The role of consumer-based brand equity on the prolongation of trademarks

Abstract

AbstractTrademarks are an integral part of a firm’s brand equity. While extant research looked at the outcomes of trademarks, e.g., a firm’s financial valuation, profitability, and productivity, limited knowledge exists regarding the factors influencing a company’s decision to prolong or terminate trademarks. For the first time, the presented research investigates the effects of consumer-based brand equity (CBBE) dimensions on the decision to prolong or terminate trademarks and how trademark characteristics and the level of regulation in a product category moderate these effects. Utilizing a unique dataset covering 25 countries and 56 product categories from 2001 to 2019, tracking 1,446 trademarks, this research establishes empirical evidence for CBBE’s critical role in trademark prolongations. The CBBE dimension relevant stature (reflecting brand knowledge, esteem, and relevance) positively affects trademark prolongation, whereas the CBBE dimension energized differentiation (reflecting brand uniqueness) negatively impacts trademark prolongation. Specifically, brand-association trademarks and trademark age attenuate the negative effect of energized differentiation on trademark prolongation. Moreover, low levels of regulation reduce the probability of trademark prolongation for brands scoring high on knowledge, esteem, and relevance. Vice versa, low levels of regulation increase the probability of trademark prolongation for highly differentiated brands. These results translate into important managerial implications.