An Investigation on Counterfeit Products' Effects on Louis Vuitton

This dissertation report investigates the effects of counterfeit products on the luxury brand Louis Vuitton. It begins with an overview of the entrepreneurial opportunity presented by the rise of counterfeit goods in the retail sector, particularly within the luxury market. The report details the research methodology, including the use of qualitative data and secondary data collection from published sources. It analyzes the impact of counterfeit products on Louis Vuitton's brand image, sales, and customer base, as well as the negative effects on innovation and consumer trust. The report also explores the strategies that can be implemented to combat the issue and protect the brand's reputation and profitability. The report includes a project plan outlining the tasks, timelines, and the methodology used for the research. The report highlights the global concern of counterfeit products and their impact on various companies, and the need for companies to think of various strategies to overcome this counterfeit issue. The report aims to provide a comprehensive analysis of the issue and recommend solutions for improving brand performance.

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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