How traders target buyers of counterfeit goods

By Our Correspondent 

Governments, international policymakers and corporate intellectual property (IP) owners wage constant war against global counterfeiting.

However, there are those with a clear interest in promoting this illegal trade, including the counterfeiters themselves and many consumers. Resistance on the supply side alone is inadequate to control or even curb the counterfeit trade.

The demand side of the market, composed of consumers, must also be addressed. A framework is outlined to assist international marketing managers and other business people in understanding the important role of creative and proactive marketing in resisting both counterfeiters and consumers of their goods.

Most initiatives to thwart counterfeiting fail because consumer attitudes and behaviors are factored inadequately, if at all, into the analysis. This is surprising, given consumers’ expectation that it is up to their governments to protect them against dangers from counterfeit medicines, car parts, airplane components and other potentially fatal products.

Paradoxically, these same consumers defend their right to choose between expensive, genuine brand-name products and much cheaper but inferior counterfeits.

Most consumers believe that they can recognize counterfeit products. Many view these as a source of enjoyment, especially in the case of fashion items which are knowingly purchased at a lower price regardless of quality.

Such consumer attitudes are at odds with legal standards, moral values, publicly stated corporate codes of conduct and even the consumers’ own well-being.

Even if consumers suspect potentially negative consequences, their desire to be fashionable and to keep up with friends and peers lead them to ignore these. If such attitudes are not factored into the analysis of consumer involvement in the counterfeit market, then initiatives to dissuade consumers from these purchases will remain ineffective.

Success in fighting counterfeits requires targeted actions involving all stakeholders on both the supply and the demand sides of the market as well as a clear-sighted evaluation of respective costs, benefits and trade-offs. Hence consumers are at the center of a complex global market in which several parties pursue their own interests, each involving conflicting cost-benefit analyses.

Consumer accomplices: the naïve and the cynical

Consumer accomplices – the buyers of counterfeit goods – promote illegal trade through their willingness to perpetuate demand for counterfeit products and services.

Some of these consumers, notably young people, are naïve: they enjoy hunting for good deals and believe that they can easily tell the difference between legitimate and illegitimate goods, regarding counterfeit fashion goods as harmless fun.

They trust their government to take steps to protect them from the invisible dangers of illegitimate counterfeit products, all the while believing that they themselves do little harm by buying counterfeit fashion goods. Other consumer accomplices, however, are cynical in their complicity.

They freely admit to having bought counterfeit goods knowingly; they see no moral wrong and do not mind colluding with counterfeiters in order to get a good deal. It is not surprising, then, that efforts by governments, international agencies and companies to curb counterfeiting have not worked: global demand is too strong and persistent.