Explaining Counterfeit Purchases – A Review and Preview

EXECUTIVE SUMMARY Introduction Counterfeiting has become an economic problem of international importance and has led to a variety of countermeasures based on lawful, political, administrative, or business techniques. In order to develop appropriate countermeasures, an understanding of the general phenomenon of counterfeiting as well as the specific reasons why people purchase counterfeit products seems expedient. The purpose of our study is to review a number of existing studies on the determinants of consumers' intention to purchase counterfeit products, and in doing so, provide an overview of the insights on this topic and identify potential gaps. Based on the results from one qualitative study, we try to enhance the contribution of previous studies by providing further theoretical concepts in order to explain consumers' motives when purchasing counterfeit products. To explain counterfeit purchases we expand on commodity theory, mood-based concepts, and cognitive dissonance. Based on these approaches, a model is developed that provides a framework for future research endeavors. Previous research For the purpose of this paper, counterfeiting is defined to mean that an original product with a remarkable brand value worth copying already exists on the market. Its characteristics are copied into another product, which is indistinguishable from the original, and is sold at a lower price as if it were the original. Nevertheless consumers are well aware of the difference between the two products. A review of previous research uncovers results that indicate the need for further investigation. First, the prevalence of quantitative designs of such studies does not allow for further insights into determinants that were previously unknown to the researcher, nor into possible underlying mechanisms that might explain the intention to purchase counterfeits beyond the mere relationship between variables. Due to the apparent lack of a profound theory, previous studies have failed so far to integrate their results consistently into a more general framework. Second, most results stem from studies based on consumers in North American or South Asian countries. As culture has been seen in existing studies to be an important factor influencing software, music, and movie piracy rates, we expect the same in the case of counterfeit purchases. Third, since results differ for various products and presumably also brands, it would be interesting to investigate other counterfeit products as well as the specific brands in those product categories. Method The study comprises a first study based on focus groups and a second based on in-depth interviews. First, we established two focus groups with a convenience sample of social sciences students between the ages of twenty and forty from a German university. Based on the results of the focus groups, we derived specific questions related to the new factors which turned out to be relevant determinants for purchasing counterfeit goods. In a second step we carried out in-depth interviews in order to gain further information on the underlying operating mechanisms of these determinants. Altogether, twelve interviews were conducted with persons who had already had experience in the purchase and use of counterfeit products. Results We discovered further reasons for the purchase of counterfeit products relating to the person, the product, and the situation, that can be summarized under a preliminary framework that allows for possible extensions. With respect to the product, we found out that the scarcity of the original product not only influences the value perception of the original brand but also of the faked brand. Commodity theory provides a framework for the investigation of scarcity on value perception and for answering the question as to whether and how the loss of the exclusivity of a brand induces a decrease of consumer demand for counterfeits of it. …