Creating a domestic trademark system

• 100 businesses awarded Vietnamese Trademark 2012 title 
• Bringing Vietnamese goods to rural areas

Nguyen Thi Thu Hang, General Secretary of the Vietnam Chamber of Commerce and Industry (VCCI), says Vietnamese trademarks are weak and lack creativeness and breakthrough capacity, citing a project to survey Asian trademarks against four criteria: friendliness, utility, creativeness and breakthrough capacity. To develop sustainably, companies must not only consider their economic potential and position in traditional markets but also penetrate international markets through building reputation in their brand overseas.

At present, Vietnam is home to many of the world’s leading export products but their brand names are lacking the recognition they deserve. For example, Vietnamese traditional tea is available in 118 countries and territories and ranked fifth in the world in terms of production volume and export value, yet consumer awareness of the origin of the product is relatively limited.

Doan Anh Tuan, President of the Vietnam Tea Association, says most domestic tea is devaluated so its price is equal to about half of that of produce from Sri Lanka.. Despite expanded markets and diversified designs, Vietnamese tea distributors are yet to build up their brand names and rarely ship finished product, with 99 percent of tea exports remaining in unprocessed form.

Most tea companies are small and lack marketing knowledge as well as experience in negotiating trade contracts. Therefore, building brand names for Vietnamese tea exporters is an urgent task, Tuan says.

Cao Sy Kiem, President of the Vietnam Small-and Medium-Sized Enterprise Association, says many Vietnamese products have had to stick with distribution under foreign brand names. Consequently, domestic businesses simply export raw products that are then processed and sold through a third country.

Kiem says protecting trademarks is a decisive factor for successful trading. Companies should build up their own brand names in foreign markets by developing reputations in a trademark that focuses on. quality, competitive pricing and distinct design.

Some experts say due to the lack of attention in developing strong trademarks, domestic companies fall into disadvantages even in the domestic market. Reputable companies compete fiercely with those who are less than savoury. However, management authorities have shown weakness in protecting a given company’s creativity and values.

Lawrence Chong, CEO of Singaporean trademark consultants Consulus, says Vietnamese companies  lack skills in building trademarks and do not know how to develop modern business models in line with international integration processes. After developing brand names for products and chain stores, several domestic companies quickly sold them tolarger foreign interests.

The Singaporean market is dominated with handicrafts featuring Vietnamese brand names, but owned by Singaporean business. With the brand name, the company achieves turnover which is up to five times higher than in Vietnam, Chong says.

Chong advises that when owning a strong brand name, Vietnamese companies should apply strategies and international trading models to further promote their trademark and raise their turnover, instead of selling it for international M&A companies.

Most experts agree that to promote their business and build a reputable trademark, companies often look for foreign investors. However, foreign companies are often reluctant to invest in Vietnamese partners because of their perceived weak management capacity. If they want to attract foreigners, Vietnamese enterprises need to develop highly-qualified personnel and create trust in terms of their management capacity.

Vu Hanh Nga, General Director of the Dinh Cao Moi Company says building trademarks is a long and continuous process.

Lawrence Chong affirms building successful trademarks is not just a matter of taking part in advertising campaigns, but business leaders must also find ways to value-add and raise profits.

Dang Le Nguyen Vu, CEO of Trung Nguyen Coffee Group says that to build a domestic trademark system and gain a firm foothold against fierce competition, companies must consider protecting national trademarks as important as protecting the life of the economy. The State should also coordinate with businesses and economic and legal management agencies to devise a comprehensive mechanism to deal with trademark infringements in a timely manner.