Getting Real About Fakes

By Peggy E. Chaudhry and Stephen A. Stumpf

August 17, 2009

As the counterfeit trade booms, companies are rolling out massive campaigns to get people to stop buying fakes. But the messages they use are often off the mark.

Companies have tried everything from threatening prosecution to linking phony products with organized crime. But marketers often don’t pay attention to what actually drives people in particular markets to buy counterfeits and what messages will actually work to curb demand of fake goods.

Companies, for instance, might roll out ads in a country stressing that fake products are of poor quality. But those ads might ignore the fact that local consumers have little disposable income and consider knockoffs a bargain—so they are willing to accept a price-quality trade-off. A better approach might be to stress that the phony goods, such as fake cigarettes, are funding terrorism or, in the case of counterfeit pharmaceuticals, are actually killing people.

To figure out how companies can improve their antipiracy marketing, we surveyed consumers in five large markets—Brazil, Russia, India, China and the U.S.—to see what would make them opt for knockoffs. Then we used that information to figure out what messages might get people to stop buying the illegitimate goods.

Why Consumers Buy

We presented consumers in each market with five possible motivations for buying counterfeits in two categories—movies and drugs—and asked them to rank the factors on a seven-point scale of importance. Here’s what they said about each.

1. Quality and performance. Consumers would buy a fake if they thought it was just as good as a legitimate product.

Only U.S. consumers ranked this as an important factor that would influence them. Elsewhere, this attribute was just “somewhat” important—and Russian consumers ranked it not important at all. Astonishingly, consumers in these country markets valued the quality of the fake medicine less than they did factors such as reduced price and availability.

On the other hand, the quality of bootleg movies was ranked as very important for Russian, Brazilian and Chinese consumers, and less so for people in the U.S. and India.

2. Cost. Consumers would buy a fake because they cannot afford a genuine product.

Not surprisingly, almost all consumers ranked this as a very important motivation for pursuing fake drugs and bootleg movies alike. The two exceptions: Chinese consumers said this factor was only somewhat important when it came to drugs; U.S. consumers said the same about movies.

3. Sentiment. Consumers would buy a fake because they do not like the big businesses that make the authentic products.

We expected some resentment here, since drugs and movies are usually produced by large corporations, and the people who buy counterfeits may believe that the industry is price-gouging consumers. But only in China did consumers express disapproval of the large movie studios as a significant motivator for buying bootlegs. And only U.S. consumers showed an anti-big-business sentiment for both the movie and drug industries.

Their Brazilian, Russian and Indian counterparts did not concur, and rated this as an unimportant justification.

4. Ethics. Consumers would buy a fake because they do not think it is illegal or immoral to do so.

In this area, consumers had very different attitudes about movies and drugs.

In Brazil, India and the U.S., consumers said that consumption of fake pharmaceuticals was an unethical behavior. In Russia and China, it was not important at all—in effect, consumers would buy the fake pharmaceuticals even if they realized it was an immoral or illegal act.

With movies, on the other hand, consumers in all markets but Brazil said that ethical behavior was unimportant when it came to obtaining counterfeit movies. (In Brazil, it was just somewhat unimportant.) These consumers simply do not see bootlegged movies as illegal or morally wrong, perhaps because of the ease and anonymity of Internet downloads and the widespread consumer acceptance of obtaining fake movies. In our survey, 50% of 1,910 consumers readily admitted to obtaining a bootleg movie.

5. Ease. Consumers would buy a fake because it is easy to obtain.

As with ethics, this factor brought up a big divide between movies and drugs. The ease of obtaining fake movies was a very important motivation in each market. However, with drugs, ease was an important factor only in the U.S., just somewhat significant in Brazil and India, and not significant at all in China and Russia.

Consumers, in other words, face different degrees of easy market access to counterfeit drugs and may pursue counterfeit drugs even if they are tougher to obtain.

What Companies Can Do

So, how can companies craft their marketing to answer these attitudes? Here are some messages they might want to push.

1. Fakes Are Poor Substitutes.
In countries where people don’t place a high priority on the quality of phony drugs, companies should inform the public about the dangers the drugs pose, especially when treating critical conditions. Companies should hammer home the idea that fake drugs are not generics—a common misperception—but dangerous lookalikes that can kill. For instance, one recent report says that pirates in countries such as China and India have used chalk, dust and contaminated water to make counterfeit drugs.

Drug makers should also highlight the fact that phony drugs could pose serious health risks not only to individuals but to nations. In some African countries, for instance, there are large counterfeit markets for treatments of malaria, among other serious conditions. If the antimalarial counterfeit contains a low dose of the active ingredient, it is actually helping the parasite to develop a resistance to the genuine medicine.

Movie makers have taken a similar strategy, and used trailers that reinforce the idea that quality is much worse for bootlegs. For instance, movies shot with camcorders in a theater usually have a herky-jerky picture and intrusive audience noises.

2. Pirates Are Not Robin Hoods.
Companies should emphasize that pirates are not philanthropists and are lured by the high profits of selling fakes. Even if, say, pirated movies are offered free on the Internet, suppliers at the top of the piracy supply chain often provide the digital fakes more as a challenge to the companies that own the intellectual property.

What’s more, many consumers think that counterfeit drugs help poor people by offering them a bargain. So, drug companies should stress that fakes end up hurting people by giving them potentially ineffective or dangerous treatments and many consumers unknowingly obtain counterfeit drugs.

Movie studios, meanwhile, should look to China’s successful antipiracy efforts for ideas. One antipiracy campaign plays up nationalism to get the Chinese consumers to buy legitimate movies. The effort links counterfeiting to organized crime and shows how the revenue lost to piracy hurts the nation’s film industry, robbing it of funds that could be used to produce smaller, independent movies.

Some Western film companies, meanwhile, have come up with their own successful measures for the Chinese market, such as offering prizes and contests for people who buy legitimate movies.

3. We’re Not Faceless Corporations.
Dislike of big business is a factor only in China and the U.S. China’s antipiracy campaign addresses this attitude, once again, with nationalism: If you steal movies, the message goes, you’re robbing resources from the country’s culture—not just big, impersonal companies.

In the U.S., one possible solution is for big businesses to carefully publicize their good works—and give solid reasons why their prices are so high. Pharmaceutical companies, for instance, should emphasize that they rely on a few blockbuster drugs to fund future research. So, seemingly high drug prices are actually underwriting potential advances that might help countless people.

4. Push Ethical Concerns.
In Brazil, India and the U.S., a clear conscience is a somewhat important motivation for buying counterfeit drugs; consumers think the practice is morally and legally sound. In these markets, drug makers should emphasize that the sale of fakes is not only against the law but also unethical, since counterfeits can end up harming consumers.

It might also help to stress the connection between counterfeits and organized crime. The pirates are not philanthropists helping the underprivileged, but profit-seeking criminals who provide useless or harmful medications with very few legal repercussions.

With movies—where an overwhelming majority of consumers in all markets studied had a clear conscience about buying fakes—getting people to change their ways is potentially tougher. Bootleg movies are not a matter of life and death, and they can be obtained even more easily and anonymously than drugs. The best approach may be to appeal to people’s basic sense of right and wrong, civic responsibility, and their personal risk of both civil and criminal penalties levied for engaging in this illicit consumption. Clearly, many people want to believe that counterfeits are ethically and legally sound. Remind them that the opposite is true.

5. We’re Making Things Tougher.
Unfortunately, the final motivation—counterfeits are easy to obtain—will be tough to battle with marketing alone.

As long as people know they can go online and get fake products with a few clicks, they will laugh off advertisements warning them about, say, digital copyright protection. (Some say that digital piracy actually provides a distancing effect for consumers, since they feel their illicit behavior is anonymous.) Likewise, as long as policing of counterfeits is spotty, people will not respond to ads warning them about the legal risks of buying fakes.

For these messages to have teeth, companies must push for tougher, more effective policing of both the legitimate and illicit supply chain, and sharper penalties. They must also come up with speed bumps that make it harder for crooks to copy their goods. For example, the Food and Drug Administration advocates the E-Pedigree system for prescription drugs, which documents each prior sale, purchase or trade of the drug to protect U.S. consumers from counterfeit pharmaceuticals.

Photo: WHO and MPAA

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