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When A Brand Is More Liability Than Equity

When A Brand Is More Liability Than Equity

"RIP Brands"Rest in peace, Muzak. Today, your corporate owner announced that they’d be killing you off in favor of the brand name “mood music.” As I quietly hum “Knock Three Times” to myself, I remember some of the other giant brands that have preceded you.

The great PanAm Airlines died an inglorious death in 1991, but it wasn’t so much that the brand name had become a liability as it was a matter of the business failing.  Eclipse Holdings, Inc bought the trademarks in 1993 and made use of the name in a few failed ventures. Now, it somehow has become the name of a railway.

We all know that a brand name can have the power of adding a lot of value to a company. If a generic can of cola sells for 75 cents, and I can sell a can of Acme Pop for $1.50, I have a price premium of 75 cents.  That can add up to a lot of money.

Every so often it happens in reverse.  I might have a care that I can sell for $12,000, but by slapping a brand new Edsel logo onto the side panel, I might lose a lot of that value even before driving out of the showroom.

Like the PanAm name, it isn’t unusual for iconic trademarked names to land on the auction block.  In one such brand auction in 2010 , the likes of Shearson, Meister Brau, and Handi-Wrap all went for under $50K each, while for about a thousand dollars, you could have been the proud owner of such forgotten brand names like Computer City and Allied Signal.  My favorite was Collier’s which was purchased by a college student from Philadelphia, who has, in fact, resurrected Colliers.

RiverWestBrands is a company that is one of the buyers of these old iconic brands. They are the proud holders of Bonwit Teller, Eagle (as in pretzels, remember?), and Brim (coffee). They’ve been able to make a case that these names can still create additional value.

It can be difficult to understand, sometimes, why a great heritage brand is killed off. Last year, the Shottenstein Property Group relinquished its attempt to revive the grand old Steuben brand name of crystal. Corning quietly took the name back, but apparently has no plans of reviving the brand name at this point. It’s not difficult to understand that the revenue they receive from Corning® Gorilla® Glass (the glass on your iPhone) far exceeds anything they’d ever make from the Steuben luxury brand.

So, Muzak, we salute you!  But if they ever decide to bring back Burma-Shave, I’m going to be using it, and singing the Girl From Ipanema.

2 comments
susansilver
susansilver

This is a super interesting discussion. I am working for a company now whose strongest asset is probably the brand name. I am amazed how powerfully it can impact you for better or worse.

barrettrossie
barrettrossie

Rick, the gentleman who owns only local independent radio station in my town (there are some 30 out-of-town corporate stations here) bought the brand name "Mutual Broadcasting System." I heard he didn't pay all that much for it, though that may be a rumor.

 

He's not doing much with it the brand name now, but just wait.  :-)  (I'm old enough to remember when that name had the real ring of authority about it!)