Combating Different Risks with an Effective ERM Solution Part II

In the first part of this article we looked at two of the most important risks faced by enterprises

worldwide namely product counterfeiting and gray market sales. In the concluding part of this article,

we would look at some other enterprise risks and how to combat these risks with an effective

Enterprise Risk Management (ERM) solution.

Minimum Advertised Price (MAP)

MAP refers to the minimum price at which the retailer can sell products. It can go above the specified

price but not below it. MAP is an arrangement wherein suppliers can set a lower limit on the prices

that its resellers may advertise for the supplier's products. The MAP policy programs can either be a

unilateral policy imposed by the manufacturer/supplier or an agreement between the

manufacturer/supplier and its resellers. The purpose of MAP programs is to ensure consistent pricing

for consumers and profit for sellers. However, certain resellers violate the MAP policy programs to

make quick money. They sell the products on the Internet at a rate lower than the MAP fixed by the

manufacturer / supplier. Such a move on the part of the reseller damages distributor loyalty, margins

and most importantly the brand.

Trademark Infringement

Wikipedia defines Trademark infringement as “a violation of the exclusive rights attaching to a

trademark without the authorization of the trademark owner or any licensees (provided that such

authorization was within the scope of the license).” The Court has put down eight specific elements

to measure likelihood of confusion and this includes strength of the mark, proximity of the goods,

similarity of the marks, evidence of actual confusion, marketing channels used, type of goods and the

degree of care likely to be exercised by the purchaser, defendant's intent in selecting the mark and

likelihood of expansion of the product lines. Trademark is any company’s most precious asset and

any infringement on it can directly affect its reputation, customer trust and revenue.

In such a scenario, there is a need for an effective Enterprise Risk Management (ERM) solution that

can bridge the gap between supply chain planning solutions and product Lifecycle management

software. Such solutions help manufacturers in the high tech, pharmaceutical and retail luxury goods

industries mitigate these risks. It provides 24/7 real-time monitoring of sources that is not possible

when using traditional methods/solutions. Since counterfeit and channel violation listings often go

on and off the Web within 48 hours, only real-time solutions can find all the violators. Thus with a

best of breed ERM solution that comes armed with an advanced web mining and reporting

technology, companies gain visibility beyond their enterprise and beyond their supply chain in the

global, open market.

Read More About: brand management, brand reputation, Anti-Counterfeiting