Conspicuous Consumption, Luxury Products and Counterfeit Market in the UK
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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: m.a.nasir@leedsbeckett.ac.uk
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.
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: m.a.nasir@leedsbeckett.ac.uk
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 three statements to
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
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 three statements to
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
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
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
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