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Story of the
$5 million name
As analysts
ponder over the impact of MIT’s demand of millions for the use of its name, and
the subsequent pullout from Media Lab Asia in India, MOHAN BABU justifies
that a name is a valuable brand and consequently a corporate asset
“What’s in a
name? That which we call a rose by any other word would smell as sweet..” So
said Shakespeare in Romeo and Juliet. Why then all the brouhaha over MIT pulling
out of the “Media Lab” name, supposedly an exclusive moniker for the use of
which they demanded $5 million? Traditionalists, especially those raised in
semi-socialist mould in India are wondering if a name can really be that
valuable, and if so should Arun Shourie have paid up the amount to MIT? Will the
lab continue to function without the name, with just the support of the Indian
government? All these questions are going to be pondered over by experts in the
weeks and months to come.
From a corporate
business standpoint, a name is indeed a valuable asset and the reason why
companies like Coke and McDonalds assiduously guard their valuable brands. As
per a recent Business Week magazine survey, Coca Cola, the world’s most valuable
brand, is worth upwards of $69 billion. At a very pragmatic level, all that coke
sells is a bottle or can of fizzy, sweet water with a pinch of “secret chemical”
thrown in for good measure. However, you and I buy not just a can of water but a
red can of refreshing thirst quencher from a familiar name, which promises
consistent experience time after time anywhere in the world you happen to
consume it. Corporate brands and logs convey an image in the minds of consumers
and users.
A Rolex watch, a
BMW auto, Nike swoosh or the Microsoft logo convey in a word or two what a sales
person may not be able to convey in an hour’s persuasive presentation. The
allure, image and ideas associated with such world-class brands is a topic that
marketing mavericks ponder over endlessly. For the rest of us, sufficient to
say, a brand name does sell.
The same concept
of brands and names applies to academia and research too. A professor from
Harvard or Yale generally commands more awe, respect (and consulting fees) than
his peer from a community college in Anytown, USA. The same applies to graduates
from prestigious schools and universities. An IIM graduate in India will command
more respect (and) money than an equally qualified peer from, say, Mysore
University. Why is it so? This is something that will take a research paper or
book to explain, but is an irrefutable fact that most of us are familiar with.
Research in IT, a topic dear to most of us has similar biases: an article or
whitepaper published by the Cutter Journal, Forrester or Gartner automatically
commands the attention of the readers because of the name associated with it.
Similarly, articles from The Wall Street Journal or Harvard Business Review are
automatically quoted as gospel by business leaders.
With this
preamble we can get back to the discussion: Was MIT justified in asking for $5
million in return for the use of its “MIT Media Labs” name? It is hard for me to
talk about the value of MIT’s name or even if it is worth the millions of
dollars, but the fact remains: MIT is a brand to be reckoned with in the global
technology research marketplace. And if they happen to ask for something in
return for the use of their name, well, they are probably justified.
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