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Effective Channel Management Is
Critical in Combating the Gray Market
and Increasing Technology Companies’
Bottom Line
KPMG Gray Market Study Update
KPMG LLP
Contents
Executive Summary 3
Survey Findings 7
Survey Highlights 14
Impact of the Gray Market Calculation 30
Conclusion 33
Time for Action 34
About Us 35
KPMG’s Gray Market Update White Paper 3
Executive Summary
Original equipment manufacturers (OEMs), channel partners,
and end customers have long been plagued by the “gray
market,” the unauthorized alternative channel where branded
products have been intentionally diverted from authorized sales
channels into the hands of unauthorized dealers, brokers, or the
open market for gain. Unlike products sold through authorized
channels, gray market products may pose serious issues for
both OEMs and customers alike. Gray market resellers may
advertise products as new, authentic, and branded goods, but
customers may wind up receiving goods ranging from used or
remarketed products to those that have been wholly or partially
counterfeited or mislabeled.
Unsatisfied end customers are only one side of the equation. Information technology
(IT) companies unwittingly suffer from price erosion, brand damage, and the hidden
costs of handling end-customer issues resulting from inadequate customer servic
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