Академический Документы
Профессиональный Документы
Культура Документы
knowingly purchase
counterfeit goods?
An essay into customer behaviour
Jack Thomson
Table of Contents
1. Abstract
Page 2
2. Introduction
Page 2
3. Critical Questions
Page 3
Page 3
Page 5
Page 7
7. Conclusions
Page 8
8. References
Page 9
In many cases, consumers are unaware that the products they are buying are counterfeit and
only find out when the product fails to live up to expectations. However, I am going to focus
on talking about those consumers who do knowingly buy counterfeit. This is because
otherwise, whilst still a major issue, it would be irrelevant to Consumer Behaviour.
In UK Law, it is not a criminal offense to buy counterfeit goods. However it is illegal to
either manufacture or sell them. Traders who do sell these goods risk a fine of up to 5,000
and/or imprisonment for up to six months. Also, the counterfeit products may be seized and
destroyed if this is ordered by the UK courts (www.which.co.uk).
The theory of social status best explains the trade of counterfeit goods. This is because of the
reasoning behind buying them is heavily related to social status,
Critical Questions
The three questions were decided upon because counterfeit goods are created in order to sell
a product at a price lower than possible when buying the genuine brand. Therefore, in order
to understand counterfeits, we must understand why people buy luxury brands. The other
factors that are present when a customer knowingly buys a counterfeit brand are then
combined with the lower price and give us the consumers motive. In order for this to be a
true issue, however, we must then look at the various reasons why counterfeiting may be
dangerous and/or damaging to their respective industries.
Social Status
Social status is your position within the hierarchy of society that is based on prestige
(www.britannica.com). It is important to note that status is not how financially wealthy a
person is. Whilst this is a factor, there are many more factors that may be taken into account.
Wealth is better described as one of the main separations that form the social differences that
exist between people that culminates in social status. Luxury goods are often more rare than
their lower-priced alternatives (www.bbc.co.uk). This may be because of the rarity or cost of
materials or ingredients used. Other factors that may add to the final price may be the cost of
production, the quantity of products manufactured or a specific trait about the product that
renders it superior (such as a specific designer or a long time spent in development to ensure
quality).
-
Authenticity of Brand
The psychologists, Bloom and Hood (2008) found that children do place higher value in
original objects than in perfect duplicates. They refuted perfect duplicates of their
attachment items such as a favourite toy or a blanket. This suggests that we have an
instinctive faith in authentic objects, despite the replicas being identical to the originals. This
explains why we may choose to spend more money on products we know to be genuine and
authentic ones.
Quality
Typically, the higher the price of the product, the higher the quality (Shapiro, 1983). Because
of this widely trusted theory, luxury brands will be trusted to be of the highest quality. This
perceived high quality makes is a very powerful motivator when it comes to making a
purchase (Bertini et al. 2012).
-
Exclusivity
Less luxury brand products are bought than their mid or low priced brand equivalents. This
means that those customers who do buy the products find themselves in a select group of
people who own it. This exclusivity can make the consumer feel special and possibly even
experience a sense of superiority and this feeling can result in a favourable financial return
for the business (Zaina, 2012/2013).
The Second Question
Why do consumers decide to buy replica/counterfeit goods? This question is central to what
this report is trying to establish. Counterfeit products are everywhere, the World Customs
Organisation estimates that between five and seven per cent of all products that are bought
and sold across the world could be counterfeit (www.iacc.org).
-
Conspicuous Consumption
This is where a consumer will purposely and excessively buy a luxury brand because they
know that others will view them as social status symbols and they wish to display signs of
high income and wealth. They will continue with conspicuous consumption, first to attain a
high social status and then to ensure that its maintained (Veblen, 1899). In terms of
counterfeit products, the customer will be someone who wants to convey a false social status.
This may be because they want others to view them as impressive and successful, when in
reality they may only have a low income. Counterfeit goods can give this customer the
feeling of higher status they crave, just without the premium price tag.
-
Social relationships with others are dependent on our self-presentation (DeBono, 1987) which
is called our social-adjustive function. Allowing self-expression is another important social
function that is called a value-expressive function. Different attitudes towards luxury brands
can determine a potential customers likelihood of purchasing counterfeit products. If their
attitude serves a social-adjustive function, then the consumer is much more likely to purchase
counterfeits than if their attitude is a value-expressive one. Likewise, their personal moral
beliefs about the consumption of counterfeit products only affects their likelihood of buying
them if the person has a value-expressive attitude towards luxury brands (Wilcox et al. 2008).
-
Status Goods
Luxury brands often have a combination of both the status and the quality of the products.
When a counterfeit is produced however, these two elements are separated and so a potential
customer who would like to buy the status can do so even if they either are not willing or they
are not financially able to buy the two elements together (Grossman and Shapiro, 1988). This
can mean that if the customer accepts foregoing the quality that is so associated with the
brand, they could, as long as they have no moral objections, have a fully valid motivation for
buying counterfeit brands.
invested in those departments can have the effect that less money is spent on key areas such
as New Product Development (Hieke, 2010).
Also the fact that these products are so widely distributed and so cheap means that they soon
lose the exclusivity that made them desirable to begin with (Hieke, 2010). If the designer
brands lose this exclusivity and high status and they become commonplace, they then
become, by definition, void. This is because designers desire to be exclusive (Moore et al.
2000) and as soon as they are freely available then they are no longer a luxury item and thus
have no place in the market.
This evidence leads to the conclusion that Counterfeiting is not only damaging to luxury
brands and the fashion industry, but also to economic health and society in general.
Conclusions
Customers choose to purchase luxury brands because of their social status and the image of
themselves that they want others to see. They also buy these products because of the
instinctive faith that humans have in authenticity. Two other factors that can affect the
consumers choice of luxury brands are the exclusivity that comes with buying them and the
perceived high quality of luxury goods.
The factors that can motivate someone to buy counterfeit goods are conspicuous consumption
and the false social status that this can convey and the social function attitudes towards
luxury brands that can identify
1. If you are likely to purchase counterfeit goods
2. If your moral beliefs are likely to prevent you buying counterfeit goods.
The counterfeit industry has many economic and social drawbacks. It not only is linked to
criminal activity but also unemployment, lack of funds for social welfare, loss of exclusivity
and, in some cases, can be harmful or even dangerous.
The Counterfeit industry is an incredibly damaging one and, unless it is controlled, could lead
to the demise of many businesses internationally that are trying to sell their high quality
products in a responsible and ethical manner.
References
1. Bertini, M, Wathieu, L and Iyengon, S (2012) The Discriminating Consumer:
Product Proliferation and Willingness to Pay for Quality, Journal of Marketing
Research, 49 (1), page 39
2. Counterfeit Goods: Your Rights Explained. Available:
http://www.which.co.uk/consumer-rights/rip-offs-and-scams/counterfeit-goods-yourrights-explained/your-rights/. Last accessed 13/12/12.
3. Cronin, F. (2011). What Will Be a Luxury in the Future. Available:
http://www.bbc.co.uk/news/magazine-13875014. Last accessed 13/12/12.
4. DeBono, K.G. (1987), Investigating the Social Adjustive and Value Expressive
Functions of Attitudes: Implications for Persuasion Processes, Journal of Personality
and Social Psychology, 52 (2), pages 279-287
5. Grossman, G.M. and Shapiro, C. (1988), Foreign Counterfeiting of Status Goods,
The Quarterly Journal of Economics, 103 (1), pages 79100
6. Han, A.J., Nunes, J.C. and Dreze, X, (2010), Signalling Status with Luxury Goods:
The Role of Brand Prominence, Journal of Marketing. 74 (4), pages 15-30
10