CHOW SANG SANG JEWELRY: THE GROWING ISSUE OF COUNTERFEITING IN THE GLOBAL MARKET
Table of Contents
TOC \o “1-3″ \h \z \u EXECUTIVE SUMMARY
1. INTRODUCTION
1.1. Research Background
1.2. Research Question
1.3. Research Objectives
2. RESEARCH APPROACH AND DESIGN
2.1. Design
2.2. Data Collection Method
2.3. Sampling Method
2.4. Questionnaire Design
2.5. Timetable
2.6. Budget
3. DATA ANALYSIS
4. LIMITATIONS
5. REFERENCES
EXECUTIVE SUMMARY
As of now, all of the global industries and businesses in the world are facing problems regarding the production and introduction of different counterfeited products in the world. The said issue is important due to the fact that it those pirates will not only serve as direct competitors but will also endangered their position in the global market.
Hong Kong is one of the cities, and as the shopping paradise of the world, that is being affected the said issue. Thus, due to the fact that the Chow Sang Sang is operating in the city, there are some customers who are having doubt about the different retail stores in the entire shopping industry in Hong Kong.
This paper uses descriptive method in order to tackle the issue of how the issue of counterfeited products from Hong Kong can affect the perspective of the mainland Chinese tourists and customers towards the products, as well as services of Chow Sang Sang. Using the data from 380 shoppers from 38 stores of the company, by survey questionnaire, the main focus is to analyze and investigate the groups of individuals in terms of age, sex and nationality that are affected by the said issue. It will also tackle the different way of how the customers asses the authenticity of the products.
It will also focus on analyzing the result of the survey and how it can be used in order to create different policies and strategies that can help to ensure satisfaction, trust and loyalty of the customers.
1. INTRODUCTION
1.1. Research Background
Selling an imitation that is intended to defraud others into accepting it as a genuine item is already considered as a criminal offence. As of now, the counterfeit market is developing in different products, categories as well as geographical regions, and it is becoming one of the primary concerns of many multinational enterprises. Brand equity erosion as well as consumer safety are considered as the major issues, and strategies that are needed in order to protect the customers against counterfeiters (Delener 2000).
Currently, counterfeiting is considered as a worldwide phenomenon that already exists for many years in majority of the sectors of the markets. In general, the said problem affects the different trademark products that enjoy prestige and acceptance among the vast population of consumers. Thus it is considered as unlawful activity that can cause economic damage and then discredits the commercial image of a given trademark (Delener 2000).
It is important to consider that international trade for counterfeit products is already worth 0 billion per year or about 6% of the entire merchandise trade in the world. The International Trade Commission reported that there are about 0 billion counterfeit market that translates into a loss of 0 billion for the global business, showing a great increase compare to the billion during 1986 (Delener 2000).
The unconcealed copying of everything from watches and handbags as well as auto parts and other promotional merchandise cuts into profits, thus harms the reputation of the owner of the trademark or brand. Thus, a gullible or even confused consumer may believe that a certain product or brand is authentic and he or she will be upset with the brand owner when the counterfeit was proven defective. That’s why the trademark infringement cannot be ignored. Aside from that, the rights of the trademark become diluted if the owners tolerate the counterfeits (Delener 2000).
Above all, the international counterfeiting is considered as financially lucrative with a very little risk, thus as the products shift from high to low margin and high volume, the monetary benefits will become greater. In addition, in different countries with the galloping inflation, currency devaluation as well as low purchasing power, counterfeited products offer an option for the consumer. In addition, it can also be observed that unstable governments with the frequent policy shifts and widespread corruption permit counterfeiters in order to operate successfully (Delener 2000).
Hong Kong is considered as the shopping paradise that attracts thousands of travelers from different part of the globe. That is the primary reason why more and more people are visiting the city. According to the Hong Kong Tourism Board or HKTB, in May 2008, the visitors’ arrival for the first quarter of 2008 had reached 7,275,521 showing an increase of 10% from the previous year of the same quarter. And again, China was the main source market for the in-bound tourists with some 1,269,673 in March, an increase of 16.8% (2008). Shopping in Hong Kong is one of the most important activities by the tourist, specially those visitors from China, because there has no sales tax in the city, luxury goods can be 10% to 20% cheaper compare to other countries (Chan 2008).
In connection, the Air Force News Service or AFNS reported that the Hong Kong retail jewelry, watch and luxury gift sales had reached 0 million in March 2008, showing a great increase of 30.9% compare to the last year of the same month (The Israeli Diamond Industry 2008).
On the other hand, the government of the city, started implements different programs that will ensure that their tourists will not be a victim of any case that is related to bogus or fraud products. The said initiative was done in order to maintain the image of the city as the shopping capital of the world.
One of the said initiatives is the implementation of Quality Tourism Services Scheme that makes it easy for the tourists to find shops, restaurants and budget visitor’s accommodation that can be trusted. The said standard requires QTS-accredited establishments to pass stringent annual assessments that show that they have met the high standards of product quality as well a service (Hong Kong Tourism Board 2008). The said action is part of the No Fakes Pledge, in order to reinforce the confidence of consumers and tourists while shopping in Hong Kong. The said New Fake Pledge was launched in cooperation of the Intellectual Property Department, Customs and Excise Department, Hong Kong Tourism Board, Travel Industry Council of Hong Kong, Consumer Council and other issuing bodies (Wong 2004).
Chow Sang Sang Jewelry is one of the companies that are being benefited by the bloom of the industry. Chow Sang Sang is considered as a leading jewelry retailer and manufacturer in the greater China region. The company is operating to a more than 100 shops in China, Hong Kong, Macau and Taiwan (Chow Sang Sang 2008).
However, the global market now is facing one of the most important problems, both for the companies as well as the consumer. Counterfeit products and the brand pirates who make, distribute and sell them continue to be a challenging aspect for many of the marketers in the world. There are an estimates that shows hundreds of billions of global sales for bogus products in both developed and developing countries (Gentry, Putrevu & Shultz II 2006).
That is the reason why, there are some consumers or shoppers in Hong Kong who are having doubt regarding the authenticity of different products that are available in the city. Thus, it can also affect the relationship of Chow Sang Sang to their consumers.
1.2. Research Question
The problem that will be addressed in the study is the impact of the issues about counterfeit products in the shopping behavior of the customers, particularly the customers of Chow Sang Sang Jewelry. The study will answer the following questions:
a. What are the common concerns of the customers in their shopping activities?
b. Are the customers educated and informed enough regarding the difference between the real and the fake one?
c. How do customers evaluate the quality or authenticity of the products?
d. What should be done in order to guarantee the customers about the authenticity of the products?
1.3. Research Objectives
To carry out the overall aim of the study, the following are the objectives of the study:
a. To examine the perception of the customers towards counterfeited products;
b. To understand how the local and tourist shopper evaluate the authenticity of different products;
c. To identify how the issues of counterfeited products in Hong Kong can affect the buying behavior of the customers;
d. To categorize the customers based on their shopping behavior and their demographic groups;
e. To determine promotional platform that can be used in order to guarantee the customers about the authenticity of the Chow Sang Sang Jewelry;
f. To present report that will disseminate information and awareness for the customers regarding the issue of counterfeited products.
2. RESEARCH APPROACH AND DESIGN
2.1. Design
The research will be descriptive in nature. A descriptive research intends to present the fact that concerns about the nature and status of a given situation, as it exists at the time during the study (Creswell 1994). In addition it also focus on the relationships and practices that currently exists, beliefs and processes that are ongoing, effects that are being felt as well as the trends that are currently developing (Best, 1970). Furthermore, it also help to describe the present conditions, events and even the different systems based on the impressions and reactions of the respondents of the research (Creswell 1994). Thus, its primary concern is to provide an accurate description for something that is happening.
Fundamentally, a descriptive research makes the most of observations and surveys. It is for this particular reason that this approach was chosen by the researcher, whose purpose is to gather first hand data from consumers from different stores of Chow Sang Sang in Hong Kong. Moreover, this will allow for a flexible approach that when a vital and significant new issues and questions arise at the period of the study, an additional investigation and examination can be conducted. In addition, with this type of approach, the researcher will be permitted to drop unproductive areas and aspects of research from the original plan of the study. Another advantage is that, with this approach, the research will be fast, thus it will help to save time, money and effort.
2.2. Data Collection Method
Survey is the chosen means to collect data from the respondents because it is important in understanding the audience, and in the analyzing the existence and magnitude of the problems, and it will also helpful in determining cause and effect relationships between variables (Commonwealth of Learning, 2000). Furthermore, the preliminary descriptive survey results can prove to be useful for planning more sophisticated survey studies with a view to identify areas where problems occur or where changes are required, to understand why people behave in a certain manner and what can be done to provide alternate solutions to the problems, where an attempt is made to understand the relationships between different variables, and the purpose of survey to diagnose or analyze the situation rather than just describe the situation (Commonwealth of Learning, 2000).
The recruitment of respondents and the dissemination of the survey questionnaire will be conducted in the 38 stores of Chong Sang Sang in Hong Kong.
2.3. Sampling Method
The study will sample a target number of 380 shoppers from 38 shops or store of Chow Sang Sang. The samples will be chosen through convenience sampling. It was chosen among other types of probability sampling due to the fact that it can make the survey faster and easier. It is important to consider that the number of shopper in Hong Kong, particularly in the jewelry sectors and in the Chow Sang Sang is huge and changing due to the different environmental factors, that’s why the use of non-probability sampling like the convenience is advisable, because 1% of the entire shoppers’ population is too much for the study to cover.
The criteria for sampling are that the respondents must be a tourist and a shopper in the store and ages 18 and above.
2.4. Questionnaire Design
The entire questionnaire will be constructed in both English and Mandarin, in order to cater for English-speaking tourists and those tourists from mainland China. In addition, due to the fact that the respondents will be chosen in convenience sampling technique and the research will interrupt the activities of the respondents for that day, close format questions will be used to make it easier and faster for them to answer.
A survey-questionnaire will be used and will have two sections. The first part will intend to acquire the demographic profile of the respondents, while the other section will contain a set of attitude statements. The purpose of the set of attitude statements is to determine the level of agreement or disagreement using a five-point Likert scale. In the Likert technique, the degree of agreement or disagreement is given a numerical value ranging from one to five, thus a total numerical value can be calculated from all the responses. (Underwood, 2004) The equivalent weights for the answers will be:
Range Interpretation
4.50 – 5.00 Strongly Disagree
3.50 – 4.00 Disagree
2.50 – 3.49 Uncertain
1.50 – 2.49 Agree
0.00 – 1.49 Strongly Agree
The questionnaire will have 4 important categories that will focus on analyzing the opinions of the customers regarding the counterfeited products, and how it can affect their buying behavior. The first category will focus on knowing the demographic background of the respondents such as age, sex and nationality. The second will focus on knowing the relationship of the customers to the store or company by knowing the regularity of their visitation and reasons for choosing the said company. The third part will pertains on asking the opinions of the customer regarding the issue of counterfeiting and its impact on their shopping perspective and decision and how it can affect their relationship with the company. The last category will focus on asking the customers regarding what should the Chow Sang Sang must do in order to guarantee them about the authenticity of their products.
2.5. Timetable
The timetable below shows the suggested timeframe for the project. When the project is underway, weekly progress reports will be sent every Friday. This will help to summarize the week’s work and give the researchers the opportunity to put into place for any modification.
It shows that the store coordination and development of the questionnaire are overlapping, it means that the questionnaire construction can be done even the coordination with the different stores are not yet finished. The next activity pertains on the process of the actual survey, where in the questionnaire will be given to the selective respondents in each and every store. Soon after the said activity finished, the analysis will follow, it will include the handling and examination of the data, and connecting it to the needs of Chow Sang Sang.
Week
Activity
1 -2
Store coordination
2 – 3
Questionnaire development
4 – 6
Dissemination of Questionnaire
7
Analysis
8 – 9
Documentation
10
Presentation
11
Final Report Available
2.6. Budget
The estimated budget for the study is 3000 dollars. It will include the money that will be for the 2 personnel that will serve as the research assistance, aside from that there are also different equipment that must be used such as the printer and other utilities such as bond paper and ballpen.
2 research assistant 200 dollars/day for 15 days 3000 dollars
Travel expenses 75
1 ream bond paper 20
1 desktop computer set 400
1 computer printer 50
4 ball pen 2
TOTAL 3547 dollars
3. DATA ANALYSIS
Data gathered using the said instruments will be collated for analysis. Data analysis will primarily be characterized by comparative and statistical approach. In line with the interview method which will be collected from the shoppers of the company. The data that have gathered from 380 respondents from the Chow Sang Sang stores will be analyzed using a coding frame such as the Likert Scale mentioned above. Herein, a coding frame will be developed to enable all enclosed questions to be coded numerically. The data would then be entered onto SPSS software. The templates for data entry can be generated from questionnaires, and records can be checked, revised and manipulated.
The weighted mean and percentage of the responses will be calculated. The data results of the study will be analyzed by determining their corresponding frequency, percentage and weighted mean. The following statistical formulas will be used:
Percentage – to determine the magnitude of the responses to the questionnaire.
n
% = ——– x 100; n – number of responses
N N – total number of respondents
Weighted Mean
f1x1 + f2x2 + f3x3 + f4x4 + f5x5
x= ———————————————;
xt
where: f – weight given to each response
x – number of responses
xt – total number of responses
Aside from that, the paper will also use cross-tabulation method in order to show the relationship of the group of respondents towards the issue of counterfeited products, and its impact on their perspective on shopping.
First is that, it will be important to relate the different demographics aspects such as the age with the issue of how counterfeiting affect the decision of the tourists in shopping activities.
Nationality
Issue of Counterfeiting Affects My Decisions in Shopping
Strongly Agree
Agree
Uncertain
Disagree
Strongly Disagree
18 – 22
25
21
13
29
32
23 – 26
22
35
2
17
16
27 – 30
19
12
1
10
8
31 – 34
35
30
5
15
10
34 – above
4
2
6
2
3
The said table will help the researcher to know the relationship between the age groups and their opinions about the said issue of counterfeiting, with their connection to the company.
Thus, it can help the management to be informed who among the groups of visitors are more particular with the issue. This will help the organization to plan, set and implement different policies and strategies that will make sure that the customers are feeling safe and satisfied about their products. It can also be applied in the age bracket or group of the customers, it will be important to know who among the age group are more aware about the issue and who among them are affected by the said aspect in terms of decision about buying.
Aside from that, it can also be used in order to present that data that have been gathered from the fourth category of the questionnaire where in the researcher will need to analyze the different recommendation and reaction of the customers regarding how to make them feel safe or comfortable with the authenticity of the brand. By doing this, it will help the company to plan and implement more programs that will enable them to gain the trust of their recent loyal customers, as well as the possible customers. Such as the connection of the government in terms of making them feel secured about a certain store, such as the influence of QTS towards the reputation or image of a particular store, particularly the company’s stores.
4. LIMITATIONS
There are some limitations or advantages First is that the study will use the convenient sampling, that will cater to the samples that are not considered as a representative of any definable population, and thus, it is not theoretically meaningful to generalize any population from the convenience sample. Thus, it will show that the study will not cater on the opinion or feeling of the majority.
Another thing is that the time of the customers as the respondents can also affect the study. Together with that, it will also be important to consider that due to the fact that the research will be done inside the store of Chow Sang Sang, there is a big possibility that some of the respondents will feel a bit uncomfortable, thus it can affect their responses.
5. REFERENCES
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Chan, S 2008, Chinese Tourists Spend Big in Hong Kong, BusinessWeek (July 23), viewed 12 December 2008, <http://www.businessweek.com/globalb iz/content/jul2008/gb20080723_568870.htm>
Chow Sang Sang 2008, viewed 12 December 2008, <http://www.chowsa ngsang.com/>
Commonwealth of Learning 2000, Manual for Educational Media Researchers: Knowing your Audience. Vancouver, Commonwealth Educational Media Centre for Asia (CEMCA), Canada
Customs seizes .5 million worth of counterfeit jewellery 2005, Hong Kong SAR Government, accessed 12 December 2008, <http://www.info.gov.hk/g ia/general/200509/27/P200509270276.htm>
Creswell, J W 1994. Research design. Qualitative and quantitative approaches. Thousand Oaks, Sage California
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Hong Kong Tourism Board Around the World 2006/2007, Hong Kong Tourism Board Annual Report , p14, Dec 19, 2007, accessed 12 December 2008, <http://www.discoverhongkong.com/eng/worldwide/annu/pdf/06_07/pdf0 6.pdf>
Hong Kong Tourism Board 2008, Quality Tourism Services Scheme, viewed 16 December 2008, <http://www.discoverhongkong.com/eng/mustknow/qts/index.jhtml>
The Israeli Diamond Industry 2008, Hong Kong Jewelry and Watch Sales Rise in March, viewed 12 December 2008, <http://www.israelidiamond.co.il/engli sh/NEWS.aspx?boneID=918&objID=3533&SearchS=Hong+Kong>
Underwood, M 2004, The Likert Scale. In Communication Studies, Cultural Studies, Media Studies (CMMS) Infobase, viewed 12 December 2008, < www.cultsock.ndirect.co.uk/MUHome/cshtml/index.html >
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