Study Shows Counterfeit Buyers Frequently Buy Real Products Later
from the acta-what-now? dept
As the negotiations over the ACTA treaty continue in secret, one of the more frustrating aspects is how defenders of ACTA repeatedly conflate "counterfeit goods" with "copyright infringement." Witness Senator Evan Bayh's nonsensical response to being asked about ACTA, where it becomes clear quite quickly that he's unfamiliar with the most basic information on the subject. He switches back and forth between counterfeiting and copyright as if they're the same thing, and seems to think that any treaty on the matter must be good.But, an even more annoying part of all this is the use of fear mongering over "counterfeit goods" as some huge problem that has to be solved, when the evidence increasingly suggests otherwise. The copyright lobbyists are using the cover of some mythical massive counterfeiting problem to push for unnecessary and potentially dangerous copyright law changes, but even the counterfeiting claims are suspect. In the past, we've noted that both the GAO and the OECD have noted that the "problem" of counterfeiting has been massively inflated by lobbyists.
And, a new study suggests that even the counterfeit goods that do get sold aren't really a huge problem to the original manufacturers (thanks to Dave Barnes for sending this in) -- if there a problem at all. In a study that was actually carried out by a former brand manager at LVMH, it was discovered that people don't view counterfeit goods as a substitute to the real goods. People aren't being tricked -- they know they're buying counterfeits, and others know that they have counterfeit goods as well:
"Consumers are a lot smarter than we may give them credit for -- just because you've got a nice fake doesn't mean you're going to get away with it."But, even more importantly, it looks like counterfeit products often act as a stepping stone to get people to go forward and buy the original version:
"The counterfeit actually served as a placebo for brand attachment," she said. "People were becoming increasingly attached to the real brand even though they never possessed it at all."So, for all the reports of "harm" done by counterfeit products, here's a study suggesting that it actually helps build brand loyalty, and appears to often lead to the counterfeit buyer later buying a massively expensive real offering in a relatively short time frame. As some are noting, this suggests that the counterfeit goods act as advertising for the real goods. These are the sorts of things that would probably be useful to discuss with those negotiating ACTA. If only those discussions weren't all happening behind closed doors due to "national security" issues.
Forty-six percent of the counterfeit-bag owners bought the authentic products within two and a half years, she said. Shoppers were willing to pay $786 for a real luxury bag....
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Filed Under: counterfeit, promotion, study
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First, Counterfeit goods are what copyright infringement use to be, you know, the street corner vendor selling the latest movies for $1 a copy. It is still a huge issue in many markets (even New York) where you can buy knock off copies of movies, music, and just about anything else. Pretty much every flea market in the world has some knock off movies or music around.
This quote is also interesting:
Forty-six percent of the counterfeit-bag owners bought the authentic products within two and a half years, she said. Shoppers were willing to pay $786 for a real luxury bag
The question: What percentage of them wanted the real thing to start with? I am guessing something like, what, 46%? Many of the people buying the fakes are doing so as status symbols, and would have bought the real thing if they had the money to start with. The fake wasn't bought and then they discovered how nice they really are, they wanted the real thing all along.
Another story missing too much information, except the information to support your point of view. At least you are low on the moral outrage score this time out, just high on slant.
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subliminal message
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Re: subliminal message
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...counterfeit goods do exactly 0% harm to the original producer.
Congratulations, you trolled yourself. It's quite an accomplishment.
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Re: Re: subliminal message
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ACTA doesn't address real counterfeiting problems
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You know what's funny? You've actually raised one or two somewhat interesting questions along the line, but nobody is really interested in entering a discussion with you because you are so aggressive and insulting in all your comments, so instead anything intelligent you say gets ignored. See how that works?
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Do you really think fake Louis Vuitton bags make the real ones *less* valuable? I've heard plenty of fashionistas critiquing people's fake bags and pointing out who has real ones before - it becomes more of a status symbol. Imitation, as they say, is the sincerest form of flattery, and with a luxury brand having imitators can be extremely helpful to building that loyalty and mystique around your product.
What's hilarious is that you say that the 56% had no intention of buying the real thing as if that's a bad thing. If they weren't going to get the real thing anyway, why not let them walk around advertising your product anyway? All the world sees is a person saying "I desperately wish I could get a real one!"
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Fundamental Difference
It is usually trademark infringement - but NOT copyright infringement.
It disadvantages the buyer since they pay over the odds for an inferior product.
Hence it is fair to represent anti-counterfeiting measures as being in the public interest.
If, however, the buyer knows that they have a cheap rip off then arguably no harm is done to anyone.
Copyright infringement (in the digital age) usually involves making an exact copy of the original. It is NOT a fake and not a loss to the buyer - except insofar as (with software) he loses out on support, after sales etc. It is pretty close to being mutually exclusive with counterfeiting.
Conflating the two is an unforgiveable abuse of logic - regardless of your opinion of either "offense".
The only possible excuse is harking back to the days of analogue piracy when pirate tapes (VHS or audio) were of inferior quality.
These days I suspect only "movie theatre camcordings" manage to fall into both categories simultaneously - but personally I don't think that they are a real problem. The movie industry uses the pirate camcorder myth as an excuse to bang on about piracy in front of its customers - with mainly counterproductive effects. (Since the warnings started appearing on the screen I have decided not to go to the cinema again - except out of regard for another family member's wishes).
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"Look, we know you're a brand, but we're doing you a huge service by doing what we want, anyway. You should learn to like it!"
I'll come over and rearrange your bookshelves. I'll put your CDs in my system for organization, you'll thank me later. I'll let my cousin stay in the attic of your home -- you're not using it anyway, and word of mouth will generate valuable interest once you decide to sell your home.
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So what?
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On the other hand, purse makers, jeans makers, shoe makers & other makers want you to buy their stuff. If they want this to happen, then they do have to put up with consumers buying and using the product in ways they don't like or not buying their product at all.
Now let's look at that last option. If you represent a certain shoe maker with a distinctive logo and you know X customer is going to buy a shoe and it's not going to be yours, would you rather that person buy a competitor's shoe or a cheap knock-off of your shoe?
If he buys the competitor's shoe maybe he comes to like the shoe and decides that is his new brand. Maybe he never buys your shoes again and what's more tells all his friends how great your competitor's shoes are and maybe they actually listen to him and start buying your competitor's shoes too. Or maybe he just wears your competitor's shoes all the time and since he is cool, others see his shoes and want a pair.
Or maybe he buys a knockoff of your shoe and wears those instead. Obviously these shoes are not going to be great shoes and eventually X is going to realize to get the quality of shoe he wants, he's got to buy the real thing. In the meantime, X is still talking up your shoe to his friends and even if he's complaining about the price, that is just a spur to some types to buy two pairs -- one in white and one in black.
Which scenario is better for the shoe maker?
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Although it is probably not that difficult to identify a poorly made pair of sneakers or a handbag, it may be very difficult for the average person to recognize a counterfeit power-supply, glucose testing strip, insulin pen needle, tires, or baby formula.
Sometimes we don't even have a choice in the matter ...counterfeit aircraft parts, or elevator parts, or even counterfeit reinforcing steel are all available.
Suggesting that counterfeit products are not really a bad thing is like suggesting a doctor with a fake medical degree is not really a bad thing. Come-on...get real!
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>>bad thing is like suggesting a doctor with a fake medical
>>degree is not really a bad thing. Come-on...get real!
Horrible strawman. No one gets hurt when someone buys a fake bag. Come-on...get real!
The problem is that everyone is so set on price that quality is out the window. In fact, WalMart's manufacturer of $4 prescription drugs has been found to have high variability of the "useful" drugs within capsules. This has caused them to be banned in the US by the FDA several times.
If you want any product, here are your choices:
Cheap, Good, Fast. Pick Two.
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Seriously, over three million aids-related deaths a year in Africa, almost entirely due to a lack of affordable. antiviral medication.. Find me solid references for just three 'counterfeit' drugs-related deaths this year and I'll retract my million-to-one estimate.
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More to the point, the article is suggesting that copyright infringement is not counterfeiting and that certain folks love to confuse the two because some counterfeiting can be quite nasty and its a lot harder to show how infringement hurts anyone.
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It doesn't add up
If the above statement is true, sales of say a Gucci Bag today, would be 46% that of the counterfeit bags two and a half years ago.
It looks and smells very wrong.
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Re: It doesn't add up
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Mike is a real sucker for these things, because every other one tend to come out and support his point of view. It's like drugs to him, I think, he needs to have a study every other day to remain sane, and to get reassurance that he is on the right track.
3 out of 4 dentists agree.
Limited time offer!
A true techduh(tm pending) concept.
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Can I visit this mystery site? Is their a bizzaro Mike Masnick? A bizzaro techdirt?
And doesn't "mehdirt" have a better ring to it. You're not very creative, are you?
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I have visited personally electronics "malls" in China and seen people taking low grade DDR3 memory and applying carefully made "Kingston" stickers in the correct places to these memory sticks. I can imagine that these sticks, let loose in the western world, would sell for under normal costs, but would likely fail more often or offer less than comparable performance. That would negatively effect Kingston's brand, wouldn't it?
The knockoff industry is huge, in Hong Kong you can buy Tommy Hilfiger shirts for about $4 US, with nice labels and everything. Trust me when I say nobody from Tommy's company has ever seen these shirts or makes a penny off them. They are significantly inferior quality, and if imported into the US and sold, would negatively effect the brand.
I would say that potentially 100% of the people who buy this stuff want the real thing, and maybe only 46% of them are willing after to part with their money, after seeing an inferior product that might scare them away from the real thing.
The study Mike points to doesn't explain what the other 54% of people are thinking, and they are they key. More than half the market appears to have been ruined.
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Wait, I get it. Never mind...
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Except, as the study found, almost everyone recognized and knew the fakes were fakes, so they did not negatively impact the brand at all.
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Counterfeits
The roll on effect of some illegal immigrant selling fake DVD‘s handbags and watches on the street corner is quite big, the loss of revenue to the government on both personal and imports taxes is quite large, also encouraging illegal’s to come to your country because they know that they’ll always find work in this industry, this undermines local government policy, and put unnecessary pressure on local law enforcement who could be better employed elsewhere
Products such as bags and fake watches do not overly affect the brand owner, but when we start looking at health products, and goods designed to save life, these have smaller mark ups, they directly affect jobs, and more importantly put the consumer at risk. Fake brake pads made of compressed cardboard, fake circuit breakers that don’t work and trailing sockets that melt and burst in flames are but many unsafe products that are now flooding our markets
The GAO and the OECD have their heads in the sand, and the “problem" of counterfeiting has not been massively inflated by lobbyists. They need to get out on the street and see the larger picture
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Re: Counterfeits
Ha! I've never seen anyone claim that either organization has their head in the and. Both are quite respected on these issues. So, I'm sorry if I take their word over your unsubstantiated claim.
I also have trouble with the following:
The roll on effect of some illegal immigrant selling fake DVD‘s handbags and watches on the street corner is quite big, the loss of revenue to the government on both personal and imports taxes is quite large, also encouraging illegal’s to come to your country because they know that they’ll always find work in this industry, this undermines local government policy, and put unnecessary pressure on local law enforcement who could be better employed elsewhere
So you have no problem admitting that resources could "better be employed elsewhere" but don't recognize that the huge detrimental waste of effort in fighting non-harmful counterfeiting "could be better spent elsewhere." As for the "roll on effect" I'll only note that you ignore the fact that this effect works in the other direction as well. The less people have to pay for counterfeit products, the more they can spend on other products...
Why do people always ignore that side of the equation?
Anyway, given that this is the 3rd study suggesting that the counterfeit complaint is totally overblown, and the only ones supporting that claim are the lobbyists... guess who seems more credible?
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As for "the study", I stand by my point: I think they started with an answer and asked questions to get the desired result. Basing your entire answer on a single study seems, well, weak.
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Re: Re: Counterfeits
Mike, when you best economic theories start with "and someone rips someone off" you can imagine that nobody cares about the positive that comes out of it.
You find yourself in the position of once again supporting the criminal element. Are you now going to say you "don't support conterfeiting, just the economic effects of it?"
*shakes head*
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Why are the originals so expensive?
I will concede that other name brand items are worth the price, e.g. shoes. An expensive pair of shoes should last you many years. And you can often get them repaired rather than buying new ones all the time.
But counterfeit brands are essentially free advertising for companies. Even if they don't have the same quality, people only see the name.
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Relying on drugs that you believe to be genuine, but aren't, is a completely different story.
RE: Africa - I live in Africa, so this is not a hypothetical debate. If a poverty-stricken African living in a Malaria area, dies of Malaria because the medication they were given by the clinic or pharmacist is counterfeit no-one will ever know. If an infant dies of malnutrition no-one will suspect counterfeit infant formula. As for HIV, who will become suspicious if a sufferer dies a little sooner because the "anti-retrovirals" they were using containing no active ingredients.
As for proof, this is difficult:) The first known case of death as a result of counterfeit medicines in Canada, for example, (Google it) was only recorded in 2006. This victim died unexpectedly, triggering tox tests...these raised red flags...analysis of the drugs in her possession raised further red flags...a forensic examination of her computer revealed that she had purchased counterfeit drugs over the internet. I suspect, that even for a first world country this was quite a detailed investigation. Where I live not even a murder investigation will be done this deeply! So the proof gets buried. Maybe if enough people die we will get the proof we need.
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The statement... "But, an even MORE annoying part of all this is the use of fear mongering over "counterfeit goods" as some huge problem that has to be solved, when the evidence increasingly suggests otherwise." ... to ME is what the article is about and this is what I am challenging.
This website focuses a lot on entertainment (music) (and now luxury products (handbags))...I am suggesting that the issue is deeper than this...the legislation which protect these companies is the same legislation that protects pharma companies AND consumers of these products.
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