Osmotic marketing

The Wall Street Journal of December 15th 2008 has an article by Professor Ross D. Petty of Babson College, MA that could be of interest to lesser known businesses seeking to get on the fast lane to customers. Prof Petty labels the tactic as "judo brand marketing" by which a company can leverage a larger business's assets to its own advantage.

The Journal article headlined "Gild by Association" suggests a number of ways by which a company can use the more recognizable brand name without running afoul of the law. Examples cited include an instance where "a company could develop a product that's compatible with a better-known
item, such as a line of replacement blades for a popular razor, and
then use the famous name prominently in advertising. A company might
also run ads that compare its product with a much bigger brand — or
try to get people talking by mocking a rival's better-known mascot".

The marketing strategy is premised on the "doctrine of fair use" where a "a company can use another's trademark without consent in certain circumstances — including some types of marketing". The article does point out the risks and the need to stay within boundaries by noting that "these tactics can be risky. There are limits to fair use, and companies
can be sued even if they handle another company's brand identifiers,
such as logos and mascots, carefully". One suggestion to avoid legal repercussions from the copyright owner is to be deliberately vague as in the case of "ambush marketing" where a company that isn't an official sponsor of an event tries to make the audience think that it is – as was the case with some ads during the olympics.

Applications of judo marketing suggested by the artice include "brand extensions,  a popular tactic among companies. Putting out a
somewhat different version of a well-known product, such as laundry
detergents with added bleach or fabric softener, can be much less risky
and costly than trying to build up a new brand from scratch". Another is via "compatible products" where "companies could put
out products and services that work with a better-known brand, such as
razor blades, printer cartridges and automobile-repair services. In
these cases, manufacturers are allowed to say that their products and
services are compatible with the bigger brand names — as long as they
don't suggest that the bigger brand approves of the offerings, or is
affiliated with them". Others include "ornamental use", a version of compatible products, where a T-shirt is adorned with the company logo of a bigger brand.  Parody marketing is also mentioned where "a trademark is mimicked rather than producing an exact copy, often to make a humorous comment on a well-known brand".

There are takeaways for hotels, particularly independent operators and include capitalizing on events such as the "Indy 500" for hotels in the Indianapolis area as well as hotels in New York looking to garner attention from one of many major world events that are frequently staged in the Big Apple. Independent hotel operators in a crowded market could also use these tactics to highlight their situational advantages in reference to better known global brands in the marketplace. But anyone who embraces these measures must do so with the clear understanding that there are likely to be challenges from brand owners that compel via litigation not only a cessation of it but also potential financial costs that may outwiegh any advantages gained.

Published by

Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

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