Brand Dilution: the Impact of the User of Counterfeits on Original Brand Perception

Barbara Loken, University of Minnesota, USA
Nelson Amaral, University of Minnesota, USA
The costs associated with counterfeit goods world-wide has been estimated at about $550 billion yet very little attention has been given to this issue in the marketing literature. Our research addresses this gap directly by investigating the effects of counterfeit goods on dilution of the brands they imitate. Our findings provide the first empirical evidence to suggest that, for prestige products, the use of counterfeit products can dilute people’s perceptions of the original brand. We find evidence of dilution effects on beliefs about the original brand’s prestige, beliefs about whether the original brand is high-class, and overall attitudes toward the original brand. More interestingly, we find a significant two-way interaction that provides evidence for the process that causes this dilution. Specifically, because of the symbolism of prestige brands for different social classes, the social class of the users of these counterfeits plays an important role in understanding the effects of these counterfeit products on the original brands.
[ to cite ]:
Barbara Loken and Nelson Amaral (2010) ,"Brand Dilution: the Impact of the User of Counterfeits on Original Brand Perception", in NA - Advances in Consumer Research Volume 37, eds. Margaret C. Campbell, Jeff Inman, and Rik Pieters, Duluth, MN : Association for Consumer Research, Pages: 859-860 .