Group report

On

Counterfeiting

Introduction to UK Graduate Study CORP 3801

Submitted By: P153x2xx300

P15xx340x
P1432xx09

Submitted To: Clovis Hagbarth

Date: 31 October 2012
Words Counted: 1572

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 Table of Contents

Abstract…………………………………………………………...3

1. Introduction……………………………………………………..4

2. Effect of counterfeiting……………………………………….4

2.1 Cost on the perspective of the right holder………………………………………4-5

2.2 Cost on the perspective of counterfeiting place……………………………………5

2.3 Cost on the perspective of country…………………………………………………6

2.4 Cost on the perspective of society………………………………………………….6

3. Development section……………………………………………..6

4. Business view…………………………………………………….7

5. Consumer’s perspective……………………………….............7-8

6. Authority view…………………………………………………..8

7. Conclusion………………………………………………………9

8. Recommendation…………………………………………………………………….. 9-10

9. References…………………………………………………….10-11

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Abstract

Counterfeiting is the way of copy product or brands of other company unethically.

Counterfeiting of luxury brands product is increasing parallel to increase industry. The demand

of the brands luxury product to customer is always positives. Recently counterfeiting has created

problem for consumer, industry and government. Luxury product counterfeiting is growing

because of emotion of consumer is related to this type of product (Aaker, 1991). Luxury product

counterfeiting is easy because is difficult to identify it. People generally purchase it for social

status. Genuine producer serve a high quality value to consumer that is not provided by

counterfeiter. Counterfeiting occurs because of technology advantages, luck of ethics,

governmental indifference and consumer luck of consciousness. To avoid the counterfeiting

manufacturer must follow same rules and regulation and always try to make consciousness to

peoples mind. People can get the counterfeit luxury product but don’t get the high quality of

product (Bloch, 1993). Consumer should avoid counterfeit product because it is harmful for in

long-term. Government also takes some roles to stop the counterfeiting.

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1. Introduction:

Counterfeit is a word which is generally used to copy or imitate anything without permission of

the original producer.it is done intentionally and low quality products than the original are

provided. It is a one type of crime and an illegal work. Counterfeit includes all products,

hardware, software, services, logo, brand name etc. it is a popular way for getting more profit in

shortcut way. But it breaks the copyright or trademark law. Pirated goods are an overlapping of

counterfeit. Pirated goods mean imitating product without any permission of owner or don’t

following copyright rules and regulation.it is spreading very fast all over the world and gives a

bad effect on branding products (COHEN, 1990). Generally the luxury brand products are

counterfeited. Luxury brands are used in society as a scale of social status.so people generally

wants to buy the brands products for them. The counterfeiter takes this opportunity.

2. The effects of counterfeiting on luxury brands product

Counterfeit makes a product like the original product as a result usually it is not easy for

customer to differentiate between the original and fake products. Then the reputation of the

brand owner is devaluated. Some others critical effects of counterfeiting on luxury brands

product are given below

2.1 Cost on the perspective of the right holder

Counterfeiting is increasing in industry world-wide as a result the industry is losing millions of

dollar.it can be in many ways. Original brands product have to competitive with the

counterfeiting product in now days.so the sales of product is decreasing and loss occurs (Chen,

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2001). There are many markets in the world where market is dominated by counterfeiting

products because of good quality of counterfeiting product.

When customers buy luxury brands product they think it is the genuine product. When that

products fail to full fill the expectation level of customer, they make blame to the original brands

company. So the company loses its good will. If the counterfeit products enable to establish faith

in customer mind it is a big threat for genuine company.

As counterfeiting is a threat for company so it must invests much money for protection its copy

right.so the cost of the company increases.

2.2 Cost on the perspective of counterfeiting place

Counterfeiting is responsible for reducing the foreign investment in a country where

counterfeiting is available. Most of the reputed global company is not interested to produce their

products in counterfeiting countries. Those companies don’t want to believe counterfeiting

countries copy right and intellectual property law. As a result that countries lose direct the

foreign investment and belief. When reputed company product is counterfeited in any country,

that company moves from counterfeited company (Commuri, 2009).as a result the

unemployment is also created. Fundamental development of a country depends on the creating

entrepreneur for new business. But existing of counterfeiting discourages the development of

new buss idea. For this reason the new investment is not occurred and the resource is not

properly used.

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2.3 Cost on the perspective of country

As counterfeiting causes job loses, sales opportunity dismisses, and government revenue loses

and discourages to new business.so the economics cost occurs. Government has to give more

attention to make copyright and intellectual property law .as a result government spends more

time and money for this reasons.

2.4 Cost on the perspective of society

Customer actually has to pay for product which is counterfeit or original. Customer pays more

for counterfeit product because they don’t identify the right product. Inferior quality of products

has a great impact on health such as medicine. Counterfeiting of such type of products are threats

to people’s health and safety (Dubois, 1993). Generally worker who works of producing

counterfeit products works in poor environmental situation. They are also again in threat of

health and safety.

3. Development section

Counterfeiting is a great problem for now days in every industry and a bad effects on customer,

government, industry and society.so there must be some steps taken to protect this counterfeiting

specially in luxury brands product.it is not possible to take steps individually to protect the

counterfeiting. Not only the company but also all who are affected by counterfeiting must come

forward to solve this problem. In details consumers, business, trade, associations, Regulatory

agencies, local and national law and not only local government but also foreign government must

work together. To protect counterfeiting –

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4. Business view:

Company can use multiple approaches to stop and discourage the counterfeiting product. It can

reduce their profit loss. Protect customers and legal right of company. Business generally use

many tools such as product identification technology, legal action, managerial tools and technics

etc. company must make anti-countering strategy which protect it and monitoring this strategy

continuously. Counterfeiter generally tries to identify the weakness of supply chain. Company

must protect its supply chain for anti-counterfeiting (Keller, 1993). Generally institutional

safeguard must be strong that make impossible to counterfeiter to interfere with supply chain.

Business should develop a preventive measure that will help to identify copy right and

intellectual thieves.

A company must be able to solve the properly the dispose of unused product or damaged product

and surplus. Counterfeiter used many ways to obtain waste repositories. So it is difficult for

company to stop their waste from Counterfeiter. Company should make a policy that will ensure

the damaged or unused products have been totally destroyed in such a way that protect

counterfeiter. Company should reduce the number of middle man to reduce counterfeiting.

5. Consumer’s perspective:

At first consumer should stop buy any counterfeit product intentionally? There are many

consumers who are not interested to identify fake or genuine product. On the other hand there are

many consumers who intentionally seek counterfeit product and buy for save money or in the

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case of luxury product. Every customer should aware of the product and they should know that

buying counterfeit product is harmful for consumer, producer, society and it encourage the

criminal activities. There is an old concept in customer mind that low price means counterfeit

product. Now days it is not appropriate way for seeking genuine (Nia, 2000). Consumer should

give attention to the product quality and its effectiveness. Consumer should always compare

buying product with same product that purchased previously. If product is low quality,

consumers should report to the original manufacturer or the authentication agent who detect

counterfeit goods.

Consumer should identify the fake dealer and should avoid the suspicious dealers from buying

them. Consumer should inform the author, producer.

6. Authority view:

Every county’s governmental and law enforcement agency should make the proper intellectual,

copyright and trademark law so that it is protected from counterfeiting. There must investigation

committee to investigate the counterfeit product seller. Government must ensure that the anti-

counterfeiting program is running effectively (Nueno, 1998). Government should give time and

resource to this fact because counterfeiting has a bad impact on economy and society.

Government should make contract with other country to monitor the counterfeiting product.

International organization such as EU, WTO etc. should take the effective action against

counterfeiting luxury bands product and others product.

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7. Conclusion:

Luxury brands product counterfeiting is one of the most difficult works to identify. The customer

fails to identify the genuine producer luxury product because they don’t see any bad effect of

using. Even though most of the intellectual property proponents believe that the genuine

manufacturer has own technic and tools to identify the counterfeit. To stop the counterfeiting of

brands luxury product consumer perception must need change. Consumers should give the

attention to the quality, feasibility and effectiveness of product. The positive belief of customer

on counterfeit product has increased the counterfeiting. The consumer is emotional attached to

the luxury product (Sharma, 2011). They don’t consider the economic value and also buy the

counterfeit product for use intentionally.so government, consumer and producer should their

perspective and work actively to stop counterfeit of luxury brands product.

8. Recommendation:

1. Calculation Method should be introduced by the government.

2. Amending in trade mark laws need to include by the government.

3. Government can make awareness among the general people for bad impact of counterfeiting

on the human life.

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4. Discourage the counterfeit products and make sure to justify the market have there any

counterfeiting product by the famous companies, if have taken proper steps.

5. Make sure laws of counterfeiting should be applied instantly by the government of a country.

9. References:

1. Aaker, D. (1991), Managing Brand Equity, Free Press, New York

2. Bloch, P., Bush, R., Campbell, L. (1993), “Consumer “Accomplishes” in Product

Counterfeiting”, Journal of Consumer Marketing, Vol. 10, Issue 4, pp. 27-36

3. Chen, A. (2001), “Using Free Association to Examine the Relationship between the

Characteristics of Brand Associations and Brand Equity” Journal of Product & Brand

Management, Vol. 10, Issue 7, pp. 439-451.

4. COHEN, Laurence J. (1990), “Warding off the Foe: How Trade Marks still can Offer some

Protection against Parallel Imports”, European Intellectual Property Rights, Belgium.

5.Commuri, S., (2009), "The impact of counterfeiting on genuine-item consumers’ brand

relationships", Journal of Marketing, Vol. 73, Issue 5, pp. 86-98

6. Dubois, B., Duquesne, P (1993), "The market for luxury goods: Income versus culture",

European Journal of Marketing, Vol. 27, Issue 1, pp. 35-44

7. Keller, K. L. (1993), “Conceptualizing, Measuring, and Managing Customer-Based Brand

Equity”, Journal of Marketing, Vol. 57, Issue 1, pp. 1-22

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8. Nia, A. & Zaichowsky, J. (2000), "Do counterfeits devalue the ownership of luxury brands?”

Journal of Product & Brand Management, Vol. 9, Issue 7, pp. 485-497

9. Nueno, J. & Quelch, J. (1998), “The Mass-Marketing of Luxury”, Business Horizons, Vol. 41,

Issue 6, pp. 61-68

10. Sharma, P., Chan, R., (2011), "Counterfeit proneness: Conceptualization and scale

development", Journal of Marketing Management, Vol. 27, Issue 5/6, pp. 602-626

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