In today’s knowledge-driven economy, intangible assets like knowledge and information became essential determinants of profitability of technology-intensive enterprises and success of business.
Knowledge can be identified as intellectual property (hereinafter IP) and be evaluated in terms of market value. Moreover, it can be a market for potential partners separated from products or services based on that specific knowledge. IP can be seen as an important marketers’ tool for maintain, expanding market share and creating new market. Literature dealing with marketing in the past hasn’t really dealt with IP.
In the past, IP in the past was viewed in correlation with law and legal protection of invention which companies need to comply with, but not as an important tool for enhancing the value of assets, for establishing company’s own specific standards, value and reputation, for hindering or preventing rivals from operating, for entering business partnerships and so on.
So, one might think that IP and marketing are completely separated fields. This kind of understanding is unfortunately still seen in many marketing campaigns or in marketeers who lack the understanding ‘’of law as a value-capturing resource’’ (Sugimitsu, 2017) and sometimes unintendedly violating different IP protections.
American Marketing Association defines marketing is defined as activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”.
Or as Mike Sprouse, Chief Marketing Officer, Epic Media Group put it: ‘’Marketing, in general is the communication of information about a product or service to an audience. Effective marketing is a two-way communication that combines both art and science. It is a discipline with no end game that must be constantly honed, tweaked and tested.”
Effective marketing builds relationships and inspires trust; it is not ‘’push’’ or ‘’pull’’. The key to effective marketing is getting the communication mix correct for your brand, product or service, understanding how it best interacts with customers or users in the most conducive and accepting environment. ‘’(Cohen, H., 2011).
Basically, market strategy should enable customers to distinguish between your products or services and those of your competitors and link certain qualities to your company and products.
Marketing process and developing marketing strategy undergoes many steps, and IP can contribute to market analysis, targeting, marketing segmentation, marketing mix in order to help to maintain market share, expand market share and enter new markets (Sugimitsu, 2017).
When entering new market, the environment it represents can be seen rigid. However, IP rights stemming from innovation act as “the function of deterring market entry.”
It should be noted, that IP can change business environment intentionally. To identify business weaknesses, opportunities, strengths and evaluate external factors, opportunities and motivations marketers use SWOT analysis. Patent information can be very useful in this process, because after several months of its application, patent information is opened to the public, which provides information of R&D strategies, business strategies, market opportunities. (Sugimitsu, 2017). patent information can be useful in process of identifying potential competitors and patent information can be used to evaluate the strength of own companies.
While differentiation in product strategy is an important concept in marketing, IP can also serve as a tool for achieving differentiation. IP has a function of deterring market entry and the function of exclusion from the market which helps to maintain market share. For the product differentiation one can obtain patent for technology or design and even service, brand has functions of differentiation and quality assurance, but what is even more important is the fact that copycats can be removed from the market. So IP enables exclusion from the market.
Companies that own IP rights can build business partnerships. They can decide for example to give license to other companies and in that way enhance the market or not to give license which enables them to maintain the market. This important marketing decision should be taken into consideration. (Sugimitsu, 2017).
One of important aspects of IP used as a tool in marketing is promotion of product, brand, company. Research shows that costumers tend to buy patented products. Besides, patent marking can be used as a marketing tool to attract consumers (Grant,2004). Trademarks symbolise the relationship of trust developed over a period of time by the manufacturer or provider of a product with the users and are important parts of branding and advertising. IP can also help to expand market strategy to various target groups and makes marketing in foreign countries possible.
In conclusion, IP has important and multiple functions related to marketing, if used properly it can play an essential part in future potential revenue and development of a business and can as a marketing tool improve marketing strategies. It is important for marketers to take into consideration not only legal limitations related to IP, but make better decisions and integrate IP into their marketing strategies.
Sugimitsu, Kazunari, 2017. Intellectual Property as a Marketing Tool. 〈日本知財学会誌〉 Vol. 13 No. 3― 2017 : 4-14. https://www.ipaj.org/bulletin/pdfs/JIPAJ13-3PDF/13-3_p004-014.pdf
Cohen H., 2011. 72 Marketing Definitions. https://heidicohen.com/marketing-definition/