counterfeiting, trademark infringement, intellectual property, counterfeit goods

How Can Counterfeiting Hurt Your Brand?

They say that imitation is the most sincere form of flattery. When it comes to brands, however, the intentions of counterfeiters are always less than noble and brand owners should be ready to protect their property.

Counterfeiting is an infringement of the legal rights of an owner of intellectual property. Counterfeiters manufacture products and sell goods under the guise of a known brand, without permission of the brand’s owners.

Counterfeit products are merely fake replicas of the real deal produced to take advantage of the brand’s perceived value in the marketplace.

What can be counterfeited? Anything. If it can be made it can be counterfeited.

Counterfeited items run the gamut from clothing to cigarettes. Most people are aware that there are counterfeit purses, DVDs, clothing, footwear, CDs, electronics, software, shoes and watches out there, but that’s just the tip of the iceberg. Counterfeit goods also include garden hoses, jewelry, baby formula, medications, art, cigarettes, and batteries. Products like airplane and automobile parts (air bags and brake pads, yikes!), toys, toothpaste, and olive oil have also been counterfeited. Even entire retail stores have been counterfeited.

Widespread as the practice is, its insidious effects can severely weaken a company’s brand image in a variety of ways:

Lowers consumer confidence in the brand. A brand’s reputation is damaged when a person, thinking they have bought a brand name product, gets an inferior product. Counterfeit goods are notorious for being of low quality. The product might wear out easily or even have dangerous health consequences.

Any potential for positive word-of-mouth and inspiring a brand advocate is eroded. Instead, what gets passed on are negative messages about the brand.

Any profits derived from the sale of a counterfeited product come at the expense of the brand’s owners, who lose two ways: a sale’s opportunity is lost and so is a customer who, instead of buying the real McCoy, is fooled into or chose to buy an imitation product instead.

Tarnishes brand image. Counterfeits devalue the brand. The brand gets weakened by the inferior quality of the knock-off and weakened even more so by the diluting of its exclusivity.

Why buy the product when everyone else has it? Counterfeits devalue the positive brand-associations that consumers who have bought the real product expect.

Undermines brand equity. Counterfeiters take brand value and destroy it. Brand owners and employees work hard to grow a brand, and are entitled to the financial benefits of those efforts. Counterfeiters take valuable brand equity, and flush it down the toilet by applying it to an inferior product. The brand loses credibility in the marketplace and its value is diminished

What can you do to protect your brand? Brands are wise to hire a professional private investigator to determine who is manufacturing and selling counterfeit goods and take appropriate legal action.

Photo Source: Flickr

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