Impact of Counterfeit Products on Consumer Buying

Behavior: Empirical Investigation form Karachiites

Nawaz Ahmad*, Aamir Firoz Shamsi**, Sarah Hussain***

ABSTRACT
The study aims to investigate which of the social and personality factors affects
the buyingbehaviour of the consumers towards counterfeit products. The study is
also set out to examine the relationship of consumers’ buying behavior towards
counterfeit product with purchase intention. We used primary data which was
collected through questionnaires consisting of 12 questions. A survey of 100
respondents was conducted in the educational institutes and offices of Karachi.
Regression model was used to test the hypothesis postulated and research
question. It is discovered that there is no impact of counterfeit products on
consumer buying behaviour. By having a better understanding of the consumers’
behavioral intentions of buying counterfeit products, the manufacturers and
marketers of the genuine brand products can make better marketing strategies to
entice the consumer to buy the original product and not the counterfeit version.
Theoretical contribution of this study is an extension of knowledge of consumers’
buying behaviour with regards to counterfeit productsin the fashion industry of
Karachi.

Keywords: counterfeit product, consumer buying behavior, fashion industry

*Visiting Professor at Iqra University, Karachi. nawazahmad_pk@hotmail.com

**Associate Professor at Bahria University, Karachi. aamirfs.pk@gmail.com

***Masters students at KASBIT, Karachi. sarah.hussain00@hotmail.com

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 1. INTRODUCTION
1.1 Background of the Study
Back in 1965’s, after the World War II, the people faced a lot of financial and
economic crisis. They did not have enough money to choose the best fashion products for
them. That was the time when marketers started manufacturing same types and same
sizes of clothes and other fashion products for the people to buy. People being
economically disturbed, started buying whatever was available to them.

After some time came the era, when marketers started manufacturing different
products but they worked on selling for they have produced or in other words that was the
era of marketers. At that time there wasn’t much awareness about brands and branded
products as people initially wanted to fulfill their basic needs.

As the time passed, people became aware of different brands and luxury fashion
products. Even at that time, some consumers’ income was good enough to buy the luxury
brands but at the other hand the ones whose income has dropped began looking for the
counterfeit products. Counterfeit products are also known as knock offs, replicas, copy or
fake products. As a result, the demand for the counterfeit products increased and the
manufacturers started working on such products to increase their profit. Such products
are the exact copy of the original product with a slight difference which normal people
(those who do not have the experience of the original brand) could not figure out.
Therefore, counterfeit products are the ones which have the same features or are slightly
different from the original products or the branded products (Eisend&Schuchert-Guler,
2006). The goods that provide the sense of originality are known as luxury or prestigious
goods (Husic&Cicic, 2009). (Vigneron and Johnson, 2004) believes that these products
can be distinguished by their dimensions such as uniqueness, exclusiveness, expression
and quality.

The question arises that if people have low income and they cannot afford the
luxury brands then why they want to buy it? Well, there is no end to humans wants and
the fashion products attract everyone whether it’s a young person or an elder. Everyone
wants to be a member of the high class and they get attracted through their reference
groups and through the other social classes. The marketers and manufacturers picked up
this weakness of the consumers and started producing counterfeit products. These days if
we search the market, there are the counterfeit available in almost every area and not only
a single counterfeit but now it has categories such as 1st copy and 2nd copy.

We believe that counterfeit products attract only the consumers who have low
income but it is not completely true. Even the consumers with high income find it
economical to go for the counterfeit products. The main reason behind it is that the ones
who buy the original products when see the replicas of their brands on every second shop
then they get frustrated and as a result they have also started buying the forged goods.
(Eisend&Schuchert-Guler, 2006) asserts price as the main determinant responsible for the
buying of counterfeit products but on the other hand the ones who are not linked with low
income are also motivated to buy the counterfeit products as it is economically favorable.

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And this is the main reason that the counterfeits are widely spread in the countries which
are developed economically such as Pakistan.

Another important role is being played by the manufacturers of the counterfeit

products who are constantly working towards improving the quality of these products
(Eisend&Schuchert-Guler, 2006), due to the advanced technology. These manufacturers
are also using the social networks such as Facebook and other networks such as Watsapp
groups and all to familiarize the consumers with their products. According to (Nia and
Zaichkowsky, 2000) as the brands will become famous it would easier to manufacture
their counterfeits.

As we know that counterfeit products have been there since long but it was not a
trouble for the manufacturers till 1970 but since 1970s it became a serious problem for
the manufacturers of the original brands (Bian&Moutinho, 2009). Consumers, society
and even the manufacturers of the counterfeit products know it very well that the
manufacturing of such products is illegal and unethical but still they are encouraged by
the consumers to manufacture such products (Chaudhry &Stumpf, 2011).

Multiple research have been conducted in the context of fake products and the
impact these products have on the consumer buying behavior but still none of the
researchers has been able to create a clear picture of these products. According to the
literature, the consumers go for the counterfeit products for getting economic benefits
(Yoo& Lee, 2009).

After reviewing the literature and going through the comprehensive background
and history of the counterfeit products, I look at attitudes and beliefs of the working male
and females and University Students. Through this survey, I am now able to infer the
attitudes toward counterfeit brands among a tiny group of people of Karachi. This
research consists of fundamental definitions for the vocabulary used for the study and the
objectives of my research as well. The questions used for the survey discuss facts and
thinking about counterfeit products, along with five questions used to establish
demographics and geographic of the sample.

1.2 Background of the Study

The scope of this study is to investigate the impact of Product Counterfeiting on
consumer buying behavior with respect to Fashion Industry through a questionnaire from
the working men and women and students of universities of Karachi.

1.3 Objective of the Study

This study has the objective to determine the impact of Product Counterfeiting on
Consumer Buying Behavior with respect to Fashion of Karachi.

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1.4 Problem Statement
The problem statement is how the product counterfeiting in the fashion industry
affects the consumer buying behavior.

1.5 Hypothesis
Ho: There is no impact of product counterfeiting on the consumer buying behavior in the
fashion industry.

2. LITERATURE REVIEW
The marketing literature shows that the counterfeit and fake products are offered
widely to the larger markets which jeopardize the exclusivity of original luxury brands
(Grossman & Shapiro, 1988; Lai & Zaichowsky, 1999; Gistri et. al., 2009; Sharma &
Chan, 2011).Market demand of counterfeit products is very high due to two main
determinants i.e. low price and the high value of money.(Cordell et. al., 1996; Wilcox et.
al., 2009; Wiedmann et. al., 2012).
Buying fake products has one very important reason which is the symbol of the
brand. People buy such products to become a part of high social class (Grossman &
Shapiro, 1988; Wilcox et al. 2009). People buy counterfeit products in order to lessen the
risk of being spendthrift by buying original products. Another reason is that the price of a
fake one is one third or sometimes one fourth of the price of original product. Due to this
advantage people ignore the low quality of such products (Tom et. al., 1998; Wiedmann
et. al., 2012).
As compared to original products, counterfeit has low quality but still people tend
to buy it as the good worth for money is delivered by such products (Wilcox et. al., 2009;
Wiedmann et. al., 2012). Brand justice has two main approaches; a customer-based
approach and the financial move toward (Lassar et. al., 1995; Kim et. al., 2003; Pappu et.
al., 2005).
If anorganizationbecomes successful in making consumers truthful to the brand, it
will have more benefits as the consumers will become less sensitive towards the price of
the products (Yoo et. al., 2000).
Marketing cost is decreased by brand faithfulness, this directs to trade influence
since ideal products gets ideal shelf space, and can easily attract consumers and more
importantly the organization will be able to compete and react to competitors as they will
be relieved knowing that their faithful customers will not switch the brand (Aaker, 1991).
Customer´s perception is the perceived quality of the largely excellence or control
of a good or service with reverence to its potential point, comparative to replacements
(Aaker, 1991; Yoo&Donthu, 2001). The excellence is a perception therefore it cannot be

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impartially dogged but also since it is slanted decision of what is significant for the buyer
concerned (Aaker, 1991).
The distinctiveness of counterfeit goods and original goods are unlike from one
another. Counterfeit products link with stumpy individuality and cheap prices (Grossman
& Shapiro, 1988; Lai &Zaichowsky, 1999; Gistri et. al., 2009; Sharma & Chan, 2011).
Premium quality and expensive products are offered in a choosy market that is linked
with the original luxury branded products (Kapferer&Bastien, 2009;
Turunen&Laaksonen, 2011).
Copies of brands destroy the image of the genuine brands and also add to the
defeat of exclusivity and individuality of these brands (Fournier, 1998; Hellofs&
Jacobsen, 1999; Commuri, 2009). The consumer gets admired by owing branded product;
these branded products are recognized and accepted by others as a result individual
agreement of owning these goods increases (Nia &Zaichkowsky, 2000). A larger crowd
of purchasers buy original brands because of the availability of counterfeited products. It
devalues the ownership of original luxury brands. Low prices enable everyone to buy the
counterfeit products (Wilcox et. al., 2009).
According to previous studies the consumers’ attitude of different countries differ
towards counterfeited product. The factors such as social influence, personality
characteristics, and products attribute helps to explain such differences (Ang et al., 2001;
Wee et al., 1995).
As per western researchers the definition of counterfeited products is associated with the
infringement of trademarks, copyright, brand, labeling, and features, all of these
concerning the appearance of the product (Bosworth and Yang, 1996).Since there is
continuous increase in demand and supply side, therefore, counterfeiting continues to
flourish. This is because multinational marketing has created high worldwide demand for
well-known brands (Bush et al., 1989).
A major problem is occurred from counterfeit luxury products since; Asian
countries are widely known places (Cheung et al., 2006).Over the years the quality of
counterfeit luxury products has improved thus differentiating the quality of counterfeit
luxury products with the genuine luxury brands has become hard (Gentry et al. 2006).The
definition of Counterfeited product is “the act of producing or selling a product
containing a deliberate and calculated reproduction of a genuine symbol. A counterfeit
symbol is identical to or significantly cannot be distinguished from a genuine symbol
(McCarthy, 2004).
Trying to fight counterfeiting appears inadequate, especially in the luxury market.
In luxury market the consumer is aware that the product being bought is an imitation (Nia
&Zaichkowsky 2000; Wilcox et al., 2009).We notice the growth of studies that are
connected to the demand for counterfeit products. These studies are determined by a
desire to understand consumer demand for counterfeit products. There are three
motivations to consume counterfeit products, they are: Symbolic status of counterfeiting,
Distribution channel of retailers, Price of counterfeit products (Prendergast et al., 2002 ;
Tang & Pam 2005).
According to most of the literature review price has always been the most
important factor making the consumers disloyal to the original brands (Albers-Miller,

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1999; Wiedmann et al., 2007). Consumers money is saved due to low prices of
counterfeitproducts, due to which the imaginary value of such products is comparatively
high (Ang, 2001). Lavish or significant products are defined as products that bring
wisdom of status to their holder (Husic&Cicic, 2009).
Customer perceived value has four types: financial value, functional value,
individual value and social value (Wiedmann et al., 2007).Counterfeit products have been
there for a long period of time but they have become a genuine problem for the
proprietors from 1970s (Bian&Moutinho, 2009).It is known that copies and other fake
products are unethically made and circulated, consumers are ready to accomplish,
consume and distribute them, this way cheering their extend even more (Chaudhry
&Stumpf, 2011).
Scientific literature proves that buyers usually choose fake products due to their
economic benefits (Yoo& Lee., 2009). It is declared by some researchers that consumer’s
age does not have any influence on intent to purchase counterfeits (Bloch et al., 1993;
Wee et al., 1995).Some researchers assert that youth is mostly interested in buying fake
products. A comparable difference takes position when the effects of income, education
and gender are discussed (Tom et al., 1998).

3. METHODOLOGY
Our research topic is to determine the impact of product counterfeiting on the
consumer buying behavior in the fashion industry, therefore, it will be considered as a
causal research.

3.1 Data and Variables

This research topic is based on the attitudes and behavior of the consumers
therefore it requires primary data. We have the ‘questionnaire’ as tool for collecting the
primary data. The questionnaire (see appendix 1) contains 5 demographic questions and
12 questions based on the two main variables which are Counterfeit Products as an
independent variable and Consumer Buying Behavior as a dependent variable. We have
further sub divided the main variables into its sub variables. The table below is explains
the division.

Counterfeit Products Consumer Buying Behavior

(Independent Variable – X) (Dependent Variable – Y)
Satisfaction Quality
Risk Price
Attitude Brand

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3.2 Sampling Technique
For the collection of data, we have followed the convenient sampling technique
i.e. we gave the questionnaires to those people who were easily accessible in the
following institutions and offices.
 Institute of Business Administration (IBA)
 KASBIT
 Beacon house School System (Teachers of the system)
 Muller and Phipps Distribution Network
 Iqra University

3.3 Sample Size

We floated 130 questionnaires to all the easily available people out of which we
received back 100 responses. Therefore, our sample size is 100 and so the response rate is
76 %.

3.4 Model
The purpose of our research was to identify the effect of counterfeiting products
on consumer buying behavior. As this research will be considered as a causal research,
therefore, we used regression model to find out the impact of our independent variable
i.e. Consumer Buying Behavior on our dependent variable i.e. counterfeit products.
Y    X  

Where Y= Fashion Industry

X=product counterfeiting
α and β = coefficients
ε = error term

4. RESULTS AND DISCUSSIONS

4.1 Inferential Analysis
Reliability Analysis
Variables Cronbach's Alpha No. of Items
Consumer Buying
.783 6
Behavior
Counterfeit Products .638 6

We have used Cronbach’s Alpha to check whether the questionnaire was reliable
enough or not. The lenient cut off of Cronbach Alpha is 0.6 and the strict cut off is 0.7.

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As we have got 0.783 for our dependent variable and 0.638 (which is also close to 0.7)
for our independent variable this means that our questionnaire was reliable.

Correlations

CBB CF
CBB Pearson Correlation
1 .835**

Sig. (2-tailed) .000

N 100 100
CF Pearson Correlation
.835** 1

Sig. (2-tailed) .000

N 100 100
*correlation is significant at 0.01 level of significance (2-tailed)
We apply correlation to check the independence between the main variables. We
are getting 83.5% correlation between our main variables which are Consumer Buying
Behavior and Counterfeiting Products. The result shows that counterfeit products and
consumer buying behavior are highly independent as the sig value is less than 0.01 and
the correlation is significant at 1%.

Regression
Model Summary

Adjusted R Std. Error of the

Model R R Square Square Estimate
1
.835a .697 .694 .42388

a. Predictors: (Constant), CF
Coefficient of determination which is shown by R square which tells that how
much fit the model is. It is 69.7% here which means the changes in Counterfeit Products
dictates 69.7% changes on Consumer Buying Behavior. More importantly, the difference
between R square and adjusted R square signifies that there were no sample errors as this
difference is less that 5%.

ANOVAa
Sum of
Model Squares df Mean Square F Sig.
1 Regression 40.512 1 40.512 225.478 .000b
Residual 17.608 98 .180
Total 58.120 99

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a. Dependent Variable: CBB
b. Predictors: (Constant), CF

As we know that sig value is less than 0.01 which means that it is significant at
1%. Other than this, the ANOVA shows us the overall significance and the fitness of the
model. The cutoff of F is 4. Here the value of F is 225.478 which is obviously greater
than 4. It means that the model is significant.
Coefficientsa

Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant)
.114 .187 .609 .544
CF .997 .066 .835 15.016 .000

a. Dependent Variable: CBB

The impact of counterfeit products on consumer buying behavior is shown by this

table. The coefficient of Counterfeit Products here is positive .997 which shows the direct
relationship between the counterfeit products and consumer buying behavior. If the
counterfeit products increase by one unit the consumer buying behavior will increase by
.997 units. The cutoff of‘t’ value is 2 and here it is 15.016 which is greater than 2. This
shows that the relationship is statistically significant. The sig value is also less than 0.01
which consludes that the relationship is significant.

4.2 Discussion
The aim of this research was to determine the impact of counterfeit products on
consumer buying behavior. The questionnaires were floated to gain the better
understanding of the impact of counterfeit products on consumer buying behavior.
Through these questionnaires we have collected the primary data and we applied that data
on the regression model.
As a result, we came to know that counterfeit products and consumer buying behavior
are higly independent. Other than this, counterfeit products and consumer buying
behavior have a significant relationship which means that if the counterfeit products
increase by 1% the consumer buying behavior will increase by 69.7%. the data collection
and the results of the survey show that the manufacturers of the original brands should
continue bringing innovations and should carry on creating new designs as the consumers
of the original brands will are going towards the counterfeit products.

5. CONCLUSIONS, LIMITATIONS AND

RECOMMENDATIONS
5.1 Conclusion

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 After considering all the results and analyzing the data, we have come to a
conclusion that hypothesis H0 has been rejected as there is a significant relationship
between counterfeit products and consumer buying behavior.
The manufacturers of the branded products should bring innovations and should
use social media and other social networks to grab the attention of the market. There
products should be designed in such a way that the counterfeit cannot be easily created.
This way the consumers would go for the original brands instead of counterfeit.
Moreover, they can alos reduce the price of their products so that a consumer with normal
income can also purchase the original products.
5.2 Limitations
Although we have achieved the aims and objectives of our research but still we
are of the limitations of our research. First of all, we would like to discuss the sample size
which is less than 200. The reason behind this was the time limit. Due to the shortage of
time, we have collected the responses form 100 people only. But to generalize the results
of a larger sample size, another study can be conducted to see the better results.
Secondly, we have collected the data through the convenient sampling technique,
therefore, we short listed the some offices and universities only as our scope was to
collect the data from the working men and women and the university students who are
both professionals and students.
5.3 Recommendations
After the conduction of this study, the collection of the data and through this
survey we have come up with some interesting results on our research topic “Impact of
Counterfeit Products on Consumer Buying Behaviour”. The results have already been
discussed above but we would like to give some recommendations to the manufacturers
of the original brands. First of all, the manufacturers of the original brands should not try
to gain 100% product for each of their product by increasing the prices. As price is the
main factor which leads the consumers towards the counterfeit products.
Secondly, they should come up with such designs that could not be easily copied
by the manufacturers of the counterfeit products.
Finally, they should come up with some legal laws by taking help from the
Governement to bring awareness in people that counterfeit products are illegal and
unethical.

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 Questionnaire

Have you ever purchased/experienced Counterfeited

(Fake) products? Occupation
a. Yes a. Student
b. No b. Professional
c. Non professional
Gender
a. Male Income
b. Female a. 15k – 30k
b. 31k – 50k
Age c. 51k – 70k
a. 18 – 30 years d. 71 >
b. 31 – 45 years
c. 46 – 65 years Education
d. 65 > a. Matric
b. Intermediate / Diploma
Marital status c. Bachelors
a. Single d. Masters
b. Married e. Others
c. Others
*Please rate accordingly as 1 being the least and 5 being the highest level of agreement

Main Variables Sub Variables Question 1 2 3 4 5

Counterfeits have satisfying quality
Quality Counterfeit products are durable and reliable

Consumer Buying
Price I could likely afford to pay such a price for
Behavior
purchasing original product
For me to spend a lot of money for purchasing
original product is easy
Brand I compare the price of different brands to assure
that I get the value for my money
Counterfeit products are just as good as designer
products
Satisfaction The counterfeit products performances will not
Counterfeit products the same as the genuine product
Purchasing counterfeiting product can satisfy
my need
Risk In term of safety, the counterfeit products may
not as safe as the genuine one
Choosing a counterfeit will not bring the best
financial advantage.
Attitude By selecting counterfeit products, others might
have negative perception toward buyer
Buying counterfeit increases social status

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