Now I am not kidding myself. I can't push this foray into the outer reaches of IP metaphysics for too far or too long, lest I become the object of glazed-over, or disconnected, stares. But 5-15 minutes of this exposition, Coca Cola container in hand to serve as a ready example, seem to do the job. What becomes even more difficult is when the discussion moves from trademarks to brands (there are invevitably several upwardly marketing types in each class). I am aware that yesterday's trademark manager has become today's "head of corporate branding" in many companies.
But for me, the uncertainties about setting the metes and bounds of brands and branding make the class discussion among the most challenging of the entire course. Is branding about various lines of an international cosmetics company, or is about the overall value and draw of the name of multi-faceted retail chain?
I was reminded of the uncertainties regarding discussions on brands in an article that appeared in the December 8th issue of Business Week, "How Private Equity Strangled Mervyn's". The focus of the article was the bankruptcy of the U.S. chain retailer, Mervyn's. At its height, Mervyn's had 257 stores and 30,000 employees, and it was a well-known retail fixure in the U.S. West Coast. The article took the slant that the ultimate demise of the company was due to the interests of its most recent owner, a consortium of private equity investors, whose financial interests were not necessarily in the best interest of the long-term prosperity of the company and its brand.
According to the article, the new owners of the chain were more interested in reaping short-term benefit from sellling off real estate and engaging in certain sleights of hand with store leases than in attending to the nuts and bolts of trying to resucitate a declining retail brand. Indeed, the account of the actions of the chain's private equity owners is notable by the fact that the things that presumably went into building the brand--merchandise, pricing, ambience, service, and customer goodwill--are virtually unmentioned. For these owners, at least, there was more (or at least different, if only for the short term) value in the physcial assets acquired and later disposed of, than in what we would typically understand as part of the chain's brand.
In fact, the decline of the Mervyn brand began much earlier, in 1978, when the family-owned business was sold to the retail conglomerate Dayton Hudson. According to the article, Dayton Hudson preferred to use the money that was being spun off by Mervyn to strengthen its flagship franchise, the well-known U.S. retainer Target. The result was that, here as well, the kinds of things that are necessary to maintain a brand in the rough and tumble of retailing were being neglected by virtue of the diversion of cash flow from the company's parent to another (and preferred) member of the corporate retailing stable.
In recounting this story, it is clear that we have drifted far afield from a conventional understanding of branding. Will the regrettable end of Mervyn's find its way into my next MBA course? Probably not, after all, it is not really about IP strategy. That said, it too is about branding, or more precisely, what happens when branding ceases to become a primary focus of the company's operations.