Product counterfeiting and the impact on brand equity
I was driving in traffic and was amazed and at the same time appalled to see that a recently celebrated movie that premiered at the cinema was already been sold as DVD in traffic. I didn’t need to be told that it’s a counterfeit product; a scenario that is prevalent in this part of the world. According to Wikipedia “To counterfeit means to imitate something. Counterfeit products are fakes or unauthorised replicas of the real product. Counterfeit products are often produced with the intent to take advantage of the superior value of the imitated product”.
The issue of counterfeiting is what many brands and manufacturers contend with on a regular basis; which is growing at an alarming rate! Brand owners spend a substantial amount of time and resources to build their brand image, value and reputation, which becomes jeopardized when they are counterfeited or faked by elements who want to leverage the strong brand name. When we talk counterfeiting, there are two classes of the end users that can be identified:
1. Customers who have bought the brand on the assumption that they are buying the original: Counterfeiting is becoming more sophisticated and as such increasingly more difficult to easily tell that they have purchased a fake product. In this case, customers buy these products at about the cost price of the original and their expectation of the brand is at the level set by the brand owner which often cannot be met from the fake product. Due to this passing off, the negative effect rests on the brand as the customers feel they haven’t lived up to their promise and it adversely impacts on the reputation of the brand and gradually chips off on the brand equity.
2. Customers who know they are not buying the original but are glad to be part of the brand franchise: This is quite prevalent with luxury brands that often seem out of reach of the ordinary people. These customers are glad to be part of the brand franchise at a fraction of what they would have paid for the original. The profile of these customers are at variance to what the brand owners envisaged for their brand.
Counterfeiting may have both social and economic impact on the brand; on the social perspective, a brand may lose its reputation and strong brand perception while on the economic stand point, there is lost sales and revenue from products that may have been passed off as original; for which the buyers were not able to decipher that they are fake.
What can brands do about counterfeiting? Counterfeiting is difficult to totally eradicate as it lives with us! However it behoves on brands to ensure that they position and set themselves up to be able to checkmate the counterfeiters and be a step ahead of them.
1. Product education is important: For brands that are prone to being faked, it will do them well if they can have a product education campaign where the can let their customers know about the key features of their brand and how to identify the original versus the fake. This is a proactive initiative.
2. Register trademarks & intellectual properties: This is necessary so that you can institute legal actions where necessary. Ensure you register your brands in all locations that you do business in.
3. Monitor what goes on online: The advent of the online platform has made it easy to sell counterfeits. Brands need to set up a robust monitoring system to ensure that they are abreast of what is happening.
Unauthorised use of your logo, imagery and brand names have negative effects on your brand and depending on the nature of the brand, the effect of counterfeiting can range from mild to catastrophic.
Bolajoko Bayo-Ajayi