A study on the effects of counterfeit products on original product brand image. A case study on Louis Vuitton

In the present study, counterfeiting products are considered as unauthorized or fake products that relicates the real or original products offered by companies in regard to take benefit of superior value through imitating the original product. However, business is focused upon producing luxurious, fashionable and designer quality products in order to fulfil the expectation of consumers. But there are certain businesses who launch the replicate products of the luxurious brands at low prices and thus it damages the brand image of firm in market. However, through introducing counterfeiting products it impacts upon the original products and affects the business image (Agarwal and Panwar, 2015).

Through developing Information and Communication Technology (ICT), problem of counterfeiting products has been increased within the luxury brand market. Louis Vuitton is a leading luxurious fashion company and provide wide range of products such as clothes, shoes, accessories, jewellery, books etc (Bortolini and et. al., 2015). There are various medium through which businesses sale their products such as online medium, boutiques and departmental stores. However, management of such businesses are facing challenge of counterfeiting for the fashion brand companies such as Louis Vuitton. It has been identified that in the late 1970's counterfeiting of the products and services withdrew the luxury brands completely from the market. It is because it affects the fashion industry that results in obtaining significant loss of revenues, profitability and competitive strength and reputation as well. Due to globalization, there are several challenges being faced by fashion companies as majority of the suppliers products were founded fake, replicas, or counterfield. Thus, here the focus of carrying out study is to assess the effect of counterfield products upon luxury brand (Jalili and et. al., 2015).

Counterfeit products are most commonly known as fake products are affected the luxury image of brand in market. However, the products look like same as the original products, therefore, consumers purchase them and thus it affects the brand image of business. Main problem is the impact of counterfeit goods on brand reputation is both a social and economic issue. Through, replicating the luxury products which are being sold as through they were original and imitating such products affect the luxury image in market. Counterfeiting is also termed as a criminal activity in which branded products are imitated by people and thus it is affecting the image of brand among consumers (Francis, Burgess and Lu, 2015).

Problem statement

In the present study the main problem identified is counterfeiting that affects the luxurious brand image and also affects brand owners because they devote significant amount of time, funds and put extreme efforts to design, produce and develop products or services. Further, it has been evaluated that counterfeiters manufactures fake products of real products and thus affects the interest of owners (Basu, Basu and JK Lee, 2015). Counterfeit gives rise to social and economic risk because customers are not able to differentiate among original and imitate products. However, the counterfeiters also charges similar prices for their products and thus it affects the owners of original products. Hence, due to this such factor gained interest of scholars in order to conduct research within that particular area and assess the impact of counterfeiting upon luxurious brand.

Further, the problem statement identifies that counterfeit goods impact upon brand reputation in both social and economical way. Individual who counterfeit luxury products and produces imitate products that affects the brand image of business in market. Hence, it is essential for business owners to assess that counterfeiting the luxury goods is a crime and thus people involved in that process needs to be identified so that they could be punished for their act. Brand owner need to quickly identify and deal with such type of counterfeit products (Kelesidis and Falagas, 2015). However, they need to prepare certain rights so that it could protect the luxurious products from replicating.

Research aim

Main focus of research is to examine the effects of counterfeiting practices on original goods brand value of luxurious companies. Thus, in regard to achieve this, Louis Vuitton is selected which is a multinational company selling fashionable products to consumers.

Research objectives

• To investigate the original brand consumers perceptions on counterfeit Louis Vuitton products.
• To investigate the different factors affecting for positive and negative brand image of Louis Vuitton products.
• To identify the effects of counterfeit Louis Vuitton products on original Louis Vuitton products brand image.
• To provide recommendations for Louis Vuitton, how to enhance their brand image and differentiate their products from Louis Vuitton counterfeit products.

Research questions

• What is the original brand consumers perceptions on counterfeit Louis Vuitton products?
• What are the different factors affecting for positive and negative brand image of Louis Vuitton products?
• How the effect of counterfeit Louis Vuitton products on original Louis Vuitton products brand image?

Significance of study

Following is the significance of study which are discussed underneath-

• It can be assessed that after identifying the research problem, scholar carries out the study in order to help businesses in determining the counterfeit of luxurious goods and its impact upon brand image of firm (Dégardin, Roggo and Margot, 2014).
• Another importance of carrying out this study is that it helps business owners to assess the main problems associated with this in relation to affect the price upon which intimate products are being sold. Thus, it is affecting the original value of products and therefore, business owners need to take crucial steps in relation to overcome such problem.
• Study is also being used by different businesses and Phd scholars in regard to develop an understanding about the effects of counterfeit the original products and its impact upon the brand image of firm in market.
• Further, identifying the importance of study within different researchers in order to understand the decreasing performance of businesses due to increasing counterfeit market. Therefore, analysing the study results in evaluating the effects of counterfeit products of original products and thus decreased the brand performance of business (Agarwal and Panwar, 2015).
• Research is also useful for businesses in order to understand the concept of counterfeit and thus helps in identifying the impact of replicate products on the image of original products so that brand image of firm could be improved.

Dissertation structure

The dissertation structure adopted by researcher is as follows-

Chapter 1 Introduction- In this particular chapter, background and rationale of the subject matter has been discussed. Thus, it assesses that the effect of counterfeit goods on the brand image of businesses selling original products. In the introduction chapter it discusses the aim, objectives and rationale upon the selected topic so that discussion could be carried out further.

Chapter 2 Literature Review- Further, in this chapter, literature is being carried out using different scholars and thus overview the study. Further, conceptual framework is developed that investigates upon the subject matter so that discussion is being carried out. It is also essential for executing the research upon the topic so that different objectives could be researched in-depth and obtain proper outcomes.

Chapter 3 Research Methodology- Here, researcher identifies the tools and techniques in relation to conduct the study. Research methodology is crucial aspect so that the selected topic could be researched in an appropriate manner. Also, there are different techniques such as primary and secondary research that could be used by scholar which results in conducting the research.

Chapter 4 Data Analysis- Further, the collected data is being analysed by the researcher through using different qualitative or quantitative methods. Here, questionnaire is being prepared and thematic analysis is carried out so that the collected data could be assessed.

Chapter 5 Conclusion and Recommendation- It is the last chapter in which conclusion and recommendation has been given upon the particular topic and thus best results could be obtained. Hence, it helps readers to suggest the areas where further research could be carried out.

Chapter 2: Literature Review

Introduction

This chapter is an important and helpful enough to understand the perception that other researcher have over similar topic and that is over brand image. There are many authors who have conducted research on similar topic. This has helped in understanding the present research aim and objectives (Chaudhry and Stumpf, 2011). Further, it also enables to come up with an appropriate outcome for the research. Main aim of this research is to make proper investigation on the efforts of counterfeit products on the original product brand image. Major focus of this chapter will be to make sure that historic investigation is taken place with similar subjects that are conducted by other researchers. Different articles and journals will be taken into consideration to come up with appropriate outcome for the research.

Original brand consumers perceptions on counterfeit

According to Mavlanova and Benbunan-Fich, (2010) counterfeit products can be determined as the copy of the original product that will not hold out same quality that original has. There are different set of perception that people have over the purchases that are made by people. People tent to make purchases of the product that are provided to them at high quality and low price. As per Poddar, Foreman and Ellen, (2012) there are many companies that deliver their customers with similar products and services. Ultimate aim of any firm to gain maximum profit. This is only possible when they understand the needs and requirement of customers and provide them services accordingly. In order to gain profit, people tent to copy the products that are delivered by organization that has high brand value. This way it becomes helpful them to gain huge profit. There are different reasons that can b determined due to which people tent to make purchases of counterfeit products. In this context, below given are few of the reasons:

Lack of information: The copy that is made does not have all the elements that are provided by original product. However, the customers get affected due to the lack of information that they have over the products (Michaelidou and Christodoulides, 2011). When people do not have proper information, then they fail to identify the difference in which one is original and which one is not. On other hand, when customers are well aware of the differences then they will not prefer to make use of the counterfeit products as there are many negative issues that are faced by them. This way it can be stated that people are not aware of the product they are want to make their purchases for. It is important for the organization to make sure that they provide their customers with proper information so that customers get to know the difference (Gino, Norton and Ariely, 2010). This way it will enable to make sure that the customers get the right products and their perception due to went negatively may not get affected.

Preferences: There are different set of perception that people have over the type of products and services that are bought by customers. There are many differences that a counterfeit product have when compared with original. In this context, the differences can be of quality, quantity, price, etc. With this respect, the price of the original prod cut will always be high when compared with counterfeit (Lebel, Gagnon and Waldron, 2014). There are people who will prefer to purchase counterfeit products due to the low price it holds. People prefer to make use of the services that are provided to them at low price and of high quality. In this context, it can be stated that people make use of the services that help them to make their purchases in an effective manner. The people who are loyal to the product and the services that are provided by the organization. It is important to make sure that organization deliver their customers with high quality, only then they will be able to maintain the loyalty of people towards the services and the products that are provided to them.

Quality and preferences: This is a type of aspect in which the preference of customers is determined over the quality that is provided by the organization. In case the quality that is provided by counterfeit product is similar to the original product, then customers will prefer to mane purchases of counterfeit products (Stumpf, Chaudhry and Perretta, 2011). This is type of negative issue that is faced by companies. With this respect, it is important the organization develop unique aspect with the help of which other can not copy them. For example, Coco-Cola is one of the well known cold drink brand has not revealed the ingredients that they use for making their cold drink. This type of strategies are used so that other may not be able to copy them. Further, the price of product is low and this motivates people to raise their purchases to counterfeit products.

Ease: People will prefer to make purchase of fake products as they are easy to obtain. When a product is released, then it takes time to reach out the customers (Cheng, Fu, and Tu, 2011). In such situations, fake products are developed and their provide customers with the opportunity to get the product and show it to others. There are conditions in which customers have to weight for even a month or two so that they get to use the original product use. However, this is not possible for some of the people or customers to do that. In this context, they make use of counterfeit products as they are easily available. There is a physiological aspect in which people prefer to show off when they get purchase a product that is not available to anyone. In order to get that level of satisfaction, they tent to make purchases of the counterfeit products (Carpenter and Lear, 2011). These are easily available and all the basic function or the thinks that an original product promises to meet and met by fake products.

Different factors affecting for positive and negative brand image

As per Kim, Kim and Park, (2012) there are different type of strategies that are implemented by organization in order to make use that the products or services that are delivered by the firm is able to develop unique place when compared with the organization that deliver similar products and services. It is important to make sure that firm develop unique place in the mind of customers (Jiang and Cova, 2012). This is possible with the help brand image that is being developed by the firm on customers. In this modern work, there are different type of strategies that are implemented to raise the brand image. In this context, one of the effective way is to consider the social media. This is a type of platform in which companies get the opportunity to have direct interaction with customers and to clarify the doubts that they have over the products and services that are delivered by organization (Norum and Cuno, 2011). Further, it also enables to know the perception that they have over the services that are provided to them.

There are different type of ways that are helpful enough to raise the brand image of the organization. In this context, one of the effective way that are helpful enough to raise brand image is with the help of communication. There are conditions in which with the help of communication it provides the opportunity to convey the information about products and services that are provided by the organization. When get to know the products and services more and more, then it helps in developing positive aspect among the mind of customers (Fiori and Andrisano, 2014). It helps in to make people understand about the type of services and products that are provided by the firm. With this respect, it is important for the firm to make use of all type of promotional tools like television, radio, newspaper, etc. that are helpful enough to develop positive perception within the mind of people. This way they get to know more about the products. In this context, one of the effective tool that is used by the firm is social media (Lindenbaum and Ewen, 2012). It is an effective source through which people get understand the type of products and services that are delivered by the organization. It provides the opportunity to understand the perception of people and different ways are identified with the help of which the issues that are identified and accordingly steps are taken to in order to make improvement in the services and products that are provided by the organization. More specifically, there are social sites like Facebook, Twitter, etc. Similarly, there are many different type of issues that are faced by business due to negative aspects of branding. This way it enables to make sure that firm get to develop positive perception within the mind of customers and it also enables to raise their sales and profitability.

As per the view of (Bortolini and et. al., 2015) due to globalization in the market, counterfeiting has been increased and thus it affects the business performance who are selling original products. Thus, it is essential for business owners to make different policies and rules that impacts upon the brand image of business. It also decreases the sales due to availability of replicate products in market. Hence, through such way business gets affected in negative manner and decrease their sales and profitability. Within fashionable industry, there is increasing demand of products and services and thus businesses are selling varied range of products at high prices due to its cost and brand image. Thus, at such time availability of replicate or counterfeit products affects the businesses and therefore, it results in decreasing the sales and performance in business. However, (Jalili and et. al., 2015) argued that fashion businesses need to identify its competitors as well as businesses who are involved in such criminal act and thus appropriate action needs to taken so that replicate products could not be sold in market. Further, through increasing counterfeit product in market, businesses are getting affected and decrease their brand image so that company is incurring heavy losses.

Counterfeit products are ultimately affecting the brand image of business and therefore, such issue needs to be resolved so that better performance could be attained. Thus, counterfeit products are increasing within fashion industry and therefore business owners need to take right steps in order to protect the brand image of business. Also, there are different factors that negatively affects the brand image of fashion businesses in market. It results in decreasing the brand image of business in market and thus affect their sales and profitability. (Francis, Burgess and Lu, 2015) stated that business also need to evaluate the attitude of customers and identify the trends and challenges being faced by business so that market share of business could be impacted. It is essential for firm to enhance its market share and thus replicate products need to be avoided from market and enhance the brand image of firm. However, several necessary steps need to be taken in relation to enhance the business performance and thus bring positive outcomes so that market share of firm could be raised.

(Basu, Basu and JK Lee, 2015) evaluated that all such negative factors affects the business and thus it affects in terms of affecting the brand image in market. Through such way it is essential for firm to improve the business performance and improve the performance that enhances the managerial implications and thus improve the performance of firm in market. Businesses need to identify the negative brand image as it would impact the performance of businesses and therefore, they need to overcome such issues by implementing appropriate strategies so that set targets could be attained.

Chapter 3: Research Methodology

Introduction

Research methodology is the most significant chapter of the dissertation which covers the detail explanation related to the study under investigation. It enables researcher to collect the data in the direction of aim and objectives and accordingly draw valid conclusion. This basically covers, research approach, research design and data collection as well as analysis methods. This in turn researcher can effectively conclude the findings and reach the investigation effectively. The chapter of research methodology covers all available method but with the justification of the selected research method for the conducting the current study. These are covered as follows-

Type of investigation

There are two types of research investigation such as qualitative and quantitative but the selection of the most appropriate one is based on the requirement of the dissertation. The use of quantitative method is done in analytical kind of study where researcher ensure to apply statistical tools to reach at the aim of the investigation. The qualitative type of research useful for deep understanding related to the topic of the study whereby research can carry out in-depth analysis. It would be effective to develop the understanding related to concept of counterfeiting in the fashion industry (Mackey and Gass, 2015). The main reason behind application of qualitative type of investigation is to focus on the findings through which it becomes easy to extract the findings effectively. Therefore, the research under consideration applies qualitative type of investigation so as to assess the effect of counterfeiting practice and goods on the brand image of luxurious companies. Here, quantitative research is not applied due to limitation to use the available information where existing knowledge of the research is not valued to a great extent. Owing to this, qualitative research is considered as the most suitable one for completing the investigation.

Research design

The research design is selected to present the findings of the study in the form of its blue print. This aids readers to understand the findings and frame the appropriate decision accordingly. It consists of designs such as descriptive, exploratory and explanatory which are used as per the nature of the study. The descriptive research design is applied in the studies which involve human being and their views as the prime input for completion of the research objectives or aim (Taylor, Bogdan and DeVault, 2015). Further, with the use of descriptive research design scholar can effectively understand the characteristics of population and their contribution in the aim and objectives. It is helpful for selecting the most suitable technique for the collection of primary data. On the other hand, exploratory research design is applied in the field where problem has not been identified or discovered yet and researcher aims to explore something new. On the other hand, explanatory research design is applied in the study to understand the cause and effect relationship in the selected research issue. Therefore, descriptive research design has been applied in the dissertation under considered so that effect of counterfeit products on brand image can be detected or understood easily.

Research approach

Research approach reflects that set pattern of data collection with the help of two kinds of approaches such as inductive and deductive. The deductive research moves from general to specific by using the top-down approach. Here, scholar target to collect the general information related to topic and then accordingly reach to the specific one. Furthermore, inductive research approach facilitates to form new theory in accordance with specific issue and moving towards the general phenomena (Silverman, 2016). This indicates that application of inductive approach make it possible to provide the strong findings in accordance with issues which is being faced by the companies regarding the counterfeit products. Thus, inductive research approach has been applied for the completion of the current dissertation and collecting the valid information from varied sources. Therefore, inductive approach is considered as the most effective and supportive to extract valid outcome. It indicates that deductive research approach has not been applied due to investigation of the specific issue associated with the research. Hence, inductive research has been applied for collection of information and producing the valid outcome from the same.

Research philosophy

Positivism and interpretivism are two types of research philosophy which is based on assumption, values and beliefs of the researcher. Here, positivism research philosophy is based on certain facts and figures through which aim and objectives can be accomplished effectively. On the other hand, positivism research philosophy indicates that own knowledge related to particular topic can be applied by the scholar in order to accomplish the aim and objectives. Generally, interpretivism research philosophy is applied under the quality type of research. On the other hand, positivism research is applied under quantitative type of investigation due to requirement of facts and figures related to particular research issue (Flick, 2015). It indicates that interpretivism research philosophy is the most suitable. Owing to this, positivism research philosophy has not been applied due to association of existing knowledge of the scholar related to the specific issue under investigation. This is showing that interpretivism is the best suited research philosophy for the current study under which researcher consider the multi-facet of single truth. This would be effective to reach the valid outcome effectively and proper the valid suggestions in an effectual manner.

Data collection

Data collection is considered as the most significant element of the research methodology chapter under which researcher collect the data such as primary and secondary. These two types of data are generally collected to produce the valid outcome of the investigation. Here, primary data are collected first hand with specific purpose of research as they cannot be provided directly without conducting the investigation (Panneerselvam, 2014). Several methods are applied for collection of primary data such as interview, questionnaire and observation etc. On the other hand, secondary sources such as journals and books and online articles are applied in order to collect the appropriate information and producing the valid outcome out of the same.

Interview method has been used for the current study through which interaction can be done with respondents and collect reliable information from them. It is considered as the time consuming procedure but still use of interview methods leads to produce more reliable and valid outcome. For this purpose, structured interview will be conducted under which questions will be written in advance so as to save the time and get the valid input from respondents. In addition to this, mentioned sources of secondary data have been used for gathering secondary data. It is considered as the foremost aspect in order to assess direct impact of the counterfeit products on the brand image of the luxurious products (Gast and Ledford, 2014).

Sampling design

Sample design refers to the process of selecting the participants or population for collection of the primary data. Basically two types of sampling such as probabilistic and non-probabilistic but the same is applied in accordance with requirement of the investigation. The application of probabilistic sampling is ensured for offering equal chance for all objects to get selected in the study (Lushey and Munro, 2015). On the other hand, non-probabilistic sampling is applied under the studies where researcher aims to be more specific towards the participants. Sampling deigns covered under the both kind of techniques are simple random, quota, judgment and snowball. Along with that purposive sampling, stratified and cluster are also used. The current study targets the managers of the from the department of administration. Owing to this, simple random sampling has been selected for giving equal chance for all objects to get selected in the study. The sample size plays significant role as it represents the population. At this juncture, 20 sample size has been taken though which views and suggestions of all related participants can be known effectively. Hence, simple random sampling has been applied for the collection of primary data through interview from managers of the selected corporation.

Data analysis

Data analysis is the process of assessing or interpreting the collected data in accordance with the aim and objectives. There are two types of techniques applied for analysis of the collected data such as qualitative and quantitative. Here, the former one is applied for in-depth analysis with the use of thematic analysis method. This requires the frequency table and graphical representation of the collected data. It would be supported from detail analysis through which readers can easily interpret the collected information in the direction of aim and objectives (Khan, 2014). However, quantitative type of investigation is used under the study where researcher aims to assess impact of one variable on another. This requires the use of statistical tools such as regression, correlation and standard deviation etc. However, as per the demand of the current study, qualitative technique has been applied where primary information is analyzed through graphical presentation. At the same time, analysis part is consistent with the secondary data which represent the appropriate analysis of both gathered information (Mackey and Gass, 2015). Hence, thematic analysis proves to be effective for collecting the data and reaching the valid outcome.

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References

• Flick, U., 2015.Introducing research methodology: A beginner's guide to doing a research project. Sage.
• Gast, D.L. and Ledford, J.R., 2014.Single case research methodology: Applications in special education and behavioral sciences. Routledge.
• Khan, J., 2014. Reduction Of Cost Of Quality By Using Robust Design: A Research Methodology.
• Lushey, C.J. and Munro, E.R., 2015. Participatory peer research methodology: An effective method for obtaining young people’s perspectives on transitions from care to adulthood?.Qualitative Social Work. 14(4). pp.522-537.
• Mackey, A. and Gass, S.M., 2015.Second language research: Methodology and design. Routledge.
• Panneerselvam, R., 2014.Research methodology. PHI Learning Pvt. Ltd..
• Silverman, D. ed., 2016.Qualitative research. Sage.
• Taylor, S.J., Bogdan, R. and DeVault, M., 2015.Introduction to qualitative research methods: A guidebook and resource. John Wiley & Sons.