Impact of Counterfeiting Practice on National Brand Manufacturers
The counterfeit practice affects national brand manufacturers in numerous ways. Firstly, counterfeiting can cause a loss of revenue for the copied brands (Song et al. 2). Consumers may purchase a product perceived to be produced by a certain brand. Therefore, the original company may lose revenue. Moreover, counterfeit products are sold at a lower price; hence, the authentic brand will lose sales due to stiff competition. Finally, some counterfeit products can result in harmful effects on the consumer. This may tarnish the reputation of the national brand name manufacturers.
Impact of Counterfeiting Practice on Legitimate Consumers
Counterfeit practices have devastating consequences on legitimate retailers. Firstly, retailers can lose revenue when purchasing counterfeit products. Most counterfeit products can be sold as original products (Song et al., 3). Therefore, retailers are likely to incur losses when the consumers or buyers realize they have been ripped off. Secondly, legitimate retailers can suffer from legal implications. Some counterfeit products are harmful to consumers. Therefore, some consumers can take legal action against the retailers. Legal actions can result in jail terms or payment of huge fines for the sale of counterfeit products.
Winners in Counterfeiting Equation
Counterfeiting is a crime that can result in death. However, in the long run, there are real winners in counterfeiting. The real winners in the counterfeiting equation are the producers. Most producers of the products can distribute them anonymously. Therefore, they can gain profits without any major effort. Additionally, some counterfeit products are cheap and of high quality (Song et al. 3).counterfeiting practice has numerous positive and negative consequences.
Assignment Reflection
The assignment has improved my insight into the consequences of counterfeiting. I have learned counterfeiting affects producers, distributors, retailers, and consumers. The common effects of counterfeiting include loss of revenue, compromised trust between producers, retailers, distributors and consumers, and reputation damage. Finally, I recommend that companies focus on fighting counterfeit products to reduce their harmful consequences on the country. Minimising counterfeiting practice will improve profits and help establish trust with consumers.
Work Cited
Song, Lei, et al. “How Counterfeit Dominance Affects Luxury Fashion Brand Owners’ Perceptions: A Cross-Cultural Examination.” Journal of Business Research, vol. 130, 2021, pp. 1-13, doi: 10.1016/j.jbusres.2021.02.046.