The Problem of Commercial Piracy and International Strategies to Counter It (SMUnit VIII-4 of 4)

The Problem of Commercial Piracy and International Strategies to Counter It
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The Problem of Commercial Piracy and International Strategies to Counter It
The biggest problem posed by commercial piracy is the reduction in the sale and retail prices of legitimate products that have been counterfeited. Given the low cost of production that counterfeiters incur, they are able to flood the market with cheap products that sell below the market price of the original copies (Committee on Intellectual Property Rights in the Emerging Information Infrastructure, 2000, p. 189). This has the effect of eating into the market share and profit margins of the original product. This is especially the case in third world countries where consumers are attracted to cheap products. A good example is in the mobile phones industry, where China managed to sell millions of counterfeit Nokia phones in African markets. Under such circumstances, it is difficult for the marketers of the original products to compete favorably in pricing wars with the counterfeit products.
Commercial piracy also makes it difficult for companies intending to go global to penetrate new markets where counterfeit products have already been introduced. This is because the original product will ent...