If companies want to cut into sales of counterfeit products, they need to understand why consumers buy them in the first place

By  PEGGY E. CHAUDHRY And  STEPHEN A. STUMPF

As the counterfeit trade booms, companies are rolling out massive campaigns to get people to stop buying fakes. But the messages they use are often off the mark.

Companies have tried everything from threatening prosecution to linking phony products with organized crime. But marketers often don’t pay attention to what actually drives people in particular markets to buy counterfeits and what messages will actually work to curb demand of fake goods.

Companies, for instance, might roll out ads in a country stressing that fake products are of poor quality. But those ads might ignore the fact that local consumers have little disposable income and consider knockoffs a bargain—so they are willing to accept a price-quality trade-off. A better approach might be to stress that the phony goods, such as fake cigarettes, are funding terrorism or, in the case of counterfeit pharmaceuticals, are actually killing people.

To figure out how companies can improve their antipiracy marketing, we surveyed consumers in five large markets—Brazil, Russia, India, China and the U.S.—to see what would make them opt for knockoffs. Then we used that information to figure out what messages might get people to stop buying the illegitimate goods.

WHY CONSUMERS BUY

We presented consumers in each market with five possible motivations for buying counterfeits in two categories—movies and drugs—and asked them to rank the factors on a seven-point scale of importance. Here’s what they said about each.

1. Quality and performance. Consumers would buy a fake if they thought it was just as good as a legitimate product.

Only U.S. consumers ranked this as an important factor that would influence them. Elsewhere, this attribute was just "somewhat" important—and Russian consumers ranked it not important at all. Astonishingly, consumers in these country markets valued the quality of the fake medicine less than they did factors such as reduced price and availability.

On the other hand, the quality of bootleg movies was ranked as very important for Russian, Brazilian and Chinese consumers, and less so for people in the U.S. and India.

2. Cost. Consumers would buy a fake because they cannot afford a genuine product.

Not surprisingly, almost all consumers ranked this as a very important motivation for pursuing fake drugs and bootleg movies alike. The two exceptions: Chinese consumers said this factor was only somewhat important when it came to drugs; U.S. consumers said the same about movies.

3. Sentiment. Consumers would buy a fake because they do not like the big businesses that make the authentic products.

We expected some resentment here, since drugs and movies are usually produced by large corporations, and the people who buy counterfeits may believe that the industry is price-gouging consumers. But only in China did consumers express disapproval of the large movie studios as a significant motivator for buying bootlegs. And only U.S. consumers showed an anti-big-business sentiment for both the movie and drug industries.

Their Brazilian, Russian and Indian counterparts did not concur, and rated this as an unimportant justification.

4. Ethics. Consumers would buy a fake because they do not think it is illegal or immoral to do so.

In this area, consumers had very different attitudes about movies and drugs.

In Brazil, India and the U.S., consumers said that consumption of fake pharmaceuticals was an unethical behavior. In Russia and China, it was not important at all—in effect, consumers would buy the fake pharmaceuticals even if they realized it was an immoral or illegal act.

With movies, on the other hand, consumers in all markets but Brazil said that ethical behavior was unimportant when it came to obtaining counterfeit movies. (In Brazil, it was just somewhat unimportant.) These consumers simply do not see bootlegged movies as illegal or morally wrong, perhaps because of the ease and anonymity of Internet downloads and the widespread consumer acceptance of obtaining fake movies. In our survey, 50% of 1,910 consumers readily admitted to obtaining a bootleg movie.

5. Ease. Consumers would buy a fake because it is easy to obtain.

As with ethics, this factor brought up a big divide between movies and drugs. The ease of obtaining fake movies was a very important motivation in each market. However, with drugs, ease was an important factor only in the U.S., just somewhat significant in Brazil and India, and not significant at all in China and Russia.

Consumers, in other words, face different degrees of easy market access to counterfeit drugs and may pursue counterfeit drugs even if they are tougher to obtain.

Read the rest of this article on counterfeit products and fake medicine on the Wall Street Journal Web site.