Businesses get more protective of their brands in recession
Businesses becoming more protective of their brands in the recession, with 84% of executives claiming a strong brand is more important in an economic downturn than in favourable economic circumstances. 
That is one of the findings in a new report by intellectual property firm Marks & Clerk. The survey, of 222 companies, found that businesses are taking an increasingly focused approach to their business strategy. 97% intend to channel marketing efforts on core products and services in the recession. Meanwhile, 62% intend to use their existing brand as the means to diversify into sister offerings.
Correspondingly, over three-quarters (77%) anticipate that companies will become more aggressive in protecting their brands in this environment – with an even greater number (86%) suggesting that their own businesses are more inclined than previously to defend existing products and services. This is supported by the most recent statistics on the number of oppositions made to trade mark applications at the European level, which show a 12% increase in 2008, from 16,486 to 18,481.
Despite this increased aggression, the research finds that many businesses are still not acting at an early enough stage to prevent threats to their brands emerging. Only a fifth of senior management are taking a more active role in brand protection in the downturn than previously, with the remainder either “too busy” or getting involved only after a direct competitive or counterfeiting threat has emerged.
This is in spite of the fact that 95% believe consumer demand for counterfeit goods will rise in the current market, and be met with a willing supply. Meanwhile, 89% believe the rise of outsourcing will leave companies more open to potential abuses of their brands than in previous downturns. 80% blame intellectual property systems in emerging markets for failing to develop sufficiently for businesses to have confidence in their handling of counterfeiters.
Pam Withers, a partner at Marks & Clerk, commented: “One of the most important contributions a strong or dominant brand can give a business is long-term resilience and a greater ability to weather the storm as consumers fly to quality.
Businesses recognise this truth, hence their reaction in lodging more oppositions to trade mark applications at the European level and dissatisfaction with the protection their brands may have in overseas territories.
“However, businesses need to take more responsibility themselves. Too many are only focusing on brand protection when their business comes under direct attack from competitors or counterfeiters. The costs of effective brand protection and monitoring are relatively low and far outweighed by the financial headaches brand dilution or infringement will bring a business down the line”.
The survey also found that that the reality of business’s ability to protect their brands prior to litigation is worsening. 82% of those surveyed predict that “economic reality” will inevitably result in cuts to budgets that relate to brands, while almost half (46%) already spend less than one per cent of that budget on obtaining brand protection and monitoring.