trademark theory - harvard university theory.pdf · trademark theory william fisher. what do...
TRANSCRIPT
May 24, 2011
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Trademark Theory
William Fisher
What Do Trademarks Do?
What Do Trademarks Do? • Identify sources of products
What Do Trademarks Do? • Identify sources of products
Reduce transaction costs
Consumer Information Theory • TMs reduce transaction costs
(especially search time and memory requirements) by assisting consumers in making informed choices
• Value of TMs is highest when: – goods are difficult to inspect – costs of mistaken choice are high – consumers are not making repeat
purchases – consumers are wealthy
What Do Trademarks Do? • Identify sources of products
Reduce transaction costs
What Do Trademarks Do? • Identify sources of products
Reduce transaction costs Incentives to raise quality of products
What Do Trademarks Do? • Identify sources of products
Reduce transaction costs Incentives to raise quality of products
Criticism: strategy of “brand experience” indicates that manufacturers typically build brand recognition and loyalty through strategies other than increase in product quality
“Brand Experience”
• Sources: – Performance of the product – Treatment of customers – Community – extent to which consumers of
the product identify with other brand users and support the noncommercial commitments of the company
http://www.wunderman.com/Content/assets/10059_bes.pdf
http://www.wunderman.com/Content/assets/10059_bes.pdf
“Brand Experience”: 2002 Scorecard
Source: http://www.wunderman.com/Content/assets/10059_bes.pdf
“Give Women What They Want” http://www.wunderman.com/wunderman/pdf_files/news/46.pdf
What Do Trademarks Do? • Identify sources of products
Reduce transaction costs Incentives to raise quality of products
Criticism: strategy of “brand experience” indicates that manufacturers typically build brand recognition and loyalty through strategies other than increase in product quality
What Do Trademarks Do? • Identify sources of products
Reduce transaction costs Incentives to raise quality of products
Criticism: strategy of “brand experience” indicates that manufacturers typically build brand recognition and loyalty through strategies other than increase in product quality
Retort: But those strategies are welfare enhancing for other reasons
What Do Trademarks Do? • Identify sources of products
Reduce transaction costs Incentives to raise quality of products
What Do Trademarks Do? • Identify sources of products • Mnemonic devices
Reduce transaction costs Incentives to raise quality of products
Mnemonic Power
Honda Acura Lexus Chevrolet Toyota Mazda Hyundai Chrysler Harley-Davidson
Mnemonic Power
Honda (bonus: Honda Motorcycles) Acura Lexus Chevrolet Toyota Mazda Hyundai Chrysler Harley-Davidson
Mnemonic Power
Honda (bonus: Honda Motorcycles) Acura Lexus Chevrolet Toyota Mazda Hyundai Chrysler Harley-Davidson
Excellent
Mnemonic Power
Honda (bonus: Honda Motorcycles) Acura Lexus Chevrolet Toyota Mazda Hyundai Chrysler Harley-Davidson
Excellent
Good
Mnemonic Power
Honda (bonus: Honda Motorcycles) Acura Lexus Chevrolet Toyota Mazda Hyundai Chrysler Harley-Davidson
Excellent
Good
Poor
Mnemonic Power
Mnemonic Power
Mnemonic Power
Mnemonic Power
Mnemonic Power
Mnemonic Power
Mnemonic Power
Mnemonic Power
Mnemonic Power
Mnemonic Power
Mnemonic Power
What Do Trademarks Do? • Identify sources of products • Mnemonic devices
Reduce transaction costs Incentives to raise quality of products
What Do Trademarks Do? • Identify sources of products • Mnemonic devices • Provide substantive information
Reduce transaction costs Incentives to raise quality of products
May 24, 2011
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
May 24, 2011
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
May 24, 2011
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Effects of Trademarks that Convey Substantive Informative
Beneficial • Assist consumers in
making informed choices
• Pressure manufacturers to increase quality
Pernicious • Confer market power
on owner of the TM • Prices rise • Some consumers
priced out of the market
What Do Trademarks Do? • Identify sources of products • Mnemonic devices • Provide substantive information
Reduce transaction costs Incentives to raise quality of products
What Do Trademarks Do? • Identify sources of products • Mnemonic devices • Provide substantive information
Reduce transaction costs Incentives to raise quality of products
What Do Trademarks Do? • Identify sources of products • Mnemonic devices • Provide substantive information
Reduce transaction costs Incentives to raise quality of products Confer market power and threaten competition
What Do Trademarks Do? • Identify sources of products • Mnemonic devices • Provide substantive information • Generalized indicia of prestige
Reduce transaction costs Incentives to raise quality of products Confer market power and threaten competition
May 24, 2011
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
What Do Trademarks Do? • Identify sources of products • Mnemonic devices • Provide substantive information • Generalized indicia of prestige
Reduce transaction costs Incentives to raise quality of products Confer market power and threaten competition
What Do Trademarks Do? • Identify sources of products • Mnemonic devices • Provide substantive information • Generalized indicia of prestige
Reduce transaction costs Incentives to raise quality of products Confer market power and threaten competition
Satisfy tastes for exclusivity (Kozinski)
What Do Trademarks Do? • Identify sources of products • Mnemonic devices • Provide substantive information • Generalized indicia of prestige
Reduce transaction costs Incentives to raise quality of products Confer market power and threaten competition
What Do Trademarks Do? • Identify sources of products • Mnemonic devices • Provide substantive information • Generalized indicia of prestige • Increase the attractiveness of products
through sound, appearance, or connotation
Reduce transaction costs Incentives to raise quality of products Confer market power and threaten competition
Increase attractiveness through sound, appearance, or connotation
• Make the products itself more attractive – Harley-Davidson muffler sound; shape of
Perrier bottle • Evoke positive associations not
attributable to another manufacturer – Acura, Lexis, Nantucket T-shirts
• Evoke positive associations attributable to another manufacturer – Rolls-Royce Radio Tubes; Gay Olympics
What Do Trademarks Do? • Identify sources of products • Mnemonic devices • Provide substantive information • Generalized indicia of prestige • Increase the attractiveness of products
through sound, appearance, or connotation
Reduce transaction costs Incentives to raise quality of products Confer market power and threaten competition
What Do Trademarks Do? • Identify sources of products • Mnemonic devices • Provide substantive information • Generalized indicia of prestige • Increase the attractiveness of products
through sound, appearance, or connotation • Provide vehicles for conversation and parody
Reduce transaction costs Incentives to raise quality of products Confer market power and threaten competition
What Do Trademarks Do? • Identify sources of products • Mnemonic devices • Provide substantive information • Generalized indicia of prestige • Increase the attractiveness of products
through sound, appearance, or connotation • Provide vehicles for conversation and parody • Shape consumers’ preferences and attitudes
Reduce transaction costs Incentives to raise quality of products Confer market power and threaten competition
What Do Trademarks Do? • Identify sources of products • Mnemonic devices • Provide substantive information • Generalized indicia of prestige • Increase the attractiveness of products
through sound, appearance, or connotation • Provide vehicles for conversation and parody • Shape consumers’ preferences and attitudes
– undermine premise of signal theory: exogenous tastes
Reduce transaction costs Incentives to raise quality of products Confer market power and threaten competition
Compilation of Original Virginia Slims TV Ads
• http://www.archive.org/details/tobacco_leo23e00
Cultural Critique
• Leads to Physically unhealthy or dangerous behavior
• Fosters consumerism, conspicuous consumption, materialism, envy, ennui
www.2street.com/newyorker/
http://www.2street.com/newyorker/
Economic Critique
• Consumers pay the costs of -- and don’t benefit from -- ads that merely stabilize market shares
• Artificial product differentiation facilitates oligopolistic pricing
• Artificial accentuation of consumer anxieties also facilitates monopoly pricing
From the Bayer homepage Myth: All aspirin products are the same. Fact: While the active ingredient in aspirin may be the same, not all aspirin products are subjected to the same stringent quality controls. Bayer Aspirin, which people have trusted for over 100 years, is required to meet some of the highest quality standards in the drug industry, going through 100 quality control checks.Source: http://www.bayeraspirin.com/myths.html#myth3
Political Critique
• Concentration of semiotic power • Our understandings of masculinity,
femininity, beauty, success, failure, pleasure, peace are controlled to a distressing extent by a small group of people who surely do not have our best interests at heart
Economic Defense
• Trademarks/advertising heightens our capacity to experience pleasure – by increasing our awareness of the range of
goods and services available to us – and heightening our sensitivity to the
variations among them • Net effect: total pleasure is increased
Cultural Defense
• Leads to physically healthy behavior • The liveliness and richness of western
culture derives partly from the efflorescence of consumer goods
Political Defense
• Trademarks create a world-wide vocabulary and thus help to erode cultural and political barriers and suspicions
• If parody is permitted, trademarks provide the raw materials for decentralized cultural criticism -- the dispersion of semiotic power
• Utilitarian Critique: artificial product differentiation & oligopolistic pricing
• Cultural Critique: Physically unhealthy and morally pernicious
• Political Critique: concentration of semiotic power
• Utilitarian Defense: increase of hedonic capacity & total social welfare
• Cultural Defense: potential health benefits & cultural richness
• Political Defense: common vocabulary & materials for semiotic democracy
Assessments of the Preference-Shaping Power of TMs and Ads
Possible Alternatives to Trademarks
• Government certification of quality of goods – USDA Grade A Beef – Bar admissions
• Private certification of quality of goods – Ebay variation
Possible Alternatives to Trademarks
• Government certification of quality of goods – Maple syrup – Bar admissions
• Private certification of quality of goods – Ebay variation
Possible Alternatives to Trademarks
• Government certification of quality of goods – Maple syrup – Bar admissions
• Private certification of quality of goods – Ebay variation
• Warranties
Possible Alternatives to Trademarks
• Government certification of quality of goods – Maple syrup – Bar admissions
• Private certification of quality of goods – Ebay variation
• Warranties • Retailers as intermediaries
What Do Trademarks Do? • Identify sources of products • Mnemonic devices • Provide substantive information • Generalized indicia of prestige • Increase the attractiveness of products
through sound, appearance, or connotation • Provide vehicles for conversation and parody • Shape consumers’ preferences and attitudes
Reduce transaction costs Incentives to raise quality of products Confer market power and threaten competition
End