The Influence of Lawfulness Attitudes on Consumers - ANZMAC

<strong>The</strong> <strong>Influence</strong> <strong>of</strong> <strong>Lawfulness</strong> <strong>Attitudes</strong> on Consumers' Willingness to Purchase
Counterfeit Goods
Anas Hidayat, Katherine Mizerski, Edith Cowan University
Abstract
<strong>The</strong> selling <strong>of</strong> counterfeit products has long been recognised as a problem particularly in
Asian countries. Asia is home to a number <strong>of</strong> big emerging markets (BEM’s) such as China,
India, Indonesia, and South Korea (World Bank 1995), whose population and purchasing
power are rapidly expanding and promise an ever richer consumer base for IP products.
However, these emerging markets are also home to some <strong>of</strong> the world’s most virulent
counterfeit good producers (Callan 1998). <strong>The</strong> current study investigates Indonesian
consumers' general lawfulness attitudes and how this affects their willingness to buy known
counterfeit products. Results indicate that willingness to buy a high involvement counterfeit
branded product was inversely related to general lawfulness attitudes and attitudes towards
counterfeit purchasing. However, there was no significant relationship between general
lawfulness and attitudes towards purchasing in a low involvement situation.
Introduction
Counterfeiting is one <strong>of</strong> the fastest growing industries in the world (Alcock et al. 2003).
Actual losses are extremely difficult to predict because reliable counterfeit figures for each
industry are rare (Callan 1998). Estimates, however, place the losses around $200 billion for
US firms alone (Jacob et al. 2001; Yao 2005), with the estimate <strong>of</strong> worldwide sufferers
ranging from 5 to 10 per cent <strong>of</strong> world trade (Alcock 2003; Green and Smith 2002; Jayakar
2003). This estimate does not include counterfeit products that are produced and sold locally.
Taiwan, South Korea, Hong Kong, Singapore, Thailand, Philippines, Indonesia, Brazil,
Colombia, Mexico, and Nigeria have been named as some <strong>of</strong> the worst counterfeiting
<strong>of</strong>fenders. <strong>The</strong>se countries seem to utilise counterfeiting as a de facto national industrial
development strategy (Jennings 1989). Recently China, along with other countries such as
Taiwan and Singapore, enacted tougher laws/regulations against counterfeiting (Globerman
1988). Nevertheless, one problem in the development <strong>of</strong> domestic policies regarding
counterfeiting is the absence <strong>of</strong> a uniform definition <strong>of</strong> the practice. As a consequence, the
existing laws/regulations have rarely been enforced with an aggressive approach that would
create fear <strong>of</strong> further infringement (Johnson 2001/2002).
Consumers, however, are the actual force behind this counterfeiting trade (Chan, Wong and
Leung 1998; Cordell et al. 1996). Miller (1999) notes that the main problem <strong>of</strong> the demand
side is clearly an issue <strong>of</strong> consumer misbehaviour. Such behaviour is potentially harmful to
business (Harvey and Ronkainen 1985; Globerman, 1988; Olsen and Granzin 1992, Miller
1999), the consumers themselves (Harvey 1988; Dillon 1989; Pinkerton 1990), and society as
a whole (Stotland 1977). Behaviour leading to the consumption <strong>of</strong> counterfeit products
directly contributes to legitimate manufacturers' loss <strong>of</strong> reputation, loss <strong>of</strong> pr<strong>of</strong>its and loss <strong>of</strong>
job. Consumer demand becomes the counterpart to illegal acts on the part <strong>of</strong> the makers and
sellers. Low ethical standards may be the key variable that breeds unethical behaviour (Chan
et al. 1998). However, consumer involvement may be either as victim or as willing
collaborator.

<strong>The</strong> current study focuses on the consumer as a willing collaborator. Based on the review <strong>of</strong>
previous literature, there are several variables likely to influence willingness to buy
counterfeit products. This paper reports on one <strong>of</strong> these variables, lawfulness attitudes, and
examines how consumers' attitude towards lawfulness affects their willingness to purchase.
Willingness to Purchase Counterfeit Products
Willingness to buy counterfeit products is considered a non-normative behaviour. Nonnormative
behaviour includes criminal <strong>of</strong>fences (e.g. shoplifting or changing price tags) and
passive <strong>of</strong>fences (e.g. failing to correct a favourable billing error or price tag error) (Jolson
1974). . Consumer's attitudes toward non-normative behaviour vary according to the type <strong>of</strong>
<strong>of</strong>fence (Cordell et al. 1996). Further, tolerance <strong>of</strong> and participation in this type <strong>of</strong> behaviour
is <strong>of</strong>ten justified by neutralization, whereby the executor removes himself from responsibility
by deflecting blame to the victim (DePaulo 1986; Sykes and Matza 1957). This moral
permissiveness also reflects a double standard, whereby consumers tend to expect businesses
to have higher standard than they themselves are willing to follow (Chan et al. 1998). Thus,
the moral double standard can explain consumers’ attitudes and behaviours in counterfeit
trade activity. For example, when a consumer purchases a counterfeit they do not view this as
criminal behaviour. However, by purchasing, they are supporting a criminal activity - the sale
<strong>of</strong> counterfeits (Cordell et al 1996).
Cordell et al. (1996, p.42) argue that ‘consumer participation in a counterfeit transaction
supports illegal activity’. <strong>The</strong>refore, ‘the linkage between a consumer’s respect for general
lawfulness and the willingness to buy counterfeits could explain the consumer participation in
the activity’. This activity was supported by Kohlberg’s (1976) moral competence theory.
This theory suggests that personal behaviours are dictated on the basis <strong>of</strong> a subjective sense <strong>of</strong>
justice (Cordell et al. 1996).
Product Involvement
A review <strong>of</strong> the involvement literature has looked at a number <strong>of</strong> different objects, and
provided a number <strong>of</strong> different outcomes (Zaickhowsky 1985). Involvement with a product
has been hypothesised to lead to greater perception <strong>of</strong> attribute differences, perception <strong>of</strong>
product importance, and greater commitment to brand choice (Howard and Sheth 1969).
When a consumer buys a product, his/her attitude towards the product may differ from his/her
attitude towards another product, depending on the category <strong>of</strong> the product (Field 2000).
Product involvement also influences the extent <strong>of</strong> the decision making process. <strong>The</strong> level <strong>of</strong>
product involvement affects the process <strong>of</strong> a consumer’s decision making (Miquel and
Caplliure 2002). Higher levels <strong>of</strong> involvement should lead to better comprehension <strong>of</strong>
information presented regarding a product and motivate consumers to produce more elaborate
meanings about product information (Celsi and Olson 1988; Hitchon and Thorson 1995).
Consumers with high involvement will be more likely than those with low involvement to
attend to and comprehend product information (Baker et al. 2002).
Empirical studies on this issue have noted that highly involved individuals are expected to use
more choice criteria (Quester and Smart 1998), to search for information on a wider range <strong>of</strong>
product attributes, and to process information in greater detail (Zaickhoswky 1985; Edgett
and Cullen 1992). Conversely, consumers with low involvement would not conduct an
extensive search for information, make few comparisons among product attribute, perceive

that brands within a given product class were homogeneous, and show little brand preference
(Zaickhowsky 1985). <strong>The</strong>refore, it seems logical that product involvement has favourable
effects on evaluation <strong>of</strong> product attribute cues toward such willingness. Lee and Lou
(1995/1996) also found that extrinsic cues effects were not universal; rather they are
moderated by consumers’ individual differences such as product involvement.
Based on the previous research, the proposed study speculates that attitudes toward
lawfulness will have a significant influence on consumers’ participation in counterfeit trade,
thus lawfulness attitudes will predict willingness to purchase a counterfeit product. However,
because buying counterfeits is not illegal, and because vested interest has been shown to
moderate attitude-behaviour consistency (Sivacek and Crano 1982), this study will distinguish
between general lawfulness attitudes and attitudes toward the act <strong>of</strong> purchasing a counterfeit.
Furthermore, it is posited that willingness to purchase will be influenced by involvement
level. <strong>The</strong>refore,
H1: Consumers’ willingness to buy a non-deceptive counterfeit branded product will be
inversely related to their lawfulness attitudes.
H2: Consumers’ willingness to buy a non-deceptive counterfeit branded product will be
inversely related to their attitudes toward the legality <strong>of</strong> purchasing a counterfeit product.
Method
Sample
<strong>The</strong> sample consisted <strong>of</strong> 160 Indonesian post-graduate business students (100 in Yogyakarta,
Indonesia and 60 studying in Western Australia). Post-graduate students were chosen as they
are viewed as being emotionally mature and independently responsible for any consequences
when they decide to buy counterfeit products (Cordell et al 1996; Field 2000). In addition,
they already have work experience, have their own money to buy counterfeit products, and
are familiar with branded products.
Stimuli
<strong>The</strong> products used in the study included two product involvement categories, with each
category two branded products - one well known and the other a fictitious brand. <strong>The</strong> selected
products satisfy three criteria; 1) they are common and well known branded products in
Indonesia, 2) they are used by both sexes, and 3) they are clearly differentiated in terms <strong>of</strong>
product involvement (Cordell et al. 1996). <strong>The</strong> branded products used in this investigation
are Rolex wristwatches and Ray Ban sunglasses. <strong>The</strong>se products had previously been used by
Field (2000). <strong>The</strong> wristwatch represents a high involvement product with the sunglasses
representing the low involvement product. <strong>The</strong> current study re-tests the product involvement
categories using Zaichkowsky’s involvement measurement. <strong>The</strong> results agree with those
found by Field.
A 2(high involvement, low involvement) x 3 (price, retailer, brand) factorial design was used
to test the hypotheses. Table 1 provides the design.

Table 1
Treatments <strong>of</strong> Experimental Design
Three factor mixed factorial experiment with two within subjects treatment factors
Treatments Counterfeit Brand
Wristwatch Sunglasses
Famous Brand Unfamiliar Famous Brand Unfamiliar
Brand
Brand
Brand Rolex Ronwood Ray Ban Cartisa
Retailer Plaza
Indonesia
Plaza Indonesia Plaza Indonesia Plaza Indonesia
Plaza Manga Plaza Manga Plaza Manga Plaza Manga
Dua
Dua
Dua
Dua
Discounted 1/8 price <strong>of</strong> 1/16 price <strong>of</strong> 1/8 price <strong>of</strong> 1/16 price <strong>of</strong>
Price normal price normal price normal price normal price
Measures
Attitude towards lawfulness was measured using Ridquist and Sletto's (1936) lawful scale. A
factor analysis was performed on the measures with the resulting factor consisting <strong>of</strong> four
items. This factor was retained for further analyses. Attitude toward purchasing was derived
from two questions - 1) should buying a counterfeit product be illegal, and 2) should selling a
counterfeit product be illegal? This resulted in two measures. <strong>The</strong> first measure was simply
the raw score for the first question with the second measure calculated as the difference
between the response to buying and selling. This latter score was used as a measure for
attitude toward the legality <strong>of</strong> buying.
Results
<strong>The</strong> hypotheses were tested using logistic regression. Table 2 provides the results.
Table 2
Variables in the Equation for Wristwatch (HIP)
Items
B S.E. Wald df Sig. Exp(B)
Respect for general law -.402 .238 2.861 1 .09 .67
Respect for legality -.282 .138 4.194 1 .04 .75
Constant 1.615 .789 4.184 1 .04 5.03
Variables in the Equation for Sunglasses (LIP)
B S.E. Wald df Sig. Exp(B)
Respect for general law -.246 .226 1.19 1 .28 .78
Respect for legality .169 .135 1.58 1 .21 1.18
Constant -.103 .706 .021 1 .89 .90
a Variable(s) entered on step 1: Respect for general law, Respect for anti-counterfeiting
<strong>The</strong> current study hypothesised that consumer attitude toward general lawfulness and
counterfeit purchasing would negatively influence the probability <strong>of</strong> a consumer's willingness
to buy a counterfeit product. As can be seen from the table above, the sign was in the proper

direction for the high involvement (-.402 and -.282) product and for the respect for general
law for the low involvement (-.246). However, the results for the low involvement product
were not significant. <strong>The</strong>refore, H1 and H2 are supported for the high involvement condition
but not for the low involvement condition.
Discussion and Conclusion
A review <strong>of</strong> the literature on counterfeit products has specified the influence <strong>of</strong> general
lawfulness attitudes, attitudes towards counterfeit purchasing and product involvement on
consumer's willingness to purchase counterfeit goods. <strong>The</strong> results <strong>of</strong> the analysis are
inconsistent with the study's presumption that the functional relationship between
hypothesised choice determinants and consumers' response would be the same across
involvement levels. This was not the case with the findings indicating that involvement is a
significant moderating factor.
One possible explanation could lie in the sample utilised. Although more experienced than
traditional students, post-graduate students still may not have experience with the high
involvement goods. Recognition and knowledge <strong>of</strong> the brand does not necessarily translate
into experience. However, most students would have experience with sunglasses and would
recognise the functionality <strong>of</strong> these products.
Another possible explanation might be that in Indonesia, counterfeit products are more widely
available and so the sample would have more experience in purchasing. In addition, cultures
differ in terms <strong>of</strong> the entity to which they assign a right <strong>of</strong> ownership (Mittelstaedt &
Mittelstaedt 1997). Asian cultures have traditionally emphasised that individual developers or
creators are obliged to share their developments with society (Lai & Zaichkowsky 1999).
Consequently, new ideas and technology are considered as public means (Jacobs et al. 2001).
<strong>The</strong> phenomenon <strong>of</strong> counterfeiting, therefore, seems to be supported by their culture.
A final explanation for the differences may be attributed to product performance expectation.
If respondents have experience with the genuine product, they should have expectations
regarding the product performance. If the counterfeit provides a similar experience, they
should be more willing to purchase, perhaps even at the expense <strong>of</strong> compromising their
lawfulness attitudes. However, if the counterfeit product is viewed as having reduced
performance, they may be more reluctant to buy. Future research will explore this effect.
Other areas for future research include widening the sample to include non-students and
tourists to the country.

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