The ease of doing business in most parts of the globe is facilitating the growth of new businesses every day. Increasingly, small and medium-sized brands are sprouting across the world. Although globalization and advancement in technology have made it easier to establish brands, they are susceptible to umpteen challenges as well. While starting a new brand is easy, making it successful in today’s globalized economy is a big challenge for small and medium-sized companies.
Building a brand while adhering to the brand values is key; While every effort is focused on realizing this objective, when doing a SWOT analysis for the brands, most small and medium businesses ignore the threat of external factors including counterfeiting and brand abuse, which have a lasting impact on the brand and affect their sales and brand reputation. It is understood that small brands might have budget constraints that might compel them to overlook such areas, however, it is imperative that a budget be made available to implement a brand protection strategy that can fight the biggest and one of the most formidable competitors, and these are the counterfeiters.
Counterfeiting is a Threat to All Businesses
It is most likely that small and medium business enterprises operate within local markets. Such companies and those that expand into new markets believe that since they are a small brand, their products are unlikely to be targeted by criminals. However, there are some staggering statistics that needs to be considered. 3.3% of world trade is undertaken in fake goods. As unbelievable as it might sound, according to a LinkedIn post, 6.8% of all goods entering the European Union are counterfeits. The figures stand testimony to how grave and deep-seated the problem of counterfeiting is. Hence, it is short-sightedness on the part of small brands to think they will not fall victim, and this needs to be rectified. It is an obvious fact that if there is consumer demand for a brand, their product(s) or their services, criminally minded opportunists will wish to make the best of this success and mint money out of it. If research is to be believed, four out of every five small and medium sized business suffers from some form of counterfeiting or brand abuse. Despite this, some of them are oblivious to the harm that is being done to their business and ignore the threat that has the potential to hinder the brand’s growth both financially as well as in terms of the brand’s image.
Why Small Businesses are at a Bigger Risk?
Given the size of the business and global customer base, it is easy to assume that larger brands have higher risks of illegal trade since they appear more lucrative to counterfeiters. Even though this is true, larger brands acknowledge this and have brand protection policies handy (most of the time at least). Big brands use the technology of third parties to monitor their products and prevent intellectual property abuse. These solutions implemented by some big businesses are able to find their rogue sites, unauthorized listings on marketplaces, or social posts which are removed. Smaller brands are generally unaware of such infringements and thus are prone to brand abuse, and even if they are aware, they are usually at a loss as to how to implement cost-effective strategies to address the nemesis.
How SMEs Can Be Protected?
Most companies offering brand protection stick to four-point strategies- detection, validation, enforcement, and reporting. Following these strategies helps the brand safeguarding process and thus make it easier to trace and check illegal activities.
Detection – Detection as the word suggests, entails searching for infringements. Anti-counterfeiting technology or solutions like Cypheme uses artificial intelligence-powered software to geolocate and systematically look for illegal operators attempting to sell false products under a brand’s name. This helps the brand in tracing factories and manufacturing grounds trying to replicate their products.
Validation – The following step includes the identification of whether the alleged infringement is a violation of the brand’s intellectual property. This is done to avoid wrongly accusing and punishing a legitimate company.
Enforcement – At this stage, the brand protection solution takes measures to contain intellectual property rights infringement. This is a major step in putting a stop to the illegal trading of goods and services.
Reporting- The last stage is of utmost importance as it provides the brand with actionable information. Analytics are provided to the brand so they can figure out the Achilles heel that supports infringement and can take steps to avoid counterfeiting in future.
Don’t Get it Twisted, Brand Protection is Paramount
The analysis of research by consulting firm Frost And Sullivan shows that counterfeiting could be causing global motor vehicle suppliers a combined loss of more than $45 billion annually. Similarly, frauds in electronic parts cost the industry a whopping $75 billion each year. A global brand counterfeiting report for 2018-2020 shows luxury brands incurred a loss of $30 billion+ in those two years alone. These startling figures are the cumulation of both big as well as small and medium scale brands, and this shows that brand protection is indispensable to every brand, irrespective of size and industry.
What Should Brand Protection Cover?
Every brand protection solution should include some basic features like taking down infringements, protecting a trademark, monitoring marketplace, provide multiple-language protection among others
Taking Down Infringements – This is one of the prerequisites of brand protection and hence becomes a quintessential feature of brand protection solutions. This includes filing IP complaints on marketplaces like eBay and Amazon or notifying domain registrars of scams and counterfeit online shops.
Monitoring Marketplace – The brand protection solution should help in monitoring infringements across different marketplaces, even if a brand’s products aren’t listed on them because even if the products are not available on the marketplace, it does not guarantee fake products of their brand would not be sold on other marketplaces. With solutions like Cypheme’s online brand protection, SMEs need not worry.
Multiple-language Protection – It is obvious that if counterfeiters can sell fake products of a brand on other marketplaces, they can also sell fake products in other jurisdictions with different languages too. Checking keywords in other languages is important to trace fake or unauthorized sellers across other locations. This helps in safeguarding brands from counterfeiting across the globe.
Cost-effective Brand Protection Solutions for Small and Medium Sized Businesses
With a limited budget that is usually spent heavily on marketing and R&D, small and medium sized businesses usually do not have enough to spare on anti-counterfeiting technology or solutions. There are however several cost-effective solutions like Radio Frequency Identification (RFID), QR Codes, Barcodes, Holograms etc that can be considered. The drawback for the afore-mentioned solutions however is that none of them provide a full-proof solution since they can either be tampered with or replicated in one form or the other.
The good news for SMEs is that there is a brand protection solution provider which offers effective, inexpensive, and irreplicable solutions; Cypheme uses Artificial Intelligence-powered anti-counterfeit technology which is backed by an artificial neural network. Our solution involves the use of inimitable labels that integrate with the packaging of brands. It is easy to implement and extremely customer friendly. All customers, manufacturers, distributors, or wholesalers need to do is use the cameras of their smartphones to identify if a product is genuine or counterfeit in less than 5 seconds. The technology allows manufacturers to geo-fence areas where the counterfeiting of their products is widespread; This feature helps in tracking the location of the counterfeiters and their activities. What makes our product truly unique is that despite being powered by AI, it is cost-effective. Cypheme gives partner brands competitive price points with the intention of not driving their prices higher so as not to make them less competitive.
Brand Protection is one of the most important functions of business that every brand needs to pay special attention to. With accessible technologies, it is high time that SMEs took brand abuse seriously and allocated budget for the same.