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Marketing Why Do Consumers Buy Counterfeit Luxury Brands?

Author: KEITH WILCOX, HYEONG MIN KIM,  and SANKAR SEN 

Executive Summary
Despite the efforts of most luxury brand marketers, the International Chamber of Commerce estimates that this industry is losing as much as $12 billion every year to counterfeiting. This suggests that at least in luxury markets, curbing the insatiable global appetite for counterfeits is essential to winning the war on counterfeiting. Yet a clear and actionable understanding of the motivations underlying consumers’ purchase of counterfeit luxury brands remains elusive. Mark Gelvan

Given that the market for counterfeit brands relies on consumers’ desire for real luxury brands, marketers need to understand why people purchase luxury brands in the first place to gauge the motives underlying counterfeit brand purchases. Research suggests that quality considerations aside, consumers typically consume such brands in the service of numerous important social goals. The current research is guided by the premise that these social motivations drive consumers’ propensity to consume counterfeit brands. Specifically, on the basis of the functional theories of attitudes, the authors propose that both consumers’ desire for counterfeit brands and the extent to which the availability of such counterfeits alters their preference for the real brands are determined by the social functions underlying their attitude towards luxury brands. Mark Gelvan

Three studies demonstrate that consumers are more likely to buy a counterfeit brand when their luxury brand attitudes serve a social-adjustive function (i.e., help them gain approval in social settings) rather than a value-expressive one (i.e., help them communicate their central values and self-identities). Notably, consumers’ moral beliefs about counterfeit consumption affect their likelihood of consuming a counterfeit brand only when their luxury brand attitudes serve a value-expressive, as opposed to a social-adjustive, function. In addition, exposure to a counterfeit has a stronger negative effect on consumers’ preference for the real brand when their luxury brand attitudes are social adjustive rather than value expressive. Mark Gelvan

Importantly, the authors show that the primary social function served by consumers’ luxury brand attitudes is not merely a consumer characteristic but can also be determined by elements of the marketing mix (e.g., product characteristics and advertisements). For example, the authors demonstrate that the extent to which a luxury brand fulfills a consumer’s social goals (i.e., value-expressive and social-adjustive) is likely to depend on brand conspicuousness. Specifically, when the brand is inconspicuous, consumers’ attitudes toward it are going to be less able to serve a social function. As a result, the social attitude function–based differences in counterfeit consumption were minimal.  Mark Gelvan

In addition, the authors demonstrate that exposing consumers of a luxury brand to advertising messages that differentially prime the social goals associated with value-expressive versus social-adjustive attitudes influences their preference for counterfeits. Together, these findings point to the ability of marketers to influence people’s reactions to counterfeit brands through specific marketing actions.

Biography
Keith Wilcox is a fourth-year doctoral student in the Zicklin School of Business at Baruch College/City University of New York. He holds an MBA from the Haas School of Business at the University of California, Berkeley, and a BA from Baruch College. His research focuses on how emotions and experiences influence consumer decision making and self-control. Other research interests include investigating how consumers’ social motivations affect their decisions to purchase counterfeit luxury brands.
 

Hyeong Min Kim is Assistant Professor of Marketing in the Carey Business School at Johns Hopkins University. He received his PhD from the Ross School of Business at the University of Michigan and holds an MBA from Columbia University. His research interests include branding, pricing, and decision making. His research has been published in Journal of Retailing, Journal of Behavioral Decision Making, and Journal of Consumer Psychology, among other outlets.  Mark Gelvan

 

Sankar Sen is Professor of Marketing in the Zicklin School of Business at Baruch College/City University of New York. He received his PhD from the Wharton School of Business at the University of Pennsylvania. Before coming to Baruch College, he held faculty positions at Temple University and Boston University. His research focuses on consumer decision making, corporate social responsibility, and social marketing. His research has appeared in California Management Review, MIT Sloan Management Review, Journal of Consumer Research, Journal of Marketing, Journal of Marketing Research, and Journal of Economic Theory, among other outlets.  Mark Gelvan

J Marketing Research, Volume 46, Number 2, April 2009
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