Wednesday, October 10, 2012

Starbucks kebab, Quiznos gyros and Bugs Bunny

Good morning economists! Today I would like to discuss the benefits of consumer loyalty to a brand. Even though this topic largely falls under the field of marketing, economic studies have been conducted to calculate the value of brand recognition and the potential profits this brings to companies. I would like to share a few stories with you to show how small businesses try to capitalize (illegally) on big name branding.

Five years ago, I was driving along a quiet neighborhood when my eyes caught a Starbucks sign. That was curious to me because I knew for a fact that there was no Starbucks store anywhere near that area. I stepped in the store out of curiosity. I was met with an elderly lady who informed me that their specialty was the greek souvlaki. "Why the sign" I asked. "We have been here for many years now. They (the real Starbucks) just opened in this town. They are copying us!" was the reply. That seemed funny to me at the time. The store closed down a couple of months later.

My second story has to do with a gyros fast food store which opened a year ago in my town. As soon as I saw their sign, I knew they were up to something...

Recognize the logo? A very very VERY familiar logo of a well established business. When I told the local manager of the potential infringement, he acted surprised and blamed their marketing agents who designed the logo. One year later, the logo is still there.

Last story of this post. How can a local butcher who is selling rabbits capitalize on a name that everyone knows? But of course he is advertising that he is selling Bugs Bunny. Problem is, this ain't the "BAGS" (instead of Bugs) bunny Elmer Fudd is chasing all these years.
By the way, do not forget to check out Marketing Cache a blog by a good friend and colleague.

Have a wonderful day!


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