The role of individual characteristics on consumers’ counterfeit purchasing intentions: research in fashion industry

Year 2014, Volume: 1 Issue: 3, 259 - 275, 01.09.2014

Ceyda Aysuna Turkyilmaz Aypar Uslu

Abstract

Counterfeits   are   one   of   the   most   important   threats   for   organizations   that   have  orijinal   brands   as   their   most   valuable   assets.   In   order   to   increase   their   brands’  value,  organizations  make  several  sacrifices  and  ongoing  investments.  However,  the  demand   for   counterfeits   is   rising   all   around   the   world   which   creates   negative  consequences   for   these   organizations.   In   this   context,   knowing   the   factors   that  motivates  consumers  to  buy  counterfeits  is  critically  important.  In  this  regard,  this  study  focuses  on  the   individual  characteristics  which  are  proved  in  the  literature  to  have  the  most  important  role  in  buying  counterfeits  and  it  investigates  the  effects  of  these  factors  on  intention  to  buy  counterfeits.  The  individual  characteristics  that  are  included  in  the  study  are  materialism,  willingness  to  take  risk,  smart  shopper  self   perception,   value   consciousness,   fashion   consciousness,   integrity,   personal  gratification,  status  consumption.  In  the  foreign  literature,  no  study  has  that  broad  scope   containing   several   variables   as   in   this   study.   From   the   point   of   the   Turkish  literature,   there   are   very   rare   studies   related   with   this   issue.   These   two   aspects  emphasize  the  importance  and  uniqueness  of  the  study.  Depending  on  the  results  of  the  analysis  of  the  data  consisting  of  879  valid  questionnaires,  seven  hypotheses  were  accepted  while  one  was  rejected.  The  results  of  the  study  shed  light  on  the  organizations   for   their   marketing   and   branding   activities   aimed   to   prevent  counterfeit  usage  and  to  increase  the  demand  for  their  original  brands.     1.  INTRODUCTION  According  to  Turkish  Language  Association,  “to  counterfeit”  means  “to  imitate  or  to  try  to  imitate   something”   (www.tdk.gov.tr).   Individuals   may   encounter   with   counterfeits   in  every   phase   and   every   area   of   their   lives.   This   concept   may   have   both   positive   and  negative  associations.  For  instance,  you  may  imitate  the  behaviors  or  lifestyle  of  someone  you  admire.  This  was  an  example  for  a  positive  association.  On  the  other  hand,  you  may  imitate  an  artwork,  literary  or  academic  work  which  will  convey  negative  associations.    From  organizations’  or  marketing’s  point  of  view,  it  is  possible  to  state  that  imitation  or  counterfeiting  are  mostly  associated  with  products  or  brands.  Organizations  are  investing  huge  amounts  in  order  to  increase  their  brands’  values  and  brands  images  and  try  to  keep  this  success  up  to  date.  The  main  reason  for  these  ongoing  investments  and  efforts  is  that  brands  are  one  of  the  most  valuable  assets  for  organizations.  But  unfortunately,  despite  Year:  2014        Volume:  1        Issue:  3  organizations’   these   tremendous   efforts   brands   encounter   with   several   threats.   One   of  these  threats  is  certainly  “counterfeits”  that  have  increasing  production  and  consumption  rates  in  spite  of  several  regulations  and  laws.    Counterfeits   are   reproductions   of   a   trademarked   brand   which   are   closely   similar   or  identical   to   genuine   articles.   This   includes   packaging,   labelling   and   trademarks,   to  intentionally  pass  off  as  the  original  product  (Kay,  1990).  Counterfeits  are  illegally  made  products  that  resemble  the  genuine  goods  but  are  typically  of  lower  quality  in  terms  of  performance,  reliability  or  durability  (Lai  and  Zaichkowsky,  1999).  The  literature  classifies  counterfeits   into   two   categories   which   are   deceptive   counterfeiting   and   non-­‐deceptive  counterfeiting.  Under  deceptive  counterfeiting,  the  consumer  is  not  aware  of  the  fact  that  he/she  purchases  a  copy  rather  than  the  original  product  and  cannot  be  held  accountable  for  the  behavior.  It  includes  all  situations  in  which  the  customer  is  being  deceived  about  the  product’s  origin.  On  the  other  hand,  non-­‐deceptive  counterfeiting  occurs  when  people  knowingly   buy   fakes.   In   other   words,   in   non-­‐deceptive   counterfeiting   consumers  intentionally  purchase  fake  products  (Bloch  et  al.,  1993;  Tom  et  al.,  1998;  Prendergast  et  al.,  2002;  Hieke,  2010).  At  this  point,  another  concept  related  to  counterfeit  is  “piracy”.  Lai  and  Zaichkowsky  (1999)  point  out  that,  counterfeiting  and  piracy  are  in  essence  the  same  since  they  are  both  the  reproduction  of  identical  copies  of  authentic  products.  However,  piracy   is   mostly   related   to   software   and   fixed   medium   content   such   as   films   and   music  recordings  (Chow,  2000;  Cheung  and  Prendergast,  2006).  At  the  same  time,  products  that  use   a   brand   name   or   a   logo   that   differ   slightly   from   a   well-­‐known   brand   but   are   close  enough  that  consumers  will  associate  it  with  the  genuine  product  are  also  considered  as  counterfeits   (e.g.   Adadis,   Hike,   PolyStation   etc.).   This   study   focuses   on   non-­‐deceptive  counterfeits  that  are  purchased  by  consumers  who  are  willing  to  pay  less  and  know  that  they  are  fakes.       Today   one   can   face   with   counterfeits   in   almost   every   sector.   The   sectors   in   which  individuals   can   encounter   counterfeits   mostly   are   fast   fashion,   accessorizes,  health/medicine,  cosmetics,  electronics  (tvs  and  mobile  phones),  software  etc.  (Green  and  Smith,  2002;  Trainer,  2002).  Jacobs  et  al.  (2001)  classified  product  categories  that  mostly  have  counterfeits  into  four  groups.  These  product  categories  are:       1. Highly  visible,  high  volume,  low-­‐tech  products  with  well-­‐known  brand  names,  such  as  toothpaste,  candies,  and  chocolates.  2. High-­‐priced,   high-­‐tech   products,   such   as   computer   games   and   audio   or   video  entertainment  products.  Fake  auto  and  airplane  parts  are  also  in  this  category.  3. Exclusive,   prestige   products   such   as   well-­‐known   apparel   and   accessories   as   well   as  perfumes  and  other  expensive  gift  items.  4. Intensive  R&D,  high-­‐tech  products  such  as  pharmaceuticals.     The   number   and   demand   of   counterfeits   that   are   produced   in   different   product  categories   are   increasing   day   by   day   (Wang   and   Song,   2013).   James   Moody   from   FBI  Organized   Crime   Division   emphasized   the   importance   of   the   issue   when   he   stated   that  “Counterfeiting   will   become   the   crime   of   the   21st   century”   (Wilcox   et   al.,   2009).   To  illustrate   this   increase   and   importance   in   numbers   we   can   glance  at   the   report   of   IACC  (International   Anti-­‐Counterfeiting   Coalition).   According   to   IACC,   the   global   counterfeit  market  which  had  a  size  of  5.5  billion  dollars  in  1982  reached  to  350  billion  dollars  in  2012  (Ergin,  2010).  In  Turkey,  during  the  last  decade  the  counterfeit  market  size  was  doubled  and  reached  to  1  billion  dollars  in  2013.  With  this  growth,  Turkey  has  become  the  second  largest   market   following   China   which   has   the   largest   counterfeit   market   all   around   the  world  (http://www.ntvmsnbc.com,  December  28,  2013).  According  to  the  results  of  the  survey   conducted   by   Brand   Protection   Group   of   Turkey   in   2008,   58%   of   the   Turkish  consumers   regularly   purchase   counterfeits.   The   product   categories   that   Turkish  consumers   mostly   prefer   to   buy   counterfeits   are   fast   fashion,   shoes,   bags,   watches,  accessorizes  and  jewelery.    The  statistics  both  in  Turkey  and  around  the  world  show  that  in  spite  of  the  regulations  selling   and   purchasing   rates   of   counterfeits   increase   day   by   day.   As   a   result   of   this  counterfeits  have  become  one  of  the  most  important  global  problems  of  the  21st  century.  Despite  this  growing  importance  and  popularity  the  Turkish  literature  on  counterfeits  is  so  limited.  Therefore,  this  study  aims  to  fill  this  gap  in  the  literature  by  focusing  on  non-­‐deceptive  counterfeits.       In   order   to   fight   against   counterfeits   it   is   important   to   reveal   which   factors   motivate  consumers   to   buy   them.   In   this   regard,   the   literature   states   that   the   most   important  factors   effective   on   consumers’   intentions   to   buy   counterfeits   are   individual  characteristics.  Therefore,  the  study  focuses  on  individual  characteristics  that  may  affect  consumers’  decisions  in  their  counterfeit  purchases.  Specifically  the  study  has  two  main  objectives:   a)   to   understand   the   role   of   individual   characteristics   on   consumers’  intentions   to   buy   counterfeits   and   b)   to   reveal   the   most   important   individual  characteristics   that   are   effective   on   consumers’   intentions   to   purchase   counterfeits.   By  achieving   these   objectives   it   is   aimed   to   shed   light   on   organizations   marketing   and  branding  strategies  and  help  them  to  fight  against  counterfeits.     The   remainder   of   the   article   is   organised   into   seven   parts.   In   the   following   section   the  pertinent   literature   is   reviewed   and   depending   on   the   evidences   from   the   literature  research   hypotheses   are   formulated.   This   is   followed   by   research   methodology   and  empirical   findings   of   the   study.   In   the   final   sections,   conclusions   and   implications   are  derived  from  the  study  findings,  and  suggestions  for  future  research  are  provided.    2.  LITERATURE  SURVEY  2.1.  Consumers’  Intentions  to  Purchase  Counterfeits  The   stated   statistics   about   counterfeits   show   that   the   demand   for   counterfeits  countinously  increases  worldwide.  Therefore,  to  reveal  the  factors  causing  the  increase  in  demand   for   counterfeits   become   more   of   an   issue.   Defining   these   factors   play   an  important  role  to  explain  the  reasons  why  consumers  are  willing  to  purchase  counterfeits.  When  the  relevant  literature  is  reviewed,  it  can  be  seen  that  consumers’  intentions  to  buy  counterfeits   is   affected   by   several   different   factors.   Phau&Teah   (2009)   and  Hidayat&Diwasasri  (2013)  categorize  these  factors  into  two  groups  namely  social  factors