Antecedents and outcome of consumer attitude tow ard counterfeit product : Luận văn thạc sĩ

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Pham Thi My Hien ANTECEDENTS AND OUTCOME OF CONSUMER ATTITUDE TOWARD COUNTERFEIT PRODUCTS MASTER OF BUSINESS (Honours) SUPERVIOR Dr Nguyen Thi Mai Trang Ho Chi Minh City – Year 2014 Acknowledgement I would like to express my sincere gratitude to my supervisor, Dr Nguyen Thi Mai Trang for the valuable supervision, the support and encouragement she gave me I would like to express my gratitude to my ISB class friends for SPPS directions Your encouragement, excellent guidance, and critical comments have greatly contributed to this thesis Finally, I would like to thank all of the respondents without whom, this research would have been impossible Pham Thi My Hien March 2014 Abstract Counterfeiting is increasing and becoming a complicated issue across different countries on the world and Vietnam is not exceptional, so the policy makers and managers always try to find ways to face with the counterfeiting and reduce counterfeit products in the market This paper attempts to investigate the impact of the social cost and perceived risk on consumers’ attitude toward non-deceptive counterfeit products and behavioral intention to purchase these ones In order to this, basing on existing literature in this field, a questionnaire is designed and validated, then based on the data that were collected from the 176 respondents' answers to the designed questionnaire, the analysis is conducted and the results as well as the relations among the factors are explained The results show that the factor of social cost has an impact on consumers’ attitude and purchase intention toward counterfeit products Moreover, the result indicates that intention to buy counterfeit products is influenced by consumers’ attitude toward these products The hypotheses are tested with data collected from convenient sample of consumers in Ho Chi Minh City and the SPSS software is used to analyze the data gathered from the respondents Table of Contents Abstract List of tables Chapter 1: Introduction 1.1 Research background 1.2 Research problems 1.3 Research objectives 1.4 Research methodology and scopes 1.5 The structure of the study Chapter 2: Literature review and hypotheses 2.1 Purchase intention to counterfeit products 2.2 Consumers’ attitude toward purchasing counterfeit products 10 2.3 Perceived risk 12 2.4 Social cost of counterfeits 13 2.5 The conceptual model 15 Chapter 3: Research methodology 16 3.1 Research design 17 3.2 Measures of the constructs 19 3.3 Research process 17 3.4 Data analysis method 23 Chapter 4: Data analysis and data results 27 4.1 Sample characteristics 27 4.2 The reliability test: The cronbach’s alpha test 28 4.3 Exploratory factor analysis (EFA) 30 4.4 Multiple regression analysis 31 Chapter 5: Conclusions, implications and limitations 47 5.1 Conclusion 47 5.2 Managerial implications 49 5.4 Limitations and future research 52 References 53 Appendix A 59 Appendix B 52 Appendix C 65 Appendix D 67 Appendix E 69 List of Tables Table 3.1: The results of collecting questionnaires 38 Table 4.1: Sample chracteristics 39 Table 4.2: The results of Cronbach’ alpha 40 Table 4.3: KMO and Barlett’s Test 40 Table 4.4: Total Variance Explained of Independent Variables 41 Table 4.5: Rotated component maxtrix 42 Table 4.6: Correlations matrix of social cost, risk and attitude 42 Table 4.7: Model summary 43 Table 4.8: Anova 44 Table 4.9: Regression result of “attitude” model 45 Table 4.10: Correlations matrix of purchase, social cosk, risk and attitude 45 Table 4:11: Model summary 47 Table 4.12: Anova 47 Table 4.13: Regression result of “purchase” model 48 Table 4.14: Summary of hypotheses testing result 48 CHAPTER 1: INTRODUCTION 1.1 RESEARCH BACKGROUND Counterfeiting issue started since 1970s and is continuously spreading over the world as the result of the globalization and lowering the trading barriers in international transactions Most of the countries have been influenced by counterfeit products and their economics have faced to the high crisis According to the International Chamber of Commerce, the international trade in counterfeit products is worth $650 billion Vietnam is ranked fifty third globally about the size of its counterfeit market with total pirated market value of US$ 122 million (Counterfeit Goods and Piracy Industry, as cited in Cheng et al., 2011) According to Lai and Zaichowsky (1999), counterfeit products are identical copies of authentic brands and products A product that has the same brand name or logo with legitimate one but without the permission of the registered owner is considered as a counterfeit or “fake” product According to the World Customs Organization, counterfeit products account for roughly from to 10 percent of the world’s trade and their sales revenue are rising up (Arog Limited, 2008) As the statement from the International Chamber of Commerce, pirated goods are manufactured and consumed in virtually all global economies and have a big effects on trade, foreign investment, employment, criminality, innovation and the environment (International Chamber of Commerce, as cited in Kozar and Marcketti, 2011) The International AntiCounterfeiting Coaltition forecasted that counterfeiting caused losses of about US$200 billion a year in lost jobs, unpaid taxes and lost sales According to the Organization for Economic Co-operation and Development (as cited in Kozar and Marcketti, 2011), traded counterfeit products occupies over US$250 billion worth of internationally traded goods in 2007 In front of the high demand of consumers about buying counterfeit products and the high profit for counterfeit traders and manufacturers, counterfeiting continues to emerge globally (Amine and Magnusson, 2007) Counterfeiting has spread in every type of consumer goods, in luxury brands market and products, such as electronics, airplane and auto parts, pharmaceuticals, clothes, cosmetic and watches Counterfeiting is a worldwide issue across different industries and Vietnam with its open economy has also faced to its impact In Vietnam, the manufacturing and trading counterfeit products have developed more and more sophisticated in some recent years Most of the high quality products which have high sales revenues have been faked The counterfeit products appear across different provinces, from big center to small shops, from big cities to small towns in Vietnam Moreover, counterfeit products can be found in street vendors as well as legal looking stores In recent years, many stores trading faked products have become well organized and imitate to set up a store the same as selling genuine products Furthermore, with the development of internet, now counterfeit products are increasingly sold online making consumers misunderstand about buying genuine products at discounted prices Businesses have lost billions of dollars and reduced their brand reputation due to pirated goods, for example with LG Vina’s situation According to Nguyen (2011), LG Vina, the owner of cosmetic brands of Essance, Ohui and Whoo, just reached about 70-75 percent of the expected level due to counterfeit products in 2010 The combat of the government to counterfeit goods become tougher and challenged because the technology of making counterfeit products becomes more complicated, low awareness from consumers and high profit for counterfeit merchandises According to the Market Management Bureau (2013), the State found out over 13.101 cases with pirated goods, punished up to 53 billion VND in 2012 The first months in 2013, in the total imported counterfeit goods, there were over 2100 cases and punished more 1960 cases which estimated about 37.544 billion VND (the Market Management Bureau of South, 2013) Recently, much of research about counterfeiting has been deployed on the supply side of the issue, blaming the manufacturers, suppliers and governmental policy for liberation of pirating (McLaughlin, the White house, as cited in Kozar and Marcketti, 2011) However, as a basic economic reason that if no demand for fake goods exist, supply will disappear automatically, consumers are also important participants in the consumption of fake goods and existence of counterfeit trade (Yoo and Lee, Bian and Moutinho cited in Cat, 2010) Therefore, it is necessary to understand clearly potential determinants affecting their attitudes and purchasing behaviors toward counterfeit products In some previous years, some scholars have investigated the counterfeit problems from the consumers’ perspective in different countries such as the research about the consumer’s role in the growth of trade mark piracy of Wee et al (1995) or the consumer attitudes toward counterfeit goods in the paper of Cordell et al (1996) Cordell et al (1996) discovered three motivators for using pirated goods: the status symbolized by brand, the channel of the distribution and price Another example is the research about the impact of non-price factors on purchase intention counterfeits of Hanzaee and Jalalian (2012) Regarding to this topic, Furnham and Valgeirsson (2007) studied the effect of life values and materialism on buying counterfeit products in UK, Phau et al (2009) examined the consumers’ attitudes toward the counterfeit luxury goods in Singapore, and some other researches such as (Wilcox et al., 2009; Bian and Moutinho, 2009; Kozar and Marcketti, 2011; and Fernandes, 2012) In Vietnam, some researchers have been studied about this field but the number of scholars is still limited For example, Dinh (2011) researched about factors influencing purchase behavior of counterfeit products that focused on determinants of attitude function and conformity in counterfeit luxury goods, Nguyen and Tran (2013) investigated antecedents of consumer behavior toward counterfeit of fashion products in term of brand image, value consciousness, social influences and personal gratification Moreover, Nguyen and Tran (2013) focused to study with respondents who had experience in using counterfeit products 1.2 RESEARCH PROBLEMS In front of the significant development of counterfeit products, they actually become the top concern of businesses as well as policy makers Beside of initiatives in reducing counterfeiting from the supply side, the other would be to address the demand side of counterfeit products According to Staake et al (as cited in Koklic, 2011), our understanding about structure and mechanisms of the counterfeit market is still limited Therefore, knowing the determinants of the person’s attitude and intention to perform a certain behavior regarding to the counterfeit purchase is very important One of the key constructs that indicates in consumer behavior is perceived risk On the other hand, counterfeiting is a harmful and risky business that has big impact on society as declaration of Pollinger and Lewis (as cited in Cat, 2010) Thus, it is necessary to ... worth of internationally traded goods in 2007 In front of the high demand of consumers about buying counterfeit products and the high profit for counterfeit traders and manufacturers, counterfeiting... function and conformity in counterfeit luxury goods, Nguyen and Tran (2013) investigated antecedents of consumer behavior toward counterfeit of fashion products in term of brand image, value consciousness,... intention to counterfeit products The impact of consumers’ attitude toward purchasing counterfeit products on purchase intention to counterfeit products 1.4 RESEARCH METHODOLOGY AND SCOPES The