Combating deceptive counterfeiting in digital supply chain

Abstract

Purpose Product counterfeiting has been ubiquitously observed in various segments of the supply chain. The intrinsic values of brands create more opportunities for counterfeiting. The damaging reputation of such brands leaves them to deal with the fallouts of counterfeits. Hence, such companies address them mainly through legal action, price and quality strategy. However, consumer characteristics and the random distribution of counterfeit products to the consumer types affect the effectiveness of a counter strategy. This paper aims to generate insights on how to leverage digital technology to curb counterfeit entities with consideration of consumer characteristics and the random distribution of counterfeits to them. Design/methodology/approach The authors used game theory and vertical differentiation model to understand and encounter deceptive counterfeiting of brand products. The study understands the economic relationship between a brand product manufacturer and consumer types based on their awareness. Further, the authors have considered different cases in the model to gain useful insights. Findings The results reveal that when the consumers are proactive, informed and value-conscious brand product manufacturers take digital technology counterstrategy to earn the maximum revenue. Hence, this analysis highlights that the effectiveness of a counterstrategy critically depends on the consumer characteristics, whether they are proactive, informed or unaware. Practical implications The study outlines that brand product manufacturers must emphasize on the digital supply chain, product redesign and product tracking facility to empower informed and value-conscious and proactive consumers. Moreover, the government should take steps to create awareness among uninformed consumers via information campaigns. Originality/value This paper incorporates the role of consumers and brand product manufacturers to understand and address the deceptive counterfeiting issue.