How Does Enforcement Deter Gray Market Incidence?
Journal of Marketing: Vol. 70, No. 1, pp. 92-106
16 Pages Posted: 26 Aug 2014
Date Written: January 1, 2005
Gray market activity has become increasingly prevalent. The prevailing wisdom in marketing is to use more severe enforcement to deter gray marketing. However, the certainty and speed of enforcement may also have a bearing on the incidence of violations. This article examines whether and how enforcement deters gray marketing. The results from a field survey of manufacturers and an experimental design suggest that, by itself, enforcement severity has no impact. Deterrence results only when the multiple facets of enforcement are used in combination.
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