Managers 'too busy' to protect their brands

May 05 2009 by Nic Paton Print This Article

More than eight out of 10 executives agree that maintaining a strong brand is absolutely vital in an economic downturn. Yet according to new research, just a fifth are spending more time now on brand protection.

A survey of 222 businesses by intellectual property firm Marks & Clerk has found 84 per cent of executives argue that having a strong brand is more important in an economic downturn than in more favourable economic times.

Similarly, 86 per cent said they would be more inclined in today's tough times to go out and defend their products and services from competitors or threats.

Yet, at the same time, just a fifth admitted to devoting more time to brand protection than before.

This is despite the fact that virtually all Ė 97 per cent Ė saw using their brand as a key part of their business strategy to ride out the recession, particularly using it as a way of focusing their marketing efforts on their core products and services.

Similarly, nearly two thirds of those executives polled said they intended to use their existing brand as the means of diversifying into new areas and offerings.

In this context, more than three quarters anticipated they would have to become more aggressive in protecting their brands, with more than eight out of 10 suggesting they would be more inclined than previously to defend existing products and services.

But this is contradicted by activity on the ground. Many businesses were still not acting at an early enough stage to prevent threats to their brands emerging, argued Marks & Clerk, with four fifths of managers claiming to be either "too busy" to spend more time on brand protection or only getting involved once a direct competitive or counterfeiting threat had emerged.

Pam Withers, partner at Marks & Clerk, said: "One of the most important contributions a strong or dominant brand can give a business is long-term resilience and a greater ability to weather the storm as consumers fly to quality.

"However, businesses need to take more responsibility themselves. Too many are only focusing on brand protection when their business comes under direct attack from competitors or counterfeiters. The costs of effective brand protection and monitoring are relatively low and far outweighed by the financial headaches brand dilution or infringement will bring a business down the line," she added.

Even worse, just when protecting the brand was becoming more important, more than eight out of 10 of the executives polled said "economic reality" would inevitably result in cuts to budgets that related to brands, while almost half admitted they were already spending less than one per cent of that budget on obtaining brand protection and monitoring.

More widely, tighter wallets, job insecurity and more risk-averse spending was causing a significant shift among consumers, with luxury and "green" brands suffering at the expense of "value" products, either ones that were actually cheaper or ones that simply appeared to offer better value for money.

Just 14 per cent of the executives polled believed luxury brands would still prosper in the current climate.

Similarly, environmental brands or those focused social responsibility were felt to be more likely to perform badly.

By contrast, more than nine out of 10 believed "value-for-money" brands would emerge victorious, with more than eight out of 10 suggest "trust" was becoming of increasing importance to consumers, a trend highlighted by M-I columnist Dan Collins in March.

"Part of consumers' dissatisfaction with pricey brands will be a direct result of tightening purse strings and the shift towards perceived value-for-money," said Withers.

"Yet this goes hand-in-hand with the more negative associations we have from the boom coming to such an abrupt end, particularly relating to financial services. Responsibility, proportion and thrift are the new zeitgeist. Likewise, the embrace of 'green' and socially responsible brands appears to have been overtaken by the realities of the recession. Such brands are in danger of being seen as luxury or expensive options," she added.

More importantly, such shifts in consumer behaviour could be long lasting, she argued, changing the marketplace in the long term, in the process creating a real opportunity for new or lesser brands to "take and retain" market share long term, Withers suggested.

"Businesses will need to position their brands very carefully and demonstrate meaningfully the value and quality they represent, not least as the commercial benefit could prove more long lasting. Brand dynamics may well be changing now for the long term," she said.