Unless you are differentiating your product solely on price, essentially seeking to become a commodity, end-user perception of your brand is the end all, be all of your success. While this fact has not changed, the landscape and the many views that shape consumers' perceptions of your brand have been altered dramatically by technology, especially the Internet sales channel.
While the Internet has opened endless new opportunities for companies to increase sales, it has also created just as many means for unscrupulous individuals to take advantage of it. Gray marketing has become a huge problem for both manufacturers and retailers struggling to maintain prices especially as new applications for the iPhone allow customers to instantly compare all online prices.
After policing gray marketing for years internally, Marker/Völkl has teamed up with Net Enforcers, an online brand monitoring and protection company to scrutinize the Web for sales of Marker/Völkl hardgoods that deviate from its authorized Web partner agreement and minimum advertised prices (MAP) to protect the brand and retailers from the commoditization of its products.
"Our primary customer has always been the specialty retailer," says Marker/Völkl VP of Marketing Geoff Curtis. "[Gray marketing] started to become a real challenge this past season with retailers increasingly calling in to us and saying 'hey, these websites are offering products below your MAP prices."
This month, Völkl decided enough was enough and paired up with Net Enforcers to monitor the Internet for sales of its products that deviate from its policies. When Net Enforcers finds violations of authorized dealer programs, it immediately notifies its customers. "We'll basically be finding out anytime someone offers [our products] below the MAP price," says Curtis. "It's part of our ability to serve retailers. It was really in both of our best interests to step up the enforcement of our pricing policies. A policy doesn't really do anything unless you can enforce it. It's important in this environment to show we're doing everything we can to support these partnerships, [and] that the product doesn't immediately become a commodity."
Founded in 2003, Net Enforcers offers monthly subscription services focused not only on price monitoring but also brand monitoring, including reporting and enforcement actions related to copyright and trademark infringements, counterfeit product sales, gray market sales, domain squatting, and negative reviews and commentary on forums, blogs and news media. "We combine the benefits of proprietary technology and analysis by well-trained staff to ensure we separate the unauthorized sellers from legitimate commerce on the Internet," says Net Enforcers VP of Sales and Marketing Stuart Bennett. "Criminals are frequently more Internet savvy than the corporations or consumers they seek to harm. The result is an enormous amount of counterfeit goods trafficking, trademark and copyright infringement, and diversion of consumer traffic away from legitimate brand owners. At times, the temptations of the Internet can even be too great for legitimate distribution partners."
The parameters of what Net Enforcers looks for is completely customizable and Marker/Völkl has them looking specifically for new, in-season gear. "One big thing that a manufacturer needs to have is a rock solid authorized dealer program," explains Bennett. "This details everything about selling online, working with distributors and providing guidelines regarding selling on auctions/tradeboards. This enhances the monitoring service by being clear who has rights to use the clients' intellectual property online, who should be selling the clients products online, and in what settings."
Marker/Völkl and Net Enforcers' partnership just went live and Curtis says "feedback from retailers has been quite positive." Curtis adds that it's still too early to gauge the effectiveness of the program and that they intentionally implemented it during the off-season to better incorporate it into business processes for the upcoming season.
While neither party commented on specific financial terms of the agreement, Bennett says there are four main ways that Net Enforcer's customers see a return on their investment:
- The direct savings of using NEI services versus hiring internal monitoring staff.
- Time and cost savings from using NEI services rather than competitor offerings due to the ability to quickly search our finding and pinpoint potential problem areas.
- Improved relationships with authorized dealers who know the manufacturer is doing everything possible to help them make sales.
- Enhanced brand value by eliminating negative consumer experiences with unauthorized dealers.