UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Nguyen Thi Thu Trang THE INTENTION OF VIETNAMESE CUSTOMER TO PURCHASE COUNTERFEIT PRODUCT: A THEORY OF PLANNED BEHAVIOR APPROACH MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Nguyen Thi Thu Trang THE INTENTION OF VIETNAMESE CUSTOMER TO PURCHASE COUNTERFEIT PRODUCT: A THEORY OF PLANNED BEHAVIOR APPROACH ID: 22110070 MASTER OF BUSINESS (Honours) SUPERVISOR: Nguyen Thi Mai Trang Ho Chi Minh City – Year 2014 ACKNOWLEDGEMENT This thesis could not be accomplished without the help, advise, support, guidance and encouragement of many people. I wish to express my sincere gratitude to my advisor, Dr. Nguyen Thi Mai Trang, for her clear and careful direction, guidance and correction to my thesis, especially for her enthusiasm in answering reminding, help and support. Secondly, I would like to thank my dear colleagues, friend and classmates for their invaluable advice, help, encouragement and support during the time I was doing this thesis.
Last but not least, I would like to express my great thanks to my husband and my family for their support, assistance and encouragement for my study and thesis fulfillment. ABSTRACT Vietnam is a developing country so counterfeit products are more than increase appeared in Vietnam. However, so far the study for customer intention to purchase counterfeit products in Vietnam has not yet been thoroughly conducted. This research is carried out with the objectives to identify the measurement scale of customer intention to purchase counterfeit products, identify the factors that impact on customer intention to purchase counterfeit products and measure the strength of relationship between these factors and customer intention to purchase counterfeit products in the Vietnam.
This research is done by a thorough literature review on concepts relating to customer intention to purchase counterfeit products from which the initial research model and hypotheses are constructed. Research process has two steps including Generation of Items used to assure the appropriateness of the initial research model; Survey and data analysis used to collect the answer for the survey on various peoples in the South Region of Vietnam with the sample size of 329 for data analysis. Number of statistical analysis techniques are used to analyze the data collected via SPSS program. With research model which has factor analysis results in the identification of factors having significant impact to customer intention to purchase counterfeit products, and the extraction of three factor groups named as Attitude toward the Behavior to purchase counterfeit products, Subjective Norm and Perceived Behavioral Control.
After regression analysis proved that attitude toward the behavior to purchase counterfeit products has the highest impact. Besides that, this study also researches the impact of perceived financial control on the relationship between attitude toward purchasing counterfeit product and customer intention to purchase counterfeit product. TABLE OF CONTENTS ACKNOWLEDGEMENT ABSTRACT TABLE OF CONTENTS LIST OF ABBREVIATIONS LIST OF TABLES LIST OF FIGURES CHAPTER 1 INTRODUCTION. 5 CHAPTER 2 LITERATURE REVIEW .2 Theory of Planned Behavior .3 Customer intention to purchase counterfeit product .4 Attitude towards the behavior to purchase counterfeit product .6 Perceived Behavioral Control .7 Perceived financial control.
14 CHAPTER 3 RESEARCH DESIGN .5 Data collection method .6 Data analysis method .4 Exploratory factor analysis .5 Multiple regression analysis. 23 CHAPTER 4 DATA ANALYSIS .2 Assessment and refinement of measurement scale .1 Refinement of measurement scale .2 Exploratory Factor Analysis (EFA) .3 Multiple Linear Regression .1 Test of assumption .5 Moderating effect: Perceived Financial Control .1 Attitude towards the behavior to purchase counterfeit products .3 Perceived Financial Control .3 Limitations and future research direction. 50 APPENDIX A QUESTIONARIES BẢNG CÂU HỎI APPENDIX B: GUIDELINE FOR QUALITATIVE IN-DEPTH INTERVIEW APPENDIX C: SURVEY RESULTS APPENDIX D: RESULTS OF MULTIPLE LINEAR REGRESSIONS APPENDIX E: RESULTS OF MULTIPLE LINEAR REGRESSIONS FOR MORDERATING VARIABLE APPENDIX F: HISTOGRAM, NORMAL REGRESSION & SCATTER PLOT OF DEPENDENT VARIABLE: CUSTOMER INTENTION TO PURCHASE COUNTERFEIT PRODUCT LIST OF ABBREVIATIONS TPB: Theory of Planned Behavior BIN: Customer intention ATB: Attitude towards the behavior to purchase counterfeit products SUN: Subjective norms PBC: Perceived Behavioral Control PFC: Perceived Financial Control PFC_L: Perceived Financial Control with low group PFC_H: Perceived Financial Control with high group LIST OF TABLES Table 2.1: Operational definitions of constructs .2: Measurement scale after Qualitative Research .2: Reliability analysis of dependent factor .3: Reliability analysis of independent factors .4 Rotated Component Matrix .6 Model Summary of multiple regression analysis .7 ANOVA of multiple regression analysis .8 Coefficients of multiple linear regression.10 Summary result of the effect moderating variable .11 ANOVA summary result. 40 LIST OF FIGURES Figure 2.1 Research background There have been many studies in the world which researched the customer intention to purchase counterfeit products, such as in Examining customer purchase intentions for counterfeit products based on a modified theory of planned behavior (Cheng et al., 2011), in which concluded that subjective norms are the strongest influence on customer intention of counterfeit purchasing.
Another strong effect was observed with regard to the influence of perceived behavioral control. Most importantly, a contribution of this investigation is identifying the negative influence of perceived financial control on customer intention to purchase counterfeit products that concerned that when people perceive that their financial ability enables them to purchase original products, they tend to do so, and vice-versa. Besides that, subjective norms strongly influence customer intention to purchase counterfeit products. Along with retailers, marketers should launch marketing campaigns to encourage word-of-mouth communication among friends and family members when customer was not willing to pay the high price for an original product but they can buy counterfeit products instead may discourage those them purchasing.
Besides that, an aggressive advertising campaign discouraging the purchase and use of counterfeits may create a domino effect. People may be influence by the opinions of others that purchasing counterfeit products is immoral. Finally, since it was concluded that the perceived financial control, namely the perceived affordability of authentic products, negatively impacts intention to purchase counterfeits. Discounts or promotions campaigns from Marketers of retailers would help reach potential customers.
Once customers believe that the price is reasonable and affordable they may become used to purchasing original products and develop brand loyalty (as cited in Cheng et al. Or in The effects of consumer orientations on the consumption of counterfeit luxury brands 2 (Bhardwaj, 2010), mentioned that integrity has no influence on subjective norm to purchase counterfeit brands. Furthermore, the results indicate that favorable attitudes toward the purchase of counterfeit brand has a positive influence on the intentions to purchase counterfeit brands whereas it has a negative influence on the intentions to purchase original brands. Additionally, the subjective norm shows a positive relation with intentions to purchase counterfeit brands and perceived control over the purchase of counterfeit brands show a negative relationship with intentions to purchase counterfeit brands.
Finally, based on the result of the hypothesis for moderator testing, price sensitivity does not act as a moderating factor in the relationship between attitudes and intentions to purchase counterfeit brands. Based on the results obtained in the study, implications for managers, educators, and policy makers have been suggested. Besides suggesting tactical strategies to control the growing problem of selling counterfeit brands in the markets, it is believed that there is a strong need to spread awareness and information about the dark side of counterfeiting among consumers so that they develop a resistance in consumption of counterfeit and illegally sold brands in the market (as cited in Bhardwaj, 2010). With the success of these previous authors when applying the Theory of Planned Behavioral in counterfeit market, the author in this research will apply the Theory of Planned Behavioral to research what are these factors to effect on customer intention in the Vietnamese counterfeit market.
Firstly, we will overview the Vietnamese counterfeit market, such as information on the channel media: every year, Vietnam has 308 cases to be tried for counterfeit production or trafficking in counterfeit products. If in 2004 only 60 cases then in 2012, the cases were increased to the 554 production and trafficking in counterfeit products. This suggests that production of crimes, trafficking in counterfeit products tend to rise very rapidly, becoming an alarming situation. In the past 5 years, the Vietnamese Custom discovered and seized a variety of counterfeit products violating intellectual 3 property rights, such as 1,000 counterfeit bottles, 93 820 counterfeit brand cigarettes Vinataba, 7729 cosmetic jars, 3756 kg counterfeit phone accessories brand Nokia, the mobile phone 800 counterfeit Nokia brand, 3,940 bottles of counterfeit brand lubricants and Castrol Honda, 1,320 table is the author of Philip brand, 137 728 counterfeit brand soda Arabao, was shown in the report (The people's security online, 2013).
Besides that, according to report of the Market Management Department - Ministry of Industry and Trade (2012), the country has discovered 13101 cases for handling counterfeit, substandard and infringement of intellectual property rights, sanctioning of administrative violations in 53 billion. And in quarter I/2013, they also discovered 3,115 cases, handling administrative violations 13.5 billion worth of 13 billion violations. With the same problem about counterfeit products, in the report of Electronic Newspaper Vietnam Education (2012), Mr. Trinh Quoc Khanh who is deputy captain of Smuggling Investigation Department - General Department of Vietnamese Customs also mentioned that counterfeit products are not only sneaky current passing through the border region container imports through the port.
Specifically, the unit conducted recently seized and destroyed containers with nearly 10,000 counterfeit products by a company in Binh Tan district imported through Cat Lai port. The amounts of counterfeit products are mostly luggage, handbags by famous brands such as Louis Vuitton, Montblanc and Longchamp,… The next, we will go through a brief opinion of the character as a product manufacturer, as Electronic Legal Newspapers Ho Chi Minh City (2012), Ms. Nguyen Thi Huong, Director of Law VNIP company and also is LV brand representative in Vietnam, reported that LV has launched a campaign to "clean up" areas where displaying counterfeit LV, regardless of the number of small or more since 2009. Particularly, from the early years applying campaign with more than 200 test cases LV, for offenders repeated violations, LV was sued for damage 4 compensation.
For example, in 2010 and 2011, LV sue in small businesses in Saigon Square and An Dong Plaza, court results have forced offenders to compensate the hundreds of millions. In parallel with the goal of hitting retail systems, LV also focuses on clues, to control cross-border counterfeit products and most counterfeit LV brand from the border of Vietnam and China, not through the official channel. According to Counterfeit Products and Piracy Industry (2006), Vietnam has a total counterfeit market value of US$ 122 million, including software (US$ 96 million), books (US$ 16 million), movies (US$ 10 million) and cable (unauthorized connections) (US$ 1.37 million), as well as clothes, cosmetics, watches, etc. With this shows that Vietnam is one of the countries in the region have warned the number of counterfeit products compared to many countries in worldwide.2 Research objectives The overall objective of this study is to examine some factors influencing the intention to purchase counterfeit product.
Specifically, it investigates: 1. The relationship between attitude toward the behavior to purchase counterfeit product and customer intention to purchase counterfeit product. The relationship between subjective norms and customer intention to purchase counterfeit product. The relationship between perceived behavioral control and customer intention to purchase counterfeit product.
And finally, the moderating effect of perceived financial control on the relationship between attitude toward purchasing counterfeit product and consumer intention to purchase counterfeit product.3 Research scope There are two kinds of counterfeit products from customer perception also: deceptive and non-deceptive. Some consumers buy counterfeit products without being aware of the intellectual property infringement, this research call this is the 5 deceptive counterfeit products. In this case, producers make customers thinking that they are buying original products but in fact this product is made or sold illegally. Therefore, customers will not be held accountable.