Counterfeit Products

Assigned byDr. Kaleel Rahman

Done byYasmeen Al AaliReema Al Khatib

George DedoussisAbdallah Baki

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Literature Review As the basis for our research on counterfeit products, we have summarized and analyzed four articles as the main foundation for our literature review. The first article: “Thailand’s Counterfeit Dilemma” is an article written by Rujirutana Mandhachitara, Tasman Smith D.Phil, and Keith Blois. The second article is: “Do Counterfeits Devalue the Ownership of Luxury Brands?” and is written by Arghavan Nia, and Judith Lynne Zaichkowsky. The third article summarized is titled: “Consumer Misbehavior: Why People Buy Illicit Goods” by Nancy D. Albers-Miller. Last but not least, the fourth article: “Spot the Difference: Consumer Responses Towards Counterfeits”, is written by Swee Hoon Ang, Peng Sim Cheng, Elison A..C. Lim, and Siok Kuan Tambyah.

The first article: “Thailand’s Counterfeit Dilemma” is an article by Rujirutana Mandhachitara, Tasman Smith D.Phil, and Keith Blois. It basically discusses the presence of software counterfeits in Thailand. Since 60 percent of the software category (particularly the sales of counterfeit CD’s), is transacted in one location in Thailand, which is an exclusive IT mall known as Pantip Plaza. The objective of this article is to focus on scrutinizing the system that supports software counterfeiting in Thailand. The authors attempt to examine the supply of counterfeit software in Thailand by studying Pantip Plaza which is a Bangkok shopping mall. The author further examines software counterfeiting in Thailand from different perspectives, which includes the legal, cost, and moral aspects. The article goes further into discussing the factors contributing to the availability of counterfeit products in Thailand; in addition to the negative implications counterfeiting has on both the economic and social environment.

In “Do Counterfeits Devalue the Ownership of Luxury Brands?” by Arghavan Nia, and Judith Lynne Zaichkowsky, the authors attempted to find the perceptions and thoughts people have when buying or looking at counterfeit products. The authors further stress on the fact that having counterfeit products reduces the company’s brand equity and devaluates its image. But the results of the research conducted shows otherwise. In general, having counterfeit products does not lower the image of a company because according to the research, customers buy these luxury products for a physiological reason, which enables them to feel that they can afford such products or feel proud that they can afford them. But again, this is a double-edged sword. In other words, the more famous your product is, the more it is appealing for people to produce fake products, and the more people would want to own them.

Our third article titled: “Consumer Misbehavior: Why People Buy Illicit Goods” is written by Nancy D. Albers-Miller. The study that was conducted intended to prove that the decision to purchase illicit products, instead of legitimately offered products can be explained by a combination of variables drawn from the study of criminal behavior and buyer behavior. The respondents to this survey were night graduate students at a large

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southwestern university taking MBA classes, who were also involved in jobs. It was based on three variables; the selling price, the situation under which purchase takes place, and the risk association with the purchase. The importance of these variables was established using discriminate analysis and these weights were aggregated into three clusters using Ward’s method. The overall model was shown to be significant, although they varied by cluster. The main effects of product type, buying situation and price were all significant predictors of willingness to buy. The interactions of risk with product type and price with product type were also significant predictors for some clusters.

Last but not least, our fourth and final article is titled: “Spot the Difference: Consumer Responses towards counterfeits”, by Swee Hoon Ang, Peng Sim Cheng, Elison A..C. Lim, and Siok Kuan Tambyah. This article basically discusses consumers’ responses towards counterfeit products, as the title suggests. Counterfeit products are becoming widely used all over the world and the origin of these counterfeit products comes from Asia. In fact the main reasons for the emergence of such products are the attractive pricing of fake products and the self-image of the consumers whom choose to buy such products. Moreover there are certain issues and disadvantages associated with buying counterfeit products which include the risks, perceived harm/benefits to singers, music industry, and society, the morality of buying fake products, social influences in addition to personality factors. There are various ways to prevent counterfeit products from emerging such as the enforcement of government rules and regulations that would impose punishments on manufacturers and dealers of those fake products.

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In an attempt to describe and analyze the main points mentioned by the respondents in our interviews, it is crucial to acknowledge the true meaning of counterfeit products. According to Webster’s dictionary, counterfeit is: “made in imitation of something else with intent to deceive”. In other words, it is an attempt to make fraudulent copies of something valuable with the intent to defraud. Therefore, a counterfeit product is something that has been forged, copied or illegally imitated for the purpose of generating money from gullible or consenting clients to the detriment of the legal manufacturer.

According to both our video and audio interviewees, the concept “counterfeit” has been further referred to as fake products, imitation, not original, and copy of branded products. Moreover, the majority of our respondents associated the definition of counterfeit with cheaper or lower quality. Generally, all of our respondents agree on a few characteristics that define the concept counterfeit.

In an attempt to gain understanding on the meaning of counterfeit products, we utilized both audio and video interviews to gain information from our interviewees. The age of our interviewees ranged from 24 years old to 41. Although the nationalities of our respondents vary, they are all residents in the United Arab Emirates and particularly in Dubai. We interviewed two males and four females as a foundation for our analysis on counterfeit products. Our video interviewees were approached for the video interview with no prior preparation of the subject matter. As soon as we obtained their consent to interview them, we asked them our questions. This manner was made to acquire impetuous responses from our voluntary interviewees.

Our respondents vary in their social classes; one of them is from the upper income class, and one is from the lower income class, whereas the remaining 6 respondents characterized themselves as part of the middle income group. The time span of the video interviews ranged from approximately 3 minutes to 10 minutes, as for the audio interview, it lasted for 22 minutes. Although the majority of the video interviews were somehow short, we placed great efforts to ensure an inquisitive conversational style. Fortunately, we have successfully obtained informative and diverse perspectives from our interviewees regarding counterfeit products.

Our research outcomes suggest that consumers have a combination of both positive and negative attitudes towards counterfeit products. From the responses obtained, in addition to our respondents’ facial expressions, body language, and enthusiastic speaking style, we have come to understand their negative attitudes towards certain counterfeit products and the issues related to this subject matter. On the other had though, the same respondents’ demonstrated favorable attitudes towards a few counterfeit products which are mainly pirated CD’s and DVD’s. This may be as a result of the insignificance of these products, the low perceived risks associated with them, and the wide availability, and ease of accessibility of these products.

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The most common words suggested by our respondents when asked about their awareness of counterfeit products were fake, imitation, copy of the original, and copy of the branded products. These words are utterly synonymous with the word counterfeit. Also, some of our interviewees associated the word counterfeit with fake brands, “look-alikes”, and copyrights. Moreover, the majority of our interviewees perceived counterfeit products to be of “poor quality”, “good bargain”, and “cheap prices”.

Furthermore, with the regards to the reasons our respondents purchase counterfeit products or think why counterfeit products exist, the majority of our respondents believe that purchasing counterfeit products enables them to get a good bargain on particular items, which includes fake brand goods such as leather bags, shoes, DVD’s, CD’s and expensive Swiss watches. When asked why a person would purchase a counterfeit product, one of the respondents stated: “Because it cheaper, affordable”. This suggests that a person might settle for a counterfeit product because it is an affordable alternative compared to the original good. The respondents further argue that most branded products are highly priced to the extent that it makes it impossible for most people to buy such products; thus, they resort to purchasing fake products which are “look-alikes” of the original product. A respondent clearly stated: “For me of course, I prefer original but it depends if you have a budget, but if it’s just for fashion only, go Rolla”! This suggests that a person might be inclined to purchase a counterfeit product if it was only for fashion purposes, whereas if a person seeks reliability, he might probably choose the option of buying an original product.

Also, the manifest availability and the accessibility of these fake products make it appealing and much easier for people to buy them. One of the respondents mentioned her experience of purchasing a counterfeit product in Thailand. She described the ease of access to these products in Thailand, and the appealing store layouts which aims at enhancing the probability that a person would buy such products. She stated: “I was out of the country, I saw these bags, they were very nice and they attract you by nice prices. It looked especially nice in the display within the store, the lights and the way they presented the products. It attracts you to buy”. This implies that the store ambience, layout, and cheap prices may certainly be a determinant of purchasing counterfeit products.

Moreover, some of our respondents agree that people including themselves, tend to purchase counterfeit products for reasons of fashion and style, which consequently enhances their confidence and self-image. On the other hand, some of the respondents, which are either from the middle-income group, or upper income group, argue that they would never think of purchasing certain counterfeit items such as branded bags, shoes, and apparels because they believe that purchasing a fake product destructs their self image and makes them uncomfortable in public, whereas purchasing an original product enhances their self-esteem and confidence.

Moreover, one of the major points our respondents agreed and emphasized on is the “poor quality” associated with counterfeit products. They described counterfeit products

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to be of low quality, manufactured from cheap materials which include the cheap quality of leather when it comes to leather goods, in addition to the poor paint finishing, and the non original parts used to manufacture fake goods. The majority of the respondents argue that fake products do not last long enough, whereas original products last longer. This clearly indicates that consumers generally associate fake products with “low quality”, and original products with “high quality”. High quality implies that products have both tangible and intangible benefits such as the quality of raw materials used to manufacture original goods, which makes it long lasting; thus denoting reliability.

When asked about the most frequently purchased counterfeit goods, all respondents suggested the wide production and purchase of fake leather goods, which includes bags, shoes, and wallets, in addition to DVD’s, and CD’s. Also, the majority of respondents agreed on well-known brand names such as Louis Vuitton, Lacoste, Guess, Gucci, and Fendi as being among the most frequently purchased counterfeit products.

Surprisingly, when asked if a respondent has ever purchased a counterfeit product, she admittedly denied it and stated: “never, never, never, never. No I’ve never had or bought for myself a counterfeit product”. But later on in the interview, she clearly said: “I must admit, I’ve bought DVD’s, fake DVD’s. I bought them, you buy them”. This particular respondent even asked the interviewer if he knows where she can find the Chinese women that sell those pirated DVD’s, because she did not find them anymore, and stated that the reason for this is the law enforcement efforts in Dubai towards combating counterfeit products. This clearly indicates that some people may be completely opposed to purchasing branded counterfeit products; yet, unconsciously perceive the purchase of pirated DVD’s as something completely normal and may even be considered somehow ethical to those who consider counterfeit products as unethical.

It is crucial to emphasize the counterfeit products are becoming increasingly available regardless of the fact that governments are placing huge efforts to combat such practices. In the UAE for example, most of our respondents agree that the UAE government is placing huge efforts to combat counterfeiting; yet, it still exists on a wide scale not only in the UAE, but throughout the world as well. This may be a result of the poor enforcement of these laws even though they do exist. It may also be due to globalization, which makes the world an open market to import and export goods easily.

In conclusion, our literature review gives us a background on counterfeit goods; focusing on the system that’s supports a large counterfeit market in Thailand, why counterfeit goods do not devalue branded goods, how price, situational factors and product type played a great role in why consumers buy counterfeit products and finally, the issues related to counterfeit goods being purchased in general. Our respondents varied in age, nationality, and social class they belong too, however within their responses it was found that all of them agreed on some basic characteristics that define counterfeit products. From the interviews conducted it was found that the low perceived risk, wide availability and accessibility of CD’s and DVD’s has created favorable attitudes towards these counterfeit goods, though most other goods tend to have negative attitudes. It was also found that the major reason for consumers to buy counterfeit goods was that it offers

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them a bargain or rather because of their cheap price and in some cases due to fashion reasons; while it was also found that if seeking reliability people would be inclined to buy original products. Further, the ease of accessibility and availability of counterfeit goods makes them much more appealing to be purchased. The majority of our respondents agreed that people buy counterfeit goods for reasons of fashion and style; however they would never intend to do so because it would destruct their self-image and make them feel uncomfortable in public. Also respondent viewed counterfeit goods as of “low quality” and an original product of “high quality”, thus denoting the latter’s reliability. Some key brands were recognized as counterfeit targets that were frequently purchased, such as Gucci, Louis Vuitton and Fendi. Respondents were also found to view pirated DVD’s and CD’s as something normal and not a counterfeit good as opposed to other products, also although respondent recognize that the UAE government is placing huge efforts on counterfeiting, it still exists widely. Our findings show that counterfeiting is a great problem to our society and will probably continue to be as some reasons behind its existence are similar to the majority of the population.

Works Cited List

Albers-Miller, Nancy D. 1999. "Consumer Misbehavior: Why People Buy Illicit Goods." Journal of Consumer Marketing 16 (3): 273-87.

Ang, Swee Hoon, Peng Sim Cheng, Elison A. C. Lim, and Siok Kuan Tambyah. 2001. "Spot the Difference: Consumer Responses Towards Counterfeits." Journal of Consumer Marketing 18 (3): 219-35.

Eisend, Martin and Schuchert-Gluer. “Explaining Counterfeit Purchases: A Review and Preview”. Academy of Marketing Science Review volume 2006 no. 12

Hassey, D. N. and Smith, M.C. 1996 “Complusive buying: an examination of the consumption motive”. Psychology and Marketing. 13(8): 741:752

Nia, Arghavan and Judith Lynne Zaichkowsky. “Do counterfeits devalue the ownership of luxury brands?”. Journal of Product and Brand Management. 9(7): 485:497

Rujirutana, Mandhachitara and Tasman S. D. P. “Thailand’s Counterfeit Dilemma”. Anzmac 2000. 756:761

Tom, G., Garibaldi, B., Zeng, Y. and Pilcher, J. “Consumer demand for counterfeit goods”. Psychology and Marketing. 15(5): 405:421

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