Buying decisions of counterfeit goods and moral judgment.

Author:de Lucio, Juan
Position:Articulo en ingles
 
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Introduction

The purchase of counterfeits is a phenomenon of great international dimension. The International Anti-Counterfeiting Coalition estimated it hat the volume of world trade in fakes could reach between 5% and 7% (International Anti-Counterfeiting Coalition, 2013). This figure is similar to that proposed in 2004 by the World Customs Organization, estimating that counterfeiting could be between 3% and 7% of world trade (World Customs Organization, 2004). According to Trainer (2004), the value of counterfeiting worldwide may vary from 5% to 10% of world trade and in some industries could become 30%. OECD shows that the volume of trade in counterfeit goods has increased steadily to reach 250,000 million in 2008 (OEDC, 2009). Frontier Economics (2011) estimated the value of global trade of such products in 2015 between 770-960 billions $.

The ICC (International Chamber of Commerce, 2011) notes that the costs (lower revenues and higher expenses) that cause counterfeit products for governments and consumers of G20 countries could exceed 125,000 million each year and about 2.5 million jobs. For Spain it is estimated that total spending on counterfeit goods in 2012 amounted to 1,000 million (de Lucio and Valero, 2013). Given the size of the problem and its consequences, it is appropriate to identify the factors that determine it to try to act accordingly.

There are also a number of factors that currently might be affecting purchase propensity of forgeries. First we note the effects that the international economic crisis are having on the income and purchasing decisions of consumers. Second, we highlight the emergence of new competitors on the international scene with massive production capacity, with access to more developed markets, and in which there are fewer guarantees on industrial property. Finally, we emphasize the development of new products, new markets and new technologies that provide new possibilities for fakes' exchange.

Some studies show the influence, on the purchase decision of counterfeit products, of the moral judgment that the consumer and the acquaintances have in connection with the purchase of fakes (Kim et al., 2009; Wilcox, Kim and Sen, 2009; Michaelidou and Christodoulides, 2011; Hanzaee and Taghipourian, 2012).

In connection with the acquisition of counterfeits, moral judgment is crucial and it has a higher weight than personal characteristics or products features (de Lucio and Valero, 2013). Moral judgment is a key element in determining buying fakes as shows the increasing presence in research in recent years. This document is an additional contribution to the literature, both from the standpoint of the integration of different elements that can affect the purchase decision, and in relation to the analysis of a developed country net importer of counterfeit goods.

The work is divided in three additional sections plus the conclusions. The second section proposes the theoretical framework of the decision to purchase counterfeits. Specifically, models of consumer behaviour are used.

To carry out the analysis we conducted a consumer survey in 2013, whose universe of reference is the entire Spanish population over 18 years. The third section presents detailed data and working hypotheses, performing a first quantitative approach to them. The hypotheses are contrasted in the fourth section, which tests the compliance with them through econometric modelling of counterfeit purchase decision. The study ends with a summary section with the main conclusions, research agenda and policy proposals.

The decision to purchase counterfeits. Theoretical framework

The research on buying decisions of counterfeit goods uses the analysis of attitudes, intentions and the consumer final behaviour as theoretical model of reference (de Matos, Trinidade and Vargas, 2007). Such models have the great advantage of flexibility. They can incorporate a number of elements, more or less quantified both of objective and subjective character. The model can be adapted to introduce ethical and moral elements as well as any other characteristic that may determine the intention or purchase decision. A possible criticism of these models is that they are usually limited to consumer buying intentions, rather than the fact of the purchase itself. The intention and the final purchase decision may not coincide (see Figure 1). That is, the final decision of buying a counterfeit product may differ, by a lot of reasons, of the attitude or initial predisposition toward the purchase. In this sense, one of the contributions of this work is the use of information relating to both purchase intention as well as to the actual final decision of effective purchase of counterfeit products. This allows us to analyze how attitudes or dispositions are finally reflected in the final purchase decision.

The flexibility of the paradigm used allows us to introduce a classification of the different elements that can influence the purchase decision. Specifically, our theoretical model considers that the reasons that might lead consumers to buy fakes are basically of three types: personal, product and context.

First, we could consider that some personal characteristics are associated with consumption of counterfeits. These can be both objective (e.g., age, sex, family status, occupation or income) and subjective (ethics, moral principles, or self-control).

Several studies show that personal characteristics influence spending on fakes (Phau, Prendergast and Chuen, 2001; Prendergast, Chuen and Phau, 2002). According to these studies, consumers who spend the most on counterfeit products are professionals, aged between 25-34 years, and with a higher education degree. Cheung and Prendergast (2006) point out that buying counterfeit technology products appears to be more common among educated young men, while buying counterfeit clothes and accessories are more frequent in the group of women. Conversely Hamelin, Nwankwo and El Hadouchi (2012) identified a greater likelihood of purchase among men. These authors also indicate subjective factors (integrity of the consumer, for example), as elements that decrease the forgeries' purchase propensity. This branch of research linking morality, guilt, fear, and other less tangible factors to a lower likelihood to purchase counterfeits has been developed in recent years. The work has been driven by clear and powerful results that conclude that moral judgment and guilt decrease purchase intention (Kim, Cho and Johnson, 2009). Also, Michaelidou and Christodoulides (2011) made an approach to both purchase intent and purchasing behaviour; their results indicate that the ethical obligation of the individual decreases both the intention and the actual purchase. Penz and Stottinger (2012) point out the emotional factors as determinants of purchase decision. Hanzaee and Taghipourian (2012) consider that the subjective interpretation of the standard, integrity and personal gratification could affect consumer attitudes towards counterfeit products. Martell y Mansilla (2006) show how accountability is a key element for the correction of the moral gap that occurs between reasoning and acting. Thus, intangibles have come to play a central role in studies on consumer attitudes towards counterfeiting.

A second group of elements that might affect the consumption of imitations relates to the characteristics of the original product and those of the counterfeit. In this category we can identify the apparent quality, durability, aesthetics, price or the degree of overlap with the original. It can also be found in this group the efforts of the original manufacturer to prevent counterfeiting or the look of the original brand.

In this regard, studies indicate that the quality and price are the most important factors that drive the intention to buy counterfeit. These analysis provide results showing that risk-related concerns (for example, health) and doubts about the results of the counterfeit product are also important factors in order to avoid consumers buying fakes (Hamelin, Nwankwo and El Hadouchi, 2012). The paper of Hanzaee and Taghipourian (2012) is also in the same line. Ferreira et al. (2008) indicate that appearance is the most determining factor in the purchase decision. Other works suggest that consumer perceptions of the brand have a leading role in the fakes' purchasing decisions (Bian and Moutinho, 2009; Bian and Moutinho, 2011). In this sense, Ostrovskaya and Sarabia-Sanchez (2013) identify a positive relationship between consumer materialism and consumer tendency to use trademarks, concluding that a high tendency to use the brand name increases consumer vulnerability and reduces the influence of other purchasing criteria.

Finally, we identify a third category associated with the conditions of the social environment and context of the buying situation. So, when it is favoured the dissociation of buying a counterfeit product and the adverse effects that buying might lead to, buying may be fostered. Likewise, when consumer is exposed to forgeries more often, the purchase also occurs more frequently. Also, some studies note that consumers identify counterfeit products with the lowest price and the location of the point of sale (Phau, Prendergast and Chuen, 2001).

Furthermore, the social context of consumers may also affect the purchase. In this sense, the availability, the risks perceived by the consumer (e.g. financial, legal, operational risks, health consequences, harassment), institutional factors (eg. legal, police) or cultural (eg. social pressure, values more or less materialistic of the society) can affect the purchase decision. So Wilcox, Kim and Sen (2009) note that consumers' willingness to purchase counterfeit luxury brands depend on the social motivations or on the association to a...

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