When counterfeits raise the appeal of luxury brands
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When counterfeits raise the appeal of luxury brands Simona Romani & Giacomo Gistri & Stefano Pace
Published online: 9 June 2012 # Springer Science+Business Media, LLC 2012
Abstract Counterfeiting is a widespread practice throughout the world. The conventional wisdom is that it affects branded goods negatively. In this paper, however, we suggest that counterfeiting may actually benefit certain luxury brands. By means of two studies, we show how the market presence of luxury counterfeit items can increase consumers’ willingness to pay for original brands. In Study 1, we show that the presence of luxury counterfeits can increase consumers’ willingness to pay for well-known original brands, but not for lesser-known ones. Brand awareness plays a moderating role in the positive relationship between counterfeiting and willingness to pay (WTP). In Study 2, we address the psychological mechanisms that explain this increased willingness to pay. The results show that consumers’ (a) pleasure at being envied, (b) pleasure in distinguishing themselves, and (c) perception of the quality of the original goods fully mediate the relation between the presence of counterfeit in the market and consumers’ WTP for originals. We subsequently discuss the theoretical and managerial implications of the two study results. Keywords Fashion luxury goods . Consumer behavior . Counterfeiting . Brand awareness . Willingness to pay
S. Romani Department of Business and Management, LUISS Guido Carli, Viale Romania, 32, 00197 Rome, Italy G. Gistri (*) Department of Communication Arts and Sciences, University of Macerata, Via Armaroli, 9, 62100 Macerata, Italy e-mail: [email protected] S. Pace Department of Marketing, Bocconi University, Via Röntgen, 1, 20136 Milan, Italy S. Pace Euromed Management, Domaine de Luminy, BP 921, 13288 Marseille Cedex 9, France
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Mark Lett (2012) 23:807–824
1 Introduction Several recent reports reveal that counterfeiting is a massive and global economic problem. According to the International Anti-Counterfeit Coalition (IACC 2010) the global market for counterfeits exceeds 600 billion USD annually, accounting for approximately 5–7 % of world trade every year. Counterfeiting is a criminal activity that poses a threat to global health, safety, and legal business (Naim 2005; Midler 2009). However, counterfeiting does not always harm producers of original goods and can, in certain contexts, actually be leveraged to a firm’s advantage. Recently, several rationales were developed to show that piracy and counterfeiting can benefit producers of original digital and luxury goods (Barnett 2005; Bekir et al. 2010; De Castro et al. 2008; El Harbi and Grolleau 2008; Raustiala and Sprigman 2006; Ritson 2007; Whitwell 2006; Yao 2005). Our contribution builds on previous research to explain higher consumer willingness to pay (WTP) for a well-known luxury good (but not for a lesser-known luxury good) when a counterfeit version of the same article is available on the market (Study 1). In addition, we provide insights into the m
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