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1. Marketing and Branding Strategies:The Use of Trademarks and Industrial Designs for Business Success; Case StudiesGuriqbal Singh JaiyaDirector SMEs Division, WIPO

3. Malaysian Textile Competition The dependence on contract manufacturing means that Malaysia is weak in terms of design and product planning capabilities, distribution and marketing capabilities. Instead of creating original Malaysian brands or names, Malaysian manufacturers produce for major world brand names, including: Adidas, Arnold Palmer, Active Wear, BUM Equipment, Calvin Klein, Christian Dior, Gucci, Guess, Donna Karan, YSL, Levi's, Nike, Padini, Polo, Ralph Lauren, Reebok, Slazenger, Pierre Cardin, Camel, Mizuno and Montagut.

4. Marketing and Product Differentiation • DIFFERENTIATION is the act of designing a set of meaningful differences to distinguish the company’s offering from competitors’ offerings. - Kotler (1997)

5. Key Differentiating Factors for a New Product • The product represents a functional improvement on competing or substitute products • The retail-selling price is considered to be advantageous • The product and/or its labeling has an attractive design • The new product is properly branded, promoted and advertised • The new product is readily available to customers in the main retail shops • A number of after-sales services are provided that make the product appealing to consumers

6. How to Prevent Free Riding? • If functional improvements, attractive designs and a well-positioned brand are some of the features that may determine the success of a new product, what can an SME do to protect them and maintain its exclusivity over their use?

7. Innovation - functional improvement of a product Design - development of the ornamental features of a product Brand - for marketing the product Patents or Utility Models Industrial Designs The Answer… Trademarks

8. Patent for the fountain pen that could store ink • Utility Model for the grip and pippette for injection of ink • Industrial Design: smart design with the grip in the shape of an arrow • Trademark: provided on the product and the packaging to distinguish it from other pens Source: Japanese Patent Office

9. Corporate Image, Product Positioning and Brand Equity TRUST and RELATIONSHIPS are the bulwark of any enterprise, be it big or small, with a global or local ambit, having a traditional or modern management style, high tech or low tech, leader or follower, and irrespective of it being a part of the old world of ‘brick and mortar’ or a rising star reliant on e-commerce

10. Building Trust and Relationships A Brand is a consistent, holistic pledge made by a company, the face a company presents A Brand serves as an unmistakable symbol for products and services “Business card” a company proffers on the competitive scene to set itself apart from the rest

11. Trust is to Business, as Trademark is to Brand Brand Equity built on the foundation of a protected Trademark Brand/Trademark can: (a) be disposed off separately from other company assets (Free-standing Institutions); and (b) give rights that can be legally protected

12. Brand/Trademark Trademark: Legal concept Brand: Marketing concept Registration of a trademark adds value as it protects its other inherent assets Brand profile and positioning may vary over time, but trademark protection remains the same

13. WHAT IS A TRADEMARK? • Any sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark. • Words including personal names, letters, numerals, figurative elements (logos), combination of colors, sounds, smells, etc • Visually perceptible; 2D or 3D (shape) • Graphic representation

14. Any Distinctive Words, Letters, Numerals, Pictures, Shapes, Colors, Logotypes, LabelsIn some countries: Sounds, Smells and Three-dimensional marks • Examples:

17. Definition of a Brand (1) Defines the differential features of a product or service: Real or Imaginary Rational or Irrational Tangible or Intangible

18. Definition of a Brand Contd... (2) Constitutes an image that creates a personal experience: Own Third party Imaginary

19. Definition of a Brand Contd... (3) With conscious and unconscious contents that the consumer projects and deposits on it; (4) Constitutes part of and builds up his/her identity; (5) Generates certain perceptions, attitudes and behaviors and enables fulfillment in their lives

20. Brand Identity • Mind share (cognitive level) • Heart Share (Emotional relationship) • Buying intention share • Self share (self-expression and self-design) • Legend Share (cultural-sociological proposition; legendary; mythological)

21. Role of Brands: For the Company In a highly competitive world, where manufacturers are losing their pricing power, branding is seen as a way of clawing back some of the lost influence.

22. Role of Brands: For the Company Real and marketable asset Higher profit margin (Price Premium) Incremental cash flow Reduces cash flow sustainability risk

23. Role of Brands: For the Company Accelerates speed of cash flow Increases bonding and customer loyalty Increased market share Entry barrier Limits growth of competitors

24. Role of Brands: For the Company Requires lower investment levels Better negotiating position with trade and other suppliers Facilitates higher product availability (better distribution coverage) Dealers order what customers explicitly request

25. Role of Brands: For the Company Extends products’ life cycle Allows lower cost brand extensions Can be the basis for international expansion Provides legal protection; licensing; franchising Buffer to survive market or product problems

26. Role of Brands: For the Company Value of Brands is a key determinant of enterprise value and stock market capitalization Financial markets reward consistently focussed brand strategies Brand management a vital ingredient for success in corporate strategy

27. But... Brand Building Requires Time and Money; Brand Nourishing Should be a Continuous Process; Higher Profile/Exposure, Greater its Vulnerability; Can be Target of Counterfeiting/Criminal Activities;

28. Time required... “It took seven years of marketing before car buyers began to recognize that the BMW brand was distinctive”: Jorg Zintzmeyer, board member of Interbrand, p 33 of FORBES Global, July 22, 2002 in “The best-driven brand” by Nigel Hollway

29. So... The cost of building a brand can be very substantial over a period of time. That is why buying a brand sometimes makes sense to many companies.

30. Morgan Stanley’s Pettis Report on the relationship of corporate brand strategy and stock price shows that…. “Smart strategies can result in stock price appreciation by 2 to 9%” “Positive Correlation between corporate improvements in brand strategy programs and a positive stock market return Starbucks: P/E ratio of 47!

31. The Importance of Brands “Consumers are starved for time and overwhelmed by the choices available to them. They want strong brands that simplify their decisionmaking and reduce their risks” Are there other good reasons? Kevin Lane Keller, Tuck School of Business

32. Functions of a Trademark For the consumer: • Enables consumers to distinguish between similar or identical products • Products with characteristics that may not be examined prior to purchase • Trademark as a guarantee of quality

33. Functions of Trademark • For the company: • Enables it to differentiate its products • Basis for investing in the image and reputation of a company’s products • Consumers have emotional attachment to certain trademarks • Basis for a loyal clientele

35. The Value of a Trademark • Interbrand conducts an annual survey of the most valuable trademarks in the world: Coca-cola: US$68.9 billon Microsoft : 65.1 bill. IBM: 52.7 bill.

36. The Value of a Trademark • Consumers are willing to pay a premium price for a product bearing a trademark with a given reputation • Mergers and acquisitions increasingly driven by need to acquire a trademark to, for example, enter a new market • Companies outsourcing manufacturing activities to low-cost locations rely heavily on the trademarks as the main source of competitive advantage

37. Choosing a mark • From a commercial point of view: • Short and simple • Easy to read, spell, pronounce and remember in all relevant languages • Not to have undesired connotations in any relevant language (“Nova”, “Traficante”, “Taco Bell”) • Easy to adapt to all advertising media

38. Choosing a mark • Cannot be registered as trademarks: • Generic marks (cases “nylon”, “formica”, “aspirin”, etc) • Descriptive signs • Signs that may lead to confusion as to the nature of the product • Signs contrary to public order • Geographic signs • Signs that are similar or identical to existing registered trademarks

39. Selecting a Trademark • Best choice: • Arbitrary/fanciful – • Kodak® film, Acrobat® software, Exxon® fuels • Suggestive – gives a hint of what the product is, but is not merely descriptive – • Molyvan®, Vancote® • Can not be generic or merely descriptive • ‘Super Strong’ • Diet Chocolate Fudge Soda • KANZEN TETSU ®

40. Selecting a Trademark Arbitrary/fanciful – • Acrobat® software, Exxon® fuels, Sprite® soft drink Suggestive – gives a hint of what the product is, but is not merely descriptive – • Ty-D-Bowl® cleaner, Rollerblades® in-line skates Descriptive with “acquired distinctiveness” American Airlines® • Can NOT be generic or merely descriptive • Gummy Bears or Super Strong

41. Selecting a Trademark • Must not be confusingly similar to existing trademarks used on related goods. • Are the marks related • Visual appearance, sound-alike? • Are the goods related • Trade channels, marketing channels, compare likely purchaser group • Other factors – sophistication of purchasing group, selling price, impulse vs. careful purchaser • Likelihood of confusion – would consumers believe that the two products come from the same source

42. Types of trademarks which cannot be registered in Malaysia If the representations contain the following, a trade mark will not registered : • His Majesty the Yang Di Pertuan Agong • Their Royal Highnesses the Sultans • Their Excellencies the Yang DI Pertua Negeri • National Flower and Mosque • Royal Imperial Arms, Crests or Insignia • Red Crescent, Geneva Cross and other representations of the Red Crescent, the Geneva and other crossed in red • Swiss Federal Cross in white or silver on a red ground or such representations in similar colour or colours

43. Types of trademarks which cannot be registered in Malaysia • Trade marks cannot contain the following words (in any language) • Red Crescent • Geneva Cross • Royal • Imperial • Any wording which would amount to a false trade description or which would cause confusion with a previously registered mark. • Any wording which is scandalous or offensive • Any wording which would create the impression the applicant has or recently had Royal authorization or patronage, regardless of whether it is true.

44. Types of trademarks which cannot be registered in Malaysia Trade marks will not be registered if they consist only of : • Numbers, letters or full names in plain lettering • Names of geographic locations • Shapes of the product • Words which describe the goods

45. Clearing a New Mark • Searching – • pending trademark applications and granted registrations • ‘Knock-Out’ search • Recommend to follow up with outside search (Thomson &Thomson®), which will find phonetically similar marks

46. Clearing a New Mark • Searching • ‘Common law’ marks- third party rights may also exist in non-registered marks. Sources: Google™ search, Lexis®/Nexis®, industry publications, Thomson & Thomson®

47. Clearing a New Mark • ‘In Use’ investigation – registered marks may be invalid – confirm current use through Internet or outside investigator. • Opinion – experienced trademark counsel can give guidance as to descriptiveness and confusion issues

48. Proper Trademark Usage • Why? – improper use can lead to loss of exclusive rights – mark becomes generic, and everyone can use it • Lost - aspirin, cellophane, escalator, thermos, linoleum • Saved – Xerox® copiers, Band-Aid® bandages, Rollerblade® in-line skates

49. Proper Trademark Usage How? • DO • Use as an adjective modifying a generic noun: Xerox® copiers • Set apart from other text: • Initial capital Xerox® copiers • All caps XEROX® copiers • Bold, or different font Xerox® copiers

50. Proper Trademark Usage How? • DO NOT • Use as a noun or verb • “Give me a xerox” • “I am xeroxing that now” • Use in the plural • Incorrect - Three xeroxes • Correct – Three Xerox copies