By Janet Morgan, Contributor 
Brands are the trademark by which a products and services are identified in the market place. We can all think of some typical examples of well known brands like Coke, Nike, Xerox, Kodak and McDonald's. In Jamaica, there are well-known home-grown brands like Red Stripe, Grace, Jablum, Ting, and Island Spice which now have international recognition. The power of brands is demonstrated by the fact that in Jamaica many persons still think that all vacuum cleaners are called Hoover, all nail polishes are called Cutex, and any newspaper, wherever found, is a Gleaner!
A trademark, whether registered or not, entitles the owner to not only the use of the trademark as a brand, but it creates opportunities for wealth creation in the following ways:
For directors and shareholders of a company it is an asset which may be ascribed a financial value much like the company's plant and equipment are ascribed values in financial statements. A strong brand may encourage investment in the company, attract new investors and increase the value of the shares.
In the marketplace, it distinguishes one product from another. As consumers, we all fall prey to what is called the "Power of a Brand" and we will, for no logical reason, buy a product with a brand that we know for a far greater price than another identical product that bears a brand with which we are not familiar. We are attracted to brands because they may conjure up an image we wish to create of ourselves. For example, perfumes are often given exotic French names which promise to make the user appealing or desirable, whereas another perfume without a big price tag and without a French name, which is just as fragrant, may not have the same appeal.
Consumers use the brand to identify the product for re-purchase or in identifying the goods to others.
International brands have whole departments devoted to the management and maintenance of their brands as it is well recognised that brand management can lead to increasing the value of the brands and to the marketability of the brands through:
Licensing: This employs the already well-known concept of the owner of the brand, that is the licenser, allowing another party that is, the licensee, to use the brand on specific goods or services at a price or a royalty for a period of time. Licences usually include strict provisions which prevent the licensee from degrading the value of the brand, enforceable by covenants taken from the licensee on the marketing, attainment of market projections and on the duty to collaborate with the licenser on the use of the brand. Compensation to the licenser for use of a brand may also take the form of a management fee that the licensee pays; or the licensee may make a contribution to the licenser's advertising and marketing expenses; or the licensee may agree to buy raw material from the licenser. For example, licensing occur when Coke requires the bottling licensee to purchase from Coke the concentrate for making Coke. As is stated by Raymond Perrier, an expert in brand valuations "... though the payment for these products at a given price may appear to be a tangible transfer, it is clear that the amount that can be demanded is influenced as much by the trademark rights that go with the product as by the qualities of the products themselves".
Franchising is another approach of using a brand to create wealth. McDonald's has used this approach to build one of the strongest and most commercially successful brands of the last century.
Franchising is a partnership between the owner of a business system offering branded products or services and a number of individuals who, for a fee, wish to access the system which each individual owns or operates. In this concept, the fixtures, furniture, equipment, uniform, promotional material, the service and/or the goods bear the brand of the franchiser. The franchiser maintains the brand by upgrading and marketing and the individual franchisee essentially adopts, wholesale, the culture of the franchiser.
Brand Extension. Brands may also be extended from one product to another. The brand owner can in this way attach or transfer to a new product the qualities and attributes of a well-known brand. New products can therefore enter the market more cheaply and establish an identity more quickly. In the USA, approximately 16,000 new products are launched every year, 95% of which are branded as extensions of existing brands. In England, Cadbury's extended his brand from chocolate to soups and beverages. On the other hand, the brand owner has to consider extensions carefully, as attaching the brand to a new product which is not embraced by the market may devalue the brand. Locally, Grace, has extended its brand to financial services because of the excellent brand recognition it has in the marketplace for stability and success.
Law firms, both locally and internationally, brand their services in much the same way that DunnCox, has adopted the logo that heads this article. This is called building a brand name. Many firms in Jamaica which provide a variety of goods and services adopt a logo, insignia or brand to distinguish their product or service from their competitors'.
Some major sporting tennis, football, golf, car racing events are branded by well-known brands of car, beers, cigarettes or sporting goods for the exposure that it offers to the brand holder.
The developments in branding have been described as the 'branding revolution'. There are no boundaries to this revolution in a world where the legal systems recognise and protect intellectual property rights in trademarks.
Janet E. Morgan is an attorney-at-law with the firm of DunnCox which is located at 48 Duke Street, Kingston.
