Techniques for Controlling Gray Market Violations
Techniques for Controlling Gray Market Violations
Gray markets have emerged as a major problem in the current business world . For supply chains and for brand owners alike , the growing incidence of gray markets comes forth as a major issue which dilutes a brands ' presence , damages the relationship among distribution partners , raises concerns regarding a company ' s reputation , induces channel conflicts and eventually leads to legal liabilities . Gray markets are hard to control given the highly distributed data regarding such activities . A number of companies have established strict standards which call for severe punishments of such operators . However , this solution alone is highly ineffective . Following are some utile techniques to control gray markets :
Develop Proficiencies to Sense Gray Market Violations and Their Extent
The problem with gray markets is that techniques which uncover these sales are highly underdeveloped . The best way to detect gray market violations is to make use of periodic but unannounced audits of distribution partners and their relevant records . Other than this , a more cost effective method is to establish toll-free numbers which can be used by authorized dealers for reporting such activities .
Contracting with market research firms is to gain an estimate of the overall extent of gray market violations of specific products and services is also a useful suggestion . Given the wide knowledge base and industry expertise of these firms , they have a greater understanding of the market operations . High-tech solutions may also be used to track the products through different distribution channels . Sophisticated tracking software , Web crawlers which compare different URLs of authorized dealers in order to detect traces of unauthorized sales , inert and traceable substances in products and RFID are some recommendations for sensing these violations .