Picture this. You are shopping for your monthly groceries at a
supermarket. The supermarket has national brands and the store brand for most
products that you want. That is, if you want to buy breakfast cereals, the store
has, say, Kellogs Nutri Grain as well as its equivalent store brand, say, Value
Choice N Grain. Which one would you buy, considering that the store brand for
most products is at least a tenth cheaper than national brands?
As a typical shopper, you will most likely choose the national
brand, even though it is costlier! Why? Choosing the national brand is not about
conspicuous consumption. That is, you do not buy a Surf Excel to show off to
guests at home. You buy Surf Excel because you think that an equivalent
store-brand detergent may be of poorer quality and cause allergies. But why Surf
Your grocery shopping is primarily driven by your brand recall.
The more you hear and watch name-brand advertisements on TV, the greater the
possibility that you will buy such products. Psychologists call this behaviour
recognition heuristics. This behaviour works on a simple logic. If you have to
choose between two products, you pick the one that you are familiar with. And
national brands are obviously more recognisable than store brands.
Yet, research in the area of store versus national brands in the
US has shown that consumer preferences are not really based on taste or quality.
A US consumer study, for instance, shows that store brands are just as good as
national brands in most categories. So, the argument that branded choco-chip
cookies are better than, say, Great Values, Walmarts store brand, may not be
In another US study, individuals were offered peanut butter from
three different jars. Unknown to the individuals was the fact that each jar
contained the same peanut butter. Yet, three-fourths of the participants in the
study chose the jar that had a national brand label on it. Clearly, name-brand
can change the way you perceive taste. Why?
Our purchase decision starts with a subconscious effort to rely on
recognition. This short-cut to choosing a product reduces post-purchase regret.
After all, you choose a product that many consumers buy as well. On the other
hand, by choosing to buy a store brand, you are risking the possibility that the
product may be of inferior quality.
So, will you try store brands at all? You would, if you are
willing to experiment, given the saving on your grocery bill. And then, too,
perhaps, on products that you do not have to consume or apply on your body.
(The author is the founder of Navera Consulting. He can be reached
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