Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic

Marketing: A

Global−Managerial

Approach, 14/e

9. Elements of Product
   Planning for Goods and
   Services

Text © The McGraw−Hill

Companies, 2002

264 Chapter 9

264

U.S. common law and civil law protect the rights of trademark and brand name

owners. The Lanham Act(of 1946) spells out what kinds of marks (including brand

names) can be protected and the exact method of protecting them. The law applies

to goods shipped in interstate or foreign commerce.

The Lanham Act does not force registration. But registering under the Lanham

Act is often a first step toward protecting a trademark to be used in international

markets. That’s because some nations require that a trademark be registered in its

home country before they will register or protect it.

A brand can be a real asset to a company. Each firm should try to see that its

brand doesn’t become a common descriptive term for its kind of product. When this

happens, the brand name or trademark becomes public property—and the owner

loses all rights to it. This happened with the names cellophane, aspirin, shredded

wheat, and kerosene.^14

Even when products are properly registered, counterfeiters may make unautho-

rized copies. Many well-known brands—ranging from Levi’s jeans to Rolex watches

to Zantax ulcer medicine—face this problem. Counterfeiting is especially common

in developing nations. In China, most videotapes and CDs are bootleg copies.

Counterfeiting is big business in some countries, so efforts to stop it may meet with

limited success. There are also differences in cultural values. In South Korea, for

example, many people don’t see counterfeiting as unethical.^15

Branders of more than one product must decide whether they are going to use a

family brand—the same brand name for several products—or individual brands for

each product. Examples of family brands are Keebler snack food products and Sears’

Kenmore appliances.

The use of the same brand for many products makes sense if all are similar in

type and quality. The main benefit is that the goodwill attached to one or two

You must protect

your own

Counterfeiting is

accepted in some

cultures

Keep it in the family

How to Blow Out a Relationship with Customers

There are few brand names that are more familiar

to U.S. consumers than Firestone and Ford Explorer.

Yet in the aftermath of tread separations on tires that

resulted in many rollovers and tragic deaths, the rep-

utations of these once lofty brand names are seriously

tarnished. There are millions of consumers who say

that they will never again buy any tire with the Fire-

stone name on it. The Firestone brand may not

survive. The plant where many of the unsafe tires

were produced has already been shut down. What

automaker would buy from that plant and risk its own

image and sales. Tire retailers who sell replacement

tires in the consumer market face similar reactions.

It’s easier for them to just sell Michelins, a brand that

positions itself on safety benefits.

In part to protect its customers, Ford recalled

millions of Firestone tires, including many designs

that Firestone says are not a problem. Who should

pay the cost? Unlike most of the components used in

building a car, the tires are covered by a Firestone

warranty, not by Ford’s warranty. Responsibility is

clearer in government recalls. But staff shortages at the

National Highway Traffic Safety Administration con-

tributed to delays in figuring out who was really at fault.

The long-standing relationship between Ford and

Firestone is severed. Imagine how you would feel if

you were Bill Ford, chairman of Ford. Firestone was

his grandfather. That aside, questions about rollovers

have eroded the brand equity of one of the best sell-

ers in Ford’s whole product line. Rebuilding profits

won’t be easy. With all the bad publicity customers

are very concerned about rollover hazards of the

Explorer. Even if a complete redesign would help

reassure them, that’s not an option. The new-product

development process for a big change in the Explorer

will take years.^13

http://www.

mhhe.

com/

fourps

Protecting Brand Names and Trademarks

What Kind of Brand to Use?