Conspicuous Consumption, Luxury Products and Counterfeit Market in the UK

This study elaborates on the factors driving the market for counterfeit products in the UK. The data collected by means of survey questionnaires from 306 respondents and empirical techniques including descriptive and inferential statistics (correlation and multiple regression analysis), have shown that the consumers have a negative attitude towards counterfeit luxury products.

72
CONSPICUOUS CONSUMPTION, LUXURY PRODUCTS
AND COUNTERFEIT MARKET IN THE UK
Trang Huyen My Pham, Muhammad Ali Nasir
Leeds Beckett University, Faculty of Business and Law,
Leeds, United Kingdom
Abstract:
The fast growth of fashion brands and the popularity of counterfeit
goods has posed certain challenges to the existing and new luxury fashion
brand players. This study elaborates on the factors driving the market
for counterfeit products in the UK. The data collected by means of
survey questionnaires from 306 respondents and empirical techniques
including descriptive and inferential statistics (correlation and multiple
regression analysis), have shown that the consumers have a negative
attitude towards counterfeit luxury products. However, they showed
fewer tendencies to seek for a brand whose counterfeit cannot easily
be found and preferred to buy a genuine rather than a counterfeit. In
terms of frequency of purchase, reversion to counterfeit has negative
impact, unlike the tendency to seek a brand whose counterfeit is hard
to find. The overall results show that the attitude and acceptance of
counterfeit do not greatly prevail in the market. However, about 27%
of respondents demonstrated either a positive or a neutral tendency
towards counterfeit products, which could have serious implications
for the luxury goods market.
Key words:
luxury fashion brands,
consumer choice,
counterfeit products,
conspicuous consumption.
* E-mail: [e-mail]
EJAE 2016, 13(1): 72-83
ISSN 2406-2588
UDK: 339.192(410)
658.62.018.2
DOI: 10.5937/ejae13-10012
Original paper/Originalni naučni rad
INTRODUCTION
Luxury1 fashion brands are no longer the privi-
lege of the upper class. The emerging middle class is
being more open-minded, their demand for luxury
fashion brands is increasing along with their income,
as they are becoming potential consumers of luxury
fashion brands (Kauppinen-Räisänen et al., 2014).
The retail sector is a major contributor to the UK
economy, employing a total of 4.3 million people
in 2012, which is 15.9% of the overall population
1 “Luxury is derived from the Latin word Luxus, which
translates to “excess”, thus luxury products in general refer
to products that lead to condition of abundance, things
that provide pleasure or comfort but are not absolutely
necessary” (Fuchs et al., 2013).
(Chris, 2014), and luxury fashion constitutes an
important component of this sector. However, lux-
ury brand companies are threatened by the coun-
terfeit products market. In this regard, the Global
Financial Crisis in 2008 is marked as the historical
key point. Timberlake et al. (2014) argued that in
the post-crisis period and recession world, luxury
customers have sought products with an affordable
price. Concomitantly, with luxury fashion brands,
differentiating and adding extra value is important
to improve their competitive advantages. To that
end, it is fundamental to understand the implica-
tions of counterfeit luxury products and the at-
titude of consumers towards them.

73
There is a growing presence of counterfeit
goods in the UK, which may pose serious prob-
lems for the company, consumers and the overall
economy (Okonkwo, 2007). Sonmez et al. (2012)
argue that it destroys the rarity of luxury fashion
products that impact customers’ decision-mak-
ing. In the current climate, luxury fashion brands
do not only compete with other luxury fashion
brands, but also with counterfeit manufactur-
ers. Although certain efforts have been made to
search for manufacturers of counterfeit goods and
prevent their activities, this situation has not im-
proved and even seems to be deteriorating (David,
2011). From the customer’s perspective, it might
be that counterfeiting influences customers’ views
about genuine luxury fashion items. Therefore, it
is necessary to be able to understand customers’
opinions about counterfeit. The aim of this study
is to become conversant and gain better under-
standing of the current counterfeit luxury brand
market in the UK and to identify the key factors
that customers believe have the greatest bearing on
the purchase of counterfeit luxury fashion brands.
There are numerous studies that seek to identify
the main dimensions of luxury, such as Fionda et al.
(2008), Berthon et al. (2009), Christodoulides et al.
(2009), and Hudders, et al. (2013). More specifical-
ly, in the context of luxury fashion products, Walley
et al. (2013) observed the key dimensions of luxury
from a UK consumers’ perspective. Various studies
have been conducted in terms of particular factors
affecting customers’ choice, such as price (Hwang
et al., 2013), quality (Husic et al., 2009) and brand
reputation, quality and appropriateness (Derry et
al., 2014). A vast majority of research is focused
on defining reasons for purchasing luxury fashion
brands (status promotion, self-image, gifting its
owners). We have some evidence on the counter-
feit luxury products, such as the study by Doss and
Robinson (2013) which compared and contrasted
the attitude of young US females towards luxury
fashion brands and their counterfeits2
. However,
2 Doss and Robinson (2013) found that the perceptions of the
luxury brand were significantly higher than those for the
counterfeits of that brand. Moreover, the luxury perceptions
this study is not gender specific, nor it compares
the perception of luxury fashion brands with their
counterfeits, but it is rather investigating the atti-
tude of British consumers towards the counterfeits
of luxury products, and not the counterfeits of the
products they have used. There isn’t sufficient evi-
dence on the attitude of British consumers towards
counterfeit luxury products. The UK luxury fashion
market makes a considerable contribution to the
global market and national economy, while previ-
ously cited figures give some idea about its size.
Having that in mind, the study attempts to find out
the reasons that customers take into consideration
when buying a counterfeit luxury fashion product.
Specifically, it explores the most important factors
that affect customer’s choice of luxury fashion
brands in the UK by posing threestatementsto
the respondents of survey questionnaires:
a) Do they mind if the product is counterfeit
(no effect on decision)?
b) Do they seek the brand whose fake version
is hard to find in the market?
c) Would they buy the fake rather than the
genuine product?
The answers to these three questions on a five-
point Likert scale range from strongly agree to
strongly disagree and will help us to understand
the consumers’ attitude towards counterfeit prod-
ucts. Moreover, we would also observe the impact
of these attitudes on the frequency of purchase of
luxury products. Nevertheless, this treatise is an
effort to understand customers’ attitudes to luxury
fashion brands in terms of their current counter-
feits in the UK market. In the next section, the
authors will examine the existing evidence on the
subject and discuss research methodology to pro-
vide an insight into the methods being employed,
prior to reporting the findings and concluding
remarks. The novelty of the research should be
emphasized and the subject is well-documented
in the up-to-date literature.
of those whose last handbag acquisition was a luxury brand
significantly differed from the luxury perceptions of those
whose last handbag acquisition was a counterfeit brand.
EJAE 2016  13 (1)  72-83
Pham, T.H.M., Nasir, M.A. Conspicuous consumtion, luxury products and counterfeit market

74
LUXURY BRAND & COUNTERFEIT
People purchase luxury fashion brands for a
number of reasons. Firstly, they need clear hi-
erarchy to define their high position in society
(Kapferer, 2014). Secondly, luxury items link to
psychological values, as people in the upper-class
desire to distinguish themselves from others, while
people belonging to the lower class attempt to be
perceived as in a higher status, and they consider
luxury consumption as a means of achieving that
(Veblen, 2009). Thirdly, purchasing luxury fashion
products also nurtures owner’s identity and self-
image (Hudders et al., 2013). Furthermore, people
buy luxury items for self-gifting purposes, as a way
leading to personal reward, compliance (Lourreiro
& Araujo, 2014), relieving stress and cheering up
(Kauppinen-Räisänen et al., 2014). Moreover, pre-
mium and reliable quality is a reason for consum-
ing luxury items, as mentioned by Hudders et al.,
(2013). Fashion consciousness was also stated as
a reason for luxury fashion brands consumption
(Maden et al., 2015). However, if we look at these
reasons for buying luxury products, the question
imposes as to the number of those that could be
served by counterfeit luxury products whose prices
are not that exorbitant.
By highlighting the main role of the brand’s
name, identity, awareness and loyalty, Okonkwo
(2007) claims that the first thing that comes to a
luxury customer’s mind is “brand”, which probably
describes its history, language and total offerings.
Similarly, Palmer (2009) suggested that custom-
ers seek their own perceived personality through
brand image. Moreover, brands are chosen when
the image they create matches the needs, values and
lifestyles of customers. Now, the question imposes
as to the number of needs and values that could be
achieved using a counterfeit product. However, the
study by Han et al. (2010) showed that there are
two groups of luxury consumers. The first group
prefers less prominent luxury brands, while the
second one opts for those more prominent. In the
former group, customers focus on the real quality
and function of luxury products rather than on the
brands with conspicuous signs; the latter one might
lack any deep knowledge of luxury brands and
might be keen on purchasing prominent products
to show off. If that division holds, the latter should
be more prone to accepting the counterfeit, as it
serves the purpose of conspicuous consumption.
There is a growing number of counterfeit prod-
ucts in today’s marketplace. Counterfeit luxury
goods are known as illegal, low-priced, and often
low-quality replicas of genuine luxury products
(David, 2011). The study by Sophie (2010) con-
sidered counterfeit as a big issue which might put
the genuine luxury brand market at risk. Although
intellectual property laws are set up to protect the
genuine market of luxury products, the legal sys-
tem for combating counterfeit products is low in
many countries (David, 2011). It affects the genu-
ine brand performance, which could be contingent
on the customers’ behavior towards counterfeit
and its acceptability. So, why should a customer
choose a counterfeit? Sonmez et al. (2012) show
that there might be two situations when consum-
ers purchase counterfeit luxury products. Firstly,
customers are cheated to buy fake products, and
secondly, customers are supposed to buy them. The
former situation might lead customers to underes-
timate the quality of the genuine one and look for
other brands. The latter situation can be seen as
customers’ natural desire to possess the product
with physical characteristics similar to the genu-
ine luxury brand, which might destroy the rarity
of luxury goods. Previously discussed issues may
decrease customers’ demand of luxury goods. How-
ever, in order to warrant the rarity of the product
and avoid the fake product, many fans of luxury
fashion brands look for another way to avoid these
situations. Namely, instead of buying the promi-
nent luxury brand, the cheeper one will be chosen.
For instance, Han et al. (2010) mentioned that one
of the reason for emerging brands is that customers
might choose the less prominent brand rather than
the well-known one as the safe alternative method.
In the second group of customers including those
EJAE 2016  13 (1)  72-83
Pham, T.H.M., Nasir, M.A. Conspicuous consumtion, luxury products and counterfeit market

75
who are keen on showing off their status, counter-
feit does not only have a negative status. Namely,
once the customers purchase a fake product, they
may not buy it again due to its poor quality, and
would opt for the genuine one (Ritson, 2010). For
instance, despite having the largest share of coun-
terfeit products in the handbag market, the Louis
Vuitton sample is considered, even it is well-known
to be in the most favourable position. This might be
the result of customers’ loyalty (Newman & Dhar,
2014). Overall, counterfeit is identified as the rea-
son for a decreasing demand for luxury products,
but somehow it may or may not persuade custom-
ers into choosing genuine luxury products. When
analyzing US young female consumers, Doss and
Robinson (2013) found that the perceptions of the
luxury brands were significantly higher than those
for the counterfeits of the same brands. Moreover,
the luxury perceptions of those whose last handbag
acquisition was a luxury brand significantly dif-
fered from luxury perceptions of those whose last
handbag acquisition was a counterfeit brand. That
implies that the counterfeit may repel the consumer
from the future purchase of the genuine product.
Customers mainly choose to be loyal to genuine
luxury brands due to their quality, as an impor-
tant feature of any product, which is rather hard
to define. A product is normally evaluated as poor
quality when it fails to meet the buyer’s expecta-
tions (Palmer, 2009). Accordingly, if the counterfeit
product meets the customer expectations, it should
be considered a quality product. However, along
with tangible there are intangible aspects of qual-
ity, such as experience and feeling (Yuen & Chan,
2010). Hence, if a counterfeit is doing well on both
aspects, a rational consumer should drive the same
amount of utility from a counterfeit as from an au-
thentic luxury product. Nevertheless, the net utility
should be great as there is less expenditure involved,
which may cause some disutility3
.
3 Net utility of counterfeit = total utility from consumption
– disutility of regret and guilt
Net utility of authentic = total utility from consumption
– disutility of paying the high prices
On the decision matrix if the utility of counterfeit is > than
utility of authentic one should use counterfeit and other
way round.
Pricing is an important factor which could in-
fluence the customer’s decision to purchase certain
product (Palmer, 2009). In fact, a luxury fashion
brand differentiates itself from the mass market
fashion brand by setting up premium price strate-
gies. The luxury customers may use limited access
products, regardless of their price, in order to stand
out from the mass (Husic & Cicic, 2009). Concomi-
tantly, in the case of luxury brands, customers gen-
erally accept the premium pricing strategy (Doss
& Robinson, 2013). In the luxury market, higher
price can be more attractive than the lower one,
although their tangible function might not differ
significantly. However, when the price reaches a
certain limited point, the demand will fall down
completely (Olorenshaw, 2011). On the other hand,
when the products’ price is reduced below a certain
limit, consumers may no longer consider it a status
symbol. Accordingly, when the price of a luxury
product becomes too low and easily accessible
and affordable to the middle class, it immediately
loses its rarity (Kuksov & Xie, 2012). That is in
line with the argument put forward by Eaton and
Eswaran (2009) who claimed that customers prefer
that the prices of luxury products remain high or
keep rising. Han et al. (2010) analyzed different
behavioural patterns among various social classes
including patricians, parvenus and poseurs who
have purchased luxury products. They found that
patricians are willing to pay a premium for luxury
products which have inconspicuous brand names
with high function and quality, while parvenus and
poseurs prefer conspicuous brand names in order
to show off. Their behavior differentiates them
from the upper class they tend to reach. However,
contrary to what the economic theory of price sug-
gests, the inclusion of counterfeit may shift the
paradigm. Perhaps, the perception and attitude
of consumers is dynamic and the attitude of soci-
ety changes over time. Timberlake (2014) argued
that the 2008 crisis has blown a new trend into the
fashion luxury market, customers have become
more open-minded and they have chosen the style
mixing high and low-end brand. They are looking
EJAE 2016  13 (1)  72-83
Pham, T.H.M., Nasir, M.A. Conspicuous consumtion, luxury products and counterfeit market

76
for a high-quality brand that is not too expensive.
Could it be a counterfeit? One might suggest that
the increase in income may discourage the price
and could lead to an increased demand for luxury
goods (Shilling, 2007). In the Maslow’s hierarchy
model, the esteem dimension can be seen as the re-
spect from other people, which can be deserved by
buying a luxury brand to show their status, as well
as their high income (Carlin et al., 2013). Moreo-
ver, the demand for luxury goods will be higher in
societies with larger income disparity where a need
to confirm one’s social status is more pronounced
(Ray et al., 2013). If that is the case, the question
imposes at to whether counterfeit products meet
that purpose, particularly when the price is low and
income high but limited.
Place or delivery of products is also an impor-
tant factor in terms of convenience and availabil-
ity, customer’s value, speed and availability (Den-
nis et al., 2004). Luxury fashion brand stores are
usually located in city centers or busy traffic areas
in order to attract customers’ attention. However,
as counterfeits are considered illegal, such market
cannot operate freely like authentic luxury brand
stores. Although it may bring some advantages,
such as cost of selling associated with physical
presence, it deprives the customer of the pleas-
ure and satisfaction of purchsing luxury goods
in retail stores. Nevertheless, the related aspect is
the promotion of counterfeit products and com-
munication with the customer. The promotion
tools such as advertising, personal selling, public
relations, sale promotion, sponsorship and direct
marketing methods may not be used by the coun-
terfeit product makers and sellers in the same way
as by authentic producers of luxury products and
brands. As suggested by Khan (2014) with devel-
opment of technology, promotion is considered
the key aspect for promoting brand image in the
contemporary market, and counterfeit brand mak-
ers could be metaphorically described as parasites
who earn their living from the promotion of au-
thentic brand makers.
METHODOLOGY & DATA
In the case of counterfeit luxury fashion brands
and consumers’ attitude towards them, quantita-
tive method can be used to acquire certain find-
ings. We collected the primary data by survey
questionnaires using self-administered question-
naires due to the big sample size and limited time.
This survey included four statements. The first
three statements were under the main question: To
what degree does the fact that a product is counter-
feit affects your choice when you make a decision
to purchase a luxury fashion brand product? The
respondents are given three specific statements:
a) I do not mind that the product is counterfeit
(no effect on decision) b) I seek the brand whose
fake version is hard to find in the market and
c) I would buy the fake rather than the genuine
product. The respondents were asked to choose
the answer they consider most relevant and their
responses ranged from strongly agree to strongly
disagree. In the fourth statement, they were asked
about the frequency of purchase of luxury fash-
ion brands. The whole questionnaire was divided
into 2 sections including the demographic and the
main part. The data collection process was kept
confidential and anonymous. All participants gave
their consent and were guaranteed confidentiality
and anonymity and were not given any financial or
other incentives. Subsequently, participants vol-
unteered by answering questionnaires in person.
Around 306 responses were included in this study.
We performed four different methods of analysis,
including reliability analysis, descriptive analysis,
correlation and multiple linear regression analysis.
ANALYSIS AND FINDINGS
Out of the total number of responses (i.e. 306),
58.2% were provided by female and 41.8% by male
participants. The sample was randomly composed,
including the respondents from various age, income
and education groups, which provided us with a
random sample. Table 1 gives an inclusive depic-
tion of respondents’ demographic characteristics.
EJAE 2016  13 (1)  72-83
Pham, T.H.M., Nasir, M.A. Conspicuous consumtion, luxury products and counterfeit market

77
RELIABILITY ANALYSIS
We first need to perform the reliability test
to see whether our data was reliable or not. To
that end, we performed the Cronbach’s alpha to
test reliability of our data. As a benchmark, we
relied on the statement of Nunnally (1978) who
suggested that if alpha values are 0.70 or higher,
the scale should be considered acceptable, while
values below the benchmark make it unreliable.
The results are shown in Table 2.
Cronbach’s alpha Number of items
0.71 22
Table 2. Reliability analysis
As shown, the Cronbach’s alpha is 0.710 > 0.7,
which implied that the collected data is reliable
and that it makes sense to carry on with it.
Demographic Frequency Percentage (%)
Gender Male
Female
128
178
41.8
58.2
Total 306 100
Age
<18
18-25
26-35
36-45
>45
12
109
84
41
60
3.9
35.6
27.5
13.4
19.6
Total 306 100
Income
Less than £10,000
£10,000 to £14,999
£15,000 to £24,999
£25,000 to £34,999
£35,000 to £44,999
£45,000 to £54,999
£55,000 above
107
37
70
38
21
12
21
35.0
12.1
22.9
12.4
6.9
3.9
6.9
Total 306 100
Highest educational
qualification
Primary School
High School
College diploma
Bachelor’s degree
Master’s degree
Doctorate degree
1
41
52
101
86
25
0.30
13.4
17.0
33.0
28.1
8.2
Total 306 100
Table 1. Demographic Characteristics of Participants
Source: Authors’ calculations using the questionnaire data
EJAE 2016  13 (1)  72-83
Pham, T.H.M., Nasir, M.A. Conspicuous consumtion, luxury products and counterfeit market

78
DESCRIPTIVE ANALYSIS
Descriptive statistics is an important way of
learning about the features of availabe data and its
implications for our study.Customers were asked
about counterfeit luxury fashion products and their
answersranged from strongly agree to strongly
disagree (reponses were coded from 1 to 5). Fig-
ures 1-3 present visual depictions of consumers’
responses.
In response to our first statement that “I do
not mind that the product is counterfeit (no effect
on decision), most of the respondents strongly
disagree with the statement, thus suggesting that
consumers do care if the product is counterfeit.
In response to the secondstatementthat if they
seek the brand whose fake version is hard to find in
the market, most of the customers provided neu-
tral answers, suggesting that the consumers are
not putting enough effort into ensuring that the
product is not fake. This could be related to the
trust associated with shopping from designated
places. The second largest group included those
who agreed that they seek the brand whose fake is
hard to find. The last statement put forward to re-
EJAE 2016  13 (1)  72-83
Pham, T.H.M., Nasir, M.A. Conspicuous consumtion, luxury products and counterfeit market
Figure 1. I do not mind that the product is counterfeit
(no effect on decision)
Figure 2. I seek the brand whose fake version is hard
to find in the market
Figure 3. I would buy the fake rather than the genuine product

79
spondents was that they would buy the fake rather
than the genuine one.
Figure 3 depicts the responses obtained. It
showed that most of the consumers strongly dis-
agree or disagree with the statement. It showed
that the consumer has disgust towards the coun-
terfeit products. Hence, if the demand of luxury
products would be for the purpose of conspicuous
consumption, the counterfeit could be considred
appropriate. Even though there is still a substan-
tial number of respondents that either strongly
agreed or agreed with the idea that they would
prefer counterfeits. When putting them together
with neutral, it makes over 27% of respondents
which is still a considerable number.
Therefore, we come to the descriptive statis-
tics and look at the measures of central tendency
(mean, median & mode) and dispersions (standard
deviation). The responses were coded from 1 to 5
in order, equal to strongly agree, agree, neutral,
disagree and strongly disagree, respectively for
the first statement. The rationale was to gauge
the degree of aversion as respondents chose from
strongly agree 1 to strongly disagree 5. The results
of descriptive statistical analysis are summarized
in Table 3 below.
Coun-
terfeit
Aversion
Seek
brand
which
hard to
find fake
Buy fake
rather
than
genuine
N Valid 306 306 306
Mean 3.483 3.098 2.006
Median 3.500 3.000 2.000
Mode 5 3 1
Std. Deviation 1.257 1.135 1.049
Minimum 1.00 1.00 1.00
Maximum 5.00 5.00 5.00
Table 3. Descriptive Statistics: Opinions about coun-
terfeit goods
Source: Authors’ calculations using questionnaire data
In response to the first statement i.e. Do not
mind that the product is counterfeit (no effect on
decision), it showed that with mode of 5 (strongly
disagree) most respondents strongly disagree with
purchasing counterfeit. Moreover, the values of
the mean and median are about 3.5, which shows
that the average opinion is between neutral and
disagree. Hence, the consumers’ response to the
measures of central tendency was negative towards
counterfeit.
The answers to the second statement were
designed to range from strongly disagree (1) to
strongly agree (5). The statement was “I seek the
brand whose fake version is hard to find in the
market”. It can be seen that mean, mode and me-
dian have a similar score i.e. 3. That means that
most people have neutral opinion, which implies
that although the attitude towards the counter-
feit might be negative, there is still an element of
neutrality or less effort when it comes to a luxury
brand whose counterfeit is hard to find, which
implies trust in what they are getting.
The third statement was “I would buy the fake
rather than the genuine” and the answers were
designed to range from strongly disagree (1) to
strongly agree (5). In this case, the value of mode
was 1 showing that the most frequently occur-
ring response was strongly disagree. Moreover,
the mean and median showed value 2 (disagree),
thus implying that although the consumer showed
a negative attitude towards counterfeit, they would
not prefer to buy a counterfeit rather than a genu-
ine product. This implies that customers gener-
ally have strong aversion towards counterfeits and
most of them mind if the product is fake and not
genuine, but do not consider the practice of look-
ing for a brand whose counterfeit is hard to find.
Nevertheless, they would prefer to buy a genuine
rather than a counterfeit product, thus implying
that buying luxury products is not only the mat-
ter of conspicuousness. Yet, as given in Figure 3,
there is still a considerable number of those who
may prefer counterfeits, which could have serious
implications for businesses.
EJAE 2016  13 (1)  72-83
Pham, T.H.M., Nasir, M.A. Conspicuous consumtion, luxury products and counterfeit market

80
CORRELATION ANALYSIS
In order to examine the association between
the observed variables, an inferential statistical
analysis was performed. We started with analyzing
correlation between the frequency of purchase and
attitude towards counterfeits (Table 4).
As can be seen, when asked if they mind that
the product is counterfeit, customers’ answers
provided significant negative correlation with the
frequency of purchase at 5% significance level (sig
value- 0.04<0.05), thus implying that there is a
negative correlation between the frequency of pur-
chase of luxury products and counterfeit aversion.
Hence, those who have greater tendency to mind
the counterfeit seem to less frequently purchase
luxury products. Moreover, the statement “Seeking
the brand whose fake version is hard to find in the
market” has significant positive correlation with
the frequency of purchase at 1% significance level
(sig value 0.000 < 0.001), thus implying that those
who agree with seeking a luxury brand whose fake
is hard to find in the market were more frequent
purchasers of luxury brands. The last statement
of buying a fake rather than a genuine product
showed a negative though insignificant correla-
tion with the frequency of purchase, thus implying
that those who agree with the purchase of the fake
rather than the genuine products are less frequent
buyers. However, the results were not highly sig-
nificant (sig value 0.148 > 0.05).
REGRESSION ANALYSIS
The correlation analysis does not imply cau-
sation. Therefore, in order to analyze the cause
and effect relationship among the variables, the
regression analysis was performed. The impact of
perception about counterfeit was analyzed based
on the purchase frequency. The model took the
following form:
Frequency of
purchase
Counterfeit
Mind
Seek brand
which hard to
find fake
Buy fake rather
than genuine
Frequency of purchase
1 -0.113 0.124** -0.076
Pearson Correlation
Sig. (2-tailed) 0.048 0.000 0.184
N 306 306 306 306
Counterfeit mind
-0.113* 1 -0.229** -0.430**
Pearson Correlation
Sig. (2-tailed) 0.048 0.000 0.000
N 306 306 306 306
Seek brand whose fake is hard to find
Pearson Correlation -0.240** -0.229** 1 -0.058
Sig. (2-tailed) 0.000 0.000 0.309
N 306 306 306 306
Buy fake rather than genuine
Pearson Correlation -0.076 -0.430** -0.058 1
Sig. (2-tailed) 0.184 0.000 0.309
N 306 306 306 306
* Correlation is significant at the 0.05 level (2-tailed). ** Correlation is significant at the 0.01 level (2-tailed).
Table 4. Correlation between frequency of purchase & opinions about counterfeit
EJAE 2016  13 (1)  72-83
Pham, T.H.M., Nasir, M.A. Conspicuous consumtion, luxury products and counterfeit market

81
( ) ( 1) ( 2) ( 3) t
Y PurchaseFrequancy X X Xa b b b e= + + + +
Where a is the constant, Y is the response vari-
able (frequency of purchase) and X1 – X3 are ex-
planatory variables, βt are the (n x n) coefficient
matrixes and εt is the (n x 1) white noise or unob-
servable vector process with the assumptions of
no autocorrelation and independent distribution,
i.e. et ˜ N (0, σ2).
Dep. Variable Frequency of
Purchase Sig
Constant 3.562 0.000
(7.469)
Counterfeit Mind/
Reversion
-0.128 0.075
(-1.788)
Seeking hard to find
counterfeit
0.257 0.000
(3.585)
Buy fake rather than
genuine
-0.151 0.071
(-1.814)
F test 7.744 0.000
R squared 0.071
N 306
Note: absolute ‘t’ ratio IN BRACKETS
Table 5. Regression analysis, opinions about counterfeit
& frequency of purchase
The results of our regression analysis show that
for our first statement, “Do not mind counterfeit”,
which we call the counterfeit reversion showed
a negative impact (- 0.128) on the frequency of
purchase, at 10% significance level (sig value 0.075
> 0.05). It implied that the counterfeit reversion
has adverse effects on the frequency of purchase
of luxury products. Hence, a consumer with
more tendency of counterfeit reversion will buy
a luxury brand less frequently. On the other hand,
agreement with seeking hard to find the fake one
demonstrated a positive impact (0.257) on the fre-
quency of purchase, which was at 1% significance
level (0.00 < 0.01). It implied that the consumer
with the tendency of seeking hard to find coun-
terfeit of luxury brands would buy luxury brands
more frequently. It can be said that those who are
more careful about the choice of luxury fashion
products will buy more frequently. It to some ex-
tent reduces the fears of Sonmez et al. (2012) that
counterfeit might put genuine brands at risk. The
last statement Buy the fake instead of the genuine
product showed a negative coefficient (- 0.151)
on frequency of purchase, which was at 10% level
of significance (0.07 < 0.10), thus implying that
those who have a tendency to agree with the idea of
buying the fake instead of the genuine product ac-
tually buy the luxury brand less frequently. These
results can be explained by saying that if customers
purchase fake products they would not buy the
genuine and the other way round. It is quite oppo-
site from Ritson’s (2010) idea that customers will
return to luxury fashion brands after experiencing
fake products. Additionally, customers just show
positive opinion on the idea of seeking a brand
whose fake version is hard to find, but people who
agree with this statement tend to purchase luxury
fashion brands more frequently. Overall, in terms
of all explanatory variables and their relationship
with the response variable (frequency of purchase),
we have the F-statistics value of 7.744, which was
greater than the critical value for the F-test (2.083),
the results were also significant (0.000 < 0.01) at
1% significance level. In terms of the goodness of
fit, our results show a modest explanatory power
of the model (7.1%) in explaining the level of fre-
quency of purchase. However, it does explain how
these tendencies and attitudes towards counterfeit
products prevail and influence the consumer be-
haviour in their own capacity.
CONCLUSION
In the light of the above cited findings and
discussion, we can hereby conclude that there is
an element of dislike among the British consum-
ers towards counterfeit products, mainly due to
the fact that they are counterfeit. It also showed
that the consumers’ attitude towards hard to find
EJAE 2016  13 (1)  72-83
Pham, T.H.M., Nasir, M.A. Conspicuous consumtion, luxury products and counterfeit market

82
counterfeits was rather neutral. However, those
with greater tendency of seeking brand whose
fake is hard to find would buy luxury brands more
frequently. Our findings also imply that although
comparatively most of the consumers will prefer
to buy genuine luxury products, it is not only the
matter of conspicuous consumption. Namely, a
significant number of consumers would prefer to
buy counterfeit rather than authentic and genuine
luxury products. In terms of frequency of pur-
chase of luxury product, those who agree with the
idea of buying fake rather than genuine products,
buy luxury products less frequently.
Nevertheless, this study has certain limita-
tions. For instance, we are yet to discover why
these tendencies exist among the consumers and
to identify the drivers of such consumer behavior.
The authors shall more thoroughly address these
issues in some future research.
REFERENCES
Carlin, A., Verel, S., & Collard, P. (2013). Modeling lux-
ury Consumption: An Inter-Income Classes Study of
Demand Dynamics and Social Behaviors. Retrieved
November 20, 2014, from http://ofce-skema.org/
wp-content/uploads/2013/0 6/carlin.pdf.
Chris, R. (2014). The retail industry: statistics and policy.
Retrieved November 20, 2014, from http://democ-
racy.middlesbrough.gov.uk/aksmiddlesbrough/
images/att1005416.pdf.
Christodoulides, G., Michaelidou, N., & Li, C.H. (2009).
Measuring perceived brand luxury: An evaluation
of the BLI scale. Journal of Brand Management, 16,
395-405. doi:10.1057/bm.2008.49.
David, F. (2011). Intellectual Property No Credit for
Fake Brands! Business Law Review, 32(3), 56-58.
Dennis, C., Fenech, T., & Merrilees, B. (2004). E-retail-
ing. London: Routledge.
Doss, F., & Robinson, T. (2013). Luxury perceptions:
luxury brand vs counterfeit for young US female
consumers. Journal of Fashion Marketing and Man-
agement: An International Journal, 17(4), 424-439.
doi:10.1108/JFMM-03-2013-0028.
Eaton, B.C., & Eswaran, M. (2009). Well-being and afflu-
ence in the presence of a Veblen Good. The Economic
Journal, 119(539), 1088-1104. doi:10.1111/j.1468-
0297.2009.02255.x.
Fionda, A.M., & Moore, C.M. (2008). The anatomy of the
luxury fashion brand. Journal of Brand Management,
16, 347-363. doi:10.1057/bm.2008.45.
Fuchs, C., Prandelli, E., Schreier, M., & Dahl, D.W. (2013).
All that is users might not be gold: How labeling prod-
ucts as user designed backfires in the context of luxury
fashion brands. Journal of Marketing, 77(5), 75-91.
doi:10.1509/jm.11.0330.
Han, Y.L., Nunes, J.C., & Dreze, X. (2010). Signaling
status with luxury goods: The role of brand promi-
nence. Journal of Marketing, 74(4), 15-30. doi:10.1509/
jmkg.74.4.15.
Hudders, L., Pandelaere, M., & Vyncke, P. (2013). Con-
sumer meaning making: The meaning of luxury brands
in a democratised luxury world. International Journal
of Market Research, 55(3), 69-90. doi: 10.2501/IJMR-
2013-000.
Husic, M., & Cicic, M. (2009). Luxury consumption
factors. Journal of Fashion Marketing and Manage-
ment:An InternationalJournal,13(2),231-245.
doi:10.1108/13612020910957734.
Hwang, Y., Ko, E., & Megehee, C.M. (2013). When higher
prices increase sales: How chronic and manipulated
desires for conspicuousness and rarity moderate
price’s impact on choice of luxury brands. Journal of
Business Research, 67, 1912-1920. doi:10.1016/j.jbus-
res.2013.11.021.
Kapferer, J.N. (2014). The artification of luxury: From
artisans to artists. Business Horizons, 57(3), 371-380.
doi:10.1016/j.bushor.2013.12.007.
Kauppinen-Räisänen, H., Gummerus, J., von Koskull, C.,
Finne, A., Helkkula, A., Kowalkowski, C., & Rindell,
A. (2014). Am I worth it? Gifting myself with luxury.
Journal of Fashion Marketing and Management: An
International Journal, 18(2), 112-132. doi:10.1108/
JFMM-04-2013-0062.
Khan, M.T. (2014). The Concept of ‘Marketing Mix’ and its
Elements (A Conceptual Review Paper). International
Journal of Information, Business and Management, 6(2),
95-107.
Kuksov, D., & Xie, Y. (2012). Competition in s status goods
market. Journal of Marketing Research, 49(5), 609-623.
Lourreiro, S.M.C., & Araujo, C.M.B.D. (2014). Luxury
values and experience as drivers for consumers to
recommend and pay more. Journal of Retailing and
Consumer Services, 21(3), 394-400. doi:10.1016/j.jret-
conser.2013.11.007.
Maden, D., Goztas, A., & Topsumer, F. (2015). Effects
of brand origin, fashion consciousness and price-
quality perception on luxury consumption moti-
vations: an empirical analysis directed to Turkish
consumers. Advances in Business Scientific Research
Journal, 6(1), 15-29.
EJAE 2016  13 (1)  72-83
Pham, T.H.M., Nasir, M.A. Conspicuous consumtion, luxury products and counterfeit market

83
Newman, G.E., & Dhar, R. (2014). Authenticity is con-
tagious: Brand Essence and the original source of
production. Journal of Marketing Research, 51(3),
371-386. doi:10.1509/jmr.11.0022.
Nunnally, J.C. (1978). Psychometric theory. New York:
McGraw-Hill.
Okonkwo, U. (2007). Luxury fashion branding: Trends,
tactics, techniques. Basingstoke: Palgrave Macmillan.
Olorenshaw, R. (2011). Luxury and the recent economic
crisis. Vie & Sciences Économiques, 188(2), 73-90.
doi:10.3917/vse.188.0072.
Palmer, A. (2009). Introduction to marketing: Theory and
practice. Oxford: Oxford University Press.
Ray, A., & Vatan, A. (2013). Demand for Luxury Goods in
a World of Income Disparities. Retrieved November
20, 2014, from https://hal-pse.archives-ouvertes.fr/
hal-00959398/document.
Ritson, M. (2010). The sham surrounding fake luxury
brands. Retrieved November 12, 2014, from https://
www.marketingweek.com/2010/09/08/the-sham-
surrounding-fake-luxury-brands/.
Shilling, A.G. (2007). Small luxuries. Retrieved No-
vember 28, 2014, from http://eds.a.ebscohost.com.
ezproxy.leedsbeckett.ac.uk.
Sonmez, M., Yang. D., & Fryxell. G. (2012). Interac-
tive role of Consumer Discrimination and Brand-
ing against Counterfeiting: A study of Multinational
Managers’ Perception of Global Brands in China.
Journal of Business Ethnics, 115(1), 195-211.
Sophie, H. (2010). Effect of counterfeits on the image of
luxury brands: An empirical study from the customer
perspective. Journal of Brand Management, 18(2),
159-173. doi:10.1057/bm.2010.28.
Timberlake, C. (2014). Michael Kors wins over Europe’s
fashionistas. Bloomberg Businessweek, 4377, 27-28.
Veblen, T. (2009). The Theory of the Leisure Class: An
Economic Study of Institutions. Oxford: Oxford Uni-
versity Press.
Walley, K., Custance, P., Paul, C., & Perry, S. (2013).
The key dimensions of luxury from a UK consum-
ers’ perspective. Marketing Intelligence & Planning,
31(7), 823-837. doi:10.1108/MIP-09-2012-0092.
Yuen, E.F.T., & Chan, S.S.L. (2010). The effect of re-
tail service quality and product quality on customer
loyalty. Journal of Database Marketing & Customer
Strategy Management, 17, 222-240. doi:10.1057/
dbm.2010.13.
Received: March 9, 2016
Correction: April 18, 2016
Accepted: April 27, 2016
UPADLJIVA POTROŠNJA, LUKSUZNA ROBA
I TRŽIŠTE FALSIFIKATA U VELIKOJ BRITANIJI
Rezime:
Brz razvoj modnih brendova i popularnost falsifikovane robe predstavlja veliki
izazov za postojeće i nove proizvođače i korisnike luksuznih modnih brendo-
va. Ovaj rad ispituje faktore koji podstiču tržište falsifikovane robe u Velikoj
Britaniji. Na osnovu podataka prikupljenih iz upitnika u kojem je učestvovalo
306 ispitanika i korišćenjem empirijskih tehnika, poput deskriptivne i inferen-
cijalne statistike (korelaciona i višestruka regresiona analiza), može se zaključiti
da potrošači imaju negativan stav prema falsifikatima luksuznih brendova.
Međutim, oni pokazuju slabiju tendenciju prema kupovini brendova čije je
falsifikate teško naći i u tom slučaju radije kupuju original. Kada je reč o uče-
stalosti kupovine, ispitanici imaju averziju prema falsifikovanoj robi i nastoje da
kupuju brendove za koje je teško naći falsifikat. Generalno posmatrano, rezultati
pokazuju da zagovaranje i prihvatanje falsifikovane robe nije toliko prisutno
na tržištu. Međutim, oko 27% ispitanika ima pozitivan ili neutralan stav prema
falsifikovanoj robi, što u velikoj meri utiče na tržište luksuzne firmirane robe.
Ključne reči:
luksuzni modni brendovi,
izbor potrošača,
falsifikati,
upadljiva potrošnja.
EJAE 2016  13 (1)  72-83
Pham, T.H.M., Nasir, M.A. Conspicuous consumtion, luxury products and counterfeit market