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Industry trade group

A trade association, also known as an industry trade group, business association or sector association, is an organization founded and funded by businesses that operate in a specific industry. An industry trade association participates in public relations activities such as advertising, education, political donations, lobbying and publishing, but its main focus is collaboration between companies, or standardization. Associations may offer other services, such as producing conferences, networking or charitable events or offering classes or educational materials. Many associations are non-profit organizations governed by bylaws and directed by officers who are also members.

In countries with a social market economy, the role of trade associations is often taken by employers' organizations, which also have a role in the social dialogue.

Political influence

One of the primary purposes of trade groups, particularly in the United States and to a similar but lesser extent elsewhere, is to attempt to influence public policy in a direction favorable to the group's members. This can take the form of contributions to the campaigns of political candidates and parties through Political Action Committees (PACs); contributions to "issue" campaigns not tied to a candidate or party; and lobbying legislators to support or oppose particular legislation. In addition, trade groups attempt to influence the activities of regulatory bodies.

While direct contributions by PACs to candidates are required in the United States to be disclosed to the Federal Election Commission (or state and local election overseers) and are public information, and there are registration requirements for lobbyists, it can sometimes be difficult to trace the funding for issue and non-electoral campaigns.

Publishing

Almost all trade associations are heavily involved in publishing activities, in print, and/or online. The main media published by trade associations are as follows:

  • Association website. The association's corporate website typically explains the association's aims and objectives, promotes the association's products and services, explains the benefits of membership to prospective members, and promotes members' businesses (for example, by means of an online listing of members and description of their businesses).
  • Members newsletters or magazines. Whether produced in print or online, association newsletters and magazines contain news about the activities of the association, industry news and editorial features on topical issues. Some are exclusively distributed to members, while others are used to lobby lawmakers and regulators, and some are used to promote members' businesses to potential new customers.
  • Printed membership directories and yearbooks. Larger trade associations publish membership directories and yearbooks to promote their association to opinion formers, lawmakers, regulators and other stakeholders. Such publications also help to promote members' businesses both to each other and to a wider audience. A typical membership directory contains profiles of each association member, a products and services guide, advertising from members, and editorial articles about the aims, objectives and activities of the association. The emphasis of association yearbooks on the other hand is on editorial features about the association itself and the association's industry.

The opportunity to be promoted in such media (whether by editorial or advertising) is often an important reason why companies join a trade association in the first place.

Examples of larger trade associations that publish a comprehensive range of media include EWEA,[1] Association of British Travel Agents (ABTA)[2] and the Confederation of British Industry (CBI).[3]

Generic advertising

Industry trade groups sometimes produce advertisements, just as normal corporations do. However, whereas typical advertisements are for a specific corporate product, such as a specific brand of cheese or toilet paper, industry trade groups advertisements generally are targeted to promote the views of an entire industry.

Below are two different general types of generic advertising used by these groups.

Ads to improve industry image

These ads mention only the industries products as a whole, painting them in a positive light in order to have the public form positive associations with that industry and its products. For example, in the USA the advertising campaign "Beef, it's what's for dinner" is used by the National Cattlemen's Beef Association to promote a positive image of beef in the public consciousness.

Ads to shape opinion on a specific issue

These are adverts targeted at specific issues. For example, in the USA in the early 2000s the MPAA began running advertisements before films that advocate against movie piracy over the Internet.

Controversy

A common criticism of trade associations is that, while they are not per se "profit-making" organizations that claim to do valuable work which is ultimately for the public benefit, they are in reality fronts for price-fixing cartels and other subtle anti-competitive activities that are not in the public interest.

Anti-competitive activity

Jon Leibowitz, commissioner at the Federal Trade Commission in the United States, outlined the potentially anti-competitive nature of some trade association activity in a speech to the American Bar Association in Washington, D.C. in March 2005 called “The Good, the Bad and the Ugly: Trade Associations and Antitrust”. For instance, he said, under the guise of "standard setting" trade associations representing the established players in an industry can set rules that make it harder for new companies to enter a market.[4]

Cartels

In September 2007, the German trade association for Fachverband Verbindungs- und Befestigungstechnik (VBT) and five fastener companies were fined 328 million Euros by the European Commission for operating cartels in the markets for fasteners and attaching machines in Europe and worldwide. In one of the cartels, the YKK group, the Prym group, the Scovill group, A. Raymond, Berning & Söhne agreed coordinated price increases in annual price rounds with respect to fasteners and their attaching machines, "in the framework of work circles organised by VBT".[5]

National and international trade associations

International

Canada

East Asia

Europe

India

United Kingdom

In the UK there are thought to be more than 1600 trade associations.[6]

Note: the term "industry trade group" is used very little in British English. Alternative terms used in the UK include trade association and employer association.

United States

There are over 7,600 national trade associations in the United States, with a large number (approximately 2,000) headquartered in the Washington, DC area.[7] There are also many trade associations at the state and local levels.

One of the oldest trade associations in the United States is the American Seed Trade Association, founded in 1883.[8]

Copyright trade groups

Sometimes the shorthand **AA is used to refer to both the RIAA and the MPAA.

  • AJA, The Association of Japanese Animations is a group consisting of small to medium sized companies, united together to overcome some of the bigger problems, like infringement of intellectual properties, as rampant piracy and illegal file exchange has risen due to the introduction of P2P networking software.
  • BSA, the Business Software Alliance, protects the intellectual property of software developers.
  • ESA, the Entertainment Software Association, protects the intellectual property of game developers in the US.
  • affiliated with the RIAA.
  • BPI, the British Phonographic Industryis the UK music industry association. They founded the BRIT Awards, and give Gold, Silver and Platinum disks for UK-based sales. While they also try to prevent and punish copyright infringement, their efforts are more subdued than those of the RIAA's.
  • ASINCOL, the Colombian Association of Phonograph Producers is the Colombian music industry association.
  • FACT, the Federation Against Copyright Theft is the main UK anti-copyright infringement organization, though it mainly deals with copyright infringement relating to films.
  • Music Canada, formerly known as the Canadian Recording Industry Association is the non-profit trade organization representing the largest Canadian companies that create, manufacture and market sound recordings.
  • ARIA, the Australian Recording Industry Association is the organization which oversees the collection, administration and distribution of music licenses and royalties in Australia.
  • RIANZ, the Recording Industry Association of New Zealand, is the non-profit trade association for producers and artists in New Zealand.
  • JASRAC, the Japanese Society for Rights of Authors, Composers and Publishers in Japan.
  • RIAJ, the Recording industries Association of Japan.
  • ROMS, the Russian Organization on Collective Management of Rights of Authors and Other Rightholders in Multimedia, Digital Networks & Visual Arts in Russia.
  • AMPROFON, the Mexican association of Producers of Phonograms and Videograms.
  • AVPAS, Anti Video Piracy Association of Singapore for anime.
  • GEMA (Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte) in Germany

See also

References

Further reading

  • Garrelts, Frank: Märkte im Umbruch - Kooperationen als Chance im Handel (Markets on the move - trade associations as a business opportunity), München: Beck 1998, [1]

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