Chapter I Introduction
1.2 Research Purpose and Significance of the Study
國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
satisfy their needs as well as to gain enjoyment. However, despite that some people are willing to pay less money to get counterfeit products, others may refuse to purchase the fake one for various reasons. For example, some consumers may find out the gap of quality between genuine and counterfeit after the purchase. It is possible that use of counterfeit goods may further generate sense of guilt and negative image or self-conscious (Jinhwa, 2009). Accordingly, the research purpose of this study focuses on the differences of purchase intention toward genuine and counterfeit goods, and specify luxury bags.
1.2 Research Purpose and Significance of the Study
With regard to research on luxury related consumer behavior, most of the research focus on consumer behavior, such as individual’s motivation of purchasing genuine luxury goods, or only target on the counterfeits’ aspect to prevent transaction happens (Victor V., Nittaya &Robert L., 1996). However, this research will like to both understand consumer’s behavior and attitude toward purchasing genuine luxury goods and counterfeit goods, and further compare the different factors between them.
Furthermore, according to Jing daily article, counterfeit goods are classified into five levels range from “1:1”, “super A”, “A”, “B” and “C” in China which is recognized as major counterfeit market, and the study will only take level of “1:1” and “super A” as reference (https://jingdaily.com/china-counterfeit-report-do-factory-extras-really-exist/).
‧
Purchasing genuine luxury goods or counterfeit goods is not an essential need to satisfy consumers, the need usually comes from individual’s psychological aspect and society. Under current society, the major motivation of purchasing luxury goods is a behavior to pursue and show the social status, it can attribute to unsatisfied sense of belonging and materialism (Kasseretal, 1995; Rose and Dejesus, 2007). However, take conspicuous consumption as an only reason of purchasing counterfeit goods is not sufficient to support previous scholar research, cannot explain different types of consumers as well( and 2017), therefore, it is important for the research to discuss more variables.
Different motivations and needs will lead to different purchase intention, some people will purchase genuine luxury goods, on the other hand, others might consider counterfeit goods with same design but poorer quality. The behavior can be explained by various factors, hence, in the research will include motivation, individual differences and product involvement to testify how each variable relates to purchase intention of genuine or counterfeit luxury goods, and explain the results of two different purchase behaviors. Moreover, following is the research questions for this study,
• Research Question
Q1. How would the consumer’s motivation lead to different purchase intention between genuine and counterfeit luxury bag?
Q2. How would the individual differences lead to different purchase intention between genuine and counterfeit luxury bag?
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Q3. How would the individual level of product involvement lead to different purchase intention between genuine and counterfeit luxury bag?
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Chapter II Literature Review
2.1 Motivation
2.1.1 Conspicuous Consumption
According to Yann’s (2010) study that motivation of luxury consumption can be categorized into two reasons: personal and social factor, and social factor of consumption based on the explicit behavior that is eager to show-off themselves which refer to socially express. The idea has frequently been brought out in previous research, and mostly focus on Veblen’s well-knowing conspicuous consumption concept (Manson, 2001; O’Cass & Frost, 2004; Truong et al., 2008). Therefore, conspicuous consumption can be viewed as one of significant and meaningful motivations toward luxury goods consumption.
The “Veblen Effect” means that individual is willing to purchase a functionally equivalent product with high price to represent prestigious social status (Bagwell &
Bernheim, 1996), hence, it can be referred as “conspicuous consumption”, which sums up that no matter rich or ordinary people will consider purchasing luxury goods to impress others and gain more social status. As Veblen (1899, p.29) mentioned,
“Individual becomes indispensable to accumulate, to acquire property, in order to retain one’s good name.” Theoretically, to explain the behavior of conspicuous consumption
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
that individual will tend to purchase luxury goods to gain recognition from group of people who socially situated either directly or considerably above them (Ericksen, 1996;
Mason, 1998).
There are lots of motivations relate to previous research, to reflect higher social status by conspicuous consumption seems to consolidate the phenomenon of consumer purchasing behavior (Yann, 2010). Therefore, purchase luxury goods would satisfy individual’s intrinsic needs of recognition from others. Based on the literature review so far, researcher can develop a hypothesis:
H1a. Motivation of conspicuous consumption will enhance individual’s purchase intention of genuine luxury bag.
There are lots of counterfeit goods exist in luxury market, it can be viewed as a reproduction of luxury brand (Victor V., Nittaya &Robert L., 1996), they are the alternative to the genuine one with lower price (Adrian & Halldor, 2007), and quality might not have obvious differences (James W., Sanjay & Clifford J., 2006). Moreover, marketers will likely produce counterfeit products with well knowing brand name.
From the previous research of counterfeit goods, they examined lots of factors, including economic, quality, legal and ethical issues etc., will have the influence effect to consumers’ purchase intention toward counterfeit goods (Marin & Pakize, 2006;
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
related reputation and social status are significant reasons for consumers to purchase counterfeits goods of luxury brands (Victor V., Nittaya &Robert L., 1996; Fang et al., 2005), in other word, while purchasing counterfeit goods would present connotation of prestige to consumers but only in the condition that quality is decent.
Moreover, an individual’s conspicuous consumption can associate to social class position, they are likely to relate themselves with social status they are, both in or above (Mellott, 1983). Hence, if a product is too expensive for individual to purchase, they would probably consider buying counterfeit as an affordable substitute for the genuine one (Ian, Min & Agnes, 2009). As such, the following hypothesis is proposed:
H1b. Motivation of conspicuous consumption will enhance individual’s purchase intention of counterfeit luxury bag when it is difficult to distinguish it from the genuine one.
2.1.2 Self-Gratification
According to Ian, Min and Agnes (2001) research, they point out individual’s gratification is related to personal satisfaction of accomplishment and social recognition, importantly, desire to enjoy the hedonistic life is one of important psychological factors to fulfill. Moreover, from previous studies show luxury goods consumption can trigger the feeling of intangible happiness (Dubois & Laurent, 1994)
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
that purchasing behavior includes the concept of emotional responses and excitement (Benarrosh-Dahan, 1991).
Purchasing luxury brand tend to be influenced by various motivations, nevertheless, when the individual need to satisfy self-gratification, they would likely end up purchase products which can provide pleasure (Marwa & Adrian Razvan, 2016).
Based on this concept, it can be clearly explained by hedonistic effect which individual more concerns about intrinsic feeling and pleasure instead of price tag. From Roux and Foch (1996) research, luxury goods consumption resembles to emotion of pleasure while purchasing luxury goods has shifted position from status symbol to hedonism, individual view it as an action of self-gratification. Therefore, based on above literature review, the hypothesis is developed:
H2a. Motivation of self-gratification will enhance individual’s purchase intention of genuine luxury bag.
However, price means everything for smart shoppers who referred as not impulsive consumers, cost saving is the priority for them when it comes to purchase products. Mano and Elliott (1997) brought out the concept of price saving “it may be a source of pride and accomplishment as much as their desire to escape their class habits and to acquire the appearance of certain upper social status” (Jinhwa, 2009, p.26).
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Even though certain consumers concern most about price tag, they still have strong desire to present the outstanding image to others, and have possession to reflect quality standard of living (Festinger, 1954). Hence, they might choose counterfeit over genuine products when there is a price benefit (Bloch et al., 1993), this finding also suggested by Grossman and Shapiro (1988) that counterfeit goods usage could maintain the social status and quality attributes of branding products with price advantage. As such, consumers might face a conflict between actual identity and imitate appearance when they decide to purchase counterfeit goods, however, it would be compromised with the incentive of money-saving (Jinhwa, 2009), and under this pattern of consumption behavior, consumers who purchases counterfeit luxury goods might still receive same level of self-gratification as those who purchase genuine luxury goods. Consequently, researcher forms the following hypothesis:
H2b. Motivation of self-gratification will enhance individual’s purchase intention of counterfeit luxury bag, while price is an essential concern.
2.2 Individual Difference
2.2.1 Self-Confidence
In current society, possession isan important object to represent personal identity (Belk, 1988), hence, according to Shavitt (1989) that individuals are likely to purchase items which can assist them to define their social and personal identities, and luxury
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
products can be significantly represent in this regard (Dodd et al., 2000; O’Cass, 2000;
Solomon, 1985).
Moreover, even though there are many different social classes, the demand of luxury goods remains high and consumers expect higher quality as well (Kim, Sullivan
& Forney, 2007). Luxury brand becomes one acquisition to represent individual’s social status, identities and can enhance self-confidence as well (Kim et al., 2007). Therefore, consumers who purchase name brand products might be viewed as a person who concern about self-consciousness and especially the self-image they present (Penz &
Stottinger, 2005).
From Jinhwa’s (2009) research, an individual who has an undetermined self-concept would probably end up acquire low self-esteem, therefore, they are likely to purchase prestigious luxury goods so as to present upper-class social status and to help them build up and sustain individual identities and self-images. Moreover, when a low self-esteem person purchases counterfeit goods may view themselves as an individual who has lower economic status, lower self-confident, lower social status and less success than those who purchases genuine luxury goods. Therefore, the following hypothesis is derived to address to the influence of self-confidence on consumption:
H3. Individual with lower self-confidence is more likely to purchase genuine luxury bag.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
2.2.2 Moral Concern
From the U.S. Customs and Border Protection Office of International Trade (2007) survey, 70 percent of counterfeit goods are fashion or luxury products, under this fact, most consumers might purchase counterfeit goods as an alternative, and take it quite acceptable. However, producing and selling counterfeit goods can cause lots of problems, especially it violates the intellectual property of luxury brand design and cause unequal industrial competition (Jinhwa, 2009), therefore, to understand consumers’ purchase intention toward counterfeit luxury goods will be helpful for luxury industry.
From Lichtenstein, Ridgway and Netemeyer's (1993) research, they pointed out price is the most significant factor which will influence purchase intention, hence, buying counterfeit goods might be beneficial to individual’s self-interest and satisfaction (Nill & Schultz, 1996). However, ethical issue has been widely discussed in the counterfeits-related literature as one of factors which will determined consumers’
purchase motivation, Penz and Stottinger (2015) claimed that the concept of moral examination has an important role in the consumer behavior.
People tend to present ideal model to others to consolidate personal image, and moral concern could moderate the result of idealism on purchase intention. Moreover, idealism is positively related to moral concern, and moral concern has significantly effect to purchase intention (Ha & Lennon, 2006). Therefore, from Jinhwa (2009)
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
research individual who consider ethical obligation issue would feel shameful when they are discovered buying counterfeit goods by others.
To sum up the previous literature review, if behavior is regulated within moral judgment by society, individual would willing to follow and perform it, however, if it is beyond moral concern, one would less willing to engage in (Nguyen & Biderman, 2008). Hence, the concept is adopted to purchase intention of luxury goods, and the hypothesis is developed:
H4. Individual who considers moral concern is less likely to purchase counterfeit luxury bag.
2.2.3 Sociability
According to Megan Minmin C. website, the article mentions twelve reasons ofconsumers’ purchase intention to luxury products, sociability is one of those which can be referred as social tool, social network effect and identity recognition etc.
(http://meganminminc.com/filter/%E5%A5%A2%E4%BE%88%E5%93%81%E7%A D%96%E7%95%A5/12-Reasons-Why-Consumers-Buy-Luxury-Goods-12). Besides, the global leading market research also a consulting firm, Ipsos, points out that purchase
intention to luxury goods can become a social
lubricant(https://www.wszchina.com/shechipin.html).
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Furthermore, from Zhihu website that it is essential to present an individual’s identity in certain social events, especially for the upper class gathering, hence, luxury brand’s products become the representative objects in these kinds of social activities.
For example, wearing a Patek Philippe in the high-end social event will bring you an advantage of social recognition, frankly speaking, people usually view luxury goods as an item to display and maintain their social status in the reality world (https://www.zhihu.com/question/26226526). Therefore, based on above argument, the researcher can infer the following hypothesis:
H5. Individual who is more sociable is more likely to purchase genuine luxury bag.
2.3 Product Involvement
Product involvement indicates to an individual’s involvement level to the certain style or fashion concept of luxury products (Jinhwa, 2009), and it also relates to the consciousness of fashion which varies from person to person. Besides, acquire the sense of fashion consciousness does not need to become either an opinion leader or a fashion innovator, it depends on individual’s enthusiasm to fashion, design and even one’s appearance (Summers, 1970; Jonathan & Mills, 1982).
From luxury goods-related research, the reason to purchase premium products attribute to the high satisfaction of items’ traits, such as prestige, brand image and fashion design, additionally, product involvement would reflect to how valuable
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
consumers perceived from luxury goods (O’Cass, 2001). Hence, it is necessary to understand the relation between product involvement and consumers’ purchase intention because previous research had proved that product involvement can cause the influence on consumer behavior (Bertrandias & Goldsmith, 2006; Goldsmith, 2002;
Penz & Stottinger, 2015; Wee et al., 1995).
Moreover, Penz and Stottinger (2005) research had supported that product involvement has a strong negatively affect for consumers to purchase counterfeit goods, on the other words, individual who has high level of product involvement will less likely to purchase counterfeit products. Hence, the hypothesis relates to product involvement and purchasing intention is conducted:
H6. Individual who has a higher product involvement is more likely to purchase genuine luxury bag.
2.4 Demographic Factors
Demographic factors can be helpful for scholars to understand individual’s purchase intention and consumption habits toward luxury products. The research examines four demographic characteristics, including age and disposable income.
Firstly, age can be an important indicator for individual to purchase genuine or counterfeit luxury bags, researcher targeting on age group between 20 and 45 because
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
users which online survey can easily reach to. Moreover, elderly people are recognized as authentic population who might has higher possibility to purchase genuine luxury bags (Gardyn, 2002; Moschis et al., 2004; Singh et al., 2007; Strain et al., 2002).
Secondly, level of disposable income can be evaluated whether individual has ability to purchase luxury products. Adapting the standard price theory, individual who has higher disposable income can purchase more premium products than others (Ikeda, 2006). From this perception, others who have lower disposable income might more likely purchase counterfeit luxury goods, however, Francese’s (2002) research presents an opposite idea that lower disposable income can selectively purchase luxury goods as well.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Chapter III Research Methodology
3.1 Research Framework
The research would like to examine consumers’ different purchase intentions toward genuine and counterfeit luxury bags, and how related variable influence individual’s purchase behavior. Both qualitative and quantitative methods are used for data collection, that is, the researcher conducts in-depth interviews and questionnaire survey so as to examine whether there are significant relationships between consumers’
purchase intentions and some psychological variables. In-depth interviews are conducted among luxury bag owners, then, questionnaires survey is conducted to gather information for the analyses, with a view to finding out answers to the research question.
The research framework of this study and research procedures are presented in the following Figure 1,
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Figure 1. Research Framework
• Research Hypotheses
H1a. Motivation of conspicuous consumption will enhance individual’s purchase intention of genuine luxury bag.
H1b. Motivation of conspicuous consumption will enhance individual’s purchase intention of counterfeit luxury bag when it is difficult to distinguish it from the genuine one.
H2a. Motivation of self-gratification will enhance individual’s purchase intention of genuine luxury bag.
H2b. Motivation of self-gratification will enhance individual’s purchase intention of counterfeit luxury bag, while price is an essential concern.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
H3. Individual with lower self-confidence is more likely to purchase genuine luxury bag.
H4. Individual who has a high consideration of moral concern is less likely to purchase counterfeit luxury bag.
H5. Individual who is more sociable is more likely to purchase genuine luxury bag.
H6. Individual who has a higher product involvement is more likely to purchase genuine luxury bag.
3.2 Research Procedure
3.2.1 In-depth Interview
In-depth interviews are conducted to obtain insights of various factors that may influence consumer’s purchase intention toward either genuine luxury bags or counterfeit bags. With the aid of interview, researcher can make sure hypotheses are significant and can clearly understand which variables cause consumers to have different purchase intention toward genuine and counterfeit luxury bag.
3.2.1.1 Selection Criteria of Interviewees
The purpose of this interview is to investigate significant explanatory variables
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
of luxury bags are included in the in-depth interview. These six interviewees are ages between 20 and 45. The Table 1 summarizes the background information about the participants of the in-depth interview.
Table 1. Information Regarding Participants in In-depth Interview
Code Name Age Status
Date of Interview Participant A Grace 25 Employee of headhunter company
2018/5/12 Participant B Nicole 43 Employee of global company
Participant C Joe 23 Student
Participant D Yichen 36 Project planner Participant E Michelle 33 Flight attendant
Participant F Amy 29 Employee of CTCB
During the interview, every recruited individual will be given few questions, they will be interviewed in the same time and will last approximately 20 minutes in total.
Furthermore, the procedure will be carried out as interviewer presents variables, including motivation, individual differences and product involvement, then ask questions to find out whether variables are factors to trigger consumers purchase intention.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
3.2.1.2 Interview Questions and Summarize
There will be seven interview questions in total to further verified the reliability of variables. Interview questions are developed,
Q1. Have you ever purchased genuine and counterfeit luxury bag?
Q2. Will you purchase luxury bag to show off your social status or fashion sense, and consider buying counterfeit one as well?
Q3. Will you consider buying luxury bag as a self-gratification for yourself, and how about purchasing counterfeit one?
Q4. Will you view product involvement as an index of purchasing genuine or
Q4. Will you view product involvement as an index of purchasing genuine or