A geographical indication refers to the inscription of the place of origin on a product. A geographical indication also means that a product will have certain characteristics – or a particular notoriety – linked to its place of origin. In addition, the existence of a geographical indication suggests that the product has a certain quality.
The main advantages of geographical indications
The use of geographical indications on products has significant economic and financial implications. The promotion of the geographical situation corresponds to a promotion in the short and long term. Local producers also benefit from the fact that the indication of the terroir is associated with a quality product, the place of origin being no longer anonymous.
Local producers usually invest time and money in research and development to ensure that these products – which are often associated with old traditions – are of high quality. By producing high quality items, manufacturers ensure that their products enjoy a lasting reputation. Geographical indications can therefore help consumers to distinguish between high-end and low-end products. People tend to pay more for a higher end item because they know they will enjoy a much better product.
Opening up to international markets
As products with a geographical indication have a better reputation, it is easier for them to enter the market. Products with a geographical indication can also enter the international market more quickly, as they benefit from a larger brand than their own. In this way, a geographical indication – by associating an item with a certain location – can help a product acquire a certain commercial value. Such products, which are considered to be high-end, also benefit from easy entry into the international market.
In addition, it should be noted that geographical indications can help consumers to differentiate products. Geographical indications give manufacturers the right to use distinctive signs, thereby differentiating their products from others on the market. When used correctly, these proprietary signs can become an effective marketing tool and can help manufacturers convey relevant information to consumers.