Cooperatives relinquish trademark amid fierce competition
Cooperatives relinquish trademark amid fierce competition
Cooperatives normally sell their products through distributors, but harsh competition has driven many to relinquish their trademarks and act as suppliers to the latter.
A farmer takes care of Yên Dũng Cooperative's cucumber farm in Bắc Giang Province. — VNA/VNS Photo Danh Lam |
The rationale behind the practice is simple: giving up trademarks allows cooperatives to offload the cost of marketing and advertising, and focus more on what they do best - manufacturing high-quality products.
Distributors, by registering their own trademarks for the no-brand products, can enjoy a huge cost advantage over other producers because they have a warehousing system in place.
Phạm Thị Út, Director of the DiLin Cooperative in Lâm Đồng Province, said taking the role of suppliers would enable cooperatives to optimise their equipment, maintain a stable workforce, and avoid the risks associated with distributing and retailing.
But everything comes at a cost. When cooperatives let go of their trademarks, they lose control over a crucial aspect of their image and put themselves at the mercy of distributors.
Nguyễn Minh Thái from the Mào Gà Cooperative in Cà Mau Province revealed that when his cooperative discussed cooperation with certain distributors, they requested the cooperative to cease the production of some product lines and shift focus to processing.
As limited capital and technical resources often impede cooperatives' ability to develop their own trademarks and distribution networks, they have no choice but to accept the deal and act as suppliers to the distributors.
"For many producers, seeing their sales double in a distributor's supermarket cannot relieve the pain of seeing their products' packages, logos, and labels changed by the distributor," said Trần Đăng Đạt, founder of Đạt Butter.
Nguyễn Thị Thu Liên from the Transparent Food Association viewed distributors as "heavyweights" that were trying to dominate the market with their cost-efficient products. She said cooperatives might not be able to rival them in terms of cost, so they should focus on quality to hold ground.
A cake producer in Đồng Nai Province viewed cooperatives as "lightweights" that were not financially well-positioned to build their own trademarks. He said their limited financial capability comes from the high discount rate at which supermarkets purchase their products, up to 40 per cent.
Experts said cooperatives are the real producers of the products, so they deserve a slice of the trademark pie. They urged cooperatives to have a long-term vision for their products and not to trade their brand names off for short-term stable revenues.
They suggested cooperatives frequently refresh product designs, improve product quality, and infuse a sense of uniqueness into their products to attract more customers and strengthen competitive positions.
Producers that own large machinery capacity, meanwhile, can focus on processing to optimise equipment and pass trademarks to distributors, said the experts.
