From Retired Brands, Dollars and Memories (New York Times)
As noted in our Product Decisions tutorial, a well-marketed, recognizable brand can often obtain financial benefits in which the name of the brand becomes a valuable commodity. That is, the name, exclusive of the actual product, has value. When this happens the marketer is said to possess a product with significant brand equity. For instance, just think how much value there is in the brand name, iPod. Because this name is so well known, anyone using this name to sell digital music devices would realize tremendous consumer awareness.
Obviously, Apple is not about to let others use their iPod brand name. Apple, like most marketers, is highly protective of its brand names and the equity these have created. They control these legally by obtaining trademarks and enforce their names by threatening lawsuits against potential violators.
Brand equity is greatest when a product is a current market leader, yet it is possible for equity to extend well beyond a product’s life. This can be seen when a product is no longer being sold either because it is a retired brand, or because the brand suffered financially and eventually went out of business. So even though a product may be off the market for several years, as long as customers recognize the brand a marketer may still reap value from the name.
A case in point can be found in this story which reports on just how valuable some old brand names may be. The story discusses an auction in which bidders are bidding on previously established and trademarked brand names. However, the owners of the original trademarks have let these names lapse, and now a speculator has filed for use of the names. At the auction, the speculator sold the rights to the application for the trademark. In other words, the trademarks have not actually been awarded, only an intention to use the name has been filed. But, this did not prevent many from seeing future value in the old brand names.
It featured names in categories like beverages (Meister Brau beer, Snow Crop frozen orange juice) financial services (the Kuhn Loeb and Shearson brokerage firms), packaged foods (Allsweet margarine, Lucky Whip dessert topping), personal care (Mum and Stopette deodorants), publishing (Collier’s, Saturday Review) and retail (Computer City, Phar-Mor).
For those who were successful in their bid, what risks are associated with their purchase?
Image by BrentDPayne