Before Paying More for the Brand Name

by David Ning · 12 comments

I won’t drink coffee unless it’s from Starbucks. They just make a better product.

Branding is very important in the retail business, because you can charge more per product and still outsell your competition. When I was a salesperson and making long drives in an unknown city, I would always stop by a Starbucks whenever I’m tired. It’s not that I thought the coffee was a notch above the rest either. It was just that the experience was consistent and predictable. I knew the setting, I knew what I wanted, how much it would cost and the product that I was getting.

If I went to local coffee shops, the predictability stops. Do they sell ice coffees? Are credit cards accepted? Is it going to be too sweet? Sure, I can be adventurous, but I wasn’t in the right mood after a full day of meetings and driving. Is it worth the hassle when my main goal is to have good sales meetings? Not really.

Branding is an art-form that millions study. With careful and clever advertising, consumers can be lured into paying ridiculously high prices for a certain product that cost nothing to produce. Think of those t-shirts that cost 50 cents to make, or an pair of shoes that cost nothing more than a few dollars to produce.

As a consumer, brand name is expensive. Yet, many of us will gladly pay extra for it. Knowing when it’s worth it really comes down to personal choices, but before you shell out another dollar of your hard earn cash, think of these few factors before you give the cashier the chance to ask “credit or debit?”

  • Consumable vs Everlasting – Is the product everlasting (like a watch) or is it really just a consumable (like coffee)? Is it really worth paying twice as much to consume a product that will be forgotten in 45 minutes?
  • The Price Difference – Obviously, a $2 difference isn’t the same as $500, but do you actually know how much the alternatives cost?
  • Design and Value – Some products just lose value as time goes on. Fashion and gadgets come to mind. If this season’s color is purple and you are still buying clothes that are silver and gold, you are a little out-dated.
  • Importance to You – Some of you probably rolled your eyes when I talked about the color nonsense, while others will completely agree. Like I said, it’s all a personal choice, because different people value products differently. I couldn’t care less whether I’m wearing a red t-shirt or a blue sweater (I couldn’t even tell you what I’m currently wearing), but paying more for the latest iPhone versus the other version is important to me (if I was getting one). Know what’s important to you, and the decision becomes much more natural.

I Need More Help Deciding

Still stumped about whether you should pay more for it? Here are several ways to help you decide.

  • Bring an Expert – People who are really into fashion know that a Louis Vuitton hand bag is hand stitched and can last many years more than a regular no name brand. Other brands of clothing use high quality garment that also helps it last for years. Once you know the real differences, you can decide whether there’s value in the higher price tag.
  • Add Ignorance – Another trick is to bring someone who has no interest in the product you are considering. By not having the bias towards any brand, your friend can see quality with a much more objective eye.
  • Ask Around – Look for other people’s opinion about a product. Is it really all hype or is the higher price justified?

My New “No Name Brand” Sunglasses

I finally ordered my pair of new glasses because my glasses popped out again (this time, it happened while I was driving so that’s the end of waiting.). At first, I went to a store and the sales person kept pushing me high end spectacles. After looking around for a while, I tried on a pair that I really liked, and it happened to be 20% of what the other pairs cost. I was so happy. I forgot how pleasurable it was to find something I like at a price that’s much lower than expected.

It wasn’t a brand name, but it was just as nice, just as functional and best of all, it was much cheaper. Think carefully before you pay for another brand name.

Money Saving Tip: An incredibly effective way to save more is to reduce your monthly Internet and TV costs. Click here for the current AT&T DSL and U-VERSE promotion codes and promos and see if you can save more money every month from now on.

Related Posts

{ 12 comments… read them below or add one }

marci July 22, 2009 at 7:14 am

About what color is “in” and the latest “stuff”…..
we have a saying here in Moo-town…. (where cows outnumber people)
“The cows don’t care what color I wear or what
the latest fashion is….”
Meaning, it’s just not important at all :)

Reply

CJ Perry July 22, 2009 at 8:26 am

You are still wearing silver and gold? That was so last week.

But ya, I think being informed is the important thing. For instance, I recently bought a new big screen TV. There are many brands out there at various prices. Vizio, Sony, and Samsung were some of the one’s I was looking at.

Vizio was much cheaper than the other two brands but the quality was also less. For 90% of the people out there, it was perfectly acceptable but I’m particular about my video quality so I decided to go with a higher name brand.

Between Samsung and Sony the quality was often the same but Sony’s were priced a slight bit higher most of the time. Since there was little difference in quality, I figured I’d go with a Samsung. I actually ended up buying the Sony because I got $800 off because they were getting rid of last year’s model and making room for the new models.

But for TV’s it matters. For clothes it’s whatever Wal-Mart or Kohls or whatever has in stock. I could care less about any name brand of clothes.

So I think the key really is the importance to you like you mentioned in the article.

Reply

MoneyNing July 22, 2009 at 10:20 am

Speaking of that, I saw tons of commercial about Samsung’s ultra thin HDTVs. They sure are very nice, but I wonder why it would be useful once you bought it. I mean, it’s cool for it to be thin but once it’s on the wall, does it really matter?

I think Sony also have a better “perceived” brand across the world than Samsung so you made the right choice for sure, since it also happened to be much cheaper.

Reply

Craig July 22, 2009 at 8:31 am

Depends the product for different people. I try to buy more generic on most things given a choice but on some purchases like clothes I may prefer a more brand name cause it will last longer.

Reply

MoneyNing July 22, 2009 at 10:18 am

Looks like most people here are in the “fashion isn’t important” camp here. Too bad those people are mostly non frugal and probably won’t read this piece. It would make for some interesting comments for sure :D

Reply

Meg from FruWiki July 22, 2009 at 10:23 am

Great post. I find branding to be very interesting, maybe because I’m a small business owner, but I think it also ties into my general interest in psychology. I like how you balanced the pros and cons of sticking with a brand in your Starbucks example because sometimes there are times when it makes sense to stick with a brand, even if it costs more. But of course, we should think about our brand choices carefully so that we can save money where it makes more sense instead of just mindlessly buying a particular brand because the packaging looks nice or because it’s what our moms used (even though whatever it is probably has been revised so many times that it’s not really the same product).

I used to think I wasn’t one of those people who is brand loyal or even that affected by brands, but then I realized that just because I don’t really care if my bag says Coach or Prada or nothing at all doesn’t mean that I’m not affected by brands.

With many things, I do look consider my options carefully and try to find the best product for my needs and that is of good (or at least good enough) quality. Many times, this means checking reviews — which means looking up things by brand. And yes, you might miss out on some good but fairly unknown brands. Sometimes I do experiment with lesser known brands, but mostly when there is a decent price incentive or they offer something other companies don’t at that store or if they appeal to my sense of ethics and local pride. And one in person recommendation even from a stranger is often worth more than hundreds of online reviews so long as I think they’re honest.

And despite the fact that I will switch some things based on price and often buy lesser known brands, I am pretty brand loyal. After all, I can only experiment so much. Once I find something that I love, why waste money trying something that might not work well? Plus, I have a strong desire to buy local products or products that are more ethical or green — which I will pay more for instead of switching to cheaper brands because I feel very committed once I’ve started buying those types of things. However, other brands still have a chance to win me over if they can show me that they’re at least as green/local/ethical/etc.

Reply

Brian July 22, 2009 at 12:28 pm

I am in the fashion is important camp for sure. As mentioned in the TV analogy, the same thing goes for clothes. You pay for quality, not always for the brand. I recently shopped at Kohls for knock around shorts for the summer, as I usually never wear shorts I figured I could sacrific the quality. I became a fan of getting a bargain on clothes, after years of buying expensive clothing. That being said, you can certainly tell the difference.

If you’re in a profession that relys on image, it pays to make fashion important.

You’d certainly avoid hiring a lawyer dressed in wrangler jeans and a flanel, as you’d be smart to avoid a doctor driving a 15yr old senta.

Sometimes you need to judge a book by its cover.

Reply

marci July 22, 2009 at 1:15 pm

@Brian – Depends on where you live, I would expect. Around here we’d be MORE apt to hire the lawyer dressed in wrangler jeans and flannel, just like our past governor was usually dressed in wrangler jeans and ‘cowboy’ shirts…. We shy away from those ‘slick city slickers”… :) Definitely depends on where you live.

Reply

Free Arcade Games July 22, 2009 at 2:53 pm

Branded things are actually the ones that are overpriced and sucks. Not to mention, they usually do much more harm to you. Of course it’s not always true, but most of the time it is.

-Mike

Reply

The Little Dough Girl July 23, 2009 at 8:12 pm

I bought my own fancy cappuccino maker three and a half years ago. It has paid for itself about 6 times over. That is the way to go, my friend…

Reply

financial suggestion July 24, 2009 at 2:40 am

hello,you are a taste man.For my brand name products is much safe than other none brand products.Because make a brand is not so easy.

Reply

Wilson Pon July 26, 2009 at 10:30 pm

Well, branded products are definitely much expensive than other unbranded stuffs, but it doesn’t mean that it have a better quality as well. Hence, use our money wisely, especially in this economic downturn period.

Reply

Leave a Comment