�� 2009 Palgrave Macmillan 1350-23IX Brand Management Vol. 16, 5/6, 364���374 www.palgrave-journals.com/bm/ Correspondence: Giacomo Gistri Dipartimento di Scienze della Comunicazione, Via Armaroli, 9, Macerata 62100, Italy Original Article Consumption practices of counterfeit luxury goods in the Italian context Received (in revised form): 8 th September 2008 Giacomo Gistri is an assistant professor at the University of Macerata (Italy). His primary research interests are brand management, consumer behaviour and marketing communications. His papers on these subjects have been published in academic journals such as Advances in Consumer Research and European Advances in Consumer Research , among others. Simona Romani is an associate professor of Marketing at the University of Sassari (Italy). Her interests are branding and consumer behaviour. Her work has been published in Advances in Consumer Research , European Advances in Consumer Research and the Journal of Product and Brand Management , among others. Stefano Pace is an assistant professor of Marketing at the Bocconi University (Italy), where he earned his PhD in Business Administration and Management. His current research interests include brand communities and services marketing. His international publications include papers in journals such as International Marketing Review , European Journal of Marketing , European Management Journal , Qualitative Market Research , European Advances in Consumer Research and Group Decision and Negotiation . Veronica Gabrielli is an assistant professor at the University of Modena and Reggio Emilia (Italy). Her primary research interests are consumer behaviour, branding and marketing communication. Her papers on these subjects have been published in academic journals and have been presented at international conferences. Silvia Grappi is an assistant professor at the University of Modena and Reggio Emilia (Italy). Her primary research interests are consumer behaviour and branding. Her papers on these subjects have been published in academic journals such as Advances in Consumer Research . ABSTRACT Counterfeiting is an expanding and increasingly relevant phenomenon in contemporary markets that has a particular impact on luxury branded goods. Most academic literature to date has focused its attention on the determinants of purchase, underestimating the consumption phase. This paper aims to fi ll this gap by investigating how people consume counterfeit luxury products. Our results help us to better understand the phenomenon as a whole, with the objective of providing useful insights for the companies that produce luxury goods, and assisting them in realising effective policies for stemming counterfeiting. Journal of Brand Management (2009) 16, 364 ��� 374. doi: 10.1057/bm.2008.44 published online 6 February 2009 Keywords: luxury goods counterfeit consumption brand equity anti-counterfeiting policies

�� 2009 Palgrave Macmillan 1350-23IX Brand Management Vol. 16, 5/6, 364���374 365 Consumption practices of counterfeit luxury goods The aim of this paper is to understand these consumption practices by applying frames and models of consumption behaviour. 5 Studies on counterfeiting are numerous. We can, however, with a few exceptions, notice three gaps in previous researches: 6 ��� 14 The stage of the customer process : Previous studies have focused on the purchase stage of counterfeit goods instead of the consumption stage. The determinants of the purchase of counterfeit goods are extensively assessed in the literature, whereas consumption practices are less frequently addressed. The methodology : Past research has mainly been quantitative rather than qualitative. The products : Fashion / luxury goods (and functional products as well) seem somehow to be understudied, in the sense that luxury is not the core of pre- vious contributions, which are focused on counterfeiting, and often consider the type of goods as a variable to con- trol, rather than the core issue. The question of what distinguishes luxury brands from other classes of product when counterfeiting is considered is not answered by the previous literature. Our aim is to fi ll these gaps by qualitatively studying the consumption practices of luxury counterfeit products. There is no unanimous consent around a common defi nition of a luxury brand. In this sense, we can refer to the work by Vigneron and Johnson. 15 The two authors indicate fi ve factors that would defi ne a luxury brand: conspicuousness, uniqueness, quality, use for the extended-self 16 and hedonism. High price is a common facet that cor- relates with the fi ve factors listed above. 17 The exclusivity and high quality of a luxury product determine a high price. The affl uence that an individual would like to ��� ��� ��� INTRODUCTION AND THEORETICAL BACKGROUND Counterfeiting represents a complex phe- nomenon that affects brands, consumers and entire economies. In our study, we spe- cifi cally focus on non-deceptive counterfeit goods in the luxury sector, which involve the customer intentionally buying and using a luxury product that is known to be fake. 1,2 According to the report published by the Organization for Economic Co-operation and Development in 2007, 3 the total value of counterfeit goods in 2005 was at an astounding level of $ 200 billion. This fi gure includes exclusively the goods traded inter- nationally. The total value of counterfeiting is even higher if one considers the domestic market for counterfeit goods. According to the European Commission, 4 in 2006, European customs seized a quantity of counterfeit goods and goods that infringe intellectual property rights that was 273 per cent greater than in 2000. Luxury brands are a core target for coun- terfeiting. As the European Commission reports, ��� The more traditional sectors of counterfeit goods, namely clothing and luxury goods, have shown again another big increase this year ��� . 4 Italy represents a key case for those inter- ested in studying counterfeiting practices and counterfeit luxury in particular. Con- sidering any category of goods, in 2006 Italy was fourth among the European States for the number of counterfeit articles seized by customs police, with more than 18 million items. The huge impact of counterfeiting on luxury brands, combined with its com- plexity, calls for a deepening of studies of the phenomenon. The starting point is the consumer: what are the practices of con- sumption for luxury counterfeit goods? From the answers to this question, policy- makers and companies could obtain sugges- tions for ways to address counterfeiting.