Antecedents and outcome of consumer attitude tow ard counterfeit product

This paper attempts to investigate the impact of the social cost and perceived risk on consumers’ attitude toward non-deceptive counterfeit products and behavioral intention to purchase

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Pham Thi My Hien

ANTECEDENTS AND OUTCOME

OF CONSUMER ATTITUDE TOWARD

Finally, I would like to thank all of the respondents without whom, this research would have been impossible

Pham Thi My Hien

March 2014

Abstract

Counterfeiting is increasing and becoming a complicated issue across different countries

on the world and Vietnam is not exceptional, so the policy makers and managers always try to find ways to face with the counterfeiting and reduce counterfeit products in the market This paper attempts to investigate the impact of the social cost and perceived risk

on consumers’ attitude toward non-deceptive counterfeit products and behavioral intention to purchase these ones

In order to do this, basing on existing literature in this field, a questionnaire is designed and validated, then based on the data that were collected from the 176 respondents' answers to the designed questionnaire, the analysis is conducted and the results as well as the relations among the factors are explained

The results show that the factor of social cost has an impact on consumers’ attitude and purchase intention toward counterfeit products Moreover, the result indicates that intention to buy counterfeit products is influenced by consumers’ attitude toward these products The hypotheses are tested with data collected from convenient sample of consumers in Ho Chi Minh City and the SPSS software is used to analyze the data gathered from the respondents

Table of Contents

Abstract

List of tables

Chapter 1: Introduction 1

1.1 Research background 1

1.2 Research problems 4

1.3 Research objectives 6

1.4 Research methodology and scopes 6

1.5 The structure of the study 7

Chapter 2: Literature review and hypotheses 9

2.1 Purchase intention to counterfeit products 9

2.2 Consumers’ attitude toward purchasing counterfeit products 10

2.3 Perceived risk 12

2.4 Social cost of counterfeits 13

2.5 The conceptual model 15

Chapter 3: Research methodology 16

3.1 Research design .17

3.2 Measures of the constructs .19

3.3 Research process 17

3.4 Data analysis method 23

Chapter 4: Data analysis and data results 27

4.1 Sample characteristics 27

4.2 The reliability test: The cronbach’s alpha test 28

4.3 Exploratory factor analysis (EFA) 30

4.4 Multiple regression analysis 31

Chapter 5: Conclusions, implications and limitations 47

5.1 Conclusion 47

5.2 Managerial implications 49

5.4 Limitations and future research 52

References 53

Appendix A 59

Appendix B 52

Appendix C 65

Appendix D 67

Appendix E 69

List of Tables

Table 3.1: The results of collecting questionnaires 38

Table 4.1: Sample chracteristics 39

Table 4.2: The results of Cronbach’ alpha 40

Table 4.3: KMO and Barlett’s Test 40

Table 4.4: Total Variance Explained of Independent Variables 41

Table 4.5: Rotated component maxtrix 42

Table 4.6: Correlations matrix of social cost, risk and attitude 42

Table 4.7: Model summary 43

Table 4.8: Anova 44

Table 4.9: Regression result of “attitude” model 45

Table 4.10: Correlations matrix of purchase, social cosk, risk and attitude 45

Table 4:11: Model summary 47

Table 4.12: Anova 47

Table 4.13: Regression result of “purchase” model 48

Table 4.14: Summary of hypotheses testing result 48

CHAPTER 1: INTRODUCTION 1.1 RESEARCH BACKGROUND

Counterfeiting issue started since 1970s and is continuously spreading over the world as the result of the globalization and lowering the trading barriers in international transactions Most of the countries have been influenced by counterfeit products and their economics have faced to the high crisis According to the International Chamber of Commerce, the international trade in counterfeit products is worth $650 billion Vietnam

is ranked fifty third globally about the size of its counterfeit market with total pirated market value of US$ 122 million (Counterfeit Goods and Piracy Industry, as cited in Cheng et al., 2011) According to Lai and Zaichowsky (1999), counterfeit products are identical copies of authentic brands and products A product that has the same brand name or logo with legitimate one but without the permission of the registered owner is considered as a counterfeit or “fake” product According to the World Customs Organization, counterfeit products account for roughly from 7 to 10 percent of the world’s trade and their sales revenue are rising up (Arog Limited, 2008) As the statement from the International Chamber of Commerce, pirated goods are manufactured and consumed in virtually all global economies and have a big effects on trade, foreign investment, employment, criminality, innovation and the environment (International Chamber of Commerce, as cited in Kozar and Marcketti, 2011) The International Anti-Counterfeiting Coaltition forecasted that counterfeiting caused losses of about US$200 billion a year in lost jobs, unpaid taxes and lost sales According to the Organization for Economic Co-operation and Development (as cited in Kozar and Marcketti, 2011), traded

counterfeit products occupies over US$250 billion worth of internationally traded goods

in 2007 In front of the high demand of consumers about buying counterfeit products and the high profit for counterfeit traders and manufacturers, counterfeiting continues to emerge globally (Amine and Magnusson, 2007) Counterfeiting has spread in every type

of consumer goods, in luxury brands market and products, such as electronics, airplane and auto parts, pharmaceuticals, clothes, cosmetic and watches

Counterfeiting is a worldwide issue across different industries and Vietnam with its open economy has also faced to its impact

In Vietnam, the manufacturing and trading counterfeit products have developed more and more sophisticated in some recent years Most of the high quality products which have high sales revenues have been faked The counterfeit products appear across different provinces, from big center to small shops, from big cities to small towns in Vietnam Moreover, counterfeit products can be found in street vendors as well as legal looking stores In recent years, many stores trading faked products have become well organized and imitate to set up a store the same as selling genuine products Furthermore, with the development of internet, now counterfeit products are increasingly sold online making consumers misunderstand about buying genuine products at discounted prices Businesses have lost billions of dollars and reduced their brand reputation due to pirated goods, for example with LG Vina’s situation According to Nguyen (2011), LG Vina, the owner of cosmetic brands of Essance, Ohui and Whoo, just reached about 70-75 percent

of the expected level due to counterfeit products in 2010 The combat of the government

to counterfeit goods become tougher and challenged because the technology of making

counterfeit products becomes more complicated, low awareness from consumers and high profit for counterfeit merchandises According to the Market Management Bureau (2013), the State found out over 13.101 cases with pirated goods, punished up to 53 billion VND in 2012 The first 6 months in 2013, in the total imported counterfeit goods, there were over 2100 cases and punished more 1960 cases which estimated about 37.544 billion VND (the Market Management Bureau of South, 2013)

Recently, much of research about counterfeiting has been deployed on the supply side of the issue, blaming the manufacturers, suppliers and governmental policy for liberation of pirating (McLaughlin, the White house, as cited in Kozar and Marcketti, 2011) However, as a basic economic reason that if no demand for fake goods exist, supply will disappear automatically, consumers are also important participants in the consumption of fake goods and existence of counterfeit trade (Yoo and Lee, Bian and Moutinho cited in Cat, 2010) Therefore, it is necessary to understand clearly potential determinants affecting their attitudes and purchasing behaviors toward counterfeit products In some previous years, some scholars have investigated the counterfeit problems from the consumers’ perspective in different countries such as the research about the consumer’s role in the growth of trade mark piracy of Wee et al (1995) or the consumer attitudes toward counterfeit goods in the paper of Cordell et al (1996) Cordell

et al (1996) discovered three motivators for using pirated goods: the status symbolized

by brand, the channel of the distribution and price Another example is the research about the impact of non-price factors on purchase intention counterfeits of Hanzaee and Jalalian (2012) Regarding to this topic, Furnham and Valgeirsson (2007) studied the effect of

life values and materialism on buying counterfeit products in UK, Phau et al (2009) examined the consumers’ attitudes toward the counterfeit luxury goods in Singapore, and some other researches such as (Wilcox et al., 2009; Bian and Moutinho, 2009; Kozar and Marcketti, 2011; and Fernandes, 2012) In Vietnam, some researchers have been studied about this field but the number of scholars is still limited For example, Dinh (2011) researched about factors influencing purchase behavior of counterfeit products that focused on determinants of attitude function and conformity in counterfeit luxury goods, Nguyen and Tran (2013) investigated antecedents of consumer behavior toward counterfeit of fashion products in term of brand image, value consciousness, social influences and personal gratification Moreover, Nguyen and Tran (2013) focused to study with respondents who had experience in using counterfeit products

1.2 RESEARCH PROBLEMS

In front of the significant development of counterfeit products, they actually become the top concern of businesses as well as policy makers Beside of initiatives in reducing counterfeiting from the supply side, the other would be to address the demand side of counterfeit products According to Staake et al (as cited in Koklic, 2011), our understanding about structure and mechanisms of the counterfeit market is still limited Therefore, knowing the determinants of the person’s attitude and intention to perform a certain behavior regarding to the counterfeit purchase is very important One of the key constructs that indicates in consumer behavior is perceived risk On the other hand, counterfeiting is a harmful and risky business that has big impact on society as declaration of Pollinger and Lewis (as cited in Cat, 2010) Thus, it is necessary to

investigate the relationship between the factor of social cost that implies the consumers’ perception about the risk and loss of counterfeiting to society with consumers’ attitude as well as purchase intention toward counterfeit products Along with this point, Cordell et al., Grossman and Sapiro (as cited Carpenter, 2011) also proposed to conduct more research on the factor of social cost However, it is our understanding that although a lot

of studies have been conducted to investigate this problem on the world but there is a few number of the research about the determinants of consumers’ attitudes toward counterfeit purchase intention In Vietnam, the number of studies about this issue is still limited Even the studies of Dinh (2011) and Nguyen and Tran (2013) investigated about factor effecting consumer behavior toward counterfeit products in Vietnam but they focused on other constructs such as conformity, value consciousness, social influences and personal gratification Moreover, previous research just concentrated in counterfeit fashion luxury products, especially Nguyen and Tran (2013) conducted the research within respondents with experience in using counterfeit products

Therefore, in order to fulfill this gap and in an effort to identify the key factor affecting

on consumers’ attitudes and purchase intention toward counterfeit products, the research considers the concepts of perceived risk in counterfeits purchasing, social cost, attitudes towards counterfeiting and purchase intention of counterfeit goods The concepts of perceived risk and social cost need to investigate in this study because they can be considered as two sets of perceived consequences of counterfeit purchases and critical factors affecting ethical decision making (Tan cited in Koklic, 2011) Social cost means

the unexpected consequences of counterfeits for society at large while perceived risk mentions the perceived consequence for the individual who buys fake goods

After this research, it is hopeful that its founding will enable policy makers, brand owners and anti-counterfeiting groups to develop the suitable strategies to reduce counterfeiting from the consumers’ demand side

1.4 RESEARCH METHODOLOGY AND SCOPES

The research was conducted on consumers in Ho Chi Minh City which is a big city in Vietnam It centralizes all trading activities and gathers people from different provinces and social level in our country

This study just focused its scope on non-deceptive counterfeiting because consumers’ perceptions of counterfeits might create their demand for these goods only under non-deceptive counterfeit circumstances (Bian and Moutinho, 2009) To be different from the deceptive counterfeiting where consumers believe they have bought an

authentic product while in fact it is a counterfeit product, the non-deceptive counterfeits indicate the situations when consumers are fully known that they are purchasing a fake product at the time of buying (Grossman and Shapiro, 1988)

The author applied data analysis tool (Microsoft Excel and SPSS) to handle the collected data and to perform the research And then, using SPSS to test the scale reliability (Cronbach’ s Alpha), Factor analysis to determine which of a fairly large set of items were answered most similarly by the respondents, using Multiple Regression to check the relationship between independent variables and dependent variables

1.5 THE STRUCTURE OF THE STUDY

This thesis is organized into five chapters:

 Chapter 1: Introduction

This chapter presents the research background of the study, research statements/ research problems, research objectives, research scopes and methodology, the significance of the study, and the research structure

 Chapter 2: Literature review and hypotheses

In this chapter, the author presents the fundamental theories and definition of each mentioned concept and theoretical modeling with the proposed hypotheses In this chapter, the conceptual model of the study is also presented

 Chapter 3: Research Methodology

This chapter mentions about the research design, research methodology and illustrate the process of conducting the research

 Chapter 4: Data analysis and data results

For this chapter, the author summaries the characteristics of collected samples and presents the result of the research after analyzing collected data From that result, the author draws the conclusions for the research hypotheses proposed in Chapter 2

 Chapter 5: Conclusions, implications and limitations

This chapter performs the main results of the research, the contribution of the study in management theory and practice as well as the limitations of the study for future research direction

CHAPTER 2: LITERATURE REVIEW AND HYPOTHESES

In this chapter, the author presents the literature review, proposed hypotheses and conceptual model of the research

There are many ways to definite the meaning of counterfeits In this study, counterfeiting means the manufacturing of copied products with appearance, trademarks, labels the same as the authentic items Moreover, counterfeiting is involved an illegally manufactured copy of the genuine item (Wee et al., 1995; Phau et al., 2009, as cited in Hanzaee and Jalalian, 2012) There is the difference between deceptive and non-deceptive counterfeiting Deceptive counterfeiting happens when the consumer is unaware that she/he is purchasing a product that carried the brand name or logo without permission of the authentic owner (Grossman and Shapiro, 1988) Non-deceptive counterfeiting, consumers realized that products are not genuine through different information such as price, distributing channels, used materials (Charaborty et al., 1997; Gentry et al., 2011, as cited in Carpenter, 2011) or consumers purchase counterfeit products intentionally However, this research will focus on non-deceptive counterfeiting

in which consumer is fully known that purchased product is a fake one at the time of purchasing (Nia and Zaichkowsky, 2000; Grossman and Shapiro, cited in Cat, 2010)

2.1 PURCHASE INTENTION TO COUNTERFEIT PROUDUCTS

In the marketing literature, the relationship between the attitude and behavioral intentions has been strongly considered Ajzen and Fishbien (1980) proposed the Theory

of Reasoned Action that is built up of three determinants namely behavioral intention, attitude and subjective norm The theory supposes that an individual’s behavioral

intention is a function of the individual’s attitude toward performing the behavior and subjective norm related to performing the behavior The behavioral intention has discussed as individual’s relative strength of intention to do a behavior The attitude includes different beliefs about the results of doing the behavior multiplied by the evaluations of these results The subjective norm is a person’s belief about if others feel that she or he should perform the target behavior (Ajzen and Fishbien, 1980) In briefly, the individual’s attitude and the subjective norm perform the behavioral intention (Hanzaee et al., 2012) Moreover, according to Ajzen and Fishbien (1980), attitude is positively correlated with behavioral intentions, which in turn becomes a determinant of the real behavior There also were the numerous number of research about the positive relationship between attitude and purchase intent among different products and services (for example, Fitzmaurice, 2005; Pavlou and Fygen, 2006; Smith et al., 2008, cited in Zhang and Kim et al., 2013) According to Bellman et al (2009), the buying intentions to the fashion accessories in young female shoppers are influenced by their attitudes towards purchasing fashion accessories Yoo and Lee (2009) stated that there is a positive relationship between consumers’ attitude towards purchasing counterfeits and their buying intentions

2.2 CONSUMERS’ ATTITUDE TOWARD PURCHASING COUNTERFEIT PRODUCTS

Attitude towards deploying a behavior is considered as an evaluation of the level

to which a person likes or favors doing the behavior (Finlay et al., 2002) According to Hayes (as cited in Hanzaee and Jalalian, 2012), attitude influents on the way in which we

perceive or know the world around Ajzen and Fishbein (1980) and Fishbein and Ajzen (1975) (as cited in Zhang and Kim, 2013) presented their works about the relationship among beliefs, attitude, behavior intentions and behavior In which, attitude has some characteristics:

 Attitudes are not inherent but learned from experience

 Attitudes can be influenced by the observed antecedent stimulus and the consequent behavior pattern

 Attitudes have objective reference

 When attitudes are established, they are stable dispositions and not able to change under ordinary conditions

 From operational opinion, attitudes are consistent in a specific object situation

In marketing theories, attitude also is one of the most important concepts that marketers usually apply to understand consumers Consumers’ attitude shows how people’s beliefs and knowledge lead to attitudes and how their information integration process establish attitudes toward actions and impact on people’s intentions to perform behaviors (Xia and He, 2011) Moreover, as Phau et al (2009), attitude is often used as a predictor of consumer intentions and behaviors in which attitude is considered to be highly correlated with one’s intentions and it is a direct predictor of the consumers’ intention and behavior in the decision making process From above discussion, we have the first hypothesis

H1: Consumers’ attitude toward purchasing counterfeit products is positively related to purchase intention to counterfeit products

2.3: PERCEIVED RISK

Perceived risk is a risk in terms of the consumers’ perceptions about the uncertainty and adverse consequences of purchasing a product or service (Dowling and Staelin, 1994, cited in Matos et al., 2007) Moreover, consumers judge what are the possibilities that a problem might happens and also what will be the negative consequences of such problem, and this assessment will affect every stage of the consumer decision making process Because the nature of these problems differs, the risk might include different elements such as financial, safety, social, psychological, performance and time/ opportunity aspects (Havlena and Desarbo, 1991, cited in Matos et al., 2007) As Albers (1999), the risk factor has a significant role on purchasing of counterfeits In this circumstance, a consumer likely consider that: the product will not perform as well as an authentic one and there will be no guaranty from the seller; selecting a counterfeit will not bring the best possible monetary gain; the item might not

be as safe as the original one; the choosing of a pirated product will impact in an inverse way how others perceive them; and consumer will waste time, lose convenience or waste effort in having to repeat a purchase According to Matos et al (2007) confirmed that perceived risk was the most important variable to predict consumers’ attitude toward fake products Moreover, Chiou et al (2005), (cited in Koklic, 2011) revealed that perceived risk negatively impacts on the attitude of illegal copy and counterfeited music product buying In addition, perceived risk has also led to diminishing consumers’ favorable attitude toward purchasing pirated products As Albers (1999), (cited in Koklic, 2011) perceived risk decreases the willingness to make purchasing on faked color televisions

On the other hand, there are some studies found that perceived risk has been a factor to reduce the purchasing intention in counterfeit products as (Sinha and Mandel, Tan as cited in Koklic, 2011) From above discussions, the second hypothesis is created:

H2: Perceived risk is negatively related to consumers’ attitude toward counterfeit products

H3: Perceived risk is negatively related to purchase intention to counterfeit products

2.4: SOCIAL COST OF COUNTERFEITS

The social cost of counterfeits is the consequence counterfeiting brings to the society (Cat, 2010) Consumers usually buy pirated products to get the benefits from a well-known brand name without paying for it (Cordell et al., Grossman and Shapiro, cited in Carpenter et al., 2011) One research stated that consumers’ attitude toward counterfeiting purchasing is more favorable when the good is a luxury item with intention using in public, such as a counterfeit Rolex watch, compared to a necessity fashion good like tennis shoes (Chapa, et al., cited in Carpenter 2011) According to Chapa (cited in Carpenter 2011), he also believes that consumers who are more aware of global issues might be less interested in purchasing counterfeit products

In order to assess the social cost of counterfeit, the author refers to Lewis et al (2009), the OECD report (2008), the BASCAP report (2009) and Pollinger (2008) The consequences were frequently mentioned:

- Funding of international crime The counterfeiting seems the most attractive to

terrorists compared to other illegal businesses such as drug smuggling and human tracking There are many pirated organizations that are linked to terrorist groups

and organized crime (IACC, 2007; Kelly, 2005; Noble, 2003 cited in Carpenter et al., 2011) Basing on the counterfeiting activities, terrorists can get money easily without taking the risk a lot Moreover, pirating has become a means of funding for radical fundamentalist groups such as Al Qaeda and Hizbullah (Noble, 2003; Nurton, 2002, cited in Carpenter et al., 2011)

- Job losses Counterfeiting is one of the causes of job losses at a large scale in authentic companies

- Loss of taxes: The government faces to the huge losses of tax revenues because the

production and sales of fake products usually evade the duties of paying business

tax

- Child and forced labour: The counterfeit producers do not follow the current labor

legislations According to the International Labor Organization, that millions of children are forced to work in pirated manufacturers in China, where most of

counterfeit products are produced to serve the US market (Goodwin, 2006)

Therefore, informing consumers to understand about the social consequences of counterfeiting can be used to send potential consumers of faked products the negative cues Salembier, an editor of fashion magazine Harper’ s Bazzar, said, “ If people knew where their dollars were directed when they buying a fake watch or fake handbag, there is

no question that they would think twice about purchasing a fake” (Harper’s Bazaar, 2007,p.1, as cited in Carpenter et al., 2011) In addition, Penz et al (as cited in Carpenter

et al., 2011) found that when consumers know more about the specific negative business practices associated with counterfeits, they will be harder in purchasing counterfeits

However, according to Bloch et al (1993) and Cordell et al (1996) (as cited in Carpenter et al., 2011), their studies state that consumers may buy counterfeit products without considering public welfare issues In some situations, it might be that consumers are not aware of the social issues associated with pirates Cuno (2008) found that there is

no difference in intention to purchase counterfeit products between a group with awareness of the illegality and negative effects of counterfeiting and the other had not From these statements, the further hypothesis is:

H4: Social cost of counterfeits is negatively related to consumers’ attitude toward purchasing counterfeit product

H5: Social cost of counterfeits is negatively related to purchase intention to counterfeit products

2.5 THE CONCEPTUAL MODEL

Basing on the review of the previous literature and hypotheses presented, the following conceptual model is proposed

Figure 2.1 Conceptual Model

Summary

This chapter mentions about definition and theoretical background of each concept

in the model From previous literature, consumers’ attitude toward counterfeit products is impacted by two factors: perceived risk in counterfeit buying and social cost while

purchase intention toward pirated goods is influenced by perceived risk in counterfeit buying, social cost and consumers’ attitude toward purchasing these products There are five hypotheses in this study

CHAPTER 3: RESEARCH METHODOLOGY

This chapter mentions about the ways to find the answer for research questions, including: research design, research process, research scale, sample size, data collection procedure and data analysis method

3.1 RESEARCH DESIGN

In order to dress a design for research, researchers considered the kind of model and measures were suitable to the subject of the research The focus of this research was examining the factors affecting consumers’ attitude and intention toward purchasing counterfeit products which includes perceived risk, social cost, the attitude toward purchasing counterfeits and purchase intention of counterfeit products An operation model was presented in Figure 2.1 This research used primary data that collected from consumers in Ho Chi Minh City Thus, a questionnaire survey design was used as the data collecting method

3.2 MEASURES OF THE CONSTRUCTS

Based on the literature, the researcher set up the survey instrument, using scales that were already validated in previous studies

 Perceived risk was measured by 2 items according scale of Dowlingand Staelin (cited in Hanzaee and Jalalian, 2012):

Risk1 The risk that I take when I buy a counterfeited product is high

Risk2 There is high probability that the product does not work

 Consumers’ attitude toward purchasing counterfeited products was measured by 3 items borrowed from scale of Huang et al (cited in Hanzaee and Jalalian, 2012):

Attitude1 I like shopping for counterfeit products

Attitude2 Counterfeit products generally benefit the consumer

Attitude3 Generally speaking, buying counterfeit products is a better choice

 Social cost was measured by 3 items from scale of Kwong et al (cited in Carpenter, 2011)

Social1 Counterfeit products hurt the companies that manufacture the genuine product

Social2 Counterfeit products hurt the world economy

Social3 Counterfeit products discourage investment in innovation and brand building

 Purchase intention of counterfeit products was measured by 2 items as the scale of Summers et al (cited in Zhang and Kim, 2013)

Purchase1 I would like to buy counterfeit products

Purchase2 I intend to purchase counterfeit goods within the next year

All of the measurement scales used Likert scales varying from 1 (completely disagree) to 5 (completely agree) to explore the opinion of the respondents

In this study, it was not clarify any counterfeit product in particular Questions considered the meaning of “counterfeit products/ pirated products/fake products” in general because the purpose at this moment was to evaluate consumer attitudes and purchase intention toward counterfeit products in overall Next, the author mentioned the process done to conduct the research

After finishing the preliminary questionnaire, the researcher conducted the depth interviews with 10 people in Ho Chi Minh City to obtain the correct items in the context of Vietnamese consumers, check the content and meaning of words used in the initial measurement scales and modify them to be more suitable and understanding Although most of the measures of the constructs were mentioned in the previous literature, this step is necessary to make them appropriate and easy to understand in the context of studying During the interview, the author received some significant feedback and suggestions from the interviewees to make the improvement for the official questionnaire (See Appendix A)

in- Quantitative research

After the qualitative research, the author adjusted the questionnaire again to be more suitable with Vietnam market and easier to understand When the author considered that the questionnaire was designed properly, the main survey was conducted widely by using

convenience sample which collected from consumers in Ho Chi Minh City The process

of the quantitative research was followed these steps:

- Step 1: The author composed the questionnaire for the research:

Questionnaire was designed in English, after that the author translated into Vietnamese for delivering to respondents (See Appendix B&C)

- Step 2: The author defined the sample size of the research:

According to many researchers, the size of the sample depends on the method of estimate the sample According to Hair et al (2010), a general rule, the sample size should be 100 or greater and the minimum sample is 5 observations for each scale The model in this study consists of 4 factors with 10 scales so that the minimum sample size should be: 10*5 = 50 observations

For standard multiple regression analysis, the required sample is recommended by Tabachnick and Fidell (1991) should be n>50+8m (where m=number of independent variables) There are 4 independent variables in this research Hence, the minimum sample required to run multiple regression in this study is n > 50+ 8*4= 82 observations

The author used the sample size at 176 observations This sample size was appropriate for EFA and multiple regression analysis After that, sampling was conducted based on convenience sampling All respondents were asked to know about counterfeit products before answering the questionnaire

- Step 3: The author issued the questionnaire to the interviewees

The author issued questionnaires to respondents who live in Ho Chi Minh City at the time the research was deployed by delivering directly hard copy to respondents In order to be more convenient for respondents, the questionnaires were also broadcasted via the internet by Google docs By this way, the author sent the survey link to respondents via gmail, facebook and yahoo chat The respondents could answer the survey by clicking on the link and keying their answers and submitting the link to the researcher To make sure respondents understanding clearly at the beginning of interviews, counterfeit products were defined as products that bear a brand name or logo without the permission of the registered owner or an illegally manufactured copy of the genuine item Data collection was conducted during 2 weeks The author collected 120 questionnaires from online channel and out of 120 questionnaires in hard copies, respondents returned 103 questionnaires 120 hard copies were delivered researcher’s colleagues at the working place and students at University of Economics and at the library of university of social sciences and humanities in Ho Chi Minh city In total, the author collected 223 answers

- Step 4: The author received the questionnaire and checked again for suitable results

The author collected 223 answers After checking and removing the error questions which were missed answering or answered with value number “3” for more than fifty percent of the number of questions in the questionnaire from the

list of response As a result, the usable data or this study was 176 observations It

is suitable with the requirement of minimum sample size: 82 observations

Below table summarized collected data from the survey

Table 3.1

The results of collecting questionnaires

Number of questionnaires were

delivered

Number of questionnaires were returned Percentage

Number of questionnaires were usable after cleaning data

to answer all the questions before submitting the result Therefore, when one item that respondent forgot to answer, they could not finish the survey While conducting the survey by hard copies, some respondents missed answering ore ignore the item in questionnaire As a result, questionnaire without finishing all questions were removed for data analysis

 Data code:

Data were reviewed for completion, coded and input the raw data in IBM SPSS Statistic version 16 with the scale as mentioned in Part 3.2

3.4 Data analysis method

The SPSS (Statistical Package for Social Science) software version 16.0 was used

in this study for analyzing collected data Moreover, in order to statistic the sample, compare the results, other main tools of SPSS version 16.0 and Microsoft Excel were used for sample description For the next steps, the reliability and validity of measurement scales were evaluated by using Cronbach’s alpha and exploratory factor analysis (EFA) After that, the author used Muliple Regression to test the relationship between independent variables and dependent variables as proposed hypotheses

3.4.1 Cronbach’s alpha

According to Connely (2011):

Cronbach’s alpha is used as only one criterion for judging instruments or scales It only indicates if the items “hang together”; it does not determine if they are measuring the attribute they supposed to measure Therefore, scales also should be judged on their content and construct validity (p.45)

As Leech et al (2005), the acceptable value of Cronbach’s alpha for reliability is obove 0.7 However, it can reduce to 0.60 – 0.69 range, especially if there is only a handful of items in the scale When the Cronbach’s alpha is very high (greater than 0.90),

it probably means that the items are repetitious or there are more items in the scale than are really necessary for a reliable measure of the concept (Leech et al., 2005)

Beside of evaluating the value of the Cronbach’s alpha, the Corrected Item – Total Correlation is also important to consider According to (Leech et al., 2005), if this correlation is quite high or high (equal 0.40 or above), the item is probably correlated with most of the other items and make a good component of this summated rating scale

If the item – total correlation is negative or too low (less than 0.30), it is necessary to consider the item for wording problems and conceptual fit by modifying or deleting such items

3.4.2 Exploratory factor analysis (EFA)

Norris and Lecavalier (2010, p.9) declared that “EFA is based upon a testable model and can be evaluated in terms of its fit to the hypothesized population model; it indices can be generated to help with model interpretation” On other hand, EFA method is used to identify which of a large set of items go together as a group, or are answered most similarly by respondents (Leech et al., 2005)

3.4.3 Multiple regression analysis

The multiple regression analysis is used to test the hypotheses and predict one outcome measure from several independent variables (Leech et al., 2005) According to Leech et al (2005), the multiple regression analysis requires many assumptions but it is better to focus on the major ones that are tested easily with SPSS The assumptions include:

1 The independence of residuals (errors)

2 A linear relationship between each of the predictor variables and the dependent variable

3 Residual or the error is normally distributed

with 10 respondents to check if the meaning as well as the word using in the scales were easy to understand and suitable with research context After qualitative research, the questionnaire was lightly revised to be more suitable On quantitative research, the author listed out five steps from composing questionnaire, the way of defining the sample size for this study, the method of delivering questionnaires to respondents, cleaning collected date to be usable for analyzing to coding data for input into SPSS software The author applied both a paper questionnaire and online questionnaire to distribute to respondents After collecting and cleaning the data, the sample size could be used for final analysis included 176 questionnaires Finally, the author introduced the method that the researcher applied to analysis the collected data The next chapter will present data analysis results

of main survey

CHAPTER 4: DATA ANALYSIS AND DATA RESULTS

In this chapter, the author reported the result of the research Firstly, the descriptive of the collected data was presented Next step, the author tested the reliability and validity of the scales by Cronbach’s alpha reliability and Exploratory factor analysis (EFA) After checking the validity of the scales measurement, the model was evaluated

by multiple regression analysis

4.1 SAMPLE CHARACTERISTICS

A sample of 176 respondents include 87 men (occupied 49 percent) and 89 women (occupied 51 percent), aged from 18 to over 45 years old with majority being in the age group of 18 to 30 years old (about 143 respondents, occupied 81 percent) In terms of career, most of respondents are office staffs who accounted for 63 percent of the sample Regarding to income per month, it was ranged from less than 5 million VND to over 20 million VND but the majority of interviewees had a monthly income from 5 to 10 million VND with 59 percent The second group of higher income was from 10 to 15 million with 43 percent of total sample All respondents were known about counterfeit products and 93 percent of them expressed that they were most interested in counterfeited fashion cloths and accessories

4.2 THE RELIABILITY TEST: THE CRONBACH’S ALPHA TEST

It is obligated to test the Cronbach’s alpha of scales for each construct in order to make sure that all items in one scale were reliable in measuring the research concept The Cronbach alpha helps to delete unreliable scale or unsuitable scales As theory, the value

of Cronbach’s Alpha should be above or at least equal 0.6 to qualify internal reliability (Nunnally & Burnstein, as cited in Nguyen, 2011) Moreover, if the correlation of each

specific item with total of the other items in the scale ( Corrected Item-Total correlation)

is moderately high or higher 0.3 (Burnstein & Nunnally, as cited in Nguyen, 2011), the

item is probably at least moderately correlated with the most of the other item and will

make a good component of this summated rating rate On the other hand, if the item of

total correlation is negative or too low (less than 0.3), it is required to check again the

words used in questionnaire, take a look on the meaning between each item and modify

the item if it is necessary for conceptual fit

The results of Cronbach’s alpha test for each construct were summarized in below table:

Table 4.2

The results of Cronbach’ alpha

Scale Mean if Item Deleted

Scale Variance

if Item Deleted

Corrected Item - Total

Correlation

Cronbach's Alpha if Item Deleted

The result performed that 4 scales had the result of Cronbach’s alpha above 0.6, the highest was 0.899 (purchase intention toward counterfeit products) and the lowest was 0.707 (perceived risk) Moreover, the corrected item-total correlation of each item is above 0.3 This indicates that all scales fit the requirement for reliability As a result, these measures were used in establishing the main survey to test the study hypotheses

4.3 EXPLORATORY FACTOR ANALYSIS (EFA)

After analyzing the Cronbach’s alpha, the author evaluated the measurement scales by conducting exploratory factor analysis The purpose of EFA is to define which set of items go together as a group or are answered similarly by respondents (Leech et al., 2005) In this study, EFA was run through the Principal Axis Factoring with Varimax rotation method As the conceptual model that there are four factors: Perceived risk, social cost, consumers’ attitude toward purchasing counterfeited products and purchase intention toward counterfeit products The author examined if the items belonging to one concept actually are in the same group

Based on the test of assumption, the KMO was 0.771 presenting sufficient items for each factor KMO test indicates one whether or not enough items are predicted by each factor The Bartlett was significant (0.000 less than 5%) means that the variable are correlated highly enough to provide a reasonable basis for factor analysis (See Table 4.3)

By doing EFA (Principal Axis Factoring with Varimax rolation method), the result showed that four factors were extracted from 10 items measuring: perceived risk, social cost, consumers’ attitude toward purchasing counterfeit products and purchase intention toward counterfeit products Moreover, the cumulative of the first four factors occupied

for 78.3 percent of variance This indicated that nearly eighty percent of variance could

be explained by four initial items

The Rotated Factor Matrix showed the items and factor loading for rotated factors with loading higher than 0.5 are significant as requirement The items clustered into four groups that they belong to