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Abstract
The paper suggests that generic brands can develop in industrial markets as easily as they can in consumer goods markets. It briefly
examines the issue of branding in industrial markets and then describes the problems that firms can face if their brand name becomes used in
a generic manner. It suggests actions that such firms can take as responses to this situation. D 2002 Elsevier Science Inc. All rights reserved.
0019-8501/02/$ – see front matter D 2002 Elsevier Science Inc. All rights reserved.
PII: S 0 0 1 9 - 8 5 0 1 ( 0 0 ) 0 0 1 3 1 - 0
386 J. Low, K. Blois / Industrial Marketing Management 31 (2002) 385–392
Table 1
Examples of the components of brand value
Components Tangible Intangible
Product Number of defects; useable product life Perceived reliability
Distribution services Lead times; number of late deliveries Ease of ordering; responsiveness in emergencies
Support services Times and number of staff available Perceived service quality; rapport between service provider and customer
Company Profitability; market share Reputation; country of origin
Source: Based on Ref. [1].
Unfortunately, for Sortex, it has become acceptable to between ‘‘basic brands,’’ ‘‘augmented brands,’’ and ‘‘poten-
classify rice sorted with an optical sorting system from any tial brands.’’ Basic brands, it is argued, depend primarily
supplier as ‘sortexed.’ Furthermore, confusion as to the upon the product component with the other three compo-
original manufacturer of installed equipment results in poor nents remaining relatively less distinct. With augmented
performance and inadequate reliability being attributed to brands both distribution and support services gain signific-
Sortex even in cases where it is not their machine. Indeed ance. Finally, potential brands feature all four components in
from time to time, firms operating competitors’ equipment a balanced manner.
will telephone Sortex asking for technical support following It has also been claimed [2] that there are nine specific
a breakdown! benefits that an industrial company will derive from having
a strong brand image for its products:
3. The case for branding industrial2 goods 1. Premium prices can be obtained.
2. The product will be demanded.
The case for branding in general is well established and 3. Competitive products will be rejected.
supported by a considerable volume of research. However, 4. Communications will be more rapidly accepted.
the greater part of it has been concerned with ‘consumer’ 5. The brand can be built on.
goods and, in comparison, relatively little has been written 6. Customer satisfaction will be improved.
or researched about issues associated with ‘industrial’ 7. Power in the distribution network will be increased.
brands. Indeed some writers have suggested that to indus- 8. Licensing opportunities could be opened up.
trial marketers ‘‘the word brand connotes a gimmicky tactic 9. The company will be worth more when it is sold.
for a less serious consumer product’’ [1].
This view is, perhaps unintentionally, supported by the It is not only claimed that owning a strong brand brings
suggestion [2] that, from the customers’ point of view, benefits to a company, but that there are serious penalties for
branding offers three intangible but significant advantages: those companies that do not develop strong brands [2].
Yet, these nine benefits are broad generalizations and the
1. A brand is a summary of all the values associated with it. applicability of each of them is contingent upon specific
2. A brand makes customers confident in their choices. circumstances within which a product is being marketed.
3. It makes customers feel more satisfied with For example, the assertion that the third benefit of strong
their purchase. branding is that ‘‘competitive products will be rejected’’
implicitly assumes that there is only one strong brand in the
It has also been argued [1] that the issue of brands must market and/or the cost of purchasing the competing brands
be viewed from the customer’s perspective, and it has been is substantially higher. This is because if, as is the case in
asserted that brand value is comprised of four components many consumer markets, there is more than one strong
each of which involves tangible and intangible elements brand, then competitive products will only be rejected in
(see Table 1). That is, that a brand name conveys to favor of a specific brand when that brand is the ‘‘strongest’’
customers that these components have certain values.3 and not just ‘‘strong.’’ In addition, a customer will only
Of course, brand value is difficult to analyze in a precise switch brands when the difference between the cost of
manner and in reality these four components ‘‘blur purchasing the new brand and the established brand is less
together’’ [1]. In addition, a distinction is also made than the difference in the value that the customer perceives
between the two brands.
2
To avoid being repetitive, in the remainder of this paper, the word
‘industrial’ is omitted, but where an issue refers only to a consumer product,
this will be indicated.
3 4. The value of brands
It is important in the euphoria of discussions about the benefits of
brands to always remember that a brand may have a negative connotation.
For example, Skoda, at least up to the time that it was bought by Determining what value to place on a brand name has
Volkswagen, had a very negative image. been a problem for many years and has led to many disputes
J. Low, K. Blois / Industrial Marketing Management 31 (2002) 385–392 387
about the value of those companies which own brands. There This type of situation has occurred even when the
is evidence that investment analysts recognize that a strong company whose name has become used in this way and/
brand name is an asset and this presumably affects their or reasonably large competitors have sought to resist such
valuation of a company. Indeed at least half of a sample of development. Such attempts range from the serious and
investment analysts [5] rated a series of brand measures as costly through to the relatively trivial. An example of a
being useful information and 66% of the sample believed that serious attempt that was only partially successful was Coca
companies should publish more information on brand values. Cola’s move to stop ‘‘Coke’’ being used as a generic term.
However, there are still many debates about how a brand Interestingly, in so far as their defense of their brand name
should be valued. Indeed there are several consultancies was successful, it was in part due to the strength of another
(e.g. Interbrand) whose major activity is to provide meth- brand, namely McDonalds. For Coca Cola’s insistence that
odologies to enable companies to evaluate their own and McDonalds told customers who asked for ‘‘a coke’’ that
other companies’ brands. A report [6], which used Inter- they would not get ‘‘a Coke’’ attracted considerable press
brand’s methodology, sought to assess the value of brands attention and made an impact on large numbers of cus-
using a combination of financially reported data and a tomers, because of McDonalds’ own success as a brand.
mixture of quantifiable and intangible assessments of the However, it remains the case that many pubs, restaurants,
company’s activities. However, the report openly admits etc. continue to supply a non-Coke when asked for ‘‘a
that the value placed on a brand is dependent upon the Coke.’’ An example of a relatively trivial attempt of
criteria used to judge it and that there is no commonly a competitor attempting to slow the development of a
agreed set of criteria for this purpose. Definitions of brand generic brand name was Electrolux’s action. This company
value, such as: ‘‘A brand’s value equals the net present value encouraged its employees and their families to use the verb
of its future cashflows, which are determined by future sales ‘‘to vacuum’’ rather than ‘‘to hoover’’ with the use of the
volumes and prices and by the value of the option to create word ‘hoover,’ other than to describe the competitor
brand extensions’’ [7], illustrate the difficulties. Certainly, it Hoover, almost being a disciplinary offence!
seems that ‘‘(f)urther research is needed to shed light on the There are also examples of generic brands in industrial
way customers in particular industries actually value differ- markets — though here, the brand name may not enter into
ent tangible and intangible attributes’’ [1]. everyday language but only into the language of a specific
Managers do express, through comments such as ‘‘Our industrial situation. However, the essence of the situation
brand names draw the distinction between the standard item is still that the brand name becomes used as a word to
for a particular business and the differentiated, and superior, describe a product, process or service marketed by any
product’’ [3], a firm belief in the value of a brand name. supplier in the industry. Brand names such as Caterpillar,
Indeed many industrial firms indicate that they believe that Styrofoam and Silastic are all examples of generic brand
‘‘brand names enhance company success and marketing names applied to industrial goods that have entered into
success, are a major asset to the company, and produce everyday language.5 Indeed, although the Oxford English
many other important benefits’’ [4]. Nevertheless, how this Dictionary does in the case of each of these three brand
value is evaluated is still a matter of dispute. names state the term is ‘‘a proprietary name’’ it also gives
examples of them being used without an initial capital
letter — thus indicating that they are also used in a generic
5. The evolution of generic brands manner. In comparison, although Sortex has, as indicated
above, become a generic brand name, it is only known to
One of the recognized problems with successful brand people familiar with a specific sector of the food process-
names is that they can become used as generic terms. That is ing industry.
they enter into everyday language and are used to describe a There is no clear understanding of why a particular brand
product or a process without necessarily being associated name becomes used as a generic term. It is often suggested
with the brand owner. In consumer markets, there are many that in most cases, a generic brand name is that brand name,
examples of this with brand names such as Hoover, Ther- which first established a clear and positive (remembering
mos, Sellotape and many others all being used as a synonym that there can be brand names with negative associations)
for or instead of the name of the original product category. brand, identity during the development of the product
For example the word ‘hoover’ is firmly established in market. However, there has been no published research that
everyday usage with people asking in shops to see an would confirm this assertion. A second question that
‘Electrolux hoover’ and the verb ‘to hoover up’ almost requires examination is why generic names develop in the
totally displacing the term ‘to vacuum up.’4 case of some products and not others. Why for example is
4 5
Surprisingly, the Microsoft Word 95 Spell-Check accepts ‘Hoover’ as ‘‘Caterpillar’’ is of course the name of an animal and was first applied
a correct spelling, but rejects ‘hoover’ even though the Oxford English to track-laying vehicles by the allied troops when they saw the first tanks in
Dictionary accepts it. World War I.
388 J. Low, K. Blois / Industrial Marketing Management 31 (2002) 385–392
Insert 1. Intel and the generic use of MMX its competitors’ customers are using its brand name in a
generic manner action, it may be very difficult to take
action, which will dissuade them from continuing to do so
In March 1997, Intel filed suit against AMD without incurring very considerable costs.
(Advanced Micro Devices) and Cyrix for infrin- Of course, in cases of infringements of the use of a brand
gement of its pending trademark MMX. The suit name, legal action can be taken. However, there are obvious
alleged that AMD and Cyrix were appropriating practical difficulties and risks associated with such an
the name, possibly confusing consumers and action. First, the legal costs can be considerable and, as
improperly leveraging Intel ’s investment in its the Intel example (Insert 1) shows, may require legal actions
multimedia technology product. That the suit in several countries. Second, unless action is taken against
was merely over trademark rights to the term those who use the brand name in an inappropriate manner at
MMX and not over the technology was indicated the earliest possible time, then the legal defense of the brand
by the fact that AMD had the right, under a name can become substantially more complicated as For-
licensing agreement, to produce microprocessors mica discovered (Insert 2). Third, particularly where a
with MMX technology. company is large or dominates a market such actions, even
Intel sought preliminary and permanent if legally justified, can both bring adverse publicity to the
injunctions, along with unspecified damages company and also draw attention to the existence of com-
and fees. A similar suit was also filed in Ger- petitors. Indeed challenging small competitors may enhance
many, at the time the only country where the their credibility for, if the industry leader sees them as a
name was registered and Intel also applied to threat, they must be good! Indeed a respected industry
trademark MMX in Canada. commentator, while agreeing that MMX was not a generic
Cyrix and AMD contended that Intel was term, still questioned Intel’s wisdom in pursuing Cyrix and
attempting to trademark a generic, industry term AMD for labeling their product MMX stating: ‘‘I think that
for multimedia extensions. Industry observers sometimes Intel get so focussed on the legal issues that they
were not convinced, however, and many agreed lose focus on the bigger picture, which is — why highlight
with Intel’s claim that: ‘‘Their (i.e. AMD’s and the fact that your competitor has developed a new tech-
Cyrex’s) clear intent is to leverage our investment nology?’’ [9].
in that brand equity associated with MMX. If we
start letting people invade and turn our brands into
generic names, then we’re headed down a slip- Insert 2. A legal threat to Formica’s brand name
pery slope where we lose a lot of value (for) our
shareholders.’’
However, by the end of April, following a similar As the range of products included in the For-
settlement earlier in the month between Intel and mica brand product line increased, Formica deci-
Cyrix, a deal was announced between Intel and ded to build on earlier measures to protect the
AMD, which allowed AMD to use MMX to promote Formica brand name. However, on 31 May 1978,
its chips. A vice president of AMD said in a the Denver regional office of the Federal Trade
statement. ‘‘Our agreement with Intel secures for Commission filed a petition with the Trademark
AMD and its customers the ability, on a world wide Trial and Appeals Board to cancel the registration
basis and in all channels of distribution, to con- of the Formica trademark. The petition alleged that
tinue promoting the MMX capabilities of the AMD- the trademark, which appeared on a variety of
K6 processor, including the use of the term in the plastic laminates and other products manufac-
AMD-K6 processor logo.’’ He also said the settle- tured by Formica, had become the generic or
ment meant that any confusion in the marketplace descriptive name for all decorative plastic lami-
that might have occurred had the litigation resulted nates. The Formica managed to convince the
in a protracted legal battle would now be avoided. Trademark Trial and Appeals Board that the FTC
was incorrect. However, as a consequence of this
threat to their brand name, Formica took new
includes: the direct customers; the customers’ customers; steps to protect the Formica brand. These
trade associations; and journalists. Such a list presents a included, as well as advertising directed at cus-
formidable challenge to a firm that is anxious about the tomers, aggressive advertising campaigns target-
development of or the actual generic use of its brand name. ing journalists with the straightforward message
Thus, it is inevitably time-consuming and costly for a that Formica is a trademarked brand, not a generic
company to monitor the situation with the intent of trying name for high-pressure laminate, countertops or
to rectify any poor publicity and/or inappropriate use of its furniture finishes.
brand name. In any case, even if a firm identifies that, say,
390 J. Low, K. Blois / Industrial Marketing Management 31 (2002) 385–392
7.1. Fight Should the ‘fight’ route not look attractive (and even for
large companies this is frequently the case), then ‘accept-
Inevitably, as the Intel example illustrated, the firm ance’ should be considered. Indeed it is arguably the only
fighting will incur considerable financially costs, not alternative open in those cases where brand name and
infrequently bad publicity, and sometimes, perversely, company name are the same. ‘Acceptance’ does not of
even provide beneficial publicity for those companies course simply mean passivity. At the very least, a company
being attacked! Furthermore, where it is necessary to following this policy should have carefully prepared draft
fight in several countries, the costs can be daunting, for statements available for issuing to the media in a variety of
using the legal system in some countries often appears to foreseeable circumstances. For example, if a competitor’s
bring with it major problems. For example, in the case of product suffers a disastrous failure and the media refer to
Thailand, it has been said that: ‘‘Litigation in Thailand the product by the generic brand name, then the existence
can be very costly’’ [10], indeed so costly that this is one of a draft press release could be invaluable in preparing a
of the reasons why in Thailand ‘‘there are relatively few speedy response. Other ways in which ‘acceptance’ can be
Supreme Court precedents in international commercial less than passive is by replying with some information
disputes’’ [10]. Therefore, before embarking on such a about the real brand to all those communications that are
procedure, some assessment must be made of both the received as a result of the use of the generic term about
likely costs and the probability of winning. In general, to competitors’ products.
J. Low, K. Blois / Industrial Marketing Management 31 (2002) 385–392 391
Table 3
Identifying and responding to the generic branding threat
Identifying the problem Action
Check actual and potential customers’ usage of the brand name in If it appears that the brand name is being used in a manner which
communications with you. does not strongly associate the product with your company then require
sales staff to emphasize your brand’s uniqueness and develop a
communications program to support this activity.
Monitor articles in newspapers and trade press for use of the brand name. If the brand name is even beginning to be used as a generic term write to
(This is now relatively easy with on-line databases such as the journalist involved stressing the name’s legal status. Also write to all
ProQuest and Reuters.) journals targeting similar audiences.
Monitor competitors’ publicity material. If there is any evidence of inappropriate use of your brand name instruct
lawyers to write to the competitor immediately.
7.3. Change plus new promotional and advertising material, new pack-
ing, documentation, etc. Because of this, it may only be
The policy of ‘change’ — that is changing the name appropriate to implement it as a policy when other factors
associated with company’s product to something distinct require changes to be made. For example, if for some other
from the now generic name — is obviously really only reason, the container needs to be redesigned, this would be
open to companies where the brand and the company an ideal moment to rename the product.
name are separate. The reason being that most companies
find the prospect of changing their company names too
daunting a task. 8. Conclusions
Two cases where companies have changed the name of
their products are Silastic produced by Dow Corning and The threat of a brand name becoming used in a generic
Flowpak produced by Rose Forgrove. Silastic is now known fashion is always present and so a company must take steps
as RTV 732 within the industrial market. The case of Rose to try to avoid its occurrence. This involves identifying the
Forgrove is more complicated because the brand name problem and then determining what action to take. As
Flowpak was easily converted into ‘flow pack’ (a term that Table 3 indicates, it is necessary regularly to monitor the
cannot legally be protected as it is simply two English words), use of a brand name so that action can be taken as soon as
and it is interesting that at one stage, the company stopped there is any evidence of the name starting to be used
using the term Flowpack, but following a take-over, this name generically. However, it is apparent that, sometimes, evid-
was reinstated. It must be assumed that both companies had ence that this is occurring is not noted or that the generic use
evidence that the distinctiveness of their products was being of the name develops a momentum that cannot be stopped.
substantially eroded by the development of the generic name. Where this occurs, then the alternatives considered in
Perhaps for example, Dow Corning had evidence that dis- Section 7 above need to be evaluated.
tributors’ staff when asked for a container of Silastic were at Reaching the appropriate decision regarding a company’s
least as likely to sell a competitor’s product as the Dow response to the use of its brand name in a generic manner is
Corning version. Yet, in neither case, because their brand difficult. Inevitably, a number of assumptions and ‘guess-
names and their company names were quite different, did the timates’ will have to be made. Even a large firm, which
companies have the problem that Sortex faced. Therefore, for might have the resources to carry out a thorough assessment
example, once Dow Corning had recognized that Silastic was of the costs associated with each policy and the likelihood of
being used as a generic term, it could try to retrieve its product their being successful, will still have to reach a decision on
from the association with the name Silastic without having the basis of a high degree of uncertainty. For a small firm
any impact on its company name.6 with limited resources, the decision will necessarily be
‘Change’ is of course costly as it requires, if the desired based almost entirely on managerial judgement for the cost
impact is to be made, a special public relations campaign of even the simple market survey proposed in Table 3 may
be too great for it to be undertaken. Again, even a large firm
6 may question the wisdom of defending a brand name, once
In fact, they seem only to have responded to this development within
the industrial market where they changed the name to TRV 732. However,
it has become a generic term, because to do so may incur the
in the health care industry market where the name has also become a expenditure of large amounts of time and money with
generic term, they have taken no action. relatively little probability of successfully re-establishing
392 J. Low, K. Blois / Industrial Marketing Management 31 (2002) 385–392
the integrity of the brand’s name. For a small firm, the costs [5] Institute of Practitioners in Advertising. The Brand Finance Report
(London).
will almost certainly be too great.
[6] Badenhausen K. Brands: the management factor. Finance World
In spite of this, it would seem wise to reach a conscious 1995;22:50 – 69 (August).
decision. Then, at least, all staff will know the context [7] Desmet D, et al. The end of voodoo brand management? McKinsey
within which they are operating and know what the com- Q 1998;2:106 – 17.
pany policy is when confronted with any of the many issues [8] Court D, Freeling A, Leiter M, Parsons A. If Nike can ‘just do it’ why
that can impinge on a company whose brand name is now can’t we? McKinsey Q 1997;3:24 – 35.
[9] Anderton P. Intel battles with Cyrix and AMD over MMX moniker.
being use as a generic term. Comput Can 1997;23(7):5 – 6.
[10] Seline C. The business guide to Thailand. Singapore: Butterworth
Heinemann Asia, 1998.
References
Dr. John Low was the Technical Director of Sortex Ltd and is
[1] Mudambi SM, Doyle P, Wong V. An exploration of branding in in-
currently the Research Director, Royal National Institute for the Deaf.
dustrial markets. Ind Mark Manage 1997;26:433 – 46.
[2] Hague P, Jackson P. The power of industrial brands. Maidenhead: Dr. Keith Blois in Industrial Marketing, Templeton College and
McGraw-Hill, 1994. Deputy Director, the Said Business School, both within the University
[3] Textile Outlook International. Face to Face: Alan Pedder of ICI Fibres. of Oxford.
May 1987, pp. 35 – 45.
[4] Shipley D, Howard P. Brand-naming industrial products. Ind Mark
Manage 1993;22(1):59 – 66.