Brand protection finds favour during recession

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By: Wise Marketer Staff |

Posted on May 14, 2009

Brand protection finds favour during recession

Businesses are generally becoming more protective of their brands in the light of the recession, although most are taking action far too late, according to research from intellectual property firm Marks & Clerk.

With 84% of the executives surveyed claiming that a strong brand is more important in an economic downturn than in favourable economic circumstances, 86% also said that they are more inclined to defend existing products and services from competitive threats than before the recession. However, only 20% said that management was devoting more time than before to brand protection.

The research found that businesses are taking an increasingly focused approach to their business strategy: 97% intend to channel their marketing efforts into core products and services during the recession, while 62% intend to use their existing brand as the means to diversify into other offerings.

Correspondingly, over three-quarters (77%) of respondents anticipated that companies will become more aggressive in protecting their brands in this environment, with an even greater proportion (86%) suggesting that their own businesses are more inclined than before to defend existing products and services. This is supported by the most recent statistics on the number of oppositions made to trademark applications in Europea, which showed a 12% increase in 2008, up from 16,486 to 18,481.

But despite this increased aggression, the survey found that many businesses are still not acting at an early enough stage to prevent threats to their brands. Only one-fifth of senior management are taking a more active role in brand protection in the downturn than before, with the remainder either being "too busy" or getting involved only after "a direct competitive or counterfeiting threat" has emerged.

This is despite the fact that 95% believe that consumer demand for counterfeit goods will rise in the near future - and be met with a willing supply. Meanwhile, 89% believe that the rise of outsourcing will leave companies more open to potential abuses of their brands than in previous downturns.

The study also showed a distinct shift in the kinds of brands that businesses believe will fare well with consumers in the current market. Luxury brands are expected to struggle the most, with only 14% believing they will prosper. Similarly, respondents anticipate that environmental brands or those that exude social responsibility will perform poorly. Only 39% believe that environmental brands will fare well in the recession. Less than one-third (30%) believe that socially responsible brands will prosper in the current economic climate. In contrast, 93% believe that "value-for-money" brands will emerge victorious.

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