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ASSIGNEMENT 3: RESEARCH PROPOSAL

Counterfeit goods are illegal products made as imitation or reproduction of valuable products that already exist, with the intent of fraudulently passing it off as genuine. Today, the counterfeit trade is reaching epidemic proportions and has been describe as ‘perhaps the world’s fastest growing and most profitable business’ (Gene M. Grossman and C. Shapiro, 1986) 1. The luxury market is significantly affected by counterfeit goods, which are taking advantage of the prestige image of its brands by capturing their tradition and identity. In particular, France is a large target for counterfeiters. Indeed, the French luxury brands are among the most imitated because of strong and valuable industrial heritage and know-how.

In this context, one of the main problems of the counterfeit market is its impact on the perception of the brand image by consumers. We can identify two types of counterfeit consumers: the deceived and the non-deceived. Non-deceived consumers are conscious that they are buying a fake product, as a Louis Vuitton handbag buying from black market for example, contrary to deceived consumers that are not aware that they are buying a counterfeit product. In that case, consumers would have a wrong perception of the luxury brand because of poor quality products in terms of design details and durability. Moreover, counterfeiters of prestige goods impose a negative externality on consumers of genuine items, as fakes degrade the personal gratification associated with a given brand. However, the luxury brands can benefit from this issue because counterfeit market is often the first place where consumers develop an aspiration for genuine luxury accessories, hence it increases brand awareness and consciousness. Furthermore, it is important to highlight that today thanks to the international anti-counterfeit fighting, much more people are aware of the problem that luxury