It has risen dramatically over the past several years and it now represents some five to eight percent of total world trade (Balfour, 2005) The extent of counterfeiting is suggested by the Organization for Economic Cooperation and Development (OECD) report, which indicates that contravention of intellectual property rights worldwide was responsible for US$200 billion in lost jobs, taxes, and sales for the year 2005. (OECD, 2007). The act of counterfeiting not only affects the economy as a whole but the brand image of luxury brands too. Consequently, in a study carried by Arghavan Nia and Judith Lynne Zaichkowsky, it was found out that people with a strong positive image of originals tended to perceive counterfeits as inferiors and that the availability of counterfeits do affect the value attached to the brand. Whereas those respondents with a more positive image of counterfeits did not see them as inferior products and thought that counterfeits do not affect the brand image of the trademark brand. It was highlighted by the research that the majority of respondents (almost 58 percent) did not believe that counterfeits decrease the demand for original luxury brand name products. Furthermore, 69 percent of respondents indicated that the value, satisfaction and status of original luxury brand name products are not decreased by the availability of …show more content…
According to Tom et al. (1998), these consumers are more inclined to purchase products with a fashion aspect attached, such as is the case for luxury products. In this kind of purchase the consumers are willing to pay for the visual attributes and functions of the product, without actually paying for the associated quality or the utility the luxury brand promises to provide to its consumers. In addition to this, consumers are also seen to prefer counterfeit products of a famous brand name that would present some meaning and a certain level of association to the customer. Hence, this reinforces the concept that only brand names that are well known or worth counterfeiting are targeted for this illegal production throughout the world. Past research has highlighted that there are certain economic, quality, and legal or ethical factors that shape and influence attitudes of consumers. It is seen in the literature that ultimately, the functional benefits of the product are important when purchasing counterfeits of luxury brands. However, so is the desire to own the prestige and the status symbol that the luxury brand has associated with themselves. In addition more commonly, price is also a significant factor towards the value attached to the counterfeit