Conceptual Issues of Global Counterfeiting on Products and Services

Counterfeiting is a global problem of enormous magnitude. Despite its obvious importance, relatively little attention has been paid to the management of counterfeiting. This paper considers the difficulties of measuring counterfeiting and provides evidence of the magnitude of the problem worldwide. The focus is on counterfeiting of privately produced goods and services, rather than the issue of the counterfeiting of currency per se, which is a somewhat different though related issue. A conceptual framework of the private and social costs and benefits of anti-counterfeiting measures is also provided. The framework highlights a number of key driving forces of counterfeiting, including existence of unsatisfied demand at the prevailing prices – a demand that is fueled by advertising and other promotional activities. The paper draws on a range of conceptual and empirical work to develop an agenda of items for company policy maker