July 3, 2011

5 Reasons Fake Products Are A Real Product Manager Problem

Successful Products Can Create A Counterfeit Goods Problem

Successful Products Can Create A Counterfeit Goods Problem

When a product manger’s birthday rolls around and before he / she gets a chance to blow out the candles on their birthday cake, it is customary that they make a wish. Guess what just about all product mangers wish for every year?

If you guessed “for my product to be successful”, then you guessed correctly. However, what we never take the time to think about is that there is a dark side to being a product manager for a successful product: counterfeits.

You can’t stop counterfeit versions of your product from showing up if your product is popular enough. Instead, you have to fight to change how your customers view counterfeit products.

The Problem With Counterfeit Products

Let’s quickly make sure that we’re on the same page here when it comes to counterfeit products. No matter how you may feel about them as a consumer, as a product manager you need to view the sale of every counterfeit version of you product as money being taken out of your pocket – your product won’t be bought, your sales won’t go up as much, and you won’t get the raise or the promotion that you might have gotten if counterfeits didn’t exist.

A couple of experts in the field of counterfeits from the Villianove School of Business, Dr. Peggy Chaudhry and Dr. Stephen Stumpf, have taken a close look at why our customers are willing to buy counterfeit products and they’ve discovered some surprising things.

Before we get in too deep, let’s just agree on why we’re having this discussion right now. Currently counterfeit products are booming as the global recession lingers. They are always a problem, but they are REALLY a problem right now.

What Have Product Managers Tried To Do About Counterfeit Products?

Dealing with the problem of counterfeit versions of their products is not something that is new to most product managers. Sure there are the basics of trying to figure out who’s making the knock-off goods and then calling up the authorities and trying to have them shut down. That only seems to be effective if the counterfeits are being made in your country.

Another approach has been to go after the customers who buy the fake goods. Some companies have specifically targeted these buyers and tried to discourage them by threatening to take them to court or by telling that that by buying knock-off goods they are indirectly supporting organized crime gangs.

Dr. Chaudhry and Dr. Stumpf report that these traditional approaches have not been working. The reason that they haven’t be working is because they have not been aligned with how consumers view counterfeit products.

5 Reasons That Customers Buy Counterfeit Products

Before a product manger can do anything about solving the problem that counterfeit products create, you first need to understand WHY your customers might choose to purchase a counterfeit product instead of your product:

  • Quality and Performance: your customers will buy a fake product if they believe that it is just as good as your real product – they don’t see any difference between the two except for price.
  • Cost: your customers will buy a fake product because they believe that they can’t afford the real product and yet they feel as though they need the product in order to be successful.
  • Sentiment: your customers will buy a fake product because they don’t like your big company that makes the real product. This is a major image issue that is generally much bigger than just your product.
  • Ethics: your customers will buy fake products because they don’t think that it is illegal or immoral to do so. In this case, you might be dealing with the wrong type of customer because this is a tough one to change.
  • Ease: your consumers will buy fake products because they are easy to obtain. This reason hurts the most – you’ve make getting your product so hard that it has encouraged a counterfeit market to spring up and simplify the process of obtaining a solution to your customer’s problem.

What Can A Product Manger Do To Fight Back Against Counterfeits?

Clearly what’s being done today is not working. Instead, product managers need to take the offensive and start to do more talking with their customers about counterfeit products. Pretending that the problem doesn’t exist won’t make the problem go away, talking about it will.

Here are four different types of conversations that product mangers can have with their existing or potential customers in order to encourage them to select your real product and to stay away from counterfeit products:

  • Counterfeits Are Poor Substitutes: taking the time to show your customers how fake products really don’t deliver the solution to their problems is a key step in diminishing the attractiveness of counterfeits.
  • Show That Pirates Are Not Robin Hoods: in today’s media, all too often some product counterfeiters are portrayed as being sort of a modern day Robin Hood. This glamorous image can attract customers who think that they are supporting the “good guys” by buying counterfeit goods. Revealing who is really creating the counterfeit goods and showing what they are doing with the money that they are making can quickly dispel this notion.
  • Give Your Product A Human Face: Often if your product is dominate in a market segment, customers may start to view you as being a faceless power. Taking the time to reveal who creates the product and how the product’s success has make their life better can help to put a human face on your product.
  • Talk About Ethical Issues: in the end everyone knows what the right thing to do is and buying counterfeit goods is NOT the right thing. Simply by having a discussion about ethics with your customers and taking the time to remind them what the right thing to do is can sometimes shrink the market for counterfeit goods overnight.

Final Thoughts

Counterfeit goods are always going to exist. As a product manger, the more popular your product gets, the bigger the issue of dealing with counterfeit versions of your product will become.

Recognizing the five reasons that your potential customers might be tempted to buy a counterfeit version of your product is the first step in addressing this serious problem. Taking the time to talk with your customers is the correct way to start to address the issue in a way that will really work.

Product managers who can do this will have have found yet another way that great product managers make their product(s) fantastically successful.


Contact Blue Elephant Consulting

If you are interested in finding out more about how you and your products can boost your firm’s bottom line and gain more market share, get in contact with Blue Elephant Consulting in order to find out how a consulting or training program could be customized to meet your unique needs.

from the Villianove School of Business