- Tech firm spends $US1.5m on marketing each month
- Firm wanted to expand operations to the US market
- Company had not adequately protected its assets
- A US competitor had a similar brand, with full protection
- Tech firm forced to write off $US36m of costs and to rebrand
An Australian company invested a monthly marketing budget of $US1.5 million to help it rapidly build an excellent local brand to springboard it into the much larger US market.
The company had built a strong brand in its home country and was spending upwards of $US1.5 million each month on marketing. It hoped to replicate this success in the US.
Unfortunately, as the company expanded overseas, it discovered its brand protection was for only a device mark, not a word mark. This meant that the company only had protection for its specific logo rather than the text-only name of the company.
Trade marks and brand are a bit like real estate: the best sites are probably owned by someone else. If a company has a great brand in one country, there is a good chance that a rival company in another country will have an equally strong brand that mimics that success making overseas expansion difficult.
Furthermore, product tweaks require constant updates to a brand strategy. New product launches can happen so quickly that companies forget to protect the brand in a rush to get it into the market. They may also mistakenly assume that protection in one country will cover the same product in a new geography. That’s often not the case.
As the company moved into the US market, it quickly discovered that a competitor with a strong brand already owned the word mark that the Australian company had invested millions in promoting.
By operating from poor advice at the beginning of its venture, the Australian company had moved too quickly to market and failed to protect the full suite of its brand’s intangible assets. It was forced to write off more than $US36 million of sunk marketing costs and had to a rebrand from scratch in the US market.
Do your homework to ensure you have the right protection around your brand, trade mark, copyright, word marks – and all the other intangible assets. Seek advice from independent experts at an early stage on how to protect your assets as this upfront investment is likely to save you both heartache and issues later on down the track.
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