The name that you choose for your business, or for specific goods or services that you provide in trade, is extremely important because it is a. how your customers, and your potential customers will talk about you and your products, and b) search for you and ask for you, rather than your competitors.
In each step along the way between a prospective customer deciding to seek out your goods and services and actually making contact with you, it’s very important that the likelihood for confusion arising is reduced.
The types of confusion that I’m talking about are illustrated by the following scenarios:
In each of the above scenarios the likelihood of a prospective client making contact with your business, so that you are able to make a business transaction with them, e.g. a sale, is reduced because of a problem communicating your trading name.
Furthermore, it’s not just that you will miss out on the initial transaction. Obviously, you will also miss out on any repeat business that might have come your way from the prospective new customer. What’s more, you will also miss out on any business that the prospective new client might have referred to you. So, there’s an overall cumulative negative effect caused by the confusion that arises in each of the scenarios I’ve described above.
What is a Trade Mark?
The key principle to overcoming the confusion that occurs in each of the scenarios described above is to pick a trade mark which is distinctive, or as it’s sometimes called “capable of distinguishing” you in the market place from your competitors.
This key principle is spelt out in the the Australian Trade Marks Act 1995, which defines the meaning of “Trade Mark” as follows: ” A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.”
That’s right! It’s often overlooked but a trade mark is a sign that customers and potential customers use to find your business and/or your products, rather than those of your competitors. Above all else, it’s not a description of your products. It’s not a sign for finding the type of products that you sell no matter which business provides them in the course of trade.
Can you imagine if street signs had place descriptors on them instead of distinctive place names? Imagine if street signs had messages on them like “Lots of houses, a service station and a bus stop”, or “A park, a shopping centre and a fire station” rather than “Baty Street” or “Riverina Place”. It would be impossible to tell your friends where you live or how to get there.
Yet, many business people misunderstand the function of a trade mark and choose a word or phrase that is generically descriptive of the goods or services that they trade in, rather than a distinctive name that is memorable, readily communicated and which can be wholly associated with their business or their product offering.
To arrive at a trade mark that is adapted to distinguish your goods and services from your competitors the following factors should be taken into account:
Principle No. 1 – Building a strong brand with a descriptive trade mark is an uphill battle
I’ve already discussed this factor above but because it’s such an important point we’ll expand on it here. First of all, do you know what each of the following trade marks is used to sell?
As you probably recognized, each of the above trade marks is very well known. They are respectively used to sell outboard motors, sportswear, MP3 players, luxury cars, luxury watches, washing machines, pizzas and coffee.
What do you notice about each of them? Well, none of them describe what they sell.
As I mentioned before, the golden rule for brand selection, which is reflected in the above list is that strong trade marks aren’t descriptors of the products that they are used to sell. I’ll go over that again because it’s incredibly important.
If you’re in the process of selecting a trade mark, steer clear of words, phrases or logos that clearly describe the product which it will be used to sell. I know that many of you will be saying to yourself “that doesn’t make sense”. “Surely”, you may be thinking, “if the trade mark describes the product then that will help to make sales”.
However, as we previously discussed, you must remember that the function of a trade mark isn’t to describe your product to potential customers. Your brochures, website and salespeople will explain the features and advantages of your product much better than a single word or short phrase in the trade mark could. The function of the trade mark is to stand out, catch the user’s attention, persist in their memory and be easy for them to say when they want to ask for your product. More concisely, the function of a trade mark is for your business to own a little piece of real estate in your customers’ heads so that when they think of your product your trade mark will come to mind.
The simple fact is that a word or phrase which clearly describes the features of your product will be used by your potential customers in relation to your competitors’ competing products as well. It won’t be a trade mark that consumers associate with your product and your business alone. Consequently, and somewhat paradoxically, it is easier to build brand recognition for a trade mark that is not directly descriptive of the products that it is used to sell.
Here are a few more examples:
Budget ® is a much better trade mark than Cut Price Cars
Lexus ® is a much better trade mark than Luxury Motors
Intel ® is a much better trade mark than Intelligent Chips
Blockbuster ® is a much better trade mark than The Video Place
Get the idea?