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Brand counterfeiting and product diversion are part of the growing pains of global development. As a result, brands must protect its products long before any such counterfeiting or diversion occurs. “Brand owners are behind the eight ball, by not acknowledging the problem until it has already happened,” said Carol Glueck of Sekuworks, LLC, a brand protection company. Statistics of brand counterfeiting and tampering are on the rise. Globally, counterfeit trade, including brand diversion, was more than $700 billion in 2001 and expected to exceed $900 billion by 2010, according to the World Trade Organization. How brands plan for inevitability of counterfeiting and diversion can be proactive or reactive, depending on the brand’s initial marketing plans.
Brands who take the proactive approach can use it as a marketing tool with consumers, who will bond with a brand that has their safety in mind. Security measures also limit the brand’s liability should the product be counterfeit. A proactive approach also allows the brand to educate the consumer on the differences between the genuine article and the counterfeit one. “Protecting a brand encompasses many components. Today, many manufacturers are hiring specific personnel to protect brands. Some manufacturers see this as a logical first step – actually putting someone in charge of brand protection, who can develop a strategy and specific means for protecting a brand,” said Jack Walsh, marketing manager, brand protection solutions, Videojet Technologies, Inc.
Sekuworks expanded into its five platform brand protection strategy that includes security consulting, technologies and information systems, security printing, mass-serialization/track and trace, as well as investigation and enforcement. A brand that neglects just one area leaves a chink in its armor.
Follow the Chain
Brands must also continually improve the transparency of its supply chain. “Manufacturers should consider developing or improving visibility in the supply chain; i.e. knowing where products are within the supply chain at any given time. The best means to achieve this is through a track-and-trace system that includes software and product identification technologies,” said Walsh.
With a transparent supply chain, brands can limit product diversion, a process that allows products destined for certain markets at various price points, to be diverted back to an unauthorized market, undercutting the manufacturer’s price point. The industry of product diversion has grown, becoming high-tech, online and extremely sophisticated. Diversion can be limited through brand security measures and various practices throughout the supply chain.