» branding

Lately we seem to be hearing more about “branding”, “maintaining your brand”, “creating your own brand”, etc. etc. There once was a TV show called “Fame Is the Name of the Game”. In business it’s really “Fame is the Game of the Name”. So why would a company with a famous 90 year old brand like “Radio Shack” change its name to “The Shack”? Does it make sense to do that? Here is an interesting article that summarizes the recent change from “Radio Shack” to “The Shack” along with some other famous name changes such as Galvin Manufacturing Corp. to Motorola Inc. and Matsushita Electric Industrial Co. to Panasonic Corp. And here is a well-written critique of Radio Shack’s decision to change its name.

Logic tells us that a McDonalds franchise location probably wouldn’t be worth as much without the ability to use the McDonalds name, the golden arches and the familiar McDonalds color scheme. Those unique identifiers – trademarks – help make each McDonalds location worth a lot more than a restaurant in the same spot that didn’t have those familiar icons. The same can be said about many familiar franchises and brands. But how do we place a value on what a name and trademarks are worth? Here is a recent story about the efforts by a Swedish internet cafe operator to buy an online file-sharing website called Pirate Bay for almost $8 million – even though the current operators of the website were criminally convicted in April and were ordered to spend a year in prison and pay almost $4 million in damages and the Motion Picture Association of America has requested that a court in Sweden stop the website from making available unauthorized copies of movies, TV shows, videogames, etc. Why is Pirate Bay worth $8 million plus whatever it will cost to operate it going forward? Apparently because the new buyer believes it can convert about 10% of Pirate Bay’s current 20 million subscribers into legit customers who will pay for downloads.

It should be interesting to see how this works out.