What Is a Trademark and Why It Is Important for A Company?


Today, the world has become a global market. Intra nation and intercontinental trade have increased in a short span. Better communication, improved means of transport and increased goods and services in the market have led to the increase of commerce and business, the world over.

This has given rise to the need for distinguishing one traders’ products and services from another. Hence the origin of Trademarks. Let us now discuss what is a trademark and why is it important.

Trademark, as the name suggests, is a mark, sign, or symbol capable of distinguishing the goods or services of one organisation or individual from another. A trademark can also be a catchphrase or a word.

It identifies that the products or services originate from one particular source. It is a type of intellectual property. Below we have enumerated some of the reasons why a trademark is important. 

However, before we look into the reasons why is a trademark important, we have to understand the basis of it, that is Intellectual property. 

Intellectual Property – A Synopsis

The term intellectual refers to cerebral or in other words “of the mind.” 

Property on the other hand means belongings or possessions. 

Therefore, Intellectual Property refers to the creations of the mind. Intellectual Property, or IP, as it is more popularly referred to, is protected by law. It allows people to financially benefit or gain recognition from what they have created.

Different types of Intellectual Property are protected by law. Some of them are mentioned hereunder

  • Patents – Protection for an invention
  • Copyrights – Protection for a person’s literary or artistic work
  • Trade secrets – Protection for confidential information
  • Industrial design – Protection for the decorative design of goods.
  • Trademarks – Law for distinguishing good and services from another

From the Intellectual Property mentioned above, we will give you an insight into Trademarks. We have already discussed what trademarks are. Now we will explain in detail why trademark is important.

Why is a trademark important?

The importance of a Trademark cannot be undermined. It protects your brand and provides you protection against someone trying to pass off his/ her goods and services as yours.  

We can classify the importance of trademarks under a few broad categories:

Trademarks Create Reputation

A Trademark is what your company is known by. A smart trademark usually conveys a message about your company in the first instance. 

A good example of a well-known trademark is the McDonalds Symbol. It consists of two curved yellow arches forming an M. The symbol immediately strikes a chord with the public.

A McDonald’s symbol on a highway or road makes the public aware that there is a McDonald’s outlet approaching. McDonald’s has created a symbol that is imprinted in the minds of people.

So much so, that they do not even have to add text to the symbol. This is the power of a good trademark.

Trademarks Make You Easily Traceable

Another main reason why trademark is important to your company is that it allows you to be found. It is such a competitive world.

There are millions of similar goods and services out there. A trademark allows the customers to know that these quality products are yours.

Customers who identify a logo with your product or service are less likely to choose another brand over yours.

Generates Assets

Over time, a trademark builds value to the company/product, or service. As the business flourishes, so do the value of the trademark.

A brand is built over time. Continuous satisfaction provided to customers makes way for brand identification. Customers identify your brand with a particular product or service.

At times a brand is recognised more than the product or service itself. Many examples of brand names becoming household names are google, xerox thermos and many more.

Trademark Reduces the Cost of Advertising

Usually having your product or service trademarked allows you to advertise better and cheaper thereby reaching a wider audience. A trademark enhances brand value with customers. Therefore, a brand that is already identified with customers does not need much advertising. 

Once a trademark has been etched in the minds of the public, creating new logos around the main one does not confuse customers. In fact, playing around with the logo acts as an inexpensive form of advertising.

For example, Google has established its value with customers. The public can identify Google even if they doodle around their main Google logo. 

Trademarks Make Business Expansions Easier

Once a trademark owner has built a brand value around a trademark, he/ she can expand the business or foray into other businesses using the same trademark. A trademark once registered, belong to the owner, lifelong.

For example, the name Maggie entered the market as a brand for instant noodles. Once the brand was established, it allowed the company to enter other commodities using the same name. Now the term Maggie is also known for pasta, sauces, masalas other than instant noodles.

Now that we have established why is a trademark important, it is safe to say that it has become a necessity. It identifies a brand and gives exclusive rights to its owner. In other words, it is an important intangible asset to its owner. 


About L.K. Monu Borkala

Educational Qualification: BSc & MBA in Administration and Marketing Profession: Online Promotions and Digital Marketing Born and bought up in India and was writing articles in local newspapers, school, and college magazines. L.K Monu Borkala re-started writing the content and blogs again after a long break in his digital marketing business in 2017. He is a writer, copy editor, content manager, Digital Marketing researcher. Finding new technologies and solutions to the problem is his hobby. He has 23 years of sales, marketing, recruitment, training & administration experience. He worked for seven years in 3 companies and started his own business in 2004 as Yellow Pages publisher. He published 24 editions of yellow pages in Mangalore, Udupi, Goa, Kasaragod, Kannur, Hasan & Shimoga. Also, published 4 educational directories, 3 health directories, many bi-monthly & biweekly magazines since 2004. He always says,” Don’t write content and blogs for google ranking, write for readers, and google will honor you automatically.

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