Jeffrey Unger, 30, cofounder and CEO of GenuOne, a Boston-based group that helps companies prevent product counterfeiting.
For product marketers, the networked global economy is a mixed blessing. Companies have benefited from new sources of low-cost manufacturing, access to huge markets, and the ability to build their brands and to sell directly over the Internet. But as the supply chain spreads across the world and into cyberspace, marketers — from sportswear makers to pharmaceutical companies — become more vulnerable to counterfeiting. Losses to U.S. businesses from global counterfeiting are estimated to total $200 billion.
Ask Jeffrey Unger (pictured, right, with Stephen Polinsky, chief brand protectionist), and he'll tell you that it's marketers' brands, not their bottom lines, that take the biggest hit from counterfeiting: "A product knockoff can weaken consumers' perception of the brand. And in industries such as the pharmaceutical and the auto-parts markets, counterfeit products can obviously have more serious repercussions." Using digital-tracking technologies and the Net, GenuOne is helping marketers develop brand-security strategies — from finding weak links in supply chains to authenticating and tracking products.
These days, product counterfeiting (or "brand erosion") covers a range of activities — from the manufacture of cheap, look-alike products to "gray-market diversion," where legitimate products end up in unauthorized channels. GenuOne's tracking services use a covert ink that was developed by the startup's Israel-based R&D team to create a customized mark — a "fingerprint" that is printed on the product or on the label. With handheld readers, employees can scan labels at key points in the supply chain to authenticate the product. GenuOne's Internet-based tracking database then confirms that the product is where it's supposed to be.
Are marketers ready to embrace GenuOne's new brand-protection model? Unger says that the nature of business today may leave them no choice. "Firms that weren't global before are global now. Firms that didn't sell products online before are selling products online now. Marketers are nervous. Without brand integrity, there is nothing behind the brand."
Contact Jeffrey Unger by email (firstname.lastname@example.org).
A version of this article appeared in the October 2000 issue of Fast Company magazine.