Functions of a Trademark

For a company, the trademark is the distinguishing feature that sets it apart from other companies. A trademark enables a company to differentiate itself from competitors. Trademarks help consumers navigate the market. But that’s not all. A trademark combines a multitude of functions.

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Origin Function, Identification Function

The original idea of trademark law is that the trademark provides an indication of the manufacturer, i.e., the origin of the goods or services.

This should not be understood too literally. Often, the company name of the trademark owner is completely different from the trademark used to identify the goods or services. This is also the case, for example, with a multi-brand strategy, where the trademark owner wants to create the impression of a diverse offering by providing their products under various trademarks.

The origin function therefore does not necessarily have to refer to the trademark owner, whose company name may be unknown to most. It is sufficient if the goods or services are perceived as belonging to a particular trademark. Thus, the trademark identifies related services and helps to distinguish them from other goods and services.

Quality Function, Guarantee Function, Trust Function

Based on customers’ experiences with the goods or services of a trademark, customers associate a certain quality level with the trademark and trust to find this quality in other goods or services of the same trademark .

For instance, the private labels of discounters strongly rely on this function of guaranteeing consistent quality. These are generally cheaper than well-established brands but, according to the provider, are of the same high quality.

Communication Function and Information Function

The trademark also acts as a communication channel to the customer. Well-designed trademarks convey diverse information to the customer. The customer can then recognize from the design of the logo and the product’s features whether it is low-priced or high-priced.

Advertising Function

All these functions together converge in the so-called advertising function, i.e., the (hopefully positive) effect of the trademark on the relevant public.

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