Effects Of Counterfeiting On Nike’s Brand Image And Consumer Purchase Intention

Background and Research Problem

Discuss about the Factors Affecting Young Consumers’ Intention to Purchase Original Brand/Product.

Luxury brands re observed to attain significant earnings along with effective brand equities. Popularity of such brands like Nike among the consumers facilitates them in attaining super profits. This is observed to be attained from the sales of the original branded products that make them major targets of counterfeiting (About.nike.com., 2018). Due to increased economic gains, duplicate offerings of exceptional luxury brands like Nike is deemed to contribute to 10% of the international trade. This is turned out to be a serious concern for luxury brands like Nike. It has been gathered that the international markets for the renowned brands was approximately $850 billion that indicates 7% growth from the previous year. Such growth can be attributed to spending of the brand lovers along with shifting of consumers between nations. It is also evidenced that trademark owners lost around $600 billion over a year because of the counterfeit offerings being readily accessible within the market (Baek, Byon Choi & Park, 2017). Other than observing drastic revenue losses along with counterfeiting, the renowned brands like Nike results in negatively impacting the brand image within the market that cannot be quantified in monetary terms. Purchase of the original brand or product will decrease at the time brand equity of the branded products does not signify a lifestyle or image rather than the real functionality (Chu, Chen & Sung, 2016). Luxury brands like Nike also indicate drastic brand equity devaluation for which the original brands like Nike tends to lose more than 10% of the brands top-line sales because if the product counterfeiting (Chiu, Kim & Won, 2018). In a situation where luxury brands like Nike is renowned and is advertised greatly for indicating a particular image or social status, it is likely to be a target for the manufacturers to make duplicate products and hamper sales of original products offered by Nike. The objective of this research paper is to conduct a research on analyzing the factors that impacts purchase intention of young consumers regarding purchasing original products of a brand. In investigating the same, Nike Company has been selected based on which the consumer purchase intention factors will be evacuated. The paper will also focus on explaining the research methods that will be suitable to be employed in order to test the hypotheses set for the research.

The process of compromising purchase of original products from renowned brands is present over a long time and for this reason, counterfeiting has been deemed as a serious concern over a long time (Davis, 2017). The products offered by the original brands like Nike is facing serious problem of attaining increased consumer purchasing intention. This is for the reason that purchasing the counterfeit products rather than from original brand can be associated with increase in international trade and mobility. Compromise in purchasing gathering original products is observed to generate serious issues (Dixon, Nordvall, Cukier & Neumann, 2017). Such issues include threatening the original business owners to slow down their innovation that is deemed as critical aspect of the Nike brand’s as well as organization sustainability. This further has drastic impact on the national growth at a macro level. Considering such research problem, the objective of this research is to analyze the consumers purchase intention of the original luxury brand that is Nike verses its counterfeit products.

Research Questions and Objectives

Along with carrying out research on this marketing issue, certain independent variables will be takeninto consideration that includes personal characteristics and consumer attitudes (Dong, Nam & Lee, 2015). These variables are deemed to have a drastic impact on the consumers purchase intention to purchase original Nike goods or counterfeit goods. In order to increase the sake of original products offered by Nike, the marketers of the company requirerealizing the major drivers of consumption along with consumer purchase intention in the nation. The counterfeit industry is deemed to be worth 362 billion and it is also recorded that Nike is among the top ten counterfeited brands all over the world (Han&Guo, 2018). This impacts the overall brand image that can further affect its brand equity and consumer purchase intention. Marketers need to take effective decisions to deal with this issue as existence of fake Nike merchandise within market results in decreased revenue and profit generation for the company.

The research questions those are to be answered through investigating the factors that impacts the purchase intention of the young consumers of the selected brand Nike are explained under:

• What are the previous purchases that impacts consumers purchase intentions of original brandedproducts of Nike?
• To what extend the consumers have positive attitudes towards the hedonic benefits of original Nike brand products that affects their purchase intentions?

The research objectives set in investigating the factors that impacts young consumers purchase intentions regarding the original products of Nike Brand are explained below:

• To analyze the previous purchases that impacts consumers purchase intentions of original brandedproducts of Nike
• To evaluate the consumers positive attitudes towards the hedonic benefits of original Nike brand products that affects their purchase intentions

Lang, Zhang and Zhao, (2018)revealed a positive relationship with the consumer intentions in consideration to counterfeits and Nike original products. The consumers those purchase Nike counterfeit products attains a positive propensity to purchase it original products in future when they are economically sound to attain products of original Nike brand. In contrast, Lee, Jackson, Miller-Spillman and Ferrell, (2015)stated that the consumers those purchase original Nike products attains a negative propensity to purchase counterfeit goods. This is due to the reason that they perceive counterfeit goods to be inferior relied on the experience of the original brand. Therefore, once they financially afford to purchase originals they deem to have the purchase intention for such products In contrast, the gains of the original Nike brand include increased awareness as these consumers have an intention to purchase original productsLu and Xu, (2015). As the Nike brand is highly symbolic, consumers thesecannotafford to purchase original Nike products tends to use counterfeit brands in demonstrating the similar image as original products of the brand.

H1: Previous purchase of counterfeit products are positively reacted with consumer intention to purchase counterfeit product with perceived quality

Maloney, Lee, Jackson and Miller-Spillman, (2014)revealed that the consumers’ previous purchases for the original Nike products can be anticipated relied on their previous purchase behavior. This can turn out to be important for the marketers for anticipating the purchasing behaviorsof particularmarket segment. Meyer, Gettelman and Donohue, (2015)evidenced that the important predictor of consumer behavior is intention as it indicates their cognitive readiness to get involved in a behavior and it is the vital indicator of understanding behavioral trends of consumers. It is gathered that repetition of a behaviordevelops habit and frequency of identical behavior is important with a perception that the individual will perform the similar purchase action in future. Nam, Do Kim and Kwon, (2016)revealed that counterfeit products are perceived as novelty products because of its inexpensive nature that attributes to the frequency of the consumers purchase intention.

Factors Affecting Consumer Purchase Intention

H2: Previous purchases of original Nike Products are positively related with consumer intention to purchase originals based on materialism

Nam, Dong and Lee, (2017)indicated that the consumers those purchase counterfeits realizes the risk of their individual image being hampered because of the embarrassment they might feel if they are caught in the society for purchasing the counterfeit goods instead of original Nike goods. Phau, Teah and Chuah, (2015)explained that self-concept is a theory that indicates self esteem of a consumer along with the value in which people perceive themselves. For this reason, purchase intentions are deemed to be linked with a particular lifestyle that is represented by the brand image or personality. It symbolizes the product rather than the functionality associated with such product that facilitates the customers to develop a self-image and facilitates them to get linked with a particular lifestyle represented by the brand. Sasmita and Mohd Suki, (2015)evidenced that the more number of consumer perceive that brands like Nike can enhance their self image the more will be their purchase intention towards the original products.

H3: Perceived future social class is positively related with consumer intention to purchase original Nike products

The target populations that will be selected in investigating the purchase intention of the consumers towards acquiring the products from original brands like Nike are young consumers of Nike brand. This selected population will belong between the age group of 19 to 28 years that reside within Malaysian regions (Vajarodaya & Fernando, 2017). As the age group of 18 years is an official adult age so any age group falling below this range will not be selected in the selected population. Certain Malaysian regions such as Penang and Kuala Lumpur are observed to include a huge student population of 70,000 individuals. For this reason, selecting this sample population increases the chance of attaining increased access to theyounggenerationconsumers that belong to a diverse nationality. It is also believed that viewpoints from the young population of the distinct nationalities might greatly improve the outcomes of the research (Weiner, 2017). The youngconsumer that belongs to the local private universities is observed to belong to the middle and upper-middle income groups. For this reason, it can also be anticipated that this young consumer segment has the capability to afford a moderate budget to purchase the original product from Nike in Malaysian market rather then purchasing the brand’s counterfeit product.

Sampling is deemed to be a process in which the targeted respondents for the researcharechosen from a selected population. Sampling facilitates the researcherto select the most important primary data source to gather important information that is aligned with the research aim and objectives. Simple random sampling technique has been employed in order to conduct the survey with the selected young consumer groups(Vajarodaya & Fernando, 2017). This sampling technique will be employed in investigating the factorsimpacting young consumers purchase intention regarding acquiring the original products. Simplerandomsampling technique offers equal opportunity to all its respondents to get selected within the survey process. For this reason, quantitative data has been gathered through employing this sampling technique from a large population. It has been gathered that quantitativeevaluation requires relatively larger sample size in order to gather relevant data and evaluate the responses obtained from the respondents(Vajarodaya & Fernando, 2017). Considering the same, a sample size of 100 young consumer groupsof the brand Nike is selected. This sample size is selected in order to gain constructive viewing from them regarding their opinion towards purchasing original Nike products along with the brands counterfeit products available within the market.

Hypotheses and Insights

A properly structured close-ended questionnaire survey will be developed in order to gather valid data for the research. The questionnaire that will be distributed among the young consumers of Malaysia is deemed to be in the English language as this is employed by most of the domestic and international university students(Lee, Jackson, Miller-Spillman & Ferrell, 2015). This questionnaire will be distributed among the target participants through greatly reviewing important literatures and based on the researchproblem. The questionnaire will be segmented into three sections from A to C.

Section A will include questions regarding demographic information related with the survey respondents those areyoung Nike brand consumers. Four questions will ne asked in this section that will be regarding their gender, age, nationality and the university in which they study. Section B will include questions regarding the three independent variables that are the factors which impacts the young consumers purchase intention towards purchasing original products of Nike brand(Baek, Byon Choi & Park, 2017). Questions will be on the three factors such as perceived future social class, previous purchase experiences based on materialism and Existence of counterfeit products with perceived quality. Total 6 questions will be asked based on these independent variables in order to gather accurate viewpoint on these factors from the young consumers. Section C of the survey questionnaire will include questions on the dependent variable that is Purchase intention for original products. Total three questions will be asked to the young consumer survey participants for acquiring relevant knowledge on the reasons for which they prefer using original products from Nike. The close ended questionnaire will also include questions that will be answered by the respondents in the liker scale asked on their preferences ranging from 1 (Strongly Disagree/Very Unlikely) to 5 (Strongly Agree/Very Likely)(Lee, Jackson, Miller-Spillman & Ferrell, 2015).

Questionnaire data collection method will be employed in investigating the factors that are considered by the young consumers in their purchase intention decision for Nike Company. 100 questionnaires will be distributed to the target participants through both the online and physicalmedium. In order to gather valid responses, the questionnaire survey will be carried out in this research (Lee, Jackson, Miller-Spillman & Ferrell,2015). It will be made sure that all the young consumer group participants fully understand the questions mentioned within the questionnaire so that they can offer exact and desirable responses to all the questions. The potential respondents for the research will be reached at random and will be informed for the reason that the participation is totally voluntary. The hypotheses that will be set in the researchwill be tested through employing the regression and correlation analysis for training significant relationship between the dependent and independent variables(Baek, Byon Choi & Park, 2017).

Both primary and secondary data collection technique will be employed in this research without just focusing on a specific option. The primary data will be used in this researchthrough questionnaire technique. In addition, the secondary data related with the research subject will be gathered from the authentic secondary data sources that includes books, journals along with the company websites. Such secondary data gathered will facilitate in evaluating the recent trend of the recognized research problem(Baek, Byon Choi & Park, 2017). The data collected will imply the fragment of information that can be analyzed in order to gather relevant data with respect to the research findings. The quantitative data offers relevant information on the subject of the human perception inclination in consideration to specific research information. For this reason, quantitative datacollection through questionnaire requires a bigger sample size for data analysis(Lee, Jackson, Miller-Spillman & Ferrell, 2015). In consideration to same, the young consumers of Malaysia are selected as target respondents for evaluating the factors that impacts their purchase intention regarding original products of Nike.

References

About.nike.com. (2018). About Nike – Company Profile. [online] Available at: https://about.nike.com/pages/company-profile [Accessed 11 Apr. 2018].

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