The Role of Trademarks in Marketing

Peter Drucker, a well-known management guru, said that a "business enterprise has two basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs." These two basic functions guide the underlying desire of a business to make a monetary profit in the process of providing quality products and services to customers. Intellectual property plays a role in both of these functions, and specifically trademarks are of primary importance in the marketing process.

Every product in the market faces competing products that are often almost identical, similar or good substitutes. Meeting or exceeding customers’ expectations is a challenging task, especially when tastes and preferences continuously evolve in a competitive marketplace, with many similar products catering for the same need. Only businesses that can meet these challenges can expect to develop and retain a loyal clientele. Distinguishing Products from Others To develop trust, confidence and loyalty in its products, every business has to develop and maintain a distinct identity, image or reputation. Only then is it able to distinguish itself and its products from those of its competitors. It must also, at the same time, provide a mechanism for linking the provider of a product to the valuable business assets of trust and goodwill. Businesses achieve this mostly through a distinctive trade name and one or more trademarks. These play a pivotal role in the marketing strategy of differentiating products from those of rivals and in developing longer-term positive – and often emotional – relationships with customers by communicating an assiduously nurtured image or reputation. Every business must woo customers to move them quickly from brand awareness, via brand recognition, to brand preference and finally to brand insistence, a point at which the consumer refuses to accept alternatives and is willing to pay an even higher premium for the desired branded product.

The popular terms used in marketing jargon, "brand" or "brand name" are interchangeable with "trademark," the term used in intellectual property legal circles. Of course, a product brand or a corporate brand is a much larger concept than a mere trademark, as building a strong brand and establishing the brand equity of a business is a bigger challenge than choosing, registering, or maintaining one or more trademarks. Strong brands and successful branding generally refers to successes in terms of contribution to market share, sales, profit margins, loyalty and market awareness. However, the ultimate success of a brand is also judged in terms of the total value derived by the customer from the product to which it relates.

Designing a Trademark Businesses often use a portfolio of trademarks for diversifying their market strategy to meet the expectations of different target groups in the same or different countries. Building a strong brand image is no easy task. Use of trademarks for effective marketing of products requires an excellent knowledge of trademark law and practice at the national and international levels – seeking professional guidance becomes necessary, as this is a specialized task. However, a few basic elements must be kept in mind for the design of a good trademark. Trademarks should be inherently distinctive, be easy to memorize and pronounce, fit the product or image of the business, have no legal restrictions, and have a positive connotation.

A brand/trademark may be a word, letter, symbol (logo), number, color, shape or, where the legislation of the country so allows, sound or smell, or a combination of one or more of these elements.