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Market-control Theory – New Strategy of Brand Protection

by:GenuinewaysPosted:2010-11-01

Rapid development of China’s economy brings great profit to intellectual property right protection industry. Meanwhile, some enterprises or individuals manufacture and sell counterfeits of famous brands in order to seek profit. Although Chinese government keeps making laws concerning intellectual property right protection and enforces the execution of law and brand owners had been investing much to protect their intellectual property right, there are still hundreds of thousands of counterfeits ranging from daily necessities to luxuries and high-tech products in and out of China appear in our life. With more rich experience, more investment, more advanced and professional technologies, counterfeiters now march to a new stage of counterfeiting:

1.location of manufacturing counterfeits is more covert
2.counterfeits are manufactured by parts by different counterfeiters and assemble by another counterfeiter 
3.counterfeits are usually manufactured at midnight, not at daytime
4.there are more distribution and circulation channels
5.counterfeit manufacturer and distributors unite as one

The traditional anti-counterfeiting pattern is conducted case by case, which is assessed according to seizures. However, this pattern is not that effective as there is always another counterfeiter and another batch of counterfeits in the market. Many brand owners had been anti-counterfeiting for several years, but the sales of their counterfeits are still rampant. Many a brand owners is now confusing about the traditional pattern and consider what is on earth the goal, significance and effect of anti-counterfeiting? Is the number of seizures the pursuit of their anti-counterfeiting?

Obviously, the traditional anti-counterfeiting pattern does not suit the changes in market and can not fulfill the need of brand owners any more. Anti-counterfeiting needs new pattern. Based on years of experience in intellectual property right protection and anti-counterfeiting, we believe that the “Market-control Theory”, making brand protection strategy on the basis of market survey, conducting long-term surveillance and monitoring exercise, through controlling the amount of counterfeits to promote the market share of the genuine goods, is worthy of in-depth discussion and promotion.

To brand owners, intellectual property right protection is the key part in their brand protection action. The reason is if consumers unknowingly bought a counterfeit of a brand, their dissatisfaction would directly influence the sales of the other goods of the brand. Making profit is the aim of an enterprise and anti-counterfeiting can reduce the market share of counterfeits and thus promote the sales of genuine ones, which would of course promote the value of the brand.

Rather than being accomplished in an action, brand protection is a long-term and complicated project. Therefore, brand owners need settle a relatively stable and persistent, other than short-term and always changeable, brand protection strategy to have a better effect in the market.

Budget for brand protection in some enterprises is limited and may even be reduced because of the economic crisis, which, however, should not be halted at present because brand owners will get half the result with twice the effort if they do not start brand protection until the recovery of world economy. How to make full use of the limited budget on brand protection? We believe that brand owners should lay emphasis on investigation, build database of counterfeiting industry, establish practicable strategy of brand protection on the basis of investigation and analysis, and focus on key targets to further investigation and give them heavy blow. Meanwhile, brand protection department should cooperate with the marketing/sales department to timely promote the sales of genuine goods after successful actions against those key counterfeiters. Anti-counterfeiting action is not isolated, and there should be effective follow-up after successful actions to grasp information of the raided target, the influence of the raid, etc. Constant raids against regular counterfeiters can increase the risk of making/selling counterfeits, which may really frighten the counterfeiters and prevent them from conduct counterfeiting actions.

Investigation plays an important role in anti-counterfeiting. Attaching importance to collection and analysis of lead and investigation is therefore the basis of brand protection. As different products have different counterfeiting problems, before anti-counterfeiting actions, brand owners need to learn the status of the market and to establish different schemes by market, product, time, etc. on the basis of analyzing investigation report. The analysis of the background of counterfeiting industry can help investigate different steps of manufacturing and selling counterfeit, and find the key part of counterfeiting chain – influential manufacturer, his counterfeiter ring and his boss. No effort should be spare to investigate and find out these influential counterfeiters to learn more information about their suppliers, manufacturers, distributors, etc. After gathering sufficient evidence, criminal or administrative actions should be conducted to give the counterfeiters a heavy blow and even to root them out in the market. Such persistent raid actions against counterfeiters will definitely raise the risk of counterfeiting and frighten the counterfeiters, who may consider the risk of manufacture/sell counterfeits and even change their tack.

It is obvious that, comparing with the traditional “case by case” anti-counterfeiting pattern, “Market-control Theory” have much higher demands towards intellectual property right companies and investigation companies. Other than passively investigate target and conduct raid action under the instruction of brand owners, “Market-control Theory” require these companies to learn the condition of market, analyze the counterfeiting industry from different angles and actively provide effective solutions for brand owners.