Effects of Counterfeit Products on Luxury Brands: A Case Study of Louis Vuitton

This dissertation investigates the effects of counterfeit products on luxury brands, with a focus on Louis Vuitton. It explores the entrepreneurial opportunity created by counterfeit products and analyzes their impact on brand performance. The research also provides recommendations for overcoming this challenge. The study uses qualitative research methods and thematic analysis to gather and analyze data.

DISSERTATION

Contents
Title..................................................................................................................................................1
1 ACTION RESEARCH PROJECT REPORT...............................................................................1
1.1 Entrepreneurial Opportunity..................................................................................................1
1.2 Research methodology...........................................................................................................3
1.3 Community of Practice..........................................................................................................6
1.4 Use of Literature / Sources....................................................................................................7
1.5 Analysis of the entrepreneurial opportunity / challenge......................................................10
1.6 Conclusions & Recommendations.......................................................................................14
REFERENCES..............................................................................................................................19

Title
An investigation on the effects of counterfeit products on luxury brands: a case study of Louis
Vuitton
1 ACTION RESEARCH PROJECT REPORT
1.1 Entrepreneurial Opportunity
In recent times, there are has been rise in competition in market in retail sector. It is due to
rise in number of businesses entering into it and they are offering similar products. But in luxury
industry there are various businesses that is offering counterfeit products. Thus, it has resulted in
decrease in brand image of luxury companies. Alongside, different new firms are manufacturing
same products and offering at low price in market (Moon and et.al., 2018). Due to that, it has
resulted in increase in competition as well. Besides that, customers are also highly attracted
towards these counterfeit products. Therefore, it has provided an Entrepreneurial opportunity to
enter into this industry. hence, by copying such type of original products it has enabled in rise in
sales and profits. The businesses are highly emerging in present market. Generally, people love
luxury brand because it offers high and premium quality products that is not offered by other
brands. Besides, customer gets highly satisfied by purchasing product from luxury brand.
However, it requires a lot of hard efforts and effective strategy to establish a strong brand name
in market. In addition to that, as already customer base of companies operating in luxury market
segment is small. But profit margin on product earned is high as compared to other firms. So,
counterfeit products result in breaking customer base. Companies are able to charge premium
prices of the products for high quality of materials and the brand reputation that has been created
through years. This has assisted firm in growing and also their brand reputation is being
increased by this. Counterfeit products basically means to imitate the original products, in order
to steal, destroy or replace the original goods and services. It has been evaluated that Louis
Vuitton sales is been suffering because of there are so many duplicate products who are using
their name and selling these goods and services (Fallis and Mathiesen, 2019). This has caused
negative impact to sales transactions of company. The main objective of research is to analyse
the concept related to counterfeit product. Research will also evaluate the impact of counterfeit
product on luxury brands. It will also recommend solution for the challenge in order to improve
brand performance. Sales of company has been affected because of the rise in sales of counterfeit
products. Louis Vuitton are selling their goods and services at premium price. They are only
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targeting luxurious consumers. Only upper class rich people can afford products of Louis
Vuitton. So, more and more consumers are involved in purchasing the counterfeit products so
that they can look classier. It has also been evaluated that here entrepreneurs need to think of
strategy which can assist them in overcoming this issue.
It is also being analysed that This topic is really important and need to be discussed as
counterfeit products are severely impacting performance level of company and also brand value
of luxury company is also affecting (Moon and et.al., 2018). Consumers who are purchasing
duplicate products are getting lower quality goods and services. They are not getting value for
money. Counterfeit products have negative impact on innovation and company’s sales and
productivity lowers down because of it. It also lowers down brand value of original organisation.
Besides sales of counterfeit products has become global concern. Research says that while the
growth of world is 2 to 3%, whereas counterfeit products have a growth of about 150%.
Manufacturers also says that counterfeit of luxury brand do not require much efforts to be sold
and also they are being easily manufactured. It has also been evaluated that because of
counterfeit products, sales of so many companies are being affecting. It has also laid impact on
profitability and revenue. It has been analysed that because of counterfeit products company has
to deal with damaged brand reputation. In this the company also loses trust which they have
created with their consumers. They need to deal with fallouts of counterfeit. In this brand value
of firm is also been hampered. It has also been evaluated that main reason of this is as consumers
are not being aware about the fact which is original and which is duplicate. They get easily
confused and manipulated. This has led to lowering down of brand value of company. It has also
led to lowering down of sales of company. In such situation consumers can also leave negative
review on online websites. This can further lead to lowering down of sales and also revenue of
firm can suffer. It has also been evaluated cases like this can break down consumers trust.
Customers looks out for product and they feel unhappy because of buying counterfeit products.
They demand refund from authentic firms and also tell them that next time they will not buy
products from them. It usually affects brand value and sales of company (Quoquab and et.al.,
2017). Firm will also not have been able to grow. Long term trust between business are also
affected. Brand reputation is negatively affected and it reduces down profit of firm. It has also
been evaluated that counterfeit products also affects growth of company. Firm also loss time and
money because of fighting counterfeit.
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It is a time consuming process and also lots of cost of company can be involved in this
while fighting from consumer. It has also been evaluated that Consumers who are purchasing
duplicate products are getting lower quality goods and services. They are not getting value for
money. It has also been evaluated that firm needs to think of various strategies so that they can
overcome this counterfeit issue. It will assist company in growing and also because of this they
are better able to achieve objectives. Counterfeit products possess threat to global fashion
industry. It has been analysed that counterfeit products can also lower down brand reputation of
firm. There sales and profitability can be lower down and also firms brand value can be reduced.
By this they will not able to achieve their target sales and objectives. It has also been analysed
that counterfeit and pirated products can also affect economy. In this it has also been evaluated
that counterfeit products have a negative impact on the sales of original products. Consumers get
betrayed by purchasing the first copy products as they are not aware about the fact that it is not
original. counterfeiting can lead to uninsurable risk, which has a harmful effect on the reputation.
It has also been evaluated that luxurious brand reputation can be lower down because of first
copy products. This can lead to the losing their consumer loyalty and also because of these
customers can be victim of fraud. It is also being evaluated that in order to overcome from this
company needs to implement different strategies so that the sales of these products can be lower
down and also this will assist firm in increasing their profitability as well as revenue. It is also
being analysed that buying of counterfeit parts are social adjusted in nature. Consumers purchase
this as they wanted to have experience of luxury brand and also they have no knowledge related
to which product is original and which one is fake. This leads to lowering down of sales of the
original goods and services and also their productivity is being affected because of this. It has
also been evaluated that Counterfeit products have negative impact on innovation and company’s
sales and productivity lowers down because of it. Present report will discuss about research
methods which is being used to achieve the set target and objectives. It will focus on analysis of
literature of review based on the topic selected.
Project plan:
Project task Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week
8
Planning
related to
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project
Recruitment of
team
Review of
Literature
Session of
training
Implementation
Evaluation of
performance
1.2 Research methodology
It is necessary to select particular research methods in conducting study so that it becomes
easy to do it in systematic way. As there are various methods available so it has to be selected as
per subject or topic given. It is being used in order to critically evaluate validity of study. There
are various types of research methods which is being used in order to achieve set target and
objectives. It includes the following:
Data type: There are two type of data one is qualitative and another one is quantitative.
Qualitative research is being expressed in words. In this it is being used in order to analyse
concepts, thoughts and experiences. This type of data collection is being used in order to gain in-
depth knowledge of subject matter. There is various type of qualitative data like for example
open ended questionnaire, interview. In this type of data there are only theoretical concepts and
basis which are being used. This type of research focuses on exploring the ideas and helping in
formulating the theory (Arthur and et.al., 2017). This is being mainly expressed in form of
words. In this type of research only few respondents are being needed. This type of research is
basically subjective in nature. The other one is quantitative. In this type of research, the main
focus is on testing theories and hypothesis. It is mainly expressed in terms of number and graphs.
Statistical analysis is also being done in this type of research. In present research qualitative
method is been used. This is being done and used as qualitative research is easier to understand
and reliable authentic results are being taken out from this type of research.
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Data collection: In this process researchers are being involved in gathering of information.
Primary method and secondary methods are type of data collection method. It has been evaluated
primary is basically collection of raw data. In this information from unpublished source are been
collected. In this method data can be collected with the help of questionnaires, interview, survey,
focus, groups (Gao, 2020). Authentic and relevant information can be collected with the help of
primary method. It is being collected for specific purpose and mostly sample size is small. On
the other hand, in secondary sources information can be gathered by researchers only from
published sources.
In the present report secondary data collection method is being used. It has been analysed
that in this data can be collected with the help of published journals, articles. Various company
blogs and websites has also been used in order to collect the data. Researchers made sure that
authentic and relevant data is been selected for study so that objectives of research can be
achieved. In this the population is already selected and it is large in nature. This method research
will assist in collecting effect of counterfeit products on luxury brands. This will assist in getting
to end results. It has also been analysed that better and authentic websites will be used so that
better secondary information can be collected. This will assist researcher in getting to end results
and also better and adequate information can be gathered because of it.
Data analysis: It is a process of interpreting and analysing data to obtain the precise information.
The researcher must be able to analyse data in an effective way so that aim and objectives will be
effectually attained. Moreover, to get the desired outcomes, proper analysis technique must be
used. In order to interpret data, there will be various tools and techniques as well as methods
available. It is the process related to cleaning and transferring of data. It assists researcher in
making better decision. It assists researcher in making better decision. For the present report
thematic analysis is been done. The reason is because research paper is qualitative in nature. The
main purpose of this analysis is to analyse data so that better knowledge related to subject matter
can be gained. In this method themes are being analysed so that adequate summarisation of data
can be done. It analysis data and also makes sense related to it. This assists researcher in getting
to end results (Wadams and Park, 2018).
Research limitations: There are various limitations related to research. In this the researcher
was unable to have access to unlimited resources like there was shortage of internet. It has also
been analysed that the time to complete the research project was low. It is also being evaluated
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that qualitative research is labour intensive research. So, this was also limitation for present
research. This method was also time consuming, so because of this researcher work got delayed.
It was also difficult to investigate casualty by making use of this research. The results related to
qualitative data was unable to be investigate.
Ethical consideration: Researchers made sure that ethical code of conduct is being followed by
them. In this they made sure that consent is been obtained from the authors whose work is been
used. Researchers has also made use of published and authentic sources, in order to achieve their
goals and mission (Galdas, 2017). In this they have made sure that no harm is been caused to
those people who are been involved in research. This has assisted them in completing research
by following ethical code of conduct. It is also being evaluated that the private data of individual
who is involved in research was kept confidential. This assisted researcher in gaining trust of
participants. It is also being analysed that researchers make sure that objectivity is been
maintained throughout the research.
Research approach: It is a step by step method which is used in order to make better decisions
and also assists in achieving the goals and objectives. There are two type of research approach
one is deductive and another one is inductive in nature. When the researcher is making use of
inductive approach, they can start with the set of observations. It has also been evaluated that this
type of approach is basically been used for qualitative study. In inductive research, it moves from
specific to broad categorisation. It aims in developing basis of the theory. The other type of
approach is being used for quantitative study where the testing of hypothesis is being done by
researcher. For the present research inductive approach is been used. This has assisted
researchers in getting end results.
Research design: Research design is a kind of a framework as a strategy that helps the
researcher in analysing all the main components or elements of a research in an appropriate,
logical and coherent manner. For this research researcher will be using exploratory research
design as it is a qualitative research. This design will also assist researchers in making better
decisions. In this the problem is been investigated and then solution for problems are being
designed. This is really necessary for researchers so that end results can be obtained and better
research can be implemented. It has been analysed that this method can assist researchers in
getting to end results. There is also various other type of research design such as descriptive.
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Reliability and validity: The data which is been collected for research are reliable and valid. In
this research, scholar has been involved in collecting the data from the authentic websites so that
better results can be gain. This has assisted them in taking better decisions which is really
necessary for achieving objective and set target. Reliability and validity is being kept so that the
accuracy of measure can be done. Validity means extent to which right elements have been used
by researcher is conducting research and interpreting data. It is necessary to use right tools so
that outcomes will not get affected. Research validity is divided into two i.e. internal and
external. Internal refers to how findings are related with reality whereas, in external, results will
be simulated in outside environment. Here, research consideration has been kept by the
researcher. This is an important part of study. It has helped in looking for the extent to which
research could be carried out in most effective and efficient manner. Also, researcher has
maintained the validity of findings by ensuring that data has been collected from authentic
sources. The data analysis tools were tested and then used. It was useful in validating the data
and obtaining outcomes.
1.3 Community of Practice
In order to overcome the issue of counterfeit products, Louis Vuitton will be involved in
communicating with key stakeholders so that this issue can be overcome. The key stakeholders
which are engaged in this are consumers, employees, managers, CEO of company. All of them
when work together can only bring out solutions for problems. In this firm will be engaged in
awareness related to counterfeit products. They will assist them in making sure that customers
are involved in buying original goods supplied by company instead of the other duplicate
company. This will assist Louis Vuitton in increasing their consumer base and also because of
this they will be able to increase consumer engagement (Faruqui, Hoque and Hride, 2017).
Communicating about the original goods and services will assist firm in increasing the sales of
their products and brand value which has been lost by them will be increased because of it.
Community of practice is basically communicating with group of people who have same issues
and concerns. In this organisation will also be engaged in taking into consideration their
employees. They will ask to workers about potential solutions to problems. They will be
involved in brain storming various ideas so that better solution can be taken out. It is also being
evaluated that employees will adopt better strategies to make consumer aware about the dis-
advantages of making use of counterfeit products. This will assist them in making sure that
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customer make right choices while selecting goods and services. It is also being evaluated that in
order to enhance consumer knowledge they will also publish information related to goods and
services online. This will support firm in making sure that issues related to counterfeit is being
solved and they are being able to increase the sales of their goods and services. Louis Vuitton
will also be involved in communicating the teams across organisation. They will be engaged in
doing individual listing and so that temporary inconvenience can be caused to counterfeit
products and services. This will assist organisation in making sure that no harm is been caused to
original goods and services because of duplicate one. In this company will also be involved in
motivating their teams to identify the counterfeit listing in both key markets. They need to make
sure that market of wholesale counterfeit is being shrink. If this will be lower down production
related to fake and duplicate goods and services will also be lower down. This will assist
organisation in achieving the set target and objectives. It will assist Louis Vuitton in saving the
authentic brand image of company.
It has also been evaluated that firm can be involved in selecting such teams who can work
on identifying the fake and duplicate goods and services. For example, E-commerce and digital
marketing teams can be involved and hire to spot and report counterfeit products and services.
This will also support organisation in saving the brand value of their firm. It will also assist in
increasing sales of original goods and services (Marticotte and Arcand, 2017). It has also been
analysed that firm can be involved in making clear policies related to whom to contact and what
tools to use when dealing with a trademark infringement. This will assist Louis Vuitton in
overcoming these concerns and also it will assist firm in increasing sales of goods and services.
By engaging all the stakeholders in these issues, organisation will be able to overcome these
problems and also they will be able to grow and achieve their set target and mission. This has
assisted firm in growing and also their brand reputation is being increased by this. Company will
be able to engage more consumers by making use of it (Quach and Thaichon, 2018).
1.4 Use of Literature / Sources
Theme 1: Concept of Counterfeit products
In the opinion of Diamantopoulos, Davydova and Arslanagic-Kalajdzic, (2019)
counterfeit products are the imitate products which looks exactly same as the original products
but are lower in quality. It has been analysed that in today’s time the sale of duplicate goods and
services has been increased because of they are available at low price and also it imitates original
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company. This is the reason it is being liked and purchased by so many consumers. The
counterfeit goods and services had led to lowering down of sales of original company and also
the trust of customers from the original firm has been lower down because of this. Popularity of
brands are also being decreased because of counterfeit products. In counterfeit products
consumers can also get damaged or lower quality products. It is basically selling of lower quality
goods without the authorization and permission of brand name. It is illegal to do so still so many
firms are being involved in doing this. It has been evaluated in counterfeit products and services
sellers of such goods infringe the trade mark, copy right or patent of original owner. In this they
are involved in selling products by making use of their brand name. It affects the economy of
country. Research has provided the evidence that in year 2014 around 7,50,000 jobs were lost in
UK because of the counterfeit products and services. It has been analysed that because of
counterfeit products, Companies find problems in regaining image in the market and attracting
skilled workforces. It is also being analysed that counterfeit products are being available easily
and selling of counterfeit products directly impacts overall relationship of luxurious brands with
their customers (Bhatia, 2018). It has also been analysed that counterfeit goods and services also
affects economy of country. It is illegal to purchase and sale counterfeit products. In United
Kingdom it can result into criminal proceedings and criminal penalties against those who are
making use of it. In this the case of money laundering can be file against those who have made
use of it. Counterfeit goods and services are really bad as it can lower down sales and
productivity of luxurious brand. Customers trust is also being broken when they tend to make use
of these goods and services. In order to overcome from this firm must be involved in making
better strategies so that they can overcome from these issue. The counterfeit goods can affect
company’s reputation severely. It can also affect their profit revenue; evidence says that
sometimes billions of the revenue is been lost because of it. . Moreover, it is evaluated that there
are many businesses that are offering these products just in case of earn huge profits. They
produce same and exact copy of luxury products which is known as first copy. Here, raw
materials used in it are not same but of low quality due to which its price is less. Furthermore, it
is difficult to find difference between original and counterfeit product as there are no criteria on
basis of which it can be done (Harun, and et.al., 2020). Due to that it becomes difficult to
identify how these product differ from original one. However, customer trust can be easily
gained from it as their needs is fulfilled as well. It has been identified that most of people buy
9

counterfeit product only for show off. Besides that, their budget is less so they are not able to
afford it and this results in making attracting towards these products.
As stated by Durham and Nevins-Henson, (2016) 5% of the goods which is been imported
from European Union were fake. It has several dis-advantages over original company as firms
are been involved in building brand for several years and that brand reputation is being lowered
by the counterfeit goods and services. The sale of such products needs to be stopped, in order to
save reputation of organisation. It is also being evaluated from research that any product which is
been protected by making use of intermediate copy rights are target for manufacturers. They
think of making the same product with lower quality of goods and services. So many consumers
are engaged in buying these lower quality goods because of lack of knowledge related to it. It is
mainly beneficial for lower to middle class of people as by getting first copy of the original
brand at lower price they can fulfil their needs and requirements. They can also improve their
living standards and it boosts their confidence when they have products as like the rich and upper
class of people.
Theme 2: Impact of counterfeit product on luxury brands
It has been stated by Bhatia, (2018) that there is great negative impact on counterfeit product
on luxury brand. It is because these products highly impact on brand image of firm. Also, it
shows that luxury brand is not able to maintain their product patent, trademark, etc. Due to which
first copy of such products are available in market. In addition to it, there are other ways as well
by which counterfeit product impact on brand image. Here, people get highly attracted towards
those products to buy. Thus, it results in decrease in sales and profits of luxury brand. Therefore,
brand is not able to compete in market with rivals. They are also not able to develop strategy in
order to control manufacturing of counterfeit products. It is because luxury brand does not get
enough proof to clarify that their product is original and other company is fake. In accordance
with Quach and Thaichon, (2018) there are various negative impact of counterfeit products on
luxury brands. The business related to counterfeit products are been increasing rapidly. It has
also been analysed that this affects luxury brands and their sales as well as revenue. It has also
been evaluated that there has been a rise in manufacturing of counterfeit goods and services as
these type of products can be purchased by middle class people and they wanted to opt for better
brand products so that they can look classy. It has direct link to their social status. Some of the
consumers do not have knowledge related to which good is original and which is fake. Louis
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Vuitton business is also affected by counterfeit products and services. It is also being evaluated
that because of these imitate goods and services the sales of original products are been lower
down. Counterfeit products possess threat to global fashion industry. It has been analysed that
counterfeit products can also lower down brand reputation of firm. It has also been evaluated
from research that counterfeit goods has negatively affected process of innovation. By this firms
only think about of copying the other firm’s goods and services. They do not think of any
innovative and creative ideas which can be developed. So the concept of counterfeit products
needs to be stopped. In this Louis Vuitton can be involved in motivating their employees to be
involved in brain storming various ideas so that better solution can be taken out. It is also being
evaluated that employees will adopt better methods to identify those who are engaged in
manufacturing these type of goods and services. This will assist them in lowering down
development of counterfeit goods and services.
In the opinion of Bian and Veloutsou, (2017) the counterfeit products have negative
perception on thoughts of consumer perception related to original brand. It is also being
evaluated that counterfeit goods have changed the thoughts of consumers like those who cannot
afford and have the desire to wear high brand luxury goods can be engaged in buying these
products. But there are also ill effects related to these imitate goods. They may not provide value
for the cost which is been given by consumers. This can affect sales of original goods and
services and also they might find it difficult to expand their goods and services. It has also been
evaluated that Consumers who are purchasing duplicate products are getting lower quality goods
and services. They are not getting value for money. It is also being analysed that counterfeit
products can also affect the evaluation of consumers for luxurious brands. They might not buy
from that brand in future. In United Kingdom it is been analysed that they consider it illegal to
buy and sale luxurious goods and services. Criminal penalty can be implemented on those who
are engaged in doing this. It has also been evaluated that brand performance is affected because
of the counterfeit goods and services. Research says that profit and revenue of luxury brands like
Louis Vuitton is been affected because of this. This can also affect their growth and revenue.
They might not be able to increase sales of their services. Besides this there are high demand for
imitate products. There are two main reason behind this one is the low prices which is being
compared to luxury brand and also the expressive functions which these goods and services are
being delivering. These are the reason because of which so many customers are being engaged in
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buying the counterfeit goods and services. Galdas, (2017) as described by more often the
counterfeit products are being purchased by customers as they can gift it to other people as it is
affordable and available at cheap prices. Some of them buy it because of lack in knowledge. All
these factors have increased sales of goods and services. It has also been analysed that
counterfeit goods and services also affects economy of country. It is illegal to purchase and sale
counterfeit products.
Customer based brand equity model can be used in order to understand the effects of
counterfeit on luxury brand. According to this model perception of consumers related to genuine
brand needs to measured. This will assist the firm in knowing about how much consumers are
aware about brand. It has also been analysed that customer based approach for creating of the
brand equity can also be used. By this company will be able to create value for their own and
also their profit will rise. Apart from it, due to counterfeit products availability in market there is
complete change in customer decision making process (Bhatia, 2018). They decision making
behaviour gets highly influenced due to which they get attracted towards buying of counterfeit
products. Here, it can be found that customer need is changed so they search about products in
market. and when they get aware about such product then they think that it will fulfil their needs
easily. Alongside, as product is available at low cost so customer money is saved as well.
Theme 3: To recommend solution for the challenge in order to improve brand performance
As per the view of Kumar and Verma, (2020) counterfeit products are laying huge impact on the
luxury brands and in order to improve performance of brand it is really necessary that different
strategies are implemented by firm so that problem related to counterfeit goods can be overcome.
In this Louis Vuitton will be involved in preparing their teams so that they can identify people
who are been engaged in making these type of imitate products and services. This will assist
organisation in knowing about who are the people that are been involved in making such type of
goods and services. It will assist company in enhancing their brand performance. It has also been
analysed that firm can be engaged in increasing awareness level of consumers, so that customer
has knowledge related to real and fake goods and services. This will assist organisation in saving
their brand reputation. It will also help consumes in getting authentic goods and services which is
really necessary to earn profit. It has also been evaluated that firm can be involved in selecting
such teams who can work on identifying the fake and duplicate goods and services. For example,
E-commerce and digital marketing teams can be involved and hire to spot and report counterfeit
12

products and services. This will assist organisation in saving themselves from the duplicate
goods and services. It is also being evaluated that the counterfeit goods can lower down
profitability and revenue of the original brand. This can also increase their cost and because of it
may be firm is not being able to achieve their set target as well as goals and objectives. The
manufacturing and production of the products is showing enormous growth without any break.
Sale of all products are affected due to these market products. It is also being evaluated that firm
counterfeiter competes with original products by offering the customers own products at the
lower prices causing the business to lose customers. In this the authentic organisation can lower
down their brand value and also because of this consumer trust is breached. It is also being
evaluated and suggested to Louis Vuitton that they must be engaged in developing their trade
strategy. In this they must be involved in building a strategy so that their trade name can be
saved.
Firm must make sure that no platform is been created so that consumers are being
deceived. This will assist them in saving their brand name and also it will assist organisation in
enhancing their brand performance (Khan, Fazili. and Bashir, 2020). Louis Vuitton can also be
involved in creating the brand name guidelines. In this firm needs to be engaged in educating
employees and other stakeholders to do be involved in doing better brand positioning, so that
there is no infringement related to their trade marks. It has also been analysed that company
needs to lay emphasis on the brand value and performance as people buying counterfeit products
may not bring original products. This can lower down the brand value and reputation of firm. It
is also being evaluated that Louis Vuitton needs to be engaged in providing better training to
their staff members so that they can be involved in identifying the people who are been involved
in selling out fake goods and services. It is also being evaluated that the people are not been able
to face value for money because of the increase in sale of counterfeit goods and services. There
are cases where they get faulty copies of the products that are not related to the goods made by
original companies and also which they have not warranted. It is also being suggested that firm
also needs to be involved in maintaining their brand consistency. This will assist them in
maintaining the brand value and also it will assist firm in achieving the set target and objectives.
In this there are also various challenges that can be faced by company. Like they might not be
able to create adequate brand equity. This will lead to failure in strategies which is being
implemented by them. It can also affect the growth of Louis Vuitton.
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As described by Pasricha, Jain and Gautam, (2019) company needs to be engaged in deploying
the other technology so that counterfeit manufacturers do not know about what methods they are
making use in order to protect their business. This will assist the firm in saving their original
goods and services. It will also support in making sure that their branded products are not been
copied by anyone else. This is really necessary for growth of firm. It can also increase the brand
value and they will also be able to achieve their set target and objectives. Research suggests that
the counterfeit products also affect the image of original products as it is seen that people tends
to avoid products that have counterfeit products as it affects their value spent. It is also being
evaluated that the value of premium goods is been lower down because of making use of the
counterfeit products. The firm in order to overcome this can make use of Aker’s brand equity
model. In this company needs to be involved in engaging more consumers towards them. This
will assist them in engaging consumers towards firm. This will also assist in making sure that
customer loyalty is created. It will help Louis Vuitton in enhancing their brand value which is
really necessary for growth of company. It is also being recommended to firm that they must
protect their copy right products and should develop strategy related to saving their trade mark.
This is necessary as it will assist company in making sure that their goods and services are not
been copied by anyone else. It is really necessary to be done so that brand value and reputation
can be saved. It will support firm in growing (Santana and et.al., 2020).
1.5 Analysis of the entrepreneurial opportunity / challenge
Often overlooked constituent of debate for counterfeiting is consumers of genuine article.
The consumers are attracted towards the premium brands in the part due to connotation and
exclusivity of the prestige associated to them. It has been evaluated from the investigations in the
research that consumers for genuine items adopt from among the three strategies at time of
seeing prospects of the favourite brands getting counterfeited: flight, reclamation and a branding.
Going in depth of the concept it has been evaluated that the counterfeit products are goods that
are made as duplicate or are first copy of luxurious brands. The cost of luxury brands goods are
hight and could not be afforded by all the people. Companies are able to charge premium prices
of the products for high quality of materials and the brand reputation that has been created
through years. On the other counterfeit products are made by other companies to satisfy the
demand of lower section of society by providing them similar looking products at reduced prices
as compared with original products (Pham and Nasir, 2016). People sacrifice the quality of
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products at many instances for getting the products at affordable prices. These counterfeit
products get acceptance in market as they look same like the original products.
The counterfeit products providing same products with low quality at affordable prices
are affecting the market for original products significantly. The research shows that development
of counterfeit products breaks the revenues and market share of luxury brands. With the rise of
market they are becoming severe issue for the original products. This is leading the companies to
make discussion to determine the ways through which it could be overcome. Counterfeit
products are not always the same products, products looking similar to original ones. It could be
seen that a separate market is operating in the reflection of original products without making any
marketing efforts. Companies spend millions to advertise and promote their products and
increase their market share across different region and while these counterfeit products are able
to sell in those market easily in which brand awareness has been created. In simple it could be
said that part of the benefits of expenditures made by original company are shared by these
counterfeit products selling small companies (Srisomthavil and Assarut, 2018). These products
are operating very strongly and actively that it becomes hard for the original firms to find from
where these products are regulating in market place.
From the literature facts are also found that popularity of original brands is decreased due to
counterfeit products. They are destroying the market by silently spreading their products at lower
prices with same designs, colour and looks. It could be evaluated from the research that on the
other side that these counterfeit products also help in increasing the brand awareness among the
people. People that are brand conscious always search for original products by these counterfeit
products. The counterfeit products also affect the image of original products as it is seen that
people tends to avoid products that have counterfeit products as it affects their value spent.
It has been recognised from the above research that effects of counterfeit products are not
only seen on original products but also on government revenues. It tends to lose huge proportion
of the tax as decrease in revenues of big corporates make government to sacrifice the taxes. Also
the industries producing the similar products are already operating at lower scale are given tax
exemption of more benefits (Grigorescu and Ion, 2020). As the prices of products is lower
revenues are also lower this leads to reduction in taxes that indirectly affects the government
revenues. Also the counterfeit products could not be banned as they are not made in same brand
name but looking alike as original one. CP are miss leading the consumers by providing them
15

products with lower quality at slightly lower prices. This industrial market is affecting the luxury
brand harshly and the growth is also tremendous without any restriction till yet. Consumers due
to the lower prices tend to have the products looking alike the luxury brands. However, it could
also be evaluated from the research that they are making compromise with their health and safety
by accepting such products and services of similar products. These products are low in quality
could health problems. It would affect brand value and performance as people buying counterfeit
products may not bring original products. People buying these counterfeit products are creating
negative image due to their experience with such products as they are low in quality as many
times they are not aware of the original products. It is creating serious needs for the luxury
brands to take actions and create policies that helps them in dealing with such situations.
The above study shows that these counterfeit products have direct impact over the
productivity and profitability of the luxury brands due to number of factors. The manufacturing
and production of the products is showing enormous growth without any break. Sale of all
products are affected due to these market products. The cost of luxury brands is generally higher
from the duplicate products (Robayo-Pinzón, Rojas-Berrio and Giraldo-López, 2020). This
leads to lower sections to search for alternative or substitute products. Increasing number of
these products is causing the sales of original products to fall at increasing speed. The major
effect is seen on the brand image of original products as part of the people purchasing buying
luxury products are not able to figure out the difference between original and duplicate products
and they have these counterfeit products that are low in quality. The copy products are not able
to satisfy customers resulting in negative image of the original products.
It has been evaluated from the study that counterfeiter competes with original products by
offering the customers own products at the lower prices causing the business to lose customers.
People were able to make the difference between these products when they were sold at same
time offline. With invent of online platforms it is highly difficult to make out difference between
the original and duplicates. These products are operating very successfully over online market by
stealing the design and branding of company and also mixing the knock off products with online
reviews for products. Images used by these competitors are at some cases real photos of the
brand owners that leaves customer playing guess game between fake and real (Bian and Haque,
2020). The research has found that these products owners have become real competitors of the
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original companies. Every year around 26 billion are lost from the counterfeit alone in fashion
industry and the problem extends over multitude of the sectors.
Authentic companies are left with fall outs from the counterfeiters. Customer looks for
products and buy counterfeit that are not able to satisfy them generally. They make demand
compensation through the refund or new products and leaves negative reviews for original
products. Number of the companies have found themselves in situations where they are dealing
with irritated customers that are complaining for poor quality of the products and service agents
do not get about products they are hearing is counterfeit. The dealings with such returns is real
headache for companies too. There are cases where they get faulty copies of the products that are
not related to the goods made by original companies and also which they have not warranted. If
company have the price agreements with the retailers and distributors and they see the listings
over online platforms that offer products at lower prices, first instinct often are being ripped by
company itself. It could be seen that it is compounded further when the partners have exclusivity
in the place. Distributors with the exclusive rights of selling in the particular location would feel
betrayed if that looks like brand itself in the direct competition (Cesareo and Bellezza, 2017). It
could serious effect and harm the relations between the distributors that have been built through
years of cooperation and trust with the other companies.
It is also analysed from the research that when the luxury brands are targeted by the
counterfeiters, generally they think of fighting back. The steps and actions for fighting with these
counterfeiters could be extremely time consuming and expensive as well. It has to put its
resources for preventing the counterfeits to spoil their market share that will affect the products
development or to make promotions and advertisements or other things that company was to
invest in. It would be required to flow its funds towards the lawsuits and lawyers for defending
the intellectual property rights and protecting copyrights. The legitimate companies have been
spending thousands of money in year to force back the tidal waves that are created by
counterfeits being sold on places such as eBay, Amazon and Alibaba. Executives and CEO of
companies have to spend time at reacting to these infringements along with leading companies to
future.
Going through the literature it is also evaluated that counterfeit industry operate in grey
market which means the solid numbers of products and sellers are difficult to estimate and yet
studies come with different and similar numbers. There is generally gap between the different
17

figures for counterfeits. It has been analysed from the research that counterfeit market accounts
for around 5-9% of the world trades that have remained static for few years and assessed that
percentage is not based over empirical findings. Luxury goods industry see significant growth in
market value and growth rate. Around 1/3 of the sales of luxury counterfeit are made on the
online platforms (ŠIRENJA, MARAKA and MOGUĆE, 2019). Consumers rely only over the
information provided by sellers through pictures, texts or the videos that are easy to manipulate.
Internet has eased the counterfeit market to spread fast and successfully as they are able to
decrease the prices and manipulate the information.
Impact of the counterfeits on organisation runs deeply and could also cause a long lasting
effect. Brands are seeing sales hit after the problems from them becomes widespread as they are
able to compete with them through price cuts. Reputation of the business is affected as people
may equate the original brand with buying counterfeit. The research has also shown that the
widespread awareness of counterfeits also affects the company as consumers see brand as
generally less desirable with threat of being deceived with counterfeit. Once they have bought
copy they would never realise nature of original products and will return over authentic brands
for the solution. It leaves brands to clean mess created by these counterfeit for no rewards.
1.6 Conclusions & Recommendations
Above study discussed all about counterfeit products as what impacts does it have on
luxurious brands as well as on customers in both positive and negative manner. On the basis of
above study it can be said that counterfeit products or first copy of the original brand of products
is all have negative impacts for the original brand. But it has discussed some positive impacts for
people of lower to middle class. On the basis of above study it can be recommended to luxurious
brands whose products have been copied by other counterfeit products manufacturing company
that they should focus on making use of some tools and strategies that can help them out in
measuring quality of products. There are several tools are available that can help company out in
making customers aware and able in identifying the difference between the original products and
first copy of original products. Barcode is one of the main tool for measuring effectiveness of
products or quality of products by making use of this tool, customers can also protect themselves
against fraud and from buying poor quality of products (Nufer and Schwarz GmbH, 2017). If
luxurious brands make use of such tools for measuring performance and quality then it can help
them out in decreasing negative impacts that counterfeit products have such as poor brand, lower
18

profit margin, poor relation with customers and suppliers. Perfumes, watches, cosmetics items
are main categories of products that have been sold or produced by counterfeit products
manufacturing company. It does not only affect profit margin of original brand but it has severe
negative impacts on health of people. When brand conscious or sensitive skin of people buy
counterfeit cosmetic products and apply on their skin then it can lead to irritation and skin
problem. So, for reducing this negative impact it can be suggested to luxurious and original
brands as well as customers to implementation of policies. There are some policies have been
developed regarding maintaining quality of products so, by implementing as well as following all
rules and regulations of such policies, companies can protect them against lawsuits and can also
make their customers believe that they have original products (Yu, Hudders and Cauberghe,
2018). Customers can also protect themselves against buying false and poor quality of products
by seeking report of policies from companies and knowing if they have followed all rules for
maintaining quality or not. It can also decrease the rate or number of counterfeit products
manufacturing companies because it is not possible for these companies to follow all policies and
maintain qualities because their main aim of producing such products are earning money by
selling it at lower price. So, if they maintain higher quality then it can increase their
manufacturing cost and accordingly for earning profit they will require increasing profit margin
and prices. So, by doing, so they cannot accomplish their goals of earning easy money.
It can also be suggested to luxurious fashionable brands to develop web based tools. Such
tools can make able to companies in verifying the authenticity of products as well as legitimacy
of sellers. Companies can provide Email based mechanism to customers for reporting suspected
infringements. It can warn customers and protect them against buying poor quality as well as
false products. Brands can also develop some forms specially for customers that they need to fill
before buying products. Such forms consist of the name of original brand and all information that
can make sure to customers that they are buying products from the right place and on the basis of
the form they can refund, get cashback and other facilities if they found mistakes in products. It
can also boost their confidence, and they are being protected by original brands (Meraviglia,
2018). It can also be recommended to researcher that it should have focused on gathering
relevant information or primary data. Primary data are known as information that have never
being used before. By conducing online questionnaire by selecting target people or random
customers and employees of some luxurious brands it can have known appropriate information
19

as what actually counterfeit products have impacted on them. They can have better known about
ways and strategies that employees of luxurious brands are using and have been used for
reducing negative impacts and making customers able in knowing difference between the actual
products and first copy of products. It can help companies and researcher in taking better
decision and helping out to customers and luxurious brand in making their effective position in
the market (Aydin, 2020). So, by considering all these suggestions all negative impacts that
counterfeit products are having on customers and luxurious brands can be decreased.
Another recommendation that can be followed by Louis Vuitton is to identify what counterfeit
product are available in market and then take legal action against them. For that they can do
market research and on basis of it companies are identified. Besides that, company can create
awareness in market about their original product and where they are officially available. This can
be done through social media. Thus, it will enable in clarifying customers about their original
product and how it differentiates from counterfeit one.
CONCLUSION
On the basis of above discussion and study it has been summarized that counterfeit
products or first copy of expensive brands have both positive and negative impacts on both
customers and the company that produces original products. This study has discussed some
positive as well as negative impacts that counterfeit products can have. With the literature and
different views of authors some positive impacts have been discussed in this study that include:
affordability as customers can get first copy of expensive brand at affordable prices as compared
to prices on which original brand sells. It can increase productivity of the company that produces
first copy of the original brands of products, and they can help in improving economy by
providing employment opportunities. It is mainly beneficial for lower to middle class of people
as by getting first copy of the original brand at lower price they can fulfil their needs and
requirements. They can also improve their living standards and it boosts their confidence when
they have products as like the rich and upper class of people. Whereas, this study has discussed
several negative impacts that counterfeit products has on the actual bran or luxurious company
that produces actual brand. It also affects both customers and brand in negative manner to the
great extent. Some negative impacts that counterfeit products has on customers are: customers
sometimes get damaged products, they are being manipulated and are being cheated by these
companies. Due to lack of knowledge of identifying the difference between the actual and first
20

copy of products they become fool and it affects image of the company that produces original
products. Business of manufacturing and selling counterfeit products is increasing rapidly and
this increasing rate of companies is lowering profit margin of original brand or luxurious fashion
retailers. Due to this increasing rate, luxurious brands become bound to lower their profit margin
that can affect their sales, objectives and revenue as well. It lowers their market share by which
they face problems in taking competitive advantages, and they have to strive hard for making an
effective position in the market. Some other negative impacts that this study has discussed
include: loss of jobs as due to lower profit margin of original brand, they cut jobs for maintaining
a balance between cost and profit and it can affect economy as the whole. They hire employees
at lower salary and it can also affect their relation with suppliers and existing employees. Due to
lack of knowledge among customers, they buy first copy of brand and when they find some
differences in quality then it affects image of the original brand. It has shown that all these
factors and rising numbers of companies that sell counterfeit products increase employees as
well as customers' retention rate. Companies find problems in regaining image in the market and
attracting skilled workforces. Easy availability and selling of counterfeit products directly
impacts overall relationship of luxurious brands with their customers. So, overall in regard to
impacts it can be said that on the basis of above study that it has negative impacts more than
positive impacts.
This present study has also discussed some effective strategies as well as ways by which all
negative impacts can be reduced and can help to original brand in making their position in the
market. It has discussed effectiveness and ways of making use of QR as well as barcode for
measuring quality of products and helping out customers in identification of the difference
between the original product and first copy of product. It helps out companies in improving
brand, increasing profit margin, sales and revenue as well. This present study has also shown
importance as well as reasons of following all steps of research methodology such as:
identification of research type, research philosophy, research approach and others. Types of
research plays a vital role In conducting research as it helps researcher in gathering information
in appropriate form for making better decision and accomplishing pre-determined goals. Data
collection element of research methodology plays an important role as on the basis of collected
as well as type of data, main aim is being completed or decision have been made by researcher. It
has discussed appropriates strategy or tool of analysing data that also helps researcher in
21

improving image, making study successful and identify impacts that counterfeit products have on
customers and the original brand with effectively.
22

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