Several strategies that can capitalize on advances in information technology are available to managers for combating the gray markets (see Figure 2).
In all, distributor input of changing conditions will not only enhance the forecasting and identification of gray markets, but it will also offer the manufacturer a better understanding of its worldwide markets.
His presentation will touch on a number of issues regarding the IT counterfeit and gray markets, including how they affect consumers, the impact of the sales process, potential impacts of non-compliance on OEMs, the channel and end users, and how to curb or prevent the problem.
The Alliance for Gray Market and Counterfeit Abatement (AGMA), a non-profit organization dedicated to curbing the gray marketing and counterfeiting of technology products around the globe, today announced its President, Nick Tidd, will speak at a IQPC event on Anti-Counterfeiting and Brand Protection, that takes place October 25-27, 2006 at the Affinia Manhattan Hotel in New York City.
Gray markets / Because ethical drug shortages typically are a function of short-run (less than two years) inelasticity of demand and supply, those shortages have led to the development of gray markets for these drugs.
But in health care, this gray market has two problems: First, many people are morally troubled by the dramatic increase in price that prescription drug gray markets produce.
Gray markets are not counterfeits--the products are legitimate and involve the sales of trademarked products by way of channels of distribution that are not authorized by the brand holders [Duhan and Sheffet 1988].
Beneficial Effects of Gray Markets for Brand Owners
A gray market forms when a distributer buys a manufacturer's goods, imports them into the United States, and competes with the trademark holder's goods, often times at cheaper prices.
Gray market proponents argue that the parallel exchange provides consumers with affordable goods otherwise not within their purchasing range; however, pharmaceutical drug shortages in the United States have created an opportunity for gray good pirates to price gouge, taking full advantage of the low supply and high demand.
At its core, gray market leakage results from a lack of discipline over the manufacturer's end-to-end value chain.
The Alliance for Gray Market and Counterfeit Abatement, an initiative composed of technology companies, reports that "over $40 billion in legitimate IT products move through the gray market channel each year, resulting in $5 billion in lost profits annually to IT manufacturers.
1) Since gray market
goods are not counterfeit goods, they cannot infringe trademark law and are not, therefore, subject to criminal penalties.
Furthermore, manufacturers' goodwill need not be tarnished by their own refusal to warranty goods sold in gray markets
A Premier healthcare alliance analysis, of unsolicited sales offers made by gray market
vendors to hospitals, shows that the average mark-up for shortage drugs was 650 percent.