How do you feel when you paid 41000 pound for a car and you realize that someone else paid 14000 pound for it?
The British luxury car manufacturing – Jaguar Land Rover is prosecuting a Chinese automotive company, as they believed that the Chinese company had copied the Range Rover Evoque’s design to manufacture their Landwind X7 SUV (Holder, J 2014).
Despite there is a huge difference in the stability and performance of these cars, the appearance of these two cars is almost identical. This is upsetting the British car operation because the company has spent 230 million British Pound on investigating and developing Range Rover Evoque (Jaguar Range Rover Team, 2014). According to an Indian car magazine, Ralf Speth, C.E.O of the Jaguar Land Rover organization, stated that Landwind X7 SUV is a clear evidence to demonstrate that the Chinese company has violated the Range Rover’s intellectual property rights.
He believed that The Chinese government applies the intellectual property laws inconsistently and does not have any regulations to protect the rights of the manufacturer or preventing this practice. He claimed that this violation is the source of a lost in company ‘s reputation, reducing the company’s competitive advantages and putting the driver life into danger.
In consumer’s aspect, it is creating an issue for consumers as well, because they could not distinguish two cars and they have an anxious feeling about the safety of the car.
As a marketer, why we have to concern about intellectual property right? Why the new product should be protected by these rights?
According to Grimpe and Hussinger (2014, p. 1769), these researchers believe that innovation is the criteria that ensure the company long-term development. This new knowledge sorely achieved by research and development (R&D). The innovation would be registered to intellectual property right with the aim of preventing other competitors to use it as well as restricting other companies R&D department to investigate about it (Grimpe, C & Hussinger, K 2014, pp. 1776-1777).
In addition, intellectual property rights could protect the company reputation and customer health. In specific, automotive companies, which manufacture counterfeit car, usually have a low-level standard for durability test or evaluation process. That is the reason why the price of their product is very low (Setiawan, I 2006). Eventually, Consumers would face with a higher possibility of fatal injuries when the accidents occur. As a consequence, the car manufacturing company, for example Jaguar Land Rover in this case, would face a lost in reputation from the customers and followed by a drop in the revenue.
How intellectual property right effects customers as well as goods and services providers?
From customer point of view, a good or a service has two aspects, namely: tangibility and intangibility. Furthermore, they usually positioned a brand with some characteristics. In this case, people positioned Range Rover Evoque as a high quality and expensive car, the ability to drive it easy as tangible aspect, luxury and safety as intangible aspect. As the Landwind X7 SUV, which was built with low quality and look completely the same as the Range Rover Evoque. It has created a negative impact on the Range Rover Brand, as people would feel sceptical about the quality of the real car, about the safety of the car. The Range Rover Company has been investigating massive money to invent the new car and they are facing with a lost in sales due to the fact that another company has copied its design and they are willing to sell it with a way cheaper price.
Published by: Huy Dao
Student ID: 215231405
WordPress Username: HuyDao
Grimpe, C, Hussinger, K 2014, ‘RESOURCE COMPLEMENTARITY AND VALUE
CAPTURE IN FIRM ACQUISITIONS: THE ROLE OF INTELLECTUAL PROPERTY RIGHTS’, Strategic Management Journal, vol. 35, pp. 1762-1780.
Holder, J 2014, ‘2015 LandWind X7 – Chinese Range Rover Evoque clone revealed’, Autocar, retrieved 27 August 2016, <http://www.autocar.co.uk/car-news/guangzhou-motor-show/land-rover-complain-about-chinese-copy-range-rover-evoque>.
Jaguar Land Rover Team 2014, ‘Company Informaton’, Jaguar Land Rover, pp. 1-28.
Setiawan, I 2006, ‘DEVELOPMENT OF GENUINE CAR ACCESSORIES AND ITS CHALLENGE AGAINTS COUNTERFEIT AFTER MARKET PRODUCT IN INDONESIA’, PT Toyota Motor Manufacturing Indonesia, retrieved 27 August 2016.