Importance of Curtailing Gray Market Sales

Gray market goods have a substantial impact on brand equity. The influence of marketing communications initiatives on brand equity has been gaining significant attention of late. This is due to the changing international accounting standards associated with the reporting of the financial value of tangible assets which in turn is a result of increased focus on the impact of marketing communication on brand performance. The marketing activities by gray marketers are beyond the control of authorized distributors and might not project situations consistent with those planned by the manufacturer or the authorized distribution network. Hence, it is essential to estimate the impact of gray marketing on the brand equity.

Gray markets have been a major concern for the retailers and manufacturers since the mid 1980’s. The international gray market size is somewhere estimated between from $US7 billion to $US10 billion.

Gray Market and Counterfeiting

Gray Marketing is not same as counterfeiting. According to Duhan and Sheffet, the term “gray” suggests an “almost black market”. Gray market activities involve selling the trademarked goods and products through distribution channels that are unauthorized by the trademark holders. When gray market activities take place across international borders then the term “parallel importing” is used. Gray markets results in loss of brand reputation as well as loss of revenue.

In order to combat the dangers of gray market activities companies specializing in enterprise risk management have come up with brand protection solution, in the form of a SaaS based software that can halt gray market sales. The software effectively monitors open markets on an end-to-end basis for buy/sell listings of products and part numbers with the help of advanced search agents. These search agents also trace detailed market information from a wide range of market types that includes:

• Franchise and large distribution websites
• Independent and gray market websites
• Email-based forums that aggregate buy/sell listings
• Trade boards
• Auction sites
• Chat
• B2C sites
• Blogs
• B2B sites
  

Contrary to the generic brand protection solutions this Saas based software delivers data directly from a website to the end user in a complete, multi-dimensional market intelligence format. Referring to this format the users can have customized dashboards, custom report views and create user formatted export files. All vital information is accessible and can be used within a perceptive interface. This assists investigators to develop and manage case histories, evaluate evidence and understand the link between partners, suspect companies and other related contacts

Read More About: brand management