Chapter II

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter presented the review of related studies and literature. It also

included the conceptual framework of this research study.

A. Related Literature

According to Francis, Brugess and Lu (2015) that mainstream literature

showed that demand for counterfeit luxury brand products was primarily driven by

consumers who wanted the status and image of luxury brands without the price

tag. However, emerging evidence suggested that the interest of some consumers

may be somewhat independent of the replicated brand. Overall, the finding showed

that for this segment, consuming counterfeit luxury products was more about the

counterfeit aspects than brands or price, and the theory of cool consumption

provided plausible explanation for the result.

The two main differences between a counterfeit and an original product, as

perceived by a consumer, were lower price and the lacked of quality guarantees.

Price and risk constructs were likely to be important factors regarding a consumer’s

attitude towards counterfeited products. Studies such as Cespedes et al. and

Cerdell et al. showed price difference to be an important variable when choosing

a counterfeit. In this sense, the tendency of the consumers to believe that high

(low) price means high (low) quality became even more important when little

information was available regarding the products quality on the consumers was

unable to determine the product’s quality. (Albarq, 2015)

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Acccording to Wee (2013), Counterfeiting was a serious problem besetting

an increasing number of industries. Counterfeited merchandise cut into profits and

harms the brand owner′s reputation. The main motived for purchasing

counterfeited products was the price. Results suggested that non‐price

determinants, particularly those relating to perceived product attributed and

attitude towards counterfeiting, affect consumers′ intention to purchase

counterfeited products.

Counterfeiting was a major problem in foreign countries, especially in China.

Counterfeiting was the process of producing faked products that carried a well-

known brand name. The price of the counterfeited products were cheap because

it was not authentic. Low-quality, inexpensive counterfeited can damaged a

company's reputation and reduced its revenues. The spread of counterfeited

products made easily with the used of internet and e-commerce. Customers tend

to purchase this because of low price but low in quality. (Kaser, 2016)

Counterfeiting was a serious problem for businesses. 40% of the

respondents said that they would knowingly purchase a counterfeit product if the

price and quality of the goods were acceptable. Common counterfeited products

were clothing/go it wear, watches, perfume/fragrance etc. 65% agreed that they

were against in any form of product counterfeiting. This problem affected the

consumers' health and can put them at risk. 39% thought that counterfeiting was

very often, one of the worst profitable. (Saunders, Lewis & Thornhill, 2010)

China was now the main source of counterfeiting or imitating products.

Wobbly and uncertain, the country had taken an attitude and behavior of copying
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the products and services of other nations. Name any products or services and

China has or will have it soon. While in this phase, intellectual property rights of

the original producers of imitated goods and services were essentially infringed.

As a result, cheaper selling prices generated due to cheap labor costs and non-

payment of copyrights, trademarks, patents and other ownership rights. Hence,

the products and other "duplicable" services were sold although quality was poor.

(Young, 2015)

According to Chaudary et al. (2014) Low Price, Easy Access and Past

Experience had a Positive significant relationship with Attitude towards Buying

Counterfeited Shoes, while Value Consciousness (negative) and Social Status

found an insignificant relationship with Attitude towards Buying Counterfeit Shoes.

Attitude towards Buying Counterfeit Shoes explained a considerable percentage

of the variance of intention to purchase counterfeited Shoes. Low Price and Past

Experience found a positive significant relation with Purchase intention while Easy

Access found (negative) an insignificant relation with purchased intention.

B. Related Studies

According to Bian and Moutinho (2011) the purposed of this study was to

investigate impact of counterfeited branded products (CBP) to the owner of

branded products (BP). Investigation results consumers had more favorable

perception of branded products than counterfeited branded products.

When consumers considered feeling about a future purchased, this feeling

can influenced their purchased decision. This research identified the effect of
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anticipating regret of consumer preference for a product that was a conspicuous

counterfeit. The study showed that consumer was more likely to choose non-

conspicuous luxury counterfeit. Often, consumer was anticipated and thought the

potential regret in purchasing counterfeit product. (Chen and Teng, 2014).

According to Carpenter and Lear (2011), counterfeit fashion products posed

a serious threat to the manufacturers and retailers of authentic designer products

and to the world economy. While research suggested that gender was related to

purchase intention for counterfeited products, the relationship between gender and

the antecedents to purchased intention (attitudes regarding ethicality, social cost,

and anti-big business) had not been explored. The current research used

hierarchical structural equation modelling (SEM) to examined gender as a

moderator of attitudes toward counterfeit fashion products among a sample of U.S.

consumers (N = 305). Findings suggested that while gender had not moderate the

social cost and anti-big business components of consumer attitudes toward

counterfeit fashion products, gender had affect beliefs about the ethicality of

counterfeiting.

According to Kim and Park (2012), participants made a purchase decision

about a counterfeit product under either constrained or unconstrained cognitive

resource conditions. Participants were less likely to purchase the counterfeit when

their cognitive resources were constrained than when they were not. However, this

difference was evident only when individuals had strong (vs. weak) moral beliefs,

or when they had low (vs. high) accountability for their decisions. These and other

results suggested that the effect of cognitive resource availability on counterfeit

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purchase was mediated by participants’ perceptions of justification about the

purchase.

According to Mavlanova and Fich (2014), the Internet made it possible for

counterfeiters to sell imitation goods without prior consumer inspection.

Counterfeiters leveraging this opportunity may use product presentation and Web

site signals to represent counterfeit goods as genuine. Based on deception and

signaling theories, it was proposed that counterfeiters used product presentation

to manipulate signals that might otherwise identify a product as a fake and Web

site trust signals to present themselves as legitimate business entities. An

experiment demonstrated that advanced product presentation had a positive

influence on user perceptions of the authenticity of products and increases user

willingness to buy on-line. The absence of Web site trust signals provided

significant evidence of the untruthfulness of a seller and decreases users'

willingness to buy on-line. The results of this study provide the basis for a

cautionary note to on-line buyers and had help prevent deception by sellers of

counterfeit products who used advanced presentation techniques.

According to Mangundap et. al (2018), most of the people knew that original

product had good reputation than the counterfeit. The trust between this two

objects also different, where people more trust the Original Product than the

Counterfeit.

Basu et. al (2015) stated that many consumers bought branded products

not because they were brand loyal but, because branded products signify genuine

quality.
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According to Mangundap (2018) Many people know that the quality of

original product is higher than counterfeit. Original product have good quality of

material, long life, and the design also looks better than Counterfeit, which doesn’t

have quality of material, easy damaged, and the design also not as nice as the

Original one. The price of original product is higher than counterfeit, because of

the quality inside the product. The Original shoes product has good quality of

material, which makes the product more expensive than the Counterfeit, which

used bad quality of material.

C. Related Gaps

Bian and Moutinho (2011) investigated the impact of counterfeit branded

products. The results showed that consumers favored the branded products.

Chen and Teng (2014) researched the effect of anticipating regret of

consumer’s preference. The results showed that consumers choose non-

conspicuous luxury counterfeit.

Carpenter and Lear (2011) considered the relationship of gender and

antecedent to purchase intention. The researchers used the hierarchical structural

equation modelling. The findings showed that gender does not affect the

participants counterfeit purchasing.

Kim and Park (2012) studied the purchase decision about counterfeit

product. The results suggested that the effect of resources availability was

meditated by participant perception.

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Marlona and Fich (2014) considered the contribution of Internet in selling

imitation goods. The results provided the cautionary note to on-line buyers and

help prevention deception by sellers.

Mangundap et al. (2018) considered the original that has a good reputation.

It shows that they trust in original product than counterfeited.

Basu et al. (2015) stated that customer brought branded products because

it signify genuine quality.

Mangundap et al. (2018) stated that the quality of the original product is

higher than counterfeit, it has a good quality of material long life, and the design

also looks better than counterfeit which makes the product more expensive.

Francis, Brugess and Lu (2015) researched the demand for counterfeit

luxury brand products. The findings show that consuming counterfeit luxury

products is more about counterfeit aspects than brands and price.

Albarq (2015) researched the difference between a counterfeit and an

original product by a consumer. It stated that lower price and lack of quality

guarantees. In this sense, consumer believe that high price means with low quality

and vice versa.

Wee (2013) considered counterfeiting as a serious problem. Counterfeits

merchandise cuts the profit of brand owner. The results suggest that non‐price

determinants, particularly those relating to perceived product attributes and

attitude towards counterfeiting.

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Kaser (2016) considered counterfeiting is the process of producing fake

products that carry brand name. The spread of counterfeited products made easily

by the internet and consumers prefer to buy it because the price is low.

Saunders, Lewis and Thornhill, (2010) considered that that they would

knowingly purchase a counterfeit product if the price and quality of the goods were

acceptable. This problem affects the consumers' health and can put them at risk.

Young (2015) considered china is now the main source of counterfeiting

and has taken an attitude and behavior of copying the products. The result shows

that cheaper selling prices generated due to cheap labor costs and non-payment

of copyrights.

Chaudary et al. (2014) considered that Low Price, Easy Access and Past

Experience have a Positive significant relationship with Attitude towards Buying

Counterfeit Shoes. Low Price and Past Experience found a positive significant

relation with Purchase intention while Easy Access found (negative) an

insignificant relation with purchase intention.

None of the researchers mention about the extent purchasing of

counterfeited shoes of the students and its level of satisfaction. The researchers

seek to find out the answer on the extent purchasing of counterfeited shoes of the

consumers and what their level of satisfaction.

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D. Conceptual Framework

The conceptual framework of this study was illustrated in a schematic

diagram which is the Figure 1. As shown, the study treated relationship of the two

variables which is the purchasing counterfeited shoes and level of satisfaction of

the ABM students. Purchasing counterfeited shoes is the independent variable and

the dependent variable is level of satisfaction.

Thesis Statement:

Purchasing counterfeited shoes had been connected to the level of

satisfaction. This study claimed that extent purchasing of counterfeited shoes

reflected to the level of satisfaction of the ABM Students because they were more

likely to purchase counterfeit product then they were satisfied.

Independent Variable Dependent Variable

Purchasing
Level of Satisfaction
Counterfeited Shoes

Figure 1. Conceptual Framework