| Counterfeiting, the production and sale of products which fraudulently display a brand name, has been increasing at an alarming rate. Elite luxury brands, such as Louis Vuitton and Rolex, are popular targets for counterfeiters, as manufacturers attempt to give consumers the prestige and status normally associated with such brands at a fraction of the cost. Globally, the sales of counterfeit products are estimated to be about {dollar}299 billion (Chakraborty et al. 1997). Although the magnitude of this phenomenon is becoming increasingly large, research in this area remains sparse.; While the market for luxury goods is expanding, a considerable number of consumers abstain from purchasing elite brands (i.e.Rolex), or imitations of such brands, and opt for non-elite brands (i.e.Seiko). While some consumers may choose non-elite brands over elite brands for economic reasons, others may be able to afford elite brands, but want to avoid being perceived as materialistic and therefore choose non-elite brands. Others who could afford authentic elite brands may prefer counterfeits because they enjoy "getting a good deal". Therefore, the objective of this study was to use sociological and psychological variables to explain the possible motivating factors behind choices among three options: (1) buying socially recognized authentic elite goods, (2) rejecting elite goods in favor of non-elite brands of goods, or (3) buying counterfeit brand imitations.; The author used a multinomial logit model to analyze and predict brand-type choice. In general, status insecure and materialistic individuals were found to prefer authentic and counterfeit brands over non-elite brands. Consistent with previous findings, consumers choosing counterfeits over authentic elite brands did so because they viewed these products as being a good value for the money. In addition, a nested logit model was used to determine whether consumers engage in a hierarchical decision process when choosing among brand-types and found that consumers first decide between the non-elite and elite category of brands (authentic and counterfeit), then choose between the authentic or counterfeit brand. |
