The Influence of Logo Exposure in Purchasing Counterfeit Luxury Goods Focusing on Consumer Values

The Influence of Logo Exposure in Purchasing Counterfeit Luxury Goods Focusing on Consumer Values Jung-Min Han, Hyeon-Jeong Suk, Kyung-Won Chung Department of Industrial Design, Korea Advanced Institute of Science and Technology Abstract: This study attempted to identify differences in consumer’s pursued values when purchasing counterfeit luxury products using questionnaire and interview data. As brand names and brand logos of luxury goods significantly influence to customer buying behavior, this study focused on logos, an important element of brand and design.

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The hypotheses concern four value factors pursued in purchasing luxury products: conspicuousness, aesthetic appeal, durablility, and conformity. Data were analyzed using both quantitative and qualitative methodological approaches. A Survey instrument was designed to discover how consumer’s values influence their preferences in terms of exposure of logo. Personal interviews were conducted first and a survey was followed. Based on a quantitative analysis of a questionnaire given to 127 university students, a statistical analysis was conducted.

Specifically, it was found that people’s preferences in non logo-exposed products does not correlate with actual purchase. Furthermore, a comparison between female students of Ewha Woman’s University and KAIST revealed that, even though the participants’ education level is similar, environmental conditions affected the consumer’s values, attitude, and intention to purchase counterfeit products. Finally, 122 people were divided into 6 groups of different consumer value type. It was found that there exist statistical differences of attitude and intention to purchase counterfeit products between the groups.

Keywords: Counterfeit luxury goods, Consumer values, Brand logo ?. Introduction The size of the market for luxury brands has been expanding and is currently estimated to be more than thirty billion dollars in Korea, as reported by the Fashion channel in a program entitled “Imported luxury market is increasing”, in 2007. Accordingly, not only the number of people who are willing to purchase luxury goods, but also that of people who admit to buying counterfeit product is increasing.

Despite that luxury brands, such as Laura Ashley, Louis Vuitton, Cartier, and Revlon use extensive networks of lawyers and private firms to protect their markets worldwide (McDonald & Roberts, 1994), counterfeit products are still actively traded in the gray market. Consequently, the characteristics of consumer behavior in choosing counterfeit products have attracted substantial critical attention. Consumer’s preference in the counterfeit market is a complex issue that has not yet been definitely clarified. With the growth of the counterfeit market, research on why consumers buy counterfeit products is needed.

The present study compares several counterfeit luxury products with and without logo exposure based on consumer’s pursued values. In exploring the influence of logo exposure in purchasing counterfeit luxury goods, the scope of this paper is limited to consideration of the effect of logos. A logo has a significant effect on customers and is an important element of brand and design. As luxury goods are symbolic, brand logos are significantly influential on customers. Most previous studies about counterfeit goods have focused solely on brand image or brand name (Delener, 2000). ?. Literature Review 1.

Definition of Luxury Goods and Counterfeit Goods Luxury goods are increasing in prevalence especially as consumers’ buying behavior is becoming more symbolized. Consumers purchase luxury products to set themselves apart and express their personality(Nia & Zaikowsky, 2000). Luxury goods or status goods have been defined as goods for which the mere use or display of a particular branded product brings prestige on the owner, apart from any functional utility (M. Grossman & Shapiro, 1988a; Nia & Zaikowsky, 2000). Luxury goods are expensive in relative and absolute terms, and they are recognized and admired by others.

As a result, many consumers purchase luxury goods primarily for symbolic meanings (Dubois & Duquesne, 1993). These goods are often expensive and exclusive: some examples include Cartier, Rolex, Hermes, Mercedes Benz, Louis Vuitton, Tiffany, and Chanel. As there are many definitions of fashion luxury goods, this study focuses on Moore’s definition. An international fashion design retail market is identified as follows (M. Moore, Fernie, & Burt, 2000): They have an international profile in the fashion industry as evidenced in their having a bi-annual fashion show in one of the international fashion capitals (i. . Paris, Milan, London or New York); They have been established in the fashion design business for at least two years; They retail merchandise either through outlets bearing the designer’s name, (or an associated name), and/or within other outlets within two or more countries; And they market their own label merchandise. At the outset, it is imperative to clarify about the concept of non-deceptive counterfeit products. Nondeceptive counterfeit refers to counterfeit products that consumers know or strongly suspect to be counterfeit at the time of purchase.

It has been found that consumers are actively participating in nondeceptive counterfeiting especially in the luxury brand market (M. Grossman & Shapiro, 1988b). 2. Consumer values in purchasing luxury goods Consumer value refers to an acquired value that becomes part of an organized system of values. This value system works as a general plan for resolving conflicts and making decisions (Rokeach, 1973). As society becomes more complex and consumer’s values change, it is important to know the various values and intentions of different consumers.

This study considers 4 value factors pursued on luxury products: conspicuousness, aesthetic appeal, durability, and conformity (Kim, 2005); Conspicuousness: Conspicuous consumption is a term used to describe lavish spending on goods and services that are acquired mainly for the purpose of displaying income or wealth. In the mind of a conspicuous consumer, such display serves as a means of attaining or maintaining social status (Veblen, 1899). Aesthetic appeal: Aesthetic value is subjective and invisible. People value luxury goods based on their aesthetic appeal.

Durability: People generally believe that luxury goods are superior to other products in quality. Durable goods do not quickly wear out and yields services or utility over time rather than being onetime use products. It can be said that most goods are therefore durable goods to a certain degree. Conformity: Conformity is generally defined as behaving or thinking in a socially acceptable or expected manner. Conformity is defined slightly differently in terms of marketing, where it denotes the tendency of opinions to establish a group norm, or the tendency that people have to comply with the group norm (Lascu & Zinkhan, 1999). . Experimental Plans This study focuses on the role of an exposed logo in influencing consumer’s values in attitude and intention to buy counterfeit luxury goods. This paper thus compares logo products and non-logo products. In exploring the questions below, this paper is limited to consideration of fashion goods which is typical high-involvement product. Four research questions are addressed: 1. How does exposure of a logo influence attitudes toward the product? 2. How does exposure of a logo influence intention to purchase? 3.

How does consumer value type influence attitudes toward logo-exposed counterfeit and non logoexposed counterfeit products? 4. How does consumer value type influence intention to buy logo-exposed counterfeit and non logo- exposed counterfeit products? The related hypotheses are as follows: Study 1 [H1-1]: Pursuing conspicuous value influences attitude toward counterfeit goods and intention to purchase. [H1-2]: Pursuing aesthetic value influences attitude toward counterfeit goods and intention to purchase. [H1-3]: Pursuing durable value influences attitude toward counterfeit goods and intention to purchase. H1-4]: Pursuing conformity value influences attitude toward counterfeit goods and intention to purchase. [H1-5]: Relationship between consumer’s attitude and intention to purchase is influenced by incorporation of a logo. Study 2 [H2-1]: Pursued values between students of KAIST and Ewha Woman’s University are different. [H2-2]: Attitude toward counterfeit goods between students of KAIST and Ewha Woman’s University is different. [H2-3]: Intention to purchase counterfeit goods between students of KAIST and Ewha Woman’s University is different.

Study 3 [H3-1]: Attitude toward counterfeit goods is different according to consumer’s pursued value types. [H3-2]: Intention to purchase counterfeit goods is different according to consumer’s pursued value types. First, a preliminary experiment was conducted and the main experiment followed. The main experiment involved three studies. The experimental model is illustrated below [Figure 1]. Figure 1. Experimental Model ?. Result 1. Preliminary Experiment A preliminary experiment was performed with 12 items, all of which are well-known luxury brand goods: Chanel, Louis Vuitton, Burberry, and Gucci.

Bags, wallets and shoes were used for question items. 10 undergraduate and graduate students at KAIST participated in the test. Questions about the place of purchase, price, preference, brand image, and price were asked. Items were divided according to two criteria: logo exposure and originality. Interviewees were asked to select the product most desired to own. Four products with different price and quality were presented for each question. Sample stimuli are indicated in Figure 2. n Figure 2 Sample sti 2. imuli for pre eliminary exp periment With collected data people’s preference wa visualized by scatter p a, as d plot.

As show in Figure 3, it has wn e been fou that peop generally prefer logo-exposed pro und ple y oduct if the i item was orig ginal. If the item was counterf feit, people p preferred no l logo-exposed product. d Figure 3 Number of selected log 3. go-exposed p products Several improvemen were mad on the bas of the pre nts de sis eliminary exp periment res sults. First, one brand o should b selected t avoid pers be to sonal brand p preference, which causes bias. Second, original products w and cou unterfeit prod ducts should not be show simultaneously.

As t d wn their appeara ances are sim milar, the participa tended t have a pos ants to sitive attitude toward the counterfeit p e products’ app pearance. Third, th kind of pr he roduct should be strictly s d specified. Th participan showed te he nts endencies to purchase counterfeit goods when the item was small in one. Their preference for logo-exposed goods varied according to the product. Finally, some participants who chose only original luxury products tended to avoid selection. They did not wish to buy counterfeit products and they did not want to answer about choosing counterfeit goods.

A particularly interesting finding is that experience of purchasing luxury goods influenced their attitude toward counterfeit goods. However, as the present paper is primarily focused on brand logos, the interesting question of luxury purchaser’s attitude is not addressed here. 2. Main experiment Subjects 127 university students participated in the experiment. The average age of the students was 23. 5 (SD=2. 56) and there were 43 male (32%) and 84 female (68%) participants. The students were asked to complete the questionnaire. Five data were identified as outliers.

Stimuli The materials used in the survey were 10 counterfeit Louis Vuitton handbags, which make up the largest counterfeit market in Korea. The questionnaire involves 5 pairs of hand bags, and there is a counterfeit with a logo and without logo for each bag. Items were randomly shown. Among 5 questions, there were four questions about attitude toward the product and one question about intention to purchase. Consumer values in purchasing luxury products Consumer values were queried through the questionnaire based on the value factors pursued in luxury products; conspicuousness, aesthetic appeal, durability, and conformity.

Following an approach in a previous study (Kim, 2005), pursued values in purchasing luxury goods were composed of four values. The pursuit of conspicuousness was addressed by 4 questions and the pursuit of aesthetic included 3 questions. The pursuit of durability was addressed by 2 questions and the pursuit of conformity with 2 questions. A seven-point Likert scale was used for the responses to all questions: ‘very much’ (+7) and ‘not at all’ (+1). Questions are listed in Table1. Table1. Items for measuring consumer’s value Conspicuousness 1.

Even though it is expensive, people looks different with a luxury product. 2. Brand shows my dignity. 3. I purchase a product because its brand is famous 4. Even though it is expensive, I purchase a luxury product because I want to have different product compared to other people. Aesthetic appeal 5. I purchase luxury goods because they are aesthetically more appealing than other products. 6. I purchase luxury goods because of their unique design. 7. If the products appeal to me, I purchase them regardless of the price. Durability 8.

I purchase luxury goods even though it is expensive as it can be used for a long time. 9. I fear buying cheap products. Conformity 10. I purchase luxury products when I see friends or colleagues own them. 11. I purchase luxury products when I see a celebrity wearing or using it. Attitude and intention to purchase counterfeit goods Four questions about attitude towards products were formulated following the research (Lee, 2003) which in turn was based on a previous work (MacKenzie, J. Lutz, & E. Belch, 1986). ‘Favorable’, ‘likable’, ‘satisfactory’, and ‘recommendable’ were measured using 7-point Likert scales.

Two questions were formulated about intention to purchase based on a previous study (Lee, 2003) that employed the scale presented in Kamins and Marks’ work reported in 1987. ‘I want to buy the product’, ‘It is highly likely that I will buy the product’ were measured through 7-point Likert scales. 2. 1 General results Reliability tests For the multi-item scales that were modified from existing studies, it is necessary to test their reliability before further analysis. (items were taken from Lee’s (2003) study with a few modifications). These items were tested on the basis of their Cronbach’s alpha.

Cronbach’s alpha is a commonly used measure of reliability that is usually interpreted as the mean of all possible split half reliability coefficients. The value of Cronbach’s alpha is in a range of 0 to 1, and numbers greater than 0. 70 represent a good measure (Bohrnstedt & Knoke, 1994). However, a value as low as 0. 60 could be deemed adequate for an exploratory study (Ven & Ferry, 1980). Based on the reliability tests, the following were retained: three items for consumer’s value towards aesthetic appeal (? =0. 6), four items for conspicuousness (? =0. 15), two items for conformity (? =0. 678), and two items for durability (? =0. 736). Altogether, 11 items were retained for further analysis [Table2]. Table2. Cronbach’s alpha for each value items Value Cronbach’s Alpha Aesthetic 0. 6 Conformity 0. 678 Conspicuous 0. 815 Durable 0. 736 Independent samples T-test A comparison was made on participants who preferred logo-exposed products and non logo-exposed products were compared. Regarding attitude toward counterfeit products, every value except conspicuousness was identified to be statistically different at p

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