Consumers use product to signal status in different ways. They crave status and thus buy more accessible (less expensive), conspicuously branded goods that signal to those below and to other neophytes that they have arrived. But since, many consumers cannot afford authentic goods, they refer to buy counterfeit goods.
A counterfeit good is one that seeks to imitate through the use of trademarks or other protected properties without the permission of the owner. Given that the cost of reproducing a brand image on a particular product is fairly low, counterfeit producers can easily duplicate the brand image to send the same signals.
Counterfeit producers have lower costs of production that the original producers due to the inferior quality of counterfeits, avoidance of taxes and the lack of costs associated with brand development. It sustains costs arising from attempts to circumvent criminal prosecution and costs associated with creating copies.
The demand for counterfeit status goods presents an intriguing paradox between consumption of counterfeit goods and the desire to send status signals. Consumers purchase counterfeit products to convey positive signal to themselves and to others. Particularly in the luxury goods market, consumers knowingly purchase counterfeit products as a social signalling mechanism with low financial costs.
Implicit self-esteem is thought to play an important role in predicting status-signalling behaviours as it has been shown to affect materialism, conspicuous consumption, and compulsive buying. And by purchasing these goods, they find that it can be driven by a discrepancy between perceived social status and implicit self-esteem. Implicit and explicit self-esteem leads to high levels of materialism through a desire to self-enhance. Compared with consuming authentic luxuries, counterfeit luxury consumption can be viewed as an