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Profitability and risk of brands with city name

‘Third world country’. ‘They have soiled the name of the capital of Spain’. They are perhaps unfair simplifications, but Air Madrid crisis has left impressions like this in the minds of many citizens, especially in the of thousands of Latin Americans who could not return to their country or that could not even fly back to Spain after the closure of the company’s activity. The crisis of the airline could leave, in addition, damage collateral in the image international of Spain.

 

A recent survey of urgency, elaborate by the consultant of marks The Brand Partners and the magazine specialized Infobrands, between entrepreneurs of the sector of the tourism, agents of travel Spanish and Latin American and tourists confirms that it happened with the company air increases the perception of helplessness of the consumer in the panorama Business Spanish (Afinsa and Forum philatelic, corruption urban…).

The circumstance of that it airline hang the name of the capital of Spain as last name aggravates even more the feeling of prejudice that a conflict of this nature generates on the image and the reputation of a city or a country. This leads some experts to question whether public bodies and authorities take adequate precautions with the use of the name of the cities, regions and even countries in the marks of the companies.

‘It is essential to have tools of protection and control of the reputation, strategies of crisis, monitoring, warning, shielding and recovery of the reputation regional levels. The name of a city is much more than a mere name, there is a set of representations and meanings linked to it,” says Victor Mirabet, founding partner of the Brand Partners. At present, the applicable regulations sets that will be necessary authorisation to ‘reproduce the coat of arms, flag, decorations and other emblems of Spain, its autonomous regions, provinces, municipalities and other local entities’. But that is not the case with regard to the names. In fact, can be used as components of a mark indications of the destination and geographical origin with the sole limitation of not be used alone.

Gabriela Salinas, consultant for The Brand Partners, believes that ‘ in the case of an airline with any conflict has an international resonance. The risk is increased when the regionality coincides with the capital. That produces a negative ripple effect on all the promises that include the word Madrid’.

Both experts believe that ‘Spain strategic sectors should be defined’, including the media of communication, utilities, energy and transport, for which the use of the name of a city, region or the country as a component of the trade mark required authorization and even suggest ‘an analysis of reputational risk’ before granting it. ‘If a Protocol had been applied as well, has had unauthorized Air Madrid to use the name of the city as a component of its trade name’, says Salinas.

Regulation in the advertising field, however, is complicated and ‘what seems most urgent is to make a good promotion of the brand country or brand city’, says Angel risk, group consultants. An opinion shared by light Erhadt, of Landor, group Advisor of the Town Hall in issues of image, that although not believes in an effect dramatic on the brand Madrid, recognizes that it happened ‘ reinforces the stereotype of the disorganization of them Spanish ‘ and ensures: ‘ hopefully it company is had called of other form ‘.

AirMadrid to Custo Barcelona: other cases

The cities also take advantage of the brands that bear his name. ‘ A brand of cutting edge design and creative as Custo hung carry the surname Barcelona has been an undisputed promotion for the city’, underscoring Carlos Torrecilla, Professor of marketing at Esade. ‘ If we want that our brands are profitable have that assume risks ‘, says.

Gildo Seisdedos, Professor at the Instituto de Empresa, considered that ‘all the companies are good for the region where they are installed’. However, Conrad Llorens, Managing Director of the creator of brands Summa, distinguish cases like de Custo, the L’ Oréal Paris or DKNY (Donna Karan New York), of most of the airlines.

In the first ‘live the trademark and the city in branding’, while in the second ‘ only occurs for the place-name, since the rest Air, Airways, Aero is a generic category ‘. In the cases of cobranding, follows Llorens, ‘ despite not being regulated, it is understood that there is a reciprocal link which is suitable for both ‘. Instead, believes that them Airlines is leverage ‘ free of charge ‘ of its association with the city, and however is this which ‘ brings with them costs of their bad image ‘.

The expert recalled that the tradition of carrying names of countries comes from when the airlines were public. Its privatization, and the fact that the new airlines adopted names of cities, helped increase the risks.

Other cases

Precedent

The airline Switzerland of flag Swissair went bankrupt in 2002, and its business was absorbed by Crossair, which created the brand Swiss to maintain the national emblem. To accomplish this feat with an important public subsidy.

Association

Sometimes are the cities which seek to the mark, as has Conrad Llorens, Advisor delegate of Summa. On the occasion of its candidature for the Olympic Games, the city of Madrid has launched with Puma Edition liimitada of shoes with the name of the capital, ‘ based on the DNA of the brand: sport in urban areas ‘.

Identification

Them inhabitants of Vergeze (France), where is bottled the water mineral Perrier, have started a battle legal against the owner, Nestlé, to call part of the municipality with that name.

Source: Cinco Días

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