Why we Spend so much on Brand name Items

For most people today, buying brand name items is the norm, so much so that we often don’t even notice that we are doing it. What many people do not stop to consider is the implications of this, and why we for the most part are happy for it to continue. In fact most people could easily save themselves as much as half of what they spend on things like food, consumer goods and even services if they only realized that they were paying more than they need to.

Brand names in some cases arise because the product that the particular company offers is superior in some way to the competition. This is either because they offer a unique selling point, or because the product itself is the best in its field through superior quality. A good example of one product becoming a brand name through superior quality might be a best selling car that the public perceive to be hardwearing and cheap to run. An example of a product with a unique selling point might be the smart car, which achieves its sales by being eco-friendly and very small.

Often however brand names are more about marketing than the products actually being any better in reality however. A good example of this might be the fact that some people are perfectly happy to pay a thousand dollars for a pair of designer shoes. When in fact they most often do not last as long as a cheaper pair, and usually have very little unique about them. So the key to brand names is often down to perception rather than having to provide a better product than the competition.

In many industries, unknown to the consumer, the products that are being sold to us as different are actually the same thing. Many car manufacturers will use the same engines and frames, and then put their own badge on them and sell them on to us. Similarly many stores buy their raw materials for foods from the same place, but one company will then charge us double for the same resulting product. The end result being that we can often end up paying a lot more than we need to for the name alone, when the product is identical.

So it is often because we perceive something to be better that we are happy to pay more for the same product with a different brand name. Even small things like food and drinks have become an important battle ground for the supremacy of brand over one another. Examples of this are easy to see every day, people reaching for the brand name cereals rather then the stores own brand, or buying a car because of the name on the hood.

And brands are such a big part of shopping these days that often we will automatically reach for the brand that we recognise rather than necessarily the cheapest of best quality. The next time you go to the supermarket to buy a soft drink you will almost instinctively usually reach for a drink made by either Pepsi or Coca Cola for example. Neither of them might be the best tasting product, or the best made or even the cheapest, but because they are the best known that is what people reach for first.

Many brands are in fact so greedy that they spawn imitations and pirate copies of their products. The markets for which exist largely because of the fact that consumers are overcharged for their goods. For example a DVD of a new movie might cost $20 in a store, when it only cost $1 to produce. So if someone sees an illegal copy and buys it for $3 instead, they often don’t feel that bad about taking money from the hands of a company that is happy to exploit them to make a 90% profit level on each item. This is often a sign that brand items are too expensive and that people are tired of being overcharged for something. The simple fact being that most people would be happy to pay for a genuine item if it was priced fairly, and not at such a level that imitations can be sold for a fraction of the price.

As consumers we aren’t always being ripped off because of brand names however, there are still some that are successful on their actual merits rather than sight recognition and marketing. Markets where there are several different brands all fighting for our business have to in some way be better then the competition to get our business. The fast food industry is a good example of this, where despite there are common brands that we all usually buy, we distinguish for ourselves which we prefer and want at any given time.