Colour has never been a grey area for brands. It can be the difference between a brand succeeding or failing, a point proved in 1996, when Alex Ferguson changed football team Manchester United's kit at half time because it was the wrong shade. He said his team were losing 3-0 to Southampton because the players couldn't see each other clearly in their grey shirts. It was not the colour for a champion team and in their new kit, Manchester United went on to claw back a goal from their opponents. This is not just an issue restricted to football. Brands in every sector are beginning to understand that names and logos are no longer enough in the battle for differentiation and leadership. Colour is no longer simply an element of design, but a standalone statement about the brand.

When retailer EasyGroup announced a move into the mobile market last month with its signature orange branding, it ran into opposition from Orange, the incumbent orange brand in the telecoms category.

"We use orange simply and that's why it's so important to us as it strengthens our fun, no-frills brand," explains James Rothnie, director of corporate affairs at EasyGroup. "We're not using a whole mass of colours, it's not complex. All our businesses use the same colour and the same font. It's a way of establishing your identity in the mind of the consumer."

Orange has equally strong ideas about what colour means for its business and the telecom has trademarked its chosen shade. This gives Orange the upper hand in negotiations with EasyGroup, although the two brands have now agreed to work on a compromise.

"It is neither party's interest to cause confusion, and we intend to work together to find an amicable solution," explains Orange spokesperson Sarah Taylor.

Orange's moves to protect its colour as its brand are no longer unusual. According to the Institute of Color Research, human beings make subconscious judgements about any new situation or item within 90 seconds of their initial viewing. Between 62% and 90% of that assessment is based on colour alone.

Angela Wright, a colour psychologist at agency Colour Affects, adds: "Colour is noticed by the brain before shape or wording. Since such a high percentage of our response to colour is unconscious, brands are sending a message to consumers whether they know it or not."

Consumers themselves have also become better informed about how colour can affect a brand's progress. Sixty-eight per cent of consumers believe that new brands choosing an inappropriate colour would harm the brand's acceptance and recall, according to a 2003 survey by the David Lewis Consultancy (see table, page 27).

Scott Garrett, brand director at Heinz, agrees that for his business, the company's distinctive turquoise colour is vital. "It is instantly recognisable. It has been used for as long as anyone can remember."

Brands must also consider the demographics of their target audience when working with colour. There are marked differences in how colours are perceived depending on nationality and cultural background.

"We would be sensitive to local interpretations and wouldn't want to cause offence," says Jessica Stevens, general manager of communications at imaging brand Canon, which last year carried out a survey that looked at links between brands and colours. "There is a strong association with red, so we would not consider changing it without extensive research."

Jill Morton, chief executive of consulting firm Colorcom, says that she sees both regional and gender differences in offering colour advice to brands. Although Colorcom's research shows that black represents high quality among consumers around the world, she adds: "It's interesting that US females rank gold first - a bit flashy - but in Western Europe, women rank colours like dark blue and platinum, a more subdued metallic."

The age of target consumers is also a factor. Colour Affects' Wright cites the case of Pepsi rebranding its white, red and blue cans to blue for its GeneratioNext campaign in 1998 as an example of a brand's colour clashing with its brand and target market.

She says: "Pepsi was promoting the brand as young and lively but they had introduced this terribly solemn, grown-up blue. The customer didn't know who to believe: the words or the colour. It just threw confusion into the mix."

Jez Frampton, chief executive of brand consultancy Interbrand, adds: "Pepsi rebranded into blue to differentiate itself from red Coke - in some markets, certain brands own a colour. But blue is an establishment colour and used in over 60% of corporate identities."

Colorcom's Morton claims that global delivery firm UPS is a business that has got its colour branding right. The company's use of brown makes it appear safe and dependable to its conservative business consumer base. Recent ads in the US have even focused on the colour with straplines asking: "What Can Brown Do For You?"

Andy Davidson, head of the youth trends monitor at research company Vegas, says that colour is important in the youth market. He explains: "These kids have been brought up solely in a world of colour media. They have had colour TV their whole lives."

A number of brands have recognised the importance of colour in appealing to kids. Heinz now offers its tomato ketchup in a variety of colours including green and purple to entice younger consumers. US storage container brand Ziploc has created plastic bowls that change colour with temperature. Frito-Lay in the US has even created Cheetos crisps that turn tongues green or blue.

Once a brand has established itself with a particular colour, it also needs to consider how to protect this identity by law. A number of companies such as Cadbury, Heinz, The Post Office and Orange have all trademarked their distinctive colours to ensure that their brands have legal weight behind them.

"Our turquoise colour has been trademarked since 1999. This was because the colour had become uniquely associated with Heinz Baked Beans," explains Heinz's Garrett.

"This is a fairly recent development," adds Cristina Garrigues, an intellectual property associate at law firm Bird & Bird, "Remember that it was only in 1994 that you were able to first register shapes as trademarks. It is still going to take time for colours to be fully understood as registrations."

Colours can now be trademarked as a single entity without the need for a shape or design. Brands cannot simply trademark the broad term 'red' or 'green', but must register a shade on the internationally recognised Pantone scale.

The trademark can also apply only to specific areas of goods and services. Although EasyGroup can use its colour orange in many other business sectors where no other registrations exist, Orange has already trademarked the colour Pantone 151 for use in mobile communications. EasyGroup has an application to trademark Pantone 021, a slightly different shade, but this has not yet been granted.

The Patent Office applies common sense when it considers if a trademark application in the same business area would confuse consumers. Lawrence Smith-Higgins, head of marketing at the government body, says: "We compare the colours by sight even if the Pantone numbers are different. Identical trademarks can sit side by side as long as they are in different areas and unlikely to cause confusion. Silk Cut and Cadbury's have identical Pantone numbers but consumers are unlikely to confuse the two."

The law on colour trademarks is constantly evolving. The courts are still undecided whether it is better for brands to attempt to trademark their colour at launch or when the brand has built up a consumer base. Early registrations for colour can be refused, as the colour as yet has no meaning to the public, but if it is left until later on, other competitors can use that colour too.

He adds: "Trademark protection in the UK costs £200, lasts 10 years and can be renewed indefinitely. The other protection open to brands is a 'passing off' court case where you have to prove consumer confusion and which can cost thousands. Compared to that, trademark protection is pretty cheap."

Colour Affects' Wright disagrees. "Brands spend millions on colour copyrighting but they don't understand what colour means and they misuse it. They should look more closely at how they are using their corporate colours."

Using colour to define the brand could mean that methods of preventing certain messages from reaching consumers will no longer be effective. Could some brands use colour as a way around advertising bans? While cigarette advertising is banned in some territories, it thrives elsewhere. In Malaysia, British American Tobacco has expanded its Benson & Hedges brand to include the 'Golden Dreams' TV programme, coffee products and the Bistro bar in Kuala Lumpar's Golden Triangle. The theme that links all these enterprises is the extremely well-known B&H colour scheme: gold.

Gallaher's Silk Cut cigarette brand is associated very strongly with purple. Although the brand is no longer advertised in the UK, its use of purple means many consumers still link the colour with the brand. "Since so much of our response to colour is unconscious, we may not think we have made associations on seeing a certain colour, but we have. It is a very powerful medium," adds Colour Affects' Wright.

The Marlboro cigarette brand has been extended into clothing. But Chris Mohrmann, corporate affairs manager at Philip Morris International, denies that the company uses the red and white Marlboro colours in its range. "We don't use colour in this way. Marlboro Classics clothing is not about cigarettes. We do not even make the clothes - we franchise out the Classics range to a company called Marzotti. We advertise only through our packs and point-of-sale."

Interbrand's Frampton agrees that it would be ambitious for cigarette companies to attempt this type of colour marketing. "Although it is an alternative way of getting your message across, you need more than just a broad swathe of colour. Marlboro's brand is indicated by the red and white chevrons, but without the shape, I am not sure how effective it could be. There is a stage where colour ceases to be 'ownable'."

This often occurs when colour starts to define categories rather than brands. The UK bakery market has long used a convention of identifying different types of bread with colour-coded packaging. But Hovis, the UK bread brand, discovered that in its sector, breaking the colour rules was more effective than sticking to them.

In 2001, Hovis rebranded, using patterns of baked beans and chopped cucumbers to decorate the packaging. Paula Moss, divisional marketing director at RHM Bread Bakeries, explains: "The packaging had become so totally generic that the differences between bread brands had been lost. We wanted to assert Hovis's personality through the packaging. Bread packaging was awash with wheat sheaves, banners and bland generic colours."

Hovis was taking a risk. Research showed that consumers spent only three seconds picking their loaf of bread - hence the need for a colour-coded system. But the measures were effective. Shoppers were intrigued by the packaging and the brand's appeal has not faded. Hovis doubled in size and became the fastest growing product range in the UK grocery market for the next two years. Its annual sales now stand at £300m and it retains leadership in the bread category.

It is clear, however, that colour cannot be the only element on which to build a brand. No brand can be sold on one element of its offering. In addition, there are consumers, such as the 270 million colour-blind people worldwide, who cannot appreciate colour branding.

Dr Carol Kaufman-Scarborough, associate professor of marketing at Rutgers University in the US, who is researching colour-blindness, explains: "It is a problem if colours are used to signal specific information about the brand that is not accessible otherwise. Also if colour contrasts are too high - certain colour combinations can also be illegible. For some, red lettering on a black background appears totally black. And when the colours are 'translated' by the colour-deficient person they will appear unappealing."

But for most brands, the battle is to get their colour recognised by the other 6,377,641,642 potential consumers on the planet. Interbrand's Frampton warns: "If your brand is powerful enough, it can go beyond cultural codes of colour. You aren't chosen purely on colour - it's the whole package that counts."

The brain makes subconscious judgements of brands within the first 90 seconds of viewing them. The mind absorbs colour before design or wording and it is estimated that as much as 90% of the information taken in about a new brand is related to colour.

Colour should not be used simply for differentiation from competitors. You need to choose a colour that fits your brand message.

Research your target market as colour preferences can change with age, background and gender.

When stretching your brand into different countries, check to see if your colour scheme is associated with any deep-set prejudices that might cause the launch to fail.

Trademark your colour so that others in your services and goods category cannot cause confusion by using your brand shade.

WHITE: The colour for weddings in Europe and North America. The traditional mourning colour in China and South America. The most important priestly colour in India, where religious colour associations are more important than in the West.

BLACK: The European and North American colour for funerals. The colour of mourning for distant relatives when combined with blue in China.

RED: The colour of prohibition and warnings in Europe. Unpopular in Ireland when used with blue and white as this represents the British flag. Very popular in China as the colour of communism. In India, it is a Hindu symbol of love and generally denotes life, action and gaiety and is also a wedding dress colour for Sikhs. Should be avoided in Paraguay, along with green and blue as these colours are political.

PINK: The colour for baby girls in the UK and baby boys in Belgium and Eastern France. Seen as a male colour in Japan.

BLUE: The colour for baby boys in the UK and baby girls in Belgium and Eastern France. Seen as informative and trustworthy in Europe. Used in Sweden with yellow for the national flag and it is not seen as acceptable to use the national colours for commercial purposes. Dark blue has associations with the Kuomintang army in China and may give offence. In India, blue means truth and has intellectual appeal, although again dark blue is unpopular as the colour of the lowest castes. In Japan, blue is a female colour.

YELLOW: The colour of caution in Europe. An Imperial Chinese colour which denotes grandeur and mystery. In India, it is the colour of merchants and second only to white in terms of sanctity. Used along with white at mourning anniversaries in Japan, becoming brighter year after year. In Malaysia, it is the colour of the Sultans and can never be worn by Malays. The colour of despair in Brazil.

ORANGE: Popular in Holland, where it is national colour but unpopular in southern Ireland, where it stands for the Protestant Church. It is a symbol of Thursday in Thailand.

GREEN: The colour of the environment in Europe and a significant colour for all Muslims. It has has religious significance in Malaysia but is used commercially too. Popular in Mexico as a national colour.

PURPLE: The colour of royalty, especially in the UK. The colour of soothing in India but also associated with sorrow. The overall colour for sorrow in Brazil. Has religious connotations in Peru, especially in October, and is otherwise best avoided.

BROWN: Unpopular in Germany for clothing as too political following Hitler's Germany. It is thought to bring bad luck in Brazil.

Brands for colour coding: Heinz, Cadbury, Marlboro and Easyjet

To a very significant extent - 23%

To some extent - 45%

It would make little or no difference - 21%

It would not make any difference - 11%

MaleFemale

To a very significant extent:

Male - 25.6%

Female - 17.9%

To some extent:

Male - 42.4%

Female - 50.0%

It would make little or no difference:

Male - 22.7%

Female - 17.4%

It would not make any difference:

Male - 9.1%

Female - 14.7%