You Get What You Pay For
When you shop for groceries where do you stand in choosing either a generic vs. brand name product? Do you reach for the brand name box of Kraft macaroni and cheese, or would you rather pick up a generic box of macaroni and cheese to save that extra 10 cents? Is your decision based off a difference in taste or is it simply a matter of paying for quality of the product? What does spending more money on a brand name food product have to say about who we are in our culture today? Today there is an idea that by buying a brand name product a person is buying something of more quality, which can strangely in turn determine our importance in society. My mother stood firm by the phrase “you get what you pay
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Also, a brand name tends to have a little bit higher quality of products than the generic version. While the generic may list the exact same ingredients, it may not be as good of quality which “could” affect the taste. The individuals that usually buy brand name products have a tendency to believe they must buy them in order to get good quality. Meaning of course better quality is overall “better” in taste and health. Although, the qualities of ingredients between products are almost always identical to one another, making this argument nearly useless. The idea of better quality in name brand versus generic moves on still into a more psychological aspect rather than just economic. Society continues to buy into the belief that if it costs more it must be better. Why is that a fancy picture and a higher cost for a product give a person the impression that owning this item makes them feel better about themselves? Pride of ownership comes to play, and something about buying better quality makes a person feel better about a their own status in society. Perhaps a person may feel they work hard and deserve the best or that if they buy the name brand, they will experience better health, happiness, or appearance. This is supported with the fact that even though the spaghetti sauce taste test proved to my mother that there was little or no difference between sauces, she still buys and insists the name brand sauce is better. To this day you will rarely
Everyone has his or her own personal preference towards buying generic or name brand products. When shopping in a grocery store does the type of pasta really matter to you? How about the type of macaroni and cheese you reach for? Same ingredients, same directions on how to mix and stir up the final manufactured goods but is it really the “same”. To a lot of people it might not make a difference, but like me, a lot of people prefer spending the extra 50 cents on a box of “Kraft Macaroni and Cheese” and it’s worth every penny.
This results from the fact that it is a mature segment with many well established companies vying for market share. The industry is highly consolidated and very fragmented. To grow their businesses, companies rely heavily on mergers and acquisitions to capture additional market share. Historically, the grocery industry has been characterized by slow growth which results in strong price competition and the development of aggressive marketing campaigns between existing firms. Perceived product quality and strong brand recognition by consumers are the basis of competition among firms in the industry. The source of General Mills’ competitive advantage lies in its ability to develop innovative products and highly reputable brands. As a result, they hold cost leadership positions across a number of grocery categories. Exhibit 1 shows the top US companies according to their sale of packaged foods globally. Market leaders include Kraft Foods, PepsiCo, Nestle, Mars, Kellogg, and General Mills, however, neither company possess an overwhelming share of global sales. This is in part due to the large degree of product diversity throughout the industry and the strong brand rivalry of each competitor’s labels.
In a perfect society, a company’s products and services would rise and fall on their own merits. The best products would rise to the top and lesser products would become unprofitable so they would go the way of the Edsel. However, our society is not perfect and many consumers are sheep. The popularity of a brand typically has more to do with the amount of money that a company is willing/able to spend on advertising and the price point of the item than it has to do with the quality of the product.
The grocery store shelves are filled with many varieties, sizes, and brands of the same item. There are numerous kinds of popcorn, large and small, produced by different manufacturers. Some people choose products based on need, some base their decisions on price and some base their decision on quality or brand loyalty. With all of these options it can be difficult to choose. You may want to save money but at what cost? In this experiment we will determine if generics are equivalent alternatives or if we really get what we pay for. (Bautista, 2006)
b. Does the issue of branded vs. private label enter into this consideration? Why or why not?
As an individual, Brand name heavily influences my purchasing decisions. I am usually aware of current trends and popular brands and have a tendency to select these products. It applies specially to my selection of clothes and shoes. I believe this is due to very strong and present marketing campaigns from brands such as, Nike, Adidas ECT. As well as the influence of peers.
In this instance, consumers would spend a greater amount of time researching the various competing brands before settling on a purchase. Products that fall into this category are computers, hand-phones, refrigerators etc. For me, this would be for skincare. If I had to switch from Brand A to Brand B,
I. (Attention Getter) Opening with a question. How many of you believe brand name drugs are better than generic drugs?
Brand competitors and the diversity of choice that is available to consumers, puts brands under pressure to offer high quality products and service, excellent value and a wide availability (Clifton et al., 2009). Brands must differentiate themselves from the competition and create an unforgettable impression.
as the older brands already existing in the market and those that they are familiar with.
b. People in the industry felt that the taste preference was not better than current brands and that the claims were inflated
For instance, McDonald's is a well-known brand for its fast paced service. For buying McDonald's food, customer will think about food content and the values against the money, effort and compare McDonald's with Burger King and Subway and select the one that gives them the greatest delivered value.
Branding is a tool to make the goods of one producer different from another producer (Keller, 2003). Carroll (2008) asserts that branding is a sign of quality, and it is helpful to increase
Inside the front doors of a grocery store, customers are presented with a diverse, vibrant display of fresh fruits and vegetables. With its inviting rainbow of bright colors, the produce section leads past the wafting, sweets smells of bread and pastries in the bakery and through winding aisles stocked with an assortment of goods. Linings the aisles and fillings shelves are rows and rows of boxes of pasta, pre-made meals, processed foods, and more snacks and sweets than one would know what to do with. Grocery stores present shoppers with a myriad of choices. The shelves and displays are filled with a variety of different brands and options to choose from, which offers customers a tough and potentially stressful decision when shopping. However, before a customer decides upon a specific brand or item, whether that happens to be a name-brand product, competitor, or store-brand, they are faced with an even more important choice; they must first make a decision on whether they want to buy whole foods and produce, such as fruits, vegetables, whole grains, and other healthy choices, or more processed “junk” foods like sugary drinks and snacks or enriched breads and pasta. Not only must costumers decide between specific brands and deals, but they must also choose which of these types of food is best for them and their interests. Consumers must constantly weigh the different factors that are presented when comparing foods; between price, ingredients, health, availability, and overall
quality, and recognized by the consumer as such. The brand is seen as expensive, but