Consumers attitude towards counterfeit products

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Table of Contents

Executive summary
Introduction
Literature Review
Reference List

Executive summary

Government agencies, intellectual property units, and other law enforcement agents have made many efforts to stop practices aimed at violating intellectual rights, counterfeiting and pirating individuals innovations (Yang, 2002). Such efforts have been targeted to discourage production and trade of fake products.

While trying to understand why some consumers choose fake or illegal products, it has become clear that the market demand side plays a major role in this issue. In fact, it is a complex task trying to understand why some customers decide to purchase fake products (Yang, 2002).

However, there are a number of motivating factors causing consumers to choose fake products including factors such as affordable prices, easy access to fake products, predetermined perception, social acceptability, and weak government policies among other factors (Penz and Stottinger, 2005).

The most important thing is that once consumers begin to understand the full repercussions of purchasing fake products it is only then that they will stop the behavior of choosing counter products (McDonald and Christopher, 1994).

Additionally, it is only when the administration will fully understand the driving factors that make consumers to purchase fake products, that it will start training programs to educate and enlighten consumers in regards to counterfeit products (Hoe, Hogg, and Hart, 2003). This is because the government has a role to play in protecting consumers from the dangers of counterfeit and piracy.

This research paper will make an extensive summary of findings from research carried out to understand consumers attitudes and behaviors towards counterfeit and piracy. The main objective of this paper is to institute change in regards to consumers attitudes and behaviors towards counterfeit products.

This will help consumers to understand the dangers of purchasing fake products and hence deter such illegal purchases for social change. In a broad way, the paper will study consumers attitude towards counterfeit product in the market both in the present and in the past.

Introduction

Product counterfeit can be defined as illegal manufacturing of products, which have been protected by the intellectual property rights (Penz and Stottinger, 2005). In this project, customers attitude towards counterfeit goods has been observed closely to get a vivid picture of the crisis. Attitude is a learned predisposing to behave in a consistently favorable or unfavorable manner with respect to a given object (Penz and Stottinger, 2005).

Despite the numerous efforts by the International Trade Organizations (and other trade agencies) to discourage counterfeiting practices, products counterfeiting has been a growing problem in the world. According to McDonald and Christopher (1994), counterfeiting is a major and growing problem in the society today. Product counterfeiting and piracy has increased in both developed and under-developed countries.

This problem of counterfeiting has not only increased but it has also proved a major crisis that is hard to eliminate (Hoe, Hogg, and Hart, 2003). Because of this, many countries are spending a lot of many in trying to deter this illegal behavior (Penz and Stottinger, 2005). In the US for instance, the US administrations spends up to 200 billion dollars annually as cost of counterfeiting (Bosworth, 2006).

According to research findings, international trade in counterfeit products amounts to about 6 per cent of the world trade (Penz and Stottinger, 2005). Statistics is revealing that the trend is increasing every year.

In deed, issue of counterfeiting and piracy is not only destructive to world economy, but it is also affecting thousands of jobs worldwide, reducing the value of genuine brands, and destroying the reputation of trademarks and businesses (Bosworth, 2006). In addition to this, this problem of counterfeiting is also harmful to consumers health and safety especially when it comes to products such as birth control pills and cosmetics products among others.

Generally, counterfeit products can be classified into two major categories namely, deceptive and non-deceptive counterfeits products (Yang, 2002). Deceptive counterfeit products are goods that appear as genuine or look like original products (Yang, 2002). In the market, when customers are buying such products (deceptive products), they tend to think that they are purchasing original products.

On the other hand, non-deceptive counterfeit are products, which consumers buy with full knowledge that they are purchasing fake products (Yang, 2002). Consumers who purchase such products (non-deceptive products) buy them based on price, quality, and the type of outlet (Yang, 2002). The main objective/purpose of this paper is to study and understand consumers attitude and perception of non-deceptive product in the market around the world.

Literature Review

Overview

Before providing a research outline, it is important to give or provide an understanding of counterfeit. Different terms have been used to describe counterfeit products and most of them agree that counterfeit products are brand piracy, near logos, intellectual property, as well as other forms of products theft like, look like or unconvincing imitations (McDonald and Christopher, 1994). Generally, Counterfeiting is because of violation of intellectual property rights.

In most cases, this practice is very common in the under-developed countries in parts of Asia and Africa (Yang, 2002). Most consumers perceive the issue of purchasing fake products as having the power to own brand name luxurious good especially considering that such consumers have a limited budget (Yang, 2002). Most consumers who buy non-deceptive counterfeit products have no intentions to stop this practice since it enables them to enhance personal image or even impress their friends (Yang, 2002).

Determinant factors

Previous studies (literatures) on consumers attitude towards counterfeit products reveal that most consumers around the world differ in their attitude towards fake products and the trend is changing with time (Bosworth, 2006). As such, consumers attitude towards counterfeit products may be influenced by social, psychological, personal, and cultural factors.

Most of the literatures have focused their study in explaining consumers behavior on a variety of products such as jewelry, sun glasses, cell phones, televisions, books, shirts, CDs, computer software, cosmetics products (mostly perfumes) and auto parts which mostly call low-cost products that are manufactured easily (McDonald and Christopher, 1994). Such products also sell quickly (Bosworth, 2006).

According to Nia and Zaichkowsky (2000), demographic factors have much influence to consumers in regard to purchasing counterfeit products. Particular emphasis have been put on factors such as gender, age educational background and level of incomes since these factors are becoming significant in influencing consumers behavior (Hoe, Hogg and Hart, 2003).

Nia and Zaichkowsky (2000), suggests that education has an inverse relationship with purchasing of counterfeit product and educated people tend not to purchase counterfeit products. Most counterfeit buyers are reported to be individuals with little or no education. Statistics reveals that only few educated people purchase counterfeit products compared to non-educated people in the modern society (Nia and Zaichkowsky, 2000).

On the other hand, Yang (2002) argues that most educated people have a trend or behavior of purchasing pirated CDs and software. In a similar study by McDonald and Christopher (1994), it has been noted that individuals with high income have been found to be purchasing counterfeit products.

Issue of counterfeit products arises from both supply side and demand side considering that most organization try to discourage such practices despite the fact that some consumers are motivated to purchase fake products since they find them appealing (McDonald and Christopher, 1994).

Broadly, various researchers have carried out investigation to study the counterfeit practices, manufacturing, and trade of fake products (Bosworth, 2006). Such researches have studied consumers practices of choosing non-deceptive counterfeits and the demand side of counterfeiting (Bosworth, 2006).

Market trends

In the last decade, Nia and Zaichkowsky (2003) put much emphasis on studying the supply side of the counterfeit products in the market. There has been a growing demand to study and investigate the demand side of counterfeiting practices because it appears to have increased towards between years 1995 and 2000 (Penz and Stoettinger, 2003).

A study of the demand side was carried out after Elisabeth Hirschman had expressed the need for deeper understanding of the dark-side of consumer behavior (Penz and Stoettinger, 2003).

In response to this, another research was proposed shortly to study what has been referred as dysfunctional consumer behavior, which leads customers to purchase fake products knowingly (Yang, 2002). Such behavior has been described as addictive and obsessive behavior (Yang, 2002).

While many theories have been developed to study and explain ethical behavior in the market setting, studies aimed at addressing factors leading to unauthorized and inappropriate behavior by consumers are limited and scattered (Penz and Stoettinger, 2003). Some of the existing models suggest that most consumers when faced with non-deceptive products arrive at a decision to purchase such products knowingly being affected by specific factors such as values, beliefs, attitude, and knowledge (Yang, 2002).

Bosworth (2006) observes that consumer is more likely to purchase non-deceptive products in luxury brands. Purchasing of non-deceptive products is more prevalent in luxury goods and customers are fully aware that they are purchasing counterfeit products (Bosworth, 2006).

Recent literatures have tried to expand and study further on the causal or determinants factors contributing to customers/ consumers purchasing non-deceptive products. Literature in this area reveals that several specific and situational factors motivates consumers to engage willingly in dysfunctional or misbehavior of buying fake or pirated products (Hoe, Hogg and Hart, 2003). One of the major factors motivating consumers to go for counterfeit products in the market is the issue of price.

However, accordingly Bosworth (2006) price is not the sole determinant or the only factor influencing consumers to go for counterfeit products. Notably, counterfeit products have a price advantage compared to genuine or original products and this influences consumer to purchase such products (Hoe, Hogg, and Hart, 2003).

According to Penz and Stoettinger (2003), the penalty and sanctions related to criminal behavior, pressure put upon consumers incase the individual is conducting illegal behavior openly, personality qualities, and characteristics of individuals are among many other factors that contributes consumers counterfeiting behavior in the society.

It has been noted that most of consumers who purchase counterfeit products despite the knowledge that they are buying fake products rationalize their counterfeit behavior by saying that such practice is not illegal (Hoe, Hogg and Hart, 2003). According to McDonald and Christopher (1994), consumers attitude towards counterfeit products can be categorized into two major categories: attitude towards counterfeiting and attitude towards market prices.

If a particular consumers attitude towards counterfeit is positive, then he/she is more likely to purchase fake products. On the other hand, if a consumer holds unfavorable attitude towards branded (original products) goods, he/she is also likely not to purchase such original products (McDonald and Christopher, 1994).

Reference List

Bosworth, D. (2006). Counterfeiting and Piracy: The State of the Art. Working Paper, Oxford.

Hoe, L., Hogg, G., & Hart, S. (2003). Fakin it: Counterfeit and consumer contradictions, European Advances in Consumer Research, 6 (1), 60-67.

McDonald, G., & Christopher, R. 1994. Product Piracy: The Problem That Will Not Go Away. Journal of Product & Brand Management, 3 (4), 55-65.

Nia, A., & Zaichkowsky, J. L. (2000), Do Counterfeits Devalue the Ownership of Luxury Brands? Journal of Product and Brand Management, 9 (7), 485-497.

Penz, E., & Stottinger, B. (2005). Forget the real thing-Take the copy! An explanatory model for the volitional purchase of counterfeit products. Advances of Consumers Research, 32, 568-575.

Yang, H. J. (2002). Counterfeit understanding, Journal of Hebei University of Economics and Trade, 1, 16-21.

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