Counterfeited Brands - Essay Example

?Running Head: Counterfeited Brands Counterfeited Brands Institute's Introduction Products like Life Savers, the microwave oven Dixie Cups are the kinds of products entrepreneurs' dream of creating. In fact, each was at first an abject failure. Dixie Cups were part of an elaborate water fountain no one would buy, Life Savers were the laughing stock of the candy business, and microwaves didn't sell at first for the reason that consumers worried that radiation might make them sterile. These products and forty-six others like them were conceived, failed, and reborn in the U. S. A., thanks to Yankee ingenuity and the enthusiasm and determination of their creators. Above we see examples of several brands, who have come off big, but yet many of these brands faces problems of counterfeiting every now and then and this problem lie to several reasons. Research Questions The research questions that this study aims to investigate are as follows: 1. Are the customers' aware if the products that they are purchasing are genuine or a counterfeit? 2. Does it matter to the customers if the product they are purchasing is genuine or a counterfeit? 3. Is there any positive affect of buying a counterfeit product? Research Objectives There are certain aims and objectives of the research that are implemented in the entire research. These objectives are given below: To investigate if the customers are aware the products that they are purchasing is genuine or a counterfeit. To investigate if there is any positive affect of buying a counterfeit product To investigate if counterfeit brands affect the choice of purchasing genuine brands for the consumers. Literature Review The counterfeited brand may have the quality of the legitimate product or they may not have it nonetheless the ingenuity, the creativity, as well as the research costs that make the product exceptional have been stolen. The loss is definitely a lot much greater than the loss involving brands. When a counterfeiter attaches a counterfeit mark to a product, the stealing is restricted to the goodwill as well as brand recognition. The technological advances that have taken place over years have made real theft the fastest-growing type of commercial counterfeiting. As the digital technology have come into exitence, counterfeiters can very easily make actual copies of computer software, recorded music, and motion pictures with no loss of quality in successive generations of copies. Copyrights are suffering the greatest losses in the latter half of the 20th century, to some extent as a consequence of the many new products that have been invented, such as the video cassette, CDs, analog cassette, in addition to many other products, and owing to advances in the means of distribution. brand counterfeiting was extensive in China although all through the 1990s, the trade dispute that was investigated by the U.S. Trade Representative in the years 1994-1996 involved works protected by copyright. Cable piracy engages the actual theft of copyrighted material. The birth of the cable industry is credited to Jerry Levin. The cable pirate, who hooks up unlawfully, is stealing television programming even though it is protected by copyright. In the United States, an estimated 1 in 6 cable viewers does so unlawfully; the complicatedness is worse in other countries as compared to the United States, where entire countries engage in signal theft. The more remarkable and the ultimate achievement of digital technology is the Internet. Internet provides a platform where everyone is connected to a cyber universe by computer, modem, as well as telephone line. In this present time, electronic commerce by way of the Internet is expected to reinvent the way people buy products. The Internet offers perhaps the final boulevard for a counterfeiter, who can e-mail a pirated computer program or music recording anywhere in the world and keep his identity a secret. Professional criminals shifted from counterfeiting products to counterfeiting brands, which was not only easier to counterfeit but simpler to distribute. In 1995, $487,019 worth of counterfeit brands was detected, and in 1999 this figure had dropped to $47,060, according to the annual reports of the Secretary of the Treasury on the State of the Finances. The number of apprehended professional counterfeiters would indicate, however, that large numbers of professional counterfeiters employed their talents in counterfeiting during the 1990's. The problem was enhanced by the excellent counterfeiting jobs done in China. Furthermore, there were numerous cases of counterfeit products, the thefts in a few cases even being carried out by local board employees or persons associated with them in this activity. There were also cases of "inside jobs". Several research work has been conducted on the topic and many authors have reached to a consensus that a lot of people knowingly want to purchase a counterfeit brands for the reason that they believe that no one would find out, quality does not matter to them that much, they feel that the genuine brand is over-priced and does not provide the value required. So in orders to make them realize the worth of a genuine brand, it is important remind the consumers that it is only the genuine brand which will deliver them their promise. So it is important to have a brand with a meaningful promise. Using promises, marketers set levels of expectations for their products. By the 1990s, even the most naive consumers know they are being manipulated and have learned to expect disappointment. Nevertheless, we approach products we're trying for the first time expectantly ; when the expectations are too high, we feel cheated. Countries, cities, and theme parks promoting tourism are often guilty of making the most blatant promises, which is why areas that don't do that—like Australia—win friends and influence people. Paul Hogan's good-natured "Put another shrimp on the Barbie" showed Americans a country at ease with itself, and therefore inviting. On the other hand, Busch Gardens promises "Europe right here at home," a promise guaranteed to appeal only to accidental tourists who'd rather stay home in the first place. Moving Images Advertisers haven't used words to promise us "washday miracles" or romance created by using the right toothpaste for some time. They've learned that words are too specific, too direct, too easy a yardstick against which to judge their products' performance. Instead, they show the promise of the product indirectly through slick, quick-cut images. The promise of Seagram's Golden Wine Cooler, for instance, is that the drink sparks young dancers and musicians, and it suggests that if you want to be chic and kicky like them, "Buy our booze." Broken Promises It's great to be first in the marketplace with a seductive new promise like this, but what happens to the people who come along after that promise is broken, the way Milton Reynolds temporarily killed the market for ballpoint pens? Not much. No one holds parades for the men and women who merely correct the marketing mistakes made by their predecessors. They just clean up the mess and hope that they can dominate their chosen fields for years like other latecomers—Singer sewing machines, Postum, and Paper Mate. One company entering a field where broken promises were the rule shook things up with a new marketing technique and wound up not only covering the problem but covering the earth. Apart from keeping the promise, another problem that may face the customer in choosing the counterfeit brand or the genuine maybe the confusion. The customers might not remember the brand correctly, so in order to always be at the top of customer's minds it is important that heavy promotions of brands are done. More and more, the primary ways product managers sell their products employ one or more kinds of promotion—sampling, product demonstration, premiums, coupons, games, and sweepstakes. From the 1920s through the early 1980s, advertising was king, but no longer. Now, nearly two-thirds of all money spent on marketing goes toward promotional efforts, and only one-third is allocated to advertising. In the year 1986, Donnelley Marketing conducted an annual survey of promotional practices which showed that 39.3 percent of all expenditures goes to trade promotion and 25.5 percent goes toward consumer promotion; only 35.2 percent goes toward media advertising. Russ Bowman, a columnist for Marketing & Media Decisions, estimates that the $165 billion spent on promotion in calendar year 1986 is growing 12 percent annually, as opposed to the $58 billion spent on advertising, which is growing at less than 10 percent annually (Hartley, 1983). Eric Douglas, president of Riverside Marketing of Westport, Connecticut, sees what's happening to packaged goods as an instant replay of what happened in the fast-food business in the 1970s: "It's a condensation of what happened in fast food. Fast food was so successful, so right for the times, that it was almost impossible to make a marketing mistake." In the late 1950s and early 1960s, when Douglas was marketing director at Jeno's, "It cost $25,000 to open the doors, and most people made back their investments in the first month of operations." Calling this the bricks-and-mortar phase of fast food, he says the next step was the entry of advertising into a business that had needed very little marketing help (Berg, 2000). Advertising was the route used by several fast-food empires, most notably Wendy's, which was able to compete with the entrenched McDonald's and Burger King by relying on what Douglas calls "key-attribute marketing." A study asked the public which attributes were the most important for a fast-food chain. Cleanliness ranked first, followed by the wish to have hot food actually served hot. The idea that fast food should be juicy (not dried out) placed eleventh on the list. Says Douglas, "Wendy's took two attributes, hot and juicy, and based their entire marketing campaign around that theme line. The hot-and-juicy commercials practically wrote themselves, and the company prospered. Later they changed to other advertising concepts. "Where's the beef?" was popular for about a minute, but there was no central theme line, and sales began to slump and have never fully recovered. Advertising isn't enough any more. For at least ten years, fast food has been a battleground for market share, and that market is becoming increasingly segmented." (Arnld, 1999) Linking Douglas's history of fast-food marketing to today's business climate makes it clear that advertising alone is no longer adequate to manage the marketing function. Selling one product is an easy job for advertising ("I'd walk a mile for a Camel"), but selling multiple products or their different facets in a segmented marketplace is not something that advertising does well. That's where promotion comes in. There are three basic reasons to run promotions: • Trial: Convince people to try the product. • Continuity: Get them to buy it more often. • Loading: Induce more spending on the product by selling more of it (getting the consumer to load up) or by adding allied items to the purchase. "After World War II, we had a love affair with advertising," explains Chris Sutherland, president of the Promotion Marketing Association of America. "We loved to be wooed the way advertising did it. Now we're imaged out and it's easier to see the limits of advertising. Advertising is based on image; promotion is based on performance." Push and Pull There are two main branches of marketing thought—pushing and pulling—and the abstract ideas behind them are embodied in all marketing plans as either promotion, advertising, or a combination of both. The "push" school relies on influencing dealers and getting them to stock the product heavily. The argument is that you're better off selling the dealers, because they can give you the distribution you need, plus in-store merchandising support. Of course, it'll cost you, but then again there's no free lunch. Pushing—in essence, trade promotion—is potentially very expensive, because it cuts margins to the bone. It can include inducements like higher-than-normal markups (say an extra 10 percent), free goods (buy ten, get two free), consignment billing (you don't pay for it until you sell it), easy credit terms (120 days), and payment for prime display space (the end of a supermarket aisle). This type of payment, also known as "shelf money" and "slotting allowances," has taken over more and more of the budget as products proliferate. In addition to these direct costs, pushing also involves promotional incentives to help the dealer sell the new item. Traditional techniques include point-of-purchase displays, national publicity, in-store promotional appearances, cooperative local advertising, heavy couponing, and training and incentives for the salespeople or the dealer. The other branch, the "pull" school, relies on creating demand directly with the consumer and spends heavily on advertising. Their philosophy is to forget the dealer. You've got to convince consumers to buy, so you're better off aiming all your efforts at them in the first place. Spend your time and money cultivating the customer. Pull strategies are generally three-step affairs: (1) Advertising directly to the consumer; (2) Sampling the product generously, or, if it's a toy or a machine, demonstrating it in high-traffic areas; and (3) praying that advertising and sampling translate into demand so that the retailers stock your product. It may sound like a backward approach, but it has worked repeatedly. Adopting a pull strategy means advertising an untried and unfamiliar product nationally. It is surely not for the faint-hearted, but when it is successful with either new categories or dormant ones, the results can be spectacular and can break down dealer resistance at a stroke. There's also a bonus in that this approach makes the consumer feel more a part of the decision-making process, which reinforces brand loyalty. When Gerber Foods was forced by circumstances to take such an approach, buyers felt it was somehow "their" brand and supported it vigorously when competition began to appear. Pushing and pulling offer different advantages, but they are mutually exclusive in the beginning, because new product budgets rarely allow manufacturers to do both simultaneously. Claude Hopkins, the advertising copywriter who resurrected brands like Palmolive soap and Puffed Rice in the 1920s, wrote in My Life in Advertising, "One can rarely afford to sell to both dealers and consumers. If you sell the consumer the dealer will supply the demand." Hopkins learned his trade selling patent medicines by direct mail, which probably colored his judgment (Gunther, 1999). Most manufacturers try push strategies first with new products, because it requires less effort to give them national distribution—even though it cuts profits. If (or when) retailers turn thumbs down on new products, because they're "too risky" or "unproven," the pull strategy is usually invoked for a remarketing effort. Couponing: It is the leading promotional category in the mid-1980s, is an aspect of another P, price. A cents-off promotion is one of the best ways to get consumers to try a new product or to revitalize a sluggish one. Especially in commodity products, where consumers have a small inner voice that tells them, "There's only one way to make aspirin," purchasers are more willing to give one-time trial to a product that is virtually the same as the previously chosen brand. In fact, a high percentage of shoppers have no brand loyalty whatsoever and alternate through several based only on price. Couponing in America is a proven way of saving money. There is an ethic among a large percentage of shoppers that couponing is smart business; that it "pays" to shop smart ... to use coupons. Coupons are therefore distributed at point-of-purchase; inside or as part of the package and in newspaper (or magazine) inserts or advertising pages. A large percentage of the food section of any metropolitan newspaper is a mass of advertisements with coupons (Nabisco Brands. 1985). Only a small percentage (6 percent) of coupons printed are ever redeemed, so the couponing process is actually two-fold: It serves as advertising and reaches a wide market (when inserted in various media) and then serves as a price break for those who choose to go the distance and actually buy the product. A coupon is a tangible reward for both the consumer, who has just saved money, and for the marketer, who has just sold a product through a traceable and very real means of doing business. Games and Sweepstakes Games and/or sweepstakes are usually used not to introduce new products but to stir up sales or to add sparkle to a category that hasn't seen much glitter lately. Promoting a humdrum cleanser is a difficult task, but a Procter & Gamble brand manager gave sixty-year-old Spic and Span cleaner a shot in the arm with a game that used an in-pack premium; he hid five hundred synthetic cubic zirconia diamonds, each worth $600, in boxes and bottles of the product. Sales for the first quarter of 1985 were up $8 million over a similar period in 1984. Such a campaign was out of character for staid Procter & Gamble, which generally identifies a product need, buys or develops a technology to produce it economically, tests every element, and then decides to go ahead, staying in long after other firms would have given up. Nevertheless, this time the game revived a product in a crowded category when every other form of promotion had failed (Nance, 1984). Scope of the research The entire research is based on Counterfeiting Brands and top notch brands in the market are actually evaluated in this research. The scope of the research is quite wide and varied that is the reason why an effort has been made to limit the scope of the research on how the counterfeiting brands can have an impact on the consumer behaviour. METHODOLOGY Research Design Research design to be used will be qualitative data analysis by manual method to get a deeper understanding of the emerging concept. Primary and secondary data resources will be used. To proceed with this dissertation, mostly the available literature on internet marketing will be studied. There is a vast body of knowledge that exists in books and published journals which have elucidated the importance of effectively utilizing internet marketing for the success of the companies. Data Collection For collecting primary data a questionnaire survey will be conducted by selecting 25 companies who are currently getting benefit from internet marketing. Findings will be based on the perceptions of these research companies by assessing their responses in light of the underlying unique features of the technology that translate them into business advantages identified in the literature. Content analysis method will be used to analyze data with qualitative interpretations. Sampling Strategy Sampling Strategy: A purposive sampling strategy will be used in order to make sure that the interviews correspond to varying types of firms as well as management perspectives. Findings and Analysis As implied by the name the findings and analysis section would focus on the primary and secondary results that are associated with this research. Conclusion The literature review on this topic has suggested several aspects of counterfeited brands being used by the consumers. We have seen that a lot of times consumers have been using counterfeit products because either they are not aware that they are not genuine or that they do not care much because they have either forgotten the real essence of the brand which needs to be reminded of through extensive promotions. Besides the consumers might have also forgotten the fact that it is the genuine brand that has made the brand promises, which the counterfeit brands can never deliver. Further from the research we shall conduct, we hope to make a correlation to the above findings and give a final stance on the impact of brand counterfeiting. References Arnld, Oren, 1999. What's in a Name. New York: Julian Messner. Berg, Thomas L, 2000. Mismarketing. New York: Anchor. Gunther, John, 1999. Taken at the Flood. New York: Harper. Hartley, Robert, 1983. Management Mistakes. Columbus, OH: Grid Publishing. Nabisco Brands. 1985. History and Details of Life Savers Candy. Nance, John, 1984. Splash of Colors. New York: Morrow, 1984. Read More