Abstract
This study aims to determine the factors of consumer willingness to buy gray-market goods. The authors considered the impact of gray-market products on the product's brand image through Pakistan's empirical evidence. This study included three factors of gray goods: price consciousness, price-quality inference, and risk averseness and to check their impact individually and collectively on brand image. A field survey was conducted in this study to check the respondent's behavior toward gray markets and its impact on their brand image. The respondents of this research were those individuals who were habitual buyers of gray-market perfume products. Therefore, the population size was large enough to apply the probabilistic sampling method of Simple Random Sampling. The sample size of 350 was determined adequately. Hence, 350 respondents were asked to fill the questionnaire. The instrument of this study was self-developed. The close-ended questions by a Likert scale (7 points) were used to collect quantitative data. The internal consistency of the data was checked through the «Cronbach's Alpha» value. Hence, Cronbach's alpha's value was 81.7%. It was more than 70% threshold and showed the data was reliable and internally consistent for further data analysis. Regression analysis was performed on the data set to test the significance of hypothesized hypothesis. The result indicated that overall, there was a significant positive impact of gray-market goods on the companies' brand image. This study concluded that price consciousness did not significantly impact the purchase of gray goods. Thus, consumers are not price-sensitive, particularly in the Pakistan market. At the same time, gray goods impact the brand image in the Pakistani context. Simultaneously, the price-quality and risk averseness factors of gray goods a concern. These factors showed that companies' brand image is affected negatively. The policy and market regulators must consider the two factors pointed out in this research to mitigate the problem of gray-market goods in the developing economies.
Highlights
Today manufacturing firms are immensely affected by gray-market goods
This study's objective was to find the impact that Gray-market goods have on the brand image of that product
There's a moderate relationship between brand image and price consciousness, price-quality, risk averseness
Summary
Today manufacturing firms are immensely affected by gray-market goods These markets are operated by unauthorized dealers and take a huge chunk of business from manufacturers and authorized dealers, which eventually affects their profit and affects the brand perception in consumers' minds. To mitigate this situation businesses are seeking for strategy, which counters this phenomenon. Access to International markets and information is just a click away from Individuals and businesses worldwide This phenomenon has benefited the global business environments and creates challenges for marketers and one of those challenges is Gray Marketing or Parallel Importing. The difference lies in the value and augmented services provided by the authorized channel
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