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Reference

Title: Do Counterfeits Promote Genuine Products?
Author: Boonghee Yoo [Hofstra University] and Seung-Hee Lee [Sungshin Women's University]
Source:

Hofstra University
http://www.hofstra.edu/pdf/BIZ_mlc_workingpaper7.pdf

Year: 2005

Details

Subject/Type: Counterfeiting
Focus: Apparel and Shoes, Brands (non-deceptive counterfeits), Fashion Accessories, Luxury Goods
Country/Territory: Republic of Korea
Objective: To investigate the extent to which counterfeit items function as a promotion to increase sales of genuine items.
Sample: 369 female students at major universities in Seoul; 420 female college students in Korea
Methodology: Self-administered, paper-and-pencil questionnaire; experimental design scenarios

Main Findings

The study finds that unless consumers do have experience with counterfeits, they are more likely to buy genuine luxury goods rather than counterfeits.

As long as consumers of counterfeits are not given price and brand information, they prefer genuine luxury goods to counterfeits. However, when knowing the price advantage of counterfeits and given brand information, they no longer significantly prefer genuine items over counterfeits: they prefer genuine items and counterfeits equally, or sometimes counterfeits over genuine ones. This suggests that counterfeits consumers may not be consumers of genuine items in the future as long as they enjoy the price advantage of counterfeits.

Loyalty of customers of genuine luxury goods is not affected by the presence of counterfeit goods: the experience of consuming genuine goods reinforces their intention to buy genuine items, also when they are aware of the counterfeit price advantage and given brand information.

Overall, consumers of counterfeits show a smaller preference difference between genuine items and counterfeits than nonconsumers of counterfeits; and consumers of genuine items show a larger preference difference between genuine items and counterfeits than nonconsumers of genuine items.


The authors highlight the following managerial implications: first, consumers of counterfeits need to be convinced that the benefits of purchasing genuine items outweigh those of counterfeits by emphasising the durability and the material quality of the original (as fashionability is much easier to copy).

Second, the style of the designs of genuine items should last for a reasonable length of time, and not change too quickly or too radically, as fast and dramatic design changes make durability and high quality materials less important, encouraging consumers to buy counterfeits to live up with fast changing new ideas (e.g. key patterns and attributes by which consumers differentiate the brand from others should remain unchanged).

Third: increase consumers’ perceived risks of buying and consuming counterfeits (including performance, physical, social, physical, psychological, and time risk) by diligent investigation and prosecution of counterfeiters to teach consumers that fakes are illicit products, that purchasing them is a socially undesirable behaviour and that they cannot impress others with counterfeits.

Fourth: advertising campaigns can educate consumers about the social, performance and financial risks of fakes; informing them how to identify counterfeits causes them to perceive higher social risks of being detected and thus fail to impress others.

Fifth: given that the price advantage of counterfeits is a major determinant of counterfeit buying, marketers of genuine items may expedite the trial and adoption of genuine items in particular among counterfeit consumers by developing affordable versions of genuine items, as consumers once they have tried genuine items are very likely to become consumers of genuine items. Such affordable versions can serve as a bridge aiding consumers to gradually switch from counterfeit to original products – however, an erosion of the brand’s reputation and the cannibalisation of the more expensive genuine products need to be avoided.

[Date Added: Jan 20, 2009 ]