NEW: Consequences of counterfeits on genuine brands 

05 Aug, 2022 - 11:08 0 Views
NEW: Consequences of counterfeits on genuine brands 

The Sunday Mail

Cresencia Marjorie Chiremba 

“Counterfeit charm is worse than none at all” – Arlene Francis 


The internet era has seen an increase in businesses opening up online stores. 


This is a positive for businesses, as it has enabled them to expand their market beyond the borders at very minimal costs. 


However, it has also opened a floodgate for fraudsters, who have seen this as an opportunity to push their fake products and services using the same identity of the authentic products. 

 The recent reports of fake Rick Ross tickets, which were said to have been on the market, is a wake-up call to local companies that have set up online stores to be extra-vigilant if they do not want to lose out on sales, brand reputation and their relationship with their customers.

 Otherwise, all their blood and sweat will amount to nothing.

 Here are some of the consequences: 

  1. Trust Issues with Customers and Distributors 
  2. Organisations and individuals selling counterfeit products push the sales of their products at lower prices than the genuine products.  
    This causes a lot of trust issues with customers, who are unable to tell the difference between the fake from the original. 

    When these customers see this price variance, they are quick to think that those that sell the genuine product at a higher price are fleecing them, because they can get the same product at a lower price. 

    For example, in Zimbabwe there was a time when there was a surge of foreign alcoholic beverages that were sold in street corners at ridiculously low prices. But rumour has it that these beers were imitations of the real brands.  
     This is extremely difficult for distributors and retailers with price agreements with producers and manufacturers, because if these middlemen see listings on online platforms which offer the same products at lower prices, they are quick to think that they are being duped by the manufacturers themselves.

    Such scenarios tend to break relationships built over a long time.  
    This is because they cannot answer as to why a distributor would buy a product wholesale if a brand appeared to simply undercut them on price.  

  3. Revenue Loss 
    The arts industry is one sector that has been hit hard by this cancer, especially musicians. Pirated music has seen most musicians losing out on disc sales.  
    The problem with this is that when these fraudsters compete with the owner of the product to sell their merchandise, they offer a lower price and this makes the real owner lose out on some sales. 

     Although it is easy to detect fake from genuine when you are buying in a brick-and-mortar shop, it is not the case when doing it online.
     Online counterfeiters are now so sophisticated that they are able to steal the company’s designs and brand.
    These are very difficult to detect and can even use product images of the real brand owners. In some instances, they can also mix their knock-off goods with their online product reviews. 
     This is all meant to deceive the customer so that they end up guessing which is real and which is fake.


  4. Focus Diversion 
    Instead of organisations focusing on providing an exceptional service experience, their focus is diverted to fighting counterfeiters.  This fight will involve time and money that could be invested in productive company projects such as research or marketing activities.

    Big brands like Spar, Tongaat Hullets, Western Union and Emirates, among others, have fallen victim to these scammers through the advertisements of some bogus anniversaries where customers have to answer some questionnaires. 
    To fight this, companies end up paying money to flight adverts on different media platforms so that their customers will not fall into these traps.  

  5. Headache for Genuine Companies 
    When customers buy a product and it fails to perform according to their expectations, their first course of action is to return the product so that they can get compensation in the form of a refund or get another product. 

     For instance, if a customer buys a ‘Cascade’ drink from a street vendor at Mbare Market and then realise that the drink lacks the original Cascade taste, in most cases they will take that fake Cascade to Dairibord, which is the genuine manufacturer of Cascade, for a recourse.

    A lot of organisations are stuck with complaining customers about the poor quality of their products. 
    If these products are taken to their quality control department, they will fail but unbeknown to the company is that the failure of that product is because it is counterfeit. 

    At the end of the day, companies are taking returns and losing millions of dollars for products that they would not have produced themselves.


  6. Brand Reputation Damage 
    Unsatisfied customers, who are not aware that the products are fake, will ordinarily blame genuine producers of the products. 

     This will not only mean losing customers, but it will also take knock on the reputation of the brands.
     Negative reviews will be posted, while the powerful word-of-mouth tool will heighten the brand reputation damage.

    Since reviews are used as public indicators for brand quality, posted negative reviews from those who bought counterfeits will further damage the brand.  

    *Cresencia Marjorie Chiremba is a marketing enthusiast with a strong passion for customer service. For comments, suggestions and training, she can be reached on [email protected] or on 0712 979 461, 0719 978 335 

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