Your company can use its marks to select a distinctive brand, build widespread awareness of that brand, extend the brand to related goods/services, and educate the market about the innovative features of the branded goods/services to further strengthen the brand and the company’s desired market positioning.
As your company builds goodwill with its customers, a substantial portion of that goodwill is carried by the company’s marks (and the rest by the brand as a whole). If the company were to abruptly discontinue use of a mark, consumers of the goods/services with which that mark was used could easily be lost to competitors. Similarly, if a company allowed its mark to be pirated by a maker of cheap knockoffs, the company could suffer a tremendous negative impact on its sales, profits, and reputation.
Sometimes, customers are willing to pay a premium for goods/services associated with a particular mark (e.g., TIFFANY jewelry, MERCEDES-BENZ automobiles, a stay at a WALDORF ASTORIA hotel, etc.).
Thus, marks can be extremely valuable. For example, the COCA-COLA mark is estimated to be worth hundreds of billions of dollars and is perhaps the most valuable instance [?] of intellectual property in the world.
Consequently, by managing them well, your company’s marks, whether they be trademarks or service marks, can help you build a distinctive and valuable brand for your goods/services, such as by:
Identifying Their Source
Without even mentioning the actual name of a source, a mark can indicate that source. For example, the “golden arches” can indicate the location of a McDonald’s fast-food restaurant, without ever using that word.
Guaranteeing Their Quality
A mark can serve as a guarantee that a consumer’s experience with the goods/services with which that mark is used will be of an expected quality. For example, consumers have grown to expect an outstanding user interface with Apple’s products, excellent customer services from Zappos.com and hot french fries at McDonald’s.
Facilitating Their Advertising
By communicating certain values, a mark can function as an advertisement all by itself. Think COACH, GUCCI, and ROLEX. Or the Apple logo, Nike swoosh, or (again) McDonald’s golden arches.
In addition, once a source is well established in one market, it can apply its mark to goods/services in related markets, thereby facilitating extension of that mark (and even the brand). For example, after JELL-O was well-established in the instant pudding category, Kraft extended the mark to frozen desserts (JELL-O Pudding Pops). Similarly, Richard Branson leveraged his VIRGIN mark (and brand) into music, air travel, cell phones, and more, creating over 300 companies bearing the VIRGIN mark along the way.