While attending last week's INTA Meeting in Chicago, IPKat team blogger Jeremy spent some time discussing with various participants the Reebok Factor (see earlier blog here). Essentially, what advice do you give a brand when (i) it enjoys a high degree of recognition among consumers and (ii) products that are made under that brand are generally agreed to be of good quality, but (iii) the combination of the first two factors does not appear to generate particularly good sales and growth in market share.
According to the UK Patent Office's Edward Smith,
"Their core product, trainers, look old against the Nike and Adidas competition. There doesn't seem to be anything really distinctive about Reeboks, no phoney technological advance and no Thierry Henry/Ronaldinho advertising to give it a boost - oh dear!Athlete and IP practitioner Peter Groves (Bircham Dyson Bell) cast some doubt as to whether Reebok trainers - even if well-made - have a good technical reputation in the trade. Whether this is because they are indeed technically deficient or because they don't indulge in the "phoney technological advances" referred to by Edward Smith is however a moot point. Most lay purchasers have to rely on the advertising hype anyway since they lack the technical knowledge to assess the product.
Needs to be more fashion than function (famous designer required). Get Cristian Ronaldo to wear the stuff off the pitch as well as on, and finally get the schoolkids wearing it by serious advertising on Nick Jr."
Aaron Wood (Simmons & Simmons) suggests that the problem is that,
"whilst there is recognition of a brand which indicates high quality, it is a high quality version of something which no-one wants.Jonathan Moore (Moore Legal takes an ecomonist's view:
Perhaps the answer is to focus on design and new product development - seems to have worked for Apple. Good products build a brand - a brand will not make a bad product good".
"Assume (which I think is reasonable) a fixed level of demand for a particular type of product at a price (i.e. ignore the issue of substitutability and elasticity for the moment), then brand owners offering competing products are likely to have to “run to stand still”. Brand awareness of a mature brand may preserve market share, but efforts need to be maintained, precisely because there is a fixed level of demand. If these efforts are not preserved, then (subject to certain effects like a fortuitous celebrity endorsement (e.g. Samuel L Jackson and Kangol) the market share will tend to drop off, because of memory fade and because the brand awareness efforts of the competition will continue. So it is difficult to increase market share in these in markets which are mature and saturated – which may be a reason to get into emerging economies early!Trainee patent attorney Andrew Hartley (Urquhart-Dykes & Lord LLP) says:
In my view, substitutability (or otherwise) only adds a minor spin on the foregoing. Whilst (e.g.) Reebok may work hard to convince my son that he needs “Reebok trainers” and not “Adidas trainers”, Adidas is, of course, trying to do the same thing for itself - so more “running to stand still”.
As far as elasticity of demand is concerned, even for branded goods, demand is elastic against price (even if the brand owners try to make the demand inelastic). Market share may increase if prices are decreased, but this is a very complex mix (e.g. even the price itself may be part of the brand image) and it is not always clear whether long-term profit will increase also".
"From a non trade mark attorney's point of view i.e. a trainee patent attorney's point of view, I would say quite simply that the Reebok problem stems from the fact that currently the brand just isn't cool enough. It isn't about recognition and quality, it's about what the buying public want.Paralegal Frederick Finiguerra (Briffa) adds:
For example, Marks and Sparks [editor's note: Marks & Spencer] were arguably in the position of having a highly recognisable brand which represented quality. And yet it was well onto the ropes for a good few years. Now they have rebranded, refreshed their image and their product range. The M&S t rade mark in its rawest form is almost unchanged and yet they are doing so much better with it.
Nike is perhaps a good example to contrast with the Reebok situation. I personally believe that Nike is a cooler brand. I also believe it has a cooler trade mark as well. But I also know that they make better gear, certainly for running. And they appear to be constantly bringing out new high tech 'solutions' and materials, products, equipment and styles. They do not stagnate nor wallow. Arguably their trade mark means quality but importantly it goes beyond that.
As to a solution? Well that's the million dollar question isn't it. And I should have thought well outside the remit of a humble trade mark. Although, arguably you won't ever be cool without a cool trade mark".
"I recognise the brand and I know it's high quality, I might even own a unused pair - that's not a comment on Reebok more on the state of my health, but I cannot think of a single celebrity who wears Reebok. Let's face it celebrities are more important than brands or trade marks which is why we should all become media lawyers!".
So now we know! The IPKat says "many thanks for your views and comments". Merpel is sulking, since no-one has yet asked her for a celebrity endorsement. "Most celebrities only have two feet", she adds, "but I have four, which gives twice as much coverage for the product".