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In highly competitive markets, the objective is to stand out over and above your rivals. But what if you’re highly successful and a competitor tries to muscle in on your territory by copying your successful formula?

What can you do to stop copycats misleading and potentially stealing your customers? And how can you maintain your brand image and integrity in the face of blatant plagiarism? This Blue Paper aims to answer these questions and outline how to make your brand copycat-proof.

Why brand copycats can be a problem
Copycat products are not a new phenomenon. In the supermarket sector in particular, we’ve seen individual retailers borrow heavily from the colour schemes, logos and overall feel of established and well-known names in their own-brand products. While many consumers knowingly purchase these cheaper alternatives, plenty will still prefer to stick with the brand they know and love. But the fact that the appearance of the own-brand product is so similar to what they wish to buy has been proven to be confusing, to some at least.

Indeed, a recent study by consumer group Which? asked customers to look at a packet of McVitie’s ginger biscuits and the Lidl own-brand alternative – but after the brand names had been removed. Thirty-nine per cent of people surveyed thought the Lidl product was the branded item, which the study said demonstrates how similar packaging can be. Richard Headland, Editor of Which, commented: “We’ve found packaging tactics across the supermarkets that run the risk of misleading customers. Supermarkets and manufacturers need to play fair to avoid confusing consumers.”[1]

The reasoning behind the supermarkets’ actions is easy to understand. As John Noble, Director of the British Brands Group, notes, the practice has been widespread since the early 1990s – when supermarkets shifted their own-label offerings “from value up to mid-tier.” “Supermarkets needed to convince consumers they were brand-leading quality so they mimicked the brands to communicate that.”[2]

But does this make it right? And is there more at stake than misleading customers and diverting them away from established players in the market? Irwin Lee of Procter & Gamble recently pointed out that his organisation and other suppliers spend lots of money on researching colour, design and packaging. As a result, he believes that copycat brands are yielding the benefits of this investment in finding out what works without having pay for it themselves. According to Mr Lee, “it’s a free ride for the copycats.”[3]

At the moment, copycat packaging is deemed to fall foul of competition law if it does any of the following:

  • Any information is false and it is likely to deceive the average person.
  • It could be confused with products, names or marks associated with a competitor.
  • It knowingly misleads a person into believing a product is manufactured by a rival organisation.

The issue came to a head recently when the government opened a review into the enforcement of the Consumer Protection from Unfair Trading Regulations (CPRs) against copycat packaging. This was defined as “the practice of designing the packaging of a product (or its ‘trade dress’ or ‘get up’) to give it the general ‘look and feel’ of a competing well-known brand (typically the market leader).” [4]

Brands, retailers and other stakeholders were asked to give their opinions on whether businesses should be empowered to seek civil injunctions to stop rivals from copying their branding. The government revealed that the views expressed were “polarised”, with brand owners forcefully arguing in favour of this power, while certain regulatory bodies were against the idea.

Ultimately, though, the government rejected the calls for greater powers to clamp down on copycat packaging for one critical reason. It ruled that consumers are not actually suffering any detriment from this practice and made the point that – as we said at the beginning of this Blue Paper – many consciously buy copycat products and are happy with their purchase.

Furthermore, the government review said the average consumer is reasonably well-informed and observant, while any potential detriment would be mitigated by the fact it would be easy for a person to exchange an item for the product they wished to buy. So for all the arguments and criticism against copycat brands, even by consumer groups and advocates, it seems many people don’t actually have a problem with them – enough for the government to conclude that immediate action is not required.

Where next for brands?
As would be expected following a consultation in which the submissions were said to be “polarised” reaction to the government’s decision was equally mixed. Nick Boles, Skills Minister, stressed that brands are important to the UK economy and that the report clearly says positive brand innovation is important to consumers. However, he said there is “little clear evidence that the use of similar packaging is causing any significant consumer detriment or hindering competition or innovation.” As a result, he believes unintended consequences would arise “if we changed the status quo, given the uncertainty around the evidence and the effects of the change, particularly in respect of the litigation that would result, and on enforcement. More generally, it would be difficult to reconcile granting this enforcement power with the government deregulatory objectives.”[5]

Discount retailer Aldi, which has been among those to be criticised for emulating the packaging and feel of well-known brands, made a similar point before the review was published, insisting that consumers are “savvy and shop based on value.” Giles Hurley, Joint Managing Director of Corporate Buying, said: “It is well established that there are generic visual cues on packaging that are useful for consumers – and are legal. Aldi invests in creating attractive packaging that is unique to our products. Far from confusing customers, we are championing them by providing choice and competition.”[6]

This argument is unlikely to be good enough for the British Brands Group, which responded to the review by saying such packaging “dupes” shoppers every single day. Director of the body John Noble said: “Allowing brand owners to act would have given shoppers clearer choices and companies more confidence to invest in giving people even better, more innovative products. As it is, the decision to do nothing is bad for shoppers, bad for brands, bad for companies of all sizes that play by the rules and bad for fair competition.”[7]

It seems opinion is sharply divided on the issue of innovation in particular. The government says copycat brands are not standing in the way of innovation, while the trade body says they are. Ironically though, being innovative could ultimately be what best protects organisations against copycats better than any new powers and regulatory tools.

How can brands protect themselves from copycats?

Register your designs
If you come up with a product or design idea that you believe is unique, you need to take ownership of it and stake your claim. This can be done in various ways, such as registering your creation with the Intellectual Property Office.

Online company These Please, which specialises in colourful door knobs, handles and coat hooks is a great example of why this is so important. As Managing Director Ashley Flett notes: “It’s absolutely heartbreaking to find something you’ve spent a lot of time doing, and your money, to find someone else simply piggybacking you. In the past few years, we’ve had ten to 15 occasions where we’ve written to people asking them to stop selling our designs. We haven’t had anybody yet that hasn’t immediately backed down. A lot of them don’t realise they are breaking the law until you bring it to their attention and there are big penalties nowadays.”

But this kind of communication doesn’t have to lead to a confrontation or a court case. Indeed, in Mr Flett’s case, it opened up an incredible new business opportunity. “We once saw a copy of our door knobs on an item of furniture at a well-known home furnishing company. When we wrote to the company involved, they immediately came back to us to say they had sourced them from their supplier. The suppliers apologised and after checking our registered design, immediately removed them from sale. However, they liked the designs so much, they got back in touch to ask if they could purchase them from us directly.”

Registering its designs has subsequently given These Please the ability to fend off anyone trying to copy them, as well as opened doors that might otherwise have remained close to the business. Mr Flett said: “I would strongly recommend protecting your IP if you’re an online player and you’ve designed a product that’s key to your business. The whole world is online and if it becomes popular, someone will copy it. If you haven’t registered your design then you’ve got a problem as you can’t do it retrospectively.”[8]

Be bold
As the government review pointed out, many consumers perceive lookalike products to be just as good as branded items. Iain Connor, Partner at law firm Pinsent Masons, believes this uncomfortable reality has created tensions between brands, retailers and customers, since the brands accuse the lookalikes of confusing customers and retailers say they just want cheaper products. “And in my opinion, the consumers are probably siding more with the retailers,” Mr Connor said. However, he believes brands can do much more to fight back. “If Heinz took its tomato ketchup off the shelves of every retailer in the UK, all retailers would stop selling an own-label product that aped Heinz because their customers would demand it. So brands have got to be bold, have conviction and take the take the retailers on.”[9]

Build an emotional connection with customers
Marketing a brand doesn’t have to revolve around a product or price. Many organisations work hard to convey an ethos and set of values in order to set themselves apart from competitors. This can connect with consumers on an emotional level and forge a deeper and more meaningful relationship between them and a brand. Nir Wegrzyn, Chief Executive of BrandOpus, believes this approach can make brands far less vulnerable to imitation. He says: “I believe brands with distinctive, meaningful identities should be less concerned about copycat brands. Consistent application of a meaningful identity only provides further protection from copycats because it helps to embed a real emotive connection with consumers. If a brand is strong enough to connect on an emotional level with the consumer, then no matter where range extensions may lead the brand, its equity will remain intact and protected from copycatting.”[10]

Steer clear of predictable category cues
Nir Wegrzyn of BrandOpus points out that copycats are only infringing a trademark if they replicate a brand rather than copy product detail. This, he said, means that any packaging and customer-facing material must showcase proprietary and meaningful aspects of their unique identity on a consistent basis. Brands therefore need to avoid making the mistake of confusing packaging with advertising-led communication strategies that are designed for adverts.

Mr Wegrzyn highlighted Unilever as an example of a company that committed this error with its I Can’t Believe It’s Not Butter product. He observed: “It has been copied by absolutely everyone. The brand is structured around an advertisement end line, not a branding strategy that would have provided the foundations for a meaningful identity. Unilever’s oversight was a lack of any visual brand equity beyond the name and the category cue-lead pack design. There is simply nothing there to defend against copycatting. The innovation was imitated, the initial success was shared by everyone, and there is very little future in what is now just a value proposition.”

Ultimately, brands need to take ownership of any elements of their product that they can lay down a marker for. They are not legally entitled to exclusive use of certain colours and visual cues, but they are in a position to create a meaningful brand across multiple platforms. By engaging with a target audience in creative, distinctive and unique ways, they can establish a memorable identity and forge close emotional links with a core consumer base. This can be enough to make your brand the first port of call for loyal customers and make you, if not immune, at least very well protected against the imitators.

Finally
With the government deciding not to give brands more powers to fend off copycats, the onus is squarely on organisations to safeguard their brand integrity without protection from the law. If anything, this should be seen as an opportunity rather than an obstacle. They now have a clear reason to make their brands distinctive and imitation-proof, with a clear focus on building strong identities and devising ideas and concepts that simply can’t be copied.

It would be easy for firms to believe customers’ purchasing decisions are based on a careful weighing up of the available facts, but many experts agree that their thought processes are instead largely swayed by gut instinct and emotions. The Market Enhancement Group, for instance, argues that buying decisions are based on how six emotions come together…

  1. Greed
  2. Fear
  3. Altruism
  4. Envy
  5. Pride
  6. Shame

The idea goes that brands can therefore generate a sale if they either create or augment at least one of these emotions and that when enough of them are present, the “change occurs within the buyer’s emotional state and a purchase decision becomes inevitable.” Organisations therefore need to understand their target audience in order to know how to trigger certain responses.

According to the Market Enhancement Group, these responses are most likely to happen if people trust a brand and believe it is dependable and reliable. Emotional responses also depend on having confidence in an organisation, so they must convince prospective customers that they have the knowledge, expertise and desire to meet their needs. Finally, they must convey the sense that they have the customer’s best interests at heart and are sensitive to their needs.[11]

To do this, they need to base their identity on themes, ideas and compelling stories that resonate with their target audience. It is these that can plant very clear and long-lasting impressions in people’s heads, far more than generic images and colour schemes that can be borrowed by anybody ever could.

 

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