Ever heard of Kodak pianos? How about Buick aspirin? While most consumers may correctly infer that these products are not made by the same companies that make the cameras or the automobiles, a new study in the September issue of the Journal of Consumer Research presents compelling evidence that well-known brand names are weakened by the existence of imitative brand names - even in different product categories. The process is known as trademark dilution.
"Although the FTDA does not require consumer confusion to establish harm from dilution, it appears that the presence of confusion magnifies the amount of harm likely to be incurred by the first user of the brand name (and provides a greater benefit to be enjoyed by the second use of the brand)," write Maureen Morrin (Rutgers University), Jonathan Lee (California State University - Long Beach), and Greg M. Allenby (Ohio State University).
The researchers measured trademark dilution by looking at brand-exclusive recall, that is, the proportion of customers who only think of one brand's products when asked about the brand name in question. The researchers found that a single exposure to another, similar logo reduces brand-exclusive recall by one-third, on average.
"The results also indicate a factor not typically considered by the courts, the consumer's relative knowledge about the two product categories involved, also may have an impact on retrieval," add the authors. "When consumers are confused about the sources of two products, or when they believe the two logos are similar in appearance, the first user's category is less likely to be recalled, although the second user's category is more likely to be recalled."
Maureen Morrin, Jonathan Lee and Greg M. Allenby, "Determinants of Trademark Dilution." Journal of Consumer Research, September 2006.