1. Consumers Use Trademarks to Find Products
Properly selected trademarks distinguish companies’ products from those of their competitors. If trademarks don’t adequately distinguish the associated widgets from the competition, their owners will inevitably lose sales. Those trademarks would also be worthless company assets. Companies should carefully select trademarks that will effectively communicate a product’s source, cut through marketing “clutter” and capture consumers’ attention.
2. Trademarks are used to Identify Quality
Consumers use trademarks to identify the quality of products. Once consumers become familiar – and satisfied – with a particular product’s quality and price, consumers will continue to seek out that product time and time again. If a product’s quality is inconsistent, however, consumers will inevitably abandon that product in favor of another. Companies that deliver their products or services at inconsistent levels of quality risk severe damage to their brands. Those that offer their products at a consistent level of quality – and at a fair price – can build strong brands.
3. Trademarks are used as Decision-Making Tools
Trademarks reduce time, cost and effort in the decision-making process by allowing consumers to quickly select products based upon past experiences. Trademarks can convey emotional attributes to consumers that help with the decision-making process. A company’s trademark may convey a certain level of quality or image as well as other messages – such as a lifestyle, aspirations and desires. Trademark owners should consider what attributes consumers desire from their products when selecting new product names. Then select a name that starts the positioning process and drives the brand.
4. Trademarks Can Be A Company’s Most Valuable Assets
Trademarks may potentially be a company’s most valuable assets. Trademarks have the potential to increase in value over time. Trademarks can be used as collateral to secure business loans, which can be used for business expansion. Trademarks can also be licensed to third parties to designate new product offerings, which can increase revenues. At last count, the Coca-Cola trademark was estimated to have a value of 70 billion dollars – which is more than all of the company’s tangible assets.
There are plenty of reasons why companies should care about their trademarks. Many more than the four listed above. Simply understanding and appreciating the basic value of trademarks and how they can drive a brand are the best reasons of all and a good place to start.
What are some other reasons to care about trademarks/brand names?