Well the knock- out punch for any product comes from none other than the knock off.(sounds rhyming right!).
Well he is undoubtedly the villain in your product lifecycle curve and is responsible for your maximum sales loss. But incredibly the knock offs display certain characteristics common to all sectors:
1. Your ex-vendor: You were the one who outsourced your product to him to make it cheaper while manufacturing, however things fell apart and now he uses the same technical knowhow to become your biggest threat !
2. Price war: That’s his biggest asset- he sells for less !! The product looks identical but sells at half the price.
3. Loopholes in the law: The knock offs are one of those players who are fully aware of the loopholes in the law, especially the geographical limitations- they structure their business accordingly and very rarely get booked.
4. Launching their own brand: This is a recent trend – they have started to invest in R & D in a bid to become a full scale player and not just as price warriors ! Quite a few knock offs are going this way.
Price is undoubtedly a very big factor while making buying decisions- however it is indeed not fair to let someone use your technical knowhow and eat your market share. The best way to deal with this menace is by having stringent protection laws and more importantly by implementing it.