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Almost half of counterfeit buyers progress to real thing, says study

Nearly half the people who buy counterfeit handbags buy the real thing within two years, according to an academic study. The research shows that fakes can create brand loyalty in the counterfeited brands.10 Dec 2009

A researcher at Massachusetts Institute of Technology (MIT) who used to be a brand manager at luxury goods firm Louis Vuitton Moët Hennessy (LVMH) asked hundreds of fake bag buyers about their habits in an unpublished study 'The Real Value Of Fakes'.

Renee Richardson Gosline interviewed the consumers who knew when they bought them that the bags were fakes and found that 46% of them bought authentic branded bags within two years.

"For some status-seeking people, at least, the social power of luxury goods means that consumption must not just be conspicuous, but real," said a statement from MIT describing the research.

"The counterfeit actually served as a placebo for brand attachment,” Gosline told news service Bloomberg.  “People were becoming increasingly attached to the real brand even though they never possessed it at all.”

The luxury goods industry is increasingly concerned about unlicensed sales of goods, with handbags a major area of concern. Some bags sell for thousands of pounds.

Companies' concerns are no longer just related to counterfeits. LVMH recently won a French court ruling underlining its right to bar auction site eBay from selling genuine goods.

The court backed an earlier ruling it had made that luxury goods companies have the right to control the environment in which their bags are sold.

A separate piece of research conducted by Gosline suggests that companies such as LVMH are right to seek to control their selling environment. In more research about bags, Gosline showed that the context in which they are seen has a direct effect on their perceived value, and on consumers' confidence in spotting fakes.

Gosline showed consumers two dozen photos of bags, half of them sitting on a shelf, half worn by real people. When they saw the bags on shelves their confidence in predicting whether it was real or fake evaporated and they said on average that they would pay $403 for bags.

When they saw photos of the bags in use their confidence in spotting fakes shot up and they said on average that they would pay $786 for the bags.

Gosline said that the research demonstrates that context, such as that controlled by manufacturers in the retail chain, is vital.

"When there is no contextual information, it’s terrible for the brand,” she said. “People’s confidence in their ability to discern the real from the fake plummets, as does their willingness to pay.”

“Basically these consumers look at the person, the setting, and determine the authenticity by seeing if the person’s image corresponds with the image they have of the brand,” said Gosline.