Four Companies Lead the Way in Trademark Responsibility

Illegal counterfeiting by some of Taiwan's manufacturers has had a damaging effect on the image of all products made in Taiwan. While attention has recently centered on the counterfeiters, it is important to be aware of other manufacturers on Taiwan who have successfully developed their own high quality products using their own original trademarks.

Quality products cannot be developed overnight. Taiwan began its technological development at a relatively late stage. Lacking substantial capital and advanced technology, and facing stiff competition from Japan and the West, Taiwan manufacturers have chosen two methods of survival. The first is to learn new methods and skills by working in cooperation with foreign manufacturers. The second, called Original Equipment Manufacture (OEM), involves producing a product for a foreign company according to specific instructions, using that company's trademark.

Due in part to geographic proximity, most of the companies which first worked with Taiwan manufacturers on a cooperative basis were Japanese. Many of these companies felt that as they were utilizing Japanese techniques, it would be most appropriate to use their Japanese trademark as well, thus catering to local preferences for Japanese products. Such products were assured of immediate profits and a solid market.

Often however, quick profits were made at the expense of long-term success. Some of Taiwan's more far-sighted manufacturers soon felt constrained by these arrangements. They consequently decided to take the risk of breaking away from the controls and limitations of working with foreign companies and establish their own trademarks.

Among these farsighted companies was Sampo, one of Taiwan's top electronics companies. While working in cooperation with the Japanese Sharp Company, Sampo insisted on using their own Chinese trademark, adopting a new hexagonal logo in 1982. After continued growth, the company gradually broke off from Sharp, emphasizing in their advertisements that their "trademark means responsibility".

Sanyang is another company which operates according to the ethics of trademark responsibility. Its chairman, Chang Kuo-an compares a company's products to ones own children: "They should take on our own name." In 1962 Sanyang adopted car manufacture technologies from the Honda Company, but used their own name from the beginning.

Kuangnan, successful manufacturer of their own Kennex tennis rackets, began as an OEM exporter. The company originally made rackets to fill the orders of foreign customers, and soon began to provide their own designs, and to seek more diverse foreign clientele in order to reduce the constraints of reliance on a limited few. Continued success finally allowed them to adopt their own Kennex trademark as well, while expanding into tennis wear manufacture.

Another trademark popular on the American market is Proton, developed by the Chienhung Electronics Company. Chienhung originally worked in cooperation with English, Canadian and German companies to produce DNA home stereo equipment. After developing the necessary basic technology, Chienhung broke off from DNA and began using the trademark Proton for exports to Canada and the U.S.

All of these companies were able to establish their own trademarks and become leading manufacturers due to the high quality and originality of their products. These advantages were achieved only through continued research and development.

Sampo places particular emphasis on research and development, into which is channeled 4% of their total yearly intake. In 1981 they set up a factory in the state of Georgia in order to incorporate U.S. methods. In 1983 they signed a contract for cooperation with the electronics department of Taiwan's Industry Research Institute. Last year, Sampo led the way in establishing its own Sampo Industry Research Institute, with an annual budget of US$1,500,000. Some of the products which they have developed include a combined TV, radio and recorder, as well as a 3-screen TV on which three different channels may be viewed simultaneously.

Sanyang also realizes the value of research and development, operating under the principle that a company may adopt basic technical principles from others, but must then do their own research to adapt their product to local needs and preferences. Responding to local needs, Sanyang has developed new longer-life alloy cylinders, as well as fuel-saving and antipollution devices, all of which have contributed to the company's leading role in Taiwan's auto production.

Kuangnan has also achieved success due to its research and development of new, light-weight tennis racket materials. Proton is considered a dark horse on the U.S. market because of its success in developing new stereo and TV products.

Successful research has been accompanied by effective sales strategy. Kuangnan chose to promote a middle-sized Kennex racket, and gave their product to professional players as a form of advertising. Chienhung chose to emphasize the high quality and originality of its Proton products, and sells only to large, reputable stores which cater to knowledgeable, discerning customers. Their advertising strategies include entering their products in international exhibitions, where 50% have won prizes.

Now in Taiwan, when all are calling for an end to illegal counterfeiting, farsighted companies such as Sampo, Sanyang, Kuangnan and Chienhung provide strong examples of responsible trademarks and independent research. It is companies such as these which will help to maintain Taiwan's technological growth and development.

(Jill Ardourel)

n the future the influence of brand-name goods in the competitive consumer market will grow much stronger. Therefore, renowned brands pay close attention to protecting their trademark. Pictured is a scene from the athletic shoe production at Adidas.