MarCom Professional

'Branded' Cornflakes and the Plight of Luxury Brands

There was a time when the biggest surprise you’d find in a packet of Cornflakes was a plastic toy. But soon you could be finding logos floating in your bowl of cereal after Kelloggs announced plans to laser ‘brand’ individual flakes. Kelloggs hopes this rather extravagant measure will differentiate its cereal from cheaper imitations, highlighting the plight many luxury brands face in persuading customers to pay for the real thing. Whilst counterfeiting is nothing new, the scale at which imitation products are being made and sold has grown to a whole new level in recent years. Many brands blame the recession and the internet for their piracy woes. But is the success of their marketing to blame as well?

Counterfeiters meet rising demand for luxury brands

In the chase for higher profits, many luxury brands have extended their product range and marketing from niche boutiques to high street retailers and the average shopper. What this means is that more and more people have been seduced with the allure and aspiration of owning a luxury brand. The problem is that many of these people can’t afford or don’t want to pay the price tag that goes along with it. Luckily for those people, the internet has made it possible for counterfeit manufacturers in China to connect with Western shoppers in only a few mouse clicks. The quality of imitation products is often so good that even savvy shoppers can’t tell the difference. In fact, it’s rumoured that some counterfeit goods are churned out on the same machines that make the originals, with the only difference being that they were made without the brand’s approval or knowledge. It could be argued that many luxury brands blundered when they moved the production of their handbags, clothes and perfumes into countries which are less regulated and harder to control. So what can they do to fight back?

The carrot and the stick

The war against cheap imitations is already being fought on two fronts: educating shoppers and chasing counterfeiters in the law courts. A proportion of many brands’ marketing budgets are now being spent on persuading people why they should buy the real thing. Campaigns such as by the Federation of Swiss Watches and Fakes Are Never in Fashion are aimed at spreading awareness on all the evils associated with counterfeiting e.g. child labour, poverty level wages and even funding terrorism. In terms of the legal war, eBay, until recently a treasure trove of fake handbags and perfume, has already felt the full brunt of the luxury brands’ rage. In June 2008 a Paris Court ordered eBay to pay £15 million to Louis Vuitton and £13 million to Christian Dior for selling fake imitations and causing ‘moral harm’. Louis Vuitton’s lawyers have been particularly busy, launching 24,000 lawsuits in 2007 and shutting down 750 counterfeiter websites. The luxury brands will be hoping these efforts persuade people to pay a premium for the real thing. As otherwise they’ve created a hunger for their products which seemingly only the counterfeiters can satisfy. Incidentally, sales of Kelloggs Cornflakes have actually gone up during the recession, as people opt for a reliable and reassuring brand on their breakfast table. Perhaps Kelloggs should worry less about lasers and promote this fact in their marketing instead. _______________________________ BDA (Buckingham Design Associates) blog - real people giving real opinions, and a complete lack of agency waffle. BDA deliver an exciting blend of design and creative marketing for the Oxford, Milton Keynes, Northampton and London region.

Also posted on www.thinkbda.com