How Brand as an Intellectual Property has Led to Corporate Globalisation?

By: Solomon Prabakar
Submitted: 2007-01-17 11:43:00
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Introduction

Globalisation is referred to as a set of profound material changes that have an impact on relations between societies in the past few decades. The identifiable features of these material changes are witnessed in the development and growth of web, satellite transmission, fibre-optic technology, broadband operations, transnational corporations and the emergence of World Trade Organisation.

Globalisation is transformation of how ideas travel and the nature of their final destination leading to increase in international trade thereby increased competition. Firms expand by penetrating established markets to create new markets for their products. This necessitates them to have identity for them by establishing trademarks by way of branding and keep on administering to create value. While expanding and penetrating newer markets; developing, promoting and performing marketing operations using different trade marks for different countries become costlier. The more the countries a trademark is known, the greater is its value and the greater the need to protect the same by registering at the global level. Trademark registration involves not only higher costs but also procedural constraints while registering the same in every country.

Brands have become part of not only an economic market, but also a metaphorical market because they involve and propagate a system of using signs to control meaning and language as brands fulfils several different economic functions.

Identification: On a basic level, it serves an identification function by associating a product with a company.

Communication: More abstractly, it has an informative function, in that it provides a vehicle for the efficient communication of information, thereby reducing consumer search costs in choosing a product. Signaling: The use of branding in advertising also serves a signaling function, in that, it suggests that a company who is willing to expend a substantial sum on its advertising must have developed a good product. Expression: Lastly, branding also serves an expressive function, in the sense that it links a particular consumer identity or essence with a product.

Mega – branding Strategy

Branding involves not just the product name, advertisements, or the use of a logo, but the core assumptions and beliefs that are conjured up when one thinks of the brand. The best brands were those who could generate a certain psychological feeling about the product. Thus, the “brand essence” moved away from a focus on the product and toward a psychological association of the brand with a certain identity. Today, firms undertake “mega-branding” strategy, in which firms devote a substantial portion of their income towards placing their logo on a variety of different products and events, further amplifying the link between psychological, cultural and corporate association. In this way manufacturers control both supply and demand by manipulating consumer trends through the skilful promotion of the brand.

Brand Plan – A Valuable Management Tool

Brand plan is a crucial step in charting a business route to success. A good brand plan provides an overview of where the brand is, how it plans to position or reposition itself, and how it seeks to achieve its business objectives. A well-prepared and regularly updated brand plan is a valuable management tool that serves variety of purposes. It helps examine the feasibility of taking a brand idea to the market. A written brand plan forces a firm to think through all the key issues – such as the potential demand, the nature of the competition, entry barriers, the unique selling proposition, key employees, relevant technologies and strategic partners, raising funds, projected start-up costs, and the like.

A brand plan is a reference document that provides management with an objective basis for determining whether the brand is on track to meet its goals and objectives with the available resources in a set timeframe. Innovation is very important and critical to the future of the brands. Context, Leadership and core values of the brands are the drivers of innovation. One needs to address “What is the current situation of the brand? What threats for survival might exist?”, “What is the leadership passionate about? What drives the choices, decisions and behaviour in the organisation? How innovation and creativity improve brand? How this can be strengthened to be considered as a global brand? Customer analysis and brainstorming help generate ideas for innovation. Internal sources and customers are the best sources of ideas.

The World Intellectual Property Organization (WIPO) has initiated and promoted the Madrid Protocol, which establishes a system for the international registration of trademarks to reduce this cost due to multiple registrations in different countries. This protocol is termed as the Intellectual Property Rights. Intellectual Property Rights cover Patents, Trade-marks, Industrial designs, Copy rights & related rights, Geographical indications and Trade secrets & Undisclosed information. Trademarks have become more than a means of protecting market share. They have become an invaluable tool in claiming and creating markets. From just being a trade mark, they become trust marks as brands. According to the author and journalist Naomi Klein, “branded world where the logo is a common language understood by everyone” leading to a shift in corporate marketing strategies: from promoting commodities based on the needs of the marketplace, to promoting a brand to represent a lifestyle thereby create needs in the marketplace. The branding strategy makes the trademark and the socio-cultural identities associated with the mark including the product itself.

Intellectual property in a brand plan becomes critical as business incubator or investors need to understand and accept the coherence of the brand idea including its protection. New or original knowledge and/or creative expression of ideas, protectable by the system of intellectual property (IP), underpin their competitive advantage and success. Therefore, a brand plan should cogently reflect how the firm plans to protect, manage and leverage its intellectual property assets for brand success. Patents for Brands provide exclusivity for the commercialization of inventions and often play a crucial role in convincing investors or lenders. One or more patents along with industrial design registrations reflect as a proof of brands ability to dissuade competitors using original or aesthetically attractive features of the brand. Therefore, a brand plan should integrate intellectual property and reflect the steps that are planned to develop, register and effective use of intangible assets to win and retain market share from competitors.

While integrating intellectual property, operational elements that make the brand innovative like, Challenge, customer focus, creativity, communication, collaboration, completion and contemplation should also be considered. Issues

The possibility of inadvertently infringing a third party’s intellectual property rights is high in high-tech sectors. Confidential information such as details of production, inventions, and technical, financial and marketing know-how is often the source of competitive advantage. Intellectual Property can be a highly valuable asset. Managing and ascribing a value on the balance sheet of the brand will make it more attractive to potential investors. The more the position in the market place is exploited, more the value will be of the property while licensing it or selling the brand.

Conclusion

Administering Intellectual Property is an arduous task for approaching investors and considering the market opportunities for the brand. As the Intellectual Property provides the brand with competitive advantages and increases its value, it is necessary to let the investors know that the intellectual property integrates with the brand plan. Reference to the assets of the brand and its market opportunities should list both the tangible and intangible assets, as the latter are often the key to success of the brand. The growing emphasis on the brand has been paralleled by a massive expansion of property rights in trade symbols. In the past, the law’s major emphasis focused on protecting a mark in order to avoid the danger of consumer confusion, or piracy between goods which used similar marks. However, today, the focus has shifted towards trademark protection. In other words, in order to protect their trade marks used in advertisements and logos, firms turn to trademark law, and copyright law. As per the trademarks, 1999, the term mark includes a device, brand, heading, label, ticket, name signature, word, letter or numeral or any combination thereof. The new Trade Marks Act, 1999 has made far reaching changes in the act considering the liberalisation and globalisation of economy. They include particularly the following:

a. Registration of Service Marks

b. Collective marks provided

c. Two parts A & B abolished

d. Well known trademarks protected even if not registered

e. Shape of words can also be registered

Hence, intellectual property law should form a key part of every aspect of a good brand plan.

J. Solomon Prabakar

Article source: Expert Articles