Why trademarks are important for businesses to be successful
Trademark may by definition be an illustrative symbol - maybe a word or label or numerals or whatever - that a business uses to distinguish itself from the other competitors in the market domain, but on a deeper level, it is much more that just that. Over the years, trademarks have become an important survival and sustenance tool and have proved to be very important in the larger scheme of things. It would not be an understatement to say that the success of a business is largely dependent on how successful the trademark registered for that business is.
Once trademark have a hold in the market, they serve to easily influence the buying decisions among a plethora of consumers. So, as a businessman or a businesswoman, it is important to have a solid knowledge of the importance of trademarks and how it serves to benefit your business.
Here are a few reasons as to why trademarks are an entity so important to your budding business:
- Customers find it easy to locate you through means of trademarks
To be honest, it is a crowded marketplace out there and you need to have a trademark that really makes your product stick its neck out and be appealing to the customers. And trademarks do not pay dividends immediately. Trademarks can take decades to actually become a word of mouth, even more than that to win the trust, but once it happens to do so, there is no going back. You have found a place in people's array of choices and they will always look for you, and will do that at the cost of your competition.
A lot of consumership is driven by loyalty - as suggested by so many "loyalty programs" existing nowadays - and trademarks play to that very concept, winning long term customers on basis on the brand name alone.
Trademarks do well to "cut through the clutter" in the market and help your product stand out, thus making the choice easy for the consumers.
- Trademark serve to prevent confusion in the marketplace
Trademarks are largely convenient to the customers. They not only kill the confusion but they help build the trust and also help companies in sustaining it. Trademarks serve to be the information for the source of a product. So, let us say, a product turns out to be defective. The customers then have an accurate information about the source of that product and the knowledge about which manufacturer or supplier to approach for a refund, say. Trademarks, seen in that light, give the consumers a protection because they know what they are dealing with.
Not only in case of a defunct product, but in general, they motivate the companies to maintain a level of consistency and quality. They allow the customers in turn to decide whether to purchase a desirable product or to avoid the undesirable one.
- Trademarks serve as a communication tool which is relatively light on your pocket
Since trademarks help in building trust and create a pool of loyal consumers over a period of time, the costs involved in decision making by a customer is highly reduced. You do not have to try out different brands and see which is the best, because over the time, one of them has been, and you can close your eyes and buy it.
Trademark encapsulates the intellectual and emotional attributes of a product into one single entity. It has in it the company's name, its reputation and the nature of product and service that the company offers.
Trademarks also help communicate across borders, cultures and even languages for that sake. Famous trademarks can be recognized even by a population that speaks an entirely different language. Example: the McDonalds "arches" logo, the NIKE "swoosh" logo et al do not need language to be recognized. McDonalds is as much McDonalds in Asia as much it is in Europe.
- Trademarks tend to become enduring assets
Trademarks is not only an identity, but it is also a long term asset. They provide a company with a long term advantage over its competitors and unless there is a mega goof up along the way, this asset, unlike say a car, only appreciates over a course of time.
Apart from being an asset, they also provide you a scope to expand. Thus, Kellogs expanded from ready to eat cereals to snack bars and breakfast bars now. Armani was once into runway apparel but now manufactures perfumes and eyewear. Take the example of Virgin Airlines, which has now ventured into entertainment and carbonated drinks as well.
Apart from this, trademarks can often be treated as property. As discussed earlier, they not only appreciate in value over time, but can also be "bought and sold", or pledged as security or mortgage, or licensed, or they can be involved in the acquisition of a business.
- Trademarks support stronger sales volume, stronger margins, and can provide price maintenance legally
With so many brands placed so close to each other in quality, and all of them competing for consumer's attention, your brand can make a big difference and can be a critical factor in driving the purchasing decision of the consumer.
With a good brand name that has sustained over the years, you can also take advantage of price variance. Your product may be significantly higher priced than its competitors but your brand value can help sway the consumers to your hold, thus maximizing your profit like nothing else.
- Trademarks have low maintenance costs
Once you have filed for a trademark and have it approved, it has an infinite life span. In the United States of America, you have to just file for a renewal every 10 years. They effectively never expire.
Some of the famous brand names have been there for so many years. Mercedes came into being in 1900 while Pepsi and Cola were trademarked as back as in 1896.
It has to be noted that one must do a thorough research when filing for a trademark. That in turn will save you time and money later, when a dispute or litigation might be as costly as it will be cumbersome. Choose a name and logo that distinctly identifies your business but also stands out from its competition.
- Trademarks allow the businesses to effectively utilize the internet
Your brand name is the first thing that a consumer searches for on the internet - be it Facebook or Twitter or Instagram. Trademarks can help drive internet traffic and hence inadvertently market for your product as well. A catchy name will have people searching for it on the internet. They tend to be such that they are "top of the mind" stuff when you are thinking about a particular product.
Thus, it is crucial that a company obtains desirable domain names, because a higher traffic on the website results in a higher ranking on search engine results, and hence result in higher digital visibility.
- Trademarks protect against unfair competition
Every country has means to prohibit deceptive and misleading advertising. In turn, it helps your competition to be genuine and fair.
- Trademarks make hiring easy
Since your trademarks help build a legacy, it is bound to evoke fandom. When a certain candidate is convinced about your company, hiring him and assuring yourself of loyalty and commitment from him is not such a difficult task.
Also, employee retention is much higher when the employees have a positive feeling about the organization.