Author: Paul Curwell
Background
In June 2021, I was privileged to have an article I wrote on Detecting Product Diversion in the quarterly edition of Michigan State University’s Brand Protection Professional (BPP) magazine. BPP is part of the outreach program for the Center for Anti-Counterfeiting and Product Protection at the University.
Read:
Curwell, P. (2021). Emerging Supply Chain Integrity Practices: What this means for detecting product diversion, Brand Protection Professional, June 2021, Centre for Anti-Counterfeiting and Product Protection, Michigan State University.
The Centre for Anti-Counterfeiting and Product Protection (A-CAPP) is a non-profit, interdisciplinary research focused centre which is recognised worldwide as a leader in anti-counterfeiting and brand protection. A-CAPP operates a range of research, outreach and education initiatives including a Professional Certificate in Anti-Counterfeiting and Brand Protection which provides foundational knowledge for professionals new to this area. Reasonably priced, I have taken a few of their short courses which are informative and delivered 100% online at your own pace.
So what is product diversion anyway?
Also known as “illicit diversion”, product diversion “refers to goods that are redirected from the manufacturer’s intended area of sale or destination to a different geography or distribution channel” (Trent and Moyer, 2013). Often this terminology can be used interchangeably with the term “grey market”, despite one term referring to a fraudulent act and the other where the proceeds of that fraudulent act are sold.
The impact of diversion is that legitimate product may be sold into grey markets, in breach of a manufacturer’s sales contracts for that geographical location. This causes margin erosion for manufacturers, erodes legitimate distributors of their market share and deprives them of sales revenue, and can damage the brand through invalid warranties and returns policies for consumers.
Further reading
- Curwell, P. (2021). Emerging Supply Chain Integrity Practices: What this means for detecting product diversion, Brand Protection Professional, June 2021, Centre for Anti-Counterfeiting and Product Protection, Michigan State University.
- Post, R.S, and Post, P.N. (2007). Global Brand Integrity Management: How to Protect Your Product in Today’s Competitive Environment, McGraw-Hill, 1st edition.
- Trent, C. and Moyer, D.C. (2013). Assessing the risks of counterfeiting and illicit diversion for health care products, A-CAPP Paper Series, https://a-capp.msu.edu/wp-content/uploads/2018/05/PAPER-SERIES-Assessing-the-Risks-of-Counterfeiting-and-Illicit-Diversion-for-Health-Care-Products.pdf