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A Descriptive Analysis Into South African Consumers' Intention To A descriptive analysis into South African consumers’ intention to purchase authentic luxury fashion brands versus counterfeit products by Leanne Lauren Manley submitted in accordance with the requirements for the degree of Master of commerce in the subject of Business Management at the University of South Africa Supervisor: Prof. J.A. Wiid Co-supervisor: Prof. M.C. Cant June 2013 Student Number: 4670-788-3 DECLARATION I declare that “A descriptive analysis into South African consumers’ intention to purchase authentic luxury fashion brands versus counterfeit products” submitted in fulfilment of the requirements for the degree of Master of Commerce in the subject of Business Management with specialisation in Marketing and Retail Management at the University of South Africa (UNISA), is my own work and that all sources utilised within this research study have been acknowledged by means of complete reference. ................................................ Leanne Lauren Manley June 2013 - ii - DEDICATION This masters dissertation is dedicated to my loving parents (Lorna and Derek Spolander), who have instilled in me the notion that through perseverance and positivity anything is possible and to my wonderful husband Wayne Manley – thank you for your unconditional love and support through it all. I could not have completed this without you. - iii - ACKNOWLEDGEMENTS I would like to take this opportunity to express my sincere gratitude to the following individuals who have played a pivotal role in the completion of this study: - To my family, for the encouragement you have given me to do the best I can. - My supervisors Prof. J.A. Wiid and Prof. M.C. Cant, for all your time, patience, support, guidance and encouragement. I could honestly not have asked for better supervisors. - The University of South Africa (UNISA) for the financial assistance. - Andries Masenge at the Bureau of Market Research (BMR) for your advice and expertise in the statistical field. - Hennie Gerber for conducting my statistical analysis. - Glenda Buncombe for editing this dissertation. - Jenny Seagreen for the layout and technical editing of this dissertation. - All the UNISA students that participated in the study. - My work colleagues for all your support and advice. “It is through taking baby steps, that we learn to run.” – Anon – - iv - ABSTRACT Counterfeiting is an illegal activity that continues to boom in the 21st century. Many research studies regarding counterfeiting undertaken in the past have had a strong focus on the supply side of the industry, whereas few studies look to consumer demand and even fewer towards consumer demand for counterfeit products in an emerging African market. The aim of this research study, therefore, was to provide a descriptive analysis of the South African consumers‟ intention to purchase authentic luxury fashion brands versus counterfeit products and secondly, to examine if various demographic groupings differ in their purchase intentions. In order to achieve the research objective, an extensive literary review was conducted on the global counterfeit problem with specific focus on the South African counterfeit industry. The concept and value of branding was highlighted, followed by a discussion on consumer behaviour in conjunction with the decision-making process and the consumers‟ intention to purchase. An empirical study was conducted with UNISA students residing within the areas of Gauteng, KwaZulu-Natal and the Western Cape through a mixed method approach. Qualitative research formed the first leg of the study and assisted in identifying past purchase behaviour of authentic and counterfeit luxury fashion brands. Once identified, these brands were then utilised in a quantitative survey to satisfy the research objectives. The results of this research study indicate that South African consumers‟ have a high intention to purchase authentic luxury fashion brands versus a low intention to purchase counterfeit products. Key terms: Marketing; counterfeit; non-deceptive counterfeit product; brands; luxury brands; brand value; fashion; consumer behaviour; decision-making; South Africa - v - CONTENTS CHAPTER 1: INTRODUCTION .................................................................... 1 1.1 Introduction ......................................................................................... 1 1.2 Purpose of the research study ............................................................. 1 1.3 Background sketch of the study ........................................................... 2 1.4 The research question ......................................................................... 4 1.4.1 Primary research objective ...................................................... 5 1.4.2 Secondary research objectives ............................................... 5 1.5 Significance of the study ...................................................................... 6 1.6 Research methodology ....................................................................... 7 1.6.1 Research design ..................................................................... 7 1.6.2 Sampling ................................................................................ 7 1.6.3 Pre-testing the research instruments ....................................... 9 1.6.4 Data collection ........................................................................ 9 1.6.5 Data analysis .......................................................................... 9 1.7 Limitations of the study ...................................................................... 10 1.8 Chapter outlines ................................................................................ 10 1.9 Summary .......................................................................................... 12 CHAPTER 2: IMPACT OF COUNTERFEITING .......................................... 13 2.1 Introduction ....................................................................................... 13 2.2 Counterfeit: Etymology and definition ................................................ 14 2.3 History of counterfeiting ..................................................................... 14 2.4 The growth of the counterfeit industry ................................................ 16 2.5 The counterfeit industry ..................................................................... 16 2.5.1 Driving forces behind the supply of counterfeit merchandise ......................................................................... 18 2.5.2 Major producers of counterfeit merchandise .......................... 18 2.5.3 Distribution of counterfeit merchandise .................................. 19 2.6 Counterfeit product destinations ........................................................ 21 2.6.1 Counterfeiting: A global perspective ...................................... 22 2.6.2 The attraction of Africa for counterfeiters ............................... 23 2.7 Counterfeits: The South African market ............................................. 24 2.7.1 Demand for counterfeit merchandise ..................................... 26 2.7.2 Driving forces behind the demand for counterfeit merchandise ......................................................................... 27 2.7.3 Major counterfeit merchandise .............................................. 27 2.7.4 The impact of counterfeiting on society .................................. 29 2.8 Summary .......................................................................................... 31 - vi - CHAPTER 3: BRANDS AND BRANDING .................................................. 33 3.1 Introduction ....................................................................................... 33 3.2 Origin of branding ............................................................................. 34 3.3 The difference between a commodity product and a branded product ............................................................................................. 35 3.4 The concept of branding .................................................................... 36 3.4.1 Branding defined ................................................................... 37 3.4.2 Brand elements .................................................................... 38 3.5 Components of branding ................................................................... 40 3.5.1 Brand identity ........................................................................ 41 3.5.2 Brand image ......................................................................... 42 3.5.3 Brand positioning .................................................................. 43 3.5.4 Brand equity ......................................................................... 43 3.5.4.1 Brand awareness .................................................. 45 3.5.4.2 Brand associations ............................................... 46 3.5.4.3 Perceived quality .................................................. 46 3.5.4.4 Other proprietary brand assets .............................. 47 3.5.4.5 Brand loyalty ........................................................ 47 3.5.5 Brand value .......................................................................... 47 3.6 The importance of branding ............................................................... 48 3.6.1 Branding as a point of contact ............................................... 48 3.6.2 The role of branding for the manufacturer .............................. 49 3.6.3 The role of
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