The Black Market in China……………………………………………………………..4
Websites………………………………………………………………………………….4
Solution: Developing a Counterfeit Enforcement Program…………………………………5
Overview…………………………………………………………………………………5
Three Step Approach…………………………………………………………………...6
Time Table and Costs…………………………………………………………………..6
Conclusion……………………………………………………………………………………….7
Works Cited……………………………………………………………………………………...9
Executive Summary
The North Face brand founded in 1966, and now a part of the Vanity Fair Corporation, prides itself on its high quality, innovative, and authentic designs. Millions of dollars are spent annually on research and development where the Design and Development Team are constantly experimenting with new materials and components to provide their customers with the best possible products available on the market. These products are also tested in labs and on outdoor excursions in some of the worst conditions possible to ensure their quality and effectiveness. The North Face continues to be recognized as one of the top outdoor-lifestyle brands and is rightfully acknowledged for its authentic, sophisticated, and unique style.
However, The North Face brand, along with many other retailers, has been dealing with the issue of counterfeit products being produced and sold on the internet, at flea markets, and on busy city streets. Most of these fake items are coming from Asia; mainly China. The VF Corporation is losing a significant amount of money and customers, and the image the brand has worked so hard to achieve is now being threatened by these counterfeit operations. There have been past cases where the North Face has been able to stop illegal businesses, terminate websites, and recover money lost. However, it is still a serious issue that continues to get worse. It is critical that the proper steps are taken to significantly decrease if not put an end to these illegal businesses.
Throughout the following pages I will provide detailed information on
1. The problem, which is the illegal counterfeiting operations, and
2. The Solution, which includes detailed recommendations for developing a Counterfeit Enforcement Program
Problem: Illegal Counterfeiting Operations
Counterfeiting operations has become a huge problem for many different popular, well-known brands and corporations, especially those from the United States. The North Face is now in danger of having a tarnished image, and the brand may lose its authentic, high quality reputation. Counterfeit operations cause companies to lose a significant amount of money, available jobs, and their high status. These are various, undeniable statistics about these operations from 2006 Report (CNN Money):
Contributor to the bilateral trade deficit of $232.5 billion
Overall trade gap of $764 billion
Counterfeit goods crossing international borders totaled $250 billion
2.5 million jobs have been lost due to counterfeit product
The Black Market in China
The United States government has continuously filed formal complaints with the World Trade Organization concerning the U.S. copyrighted products being violated by the countless number of counterfeit operations taking place in China. Chinese violations cost copy-right protected industries $2.3 billion yearly (CNN Money). For example, one of the largest markets in China, the Xiushui Market in Beijing sees over 20,000 customers a day, and sells approximately $12 million dollars worth of counterfeit goods annually. (ACG)
