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Empirical
Factors affecting consumers’ study in the
intention to purchase Malaysian
market
counterfeit product
Empirical study in the Malaysian market 837
Abstract
Purpose – Most of the past studies have considered social and personal factors in relation to counterfeit
product purchase intention. However, there is a dearth of research that linked ethical aspects with such kind
of product purchase intention. Considering this gap, the purpose of this paper is to investigate the direct as
well as indirect effect of ethical aspects on the attitude of consumers’ counterfeit product purchase in the
Malaysian market.
Design/methodology/approach – A total of 737 questionnaires were distributed in China Town, Low Yat
Plaza, as well as a few “pasar malam” (night markets), which yielded 400 completed usable responses.
Partial Least Square Smart PLS software and SPSS were utilised in order to analyse the data.
Findings – The results revealed that the ethical aspect in term of religiosity, ethical concern, and perception
of lawfulness directly and indirectly affect consumers’ behavioural intention to purchase counterfeit products.
Practical implications – It is expected that the study findings will enhance the understanding of marketers
as well as policymakers about consumers’ purchase intention of such fake products. Eventually, it will help
them to come up with better marketing strategies to purchase counterfeit products and to encourage them to
purchase the original product.
Originality/value – This is relatively a pioneer study that examines the effect of ethical aspects of
consumers in term of their religiosity, ethical concern, and perception of lawfulness on their attitude towards
buying counterfeit products. Additionally, this study examines the mediating role of consumer attitude to
purchase counterfeit product between ethical aspects and behavioural intention, which is comparatively new
to the existing body of knowledge. Last, but not the least, this research has examined these relationships in a
new research context i.e., Malaysian market, which can advance the knowledge about consumer behaviour in
the East Asian context.
Keywords Counterfeit product purchase, Ethical concern, Lawfulness, Malaysian consumers, Religiously
Paper type Research paper
Introduction
In recent years, counterfeit product purchase became a global issue due to its threat to the
global economy, as well as to the social and cultural aspect. Counterfeit products are
unauthorised products that use other registered goods’ trademark (Chaudhry and
Zimmerman, 2009). Counterfeit products can be categorised into different aspects, such as
CDs and DVDs, watches and accessories, shoes and handbags, clothes, electronic products,
medicines, textiles, and pesticides Chaudhry and Zimmerman (2009). Such fake products
abuse the high brand value, logo, package, and trademark of the original brand. The
Asia Pacific Journal of Marketing
International Chamber of Commerce reported that by adding the amount of pirated digital and Logistics
instruments to counterfeit goods, the sum was worth $650 billion in 2008 alone (Marcelo, 2011). Vol. 29 No. 4, 2017
pp. 837-853
Furthermore, research conducted by The International Chamber of Commerce (ICC) (2009) © Emerald Publishing Limited
1355-5855
showed that international counterfeit products’ value will increase to $1.7 trillion by 2016, DOI 10.1108/APJML-09-2016-0169
APJML which is equal to 2 per cent of the current global economic output. Moreover, the Organization
29,4 for Economic Cooperation and Development (OECD, 2009) estimated that the counterfeit
market’s value is 5 to 7 per cent of the global trade. Another negative impact of counterfeit
products is the unemployment rate which is associated with missing tax revenues. The
unemployment cost, missing taxes revenue, and welfare spending due to counterfeit trade was
$125 billion in developed countries. Statistics from the US Chamber of Commerce in 2006
838 mentioned that more than 750,000 individuals were unemployed due to the counterfeit product
business (Marcelo, 2011). Considering threatening impact on the global economy and
sociocultural aspects, the counterfeit product purchase phenomenon received significant
research attention (see Kassim et al., 2016; Tang et al., 2014). Therefore, the present study
attempts to investigate the factors that can influence customers’ purchase intention towards
counterfeit products in the Malaysian market.
Although the sales and purchase of counterfeit products became a global issue, the reasons
for consumers’ behavioural intention to purchase counterfeit product is not fully uncovered
yet. Most of the prior studies examined the counterfeit product purchase intention in relation
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to social factors as well personal factors (Cheng et al., 2011). However, there is a dearth of
studies that have examined this phenomenon in relation to religiosity and consumers’ ethical
concern. It was argued that religious people tend to be more cautious regarding the cost, price,
and quality effectiveness of counterfeit products compared to less religious individuals
(Vida et al., 2012). In another study, Vitell and Paolillo (2003) indicated that intrinsic religiosity
could affect personal belief significantly. Again, it was also suggested that individual tend to
support moral philosophies that are idealistic rather than relativistic (Forsyth et al., 2008).
In another study, Casidy et al. (2016a, b) found significant differences between religious and
less religious individuals in terms of their attitude towards digital piracy. Therefore, it is
expected that religiosity, ethical concern, and perception towards lawfulness can be
considered as the drivers of consumers’ counterfeit product purchase intention.
It is reported that China, Thailand, India and Malaysia are named as “Home for piracy”
and “world’s worst violator of intellectual property rights and worst counterfeit offender”
(Haque et al., 2009). Havoscope Global Market Index study (2010) shows that, in Malaysia
counterfeit product value has increased to RM 378 million by recent years. On the other
hand, Congressional International Anti-Piracy “Top 10 Copyright Piracy Nations” meeting
announced Malaysia as “precedence copyright fake watch list for extra scrutiny to seize the
counterfeit products” (Top 10 Copyright Piracy Nations, 2010). However, Domestic Trade
and Consumer Affairs Ministry has taken serious steps in order to increase the awareness
about fake products through main media and advertisements. But demand of counterfeit
products did not change which is a big threat for Malaysian economy.
Considering this, the present study aims to predict the direct and indirect effects of
religiosity, ethical concern, and attitude towards lawfulness in relation to consumers’ attitude
towards buying counterfeit products. The rest of the paper is organised as follows.
First, relevant literature is reviewed and the conceptual framework is developed. Next, the
adopted methodology is discussed followed by the results, findings, and discussion. Lastly, a
conclusion is made and implications, limitations, and future research directions are highlighted.
thinks that the product is original), and non-deceptive (when consumers purchase counterfeit
goods intentionally and knowingly). In the first type of counterfeiting, the consumer cannot be
included for measuring behaviour and attitude towards buying counterfeit goods because the
consumer is not aware about the fact (Bian and Moutinho, 2011). Therefore, for the present
study, the non-deceptive counterfeiting issue is considered.
In the East Asian Region, Malaysia is one of the countries that have a high potential risk
for producing, exporting, and selling counterfeit products. The counterfeit product business
is a significant threat to Malaysia due to its economic and unemployment rate.
By considering its bad impact, the domestic Trade and Consumer Affairs Ministry of
Malaysia has attempted to control counterfeit products by implementing and enforcing
strict rules and regulation. For example, if the police arrests a seller who is selling unlicensed
software, he/she has to pay a fine of 10,000 Malaysian Ringgit or face a sentence of up to five
years in jail, or both. Despite knowing the low quality and danger of using counterfeit
products, there are still high demands for counterfeit products among the consumer
(Albers-Miller, 1999). Therefore, it is pivotal to understand consumers’ attitude as well as
behavioural intention towards buying counterfeit products in the Malaysian market.
Religiosity
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Ethical concern
The notion of ethics could be mentioned as principles, moral rules, or the standards that guide
the behaviour of a group or person in the purchase, selection, selling and use of services or
products (Riquelme et al., 2012; Vitell et al., 1993; Vitell and Paolillo, 2003). An individual’s
ethical concern helps decrease unethical behaviour by considering the ethical aspect. It is a
value that a person possesses and could be interpreted to be the enduring idea (Schwartz, 2001).
It can be defined as the degree to which the buyers believe the questionable behaviours are not
wrong or wrong, or unethical and ethical (Vitell and Muncy, 1992).
Individual’s ethical concerns in business arebeing studied since 1970s (Wilkes, 1978).
However, the ethical aspect of consumer behaviour has not received significant research
attention. Based on a different level of ethical concern, different individuals perceive the
same act differently. For example, in one study, it is reported that some consumers do not
find buying counterfeit products to be unethical (Lysonski and Durvasula, 2008). Empirical
Contrastingly, Swami et al. (2009) found that older respondents were highly concerned and study in the
had less intention to buy counterfeits compared to younger individuals. For the present Malaysian
study, it is assumed that if an individual holds a high level of ethic related to idealism, he/she
will realise that purchasing counterfeit products is a wrong doing. Considering this, the market
following hypothesis was developed:
H3. Ethical concern will be negatively related to consumers’ attitude towards purchasing 841
counterfeit products.
the level of a person’s moral judgment, the lesser that person will conduct unethical
behaviour for personal gain or for business purposes.
In regard to counterfeit product purchasing, it is assumed that if a consumer’s perception
towards lawfulness is high, then there is a possibility that he/she will exert a negative attitude
towards buying the counterfeit brands of luxury goods (Phau et al., 2009). Conversely, if the
consumer’s perception towards lawfulness is not strong enough, he/she will tend to buy
the counterfeit brands of luxury goods. Therefore, the following hypothesis is developed:
H4. Consumer’s perception towards lawfulness will be negatively related to consumers’
attitude towards purchasing counterfeit products.
Methodology
Measurement of the variables
All scales to measure the study variables were borrowed from past literature (see Appendix).
842 Behavioural intention was measured by using a five-item scale adapted from Zeithaml et al.
(1996), whereas attitude was borrowed from Phau et al. (2009). The religiosity was measured by
using five items adapted from Shukor and Jamal (2013). This scale was developed at two stages:
first, qualitative data were collected using face-to-face interview; and second, a quantitative data
was collected using a survey questionnaire. The findings of this study revealed that religiosity
can be measured as unidimensional construct that consist of five items. This scale found to be
valid and reliable and can be used by consumer researchers. Contrastingly, ethical concern and
perception toward lawfulness scales were borrowed from Chaudhry and Stumpf (2011) and
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Lichtenstein et al. (1990), rrespectively. All scales are showed in Table AI. A seven-point Likert
scale was utilised, which ranged from 1 ¼ “strongly disagree” to 7 ¼ “strongly agree”.
Study location
The primary data for this study were obtained through the questionnaire survey. This study
focussed on two major categories of counterfeit products, i.e., fashion and electronic devices.
The study was carried in China Town or alternatively known as, “Paradise of fake products”
(named by tourists), Low Yat Plaza; and a variety of local markets (pasar malam or night
market, day market, etc.). In these markets, one can find plenty of branded and also pirated
footwear, bags, clothes, toys, accessories, watches, and electronic devices.
Ethical aspect:
• Religiosity (RE)
Behavioural intention
Attitude towards
to
• Ethical concern buying counterfeit
(EC) purchase counterfeit
products (ATT)
products (INT)
• Attitude towards
Figure 1. lawfulness (ATL)
Proposed conceptual
framework
advertismnet, etc. In total, 737 questionnaires were distributed, in which 450 questionnaires Empirical
were returned and finally, 400 valid questionnaires were found usable for further analysis. study in the
SPSS version 21 and SmartPLS 3 were utilised to run the analysis. Malaysian
market
Profile of the respondents
As shown in Table I, the male frequency is 199 or 49.8 per cent of the total, while female
frequency is 201 or 50.2 per cent. The minimum frequency from the total 400 respondents is 843
equal to 32, and relevant to the age group of 56 and higher. In addition, the highest level of
frequency was 128 for the group aged from 26 to 35. The next question of demographics is
for the educational background according to six different groups. The minimum level of
frequency from the total 400 participants is 10 from the doctorates. In addition, the highest
level of frequency is 125 from the diploma/technical school certificate group.
Result
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SmartPLS 3.0 software was used (Ringle et al., 2015) to analyse the model developed.
Following the recommended two-stage analytical procedures by Anderson and Gerbing (1988),
Gender
Male 199 49.8
Female 201 50.2
Age
Below 25 80 20.0
26-35 128 32.0
36-45 104 26.0
46-55 56 14.0
56 and above 32 8.0
Ethnicity
Malay 201 50.2
Chinese 123 30.8
Indian 53 13.2
Others 23 5.8
Marital status
Single 168 42.0
Married 203 50.8
Divorced 22 5.5
Widow/widower 7 1.8
Educational background
Primary school certificate 75 18.8
Secondary school certificate 83 20.8
Diploma/technical school certificate 125 31.2
Bachelor degree or equivalent 81 20.2
Master degree 26 6.5
Doctoral degree 10 2.5
Income
Below 2,000 65 16.2
2,001-3,000 126 31.5
3,001-4,000 108 27.0 Table I.
4,001-5,000 67 16.8 Demographic profile
Above 5,001 34 8.5 of the respondents
APJML this study tested the measurement model and the structural model (see Hair et al., 2014;
29,4 Mohammad et al., 2015; Ramayah et al., 2013). In order to test the significance of the
path coefficients and the loadings, a bootstrapping (resampling ¼ 5,000) method was used
(Chua et al., 2016; Hair et al., 2014).
Common method variance needs to be examined when data are collected via self-reported
questionnaires and in particular, both the predictor and criterion variables are obtained from
844 the same person (Podsakoff et al., 2003). Harman’s single factor test was used, whereby all
items are loaded in a factor analysis and if one factor emerges explaining the majority of the
variance, then common method variance exist. Our analysis returned a 5-factor solution
( χ2 ¼ 25,679.91, po0.01) explaining a total variance of 73.107 per cent. The first factor only
captured 32.32 per cent variance, thus we can conclude that method variance is not a serious
problem in this study.
Measurement model
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First, convergent validity was confirmed when the loadings (W0.70), composite reliability
(W 0.7) and average variance extracted ( W0.5) as suggested by Hair et al. (2014) and as
shown in Table II were achieved. Next, discriminant validity was assessed using the Fornell
and Larcker (1981) method, which requires the square root of the variance extracted to be
higher than the correlations. This was also achieved in Table II. Therefore, with these two
tests, we have shown that the measures in this study have sufficient convergent and
discriminant validity.
Structural model
Assessing the structural model involves evaluating R2, β, and the corresponding t-values
with predictive relevance (Q2) (Hair et al., 2014; Mohammad et al., 2016). The R2 of attitude
was 0.508, i.e. all of the predictors explained 50.8 per cent of the variance in attitude, whereas
Intention had an R2 of 0.685, which indicates that attitude can explain 68.5 per cent of the
variance in intention.
First we looked at the predictors of attitude, religiosity ( β ¼ −0.225, p o0.01), ethical
concern ( β ¼ −0.220, po 0.01), and perception towards lawfulness ( β ¼ −0.212, p o0.01)
were negatively related to attitude. Attitude was positively ( β ¼ 0.525, p o0.01) related to
intention to purchase. Therefore, H1, H2, H3, H4, were supported.
Next we looked at the mediation effect of attitude on the IV-DV relationship.
Religiosity → attitude → intention ( β ¼ −0.118, p o 0.01, BC0.95 LL ¼ −0.0189 and
UL ¼ −0.043), ethical concern → attitude → intention ( β ¼ −0.116, p o 0.01, BC0.95
LL ¼ −0.165 and UL ¼ −0.046) and perception towards lawfulness → attitude → intention
( β ¼ −0.111, po 0.01, BC0.95 LL ¼ −0.190 and UL ¼ −0.042) were significantly mediated by
attitude. Moreover, as suggested by Preacher and Hayes (2004, 2008), the indirect effects did
not straddle a 0 in between, indicating that there is mediation. Therefore, we can conclude
Mean SD AVE CR 1 2 3 4 5
Discussion
The objective of this study was to investigate the factors that affect consumers’ attitude and
behavioural intention towards purchasing counterfeit products in the Malaysian counterfeit
market. To address this crucial matter, a research model based on the TPB was developed to
provide a more comprehensive understanding about the effect of ethical aspects on
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BC 95% BC 95%
Hypothesis Relationship Std β SE t-value Decision LL UL
committing unethical behaviour, such as lying, cheating, and/or promoting, buying, and
using illegal products and/or services.
It was also found that consumers’ attitude mediates the relationship between personal
aspects, ethical concern and consumers’ intention. This is consistent with the TPB, which
postulated that intention always mediates the relationship between attitude and behaviour.
The result was also in line with past studies that confirmed that behavioural intention can
mediate the relationship between attitude and actual behaviour (see Riquelme et al., 2012;
Chua et al., 2016). More particularly, religious, and ethical consumers are inclined to develop
a negative attitude about the counterfeit products since it is against and contradicts their
values and beliefs, and ultimately, they will not purchase these types of fake products.
marketing efforts.
Although the present study has its merits in regard to testing reasonably new linkages
and to providing some useful findings regarding this issue, it is not beyond of some
limitations. However, the limitations of this study may serve as the future research
directions for other studies in the field. As suggestions for future studies, one could test the
model presented here in different product categories (such as CDs, DVDs, food, toys, etc.)
and examine for possible differences. It is also recommended that other variables can be
included in the model as moderator, such as consumer involvement with the product, gender
and ethnicity. This is because when consumers are more involved with the product, he/she
should be more worried about the buying decision and have a higher risk aversion. In a
nutshell, this study opens up the avenue for future researchers and calls for more relevant
studies to be conducted in this field.
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Further reading
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an empirical study in China”, Asia Pacific Journal of Marketing and Logistics, Vol. 21 No. 2,
pp. 232-242.
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counterfeit goods”, The Proceeding of the UBM Conference, pp. 1-13.
Ethical concern
1 Counterfeiting infringes on intellectual property rights
2 Counterfeiting damages the original industry
852 3 Obtaining counterfeit goods is illegal
4 Obtaining counterfeit goods is unethical
Religiosity
4 I believe in God
6 I carefully avoid shameful acts
7 I always perform my duty to God
8 It is important for me to follow God’s commandments conscientiously
9 Religious beliefs influence all my dealings with everyone
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