retailer to get more retail support. • Yet in most countries, policy makers and business leaders pay more attention to the product engineer than the marketing “engineer.” But India’s future success will require investing in marketing and branding.

25. Improving Marketing Efficiency and Effectiveness • Improving marketingefficiency • buying inputs more efficiently • hunting down excessive communication and sales travel expenses • closing unproductive sales offices • cutting back on unproven promotion programs and tactics • putting advertising agencies on a pay-for-performance basis • Improving marketing effectiveness • replacing higher cost channels with lower cost channels • shifting advertising money into better uses • reducing the number of brands or sku’s • Improving supply chain responsiveness

26. Planning for today Defining the business. Shaping the business to meet needs of today’s customers Improving alignment between functional activities and business definition Organization mirrors current business activities Optimizing current operations to achieve excellence. Planning for tomorrow Redefining the business Reshaping the business to compete for future customers and markets Making bold moves away from the existing ways of doing business Reorganizing for future business challenges Managing change to create future operations and processes Dual Strategies

27. Some Vertical Marketing Methods • Modulation • The juice manufacturer varies the sugar content, fruit concentrate, with or without vitamins… • Sizing • Potato chips are offered in sizes 35 grams, 50 grams, 75grams, 125 grams, 200 grams, multi-packs… • Packaging • Nestle’s Red Box chocolates comes in different containers: cheap paper box for the grocery trade, premium metal box for the gift trade… • Design • BMW designs cars with different styling and features... • Complements • Biscuits with sugar spread on it, with cinnamon, with chocolate, with white chocolate, with black chocolate, filled biscuits… • Efforts reduction • Charles Schwab offers different channels for transacting such as retail stores, telephone, internet….

28. New category Cereals for breakfast market = into STREETS Vertical Marketing Process Cereal varieties The case of Cereal Bars Lateral Marketing Process

29. The case of Barbie Lateral Marketing Process Teenager New category Baby dolls market To feel as... = Doll varieties Vertical Marketing Process

30. Other Examples of Lateral Marketing • Kinder Surprise = candy + toy. • Seven Eleven = food + depot. • Actimel = yogurt + bacteria protection. • Gas station stores = gas station + food. • Cyber cafes = cafeteria + Internet. • “Be the godfather of a kid” = Donation + adoption. • Huggies Pull-ups = diapers + 3 year olds. • Walkman = audio + portable • Source: Philip Kotler and Fernando Trias de Bes, Lateral Marketing: A New Approach to Finding Product, Market and Marketing Mix Ideas (Wiley, 2004)

31. The Evolution of Marketing Adapted from Prahalad and Ramaswamy 2004

32. Check Where You Stand • Marketing does the marketing -> everyone does the marketing. • Organizing by product units -> organizing by customer segments. • Making everything -> outsourcing more goods and services. • Using many suppliers -> working with fewer suppliers. • Emphasizing tangible assets -> emphasizing intangible assets. • Building brands through advertising -> building brands through integrated communications.  • Attracting customers to stores -> making products available on-line. • Selling to everyone -> selling to target markets. • Focusing on profitable transactions -> focusing on customer lifetime value.  • Focusing on market share -> focusing on customer share. • Being local -> being “glocal. • Focusing on the financial scorecard -> focusing on the marketing scorecard.  • Focusing on shareholders -> focusing on stakeholders 

33. Building Brand Equity MARKETING IS THE ART OF BRAND BUILDING * IF YOU ARE NOT A BRAND, YOU ARE A COMMODITY. * THEN PRICE IS EVERYTHING AND THE LOW-COST PRODUCER IS THE ONLY WINNER!

34. How Important is Branding? • The NUMMI plant in California produces two nearly identical models called the Toyota Corolla and the Chevrolet Prizm. • Toyota sold 230,000 Corollas compared to sales of 52,000 Prizms. • And Toyota’s net price is $650 higher!

35. On the demand side: higher price increased sales volume lower churn more brand stretching On the supply side: greater trade acceptance, more favorable supplier terms, lower rejection lower staff acquisition and retention costs lower cost of capital better scale economics through higher volume A Strong Brand Improves Demand and Supply

36. Donald Trump’s family name is Drumpf. But he can’t call it Drumpf Towers. Alan Alda’s name was Alphonso D’Abruzzo. Chinese gooseberry was renamed kiwifruit. Paradise Island in the Bahamas used to be Hog Island. Names are Important in Branding

37. A Brand Must be More Than a Name • A brand must trigger words or associations (features and benefits). • A brand should depict a process (McDonald’s, Amazon). • A great brand triggers emotions (Harley-Davidson). • A great brand represents a promise of value (Sony). • The ultimate brand builders are your employees and operations, i.e., your performance, not your marketing communications.

38. Your Company’s Brand • What word does your brand own? 2. Write down other words triggered by your brand name? A. Circle the favorable words; square the unfavorable words. B. Underline the words that are favorable but not widely known. C. Double underline the words that are unique to your company. 3. Are any of the following a source for strengthening your brand’s personality? A. Founders B. Spokespersons C. Characters D. Objects E. Stories and mythologies

39. How Do You Develop a Brand Concept? • “The brand must be an essence, an ideal, an emotion. ” It must be supported by beautiful logos, clever tag lines, creative turns, edgy names, rave launch parties, big ticket giveaway promotions, and publicity buzz-making. (Advertising agency view) • “The brand should have a target group in mind and be positioned to solve one of their problems better than competitive offerings.” Furthermore the brand’s reputation is ultimately based on product quality, customer satisfaction, employee communications, social responsibility, etc. (Kevin Clancy, CEO of Copernicus)

40. Branding Components • Name • Short, suggestive, memorable, unique, pronounceable • Slogan • Logo and typeface • Colors • Music • Taglines/themelines (Got Milk!) • Stationery and business cards • Offices • Trucks • Dress code

41. Brand Slogans • BA, “The World’s Favorite Airline” • American Express, “The Natural Choice” • AT&T, “The Right Choice” • Budweiser, “King of Beers” • Ford, “Quality is #1 Job” • Holiday Inn, “No Surprises” • Lloyds Bank, “The Bank that Likes to Say Yes” • Philips, • “From Sand to Chips” • “Philips Invents for You” • “Let’s Make Things Better”

42. Design the Marketing From the Customer-Back • Marketing must be run as a set of value finding, creation, and delivery processes, not 4P functions. The four Ps are seller oriented. • The 4As are buyer oriented. • Awareness (A1) • Acceptability (A2) • Affordability (A3) • Accessibility (A4) • Market value potential = A1 x A2 x A3 x A4 • If A1=100%, A2=100%, A3=50%, A4=50%, Then MV=25% Source: Jagdish Sheth

43. Focus on Delivering Outcomes, Not Products.

44. The Challenge of Marketing for SMEs • Some products have to face competitionof other products on the market that are often similar or almost identical • Need to find mechanism that creates and maintains loyal clientele

45. Choosing a textile product • Materials and texture: • quality silk, pure wool • vegetable colors • Quality: • colorfastness • easy to clean • density of the knots • Design: • traditional designs • fashion trends • unique • Manufacturing technique: • weaving/knitting technique • hand woven • woven by women • Reputation

46. Give information • Send a message • Create image that differentiates you • To maintain credibility, confidence and loyalty Marketing a textile product • Materials and texture • Quality • Manufacturing technique • Design • Reputation

47. Role of IP in Marketing • Consumers are unable to assess the quality of products on the market • Trademarks, collective marks, certifications and geographical indications (GIs) refer to the reputation and to certain qualities of the products • Trust in the mark/GI is the reason why consumers may be willing to pay more

48. IP and Marketing • Collective marks • Certification marks • GIs Trademarks Ind Designs Individual marketing Joint marketing

49. What is a trade mark ? • A mark that • is associated with a particular product or service • helps to distinguish it from other products and services, • use of the mark in marketing and advertising, • Achieves distinguishing from other products or services • creates economic advantages to the trade mark owner or trade mark licensee

50. What can be a trade mark • A trade mark is not limited to a sign or words • Can be: • Words • Letters • Numerals • Drawings • Shapes • Colours • Logo • Audible sounds