the evolution of generic brands in industrial markets: the challenges to owners of brand equity
TRANSCRIPT
The evolution of generic brands in industrial markets: the challenges to
owners of brand equity
John Lowa, Keith Bloisb,*
aSortex Ltd and Royal National Institute for the Deaf, UKbTempleton 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 issue of branding in industrial markets has received
little attention relative to that accorded to it in consumer
markets. It is therefore not surprising that the problems that
arise in industrial markets when a brand name becomes used
as a generic term are seldom discussed. However, they can
be as significant for industrial firms as for a consumer goods
firm as the case of Sortex illustrates.
2. Sortex
Sortex1 is a small (1998 turnover £14.3 million) British
company, which was incorporated in 1947, and today is a
leading supplier of optical sorting machinery primarily for
use in food processing. This is a low-volume, high-margin,
capital goods business that is highly dependent on inter-
national markets. Sortex has built up a large installed base in
literally every corner of the world and, even though many
new competitors have entered the market over the past 15–
20 years, none has established such a strong name.
The Sortex name has become very well established
and has been applied to Sortex’s products with numbers
used to differentiate between its products and product
ranges. A 1997 survey showed that 81% of customers or
potential customers interviewed were aware of Sortex
while the next best known manufacturer was only
recognized by 45% of customers or potential customers.
However, not only is the name Sortex well known, but it
has also become a generic term associated with the
process of ‘‘optically sorting foodstuffs’’ — especially
sorting rice.
Indeed it has been known for rice processors to mark
bulk sacks of rice as ‘sortexed’ as long as an optically
sorting machine has been used. Furthermore, second-hand
optically sorting equipment is commonly referred to as
‘sortex’ machinery regardless of the manufacturer. As a
result, customers are often confused with regard to the
name of the original manufacturer of a specific optical
piece of sorting equipment and have been known to say,
‘‘I have a sortex machine, but I do not know which
manufacturer supplied it.’’ Food retailers, commodity
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-
ment. Indeed various publications provide lists of prevail-
ing world prices for rice, and these prices are higher for
‘sortexed’ rice. For example, the July 1998 price of ‘PB
5%’ Thai rice was US$295 per ton compared to US$310
for ‘PB sortexed 5%’ Thai rice.
0019-8501/02/$ – see front matter D 2002 Elsevier Science Inc. All rights reserved.
PII: S0019 -8501 (00 )00131 -0
* Corresponding author. Tel.: +44-1865-422700; fax: +44-1854-
422500.
E-mail address: [email protected] (K. Blois).1 Where a registered company or brand name is referred to, it will be in
italics. Thus, Hoover will be used when referring to the Hoover Company
and ‘hoover’ when referring to the generic use of the word.
Industrial Marketing Management 31 (2002) 385–392
Unfortunately, for Sortex, it has become acceptable to
classify rice sorted with an optical sorting system from any
supplier as ‘sortexed.’ Furthermore, confusion as to the
original manufacturer of installed equipment results in poor
performance and inadequate reliability being attributed to
Sortex even in cases where it is not their machine. Indeed
from time to time, firms operating competitors’ equipment
will telephone Sortex asking for technical support following
a breakdown!
3. The case for branding industrial2 goods
The case for branding in general is well established and
supported by a considerable volume of research. However,
the greater part of it has been concerned with ‘consumer’
goods and, in comparison, relatively little has been written
or researched about issues associated with ‘industrial’
brands. Indeed some writers have suggested that to indus-
trial marketers ‘‘the word brand connotes a gimmicky tactic
for a less serious consumer product’’ [1].
This view is, perhaps unintentionally, supported by the
suggestion [2] that, from the customers’ point of view,
branding offers three intangible but significant advantages:
1. Abrand is a summary of all the values associatedwith it.
2. A brand makes customers confident in their choices.
3. It makes customers feel more satisfied with
their purchase.
It has also been argued [1] that the issue of brands must
be viewed from the customer’s perspective, and it has been
asserted that brand value is comprised of four components
each of which involves tangible and intangible elements
(see Table 1). That is, that a brand name conveys to
customers that these components have certain values.3
Of course, brand value is difficult to analyze in a precise
manner and in reality these four components ‘‘blur
together’’ [1]. In addition, a distinction is also made
between ‘‘basic brands,’’ ‘‘augmented brands,’’ and ‘‘poten-
tial brands.’’ Basic brands, it is argued, depend primarily
upon the product component with the other three compo-
nents remaining relatively less distinct. With augmented
brands both distribution and support services gain signific-
ance. Finally, potential brands feature all four components in
a balanced manner.
It has also been claimed [2] that there are nine specific
benefits that an industrial company will derive from having
a strong brand image for its products:
1. Premium prices can be obtained.
2. The product will be demanded.
3. Competitive products will be rejected.
4. Communications will be more rapidly accepted.
5. The brand can be built on.
6. Customer satisfaction will be improved.
7. Power in the distribution network will be increased.
8. Licensing opportunities could be opened up.
9. The company will be worth more when it is sold.
It is not only claimed that owning a strong brand brings
benefits to a company, but that there are serious penalties for
those companies that do not develop strong brands [2].
Yet, these nine benefits are broad generalizations and the
applicability of each of them is contingent upon specific
circumstances within which a product is being marketed.
For example, the assertion that the third benefit of strong
branding is that ‘‘competitive products will be rejected’’
implicitly assumes that there is only one strong brand in the
market and/or the cost of purchasing the competing brands
is substantially higher. This is because if, as is the case in
many consumer markets, there is more than one strong
brand, then competitive products will only be rejected in
favor of a specific brand when that brand is the ‘‘strongest’’
and not just ‘‘strong.’’ In addition, a customer will only
switch brands when the difference between the cost of
purchasing the new brand and the established brand is less
than the difference in the value that the customer perceives
between the two brands.
4. The value of brands
Determining what value to place on a brand name has
been a problem for many years and has led to many disputes
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].
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 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
Volkswagen, had a very negative image.
J. Low, K. Blois / Industrial Marketing Management 31 (2002) 385–392386
about the value of those companies which own brands. There
is evidence that investment analysts recognize that a strong
brand name is an asset and this presumably affects their
valuation of a company. Indeed at least half of a sample of
investment analysts [5] rated a series of brand measures as
being useful information and 66% of the sample believed that
companies should publish more information on brand values.
However, there are still many debates about how a brand
should be valued. Indeed there are several consultancies
(e.g. Interbrand) whose major activity is to provide meth-
odologies to enable companies to evaluate their own and
other companies’ brands. A report [6], which used Inter-
brand’s methodology, sought to assess the value of brands
using a combination of financially reported data and a
mixture of quantifiable and intangible assessments of the
company’s activities. However, the report openly admits
that the value placed on a brand is dependent upon the
criteria used to judge it and that there is no commonly
agreed set of criteria for this purpose. Definitions of brand
value, such as: ‘‘A brand’s value equals the net present value
of its future cashflows, which are determined by future sales
volumes and prices and by the value of the option to create
brand extensions’’ [7], illustrate the difficulties. Certainly, it
seems that ‘‘(f)urther research is needed to shed light on the
way customers in particular industries actually value differ-
ent tangible and intangible attributes’’ [1].
Managers do express, through comments such as ‘‘Our
brand names draw the distinction between the standard item
for a particular business and the differentiated, and superior,
product’’ [3], a firm belief in the value of a brand name.
Indeed many industrial firms indicate that they believe that
‘‘brand names enhance company success and marketing
success, are a major asset to the company, and produce
many other important benefits’’ [4]. Nevertheless, how this
value is evaluated is still a matter of dispute.
5. The evolution of generic brands
One of the recognized problems with successful brand
names is that they can become used as generic terms. That is
they enter into everyday language and are used to describe a
product or a process without necessarily being associated
with the brand owner. In consumer markets, there are many
examples of this with brand names such as Hoover, Ther-
mos, Sellotape and many others all being used as a synonym
for or instead of the name of the original product category.
For example the word ‘hoover’ is firmly established in
everyday usage with people asking in shops to see an
‘Electrolux hoover’ and the verb ‘to hoover up’ almost
totally displacing the term ‘to vacuum up.’4
This type of situation has occurred even when the
company whose name has become used in this way and/
or reasonably large competitors have sought to resist such
development. Such attempts range from the serious and
costly through to the relatively trivial. An example of a
serious attempt that was only partially successful was Coca
Cola’s move to stop ‘‘Coke’’ being used as a generic term.
Interestingly, in so far as their defense of their brand name
was successful, it was in part due to the strength of another
brand, namely McDonalds. For Coca Cola’s insistence that
McDonalds told customers who asked for ‘‘a coke’’ that
they would not get ‘‘a Coke’’ attracted considerable press
attention and made an impact on large numbers of cus-
tomers, because of McDonalds’ own success as a brand.
However, it remains the case that many pubs, restaurants,
etc. continue to supply a non-Coke when asked for ‘‘a
Coke.’’ An example of a relatively trivial attempt of
a competitor attempting to slow the development of a
generic brand name was Electrolux’s action. This company
encouraged its employees and their families to use the verb
‘‘to vacuum’’ rather than ‘‘to hoover’’ with the use of the
word ‘hoover,’ other than to describe the competitor
Hoover, almost being a disciplinary offence!
There are also examples of generic brands in industrial
markets — though here, the brand name may not enter into
everyday language but only into the language of a specific
industrial situation. However, the essence of the situation
is still that the brand name becomes used as a word to
describe a product, process or service marketed by any
supplier in the industry. Brand names such as Caterpillar,
Styrofoam and Silastic are all examples of generic brand
names applied to industrial goods that have entered into
everyday language.5 Indeed, although the Oxford English
Dictionary does in the case of each of these three brand
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
manner. In comparison, although Sortex has, as indicated
above, become a generic brand name, it is only known to
people familiar with a specific sector of the food process-
ing industry.
There is no clear understanding of why a particular brand
name becomes used as a generic term. It is often suggested
that in most cases, a generic brand name is that brand name,
which first established a clear and positive (remembering
that there can be brand names with negative associations)
brand, identity during the development of the product
market. However, there has been no published research that
would confirm this assertion. A second question that
requires examination is why generic names develop in the
case of some products and not others. Why for example is
4 Surprisingly, the Microsoft Word 95 Spell-Check accepts ‘Hoover’ as
a correct spelling, but rejects ‘hoover’ even though the Oxford English
Dictionary accepts it.
5 ‘‘Caterpillar’’ is of course the name of an animal and was first applied
to track-laying vehicles by the allied troops when they saw the first tanks in
World War I.
J. Low, K. Blois / Industrial Marketing Management 31 (2002) 385–392 387
there not a generic brand name associated with domestic
refrigerators? Again, there is no published research that
suggests an answer.
What is clear, however, is that where a brand name
becomes used as a generic term many of those benefits
listed above are no longer pertinent. This applies both to the
benefits to customers and to the producer whose brand name
it is. However, the effects on the benefits to the producer are
the greatest. From the producer’s point of view, there is a
risk that all of the nine benefits listed by Hague and Jackson
are either diminished or destroyed because the competing
brands may benefit from a halo effect associated with, say,
Caterpillar’s best points. Thus, it is not only difficult to
‘build on’ a brand where its name has become a generic
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
difficult for the producer to ensure that such enhancements
are only associated with its products rather than all of the
industry’s products.
The risk, from the customer’s point of view, is that the
three advantages that Hague and Jackson suggest brands
bring to the customer may be lost. There is also the risk that
the generic use of a brand name such as ‘caterpillar’ will
result in the values that the customers associate with
Caterpillar being diluted to a more general average set of
values for the industry as a whole. Customers may then
question why they have paid a price premium to obtain a
Caterpillar if the competitors’ products are perceived as
possessing the same attributes.
6. The costs incurred when a brand becomes a
generic brand
As was indicated above, a strong brand name can be of
great value to a company. However, unless the company
continues to invest into it, the brand’s distinctiveness will
deteriorate. More seriously where the brand name starts to
be used in a generic fashion not only will brand equity be
lost, but additional costs will be incurred (see Table 2), and
these are discussed below.
A strong brand name is usually established as a result of
the expenditure of a considerable amount of time and effort
plus a sizable monetary investment. Where a brand name
becomes used as a generic term this can mean that the
expected return on such investment will not be achieved
because the name will now fail to differentiate the company’s
products against its competitors. This then destroys the
essence of a brand name for ‘‘(a) name becomes a brand
when consumers associate it with a set of tangible and
intangible benefits that they obtain from the product or
service. As this association grows stronger, consumer’s
loyalty and willingness to pay a price premium increases.
Hence, equity is in the brand name. A brand without equity is
not a brand’’ [8].
This view is clearly demonstrated by a spokesman for
Intel when justifying Intel’s legal action against the use of
the term ‘MMX’ by Cyrix and AMD (see Insert 1).
Moreover, the brand name owner may incur additional
costs (as distinct from loss of benefits) when its brand name
is used as a generic term. The most obvious is the risk of
being unfairly associated with the failure of a competitor’s
product. Thus, the statement: ‘‘The xerox has let us down
again!’’ could mean that a Xerox or some other manufactur-
er’s photocopier has failed. In the latter case, there is a risk
that Xerox is unfairly getting bad publicity. Indeed there
seems to be some asymmetry in such situations as problems
of poor product reliability and performance tend to be
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-
petitors’ product. On the other hand, success stories seem to
benefit the industry as a whole.
Other costs incurred when a brand name is used in a
generic manner include demands from owners of compet-
itors’ equipment for technical advice and assistance, as well
as spares. An instruction, perhaps especially in overseas
markets where language problems may exacerbate the issue,
to ‘‘get the xerox fixed’’ may lead to an approach to Xerox for
help even where a competitor’s product is involved. In the
case of products for which a second-hand market exists (as is
the case for Sortex), this danger can be increased. Such
equipment, which may be sold without adequate documenta-
tion or even clear marking on the equipment itself, might have
been described as ‘‘a sortex’’ even though it is not ‘‘a Sortex.’’
Such misuse of the name can lead to a steady flow of requests
for: advice, spares, technical assistance, etc. A response to
these requests is required even if it is nomore than a courteous
reply indicating that the enquirer is under a misunderstanding
regarding the company’s responsibilities. Failure to answer
may lead to the company gaining a reputation for unhelpful-
ness and inefficiency while a civil response may provide an
opportunity for future useful contacts.
Unfortunately, the range of people who may use a brand
name in a generic manner is very wide and typically
Table 2
Costs and benefits associated with development of a brand and its
subsequent erosion to generic status
Stage Costs incurred Benefits obtained
Development of brand Brand building costs Product distinctiveness;
possibly a price
premium
Maintenance of brand
distinctiveness
Brand building costs;
monitoring usage of
brand name; litigation
Product distinctiveness;
possibly a price
premium
Erosion of brand name
to generic status
Loss of brand equity;
unjustified bad
publicity; requests
for help from
competitors’
customers
None
J. Low, K. Blois / Industrial Marketing Management 31 (2002) 385–392388
includes: the direct customers; the customers’ customers;
trade associations; and journalists. Such a list presents a
formidable challenge to a firm that is anxious about the
development of or the actual generic use of its brand name.
Thus, it is inevitably time-consuming and costly for a
company to monitor the situation with the intent of trying
to rectify any poor publicity and/or inappropriate use of its
brand name. In any case, even if a firm identifies that, say,
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
without incurring very considerable costs.
Of course, in cases of infringements of the use of a brand
name, legal action can be taken. However, there are obvious
practical difficulties and risks associated with such an
action. First, the legal costs can be considerable and, as
the Intel example (Insert 1) shows, may require legal actions
in several countries. Second, unless action is taken against
those who use the brand name in an inappropriate manner at
the earliest possible time, then the legal defense of the brand
name can become substantially more complicated as For-
mica discovered (Insert 2). Third, particularly where a
company is large or dominates a market such actions, even
if legally justified, can both bring adverse publicity to the
company and also draw attention to the existence of com-
petitors. Indeed challenging small competitors may enhance
their credibility for, if the industry leader sees them as a
threat, they must be good! Indeed a respected industry
commentator, while agreeing that MMX was not a generic
term, still questioned Intel’s wisdom in pursuing Cyrix and
AMD for labeling their product MMX stating: ‘‘I think that
sometimes Intel get so focussed on the legal issues that they
lose focus on the bigger picture, which is — why highlight
the fact that your competitor has developed a new tech-
nology?’’ [9].
Insert 1. Intel and the generic use of MMX
In March 1997, Intel filed suit against AMD(Advanced Micro Devices) and Cyrix for infrin-gement of its pending trademark MMX. The suitalleged that AMD and Cyrix were appropriatingthe name, possibly confusing consumers andimproperly leveraging Intel ’s investment in itsmultimedia technology product. That the suitwas merely over trademark rights to the termMMX and not over the technology was indicatedby the fact that AMD had the right, under alicensing agreement, to produce microprocessorswith MMX technology.
Intel sought preliminary and permanentinjunctions, along with unspecified damagesand fees. A similar suit was also filed in Ger-many, at the time the only country where thename was registered and Intel also applied totrademark MMX in Canada.
Cyrix and AMD contended that Intel wasattempting to trademark a generic, industry termfor multimedia extensions. Industry observerswere not convinced, however, and many agreedwith Intel’s claim that: ‘‘Their (i.e. AMD’s andCyrex’s) clear intent is to leverage our investmentin that brand equity associated with MMX. If westart letting people invade and turn our brands intogeneric names, then we’re headed down a slip-pery slope where we lose a lot of value (for) ourshareholders.’’
However, by the end of April, following a similarsettlement earlier in the month between Intel andCyrix, a deal was announced between Intel andAMD, which allowed AMD to use MMX to promoteits chips. A vice president of AMD said in astatement. ‘‘Our agreement with Intel secures forAMD and its customers the ability, on a world widebasis and in all channels of distribution, to con-tinue promoting the MMX capabilities of the AMD-K6 processor, including the use of the term in theAMD-K6 processor logo.’’ He also said the settle-ment meant that any confusion in the marketplacethat might have occurred had the litigation resultedin a protracted legal battle would now be avoided.
Insert 2. A legal threat to Formica’s brand name
As the range of products included in the For-mica brand product line increased, Formica deci-ded to build on earlier measures to protect theFormica brand name. However, on 31 May 1978,the Denver regional office of the Federal TradeCommission filed a petition with the TrademarkTrial and Appeals Board to cancel the registrationof the Formica trademark. The petition alleged thatthe trademark, which appeared on a variety ofplastic laminates and other products manufac-tured by Formica, had become the generic ordescriptive name for all decorative plastic lami-nates. The Formica managed to convince theTrademark Trial and Appeals Board that the FTCwas incorrect. However, as a consequence of thisthreat to their brand name, Formica took newsteps to protect the Formica brand. Theseincluded, as well as advertising directed at cus-tomers, aggressive advertising campaigns target-ing journalists with the straightforward messagethat Formica is a trademarked brand, not a genericname for high-pressure laminate, countertops orfurniture finishes.
J. Low, K. Blois / Industrial Marketing Management 31 (2002) 385–392 389
7. What to do?
When considering what action to take if a brand becomes
a generic term, it has to be recognized that in many cases, in
industrial markets, the firm did not make a definite decision
to develop a brand. This was not the intent and the evolution
of the brand name might be described as ‘‘an accident’’!
Indeed quite often the company’s name became the brand
name through the use made of it by the customers and not
because the company planned such a development. In such
cases, the company has not spent much, if any, effort on
creating a brand name. What it has done is develop and
market a good product. Therefore, any benefits that have
been received through the accidental creation of a brand
name might be regarded as ‘‘windfall gains.’’ Perhaps,
therefore, in thinking about the costs associated with
becoming a generic brand these can be regarded as the
opposite of a windfall gain and should be fatalistically
accepted as such! However, an estimate of the identifiable
costs (e.g. number of letters dealt with, number of phone
calls received, etc.), which are being incurred because of the
brand name’s generic use should be made and should be
incorporated into the process of determining what action
to take.
There seem to be three options open to a company if it
finds that its brand name is being used generically. First,
establish that it is the only company allowed to use the
registered name and take steps to defend that position.
Second, do nothing. Third, change the name of the product
and develop a new brad name distinct from that of the
generic brand. For convenience, these options will be
labeled: ‘fight,’ ‘accept,’ and ‘change.’ Yet, as will be seen
from the discussion of each of these options, a firm’s
decision as to which of these options to follow will be
strongly influenced by whether or not the company name
and the brand name are the same — as is the case with
Sortex. Indeed where they are identical then the change
option is almost certainly not feasible.
7.1. Fight
Inevitably, as the Intel example illustrated, the firm
fighting will incur considerable financially costs, not
infrequently bad publicity, and sometimes, perversely,
even provide beneficial publicity for those companies
being attacked! Furthermore, where it is necessary to
fight in several countries, the costs can be daunting, for
using the legal system in some countries often appears to
bring with it major problems. For example, in the case of
Thailand, it has been said that: ‘‘Litigation in Thailand
can be very costly’’ [10], indeed so costly that this is one
of the reasons why in Thailand ‘‘there are relatively few
Supreme Court precedents in international commercial
disputes’’ [10]. Therefore, before embarking on such a
procedure, some assessment must be made of both the
likely costs and the probability of winning. In general, to
‘fight’ is going to be very expensive and maybe unlikely
(even if legal victories are achieved) to provide much
benefit. Thus, any company seeking to defend its brand
name in Southeast Asia has to recognize that not all of
the various legal systems that exist in that region are, to
put politely, sympathetic to the concept of intellectual
property, trade marks, copyright, etc. It follows that the
probability of achieving a legal victory in some countries
in this region is low. Furthermore, even if a firm is
successful in obtaining an injunction restraining others
from using its name, actually achieving any action can in
some legal jurisdictions seem to be a matter of chasing
the ‘‘Will o’ the whisp.’’ Indeed even within a country
like Great Britain, it can sometimes be costly to get an
injunction fully implemented.
Even where there appears to be a point of leverage, the
true impact of a legal victory may be very little. Thus, even
if Sortex was able to insist that at auction, the term
‘sortexed’ should only be used for rice, which had been
through a Sortex machine (and not just rice, which had been
subject to optical checking), the auctioneer would still have
to rely on the honesty of his suppliers’ statements as to
which type of machines they had used.
It is particularly important for a company when trying to
assess the costs vs. the probability of achieving any effective
restraint on the use of its brand name to factor into its
calculations an allowance for management time. Briefing
lawyers and the necessity in some foreign jurisdictions of
senior mangers attending court can absorb substantial
amounts of management time. However, regardless of its
size, a company like Sortex has to consider ‘fight’ as a more
serious response than, say, did Dow Corning when its brand
name Silastic began to be used generically. This because
Sortex was the company name and thus negative publicity
about Sortex was potentially damaging to the company as a
whole and not just a part of it.
7.2. Accept
Should the ‘fight’ route not look attractive (and even for
large companies this is frequently the case), then ‘accept-
ance’ should be considered. Indeed it is arguably the only
alternative open in those cases where brand name and
company name are the same. ‘Acceptance’ does not of
course simply mean passivity. At the very least, a company
following this policy should have carefully prepared draft
statements available for issuing to the media in a variety of
foreseeable circumstances. For example, if a competitor’s
product suffers a disastrous failure and the media refer to
the product by the generic brand name, then the existence
of a draft press release could be invaluable in preparing a
speedy response. Other ways in which ‘acceptance’ can be
less than passive is by replying with some information
about the real brand to all those communications that are
received as a result of the use of the generic term about
competitors’ products.
J. Low, K. Blois / Industrial Marketing Management 31 (2002) 385–392390
7.3. Change
The policy of ‘change’ — that is changing the name
associated with company’s product to something distinct
from the now generic name — is obviously really only
open to companies where the brand and the company
name are separate. The reason being that most companies
find the prospect of changing their company names too
daunting a task.
Two cases where companies have changed the name of
their products are Silastic produced by Dow Corning and
Flowpak produced by Rose Forgrove. Silastic is now known
as RTV 732 within the industrial market. The case of Rose
Forgrove is more complicated because the brand name
Flowpak was easily converted into ‘flow pack’ (a term that
cannot legally be protected as it is simply two English words),
and it is interesting that at one stage, the company stopped
using the termFlowpack, but following a take-over, this name
was reinstated. It must be assumed that both companies had
evidence that the distinctiveness of their products was being
substantially eroded by the development of the generic name.
Perhaps for example, Dow Corning had evidence that dis-
tributors’ staff when asked for a container of Silastic were at
least as likely to sell a competitor’s product as the Dow
Corning version. Yet, in neither case, because their brand
names and their company names were quite different, did the
companies have the problem that Sortex faced. Therefore, for
example, onceDow Corning had recognized that Silasticwas
being used as a generic term, it could try to retrieve its product
from the association with the name Silastic without having
any impact on its company name.6
‘Change’ is of course costly as it requires, if the desired
impact is to be made, a special public relations campaign
plus new promotional and advertising material, new pack-
ing, documentation, etc. Because of this, it may only be
appropriate to implement it as a policy when other factors
require changes to be made. For example, if for some other
reason, the container needs to be redesigned, this would be
an ideal moment to rename the product.
8. Conclusions
The threat of a brand name becoming used in a generic
fashion is always present and so a company must take steps
to try to avoid its occurrence. This involves identifying the
problem and then determining what action to take. As
Table 3 indicates, it is necessary regularly to monitor the
use of a brand name so that action can be taken as soon as
there is any evidence of the name starting to be used
generically. However, it is apparent that, sometimes, evid-
ence that this is occurring is not noted or that the generic use
of the name develops a momentum that cannot be stopped.
Where this occurs, then the alternatives considered in
Section 7 above need to be evaluated.
Reaching the appropriate decision regarding a company’s
response to the use of its brand name in a generic manner is
difficult. Inevitably, a number of assumptions and ‘guess-
timates’ will have to be made. Even a large firm, which
might have the resources to carry out a thorough assessment
of the costs associated with each policy and the likelihood of
their being successful, will still have to reach a decision on
the basis of a high degree of uncertainty. For a small firm
with limited resources, the decision will necessarily be
based almost entirely on managerial judgement for the cost
of even the simple market survey proposed in Table 3 may
be too great for it to be undertaken. Again, even a large firm
may question the wisdom of defending a brand name, once
it has become a generic term, because to do so may incur the
expenditure of large amounts of time and money with
relatively little probability of successfully re-establishing
6 In fact, they seem only to have responded to this development within
the industrial market where they changed the name to TRV 732. However,
in the health care industry market where the name has also become a
generic term, they have taken no action.
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.
(This is now relatively easy with on-line databases such as
ProQuest and Reuters.)
If the brand name is even beginning to be used as a generic term write to
the journalist involved stressing the name’s legal status. Also write to all
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
of your brand name by members of each of these categories, then
the situation is serious.
Undertake a survey to establish the extent of the acceptance of your
brand name as a generic term. For example, test what ‘‘sortexed’’ means
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.
J. Low, K. Blois / Industrial Marketing Management 31 (2002) 385–392 391
the integrity of the brand’s name. For a small firm, the costs
will almost certainly be too great.
In spite of this, it would seem wise to reach a conscious
decision. Then, at least, all staff will know the context
within which they are operating and know what the com-
pany policy is when confronted with any of the many issues
that can impinge on a company whose brand name is now
being use as a generic term.
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Dr. John Low was the Technical Director of Sortex Ltd and is
currently the Research Director, Royal National Institute for the Deaf.
Dr. Keith Blois in Industrial Marketing, Templeton College and
Deputy Director, the Said Business School, both within the University
of Oxford.
J. Low, K. Blois / Industrial Marketing Management 31 (2002) 385–392392