Intangible Assets and Counterfeit Apparel

Michael D. Moberly   January 13, 2015   ‘A blog where attention span really matters’!

Here I contrast consumer’s expectation of sporting contest authenticity to growing consumer receptivity for purchasing counterfeit apparel and accessories. My views were inspired by a Frank DeFord commentary on National Public Radio and Dr. Dan Ariely’s book titled, ‘The Honest Truth About Dishonesty: How We Lie To Everyone, Especially Ourselves’ whom I have spoken.

Mr. DeFord says most sports fans care about and expect player and contest authenticity. They want contests to be genuine battles’ of player and coach tactics, wit, skills, preparation, training, and physical and mental ability and stamina, i.e., the intangible assets embedded in our sports psyche.

Growing percentages of sporting event consumers do not consistently exhibit preference for authenticity with respect to seeking-purchasing counterfeit (sports) apparel, i.e., indifference.

Dr. Dan Ariely’s research (Duke University) describes social-psychological principles that influence consumer receptivity to buying apparel and associated accessories which they know to be counterfeit prior to purchase which he designed various (human) experiments that focus on the forces that are at work, i.e.,

  • external signaling – the way we broadcast to others who we are by what we wear.
  • self-signaling – despite what we tend to think, we don’t have a clear notion of who we are but, generally hold a privileged view of our preferences and character.

The inference being, when we knowingly purchase counterfeit apparel one may act differently than those who purchase authentic apparel. For example, one’s conventional moral constraints are likely to loosen when we knowingly purchase, accessorize, and wear counterfeit goods. Once those moral constraints loosen, Ariely suggests, we become more receptive to the ‘oh, what the hell’ effect with many consumer rationalizations. For me, this begs the question, which is more powerful – influential, the…

  • negative self-signaling emanating from wearing counterfeit apparel?, or
  • positive self-signaling that comes with wearing genuine – authentic apparel?

Ariely also points to the potency and value of external signaling which can be substantially diluted as more legitimate – authentic supply chains become variously polluted with counterfeits.

Based on my own experience, the value of external signaling, as an intangible asset becomes even more diminished and/or undermined as the ‘quality’ of counterfeit apparel elevates and becomes difficult for consumers to distinguish from authentic branded/manufactured products.

Again, self-signaling and external signaling are clear examples of intangible assets whose value is connected to consumer preference via the proprietary intellectual and structural capital and trademarked logos, etc., embedded in authentic (licensed) apparel.

Presumed consumer preference for authenticity is slowing evaporating, to the point that buyer concern whether apparel is counterfeit is becomes secondary to cost, an aspect which is particularly troublesome for me. Too, I see nothing on the horizon that suggest otherwise. The cause of course will be a reflection (consequence) of changes in consumer attitudes about external signaling and self-signaling.

Having devoted a significant percentage of my professional career to safeguarding intangible assets, the increasingly efficient global product counterfeiting industry has already ‘geared up’ to accommodate consumers whose inclinations are changing. Ultimately, apparel designers and manufacturers must recognize that the positive effects derived from external and self-signaling represent the ‘intangible asset glue’ that hold company value, revenue, reputation, and brand, etc., together!

As always, reader comments are welcome and respected, and please read and submit a review of Mike’s newest book ‘Safeguarding Intangible Assets’




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