Factors influencing purchasing behavior of counterfeit products

key constructs influencing consumer behavior toward the use of counterfeitgoods and the frequency of usage.The key objectives of the research to answer two questions:  How does consumer

ĐINH VĂN KHOA

FACTORS INFLUENCING PURCHASING BEHAVIOR OF COUNTERFEIT PRODUCTS.

MASTER OF BUSINESS

Ho Chi Minh City – Year 2012

DINH VAN KHOA

FACTORS INFLUENCING PURCHASING BEHAVIOR OF COUNTERFEIT PRODUCTS.

ID: 60340102

MASTER OF BUSINESS SUPERVISOR: Dr Dinh Thai Hoang

Ho Chi Minh City – Year 2012

I would like to express my sincere thankfulness to my research advisor, Dr Dinh ThaiHoang, for his clear and careful direction, guidance and correction to my thesis

I also thank Prof Nguyen Dinh Tho who exerts every effort in guiding me as well

as ISB students to implement research

I would like to thank my dear colleagues, friend and classmates for their invaluableadvice, help, encouragement and support during the time I was doing this thesis

Especially, I would like to give my special thanks my family for supporting me

spiritually throughout my life

Ho Chi Minh City,

Dinh Van Khoa

1.2 Damage caused by counterfeit goods………….……… 3

1.3 The fight against counterfeiting in Viet Nam … 3

1.4 The cause of the existence of counterfeit goods 4

1.4.1 Objective reasons……….… 4

1.4.2 Subjective reasons ……….…….………5

1.5 Research objectives 6

CHAPTER 2 LITERATURE REVIEW ……….…… ……… 8

2.1 Introduction……… 8

2.2 Review literature and hypothesis ……… 9

2.2.1 Counterfeit luxury goods 9

2.2.2 Attitude Function……….…… … … 10

2.2.3 Conformity ……… ………….… 11

2.2.4 Purchase intention ……….……….… 12

2.3 RESEARCH HYPOTHESIS 12

CHAPTER 3 RESEARCH METHODLOGY 14

3.1 Research process ……… 14

3.2 Measurement scale… 15

3.2.1 The attitude function ……… ……15

3.2.2 Conformity ……… … 16

3.2.3 Purchase intention ……… 16

3.3 Sampling method …… 16

3.4 Statistic method ……… ……… 17

CHAPTER 4 DATA ANALYSIS AND INTERPRETATION ……… 19

4.1 Sample Specification……… 19

4.2 Data Coding……… ……… 20

4.3 Evaluation of meansurement scales ……….21

4.3.1 The main effects of attitude function, and conformity ……….… 21

4.3.1.1 Testing the reliability of independent and dependent variable … 21 4.3.1.2 Scale testing by using Exploratory factor analysis EFA ….… …22

4.3.2 Regression analysis ……….….…… 25

4.3.2.1 Testing relationship of attitude function, conformity and purchase intention ……….……… 25

4.3.2.2 Regression analysis for variables ……… 26

4.4 Conclusion ……… 30

CHAPTER 5 IMPLICATIONS AND CONCLUSIONS……… 31

5.1 Introduction ……… 31

5.2 Conclusion ……… 31

5.3 Managerial implication ……… 32

5.4 Research limitation and direction for future research ………….……… 32

Reference ……… 33

APPENDIX 1: SURVEY QUESTION ……… 36 APPENDIX 2: CRONBACH’S ALPHA ……… 38 APPENDIX 3: EFA RESULT OF INDEPENDENT VARIABLES 40 APPENDIX 4: REGRESSION ANALYSIS RESULT………… 43

Figure 3.1: Research Procedure ……… 14

Figure 4.1: Histogram ………… ……… 28

Figure 4.2: Normal P-P of regression standardized residual ……… 28

LIST OF TABLES Table 3.1 Attitude function scale …… 15

Table 3.2 Conformity scale ……… 16

Table 4.1 Sample specification 19

Table 4.2 Data coding 20

Table 4.3 Cronbach’s alpha result of attitude function …… 21

Table 4.4 Cronbach’s alpha result of conformity ………… 21

Table 4.5 Cronbach’s alpha result of Purchase intention … 22

Table 4.6 EFA result of independent variables 23

Table 4.7 EFA result of variables 24

Table 4.8 Correlation among factors 25

Table 4.9 Regression analysis ANOVAa 26

Table 4.10 Regression analysis of variables 29

Table 4.11 Conclusion ……… 30

Chapter 1: Introduction

1.1 Problem statement & Research rationale

Counterfeiting is a profitable industry It is the production of copies that haveidentical packages, trademarks, and labels as the genuine products but use lowquality materials in the production process (Kay 1990) Even though counterfeitgoods are affordable, they may be harmful to the public due to the inferiorquality of materials Counterfeiting appears to be a major problem for brandname, luxurious, and high priced consumer products A number of industrieshave encountered counterfeiting problems These industries include foodstuffs,petroleum products, medicines, perfume, cosmetics, glasses, computeraccessories, phone accessories, electrical appliances, audio and video cassettes,automobile spare parts, toys, apparel, watches, and leather products However,this study only focuses on those counterfeit items that are used by consumers on

a daily basis and consumers know that they are counterfeits Hence, thecounterfeit objects in this study will be confined to clothing items andaccessories The focal products consist of apparel, watches, leather handbags,purses, shoes, and belts

Counterfeiting is a result of the violation of patent laws and is pervasive inmost developing nations, particularly developing countries in Asia With a hightaste of western products and limited budgets, consumers in these nationsconsider buying counterfeit goods as an alternative to owning brand nameluxurious goods Loss of sales due to counterfeiting should not be considered amajor problem since consumers who purchase and use counterfeit goods have nointention to purchase the genuine ones Under this situation, deception is not anissue since consumers know and are willing to pay for the items Theseconsumers consider using counterfeit brand name products as a way to enhancetheir personal appearance and impress others Counterfeiting may enhance thevalue of the brand instead of diluting it since only prestigious brand nameproducts have counterfeits (Nia and Zaichkowsky 2000)

Counterfeiting has existed for a long time and is now considered as a seriouseconomic, social and political problem (Veloutsou and Bian, 2008) OECD(2008) estimates that counterfeit and pirated goods could amount up to USD 250billion in 2007 Consequently, there has been a long tradition of academic and

industry led-research on the supply and the demand side of counterfeiting.However, there is a general absence of agreement in the literature with respect tothe scope and magnitude of this problem, its actual social and economic impacts,and the effectiveness of anti-counterfeiting measures (Eisend and Schuchert-Gueler, 2006) On the other hand, researchers and analysts consent that thephenomenon is global in nature and that an in-depth understanding of the factorsdriving counterfeiting activities are a pre-requisite for national, industry orpolicy-driven actions

While globalization has resulted in the lowering of international barriers, ithas also created new opportunities for illegal trade The international trade incounterfeit products is growing at an alarming rate and, according to theInternational Chamber of Commerce, is worth $650 billion Vietnam is rankedfifty-third globally in terms of the size of its counterfeit market, with a totalcounterfeit market value of US$ 122 million, including software (US$ 96million), books (US$ 16 million), movies (US$ 10 million) and cable(unauthorized connections) (US$ 1.37 million), as well as clothes, cosmetics,watches, etc The US International Trade Commission and The Allen consultinggroup (2003) define counterfeiting as “the unauthorized duplication of a productprotected by one or more intellectual property rights Regarding origin, qualityand price Dornoff and Tatham (1972) observed that original product brandimage was the main driver of the purchase of fakes (Penz and Stottinger, 2005).The economy of Viet Nam in recently years in growth, in 2011 GDP is 5.89%(http://vneconomy.vn/20111229091632776P0C9920/tang-truong-gdp-nam-2011-dat-589.htm) In recent years due to strong economic growth, improvedliving standards have changed consumer trends in Vietnam in all fields, increasethe need of the consumer (Keynes theory) For example In fashion industry, theViet Nam consumer more and more family with fashion brand such as Versace,Emporio Armani, Giovanni, San Sciaro, Valentino Creations, Carven Paris andPierre Cardin, Guess The economy growth the same with the demand of thecustomer is more and more difficult, they want to use the products with famousbrand with high quality, high price and the after sales service is good

However, there are still remain a lot of consumers still want to use thecounterfeit products of the famous brands This cause the difficulty for the

company which business the real products And also influence to the Brands thathave face products on the market.

1.2 Damage caused by counterfeit goods.

Turnover decreased from 20-30%, even 50% is consequences that manybusinesses are suffering due to the problem caused by counterfeit goods andthroughout the years the fight against counterfeit goods, counterfeit goods stillheld strong and fierce in the business However, with the sophistication,increasingly unpredictable evolution, counterfeit goods still business on themarket and put many businesses facing risk, especially enterprises with productsrelated to health lives and safety of consumers The fight against counterfeiting inworldwide In worldwide, the fight against counterfeit goods, has become aglobal issue and developed countries are specially interested in And to be able tofight this dangerous problem many countries have been linked together to acttogether 10/2011, the United States, Australia, Canada, European Union, Japan,Mexico, Singapore, Switzerland have signed an agreement – Anti-CounterfeitingTrade Agreement (ACTA) This agreement will strongly help the prosecution ofcriminal and civil against manufacturers of counterfeit products, as well asimitation of the famous brands

1.3 The fight against counterfeiting in Viet Nam.

In Vietnam, with the strongly on the functions of agencies, the newspaperhas helped many businesses in the fight with a counterfeit goods However, thecounterfeit goods still maneuver and fight as they increasingly sophisticated,more and more unpredictable According to the Administration of the marketfrom January to March 11/2011, the Department examined 793 for productionprocessing and trading of counterfeit goods, infringing intellectual propertyrights, administrative penalty in the amount 4.034 billion worth of confiscatedgoods destroyed more than $ 1.8 billion, Which of 3 cases were prosecuted ascriminal fraud business performance Rinnai gas stove; counterfeit bottled sauceand printing, copying, publishing copyright infringement More dangerous, as thenumber of piracy cases, counterfeit products related to safety and health ofconsumers, such as drugs, cosmetics, helmets, automobile parts, motorcycles areincrease (http://www.qltt.gov.vn/) This situation makes consumers extremelynervous, confused and constantly vigilant The commercial production of the

enterprise business is heavily influenced by the dominance of fake For example,

at Mylan ltd, Co spent even more money and effort to combat counterfeit goods,but now on the market, the market share of counterfeit goods Mylan, under thebrand of paper is more than Mylan genuine products Meanwhile in the ChiThanh Company, Ltd manufactures and trade of plastic - hamlet production unitfrom 2009 to the present, due to the counterfeit helmet should assume productionneeds of the company fell 2/3 compare with the past, the number of workers isreduced by half, the company operates in moderation And when faced with thesevere consequences of this are determined to fight counterfeit a higher back inthe business, such as Perfetti Van Melle Company – proper of Big Babol chewingbrand, Chupa Chups, was lawsuit its trademark violated in court Also atAjinomoto Vietnam has carried out completely from production to qualityproducts, then tightly controlled distribution system for counterfeit goods do nothave the opportunity to squeeze Meanwhile, Fashion Company Limited Viet Thyevery year to spend billions to organize seminars, promote communication onproducts to help consumers identify their genuine products And some otherenterprises focused on training the sales staff, strengthen consultation andguidance to customers to distinguish genuine and counterfeit goods With allthese efforts, the business is directed to a purpose though not definitivelyeliminate the counterfeit goods, at least do not let them affect directly toproduction and business as well as trust and reputation of their brand

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http://chiakhoathanhcong.mquiz.net/vie/news/?Function=NEF&tab=Da-len-1.4 The cause of the existence of counterfeit goods.

There are many reasons for the victim status of production and trade ofcounterfeit and pirated goods have increased brand, including the causes ofsubjective and objective reasons, subjective reasons which are still are the mostimportant

1.4.1 Objective reasons

Development of market mechanisms, besides the positive side, theseachievements it brings to the economy of our country, it is increasingly revealingthe limitations, the tremendous consequences for the economy but recovered inshort time

In recent years in Vietnam, institutions, market economy did not complete,

so that the business environment for fair competition, talent contests, the publicare not synchronized, the market has become "fertile" for the vices raging.Counterfeit goods are the most vices raging

Moreover, material and technical basis of our country generally are low,the equipment, machinery in motion for the inspection of goods quality is notthere The advanced technology to protect goods codes, bar codes, labels

Seem that undeveloped Meanwhile, many counterfeit productionfacilities have adopted the "technology" in production and increasinglysophisticated tactics than in the consumption of counterfeit goods made in theanti-counterfeiting more difficult

1.4.2 Subjective reasons

The rampant counterfeiting goods causes from the subjective reasonsprimarily the first in the subjective reasons is the absence of strong institutions oflaw in the control, detection and punish crimes of counterfeit goods Theguidelines for handling of objects of production, trading in counterfeit goods wasmissing Many documents have been issued shall have no specific guidance inleading to arbitrary treatment Moreover, our country's educational level is low,especially knowledge of the observance of the law is limited, while thinkingnarrow-minded individuals only see the immediate benefits that lead tocounterfeiting engine The alarming is not a small part of the way enterprises dobusiness fraught with quick-fit type, does not comply with the rules of civilizedmarket, taking advantage of legal loopholes, find all the tricks to service personalgain They find ways to replace bogus material, to produce cheap goods at lowcost but still sold at high prices, more profit Meanwhile, the businessmanagement of the businesses and all levels and sectors concerned loose, missingthe test, control or test, is not tightly controlled, especially when there is out ofcontrol of the limited liability company also fueled the invisible evils raging Thelegal system of our country on the fight against production and trafficking incounterfeit and pirated goods brands have not really come to life, not consideredthe problem of fake seriously need to stop, push back A number is not strictlydefined but many gaps, even overlapping, causing difficulties and obstacles to theinspection and handling

For businesses part, the businesses did not have effective measures toprotect their products The enterprise production management business models,packaging still loopholes and slow improvement and innovation, vulnerable topiracy Some of staff members of enterprises is the object in the line ofproduction and trade of counterfeit goods of that enterprise, or is the product ofthe business is high, not yet the vast majority of serving the masses One reason isthat goods produced in the country although there have been many efforts toimprove quality, design, competitive but weak, did not match the region and theworld Between localities in the country, between urban and rural developmentalso uneven Some of producers producing counterfeit brand label goods of otherfacilities to maintain their existence Partly because they do not have enoughinformation about the products of the enterprises, partly because they do not havehigh awareness in the fight against production and trafficking in counterfeitgoods Many people are more receptive to psychological counterfeit in the sensewhich money what things ", when they buy goods cheaper to use Counterfeitgoods related to life, economic and social issues society should also be a cause ofcounterfeit goods It's unemployment, lack of jobs of some workers, students,students are trained and knowledgeable about a certain industry, a field which isnot used to manufacture and trafficking selling counterfeit goods That would be

a revenue problem, by income strata of the uneven, especially peasants and poorlaborers are too low, there are no conditions to consume the goods product qualitybut high prices should be forced to accept poor quality fakes but cheap

1.5 Research objectives

Consumer behavior may be influenced by cultural, social, personal, andpsychological factors (Kotler 2000) Cultural factors include national culture,subculture, and social class, whereas social factors include reference groups,family, roles, and statuses Personal factors encompass those demographicvariables such as age, occupation, income, and lifestyles, whereas psychologicalfactors encompass those variables such as motivation and perception In thislight, consumer consumption of counterfeit goods is expected to be influenced

by a considerable set of variables In this study, a handful of variables associatedwith consumer demographic and psychographic characteristics were selected as

key constructs influencing consumer behavior toward the use of counterfeitgoods and the frequency of usage.

The key objectives of the research to answer two questions:

 How does consumer Attitude Function influence intention tobuy counterfeit products?

 How does consumer conformity influence intention to buycounterfeit products?

Chapter 2: Literature review

2.1 Introduction

There are number of determinants affect to purchase intention to buycounterfeit products that has demonstrated in many studies worldwide Eachdeterminant could have positive or negative effect on purchase intention withdifferent levels depend on each specific situation, country, and each kind ofcounterfeit products This study only looks at three determinants which haveconsidering in previous studies to have a general knowledge about their effect onpurchase intention of counterfeit products and from that find out hypothesizes tobuild a model for analyzing Those three determinants are ness, attitude function,conformity

Consumer behavior may be influenced by cultural, social, personal, andpsychological factors (Kotler 2000) Cultural factors include national culture,subculture, and social class, whereas social factors include reference groups,family, roles, and statuses Personal factors encompass those demographicvariables such as age, occupation, income, and lifestyles, whereas psychologicalfactors encompass those variables such as motivation and perception In this light,consumer consumption of counterfeit goods is expected to be influenced by aconsiderable set of variables

Counterfeit goods are illegal, low-priced and often lower quality replicas ofproducts that typically possess high brand value (Lai and Zaichkowsky 1999).Counterfeit products are often produced with the intent to take advantage of thesuperior value of the imitated product The Quality and Performance ofcounterfeit is lower than the real, Price is lower, style is more diversify,promotion is lower, service is not good as real products, and store is moreconvenience for customer

Counterfeit Consumption in Context

The reason a consumer first buys a counterfeit product may seem onlyeconomic, that is, the benefit of a lower price (Cordell, 1996) Therefore, aplausible premise would be that lower-income consumers would tend to consume

more counterfeit products than those in higher income brackets, all things beingequal However, many consumers in a developed country and with a highpurchasing power prefer to choose counterfeits, which indicates the existence ofother determining factors or attributes in the counterfeit decision making.

Consumer values in purchasing fashion brand.

Consumer value refers to an acquired value that becomes part of an organizedsystem of values This value system works as a general plan for resolvingconflicts and making decisions (Rokeach, 1973) As society becomes morecomplex and consumer’s values change, it is important to know the variousvalues and intentions of different consumers: 5 value factors pursued onproducts: ness, aesthetic appeal, durability, conformity (Kim, 2005), and Ethicinfluence

Intention to purchase counterfeit goods was also significantly different,especially attitude toward non-logo products and intention to purchase non-logoproducts However, as intention to purchase logo-exposed products was notstatistically different, it can be said that the exposure of logo is more influentialthan the consumer’s pursued value Considering that attitude toward logo-exposed products was statistically different, there might exist other factor thatmay influence the purchase of logo-exposed counterfeit goods(Han, J.-M., Suk,H.-J and Chung, K.-W 2008)

2.2 Review literature and hypothesis

2.2.1 Counterfeit luxury goods

Counterfeit means a fake, a forgery, a deliberately false imitation The

U.S International Trade Commission (1984) and Business Week (1985), among

others, have documented the extent of illegal copying of the labels and otherdistinguishing

trademarks of brand-name products The former defined counterfeiting asthe

unauthorized use of a registered trade mark on a product that is identical orsimilar to the product for which the product is registered and used Lai andZaichkowsky (1999) defined counterfeits as illegally made products thatresemble the genuine goods but are typically of lower quality in terms ofperformance, reliability, or durability On the contrary, the products that alwayscopies of the original and are typically limited to technology software Wecalled it pirated goods.

Grossman and Shapiro (1988) have defined luxury goods as those forwhich the rare usage or the display of the goods can bring prestige to the owner,apart from any functional utility Examples of these luxury goods are Cartier andRolex watches, Hermes handbags, Polo shirts; Gianni Versace suits (Nia andZaichkowsky, 2000) Based on Grossman and Shapiro (1988), counterfeitproducts markets can be divided into two types One is deceptive, and theother is non-deceptive In the deceptive case, consumers purchase productswith their awareness, so they don’t know whether the products theybought were genuine ones or not The examples are in these categories such

as automotive parts, consumer electronics, and pharmaceuticals In thenon-deceptive case, consumers often know the product which they boughtwas counterfeit They can easily distinguish between counterfeit product andgenuine product It’s particularly prevalent in luxury brand market (Nia andZaichkowsky, 2000) In this study, we limit our products category only inluxury goods, and classified the counterfeit luxury goods being non-deceptive

2 2.2 Attitude Function

Previous research mentioned that function theories of attitude serveseveral psychological functions, such as: helping people organize andstructure their environment (knowledge function), attaining rewards andavoiding punishment (utilitarian function), and maintaining their self-esteem(ego defense function) (Katz 1960 and Shavitt 1992) Attitudes are one ofimportant part in social functions, such as allowing self-expression (value-expressive function) and facilitating self-presentation (social-adjustivefunction) These all broadly indicate consumer responses, including productevaluation (Shavitt et al., 1992), advertising message processing (Synderand ebono, 1985) and even the interpurchase time of durables

mentioned that, when consumers have social-adjustive attitude toward aproduct, they are motivated to consume it to gain approval in social situations.

On the contrary, attitudes serving a value- expressive function help peoplecommunicate their central beliefs, attitudes, and values to others

Wilcox et al (2009) noted a person might purchase a Louis Vuitton bagbecause the brand reflects his/her personality or because it is a status symbol.They also indicated the product function Compared with value-expressive,counterfeit luxury goods with social-adjustive attitudes, people will likely tobuy Notably, this does not imply that counterfeit luxury goods which towardvalue- expressive attitudes will not influence a consumer’s buying behavior.Counterfeit luxury goods serve customers who aspire to own luxurygoods but are unable or unwilling to pay for the real thing (Young et al.,2010) Wilcox et al (2009) mentioned that consumers whose attitudestoward luxury goods serve a social-adjustive function than when theirattitudes serve a value-expressive function would more likely to buycounterfeit luxury goods

2.2.3 Conformity

Conformity is generally defined as behaving or thinking in asocially acceptable or expected manner (Phau and Lo, 2004) Social pressuresencourage individuals to follow the rules or, in some cases, to breakthem (Barberis and Shleifer, 2001) Consumer likes to use products, andbrands which are popular amidst in their peers Consumers conform to theexpectations of others regarding purchase decisions, and learn aboutproduct acceptability by observing the purchasing behavior of others(Bearden, Teel and Netemeyer, 1989)

Allen (1965) defined conformity is a social impact performance,because the other members of the opposition group to influence the personalviews Burnkrant and Cousineau (1975) defined conformity is an organizationviews the trend of the formation of a norm, which facilitates individualswithin the organization to obey the norm

Deutsch and Gerard (1955) pointed out that conformity include

two types—informational conformity and normative conformity.

Informational conformity occurs when an individual accepts information fromothers as evidence about reality Normative conformity occurs when the

individual conform to expectation of another person or group (BurnKrant andCousineau, 1975)

2.2.4 Purchase Intention

Purchases Intention is the dependent variable in this study Wilcox et al.(2009) opinion hat, consumer’s purchase intention always accompany withproducts advertisement

2.3 Research Hypothesis

Wilcox et al (2009) mentioned that consumers whose attitudes functiontoward luxury goods serve a social adjustive and their attitudes serve

a valueexpressive function would more likely to buy counterfeit luxury goods

To understand the affects of attitude function on consumer’s purchaseintention of counterfeit luxury goods The following hypotheses are proposed

H1 When the counterfeit luxury goods have attitude function , it will affect consumer’s purchase intention positively.

Previous research indicated that conformity because the other members

of the opposition groups to influence the views of individuals (Allen, 1965);this will make consumers want to buy the product to be impacted, especially

in luxury goods because it represents their status

In generally, the consumers who would like to buy counterfeit luxurygoods would affect by his/her peers Therefore, we predict that consumerswho have high conformity would likely to buy counterfeit luxury goods Thefollowing hypotheses are proposed

H2 When counterfeit luxury goods have conformity it will it will affect consumer’s purchase intention positively.

Independent Variable

Purchase Intention (PI)

Dependent Variable

Attitude Function (AF)

Conformity

(C)

H1

H2

Chapter 3 RESEARCH METHODLOGY

In this chapter we will present how the research was implemented Thischapter composes of five main parts : the first part is research processwhich shows the way to conduct research, the second part is measurementscales; the third part is Experiment Design ; the forth part is samplingmethods; the last part introduces the methods used to analyze data

3.1 RESEARCH PROCESS The research process is shown as figure below

Confirm Research Motives/Objectives

Literature relatedEstablish Research Framework & AssumptionDefine Research Scope & Subjects

Design QuestionaireIssue QuestionnaireAnalyze Data & Explain ResultsPresent Conclusions & Suggestions

Figure 3.1 Research Procedure

3.2 MEANSUREMENT SCALES

3.2.1 The attitude function

Table 3.1:Attitude function

scaleMeasurement Items for Social- Adjustive

1 A Tissot watch would be a symbol of social status

2 Wearing a Tissot watch would help me ft into importantsocial situations

3 I would likely to be seen wearing a Tissot watch

4 I would enjoy it if people knew I was wearing a Tissot watch

5 A Tissot watch would reflect the kind of person I see myself to be

6 A Tissot watch would help me communicate my self- identity

7 A Tissot watch would help me expressive myself

8 A Tissot watch would help me define myself

Source: Wilcox et al “Why Do Consumer Buy Counterfeit Luxury

Goods?

(2009)

In this study, we would like to change the products form Tissot watch to smart

phone Iphone 5

3.2.2 Conformity:

Table 3.2: Conformity scale

Measurement Items for Conformity

1 I purchase luxury products when I see friends or colleagues own them

2 I purchase luxury products when I see a celebrity wearing or using it

Source: Kim “The Study about Masstiege High-end Products”(2005).

3.2.3.Purchase intention

Purchases Intention is the dependent variabe in this study Wilcox et al.(2009) opinion that, consumer’s purchase intention a lways ccompanywith products advertisement We assessed purchase intention for thecounterfeit luxury goods on a seven- point scale (1= “ woulddefinitely not purchase, ” and 7= “ would definitely to purchase

3.3 Sampling method.

After conducting qualitative research, the survey via questionnaire iscompleted This stud y includes 16 variables, in which 14 variables areindependent and 2 dependent variables According to Hair, Black, Babin,and Anderson (2010), a general rule, the sample size should be 100 orgreater and the minimum sample should have a desired ratio of 5 observationsper variable

n > 100 samples and n=5k (where k=the number of variables)

Therefore, the minimum sample size is n = 5*16 = 90

For standard multiple regression analysis the desired level is:

n > 50 + 8m (where m= number of independent variables)

Hence, the required sample is:

n > 50 + 8*3 = 74

3.3.1 Sampling

A sample of 254 respondents was drawn from different social classesliving, studying or working in Ho Chi Minh City The sampling wasconducted based on convenient sampling

3.3.2 Data collection

The survey in the form of questionnaire was delivered to the consumers

by both electronic survey and handout survey by September and October

2012 Electronic survey contributed 260 samples and 134 samples werecollected from handout survey However, 40 samples from handout surveywere rejected for missing many answers (more than 30% of the totalanswers) The total number of samples was collected and used for dataanalysis is 254 samples

3.4 Statistical Method

This study adopted SPSS 20 for windows to analyze the data

Descriptive Statistics: To describe the sample profile Reliability Analysis: Toassess the internal consistency of the constructs examined in this study byCronbach’s α coefficient According to Joseph (2010) it mentioned that whenCronbach’s α with values of 0.70 to 0.98 It has higher acceptability

Exploratory Factor Analysis (EFA):

Norris and Lecavalier (2010, p.9) supposed that “EFA is based upon atestable model and can be evaluated in terms of its fit to thehypothesized population model; fit indices can be generated to helpwith model interpretation” And “EFA’s purpose is to identify latentconstructs underlying a set of manifest variables”

Multiple Regression Analysis

Meyers, Gamst, and Guarino (2006, p.152) and Hair et al (2010, p.156)proposed that the multiple regression standardized score equation is asfollows (with all the variables are measured on the same metric):

Y = β1X1 + β2X2 + … + βnXn

Where in: β is called beta weight, standardized regression coefficient, orbeta coefficient

X is the predictor entered into the equation in a single step

βX represents the score of a predictor and its associated beta

weight