A brand protection program can be a viable option — if not a requirement — to countering the risks associated with the illicit trade in your company’s brands.
Many companies, across a variety of industries, fall victim to organized criminal syndicates who engage in the illicit smuggling and counterfeiting of branded products. In the process, the targeted company risks revenue loss, loss of market share, potential regulatory scrutiny, and damage to their reputation (and the potential future revenue loss associated with that reputational damage).
There are many ways to organize and shape a brand protection program. Certain elements, however, are critical to ensuring the success and proper functioning of the program.
The first (and most critical element) is top management support. Without it, the program will essentially function with little impact and effectiveness. Active top management support will send a clear message that protecting the company’s brands, markets and reputation (and fighting against illegal practices) are non-negotiable elements of the company’s mission and values.
Secondly, the program needs team support from other functional lines in the business. These functions may include legal, marketing, sales, and logistics. Each plays a critical role in the success and proper functioning of the brand protection program. For example, your sales force is well positioned to serve not only as the company’s eyes and ears in terms of any suspicious activity involving the company brands, but also as the first line of communication to clients to assist them in protecting their own reputations and interest.
A close working relationship with legal is an absolute requirement to ensure proper compliance, as well as to ensure the proper exploration of legal remedies to threats posed by the illicit trade in your brands. The program should reflect a zero-tolerance approach and legal action is one of the effective tools to achieve this goal.
Marketing has a role to play in the design of a message campaign to educate the consumer on the harmful effects of illicit products, and how to spot and properly report them (and the activities surrounding them).
Finally, logistics has a role to play in ensuring company products and brands are secure and not susceptible to being stolen or compromised, and that procedures and processes meet compliance standards.
The third element to an effective brand management program is the provision of a proper budget for these key areas: a) training of department and company staff; b) an awareness campaign to publicize successes and train distributors and other third parties; c) investigations to identify and deter the illicit trade in your brands (including online investigations, as well as tracking-and-tracing the shipment of genuine products) to support local and regional law enforcement bodies; d) market research; e) memberships to various groups that provide support, training and coordination possibilities; f) legal actions; g) lobbying; and h) effective security features that make it difficult and expensive for organized criminals to replicate (or illegally trade) your product.
There are two primary reasons to start a brand protection program: to prevent the illicit trade in the company’s brands (whether the smuggling of genuine product or the trade in counterfeit product), and to safeguard the company’s key brands and markets.
The benefits derived from an effective brand protection program are both quantifiable and non-quantifiable. These may include the seizure of illicit product by law enforcement agencies as a result of your company’s investigations (and the dollar value associated with that), the reduction in frequency and amount of stolen genuine products (and the dollar value associated with that), and the positive boost in the reputation of your business as a result of proactively creating an effective program that supports law enforcement efforts, advocates compliance with regulatory policies, and promotes your company’s ethics, mission and belief-value system.