Going Off Label!
Americans tend to label everything and everyone. People are conservative or liberal, frugal or wasteful. Brand names take on meaning. Cadillac means fancy and Yugo means cheap. Wal Mart means discounts and Enron means crime. Coca Cola® has trained millions of consumers to order a Coke, even though most don’t really care if it is Coke and Kleenex® spends millions convincing consumers that not every tissue is a Kleenex.
Some product reputations are earned and deserved. Often though, a single factory (or sweat shop) will produce products with four or five different brand names but the same exact quality. And some brands are subject to counterfeiting, as anyone who ever bought a $25 Rolex watch can attest. So when does it make sense to buy according to brand instead of price?
Here is The Budget Doctor’s prescription for dealing with brands:
1. Only consider brand names when quality matters.
It costs money to build and protect a brand. That gets added to the cost for consumers.
That means that brand names cost more and consumers must decide if the extra cost is
justified. So, consumers should consider brand names for work shoes and
automobiles, but probably not for napkins or children's clothing.
2. Do research when buying large items.
If three different televisions are manufactured in the same factory, you might as well buy the least expensive one. It can take some sleuthing to find out where things are manufactured, but Asia is always a good guess and things are not manufactured in Asia to improve the quality.
3. Check various types of merchants for prices when buying brands.
There are chains of stores that exist just to sell brand-name merchandise at a discount. From mattresses to running shoes, it is possible to buy items for less by finding the right source. But do be careful; outlet stores often sell merchandise of a lower quality than the same brand merchandise provided to regular stores.
4. Always ask yourself questions before buying brand names.
Why do you need a brand name? Will you save money over a long period of time because the brand name product lasts longer? Is the performance of the brand name product so much better that an extra cost is warranted? Does the product include guarantees and warranties that aren’t provided with generic products?
5. Determine the real value and cost before making the buying decision.
If you pay $50 for a pair of dress shoes and wear them 25 times, you are spending $2 per wear. If you spend $100 for work shoes and wear them 500 times, you are spending 20¢ per wear. Obviously, you can afford to spend more on work shoes than dress shoes. Plus, it is more important to be comfortable 500 times than 25 times.
People assign importance to different things. You may consider your brand of cola to be extremely important or you may be obsessed with the correctness of a watch or the reliability of a pen. It is fine to have one personal indulgence if you can afford it.
Be careful though if brand awareness rules your life. If you find yourself referring to a product by brand, such as a Coach purse or a Burberry scarf, you are demonstrating that brands won. By starting with a particular brand you are limiting your options and likely spending more than you should.