The mall in Shanghai is not representative of all shopping experiences in China, and the questionnaire and its use of imagery and descriptions lack clarity and precision needed for more extrapolative results. The study however does underscore the role of ethicacy as a key determinant in defining if a person is going to purchase a counterfeit product or not.
Analysis of Counterfeit Luxury Goods Online:
An Investigation of Consumer Perceptions
One of the most rapidly expanding selling channels for counterfeit products are websites and e-commerce sites. On the Internet a counterfeiter can be up and running within a day or less, selling counterfeit items globally using PayPal and other well-known payment processing systems to manage transactions. This area of counterfeit luxury products selling is the subject of the study Counterfeit Luxury Goods Online: An Investigation of Consumer Perceptions (Radon, 2012). The methodology is loosely defined as those customers who have purchased from known jewelry and watch counterfeit sites and have provided customer success stories in the past. The researchers reasoned that those who had participated in a transaction and had a positive experience (as evidenced by the endorsement) would be more likely to respond to their questionnaire. An online survey was created to determine the trade-offs that counterfeit purchasers had made in the purchasing process. The recruitment efforts netted out 47 total respondents, 40% who whom were men and 60% being women. The respondent's ages were between 18 and 45 (Radon, 2012).
The study found that the most important factors that those who knowingly purchased counterfeit products where more concerted with conscious value and price and the implied prestige of the given item. The researchers also found that those who are most likely to purchase counterfeit products are also the most price-sensitive and seek out inelastic, commodity like pricing deals which clearly communicate the lack of value being purchased (Radon, 2012). It's as if the respondents are attempting to buy the brand as a badge of prestige with little care if the actual product will last and deliver functional value or not.
The purchase of counterfeit products is becoming more pervasive as globalization extends the reach of brands globally. When Nike is even more recognizable as a brand image compared to some nation's flags, it's apparent that brands have tremendous power to influence the values of large masses of people. The motivations for purchasing counterfeit products have been analyzed in this analysis. Not surprisingly, the less ethical foundation a person ahs the more they are likely to engage in purchasing counterfeit products and attempting to pass them off as real. The greater the ethicacy of a person and their value set, the less likely they are to purchase a counterfeit product. Of the four studies analyzed, the most likely demographic group to regularly purchase counterfeit products are male students below 20 years of age with incomes well below $20K a year (AUD). This is admittedly a finding only in Australia, yet it does show a finding that pervades all studies which is the consistent finding that women are significantly more ethical than men (Kozar, Marcketti, 2011). Another surprising finding is that Chinese consumers are more concerned about being found out when they purchase counterfeit products that the status they convey (Phau, Teah, 2009).
The following are recommendations for luxury brands to protect themselves against counterfeiting globally:
1. Concentrate on the inherent value of the brand and seek ot create strong peer communities of customers who appreciate the craftsmanship and quality of materials. This would have been very effective against the purchasing of counterfeit products that had been quickly produced to take advantage of a very small window of opportunity to sell them (Phau, Sequeira, Dix, 2009).
2. Create unique, differentiating features that show a high level of ethicacy in the production process, further differentiating the original products from counterfeits. This will be a cue to those who have borderline to higher level of ethicacy to choose to reject the cheaper, often shoddily-produced product (Phau, Teah, 2009).
3. Create product strategies that bring the same quality and brand of the flagship product lines into an affordability range for a broader market, as Armani has done with Armani Exchange as done for example (Phau, Teah, 2009)
4. Create online validation and verification programs for all the luxury products in a product line, protecting the brand online (Radon, 2012). This could be accomplished through highly specific imagery of a given watch, accessory or product that cannot be duplicated online and has a validation symbol within it. This approach to safeguarding the brand online is essential for stopping pirating that can occur online with a day.
Kozar, J.M., & Marcketti, S.B. (2011). Examining ethics and materialism with purchase of counterfeits. Social Responsibility Journal, 7(3), 393-404.
Ian Phau, Marishka Sequeira, Steve Dix, (2009) "To buy or not to buy…