The Role of Trademark in Business

Many people assume that the role of trademarks is simply as a marketing tool, limited to company names, product names, and logos. In reality, trademarks serve five important functions for businesses:

1) Trademark as an Identifier of the Product/Service Source

When purchasing products, we often choose brands we’re familiar with because we trust their quality. This first function is to identify the source of the product or service. For example, we know that Nestle produces quality products like Milo, Maggi, and Nescafe.

2) Trademark as a Tool for Consumers to Make Choices

Trademarks help consumers easily distinguish between different products or brands. Without trademarks, making choices between similar products would be much harder. For instance, trademarks like Faiza, Cap Naga, or Cap Rambutan help us choose different brands of rice without confusion.

3) Trademark as a Quality Indicator

A registered trademark is often directly associated with the quality and reputation of the product or service provider. Brands like SAMSUNG, APPLE, and HUAWEI are known for their quality smartphones, which are preferred by consumers even though they may be more expensive.

4) Trademark as a Marketing Tool

A registered trademark becomes the focal point in marketing and advertising. For example, advertisements that trigger consumer emotions, like Pizza Hut’s cheesy pizzas or KFC’s crispy fried chicken, can leave a lasting impression linked to the brand.

5) Trademark as an Economic Asset

The fifth function is lesser-known. As a business grows in profitability and reputation, the value of its registered trademark increases. Trademarks can be licensed, franchised, or sold in the future. For instance, the trademark for Maybank alone is valued at RM 10 billion.   Understanding these functions highlights the importance of registering your trademark. Without registration, your brand could be at risk, especially if someone else registers it first. So, take the initiative and protect your brand by registering your trademark today. Link: https://www.daftartrademark.com/2020/03/16/5-fungsi-trademark/