Factors influencing consumers attitude towards pirated products

5283 words (21 pages) Essay

1st Jan 1970 Marketing Reference this

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Piracy is described as the producer of copies that are in the same way packaged, together with trademarks and labeling, copied so as to appear to a consumer the real article (Kay, 1990 (Kay, 1990 Piracy is an task that bears a much superior risk to any country, social and cultural fit being than typically renowned by the purchaser. It’s a serious dilemma that it is affecting the product whose brand name is alike, and moreover the product which needs research and development to produce the product. (Nash, 1989).

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During the past of decades, Pakistani’s national exchequer loss the revenue on your own goes ahead of 10 billion rupees annually. Nevertheless, the present losses by dint of to the piracy and counterfeiting can exceed our thoughts. It is acknowledged that allowing a fair competition will allow the country to maximize efficiency and production; where competition is abridged as a result of counterfeiting, smuggling, piracy, and cartelization restrain the s country from acquiring the real potential growth. there are many sectors that are become the victim of piracy include manufacturing of goods, electronic devices, toys pharmaceuticals; films, publishing, as well as software; textiles and footwear, drinks ,electronic devices, luxury items, tobacco, agro-chemicals in Pakistan. There are many countries the sale of pirated products are frequent. For instance, in Africa pharmaceuticals companies are the major target for counterfeit and the Middle East is a substantial market for counterfeits of automotive parts. Conversely, the counterfeits of cigarettes, are everywhere in the world. Piracy of software, movies, and music, appears to be noteworthy in most of the countries, particularly rising countries. We have the most common examples of luxury brands that are counterfeited comprise Rolex, Chanel, Calvin Klein, DKNY (Nia and Zaichkowsky, 2000). The designs and trademarks are linked is directly copied by the profiteers. In Chinese market the trade of pirated product is proved to be profitable, as one-time it noted as the world’s third major consumer of accessories high-end fashions, and other luxury products (Ernst & Young China, 2005; Chadha, 2007). The coping of the luxury brand for profiteers are easy, simple and they can acquire the methods of low manufacturing costs (Shultz and Soporito, 1996; Gentry et al., 2006). In addition; consumer of the pirated products are increasing day by day because they can afford the pirated product and by the use of pirated product they can portray their status which gives them the way to live the life style of upper segment. (Chang, 1998; Eisend and Schuchert-Gu¨ ler, 2006). Manufacturers of the original products are thoughtful of these development and leave no possibility accessible to leap guarantee for the status of their brand with profitably (e.g., Green & Smith, 2002; Kay, 1990; Nash, 1989; Wee, Tan, & Cheok, 1995). The expansion of fake can be renowned to the lift in world trade and shows potential new markets, the raise in commodities and also fast speed technology progress, that are worth counterfeiting (Wee et al., 1995; Bloch et al., 1993; Alcock et al., 2003).

The studies which has been done on the consumers attitude toward piracy were insecurely created and ambiguous (Ang et al., 2001; Tom et al., 1998; Wee et al., 1995). In the majority studies, attitude was calculated by diverse sets of statements. for instance, to compare the dissimilarity in attitude between those who are the users of pirated products or not Tom et al. (1998) used a set of 13 accounts while Ang et al. (2001) engaged a completely different set of 12 statements. However, the arrangements of these statements were not confirmed and their association to further predictive variables was not examined i.e. intention to buy. Most importantly, attitude toward piracy is considered as generic instead of construct.

There are studies conducted to examine Relationship between attitude and behavioral intentions. Berger et al. (1994) suggested that managers’ attempts should be focused on changing consumer attitudes before directing their behavioral choices. Product-class involvement characterizes the normal attention of a consumer on product category every day basis (Wilkie, 1994; Zaichkowsky, 1985), which may be a variable that importantly temperate consumers’ purchase intents. The product which has the low involvement of consumers tends to purchase those recklessly, despite of their original attitude for the product attributes. on the contrary, the product with a higher consumer involvement, then consumer spend his more time and energy for the purchase of that and therefore make more balanced decisions.

1.2. OBJECTIVE OF REPORT

The objective of this report is to study the factors that influence consumer’s attitude towards the purchase of pirated products.

The report also examines the relationship between psychographic variables and attitude of consumer towards pirated products.

This report also finds out the consumer attitude who seeks out pirated products.

1.3. IMPORTANCE OF SUBJECT AREA:

The importance of my subject area is to explore the variables that influence consumer’s attitude towards pirated products in the market. It will help the marketers to understand the psychology of the consumers that why they purchase pirated products. This will also help policy makers and practitioners to formulate more effective strategies to diminish the pirated problem. The research in this report is useful for the marketer to realize the consumer’s attitude who buys pirated product

CHAPTER 2 LITERATURE REVIEW

2.1 THEORETICAL FRAMEWORK

A review on behavior/ ethical research was taken to examine the factors influencing attitude towards digital piracy. To examine various kinds of behavior together with ethical/unethical behavior, Theory of Planned Behavior had used (Randall and Gibson, 1991). The Theory of Planned Behavior states that purpose to carry out a behavior is stands on persons attitude towards the behavior, the social influence to do/not to do the behavior (Subjective Norms), and persons have power over doing that behavior (Perceived Behavioral Control) (Ajzen 1991). There is a need to validate widening the TPB with features from the ethics literature from the moment when the ethics literature frequently observes ethical judgment/evaluation and not attitudinal judgment. By the use of TPB we can study one kind general behavior. The attitude build is the next one that is match to ethical judgment in the model of TBP. Equally ethical judgment and attitude were used to clarify behavior, and ethical behavior was explained in the TPB model (Flannery and May, 2000). The judgments or evaluations both lead to intention, which is a kind of behavior itself. Ethical judgments and Attitude are the different, yet what ever influences attitude can also affects ethical decision-making. To examine the factor which is most consistently and repeatedly examined important factor of attitude, and decision-making, three factors were found as go after- individual attributes, moral obligation and moral judgment. Attitude is the one of the important part of TBP. In most of the cases it is found that it is the best predictor of intention.(Allport, 1935).

Price consciousness

Lichtenstein et al. (1993) price plays a vital role in effecting consumer behavior and this attribute is broadly studies in literatures. Lichtenstein defined seven price- related factors and alienated them with respect to consumer’s positive and negative behavior for the purchase. The number of theories suggested the people use number of price experiences and make the ranges of upper and lower limits on the basis of prices. the function of market price is the focus of attraction that it has a position with in that range which the buyer is willing to pay for. The price reference is defined which has the impact on the purchasing behavior of the buyer. Then adaptation theory named as pricing theory, the internal aspect is that it depends upon the buyer’s experience that how willingly he is ready to pay for the price on the basis of his past experiences.

Rajendran and Tellis (1994) co examined that the lower the price the more we can predict the price reference, but the past experience shoed that the brand name is the important consideration for the actual price. The truth is that the authorization channel is used as a reference price credible for the consumers, so in order to attract the consumers’ gray market take the advantage of low prices.(Bucklin, 1993) found that at lower prices 64% of the parallel imports were selling, so the researcher argued that in gray market price difference is an important factor. When both channel gary market and an authorized channel sell their goods simultaneously then consumers prefer the lower price goods in the market.

(Bloch et al., 1993) The main significant criterion in the purchase of pirated brands emerges to be price. Counterfeits provide incredible cost savings to customers even though with a few compromise in quality, it’s perceived worth is high. Therefore, pirated goods might be seen as alternative rivalry, with the benefit of a considerable reduction on current prices. Facts have also revealed that when a counterfeit has a distinct price benefit above the original product, consumers will choose the counterfeit.

Price-quality inference

The belief of the consumer that at high price the quality of product will also be high and at low price the quality of the product will be low is very vital theory which determines the consumer’s behavior. (Ordonez, 1998) defined that consumer when selecting a product fist evaluate the price of that product with their respective quality and examined that the price which is being charged for that product is with respect to that product is correct or not. The research helped that price expectancy model and proposed that as the correlation between the price and quality increased with respect to the price and quality of the product.

Tellis and Gaeth (1990) explained that how consumers make choices on the basis of information. The price quality association is important reasonable factor for the deceptive quality which effect consumer’s behavior.

Monroe and Krishnan’s (1985) explained in the price quality model that price positively effect the perceived quality and Wahlers’ (1999) suggested the same relationship between price and perceived quality in extended model. For durable goods, Brucks et al. (2000) stated that there are six dimensions of quality, versatility, prestige durability, ease of use serviceability, and performance. On the basis of different quality dimensions price effect consumer’s perception of quality. And the support was not found in some of the new research.

In a study performed to test the effect of store name, brand name and price discounts on consumers’ evaluations and purchase intentions, Grewal (1998) revealed that the effect of price discounts on a brand’s perceived quality was minimal.

Risk averseness

(Bloch et al., 1993) there is a risk involve in buying the counterfeit product that can be caught by the authorities for buying replica products. Some purchasers of the fake products think that buying fake would not completely hurt the original manufacturer, society and the industry in which they are making their products. The user of the counterfeits product thought that they would enjoy the same product benefits at lower prices because they couldn’t afford the original prices of the product. Social means that it can avert the consumer behavior. This is informational that consumer behavior changes when he seeks others approval for the use of the products; and we can say that it is normative when others approval can affect the consumers behavior.

Peter and Ryan (1976) risk is also there when the consumers selecting the product for certain brand multiplied by the adverse effect which he can face by the use of that product. (Batra and Sinha, 2000) explained that committing the decision to use the product and the level of problem which he face by that mistake. Havlena and DeSarbo (1991) defined that various character of perceived consumer risk, inimical, safety, time/opportunity, involving performance and psychological dimensions. The consumer behavior can be influenced by the perceived risk.

Mitchell (1992) explained that the five stages of the consumer decision making can be influenced by the perceived risk, which starts from recognizing the problem, the search for information before the purchase of certain product. Evaluating the alternatives, making the purchase decision and last one is post-purchase behavior of the consumers. (Lowe and McCrohan, 1989) Two types of risks are associated when consumers purchase the ancient market goods. First the opportunity for the black marketers increases the old market products which are known as counterfeits goods. Consumers who buy goods from the old market have to risk a higher chance of buying counterfeit products and paining different kinds of risk involving performance, financial psychological, social, safety, and time/opportunity risk. The next risk arises in the post-purchase stage, including failure of guarantee and service from the lawful distributor. Several brand managers must ask their approved distributors not to give services at all or augment service charges to old market goods, considerably lifting consumers’ risk and cost to stop gray marketers’ free-ride. Therefore, consumers’ risk diverseness’ influence their attitudes in the direction of old market goods.

(Muncy and Vitell, 1992) Consumer ethics have been explained as, “the ethical principle and customary that direct behavior of persons or groups as they get, utilize and organize of goods and service”. (Muncy and Vitell, 1992) Nevertheless, purchasing old market goods appears not to infringe or nearly infringe any moral norm of consumers. (Vitell and Muncy, 1992) As in the old market, consumers lawfully buy favored branded manufactured goods from a retailer they wish, they do not naturally believe that their behavior hurts someone others, or that it is in some means immoral. Mathur (1995) measured the association between marketing ethics and the old market, but from the viewpoint of the supplier, which is not measured here.

Effects of gender and ethnicity:

The model identifies that normative beliefs also play a influential role in the improvement of attitudes. If a child’s civilizing environment give confidences, models, and strengthens reading, it would results a positive attitude. Gender-definite beliefs relating to what others imagine about reading might clarify constant findings that the attitude of girls are more positive than the boys (Anderson, Tollefson, & Gilbert, 1985; Askov & Fishback, 1973; Ross & Fletcher, 1989; Shapiro, 1980; Smith, 1990; Stevenson & Newman, 1986; Wallbrown, Levine, & Engin, 1981). The condition is confused, nevertheless, the truth that the girls be inclined as a group to do better than boys on aptitude procedures (Mullis, Campbell, & Farstrup, 1993). It possibly will be societal faiths guide primary to more positive attitudes in the direction of reading in girls, which on the other hand facilitate a benefit over boys in obtaining aptitude, and that this dissimilarity in aptitude then assists to bring about more optimistic attitudes among girls. Subjective norms can also be imposed on the Ethnic group about their reading. a small number of studies have observed this relationship, nonetheless. Saracho and Dayton (1991) accounted that along with a large section of playgroup children, African Americans leaned to hold more negative attitudes than Hispanics or Whites. in view of the fact that this study concerned children who had not however begun to learn to read, the increasing consequences of reading complexity cannot report for the distinction. The options that culturally convey beliefs might hinder the growth of positive reading attitudes ought to have more careful inspection.

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Brand status:

(Martineau, 1968) The most important determinant of the individuals buying behavior is his or her the usage of the product which represents his social class which is not that much determine by the level of his or her income.

(Mellott, 1983) The social class which people get influence wants to associate his or her with that class. So that’s why they purchase the branded products which shows their status above and that brand express their wealthy position in the society so they tend to use that brands. If the brand status is an important determinant for them that show their position in the society and in the main while they cannot afford that brand so they tend to move more towards counterfeit products through which they associate themselves with the above social class.

Social influences

(Bearden et al., 1989, p. 474) The pressure of the society can influence the behaviors of person to follow the norms and values and as well as to break the rules by adapting the changes, that is consumer weakness that influenced his attitude. The weakness consumers have to enhance the value of his status and show his image by acquiring that product and brand which is not associated with his class. Their will is to match to the expectation of that class which he want to be, and seeks others expectation in his purchase decisions, and their focus is to learn by observing them and collecting the information regarding their attitude towards products and brands.

Bearden et al. (1989) suggests that susceptibility has two forms, first consumer have the susceptible about the information of the product opinion which he bought from other experts. So in these type of cases others perspective with respect to the quality of the product is critical, he is unaware of the product category which he bought. And the second is the normatively susceptible of the cons

It is the phase which is concern consumers purchase decision that is not based on experts’ opinions, but they have the expectation to impress others. Family members and the friends who have the knowledge of counterfeit products and they know the advantages which are associated with the original products and the disadvantages which are associated with the counterfeits products will influence the consumer behavior towards the drawback of counterfeit products. Same wise normative susceptibility is identified to have a negative influence on consumer’s attitude towards pirated products.

Unethical consumer behavior:

Shoham , Ruvio and Davidow (2008) Explained that piracy is the internal ethics and explained that past studies on ethics were found low, because it showed the impact on their behavior. The research was conducted on the software industry and results were found that now a day the software piracy is become very common and it is hurting all the ethical values. The person who are engage in the piracy and why they do so such act of piracy, in order to address them there should be system where they can be treated. It further explained that the Asian are more inclined towards software piracy than Americans, which is basically due to their culture difference. They defined that why consumer cheat if they really know about the pirated product, why he buy the soft ware which is illegal. Company is searching for the persons who can counter this occurrence and teach or give them knowledge about those consumers’ pirates. Though, being mythological, that type of persons is not available, and firms require using straight and tangible means to oppose current piracy. This research models consumers’ attitudes about the act of piracy as incomplete moderators between consumers’ ethical attitudes and piracy behavior.

Constructing identity through the consumption of counterfeit luxury goods

(Hilton et al., 2004), There is an increasing body of literature that examines the usage of counterfeits from various perspectives. Conventionally the most of the research were centered on the on ethical issues, the consumer socio-cultural traits facilitating strategies and counterfeiting for fighting counterfeits, Myles and Nusser, (2006). in addition, there is presently an increasing body of research examining the enthusiasms in the wake of the intentional usage of counterfeits (Wee et al., 1995; Cordell et al., 1996; Wilke and Zaichkowsky,1999; Nia and Zaichkowsky, 2000; Gentry et al., 2001, 2006; Wilcox et al., 2009). Our research means to enlarge effort on this area by looking at the relations among counterfeits’ usage, self-identity and social self-image. Persons might execute as actors in face of an viewers of major others, using supports and uniforms to produce a setting. In the conversation that appears to happen between the internal insight of the identity and the societal self-image brands might be used as signs to move sense (Grubb and Grathwohl, 1967; McCracken, 1986; Belk, 1988; Lee and Shavitt, 2006; Commuri, 2009). Customers might use counterfeits as a substitute of originals as the supports assisting them to persuasively take part in a role in face of a appreciated spectators. By aggressively following a preferred social self-image in the course of the exercise of fraud they also add to the building of their own self “Identities are basically relational” (Cherrier and Murray, 2007, p. 20). Can persons build a certain character in the course of the usage of counterfeits? May a positive consequence result from an morally problematic behavior? at the same time as Hesmondhalgh (2008, p. 330) disagreements that music away from its current image as a “optimistic resource for lively self-making” capacity also have a negative usage of counterfeit luxury products effect by generating capitalistic consumerism, we propose that usage of luxury brands’ counterfeits possibly will result in the building of a winning, gratifying self-image. We propose that from side to side their experiences in the purchase and usage of luxury products’ counterfeits consumers construct a self-concept imagining themselves as knowledge consumers who increases their economic assets, and also as delight loving persons who know how to boast fun. Moreover, subsequent on self-theory (Newcomb, 1956; Goffman, 1959; Strauss, 1959) we would attach that consumers of counterfeit luxury products utilize these to construct a social self-image by duping a pertinent spectators. They use the counterfeits products and show that they are using the original one’s, the users of counterfeits wanted to be recognized that they use the luxury product benefiting from their status impression and rejecting to give the original price of the luxury product. Therefore using counterfeits of luxury brands may provide persons a self-concept expressive function and an acquiring social function (Wilcox et al., 2009). The usage of luxury counterfeits give consumers with apparently opposing achieves. outwardly they permit them to signify the picture of a wealthy consumer, one that would logically belong to their inspiring class. Whereas the users of counterfeits are internally aware of possessing paid only a portion of the original price of that brand, think that they would make fool others to keep away from being exposed, and in the procedure experience the excitement of adventure.

Corporate Image and Product Similarity

(Hsieh, Pan, & Setiono, 2004)Corporate image signify a influential connection to brand image and buying behavior. Defined as buyer’s attitudes to a company, corporate image can make new viewpoint about a firm, which in turn builds consumer attitude towards product and product liking. Corporate image not only attach worth but also make a halo effect for all of a company’s products. In the perspective of counterfeits, the corporate image of genuine producers against counterfeiters plays an important role. Purchasing counterfeits may be consider harmful, as the risk incurred are assorted, and physical, psychological and social risks and ranging from financial, performance .

(Gürhan-Canli & Batra, 2004)To diminish these risks, consumers are liable to rely on information about the dependability of a company. Contrary to the original manufacturer, the counterfeiter is unfamiliar to the consumer. This makes it further complex to decrease perceived risk by relying on a producer’s goodwill, which is generally linked with superior functional performance. Corporate image was record as attitude toward counterfeiters. It signify that consumers give reason for the purchase of counterfeits throughout feelings of sympathy for small (counterfeiters) rather than large (original) manufacturers, based on the feeling that large companies are distant, overpowering, and socially isolated.

Attitude and purchase intention

(George, 2002) in past broadly investigated the traditional retailer relationship between attitude and purchase intention. (Shim et al., 2001) investigate in the context of internet that there is positive attitude towards internet shopping intention.

Lee (2003) also found positive relationship that the people have tended towards internet purchase through internet, by using the survey data of visualization, graphics and usability. Furthermore Kim et al. (2003) investigate that consumer who like online shopping had greater impact to purchase their clothing through internet.

Watchravesringkan and Shim (2003) also authenticated that there is a positive relationship between a positive attitude toward online shopping and online purchase intention centering on clothes. likewise, Yoh et al. (2003) found that the attitude of people are positive toward the internet clothes shopping influenced clothes buying intention by the use of the internet.

The effects of attitudinal and demographic factors on intention to buy pirated cds

This study examines the impact of attitude toward piracy on intention to buy pirated CDs using Chinese samples. Attitude toward piracy is measured by a multi-item scale that has been shown to have a consistent factor structure with four distinct components, namely, social cost of piracy, anti-big business attitude, social benefit of dissemination, and ethical belief. Our findings reveal that social benefit of dissemination and anti-big business attitude have a positive relationship with intention to buy pirated CDs while social cost of piracy and ethical belief have a negative relationship. Among these components, ethical belief tends to most strongly predict intention to buy pirated CDs. Demographic variables such as gender and age also help explain the respondents’ intention to buy pirated CDs. In addition, those respondents with experience of buying pirated CDs would tend to be more likely to buy pirated CDs than those without such experience. The results are dis cussed with a view to helping copyright businesses to effectively suppress piracy, and directions for future research are suggested.

2.2 CONCEPTUAL FRAMEWORK

Factors influencing attitude:

In this research there are three factors which are influencing consumer attitude towards pirated products i.e. price, social influence, risk averseness and brand status. These three variables are important because they can change consumer attitude towards pirated products and consumer tends to behave with respect to the presumed behavior.(Wilkie, 1994) “Attitude” means a cultured tendency to react to an entity in always favorable or unfavorable way. It considerably plays a vital role in consumer behavior. We cannot observe Attitudes directly; they are in the psychological locations that marketers must try to understand inferring through research actions. Attitude in the direction of a behavior is submitted as person’s positive or negative assessment of a pertinent behavior and is compiled of a person’s most important faiths holding the perceived consequences of executing behavior.

Price:

Consumers are very price conscious and they want maximum value at low price, so the price of any product can play a vital role in the demand behavior. If the price of the product is very high then consumers will compare the benefits/quality with the price and evaluate the product, so keeping in the mind price strategy with respect to target audience manufacturer set the price of the product which will match the functional benefits of the product.

Brand status:

Brand name is the an important aspect which influence consumer attitude towards an product, the consumer want to associate his/herself with a branded product that will portray his image in the society.

Social influence:

Social class represents one’s position in the society that what is his lifestyle, how he lived in that society with respect to the other members of the society, the persons want to be associated with the class in society which is known for their prestige and Status. In social class person get influence through family members, friends and peers who support them for the use of pirated products.

The attitude of the consumer is affected by different factors. In This research attitude towards the pirated product is taken as dependent variable and there three factors which are taken as independent variables because consumers are influence mostly because of these three factors i.e. price, social influence and brand status. Most of the time consumers are price conscious and they want maximum value at low prices which develop their attitude towards those products which belong to higher class in the society. Other reason to buy the pirated product is to maintain the status in the society by using the products which are the copy of the branded products. Social influence can also affect the consumer attitude towards the pirated products to use them because they want to be recognized and want the acknowledgement of others that they belong to the class which is known for the prestige in the society but they cannot afford that product so in order to maintain their status they tend towards the pirated the products.

Findings and implication:

Findings of the studies show that the people are cost effective and price of products play a vital role in the formation of consumer attitudes towards the pirated products; therefore it is essential for the manufacturer and marketers to be paying special attention on pricing the product and make it available at low prices. Marketers when formulating the strategies must consider the entire income group and then set the prices accordingly. In this way the consumption of pirated products will be reduced. Social influence has significant impact on the consumer’s attitude towards the pirated products that the younger people found to be more inclined towards the pirated products. It is found that people are branding conscious and they want to use the branded products to show their status in the society.

Piracy is described as the producer of copies that are in the same way packaged, together with trademarks and labeling, copied so as to appear to a consumer the real article (Kay, 1990 (Kay, 1990 Piracy is an task that bears a much superior risk to any country, social and cultural fit being than typically renowned by the purchaser. It’s a serious dilemma that it is affecting the product whose brand name is alike, and moreover the product which needs research and development to produce the product. (Nash, 1989).

During the past of decades, Pakistani’s national exchequer loss the revenue on your own goes ahead of 10 billion rupees annually. Nevertheless, the present losses by dint of to the piracy and counterfeiting can exceed our thoughts. It is acknowledged that allowing a fair competition will allow the country to maximize efficiency and production; where competition is abridged as a result of counterfeiting, smuggling, piracy, and cartelization restrain the s country from acquiring the real potential growth. there are many sectors that are become the victim of piracy include manufacturing of goods, electronic devices, toys pharmaceuticals; films, publishing, as well as software; textiles and footwear, drinks ,electronic devices, luxury items, tobacco, agro-chemicals in Pakistan. There are many countries the sale of pirated products are frequent. For instance, in Africa pharmaceuticals companies are the major target for counterfeit and the Middle East is a substantial market for counterfeits of automotive parts. Conversely, the counterfeits of cigarettes, are everywhere in the world. Piracy of software, movies, and music, appears to be noteworthy in most of the countries, particularly rising countries. We have the most common examples of luxury brands that are counterfeited comprise Rolex, Chanel, Calvin Klein, DKNY (Nia and Zaichkowsky, 2000). The designs and trademarks are linked is directly copied by the profiteers. In Chinese market the trade of pirated product is proved to be profitable, as one-time it noted as the world’s third major consumer of accessories high-end fashions, and other luxury products (Ernst & Young China, 2005; Chadha, 2007). The coping of the luxury brand for profiteers are easy, simple and they can acquire the methods of low manufacturing costs (Shultz and Soporito, 1996; Gentry et al., 2006). In addition; consumer of the pirated products are increasing day by day because they can afford the pirated product and by the use of pirated product they can portray their status which gives them the way to live the life style of upper segment. (Chang, 1998; Eisend and Schuchert-Gu¨ ler, 2006). Manufacturers of the original products are thoughtful of these development and leave no possibility accessible to leap guarantee for the status of their brand with profitably (e.g., Green & Smith, 2002; Kay, 1990; Nash, 1989; Wee, Tan, & Cheok, 1995). The expansion of fake can be renowned to the lift in world trade and shows potential new markets, the raise in commodities and also fast speed technology progress, that are worth counterfeiting (Wee et al., 1995; Bloch et al., 1993; Alcock et al., 2003).

The studies which has been done on the consumers attitude toward piracy were insecurely created and ambiguous (Ang et al., 2001; Tom et al., 1998; Wee et al., 1995). In the majority studies, attitude was calculated by diverse sets of statements. for instance, to compare the dissimilarity in attitude between those who are the users of pirated products or not Tom et al. (1998) used a set of 13 accounts while Ang et al. (2001) engaged a completely different set of 12 statements. However, the arrangements of these statements were not confirmed and their association to further predictive variables was not examined i.e. intention to buy. Most importantly, attitude toward piracy is considered as generic instead of construct.

There are studies conducted to examine Relationship between attitude and behavioral intentions. Berger et al. (1994) suggested that managers’ attempts should be focused on changing consumer attitudes before directing their behavioral choices. Product-class involvement characterizes the normal attention of a consumer on product category every day basis (Wilkie, 1994; Zaichkowsky, 1985), which may be a variable that importantly temperate consumers’ purchase intents. The product which has the low involvement of consumers tends to purchase those recklessly, despite of their original attitude for the product attributes. on the contrary, the product with a higher consumer involvement, then consumer spend his more time and energy for the purchase of that and therefore make more balanced decisions.

1.2. OBJECTIVE OF REPORT

The objective of this report is to study the factors that influence consumer’s attitude towards the purchase of pirated products.

The report also examines the relationship between psychographic variables and attitude of consumer towards pirated products.

This report also finds out the consumer attitude who seeks out pirated products.

1.3. IMPORTANCE OF SUBJECT AREA:

The importance of my subject area is to explore the variables that influence consumer’s attitude towards pirated products in the market. It will help the marketers to understand the psychology of the consumers that why they purchase pirated products. This will also help policy makers and practitioners to formulate more effective strategies to diminish the pirated problem. The research in this report is useful for the marketer to realize the consumer’s attitude who buys pirated product

CHAPTER 2 LITERATURE REVIEW

2.1 THEORETICAL FRAMEWORK

A review on behavior/ ethical research was taken to examine the factors influencing attitude towards digital piracy. To examine various kinds of behavior together with ethical/unethical behavior, Theory of Planned Behavior had used (Randall and Gibson, 1991). The Theory of Planned Behavior states that purpose to carry out a behavior is stands on persons attitude towards the behavior, the social influence to do/not to do the behavior (Subjective Norms), and persons have power over doing that behavior (Perceived Behavioral Control) (Ajzen 1991). There is a need to validate widening the TPB with features from the ethics literature from the moment when the ethics literature frequently observes ethical judgment/evaluation and not attitudinal judgment. By the use of TPB we can study one kind general behavior. The attitude build is the next one that is match to ethical judgment in the model of TBP. Equally ethical judgment and attitude were used to clarify behavior, and ethical behavior was explained in the TPB model (Flannery and May, 2000). The judgments or evaluations both lead to intention, which is a kind of behavior itself. Ethical judgments and Attitude are the different, yet what ever influences attitude can also affects ethical decision-making. To examine the factor which is most consistently and repeatedly examined important factor of attitude, and decision-making, three factors were found as go after- individual attributes, moral obligation and moral judgment. Attitude is the one of the important part of TBP. In most of the cases it is found that it is the best predictor of intention.(Allport, 1935).

Price consciousness

Lichtenstein et al. (1993) price plays a vital role in effecting consumer behavior and this attribute is broadly studies in literatures. Lichtenstein defined seven price- related factors and alienated them with respect to consumer’s positive and negative behavior for the purchase. The number of theories suggested the people use number of price experiences and make the ranges of upper and lower limits on the basis of prices. the function of market price is the focus of attraction that it has a position with in that range which the buyer is willing to pay for. The price reference is defined which has the impact on the purchasing behavior of the buyer. Then adaptation theory named as pricing theory, the internal aspect is that it depends upon the buyer’s experience that how willingly he is ready to pay for the price on the basis of his past experiences.

Rajendran and Tellis (1994) co examined that the lower the price the more we can predict the price reference, but the past experience shoed that the brand name is the important consideration for the actual price. The truth is that the authorization channel is used as a reference price credible for the consumers, so in order to attract the consumers’ gray market take the advantage of low prices.(Bucklin, 1993) found that at lower prices 64% of the parallel imports were selling, so the researcher argued that in gray market price difference is an important factor. When both channel gary market and an authorized channel sell their goods simultaneously then consumers prefer the lower price goods in the market.

(Bloch et al., 1993) The main significant criterion in the purchase of pirated brands emerges to be price. Counterfeits provide incredible cost savings to customers even though with a few compromise in quality, it’s perceived worth is high. Therefore, pirated goods might be seen as alternative rivalry, with the benefit of a considerable reduction on current prices. Facts have also revealed that when a counterfeit has a distinct price benefit above the original product, consumers will choose the counterfeit.

Price-quality inference

The belief of the consumer that at high price the quality of product will also be high and at low price the quality of the product will be low is very vital theory which determines the consumer’s behavior. (Ordonez, 1998) defined that consumer when selecting a product fist evaluate the price of that product with their respective quality and examined that the price which is being charged for that product is with respect to that product is correct or not. The research helped that price expectancy model and proposed that as the correlation between the price and quality increased with respect to the price and quality of the product.

Tellis and Gaeth (1990) explained that how consumers make choices on the basis of information. The price quality association is important reasonable factor for the deceptive quality which effect consumer’s behavior.

Monroe and Krishnan’s (1985) explained in the price quality model that price positively effect the perceived quality and Wahlers’ (1999) suggested the same relationship between price and perceived quality in extended model. For durable goods, Brucks et al. (2000) stated that there are six dimensions of quality, versatility, prestige durability, ease of use serviceability, and performance. On the basis of different quality dimensions price effect consumer’s perception of quality. And the support was not found in some of the new research.

In a study performed to test the effect of store name, brand name and price discounts on consumers’ evaluations and purchase intentions, Grewal (1998) revealed that the effect of price discounts on a brand’s perceived quality was minimal.

Risk averseness

(Bloch et al., 1993) there is a risk involve in buying the counterfeit product that can be caught by the authorities for buying replica products. Some purchasers of the fake products think that buying fake would not completely hurt the original manufacturer, society and the industry in which they are making their products. The user of the counterfeits product thought that they would enjoy the same product benefits at lower prices because they couldn’t afford the original prices of the product. Social means that it can avert the consumer behavior. This is informational that consumer behavior changes when he seeks others approval for the use of the products; and we can say that it is normative when others approval can affect the consumers behavior.

Peter and Ryan (1976) risk is also there when the consumers selecting the product for certain brand multiplied by the adverse effect which he can face by the use of that product. (Batra and Sinha, 2000) explained that committing the decision to use the product and the level of problem which he face by that mistake. Havlena and DeSarbo (1991) defined that various character of perceived consumer risk, inimical, safety, time/opportunity, involving performance and psychological dimensions. The consumer behavior can be influenced by the perceived risk.

Mitchell (1992) explained that the five stages of the consumer decision making can be influenced by the perceived risk, which starts from recognizing the problem, the search for information before the purchase of certain product. Evaluating the alternatives, making the purchase decision and last one is post-purchase behavior of the consumers. (Lowe and McCrohan, 1989) Two types of risks are associated when consumers purchase the ancient market goods. First the opportunity for the black marketers increases the old market products which are known as counterfeits goods. Consumers who buy goods from the old market have to risk a higher chance of buying counterfeit products and paining different kinds of risk involving performance, financial psychological, social, safety, and time/opportunity risk. The next risk arises in the post-purchase stage, including failure of guarantee and service from the lawful distributor. Several brand managers must ask their approved distributors not to give services at all or augment service charges to old market goods, considerably lifting consumers’ risk and cost to stop gray marketers’ free-ride. Therefore, consumers’ risk diverseness’ influence their attitudes in the direction of old market goods.

(Muncy and Vitell, 1992) Consumer ethics have been explained as, “the ethical principle and customary that direct behavior of persons or groups as they get, utilize and organize of goods and service”. (Muncy and Vitell, 1992) Nevertheless, purchasing old market goods appears not to infringe or nearly infringe any moral norm of consumers. (Vitell and Muncy, 1992) As in the old market, consumers lawfully buy favored branded manufactured goods from a retailer they wish, they do not naturally believe that their behavior hurts someone others, or that it is in some means immoral. Mathur (1995) measured the association between marketing ethics and the old market, but from the viewpoint of the supplier, which is not measured here.

Effects of gender and ethnicity:

The model identifies that normative beliefs also play a influential role in the improvement of attitudes. If a child’s civilizing environment give confidences, models, and strengthens reading, it would results a positive attitude. Gender-definite beliefs relating to what others imagine about reading might clarify constant findings that the attitude of girls are more positive than the boys (Anderson, Tollefson, & Gilbert, 1985; Askov & Fishback, 1973; Ross & Fletcher, 1989; Shapiro, 1980; Smith, 1990; Stevenson & Newman, 1986; Wallbrown, Levine, & Engin, 1981). The condition is confused, nevertheless, the truth that the girls be inclined as a group to do better than boys on aptitude procedures (Mullis, Campbell, & Farstrup, 1993). It possibly will be societal faiths guide primary to more positive attitudes in the direction of reading in girls, which on the other hand facilitate a benefit over boys in obtaining aptitude, and that this dissimilarity in aptitude then assists to bring about more optimistic attitudes among girls. Subjective norms can also be imposed on the Ethnic group about their reading. a small number of studies have observed this relationship, nonetheless. Saracho and Dayton (1991) accounted that along with a large section of playgroup children, African Americans leaned to hold more negative attitudes than Hispanics or Whites. in view of the fact that this study concerned children who had not however begun to learn to read, the increasing consequences of reading complexity cannot report for the distinction. The options that culturally convey beliefs might hinder the growth of positive reading attitudes ought to have more careful inspection.

Brand status:

(Martineau, 1968) The most important determinant of the individuals buying behavior is his or her the usage of the product which represents his social class which is not that much determine by the level of his or her income.

(Mellott, 1983) The social class which people get influence wants to associate his or her with that class. So that’s why they purchase the branded products which shows their status above and that brand express their wealthy position in the society so they tend to use that brands. If the brand status is an important determinant for them that show their position in the society and in the main while they cannot afford that brand so they tend to move more towards counterfeit products through which they associate themselves with the above social class.

Social influences

(Bearden et al., 1989, p. 474) The pressure of the society can influence the behaviors of person to follow the norms and values and as well as to break the rules by adapting the changes, that is consumer weakness that influenced his attitude. The weakness consumers have to enhance the value of his status and show his image by acquiring that product and brand which is not associated with his class. Their will is to match to the expectation of that class which he want to be, and seeks others expectation in his purchase decisions, and their focus is to learn by observing them and collecting the information regarding their attitude towards products and brands.

Bearden et al. (1989) suggests that susceptibility has two forms, first consumer have the susceptible about the information of the product opinion which he bought from other experts. So in these type of cases others perspective with respect to the quality of the product is critical, he is unaware of the product category which he bought. And the second is the normatively susceptible of the cons

It is the phase which is concern consumers purchase decision that is not based on experts’ opinions, but they have the expectation to impress others. Family members and the friends who have the knowledge of counterfeit products and they know the advantages which are associated with the original products and the disadvantages which are associated with the counterfeits products will influence the consumer behavior towards the drawback of counterfeit products. Same wise normative susceptibility is identified to have a negative influence on consumer’s attitude towards pirated products.

Unethical consumer behavior:

Shoham , Ruvio and Davidow (2008) Explained that piracy is the internal ethics and explained that past studies on ethics were found low, because it showed the impact on their behavior. The research was conducted on the software industry and results were found that now a day the software piracy is become very common and it is hurting all the ethical values. The person who are engage in the piracy and why they do so such act of piracy, in order to address them there should be system where they can be treated. It further explained that the Asian are more inclined towards software piracy than Americans, which is basically due to their culture difference. They defined that why consumer cheat if they really know about the pirated product, why he buy the soft ware which is illegal. Company is searching for the persons who can counter this occurrence and teach or give them knowledge about those consumers’ pirates. Though, being mythological, that type of persons is not available, and firms require using straight and tangible means to oppose current piracy. This research models consumers’ attitudes about the act of piracy as incomplete moderators between consumers’ ethical attitudes and piracy behavior.

Constructing identity through the consumption of counterfeit luxury goods

(Hilton et al., 2004), There is an increasing body of literature that examines the usage of counterfeits from various perspectives. Conventionally the most of the research were centered on the on ethical issues, the consumer socio-cultural traits facilitating strategies and counterfeiting for fighting counterfeits, Myles and Nusser, (2006). in addition, there is presently an increasing body of research examining the enthusiasms in the wake of the intentional usage of counterfeits (Wee et al., 1995; Cordell et al., 1996; Wilke and Zaichkowsky,1999; Nia and Zaichkowsky, 2000; Gentry et al., 2001, 2006; Wilcox et al., 2009). Our research means to enlarge effort on this area by looking at the relations among counterfeits’ usage, self-identity and social self-image. Persons might execute as actors in face of an viewers of major others, using supports and uniforms to produce a setting. In the conversation that appears to happen between the internal insight of the identity and the societal self-image brands might be used as signs to move sense (Grubb and Grathwohl, 1967; McCracken, 1986; Belk, 1988; Lee and Shavitt, 2006; Commuri, 2009). Customers might use counterfeits as a substitute of originals as the supports assisting them to persuasively take part in a role in face of a appreciated spectators. By aggressively following a preferred social self-image in the course of the exercise of fraud they also add to the building of their own self “Identities are basically relational” (Cherrier and Murray, 2007, p. 20). Can persons build a certain character in the course of the usage of counterfeits? May a positive consequence result from an morally problematic behavior? at the same time as Hesmondhalgh (2008, p. 330) disagreements that music away from its current image as a “optimistic resource for lively self-making” capacity also have a negative usage of counterfeit luxury products effect by generating capitalistic consumerism, we propose that usage of luxury brands’ counterfeits possibly will result in the building of a winning, gratifying self-image. We propose that from side to side their experiences in the purchase and usage of luxury products’ counterfeits consumers construct a self-concept imagining themselves as knowledge consumers who increases their economic assets, and also as delight loving persons who know how to boast fun. Moreover, subsequent on self-theory (Newcomb, 1956; Goffman, 1959; Strauss, 1959) we would attach that consumers of counterfeit luxury products utilize these to construct a social self-image by duping a pertinent spectators. They use the counterfeits products and show that they are using the original one’s, the users of counterfeits wanted to be recognized that they use the luxury product benefiting from their status impression and rejecting to give the original price of the luxury product. Therefore using counterfeits of luxury brands may provide persons a self-concept expressive function and an acquiring social function (Wilcox et al., 2009). The usage of luxury counterfeits give consumers with apparently opposing achieves. outwardly they permit them to signify the picture of a wealthy consumer, one that would logically belong to their inspiring class. Whereas the users of counterfeits are internally aware of possessing paid only a portion of the original price of that brand, think that they would make fool others to keep away from being exposed, and in the procedure experience the excitement of adventure.

Corporate Image and Product Similarity

(Hsieh, Pan, & Setiono, 2004)Corporate image signify a influential connection to brand image and buying behavior. Defined as buyer’s attitudes to a company, corporate image can make new viewpoint about a firm, which in turn builds consumer attitude towards product and product liking. Corporate image not only attach worth but also make a halo effect for all of a company’s products. In the perspective of counterfeits, the corporate image of genuine producers against counterfeiters plays an important role. Purchasing counterfeits may be consider harmful, as the risk incurred are assorted, and physical, psychological and social risks and ranging from financial, performance .

(Gürhan-Canli & Batra, 2004)To diminish these risks, consumers are liable to rely on information about the dependability of a company. Contrary to the original manufacturer, the counterfeiter is unfamiliar to the consumer. This makes it further complex to decrease perceived risk by relying on a producer’s goodwill, which is generally linked with superior functional performance. Corporate image was record as attitude toward counterfeiters. It signify that consumers give reason for the purchase of counterfeits throughout feelings of sympathy for small (counterfeiters) rather than large (original) manufacturers, based on the feeling that large companies are distant, overpowering, and socially isolated.

Attitude and purchase intention

(George, 2002) in past broadly investigated the traditional retailer relationship between attitude and purchase intention. (Shim et al., 2001) investigate in the context of internet that there is positive attitude towards internet shopping intention.

Lee (2003) also found positive relationship that the people have tended towards internet purchase through internet, by using the survey data of visualization, graphics and usability. Furthermore Kim et al. (2003) investigate that consumer who like online shopping had greater impact to purchase their clothing through internet.

Watchravesringkan and Shim (2003) also authenticated that there is a positive relationship between a positive attitude toward online shopping and online purchase intention centering on clothes. likewise, Yoh et al. (2003) found that the attitude of people are positive toward the internet clothes shopping influenced clothes buying intention by the use of the internet.

The effects of attitudinal and demographic factors on intention to buy pirated cds

This study examines the impact of attitude toward piracy on intention to buy pirated CDs using Chinese samples. Attitude toward piracy is measured by a multi-item scale that has been shown to have a consistent factor structure with four distinct components, namely, social cost of piracy, anti-big business attitude, social benefit of dissemination, and ethical belief. Our findings reveal that social benefit of dissemination and anti-big business attitude have a positive relationship with intention to buy pirated CDs while social cost of piracy and ethical belief have a negative relationship. Among these components, ethical belief tends to most strongly predict intention to buy pirated CDs. Demographic variables such as gender and age also help explain the respondents’ intention to buy pirated CDs. In addition, those respondents with experience of buying pirated CDs would tend to be more likely to buy pirated CDs than those without such experience. The results are dis cussed with a view to helping copyright businesses to effectively suppress piracy, and directions for future research are suggested.

2.2 CONCEPTUAL FRAMEWORK

Factors influencing attitude:

In this research there are three factors which are influencing consumer attitude towards pirated products i.e. price, social influence, risk averseness and brand status. These three variables are important because they can change consumer attitude towards pirated products and consumer tends to behave with respect to the presumed behavior.(Wilkie, 1994) “Attitude” means a cultured tendency to react to an entity in always favorable or unfavorable way. It considerably plays a vital role in consumer behavior. We cannot observe Attitudes directly; they are in the psychological locations that marketers must try to understand inferring through research actions. Attitude in the direction of a behavior is submitted as person’s positive or negative assessment of a pertinent behavior and is compiled of a person’s most important faiths holding the perceived consequences of executing behavior.

Price:

Consumers are very price conscious and they want maximum value at low price, so the price of any product can play a vital role in the demand behavior. If the price of the product is very high then consumers will compare the benefits/quality with the price and evaluate the product, so keeping in the mind price strategy with respect to target audience manufacturer set the price of the product which will match the functional benefits of the product.

Brand status:

Brand name is the an important aspect which influence consumer attitude towards an product, the consumer want to associate his/herself with a branded product that will portray his image in the society.

Social influence:

Social class represents one’s position in the society that what is his lifestyle, how he lived in that society with respect to the other members of the society, the persons want to be associated with the class in society which is known for their prestige and Status. In social class person get influence through family members, friends and peers who support them for the use of pirated products.

The attitude of the consumer is affected by different factors. In This research attitude towards the pirated product is taken as dependent variable and there three factors which are taken as independent variables because consumers are influence mostly because of these three factors i.e. price, social influence and brand status. Most of the time consumers are price conscious and they want maximum value at low prices which develop their attitude towards those products which belong to higher class in the society. Other reason to buy the pirated product is to maintain the status in the society by using the products which are the copy of the branded products. Social influence can also affect the consumer attitude towards the pirated products to use them because they want to be recognized and want the acknowledgement of others that they belong to the class which is known for the prestige in the society but they cannot afford that product so in order to maintain their status they tend towards the pirated the products.

Findings and implication:

Findings of the studies show that the people are cost effective and price of products play a vital role in the formation of consumer attitudes towards the pirated products; therefore it is essential for the manufacturer and marketers to be paying special attention on pricing the product and make it available at low prices. Marketers when formulating the strategies must consider the entire income group and then set the prices accordingly. In this way the consumption of pirated products will be reduced. Social influence has significant impact on the consumer’s attitude towards the pirated products that the younger people found to be more inclined towards the pirated products. It is found that people are branding conscious and they want to use the branded products to show their status in the society.

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