Luxury Counterfeit Goods : The Existence Of Luxury Goods

“Outlet shopping is perhaps luxury’s greatest ploy to get its goods into the hands of anyone and everyone,” (Thomas, Pg. 246). “But outlet shopping is the antithesis of the flagship, the antithesis in fact, of luxury itself.” (Thomas, 2007. Pg. 247) Columnist Karen Heller explained to Thomas after visiting Woodbury Common Premium Outlets in New York, “The clothes were marked down, picked over and repeatedly pawed, the opposite of how they were originally displayed. Their power to enchant seemed minimized, even at a third the price, smashed together like produce in a storage hold.” Thomas explains how luxury merchandise is purely just that, leftover “luxury” products: overproduction. No longer does luxury embody the experience of pampering nor does it signify class and wealth. Some

For years, Louis Vuitton enjoyed high profit margins from the luxury market in Japan until other competitors such as Prada and Gucci entered the market. Counterfeiting also became a threat to the firm’s brand by satisfying consumer demand at lower prices. Other external global environmental problems included highly priced products, limited availability in stores only, and a heavy dependency on the Japanese market (Pearce & Robinson, 2013, p. 14-18). Moreover, “the after-shocks of the global recession were a threat to Louis Vuitton’s luxury business in Japan”, and Japanese women became less interested in the brand’s products (Pearce & Robinson, 2013, p. 14-18). Alternatively, Louis Vuitton could “reinvent itself and regain what used to be its well-attested

Meanwhile, some consumers were also attracted by the counterfeit products, which have the same design and considerable quality. The situation of LV in Japan seems to be fierce, however, with effective solutions, LV can also seize the opportunity to sustain profitability in Japanese market rather than just survive. As it is stated in the case that Japanese consumers had been holding the desire for inexpensive luxury products from Louis Vuitton. Therefore, to solve this problem and attract more customers, LV should strive to make “inexpensive” products by increasing the value of products, lowering the costs and prices, and finally creating high value for the consumers. As the scandal of counterfeit sold on the websites in 2008 led to a decline in the sales of Louis Vuitton products, it can be viewed as a valued opportunity for Louis Vuitton to establish its own business online since it can both add selling channels and empower the company to fight with counterfeiting.

The consumption of luxury goods in China is mounting sharply. Not only those born to elite families, but also many common people are greedy for luxury brands (China, a Booming

Price is an important factor in Burberry as price affects the value that costumers perceive they get from buying a product (Jobber & Ellis-Chadwick, 2012). Burberry uses competitive pricing similar to its competitors which produces a psychological effect on Burberry customers (Jacobson, n.d). If Burberry for example lowered its price dramatically then customers may believe the quality has decreased and may presume it’s not worthy to be named a luxury brand. However by being expensive it suggest better quality and desire to sustain its customers as well as making there products seem exclusive.

Sociocultural: In the recent years, the desire to appear wealthy has attributed to the increased popularity in luxury products. Also, the desire for luxury goods was promoted by effective advertising and TV programming that promoted conspicuous consumption to middle-income consumers. Middle-income consumers also tend to “reward” themselves with luxury items.

Without realizing, the motivate of, mass consumption is based on societies power over members of society who aspire to part of the “in group”. In other words, heterotopia is a place linked with many other existing social sites ‘but in such a way as to suspect, neutralize, or invent the set of relations that they happen to designate, mirror, or reflect’ (Foucault, 1967, Yang, 75). As a result, people have normalized the desire for the latest IPhone, since society and consumer culture have neutralized and encourage such behavior and consumption. Our capitalist society has been structure to the point where people only desire to have “the haves” and to move away from the “have nots”. Thus, creating the high demand in the counterfeit market. People’s self-perception is based on societies and pop culture’s value system, which associates thriving brands products with a person’s social status and value in society. These ideologies have been imbedded in consumer culture where the value of a consumer is based on the value and status of the products they consume. Overall,

Ever since the middle ages, social status was of great significance, attained through birth. Certain prestigious clothing was reserved for a high class, serving as a distinction between members of the population. Young Jee Han Joseph C. Nunes, a doctoral student of marketing , & Xavier Drèze, an associate professor of marketing, identify in their article “Signaling Status with Luxury Goods: The Role of Brand Prominence” that historically “sumptuary laws specified in minute detail what each social class was permitted and forbidden to wear, including the maximum price an article of clothing could cost” (Han). Take for instance the kings and nobility of France, who expressed their political power and superiority through use of luxury. Today, the situation remains somewhat similar: according to Sirgy in his “Journal of Consumer Research”, social class is “defined as when a consumer acquires market resources to accentuate their belonging to a specific social group, in order to display their desired identity or a part of their desired identity to others” (qtd in Signaling Status with Luxury Goods) . According to Young Jee Han, Joseph C. Nunes & Xavier Drèze, “today, anyone can own a purse, a watch, or a pair of shoes, but specific brands of purses, watches, and shoes are a distinguishing feature for certain classes of consumers”(Han), proof that

This behavior brings competitive advantages to the European luxury brands. Moreover, customers in different countries have different purchase behaviors. For instance, some countries’ customers are willing to move away from common recognized brand, because they want to purchase more exclusive products. Furthermore, because of the increasing speed of globalization, people are more likely willing to travel between different countries. These travelers will buy luxury good during their trips. In fact, Chinese tourists contributed over one third of sales in Europe. The luxury goods industry should notice to adjust the actual demand between local people and tourists in Europe

The overall sales of luxury goods in the year 2009 is expected to be more than US$150 billion and Asia contributes 10% to it. The concept of luxury is now not confined to only to Europe and US, the Asian subcontinent contributes majorly to it, with India and China as the newly emerging markets. Professor James Twitchell (2002) comments on the democratization of luxury and the changing consumer psychology These new customers for luxury are younger than clients of the old luxe used to be, they are far more numerous, they make their money far sooner, and they are far more flexible in financing and fickle in choice. They do not

Consumerism and the effects of branding affect people’s lives. Branding allows consumers to easily identify which products are made by which companies. Yet, the brands create more of an influence on consumer’s lifestyles and in the end decide what kind of consumer that person is. Branding creates a blurred divide in our society. Consumers who are ore likely to purchase the branded products that are associated with better quality and higher prices are put into their own category bucket versus the consumers who choose the cheaper priced products that are made with less quality. When it comes to deciding who you are based off of the products and brands that you associate yourself with, it creates a capital divide in our society. Consumers than associate brands with personal feelings based upon whether or not they associate themselves with those brands. Lives of consumers are heavily influenced. Their lives are worse off when they feel the need to ‘keep up’ with brands in order to feel as if they are portraying themselves in the best light. In a way, this is similar to how all of branding began with livestock. Consumers want to physically brand themselves with specific brands by wearing logos and identifying with a brand. They might not be burning the brands directly onto their skin but they are burning the brands onto their clothes and burning holes in their wallets to keep up with society standards about brands.

Finally, LVMH must protect its brand against counterfeit and dilution. With the recent expansion of the internet and globalization, availability of products has grown to new heights. In order to keep the brand management that LVMH desires, it must tightly control the availability so not to dilute the market and lower the perception of their brand. Also with the increased knowledge and resources of counterfeiting, LVMH needs to keep a grasp on illegal goods. Not only are the goods becoming increasingly difficult to distinguish real from fake, but the channels of distribution of counterfeit products have increased. Europe customs believe that 75% of counterfeit luxury goods originated in China or Hong Kong. Online stores such as EBay also have seen a large amount

The shop owner did examine the bills but did not realize they were fake. High

On the other hand, the large market potential has drawn a host of luxury-goods companies to enter the China market, which makes the competition fiercer and fiercer. And it is troublesome for LV that there are plenty of fake goods imitating LV’s style prevailing in China, which are actually not likely to reduce LV’s high-end consumers, but would exert negative influences on consumers’ impression and awareness of LV.

Considering current market condition, customers’ increasing aspiration for social approval by sorts of luxury brands has generated an environment of counterfeiting. In recent years, the value of counterfeiting products, which are traded, is expected to grow to $450 to $650 billion by year 2015. Based on statistic data, fashion is taking the greatest proportion of counterfeiting product in Italy in year 2008 (shown in Table I). Besides, since luxury brands like Prada are also producing and selling watches and perfumes etc., the counterfeit product of luxury brands is much more than the value of counterfeit of fashion. It is obvious that counterfeiting products have been growing into a significant threat to luxury products. The category of Prada can be also found in Table 1 below, ranging from Fashion, IT product, to even Toy.