RETAIL MANAGEMENT ASSIGNMENT-1

CAN KNOCKOFFS KNOCKOUT YOUR BUSINESS

(HBR CASE STUDY)

SUBMITTED BY:

RAHUL KUMAR, B-36

PRN: 22020441204
BATCH: 2022-2024

Summary of the Case

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Ruffin CEO Bill Bronson is on a mission. Counterfeits of his company’s adventure gear and
clothing are on the rise, and Bronson is hell-bent on stopping them. He has hired top-notch
investigators to track down the criminals, invested in technology that will help distinguish his
products from look-alikes, and pushed online vendors to stop selling fakes. All of that has cost a
lot of money, however, and the problem seems to be getting worse. How far should Bronson take
his campaign?

List of Characters in the Case

SI.No. Name of the Character Role in the Case

1 Ted Dwayne Client service director for
Brand Protection Services
Limited
2 Bill Bronson CEO (Ruffin)
3 Kamil Zafir In-charge of operations for
Ruffins in the Middle East
regions
4 Nels Volgren Design in-charge
5 Lily Wang Director of East Asian sales
and operations
6 Ben Kilgore Chief legal officer (Ruffin)

China is the leading source of counterfeit goods found at EU borders

List of Problems faced by the business

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SI.No. Problems Encountered
1 Better manufacturing techniques have led to a significant improvement in
counterfeit products' quality. Customers' reluctance to purchase these things
decreases as they seem more and more "real," increasing demand.
2 Counterfeits can quickly dilute brand value because of overexposure.
3 The black market grows as a result of counterfeiting, particularly during
recessions, which reduces revenues for the company.
4 The counterfeiting industry has advanced. Customers are unable to
distinguish between genuine and counterfeit goods.
5 When customers connect the knockoff goods with the genuine brand, the
reputation of the business is at risk.
6 The major connection between the global spread of international terrorism
and counterfeiting has gone unnoticed by the government for many years.
7 In order to stop the promotion of these criminal activities, it is necessary to
develop and put into action strict regulations and procedures. There is a well-
established international network that serves as a source of funds for doing
so.
8 The numerous departments tasked with monitoring these actions lack
transparency, willpower, drive, and cooperation.
9 In certain circumstances, the firm wants these fraudulent items to spread
across the market because they believe it would boost the value of their
brand and encourage more people to buy it, which will ultimately damage
their brand's reputation over time.
10 Large-scale luxury goods fraud will surely leave consumers wondering how
a legitimate brand can be so readily imitated, which will eventually cause
them to lose faith in the brand.
11 It is believed that counterfeiting is a social, political, and economic issue.
Socioeconomic consequences, effects on rights holders, effects on
consumers, and effects on the government are the main effects of
counterfeiting activities.
12 Contrary to legal goods manufacturers, counterfeiters are not subject to
inspections. They avoid paying taxes, which costs the government money.

Theories Proposed

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 SI.No. Theory
1 Theory of Reasoned Action
2 Theory of Planned behavior
3 Theory of Consumer behavior towards counterfeit goods
4 Institutional theory
5 Theory of Cognitive dissonance
6 Psychometric theory

Description of theories and why they are suitable as per the context of case
study

Theory Description and suitability of proposed

Theory of Reasoned Action (TRA)
theory
 The theory of reasoned action offers a
strong framework for investigating
consumer attitudes in relation to purchase
intentions for counterfeit goods. According
to the Theory of Reasoned Action,
consumers deliberate about the effects of
their choices and select the one that would
provide the best results. Additionally,
customers are more inclined to follow
socially acceptable actions.

 A consumer's decision to buy a counterfeit

Theory of Planned behavior (TPB)
item is therefore anticipated by their desire
to buy the fake commodity, according to
TRA as applied to counterfeit buying
behavior. It is widely used to research
consumer purchasing patterns for fake
goods. One objection to this idea is that,
when it comes to behavior intention, it
might not be feasible to distinguish between
personal and societal influences.
 The notion of reasoned action is expanded
upon by this. Perceived behavioral control,
a new predictable variable added by TPB. It
is possible to define the phrase as "the
person's belief as to how easy or difficult
the performance of the behavior is likely to
be." This theory postulates that behavioral
intention is influenced by perceptions of
behavioral control.

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  TPB is frequently used to assist consumers
understand why they choose to buy fake
items. According to TPB as it relates to
counterfeit products, customers' decisions to
buy a counterfeit item are impacted by both
personal and societal aspects.

 The study of social and psychological

Theory of Consumer behavior towards
counterfeit goods
variables is supported by TPB.
 The participant's intention to buy counterfeit
items was subsequently positively affected
by consumer perceptions of fake goods. A
theory of consumer behavior towards
counterfeit goods may be developed with
the help of a better knowledge of why
customers knowingly buy counterfeit items.

 Then, in an effort to discourage such

conduct, practitioners might use this
information.
Institutional theory  Recent news stories and social media posts
seem to indicate that customers' views
toward fake items are changing.

 It is possible to use institutional theory to

assist understand this occurrence. The focus
of this theory is on "the process through
which social expectations of "correct"
conduct impact the organizational structure
and procedures.

 Since it has been utilized by researchers to

Theory of cognitive dissonance
Psychometric theory
learn more about how different actors or
marketplaces get legitimacy, this theory
seems to be the most relevant one to apply
when examining the probable evolution of
consumer attitudes toward counterfeits.
 The notion of cognitive dissonance offers a
viable framework for understanding how
rationality and moral justification affect
customers' decisions to buy counterfeit
goods.
 It is a technique for measuring personality,
and the results are used to create
personalised, highly focused marketing
campaigns.

Solutions to the Case

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 The company should prepare to open additional single-brand storefronts and high-end
retail locations to guarantee that clients are receiving genuine Ruffin’s items. These shops
might provide a platform for fostering one-on-one interactions with clients and a means
to exhibit Ruffin's particular product lines in a manner that counterfeiters cannot.
Partnering with other local players, such as department stores, will also help him to open
up more market channels.

 The CEO should keep up his initiatives to be at the forefront of innovation and
technology. In particular, if Ruffin informs customers as much as possible about what it
is doing to safeguard the originality of its goods, this might be a significant source of
difference for the business.

 Since individuals who are determined to purchase a knockoff will do so anyway,

aggressive promotion of their anti-counterfeiting tactics, particularly the inclusion of a
serial code on each product, will aid in educating consumers and helping them make
informed decisions.

 Bill should work on rallying his management team. The CEO and his team are not on the
same page.

 Bill needs to make his counterfeit prevention program more effective. He ought to hire a
third-party investigator like Ted Dwayne or a group of independent attorneys with
expertise in developing in-depth brand-protection strategies for businesses engaged in
manufacturing, distribution, and retail.

 To be effective, the electronic-tag readers Ruffin is using need to be put into the hands of
the people on the front lines—law enforcement or national customs personnel—not an
easy or inexpensive undertaking.

 Ruffin's contracts with distribution partners should have strong restrictions on their
operations, for example, forbidding items from moving to any locations other than trusted
retailers where you can track them through point of sale.

 In order to prevent all but the most dedicated counterfeiters, Bill should keep going after
the biggest producers. He should not aim to eradicate the industry entirely; instead, he
should focus on making an example of the illicit makers. The law of diminishing returns
will make such an expensive endeavor, to start with, and it would also be impossible.

 In order to prevent the proliferation of counterfeiting act, Ruffin can break up the
production process among multiple locations and vendors. Produce the parts in one
location and them assemble them in another. This will prevent anyone from knowing the
whole process.

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 Register the firm name and logo as trademarks. This will assist buyers distinguish the
brand from imitations and help the firm stand out from them.

 A federal provision known as the Lanham Act enables you to bring a lawsuit for
trademark infringement. You must provide evidence of the distributor's sale of fake
goods in order for your claim to be successful. Even if the perpetrator is aware that the
goods are fake, it still counts.

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