Diverted and gray-market products are flooding the marketplace due to globalization, brand promotion and the increased use of product licensing. This is the case with virtually any high-demand and highly-recognized product that is distributed beyond its primary market without a unified, global pricing structure.
Product diversion not only affects profitability in primary markets based on pricing, but it also erodes brand identity and value. When luxury goods turn up at unauthorized discounters or flea markets, and pharmaceuticals are being offered through the Internet, the perception of the value of the product is diminished in the consumers’ eyes.
Global organizations in specific industries specialize in diverting products from emerging markets to primary markets. These “brokers” employ various means to obtain product including front companies, corruption or deception of internal sales staff and legitimate customers, and even theft.
Since criminal remedies do not typically apply to diversion cases, it is critical to identify the “alpha source” of products and shut them down. This usually involves complex investigative techniques designed to identify the wrongdoers by working both internally and externally in the client’s operations, examining potential sources such as manufacturers, licensees, sales staff and accounts.
PICA has unique methodologies and proprietary tools designed to avoid disrupting the client’s legitimate operations or business relationships, and these techniques get to the root of the problem quickly. PICA also offers Market Surveys and Web Monitoring to maintain surveillance of primary markets on a continuous basis for both diverted and counterfeit products. With the combination of this program, investigations and due diligence of new employees, business partners and accounts, PICA helps maintain the integrity of your brand and profit margins.
COUNTERFEITING PICA UNCOVERS MASSIVE DISTRIBUTION FRAUD IN GLOBAL MEDICAL PRODUCTS
Through an investigation spanning the globe, PICA has uncovered a fraud involving hundreds of “front companies” that were diverting famous-brand medical products from Third World markets to the US, Canada and Europe. Aside from the impact on manufacturers, this fraud has created health and safety issues, due to improper storage and handling of goods, compromise of sterile products, use of expired products and instructions, and recall issues.
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