What really is Counterfeit – How to use Circle of Legitimacy?

 Dear Readers, 

We hope that all our valued readers had a safe and eco-friendly Deepawali. This festival represents triumph of ‘Good’ over ‘Bad.’ Last week, over my festival vacations, I had an in-depth conversation with one of my close friends about the definition of ‘Counterfeit,’ including if there is such a thing as ‘Good Counterfeit,’ or whether all ‘Counterfeits are Bad.’ We simulated with two different scenarios. Genuine product created by one of the affiliates but sold through an illegitimate (unauthorised) channel in scenario one, and illegitimate product sold through an illegitimate (unauthorised) channel in scenario two. Which scenario is a ‘Good’ scenario, and which one is a ‘Bad’ one? I am sure many of our readers would be polarised by now!!

I urge you to wait. Let us first describe the criterion for deciding, which we will refer to as the “Circle of Legitimacy.” 

Using the “Circle of Legitimacy” principles, a product shall be considered ‘counterfeit’ if produced or sold illegitimately within the allotted territory of an authorised manufacturer, or both. Please keep in mind that the company may use a multi-tiered distribution channel that is partially served directly and partially indirectly, but still falls under the permitted channel umbrella. Hopefully, this should remove any ambiguity around the definition or boundaries of counterfeit.

Another hot topic debated with equal intensity was reasons for counterfeit and why majority of the efforts despite availability of latest anti counterfeit technologies are not extraordinarily successful. Again, before our readers decide to jump with conclusions, I would urge caution and again put forth a decision framework first.

There are two important principles that our readers should know about: 

1. Brand Health – We measure what we value, and we value what we measure 

2. Demand and Supply – Any distortion in the equation would have direct impact either on Consumer Prices or unmet demand catered through Supply of Counterfeit Products

Role of Brand Owner as Brand Custodian is not just about focusing on 4P’s of Marketing (Product, Price, Place, Promotion). Brand is a living form so needs well-articulated Brand Heath Check Matrix. What parameters we decide to measure decides the Brand Health. Selection of wrong parameters would show a wrong picture of brand health, and this would be the breeding ground for counterfeiters. Instead of measuring traditional lag parameters like net promoter score, share of voice, brand reputation, unprompted brand recall, prompted brand recall, purchase intent etc., should measure lead parameters. In MIT Sloan Management Review Fall 2007, Julie Dexter Berg, John M. Matthews and Constance M. O’ Hare have talked in detail about following five interrelated elements that form statistically reliable core set of brand health measures resulting in customer satisfaction.

• Leadership – Measures availability of the brans, its reputation, and points of presence. It answers the question: Do customer see brand as available to serve them now and in future? Please refer to ‘Demand and Supply’ principle mentioned in above decision framework. 

• Distinctiveness – Does the brand break perception of parity in customer’s mind? 

• Attractiveness – Are Customers and prospects drawn towards the brand? 

• Liabilities – What is limiting commitment to the brand that is repelling customers? Counterfeits? Lack of Brand Protection Measures? 

• Customer Satisfaction – Do customers see the brand as satisfying their needs and wants?

Need to protect the brand is as intrinsic as deciding on quality of ingredients for producing a quality product. The brand protection or anti-counterfeit measures must be taken from the time the product is developed from concept stage and then carried through production to supply chain steps and distribution chain till product reaches the end consumer. This would call for designing elaborate brand protection blueprint, development of adaptive technology solution and execution framework.

Any shortchange in the process or ad-hoc anti-counterfeit technology solutions are going to give sub-optimal results.

We take Intellectual Property Rights (IPR) and Brand Equity very seriously at CPIGS Technologies. We have built our technology solutions with above core ideas in mind.

Please feel free to leave a comment or share.

If you have any query, reach out to us at info@cpigs.com. 

Wish you all the best & Kind Regards, 

Sunil Agarwal 

Director for Marketing & Business Development 

CPIGS Technologies Private Limited