Research offers strategies to counter counterfeit luxury goods

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In luxury, if you know, you know. Connoisseurs of high-end fashion and luxury goods may feel confident in their ability to spot a knockoff or discern the fine details of a genuine article. But does that self-assured knowledge make them more or less likely to partake in a fake?

It's a question that marketing managers in the luxury industry are eager to answer as part of their quest against counterfeit products, an illegal global trade predicted to reach a value of $1.79 trillion by the end of the decade.

"Many consumers have concerns about the immorality and unethicality of counterfeits, but they still purchase them knowing it is wrong," said Ludovica Cesareo, assistant professor of marketing in the Lehigh University College of Business.

Understanding how people's self-assessed knowledge of luxury goods affects their moral stance toward counterfeits can help shape strategies to combat the scourge, Cesareo said. She and her colleague Silvia Bellezza of Columbia University examined the issue in a new study published in the Journal of the Association for Consumer Research.

Perceived knowledge affects morality

The luxury market has long been driven by consumers' beliefs in the quality, craftsmanship and heritage of products. The researchers hypothesized that consumers with high "subjective knowledge"— how much people think they know about a domain—in this arena would be less drawn to counterfeits. Those with lower subjective knowledge, they hypothesized, would be more likely to find counterfeit products appealing.

Across four experiments assessing consumer's subjective knowledge and attitudes toward counterfeits, the researchers found that those with low subjective knowledge were indeed more likely to be drawn to counterfeit goods.

"Those not particularly knowledgeable in high-end fashion and luxury goods like counterfeits more than more fashion-savvy consumers, and they are more likely to post on social media about the original brand," Cesareo said. "This phenomenon is due to low-knowledge consumers' greater ability to disengage from moral concerns about counterfeits."

People often justify behaviors that they know are wrong using "moral disengagement," a psychological process that involves tactics such as ethical rationalization, diffusing responsibility, or downplaying potential consequences.

Cesareo explained that "low-knowledge" consumers may not understand as much about the provenance of items but may remain attracted to the look and prestige of luxury brands, as well as the cachet they carry on social media. Whereas consumers with high-level knowledge about the origins, processes and details of luxury goods are more likely to hold consistent moral views on counterfeits, low-knowledge consumers can more easily be swayed to feel counterfeits are justifiable.

Rationalizations could include that "everyone does it," that high-dollar brands aren't harmed by this downmarket practice, or that one's purchase may be only "temporary," until they can afford a genuine article.

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"Not only do low-knowledge consumers not view counterfeits through a moral lens, but they also see a higher cost-benefit of the counterfeit than high-knowledge consumers," Cesareo said.

The study also demonstrated that low-knowledge consumers can more easily be influenced by messaging about the relative morality of counterfeiting.

To confirm the external validity of their findings, the researchers also interviewed anti-counterfeiting leaders at luxury brands including Louis Vuitton, Moët Hennessy, Ralph Lauren and Moncler.

"These managers confirmed that most of their customers have low knowledge in the domain of fashion and high-end luxury goods, are aware only of the prestige of the brands they are purchasing and are not real connoisseurs of the brands' history, heritage and craftsmanship," the researchers wrote.

Their advice for anti-counterfeiting managers?

• In markets with mostly low-knowledge consumers, companies should aim to influence consumers' perceptions of the morality of counterfeiting through education. Strategies could include targeted advertising and communication campaigns by governmental agencies highlighting the immorality and illegality of purchasing counterfeits.
• To fight counterfeits in markets with mostly high-knowledge consumers, make consumers even more knowledgeable by being more informative in their advertising and communication campaigns. While most luxury advertising focuses on symbolic imagery and ephemerality, luxury brands would benefit from including more educational elements about their brand history and explanations of craftsmanship.

"A key issue for marketers and brand managers is to understand how to channel their anti-counterfeiting efforts depending on the level of knowledge of a specific target market," Cesareo said.

More information: Ludovica Cesareo et al, Knowledge, Morality, and the Appeal of Counterfeit Luxury Goods, Journal of the Association for Consumer Research (2024). DOI: 10.1086/733111

Provided by Lehigh University