The Effect of Counterfeit Products on Company Sales/Revenue of Permit Holder Manufacturing Firms in Nairobi (Kenya)

Abstract

This study looks at counterfeit products and their effect on manufacturing firms. It sets out to examine the effect of counterfeit products on the sales of manufacturing firms who are diamond mark holders in Nairobi Kenya. Using regression and correlation analysis, the study reveals that counterfeit products relate to sales of manufacturing firms and that firms are highly affected by counterfeit products; besides the firms are forced to engage in active anti-counterfeiting activities. Despite the counterfeits, the study reveals that sales of the firms studied are increasing and it appears that not all manufacturing firms fall victim to counterfeiting. The researcher recommends the need for firms to keep data on expenditures incurred in carrying out the anti-counterfeiting activities and the need to assess the effectiveness of inspection of goods at the port of entries. Further, there is need for research on the demand and behaviour of consumers on consumption of counterfeit products.