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BRAND EQUITY BE DAMNED—Go ahead–build a house on land you don’t own!
© Cheryl Hodgson 2008 | Posted on April 2, 2008
“Companies who view costs of branding as discretionary spending, and fail to take the steps to establish and protect the brand as a fundamental part of their business are risking the value of the company’s most important financial asset.” Rita Clifton, Brands and Branding (Bloomberg Press 2004)
Would you build a new home on property you don’t own? It has been known to happen in real estate where clients fail to take proper steps to INSURE transfer of title, often because they lacked trusted advisors.
Years ago, my firm actually represented a young couple, the phone installer in our new office, who lost their new dream home and lifesavings exactly this way. The young couple signed a contract and gave their money to a broker and builder as a down payment on a new home. A small problem arose. Actually it was a big problem. The builder and double dealing real estate broker never bothered to pay the balance of the purchase price due on the contract for the property. In short, the builder never paid for the lot before he started construction, and the broker never made him transfer title to the young clients The house and lot went into foreclosure when the builder stopped paying the plumbers, framers and other subcontractors! There was little we could due to save them. The contractor was bankrupt.
What does this story have to do with trademarks and brand equity? Plenty! The law books are filled with cases of businesses that have sued, or been sued at great expense over the legal right to use a trademark for certain goods or services.
While there is no insurance policy, the prudent business owner learns to manage risk . A good risk management program for building a company brand begins with the basics, proper selection , before use. Just as the couple in the story above got it out of order through lack of knowledge and proper advice, many businesses do exactly the same. Trademark lawsuits often result because someone starts selling a product or service under a trademark before they know if the brand name is even available for use and legal protection.
Brand equity is the set of beliefs developed by customers and the public about products and services which are sold under a specific trademark. Brand equity is the measurable value of your company’s worth that can be assigned to the brand. Companies are routinely valued at far more than the value of tangible assets, and sold for amounts that include intangible assets, one of them being the brand. Growing and protecting the value of your company’s brand is begins with proper selection . Proper selection is as important is as important as buying the property before construction begins on the new home.
Creating brand equity is much more involved that just the trademark on selects and uses. However, without a legally protectible one, the horse never leaves the gate.
Next: Selection requires an Investigation
Technorati Tags: brand equity, business valuation, intangible assets, trademark
1 Comment »
April 5th, 2008 at 9:48 am
Your knowledge and education on trademarks, brand equity and how it relates to my business has been invaluable!