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R. Savitha

Lookalikes are fun, especially in the wax museum. But not when a lookalike product passes off for the real thing. Here's a software initiative to deter counterfeit or fake products.

BRAND is a company's greatest asset. Brand is a promise of value and an assurance of quality that every customer looks for. Yet counterfeit products, artful lookalikes, are constantly entering millions of homes and bleeding brands of their reputation.

Brand protection has tangible and intangible benefits as it reduces revenue loss and protects reputation which is invaluable. And companies know all this all too well. But how do they keep fakes at bay?

The Mumbai-based PRS Permacel Private Ltd says it can pitch right in here to help companies combat counterfeits. The company has come out with a solution called `Kavach', which, it claims, is India's first fully integrated approach to brand attack.

It is a customised solution that meets the specific needs of a product, involving the customer in the process of protecting himself, says N. S. Shenoy, Vice-President, Marketing, PRS Permacel. The company was founded in 1927 as the industrial products division of Johnson and Johnson to produce and market masking tape or the cellotape.

Levels of testing, security

What does Kavach do? It has built-in testable features into security devices. These features empower the end-user to check for authenticity. They also enable manufacturers to raise awareness amongst end-consumers, dealers and sales staff. The product uses a combination of visual/optical technologies such as holograms, cutting-edge printing techniques and specialised inks to create a security device for the product, says the company.

According to a FICCI study, during 2001-02, the impact of counterfeiting was highest in the software sector to the extent of 70 per cent, resulting in a loss of $365 million in India and $11,000 million globally. Next cameauto parts where the impact was about 35 per cent, and loss $800 million in India and $12,000 million globally. The music industry came next, with figures between 30 to 40 per cent, and loss of $80 million and $4,300 million, respectively. Down the ladder came the pharma sector with 15 to 20 per cent impact, and loss of $800 million and $12,000 million, and then the FMCG sector with between five and 15 per cent impact, resulting in a loss of $600-$1,800 million in the Indian market and $30,000 million in the global arena.

The Kavach system begins with the identification of the current security problems of the product. Each product will have different security needs, depending on the level of brand attack. The Kavach consultant evaluates these needs in stages and develops a customised brand protection system that addresses the specific needs of the product. Level one of protection is the visual identification, inviting the customer to participate in protecting himself. Level two is a feature that requires consumer involvement to confirm the genuineness of the product; it could be the feel of the product, the look, etc. Level three permits manufacturers to track and trace a unit right from the factory floor to the retial outlet, enabling them to home in on the exact area of weakness in the supply chain. Level four is legal protection, an optional feature which is built in only if the manufacturer would like to use it for legal recourse against brand attackers. To protect its value in the process of legal recourse, the existence of this feature is only disclosed to the key executives and Kavach executives would act as expert witnesses in case of a legal suit filed by the manufacturer against a brand attacker, Shenoy says. Level five is packaging which is determined by the features of the product.

Poor awareness

Shenoy says a survey was conducted in Chennai where a fake product was given to 100 customers. "Out of the 100 people surveyed for this, about 85 did not realise that they had got a duplicate product. About five persons said `it's my fate,' another four were angry and were on the verge of marching to the distributor, which they did not finally do, and one person said he was going to write to the company about the fake product being in the market.'' Shows how much awareness consumers have about the products they want to buy.

He points out that India is the world's `leading producer' of counterfeit drugs and the FMCG industry in India loses Rs 2,600 crore per year to fake goods manufacturers. "Name the product and you will find between two and 200 copies of it that compete for customer attention. At times it also happens that in the usual packet of 10 tablets taken over the counter by customers, a couple of it maybe fake, which had been removed at some point of time in the chain.'' Scary.

In rural India, where the incidence of piracy is four times that of urban India, the impact of counterfeits is even more pronounced. However, the consumer is either unaware or apathetic to the menace. "Since spurious goods sold under fake brands physically impact the consumer, a consumer push is needed to act as a necessary catalyst to address the problem,'' he says.

What about pricing of the product? For a Rs 150-crore turnover company, the installation costs would be around Rs 80 lakh.

And what about competition? "There is competition in this field but it is a combination of solutions that's being offered, and not a holistic solution such as what we offer," he says. "This is because the technology which is available in the West for this kind of a problem has been purchased by PRS and nobody else will be able to develop the kind of solution that Kavach offers,'' he claims.

"The total potential in this country for this product ranges between Rs 150 and Rs 200 crore and within the next three years we expect to bag at least Rs 30 crore of this", he says.

The national rollout of the product will happen in another three months' time, he says.

Also, there are three confirmed clients who are in the process of revamping their existing system, he says.

rsavitha@hotmail.com

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