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Industrial Marketing Management 31 (2002) 385 – 392

The evolution of generic brands in industrial markets: the challenges to


owners of brand equity
John Lowa, Keith Bloisb,*
a
Sortex Ltd and Royal National Institute for the Deaf, UK
b
Templeton College, University of Oxford, Oxford OX1 5NY, UK
Received 1 September 1999; received in revised form 1 March 2000; accepted 1 April 2000

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.

Keywords: Brands; Industrial; Competition; Value

1. Introduction The Sortex name has become very well established


and has been applied to Sortex’s products with numbers
The issue of branding in industrial markets has received used to differentiate between its products and product
little attention relative to that accorded to it in consumer ranges. A 1997 survey showed that 81% of customers or
markets. It is therefore not surprising that the problems that potential customers interviewed were aware of Sortex
arise in industrial markets when a brand name becomes used while the next best known manufacturer was only
as a generic term are seldom discussed. However, they can recognized by 45% of customers or potential customers.
be as significant for industrial firms as for a consumer goods However, not only is the name Sortex well known, but it
firm as the case of Sortex illustrates. has also become a generic term associated with the
process of ‘‘optically sorting foodstuffs’’ — especially
sorting rice.
2. Sortex Indeed it has been known for rice processors to mark
bulk sacks of rice as ‘sortexed’ as long as an optically
Sortex1 is a small (1998 turnover £14.3 million) British sorting machine has been used. Furthermore, second-hand
company, which was incorporated in 1947, and today is a optically sorting equipment is commonly referred to as
leading supplier of optical sorting machinery primarily for ‘sortex’ machinery regardless of the manufacturer. As a
use in food processing. This is a low-volume, high-margin, result, customers are often confused with regard to the
capital goods business that is highly dependent on inter- name of the original manufacturer of a specific optical
national markets. Sortex has built up a large installed base in piece of sorting equipment and have been known to say,
literally every corner of the world and, even though many ‘‘I have a sortex machine, but I do not know which
new competitors have entered the market over the past 15 – manufacturer supplied it.’’ Food retailers, commodity
20 years, none has established such a strong name. traders or others in the food chain, will often insist that
their quality standards can only be met by the use of
Sortex equipment and make this a contractual require-
* Corresponding author. Tel.: +44-1865-422700; fax: +44-1854- ment. Indeed various publications provide lists of prevail-
422500.
ing world prices for rice, and these prices are higher for
E-mail address: keith.blois@sbs.ox.ac.uk (K. Blois).
1
Where a registered company or brand name is referred to, it will be in ‘sortexed’ rice. For example, the July 1998 price of ‘PB
italics. Thus, Hoover will be used when referring to the Hoover Company 5%’ Thai rice was US$295 per ton compared to US$310
and ‘hoover’ when referring to the generic use of the word. for ‘PB sortexed 5%’ Thai rice.

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

there not a generic brand name associated with domestic Table 2


Costs and benefits associated with development of a brand and its
refrigerators? Again, there is no published research that
subsequent erosion to generic status
suggests an answer.
Stage Costs incurred Benefits obtained
What is clear, however, is that where a brand name
becomes used as a generic term many of those benefits Development of brand Brand building costs Product distinctiveness;
possibly a price
listed above are no longer pertinent. This applies both to the
premium
benefits to customers and to the producer whose brand name Maintenance of brand Brand building costs; Product distinctiveness;
it is. However, the effects on the benefits to the producer are distinctiveness monitoring usage of possibly a price
the greatest. From the producer’s point of view, there is a brand name; litigation premium
risk that all of the nine benefits listed by Hague and Jackson Erosion of brand name Loss of brand equity; None
to generic status unjustified bad
are either diminished or destroyed because the competing
publicity; requests
brands may benefit from a halo effect associated with, say, for help from
Caterpillar’s best points. Thus, it is not only difficult to competitors’
‘build on’ a brand where its name has become a generic customers
brand name but it is also risky. For whether the meaning of
‘build on’ is to add value to the brand or to extend the range
of products marketed under the brand name, it will be This view is clearly demonstrated by a spokesman for
difficult for the producer to ensure that such enhancements Intel when justifying Intel’s legal action against the use of
are only associated with its products rather than all of the the term ‘MMX’ by Cyrix and AMD (see Insert 1).
industry’s products. Moreover, the brand name owner may incur additional
The risk, from the customer’s point of view, is that the costs (as distinct from loss of benefits) when its brand name
three advantages that Hague and Jackson suggest brands is used as a generic term. The most obvious is the risk of
bring to the customer may be lost. There is also the risk that being unfairly associated with the failure of a competitor’s
the generic use of a brand name such as ‘caterpillar’ will product. Thus, the statement: ‘‘The xerox has let us down
result in the values that the customers associate with again!’’ could mean that a Xerox or some other manufactur-
Caterpillar being diluted to a more general average set of er’s photocopier has failed. In the latter case, there is a risk
values for the industry as a whole. Customers may then that Xerox is unfairly getting bad publicity. Indeed there
question why they have paid a price premium to obtain a seems to be some asymmetry in such situations as problems
Caterpillar if the competitors’ products are perceived as of poor product reliability and performance tend to be
possessing the same attributes. focused onto the generic brand name rather than on the
manufacturer whose product is faulty. Thus, Caterpillar
might get the blame associated with the failure of a com-
6. The costs incurred when a brand becomes a petitors’ product. On the other hand, success stories seem to
generic brand benefit the industry as a whole.
Other costs incurred when a brand name is used in a
As was indicated above, a strong brand name can be of generic manner include demands from owners of compet-
great value to a company. However, unless the company itors’ equipment for technical advice and assistance, as well
continues to invest into it, the brand’s distinctiveness will as spares. An instruction, perhaps especially in overseas
deteriorate. More seriously where the brand name starts to markets where language problems may exacerbate the issue,
be used in a generic fashion not only will brand equity be to ‘‘get the xerox fixed’’ may lead to an approach to Xerox for
lost, but additional costs will be incurred (see Table 2), and help even where a competitor’s product is involved. In the
these are discussed below. case of products for which a second-hand market exists (as is
A strong brand name is usually established as a result of the case for Sortex), this danger can be increased. Such
the expenditure of a considerable amount of time and effort equipment, which may be sold without adequate documenta-
plus a sizable monetary investment. Where a brand name tion or even clear marking on the equipment itself, might have
becomes used as a generic term this can mean that the been described as ‘‘a sortex’’ even though it is not ‘‘a Sortex.’’
expected return on such investment will not be achieved Such misuse of the name can lead to a steady flow of requests
because the name will now fail to differentiate the company’s for: advice, spares, technical assistance, etc. A response to
products against its competitors. This then destroys the these requests is required even if it is no more than a courteous
essence of a brand name for ‘‘(a) name becomes a brand reply indicating that the enquirer is under a misunderstanding
when consumers associate it with a set of tangible and regarding the company’s responsibilities. Failure to answer
intangible benefits that they obtain from the product or may lead to the company gaining a reputation for unhelpful-
service. As this association grows stronger, consumer’s ness and inefficiency while a civil response may provide an
loyalty and willingness to pay a price premium increases. opportunity for future useful contacts.
Hence, equity is in the brand name. A brand without equity is Unfortunately, the range of people who may use a brand
not a brand’’ [8]. name in a generic manner is very wide and typically
J. Low, K. Blois / Industrial Marketing Management 31 (2002) 385–392 389

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. What to do? ‘fight’ is going to be very expensive and maybe unlikely


(even if legal victories are achieved) to provide much
When considering what action to take if a brand becomes benefit. Thus, any company seeking to defend its brand
a generic term, it has to be recognized that in many cases, in name in Southeast Asia has to recognize that not all of
industrial markets, the firm did not make a definite decision the various legal systems that exist in that region are, to
to develop a brand. This was not the intent and the evolution put politely, sympathetic to the concept of intellectual
of the brand name might be described as ‘‘an accident’’! property, trade marks, copyright, etc. It follows that the
Indeed quite often the company’s name became the brand probability of achieving a legal victory in some countries
name through the use made of it by the customers and not in this region is low. Furthermore, even if a firm is
because the company planned such a development. In such successful in obtaining an injunction restraining others
cases, the company has not spent much, if any, effort on from using its name, actually achieving any action can in
creating a brand name. What it has done is develop and some legal jurisdictions seem to be a matter of chasing
market a good product. Therefore, any benefits that have the ‘‘Will o’ the whisp.’’ Indeed even within a country
been received through the accidental creation of a brand like Great Britain, it can sometimes be costly to get an
name might be regarded as ‘‘windfall gains.’’ Perhaps, injunction fully implemented.
therefore, in thinking about the costs associated with Even where there appears to be a point of leverage, the
becoming a generic brand these can be regarded as the true impact of a legal victory may be very little. Thus, even
opposite of a windfall gain and should be fatalistically if Sortex was able to insist that at auction, the term
accepted as such! However, an estimate of the identifiable ‘sortexed’ should only be used for rice, which had been
costs (e.g. number of letters dealt with, number of phone through a Sortex machine (and not just rice, which had been
calls received, etc.), which are being incurred because of the subject to optical checking), the auctioneer would still have
brand name’s generic use should be made and should be to rely on the honesty of his suppliers’ statements as to
incorporated into the process of determining what action which type of machines they had used.
to take. It is particularly important for a company when trying to
There seem to be three options open to a company if it assess the costs vs. the probability of achieving any effective
finds that its brand name is being used generically. First, restraint on the use of its brand name to factor into its
establish that it is the only company allowed to use the calculations an allowance for management time. Briefing
registered name and take steps to defend that position. lawyers and the necessity in some foreign jurisdictions of
Second, do nothing. Third, change the name of the product senior mangers attending court can absorb substantial
and develop a new brad name distinct from that of the amounts of management time. However, regardless of its
generic brand. For convenience, these options will be size, a company like Sortex has to consider ‘fight’ as a more
labeled: ‘fight,’ ‘accept,’ and ‘change.’ Yet, as will be seen serious response than, say, did Dow Corning when its brand
from the discussion of each of these options, a firm’s name Silastic began to be used generically. This because
decision as to which of these options to follow will be Sortex was the company name and thus negative publicity
strongly influenced by whether or not the company name about Sortex was potentially damaging to the company as a
and the brand name are the same — as is the case with whole and not just a part of it.
Sortex. Indeed where they are identical then the change
option is almost certainly not feasible. 7.2. Accept

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.

If it appears that your brand name is being used generically Action


If monitoring customers, media and competitors indicates generic use Undertake a survey to establish the extent of the acceptance of your
of your brand name by members of each of these categories, then brand name as a generic term. For example, test what ‘‘sortexed’’ means
the situation is serious. to managers involved in the rice market.
If the survey indicates acceptance of your brand name as a generic term. Consider the: fight; accept; change, alternatives discussed in Section 7.

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.