Every entrepreneur knows the importance of establishing a strong brand for a new business or product line.
“Brand” is a somewhat nebulous concept. It’s been defined as the complete set of mental and emotional associations that consumers have with you and your products: not just who you are and what you sell, but what they think and how they feel about who you are and what you sell.
“Brand identity,” in turn, is the visual and verbal expression of a brand communicated by names, slogans, logos, and the like. It’s what triggers those mental and emotional associations.
So here’s the first thing every entrepreneur needs to know: Trademarks are the primary means by which we harness the power, and capture the value, of brand identity. Names, slogans, and logos that have been thoughtfully created capture brand identity more effectively than those that haven’t. And those that are properly protected and enforced are capable of guarding against “brand identity theft” more effectively than those that aren’t.
The dollars-and-cents value of trademarks can be enormous. Consider this: start with the market value of a successful company – the amount that a buyer would be willing to pay for it. Now subtract the value of the tangible assets: product inventory, machinery, buildings, everything down to the desks, computers, and paper clips. What’s left is the value of the company’s intangible assets: know-how, reputation, good will in the marketplace. Much of that intangible value can only be captured, for practical purposes, by trademarks.
The economic value of those intangible assets can be significant. If you can buy a soft drink company that comes with good recipes, modern manufacturing facilities, and efficient distribution channels, that’s good. Even better is to buy one that also comes with a trademark.
The economic value of trademarks is especially important when the time comes to sell, expand, or franchise a business. Trademarks are the vehicles by which the intangible values of brand identity are priced, transferred, or otherwise exploited.
I tell clients that my goals in helping them build a brand identity, and a trademark portfolio, are the same as their marketing department’s goals:
- First, to select names, slogans, and symbols that stand out in consumers’ minds as belonging to us – and only to us.
- Second, to establish and protect those marks so that they consistently convey our brand identity – and nobody else’s – wherever we’re doing business.
- Third, to do it all in a way that is cost-effective and that adds value to the enterprise.
There are a handful of key principles that make all this happen. The first is simply grasping the importance of brand identity, and recognizing the crucial role that trademarks play in creating and sustaining it.