Should Brands Encourage Counterfeits?

September 7, 2012 in Daily Bulletin, Signature

In The Knockoff Economy Kal Raustiala and Chris Sprigman argue that brands actually benefit when counterfeiters sell cheap copies of their products. Highlights from an excerpt posted on Freakonomics include:

  • When people buy a cheap knock-off of a famous product they’re implicitly sending the message that the original is so desirable that it’s worth it to buy a counterfeit.
  • This kind of endorsement is excellent marketing for any brand.
  • Since the counterfeits are often of low quality, it’s very easy to distinguish between the authentic product and the ones you can buy from a street seller.
  • One study found that 40% of those who bought a counterfeit went on to buy the genuine product later on, meaning that the counterfeit is often used as a test run for the original.

Read more about what this means for companies with trademarks by reading the full excerpt over here. You can find the book here.

Source: Freakonomics