Their brand-those three little black stripes that tell a customer it’s the real deal-acts as a filter, attracting only trustworthy and serious consumers. As this excellent post on the economics of knockoffs from Freakonomics points out, brands like Adidas benefit from passive quality control because customers who really want quality already know to skip the knockoffs. Some companies use imitators to their advantage. Fiber and composite manufacturer Honeywell directly warns customers of knockoffs on their website, and draws attention to quality control of their brand names. Other companies may take a head-on approach to imitators. By changing marketing tactics and focusing on a new demographic, Whole Foods seems to be regaining its throne as the king of natural foods. 3 In recent years, the grocery giant had begun to lose its hold on the market for natural groceries as more competitors flooded the market hoping to capitalize on the trend.

Whole Foods made a big stand against imitators this year when it announced the launch of its “365” store line, which targets a younger, lower-income demographic than its traditional audience. The market is filled with examples of companies that have turned the tide against imitators. Luckily, quality and service always trumps knockoffs. If you started reading this post looking for tricks or a quick fix, unfortunately, there isn’t one. That’s right: By offering better service and higher quality products, you can siphon customers from your imitators and win your old customers back. Did you know that this dreaded churn is primarily caused by poor customer service? Customers who report a poor service experience are even more likely to leave for a competitor than those who are unhappy with prices or product quality. When dealing with knockoffs, customer churn is actually your best friend. You may have heard the term “customer churn,” that slow attrition of customers over time through various causes. When you can’t come near competing on price, what can you do? They Can’t Fight Quality Taking the fight out into the market is dangerous too, because knockoffs tend to succeed, at least at first, with their cheap prices. Trying to fight in court can be expensive, time-consuming, and very dicey depending on patent or copyright laws. The higher the false discovery rate, the more customers you lose before they even reach your brand. As a restaurant, you may be astounded to find a restaurant down the street has copied your menu and sells cheaper, faster versions of the same meals.Īll these imitations are poison to your brand, and contribute to a marketing measurement called “the false discovery rate.” This refers to how often consumers discover an imitation instead of your real product. The auto industry is haunted by knockoff cheap brake pads that pose dangers to drivers.

And counterfeits aren’t always about brand appeal or copying trademarks, either. Toys and clothes are regularly counterfeited, especially when it comes to online or bargain shopping. Shampoo companies face imitators that sell copied products with off-market or dangerous ingredients. 1 It’s easy to imitate a product, especially if you are careless about quality.įew industries are exempt. But figures show that knockoffs cost American businesses around $250 billion per year. It’s tempting to think of knockoffs as an overseas problem. From the competitor next door to the online seller on the other side of the world, chances are increasingly high that at some point you’ll face problems with cheap imitations trying to undercut your prices. Well, I have some bad news: knockoff products can affect any industry, and globalization and the rise of digital shopping only make it easier for imitators.

You are probably familiar with knockoff brands as they relate to the fashion world-designer shoes, handbags, and luggage passed off as the real deal. Knock-offs come in all shapes and sizes, but ultimately, the best weapon you have against them is product quality.

Knock offs