Trade associations are organizations that create a means for businesses involved in a given industry to interact to the mutual benefit of all concerned. Funded by contributions made by the member companies, the association often functions as a means of enhancing the public image of the industry in general, or providing a unified voice to lobby on matters of legislation that are anticipated to have an impact on the industry. Along with these two important functions, this type of association may also provide a forum to educate the general public about a given industry and its chief products.
In many instances, a trade organization is set up as a non-profit organization. This type of business organization makes it possible for companies involved in the same industry to work together on issues of common concern. To a degree, a trade organization helps to protect the integrity of an industry, in that it normally sets standards that all members must abide by in order to be considered in good standing. Failure to comply on the standards set and maintained by the peer group who operate the trade association can lead to exclusion from the association and lose a great deal of credibility in the eyes of the buying public.
The trade organization often provides the mechanism necessary to make the voice of the industry known in the law making process. Often member companies will work through a trade association as a means of promoting legislation that is anticipated to be in the best interests of the industry. At the same time, the association may lobby against legislation that is perceived as being detrimental to the industry in some manner.
While many companies mount public relations and marketing plans to raise the visibility of the company and its products with consumers, a trade association will also attempt to educate the public and generate interest. Rather than focusing on the wares of a particular company, business associations will engage in marketing and publicity campaigns that entice consumers to purchase and enjoy the goods produced by a particular industry. Part of the marketing approach is accomplished by providing facts and figures that consumers can readily grasp. The education effort of a trade association often paves the way for the marketing efforts made by individual members of the industry.
Along with lobbying, marketing, and educational efforts, a trade association often sponsors conferences for member companies. The focus of the conferences are usually to improve the general function of the industry by providing information that each participant in the conference can absorb and take back to the company level. Just about every trade or business association sponsors at least one conference or gathering on an annual basis.