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The Devil Wears (Counterfeit) Prada - Presentation

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Transcript of The Devil Wears (Counterfeit) Prada - Presentation

A Presentation By:
Research Details
Full name:
Devil Wears (Counterfeit) Prada - A Study of Antecedents and Outcomes of Attitudes Towards Counterfeits of Luxury Brands

Ian Phau and Min Thea - Curtin University of Technology, Perth, Australia




Main Theories


Potential Further Research




Research Paper appeared in:
Journal of Consumer Marketing, 26/1 (2009), page 15-27

Purpose of the Research Paper:
How social and personality factors influence Chinese consumers' attitudes towards counterfeits of luxury brands
How these social and personality factors influence purchase intention

About the authors:
Ian Phau: Professor at Curtin University, Perth, Australia. Specialized in Consumer Behaviour and Brand Management
Min Teah: Pursued her PhD while writing this Research Paper

Antecedents: http://dictionary.reference.com/browse/antecedent
Counterfeiting is responsible for at least $200 billion a year in lost jobs, taxes and sales (Furnham and Valgeirsson, 2007)

20% of goods sold in the Chinese market are counterfeit goods (Alcock et al., 2003; Bian and Veloutsou, 2007)

The trading of luxury goods in China has proved to be a lucrative market as it has been noted as the world's third largest consumer of high-end fashions, accessories, and other luxury products (Ernst & Young China, 2005; Chadha, 2007)

The market is recorded as generating more than $2 billion in sales a year and is projected to continue growing an estimated 25% annually (Ernst & Young China, 2005; Embassy of the People's Republic of China, 2005)

It is reported by Chinese officials that counterfeiting is a staggering $16 billion business annually (Bian and Veloutsou, 2007)
Methodology - Data Collection
Data was collected through a mall intercept at a major shopping complex in Shanghai, China

Shoppers were asked to participate in a self-administered questionnaire

The interviewers asked every fifth individual that crossed a designated spot

Methodology - Survey Instrument
The survey instrument was developed in English and translated into Chinese, and then back translated into English

Instrument consisted of five sections:
1) Sections A & B - Measured social factors and personality factors
2) Section C - Examined attitudes and purchase intentions towards
counterfeits of luxury brands
3) Section D - Comprised items regarding purchasing habits of
counterfeit products and brands
4) Section E - Comprised demographic information of respondents

Methodology - Findings
270 Questionnaires in total

68 Questionnaires discarded

The remaining 202 questionnaires were analyzed by SPSS V.14

SPSS = Statistical Package for the Social Sciences
Program was developed by IBM in 1968
Used for statistical regression

Main Theories - Overview
Definitions of Counterfeits:
Counterfeits are reproductions of a trademarked brand (Cordell et al., 1996)

Counterfeits are closely similar or identical to genuine articles. This includes packaging, labelling and trademarks, to intentionally pass off as the original products (Kay, 1990; Ang et al., 2001; Chow, 2000)

Counterfeiting and piracy are in essence the same since they are both the reproduction of identical copies of authentic products (Lai and Zaichkowsky, 1999)
Main Theories - Attitudes Towards Counterfeiting
Counterfeits are closely related with the overall 'image' of a brand and its products (prestige, status symbol)

Variables affecting this 'image' might encourage or discourage consumers to buy counterfeit products

Variables mentioned in the research paper:
- Quality
- Price
- Try before you buy
- Warranties
- Situational Ethics

Phau and Teah state that "in view of Chinese consumers, attitudes towards counterfeits of luxury brands can be influenced by a number of antecedents":

- Social Factors (Normative and Informational susceptibility towards social influence and collectivism)

- Personality Factors (Value consciousness, integrity, personal gratification, novelty seeking, and status

Example: http://www.ioffer.com/
Main Theories - Antecedents (Social Factors)
H1a: Normative and information susceptibility have a negative influence on consumer attitudes towards counterfeits of luxury brands

Social influence refers to the effect that others have on an individual consumer's behaviour (Ang et al., 2001)

Two common forms of consumer susceptibility to social influences:
1) Normative susceptibility (= expectations of what would impress others)
2) Information susceptibility (= decision based on expert opinions of others)

Negative consequences = negative attitudes towards counterfeits

H1b: Collectivism has a positive influence on consumer attitudes towards counterfeits of luxury brands

1) Is target specific
2) Degree varies depending on geographical location
3) Tends to slow down economic development (Hofstede, 1991)
4) Major factor to positively influence attitudes towards pirated products and counterfeits

Main Theories - Antecedents (Personality Factors)
H1c: Value consciousness has a positive influence on consumer attitudes towards counterfeits of luxury brands

H1d: Novelty seeking has a positive influence on consumer attitudes towards counterfeits of luxury brands

Novelty seeking is the curiosity of individuals to seek variety and difference (Hawkins et al., 1980; Wang et al., 2005)

H1e: Integrity has a negative influence on consumer attitudes towards counterfeits of luxury brands

H1f: Personal gratification has a negative influence on consumer attitudes towards counterfeits of luxury brands

Personal gratification is the need for a sense of accomplishment, social recognition, and the desire to enjoy the finer things in life (Ang et al., 2001; Wang et al., 2005)

H1g: Status consumption has a negative influence on consumer attitudes towards counterfeits of luxury brands

Status consumption has long been defined as the purchase, use, display and consumption of goods and services as a means of gaining status (Veblen, 1899; Packard, 1959; Mason, 1981; Scitovsky, 1992; Eastman et al., 1997)

Main Theories - Overview
Main Theories - Purchase Intention (TOPB)
H2: There is a significant relationship between attitude and purchase intention towards counterfeits of luxury brands

Theory of Planned Behaviour (TOPB):
1) Purchase behaviour is determined by the purchase intention, which is in turn determined by attitudes (Fishbein
and Ajzen, 1975)
2) Attitudes towards behaviour instead of towards the proiduct are noted to be a better predictor of behaviour
(Fishbei, 1967; Fishbein and Ajzen, 1975; Lutz, 1975; Yi, 1990; Penz and Stöttinger, 2005)
3) The opportunities and resources, such as the accessibility of counterfeit products, must be present before
purchase behaviour can be performed. Without such circumstances, regardless of how favorable intentions are, it
would be difficult to perform a purchase (Chang, 1998)

H3: There is a significant relationship between social and personality factors (...) and purchase intention towards
counterfeits of luxury brands

Social and personality antecedents have long been established to have an influence on consumer decision making towards purchase intention (Miniard and Cohen, 1983)
Main Theories - Final Hypothesis

Buyers of counterfeits of luxury brands will perceive their actions in a more favorable light, and are known to have some degree of loyalty towards counterfeit goods (Tom et al., 1998). As such, Phau and Teah presented the following hypothesis:

H4: Buyers of counterfeits of luxury brands have more positive attitudes towards counterfeits of luxury brands than

Normative susceptibility is shown to influence consumer perceptions of counterfeits and purchase intentions. Consumers may possess the desire to own luxury brands to impress others. Due to the high prices of the originals, people resort to counterfeits.

There could be less inclination for Chinese consumers if the prices of originals would be lower - although this could erode the prestige and exclusivity of the brands

Because of decreasing ability to discern between counterfeits and originals, luxury firms and advertisers should ensure that there is a difference in quality, functionality and reliability

Information susceptibility shows that consumers who rely on the expert opinion of others on their purchases, are less inclined to purchase counterfeits (status consumption)

Contrary to previous studies (Ang et al., 2001; Wang et al., 2005), collectivism did not play a role in influencing consumer attitudes and purchase intention towards counterfeits of luxury brands

Phau and Teah's advice regarding integrity:
1) Companies of luxury brands to focus on internal integrity, and to advertise in a way that it highlights the fact that
counterfeits are not of the same quality as the original products
2) To educate consumers on ethics and morals, starting at primary schools and continuing during employment at a
multinational company

Potential Further Research
Increase the geographical area of the initial research

Research the consumer's view upon non-luxury, well-known brands (B-brands)

Relate the comprehensive economic paradigm to the purchases of counterfeits: does China's economic growth (in terms of GDP) directly affect Chinese customers in their choice for counterfeits or originals?

Perform the same questionnaire again in order to collect data which could be used for a regression to the mean

What is the current status of Chinese counterfeit products being sold on the internet by people from across the globe? Does this affect the variables of the research?

Are there benefits in the current situation of Chinese consumers purchasing counterfeits rather than originals?
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Anna Kerola (B00260917)

Fangzhou Liu (B00259698)

Tim 't Hooft (B00260268)

Cunzhu Shi (B00260288)
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