Trump University fails students: Lawsuit

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    Trump Tower on 5th Avenue in New York.

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    The Trump Plaza hotel and casino in Atlantic City, N.J.

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    The Trump National Golf Course in Rancho Palos Verdes, Calif.

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    Trump Ice water.

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    Trump introduced Trump Steaks, a line of mail-order meat through The Sharper Image, in 2007.

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    The Trump Wollman Skating Rink in Central Park, New York City.

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    Donald Trump holds up a copy of his book "Think Big and Kick Ass in Business and Life" before participating in a book signing at an area bookstore October 16, 2007 in New York City.

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    In 1989, Trump bought Eastern Airlines Shuttle and renamed it Trump Air. Here, a Trump shuttle Boeing 727-214.

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    The Trump Taj Mahal in Atlantic City, N.J.

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    Trump starts Trump Model Management in 1999. Here, Trump with Melania Knauss and models, at the viewing party for the fashion episode of 'The Apprentice' on October 14, 2004.

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    Trump partnered with NBC in 2002 to run Miss Universe pageants. Miss Teen USA Logan West, Donald Trump, Miss USA Nana Meriwether and Miss Universe Olivia Culpo attend the crowning ceremony of the new Miss USA at Trump Tower on January 9, 2013 in New York City.

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    Donald Trump attends Trump Vodka launch party at Les Deux on January 17, 2007.

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    Donald Trump attends the Universal Studios Hollywood Apprentice Casting Call on March 10, 2006.

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    - Serta

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    In this handout photo provided by Estee Lauder, Donald Trump's cologne, The Fragrance.

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    The Trump International Hotel & Tower (C) rises above the city's business district August 18, 2008 in Chicago, Ill.

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(Check out the slideshow of Trump's various branded products above.)

Donald Trump spent Monday on the defensive -- as much as anybody with such a knack for self-promotion can actually be on the defensive.

Trump took to the airwaves to deny charges in a $40 million lawsuit filed by New York Attorney General Eric Schneiderman. He is accused of fraud for allegedly helping to run a bogus for-profit university where students paid up to $35,000 for not much more than a series of seminars.

That's a lot of chicken scratch just to be associated with the Trump brand. But that's the point: His name, after all, is the real estate mogul’s trump card.

Sure, Trump is a billionaire. Forbes estimates he’s worth $3.2 billion. But in some ways you could call him cheap.

“I think he licenses his name to everything and anything that someone will pay him to do it,” says Hayes Roth, chief marketing officer at Landor, a branding firm. “He’s tried airlines, and he’s tried soda pop and he’s tried all kinds of things.”

Reality TV, women’s perfume, men’s cologne, chocolate designed like gold bars.  The details of the deals are private, so it’s hard to know what’s succeeded and what hasn’t. But we do know Trump has declared corporate bankruptcy a number of times. Could that could that be why he rents his name so extensively?  

No, says Roth.  “I think he’s a born entrepreneur -- I think he’d do it whether he went bankrupt or not.”

For Trump, licensing is about more than cash.

“The other thing it does,” says Tim Calkins, a professor of marketing at Northwestern’s Kellogg School of Management, “it makes the Trump brand look even bigger.”

Calkins notes that many of Trump’s deals have run into problems, but the brand still conveys confidence.

“It doesn’t matter if you’re a senior citizen who has a dispute about a real estate deal, or if you’re the New York Attorney general,” he says. “He’s very, very quick to come back and say, ‘The problem is not with Trump, the problem is with you.’”

That attitude is what keeps the licensing deals coming. Market research firm Q Scores says 70 percent of Americans, age 6 and older, know Trump’s name.

About the author

Sally Herships is a regular contributor to Marketplace.


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