Counterfeiting of Luxury Brands

Firms spend their resources and time in building their brands over the period of years to have prominent positions in consumers‟ minds and to build the desired image equivalent to the brand identity. For luxury brand owners, brands are the most valuable – though intangible – assets of the firms; a brand without the brand itself is just another product nowadays. Where brands have been facing the challenges due to a troubling phenomenon: the „democratization of luxury‟ (Kennedy) since the last decade, the practice of counterfeiting strong luxury brand goods is another major problem. One of the main problems that luxury brands are facing in today‟s globalized world is of counterfeit goods (Hilton et al 2004). Counterfeiting has become a significant economic phenomenon (Bian and Moutinho 2009; Hamm 2009), and is referred as „the crime of the 21st century‟ (ACG Report 2003), „world‟s premier criminal enterprises‟ and „sophisticated network of criminals‟ (Gordon 2002), „organized crime‟ (McCaughey), and „threat to legal marketers of brands‟ (Perez et al 2010).

Counterfeiting - global problem of enormous magnitude – about which James Moody, former Chief, FBI Organized Crime Division warned saying that counterfeiting will become the crime of the 21st century is considered as one of the oldest crimes. The counterfeiting of luxury products – sector in which counterfeiting is widespread (Hilton et al 2004) - is a longstanding problem itself. But in today‟s world, brand names of leading luxury goods manufacturers that has been synonymous with sophistication, elegance and style is facing a significant threat from counterfeits and cheap knock-offs – counterfeits are called by many different names like imitation, fake, bogus, copy and overrun, which are little different in meanings, but there is not much difference in creating similar problems for genuine-item manufacturers (Yoo and Lee 2005).