China Fire Bulletin Issue #1 September 2014 | Page 27

APPARATUS
消防车
branded product and protect valued
channel partners.
What is the overall impact of
the Gray Market and counterfeit
products on Manufacturers?

1. First, there are the multiple
customer satisfaction issues
resulting from counterfeit products
and gray marketing. Anytime
products are purchased outside the
authorized distribution channel,
there is risk that the customer is
buying counterfeit or substandard
products, including products that
may have been altered in some way,
or used products represented as
new. Further, gray market products
can be mishandled or damaged
during multiple shipments all around
the world, which would cause
additional customer satisfaction
issues. Manufacturers cannot
protect against mishandling when
the product leaves the authorized
channel.
2. Second, gray market and
counterfeit products entering the
market place result in shadow
inventory that is not visible to
manufacturers, thus making it
difficult to forecast accurately.

3. Third, the existence of counterfeit
products can cause a decrease in the
demand for your genuine product
as customers and the channel are
unsure of ways to guarantee they are
purchasing quality authentic goods.
4. Fourth, when products move
through multiple tiers there can be
a drain on overall revenues for the
manufacturers and their channel
partners.
5. Fifth, in certain instances, this
may also void the manufacturer’s
warranty, thus disappointing
consumers and hurting the
manufacturer's reputation.
What can the Fire Fighting
Bureau decision makers do
to protect themselves against
counterfeit and gray market
products?

The ultimate responsibility lies
with the purchasing decision maker.
It may add a level of complexity
that has never been part of the
specification process in the past,
but doing so will help to ensure that
the XFD purchases only genuine
products and can expect the future
benefits of manufacturer support
and service if, and when, it becomes
necessary in the future.

Perhaps most important, however,
is the safety considerations of the
users, the firefighters. Counterfeit
or gray market fire fighting
equipment is almost always sold by
agents competing on price alone.
This aggressive pricing discount,
compared to other known genuine
brands, should be ruthlessly
analyzed. Manufacturing costs of
similar products, no matter where
goods are made in the world, are
typically very similar, +/- 10%
maximum. If a differential exceeding
this is seen in competing products,
this should immediately sound
alarms of potential manufacturing
defects, bad engineering, poor
quality materials used, and overall
unsafe and unsound for firefighter
use.
1. During tender