How Now Ralph Lauren? The Separation of Brand and Product in a Counterfeit Culture

 

 

James W. Gentry

University of Nebraska-Lincoln

 

Sanjay Putrevu

Brock University

 

Clifford Shultz II

Arizona State University - East

 

Suraj Commuri

University of Nebraska-Lincoln

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

           

 

 

 

 

 

 

The authors would like to thank Roger Dickinson for his comments on an earlier version of this paper.

 

How Now Ralph Lauren? The Separation of Brand and Product in a Counterfeit Culture

 

 

Abstract

 

            In discourses on search in marketing and consumer behavior, we assume that consumers search for brands within a product. Research among consumers in markets where counterfeit goods abound reveals that consumers also search for "products" within a brand. In other words, even after consumers make a brand choice in a purchase context, search may ensue and further evaluation takes places between a genuine article and various counterfeits. This indicates that when brand equity begins to symbolize strongly an image rather than more tangible product attributes, consumers may begin to regard the brand and the product as different entities serving different purposes. This notion has the potential to explain the complex search and decision-making process involved in the volitional purchase of counterfeits.

Introduction

Product quality variance has reduced greatly in North America (Carsky, Dickinson, and Canady 1998), and brand name has become an exceptionally strong cue for quality. The consumer search literature has strong roots in economics. It is interesting to note that early economic models assumed that consumers had or could easily obtain perfect information and, therefore, knew the most efficient brands and stores (Goldman and Johansson 1978; Stigler 1961). While such unrealistic assumptions have been discarded for more complex and realistic models, the consumer search process is essentially assumed to be one involving two steps: (1) the determination of the preferred brand(s) through some kind of evaluation process that compares the various brands across the salient attributes and (2) the systematic search for the lowest price on the identified brand across stores based on a cost/benefit tradeoff (cf., Putrevu and Ratchford 1997). The order of the two steps is unclear; i.e., some consumers might first select the store and then search across brands. What is important is that such a perspective concentrates primarily upon pre-purchase search, a notion that has been questioned frequently (Bloch, Sherrell, and Ridgway 1987). As an example, Bloch et al.'s (1987) ongoing search construct acknowledges that those with enduring involvement may search all the time, and not just when a need to purchase has been recognized. However, most search literature still focuses on comparisons across brands, with little emphasis on search within brands -- not so much in the price/quality tradeoffs made within a brand's product line, but rather the search for quality within one model of the brand. Whereas most Western consumers would assume little variation to exist within a model, the existence of counterfeit goods makes this process far less than a given. Figure 1 depicts the typical search behavior that is examined in marketing and consumer behavior.

The assumption here is that once a consumer makes a product decision, then the search is restricted to brands in terms of brand equity, quality, and price. However, when counterfeits are available, even after consumers make a brand model choice, they may search among the genuine product and the counterfeits. This may be with regard to distinguishing the genuine item from the counterfeit or differentiating among counterfeits. The purpose of this paper is to investigate consumer search within the brand model in market conditions where fakes are plentiful. The intent here is not to discuss the ethical issues involved in counterfeiting [which have been discussed systematically in Gutterman and Anderson 1997; Jain 1996; Nill and Shultz 1997; Shultz and Saporito 1996] nor to attempt to understand the cultural bases facilitating counterfeiting (see Mittelstaedt and Mittelstaedt 1997 for a systematic discussion). Instead, we accept the reality of counterfeits and investigate consumers' lived experiences with the phenomenon.

The Growth of Counterfeits

Globally, the sales of counterfeit products are estimated to be about $299 billion (Chakraborty et al. 1997). The International Chamber of Commerce estimates that counterfeit products account for 8% of world trade (Freedman 1999). Though currently a topic of keen global interest, this phenomenon is not new. For example, counterfeit paintings became so common in late Ming China that only one in ten paintings was estimated to be genuine (Clunas 1991).

            Most Westerners (and most people in general) attribute the purchase of counterfeits to "others." For example, even informants in countries where counterfeits are rampant claim that the majority of purchases are by tourists (Gentry, Putrevu, and Schultz 2000). While notions such as a $10 Rolex, a $5 Swiss Army knife, and a $3 bottle of Napoleon brandy may not be unfamiliar to Western consumers, the general belief is that such items are only available in urban areas from street vendors or from people selling from the trunks of their cars. However, Business Week (1999) recently noted that billions of dollars worth of golf equipment sold in the US are counterfeits imported from Asia, including a version of the $500 Great Big Bertha driver from Calloway Golf. Even more recently, US customs officials seized more than $20 million worth of counterfeit Pokeman products in the last six months of 1999. Nintendo, which owns the marketing license for Pokemon goods, is training customs officials and police officers in New York City and Honolulu how to tell the difference between real and fake Pokemon cards (Lincoln Journal Star 1999). We argue that we are seeing just the tip of the iceberg, as the prospect for counterfeiting is enormous with the advent of e-commerce. Startup firms offering great prices may or may not be selling the genuine brands. The credibility justifiably earned by many mail-order operations and by e-commerce leaders such as Amazon.com may reduce consumer skepticism in the short run. However, the lack of Western consumer expertise in identifying counterfeit items may provide opportunities for those with access to "quality" counterfeit goods.

            Traditionally consumers in environments flooded with fake branded goods have used non-product cues such as price or the type of outlet selling the item to identify counterfeits. The perception that there is a simple dichotomy (authentic brand vs. obvious fake) is questionable in today's global economy. The outsourcing of production to developing economies has provided these countries an access to improved manufacturing processes and access (and familiarity) to the Western brands themselves. Further, technology advances have decreased the startup costs for counterfeiters greatly. Given the costs associated with establishing brand equity, borrowing others' equity apparently is an attractive alternative.

The Study

            Over 100 students at an Australian research university conducted interviews with international students. The students were trained in data collection through interviews by one of the researchers and were required to collect the data reported here as part of a course requirement. The focus of the interviews was on discussing the existence of counterfeit items in the home countries of informants, the level of sophistication in terms of being able to identify counterfeits, and the rationale for purchasing counterfeits deliberately. Table 1 provides a list of the countries represented in the study. The nature of the sample reflects Perth’s relatively close location to Singapore, Malaysia, and Indonesia. Further, nearly all of the informants from these three countries were members of the Chinese subcultures there, and not members of the more populous Malay subcultures found in Malaysia and Indonesia.

Table 1

Informants’ Cultures of Origin

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                Country / Region                                 Number                  Country / Region                                 Number

 

                Singapore                                                31                          USA                                                          3

                Malaysia                                                  30                          Eastern Europe (Romania,                     2

                Indonesia                                                 8                                                           Yugoslavia)

                Western Europe (Italy 3, France,          6                           Papua New Guinea                                  2

                                England, Austria)                                                 Taiwan                                                      2

                Hong Kong                                              5                           PRC                                                           2

                Brunei                                                       4                           South Africa                                            1

                Thailand                                                                   4                           New Zealand                                            1

                Egypt                                                        1

 

            By reviewing the text of the interviews, emergent themes were gleaned (e.g., Lincoln and Guba 1985). Though the vignettes shared here might be categorized as less than "thick descriptions," collectively they provide rather vivid portrayals of consumer perceptions vis-à-vis quality issues concerning counterfeit items. The home countries of the informants are used to identify the quotations used in this paper.

            As noted by a reviewer, it might well be better in future research to collect data focusing less on opinions about getting counterfeit goods in general than on specific instances (e.g., critical incidents) when consumers actually bought a counterfeit versus an authentic version of a brand.

Interpretation and Analysis

The Volitional Choice for Counterfeits

            Though there appeared to be a certain caution against being deceived into buying a counterfeit, some respondents also expressed a rational choice in favor of counterfeits. In cases where the display of a brand insignia was an important part of consumption of a product, consumers appear to be paying attention to the brand insignia and less importance to the more tangible product attributes. Under such circumstances, a less expensive and inferior quality counterfeit that bore the insignia appeared to be preferred over the more expensive original.

Singapore is a very materialistic country where people are judged solely on what they drive and wear. This has led to many Singaporeans buying counterfeit goods so that it is very hard to tell a counterfeit shirt from an original unless you look at the label which is the reason why a lot of money is spent on counterfeit goods by the residents. On the streets, a typical Singaporean will not care if the clothes look good or not as long as the right designer brand is on the garment.  [Singaporean]

 

As the branded goods in Singapore are highly priced, not many of them [consumers] can afford the genuine stuff. Thus, they go for the next alternative, which are counterfeit products that are so much cheaper. They do not go for the quality but it is the name that they are after, this is why it doesn’t really matter whether the good is genuine or fake. As long as people are able to see them possessing the ‘branded’ goods, they are satisfied. They may even go to an extent of telling others that the counterfeit good is real stuff, not admitting they bought a fake one at a cheaper price. It is also very common nowadays that when Singaporeans go traveling, they will buy back lots of imitation goods. Such places like Hong Kong and Bangkok are very popular with counterfeit goods and it may be the main reason why they go there in the first place. [Singaporean]

 

            In other cases, the volitional purchase of a counterfeit appeared to serve other purposes. Consumers also appeared to view the purchase of a counterfeit as a less risky trial or prelude to the purchase of the more expensive original or simply as a less expensive alternative to the more expensive original.

Frequently the product is not expected to be used for a long period of time. For example, in terms of counterfeit  accessories such as bags, the fashions change so frequently and the price is sufficiently negligent that it is OK to buy numerous counterfeits. [French]

 

The adoption of ‘Why pay more …much more … when you can purchase a counterfeit which is extremely similar to the original brand?’ is prevalent among the locals. [Hong Kong]

 

If you want to collect CDs or VCDs, you buy the cheap pirated one first and then, if you like it (music/movie), buy the original. [Malaysian]

 

Sometimes, the goods are so cheap (inexpensive) that they do not see it as counterfeits but just another product to buy and use. Once it is broken or ruined, it is replaced. [Malaysian]

 

            In other cases, in addition to being less expensive, counterfeits also appeared to offer "more product for the buck" as compared to the genuine item.

Counterfeits may be actually better. They provide more value for the money. For example, there are more songs in a compilation CD. [Singaporean]

 

In Malaysia, the authentic ones may not even match the quality of the fake one. [Malaysian]

 

            Two other factors that appeared to facilitate a conscious choice of a counterfeit over a genuine item appeared to be the growing acceptance of counterfeits among members of the cohort and adjusted criteria for evaluating counterfeits. As the purchase of counterfeits rose among peers, a decision to purchase a counterfeit appeared to be a sensible and guilt-free alternative.

For goods like VCDs, CDs, and Playstation games, Hong Kongers would rather pay less because, first, they are much cheaper and second, because everyone is doing the same thing too. [Hong Kong]

 

Counterfeits are very popular among customers who have low purchasing power and yet yearn for the status and class of branded goods. [Singaporean]

 

            As the purchase of counterfeits became more common, consumers appeared to develop  relevant parameters for the evaluation of counterfeits. Unlike evaluating the purchase of a counterfeit as being a compromise or the result of being deceived, many consumers appear to evaluate the value-for-money of a counterfeit vis-a-vis the reduced value (durability and reliability) against the reduced price of a counterfeit. The avoidance of  the consideration of the genuine item appeared to aid a conscious decision to purchase a counterfeit.

Customers are fully aware that they are buying imitations because nobody could get such good bargains for the real stuff anywhere. Their expectations on their purchases are also directly related to the prices they pay. Thus, they will not expect these products to match up to the authentic versions. [Thai]

 

            Thus, there appears to be, often times, a conscious comparison of a counterfeit with a genuine item. The predominantly western notion that the genuine article is the norm and the counterfeit is deception may not be valid in a marketplace where counterfeits abound and where consumers have begun to build norms for comparison of counterfeits with genuine items.

            In fact, in such markets, consumers demonstrated high levels of confidence in their ability to distinguish a counterfeit from an original. While (lower) price and (non-conventional) location were some ways in which consumers could tell whether an item was genuine or a counterfeit, far more intricate ways to differentiate were also common.

I can recognize these counterfeit goods upon inspection since they are usually made of low-grade materials. Moreover, the labeling and brand names are usually slightly different from the genuine products. For instance, real branded wallets are usually made of genuine leather while counterfeit wallets are usually made of PVC leather. [Malaysian]

 

From my experiences, counterfeit products are usually of a lower quality with logos lacking minor details or with slight amendments. Take for example, Prada handbags. The counterfeit ones usually come with logos that are not as well defined as the originals, or with certain minor details missing though they are not easily noticeable to someone who is unfamiliar with the brand. [PRC]

 

It is possible to detect the piracy goods. For instance, material used to make a particular product (e.g. handbags) can be different in terms of quality. More specific details like the brand’s logo must be symmetrical to each other at all angles and whether this product is truly designed by a particular brand designer, only loyal or brand conscious customers can pick out these differences from a counterfeit product. [Singaporean]

 

            The ability to differentiate a counterfeit from a genuine item also appeared to vary from one product to the other (and  certainly across consumers). Some products appeared to lend themselves to easy detection because of the difference in quality of the packaging/instruction manual and the actual product (packaging and other peripherals being of inferior quality).

I am able to recognize counterfeit software and VCDs at one glance because they usually have inferior packaging. [Malaysian]

 

Video CDs are obviously counterfeit from the packaging which are often in plastic sleeves rather than proper clear plastic boxes. The boxes provided are also of a cheap plastic quality and totally black in color. [Malaysian]

 

Consumers are wise in judging which is counterfeit by the packaging and the method in which the products are displayed. Tags on clothing will be the easiest to determine quality. [Brunei]

 

 

            In the case of products that were not individually packaged or did not carry instructions  (e.g. clothing), the more obvious cues offered by the packaging were absent and detection was more difficult.

With regards to poor quality stitching, the judgment of the brand quality could be found in the time factor (in terms of product durability). Often counterfeit goods would be worn off after a few washings but the genuine product would have a much longer period of durability. [Brunei]

 

Even for famous products, although the counterfeit’s price is still high, it has differences with the real one. If we look closely, the stitches or pirated design are quite different from the real one. It is hard to identify the differences, but for people who are used to encountering the real one, they will realize the difference immediately. [Indonesian]

 

            Thus, there appear to be three possible consumer-product relationships in markets where counterfeits are plentiful and they are depicted in Figure 2. Relationship A is what is commonly studied in marketing and consumer behavior. Consumers in a market do not expect to buy anything other than the genuine item and that is what is commonly offered in the marketplace.  Product search and evaluation behavior follows the typical pattern discussed in Figure 1 earlier. Consumers make a product decision and then search for brands within the product model.  The polar opposite (the existence of the extremely obvious counterfeit) will also be included in this category (as it too ignores the possibility of intervening levels of quality). One difference is that the purchase of the novel fake item (most often by tourists) represents the playfulness dimension discussed by Holt (1995). Relationship B is the case where consumers unwittingly purchase a counterfeit because they are led by sellers into believing that the item is a genuine one. What is typically examined under research on counterfeits is the deception involved. Here the assumption about consumer search is that consumers are searching for a brand under a product model but are offered a counterfeit brand. The fact that a counterfeit is offered in the marketplace is not expected to alter consumer search or evaluation as the consumer is not expected to possess the knowledge that s/he purchased one.      

 

 

 

 

 

 

 

 

 

 

 

 

 

                What also emerges from the data is the presence of product-customer relation C (Figure 2) -- a case where consumers seek counterfeits and there is little deceit involved. This means that consumers are not simply searching for a brand within a product, but also for further "products" within the brand model. In other words, what our data reveal is that after making a product choice, consumers make a brand choice as in the case of any other search behavior. However, after making the brand decision, consumers may be now faced with another choice, whether to purchase a genuine item or a counterfeit. Figure 3 illustrates this second tier search for products. Several informants discussed the results of the Asian meltdown; prior to that event, they had developed preferences for a certain brand (see Wong and Ahuvia (1998) for a discussion of the relationship between economic progress of a nation and the consumption of luxury brands in Eastern cultures). After the meltdown, they could no longer afford the brand, but could buy a counterfeit version.

     

Quality Comparisons Across Counterfeits

            Consumers also appeared to search among counterfeits. The difference between counterfeits and genuine articles did not appear to be dichotomous but a more continuous one that was made up of various levels depicted in Figure 4. In other words, consumers perceived differences in quality among genuine items, seconds, and various counterfeits. Our data collection focused mainly on the extreme phenomena listed in the Figure. This is an interesting notion that reveals that there are different levels of counterfeits ranging from those that are closer in quality to the genuine to those that are easily distinguishable as counterfeits because of their inferior quality.

The more fashion and status-oriented of course will buy only those of higher quality and refined imitation from overseas when compared to those available cheaply at local weekend markets. In Hong Kong, for example, one now has the choice of buying different grades of counterfeit goods for different products. [Singaporean]

 

There are two classes of counterfeits in these countries. First is the “same-name-but-different-style-positive-feel-bag.” Sure it has the word Prada written, but the material of the counterfeit bag is weak, easily torn, and zippers don’t work. Even in the extreme case, Prada is spelt differently. Hence, very cheap. The second class is “up class fake bag.” It is 95% the exact replica of the original Prada, material and color is closer than far from the first class counterfeit, and probably the only difference from the real thing is the price and where it is made. Plus it doesn’t come from Italy and contain an authentic Prada card inside. Now that is the true-blue thing. [Hong Kong]

 

The best indicator to judge the quality of the counterfeits would be price. Many consumers would not mind paying for it if the quality is good and it is value for money. [Singaporean]

 

Many are willing to pay for better quality counterfeit products. This is especially true for products such as sunglasses and clothing. [Malaysian]

 

 

At times the difference in quality of counterfeits appeared to vary from truly inferior to one that cannot be distinguished from that of the genuine item.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For VCDs, the counterfeit ones are easy to recognize. The filming quality is so poor you know that someone has just decided to bring his or her own video camera into the theater and film it while he or she is watching. At times you see the shadows of a patron who stood up and walk out in the middle of the screening. [Malaysian]

 

When you watch the movies (VCD), you will be shocked to know that the quality is almost the same as the original. [Malaysian]

 

One can get a Prada handbag at as low as HK$120 but it would be for a poorly produced imitation. However, there are some consumers who are willing to pay more than HK$1000 for an imitation, which has the quality and design of the genuine one. [Hong Kong]

 

            These quotes provide strong evidence that intense “hands-on” product evaluations can distinguish varying levels of quality, and that such search processes are indeed a reality. Many marketers have attributed the slow acceptance of direct marketing approaches in Southeast Asia to the fact that consumers are high-context and need to see and touch the products before purchase. An expanded explanation would include the presence of counterfeits. If there is any skepticism of the provider’s ability to provide genuine items, the need to investigate systematically the item to be purchased is understandable. And, given the obviously high frequency of encountering counterfeits in these environments and the varying qualities of counterfeits, skepticism is to be expected.

            In addition to careful examination of the quality of counterfeits, consumers also developed several heuristics to differentiate the quality of a counterfeit. Country of origin and type of retail outlet appeared to be two such heuristics.

Counterfeits from Hong Kong are the best, and more expensive. Counterfeits from PRC are cheaper but less quality. [Indonesian]

 

Korea is known to be the best at producing exquisite imitation goods. Hong Kong comes in second then followed by Thailand. [Singaporean]

 

The clothing everywhere is fake. I will not buy any article of clothing in Brunei as it generally appears fake, and I know the quality is lower. [Brunei]

 

            The type of retail outlet appeared to offer an indirect cue of the quality of the counterfeit. There appeared to be a perception that counterfeits were usually sold in street markets and smaller stores in markets known for selling only counterfeits and not in larger stores.

Counterfeit goods are typically sold in open air markets, street stalls and small shops in both cities and small villages around the country. [French]

 

In Malaysia, counterfeits are so predominant that it is generally accepted as the culture there. Petaling Street and Sultan Street, both situated in Kuala Lumpur, are the equivalent of Temple Street in Hong Kong (famous for counterfeit products at a low price). [Malaysian]

 

In the US, you can get counterfeits on the streets. Jeans are the largest items on the streets in Seattle, almost always being sold out of the back of vans or at a street vendor’s. [American]

 

            However, there also appeared to be the knowledge that some larger stores did sell counterfeits along with genuine items. But the confidence to shop at these larger stores appeared to be drawn from presumptions that the counterfeits in these stores would be closer in quality if not akin to the genuine items, that the difference will be very difficult to distinguish, and that these retail stores offered competitive prices appeared to be an additional incentive that overrode any ambiguity.

Stores even place the real and the counterfeit products in the same stores, same shelves, and charge the same price. It is a real cheat to customers even though the quality difference is so little that people who are not used to encountering the real products would not know if they end up buying the fake one. In this case, customers buy counterfeit products unwillingly. [Malaysian]

 

Consumers purchase these counterfeit products, sometimes even unknowingly (they think it’s original). They are usually of high quality, at times higher quality than originals, and priced below the original’s price tag. As it is almost impossible to tell the difference between counterfeits and originals, all consumers tend to buy the counterfeits when available on the market, simply because they are cheaper. [Italian]

 

            Thus, in addition to the volitional purchase of counterfeits, in markets where counterfeits abound, there also appears to be a search for the desired quality of a counterfeit. After making a decision to purchase a counterfeit or a genuine item, consumers appear to be searching for information on quality of counterfeits and are left with the decision of the level of counterfeit that they are willing to purchase.

Counterfeits and Price Bargaining

            A final stage of search appears to be a search for the right price within the product-brand-"level of counterfeit" schema. After identifying the level of counterfeit that they are willing to buy, consumers enter the -- often lengthy -- process of bargaining for the right price. Bargaining for a price appeared to be common in shopping for counterfeits and the asking price appeared to have been seldom accepted by consumers.

The price would be a lot cheaper, say for a Rolex for example. The seller may initially put the price high for about $1000, but when the customer is really interested, the final bargaining can make the watch reach to $50. [Malaysian]

 

For as little as RM$10 (about US$3.00), one can purchase a full version of Microsoft Windows 98, as well as many of the latest software that may not even be available in legal market yet. [Malaysian]

 

            Thus, though consumers who consciously seek counterfeits behave like other consumers in seeking the lowest price, its place in search and evaluation appears to be different than in the case of what we understand in the West as search and evaluation in the case of genuine products (the latter schema is depicted in Figure 1). More specifically, it appears to be within the chosen alternative and not across a set of alternatives as in the case of what is understood as search and evaluation behaviors in the case of the purchase of genuine items.

Conclusions and Discussion

            Counterfeiting is a global phenomenon, though its presence is more common in some parts of the world than others. Our findings indicate that there are obvious cues (informal retail setting, unbelievably low price -- after negotiation, and poor packaging and labeling) that help identify counterfeits (cf. Cordell, Wongtada, and Dieschnick 1996). However, the quality of counterfeits has improved greatly, especially as manufacturing technology has been out-sourced and new technology such as cheap, high quality color printers and copiers, and cheap CD burners and recording equipment have become more common. The sophistication needed to discern quality counterfeits from authentic items has increased.

            Ethical issues aside, manufacturers no doubt are in a quandary as to the real cost of counterfeits. Large manufacturers spend millions of dollars tracking consumer tastes, designing hot new products, distributing them efficiently, and creating demand through impressive advertising campaigns. Also it would seem clear that counterfeits reduce the brand equity so established, especially if the purchase of shoddy merchandise is made unwittingly. On the other hand, what brand would have any equity if it were not worth counterfeiting? Ironically in some cases companies actually may view being counterfeited as a boon to their efforts to build brand awareness (cf. Freedman 1999; Shultz and Saporito 1996). Regardless, we argue that one needs to look at the issue from the consumer’s perspective and, more specifically, from one’s tendency to search. One view is that obvious knockoffs are easily identified and that consumers (tourists) buy them only for novelty purposes. In fact, a trial judge in Hong Kong, while sentencing a wholesale counterfeiter, noted that “no one (Dunhill, D&G, Polo, or Ralph Lauren) – ever lost a sale to this sort of activity… No one would be fooled” (Strait Times 1999). On the other hand, evidence suggests that the quality of some counterfeits can approach or even match that of the authentic items, making the cost of search much higher.

Our findings indicate that there may be other explanations here. First, counterfeits allow consumers to try a low-grade version with the intent of purchasing the authentic item if the trial is successful. Second, counterfeits also appear to offer lesser value for lesser cost, an acceptable compromise and at times a desirable one given the initial outlay of expenditures required. However, what may be most critical for owners of brands to consider is the extent to which counterfeits allow consumers to delink the brand and the product. Counterfeits are only good as long as they are counterfeits of some brand. Thus, the reason why consumers buy a counterfeit is because it represents -- albeit to varying degrees -- the brand it is supposed to be copying. In cases where consumers are deceived into purchasing a counterfeit, it can be argued that the consumers may have been under the assumption that s/he may be buying the genuine product. However, our data reveal that consumers often purchase counterfeits out of conscious choice. Under such circumstances, consumers are reaching for a specific brand and willing to compromise on the product. A counterfeit appears to offer consumers a chance to separate the brand from the product. While the purchase of a counterfeit represents the consumption of the brand (brand decision), it does not appear to represent a "product" decision. Consumers have yet to choose among the various counterfeits of the brand and yet to agree on the price of the product. In other words, the consumer purchase decision in the case of counterfeits appears to follow the schema represented in Figure 5, rather than the conventional model in Figure 1.               

 

 

 

 

 

 

 

 

 

Informants from developed countries acknowledged that counterfeiting exists there, but only in street markets. A certain degree of insulation from such activities was obvious. As e-commerce grows though, the developed world may see vastly increased numbers of counterfeits circulating. Some marketers have questioned why fixed-format retailers would compete against themselves by creating web sites. This paper indicates an obvious reason: the store’s equity will assure the buyer of obtaining an authentic item, whereas skepticism will exist for lower-priced competitors.

            Another insight from our findings is the mirror-image of a point raised frequently by Belk (1999) and others: people in transition economies are willing to pay disproportionate parts of their income for symbolic Western products. Our data reveal that such desires are also fulfilled through the possession of the brand and not necessarily of the product. There is evidence that well-resourced tourists also seek to acquire symbolism, but in the form of obviously counterfeit goods. The novelty and the tangible symbol of one’s travel experiences merit more investigation, especially given tourism’s role as the largest industry in the world.

A final insight is one that contradicts the guidelines of most international marketing textbooks, that consumers in developing countries are extremely price conscious and that the price for one’s product should be kept as low as possible. Our findings indicate that a very low-priced Western good may be seen as a counterfeit, rather than as a good buy. If there is a degree of brand equity involved, we would admonish the manufacturer to distribute the product to “upscale” stores (though, admittedly, this emic may vary greatly across cultures) and avoid being extremely competitive in terms of price. An extension of this implication is that manufacturers may want to be very careful when introducing a modified product into a market flooded with fakes, as it may well be seen as a counterfeit. Care needs to be made that those subtle cues used to judge authenticity are still evident in the modified product.

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