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Famous brands can bring more trust to consumers. So even if the quality of the product is the same, people will still choose the famous brand, regardless of the price difference.

A few years ago, the phrase "only buy the right one, not the expensive one" made Diaopai laundry detergent come into people's sight. But now, this advertising slogan seems to be less popular, and the popular one has become "I'd rather buy expensive than the right one".

For example, when many people choose laptops, most people will choose products from big brands such as IBM, Apple, Sony, etc.; For example, people are willing to spend 20,000 yuan on an LV tote bag, and they are not willing to save some money and spend 200 yuan on a leather bag of the same quality but not famous......

These products may be of comparable quality compared to other products, but the price is much higher. But even so, people are still keen to buy such expensive goods, why?

This brings us to the concept of branding in economics.

After moving to a new home, many people will choose to change to a new set of furniture and appliances, and their choice at this time is often some big brand-name products. For example, the most common TV,In the shopping mall,The same specification、Different brands of LCD color TVs,The price varies greatly,In fact,The quality of domestic household appliances, especially TV products, is not much different,All of them are imported picture tubes。 But most consumers tend to opt for brand-name products that are more expensive.

The reason for this phenomenon is simple: famous brands can bring more trust to consumers. So even if the quality of the product is the same, people will still choose the famous brand, regardless of the price difference.

People's recognition of the quality of TV products cannot be obtained through practice. Televisions do not need to be replaced as often as ordinary consumables, and they can usually be used for years or even more than ten years after purchasing a TV, so it is difficult for consumers to accumulate emotional experience. Most of consumers' purchasing behavior is influenced by the results of evaluations and surveys published in newspapers, such as which TV has the largest sales, which TV has the first rating, and which TV has the longest lifespan, and in these aspects, the investment in brand-name products will be greater.

Not only in the commodity market, but also in the cultivation of universities, there is also a famous brand effect. When the economist Spencer was a doctoral student at Harvard University, he discovered a very interesting phenomenon: many MBA students were very ordinary before entering Harvard, but after a few years of Harvard education, they earned several times or even dozens of times more money than graduates of other schools. That's where prestigious universities come in. Harvard's elite effect makes its graduates more competitive in the market than similar college students.

In the market economy, people recognize the brand, which is the embodiment of the potential benefits of the brand. The potential benefits of a brand are rooted in the investment that was made in the initial establishment of the brand. In the economic market, the price of a company's products is mainly affected by factors such as cost, demand and competition, while the pricing of brand-name products also takes into account the value of its intangible assets.

A famous brand is a wealth with rich value connotation.

First of all, there is the cost value of the brand. Cost value is the material basis for the formation of brand-name benefits, and cultivating a brand-name product often requires higher investment. Enterprises need to hire professional institutions to conduct market research, commission experts to design products, etc. And when the product is put on the market, more advertising expenses need to be invested. Before building a famous brand, enterprises often have to pay attention to the trademark packaging of products. For example, Exxon in the United States once paid more than $1 billion for the design, consulting, and printing of its own gasoline trademark.

Secondly, the reputation value of the brand. The reputation value mainly refers to the high popularity and reputation of the famous brand in the market, which is an important part of the value of the famous brand. Popularity reflects consumers' knowledge and familiarity with brand-name products; Reputation reflects the degree of recognition and preference of consumers for famous brands. The reputation value of brand-name products has a strong influence and attraction in the market, and has also become an important resource and a driving force for sustainable development of enterprises, and the potential benefits created for enterprises are far higher than the cost of research and development of products.

In the final analysis, the life guarantee of a famous brand is actually the quality of the product. In the economic market, brand-name products are all high-quality to win consumers. In order to maintain the quality of brand-name products, enterprises need to pay a higher price, such as the use of advanced technology, exquisite technology, high-quality raw materials and unique formulas, etc., all of these inputs are just to enjoy more "output" of brand-name benefits.

In order to maintain the quality leading position of brand-name products, enterprises often set a higher price for them, so that foreign products can make up for the cost of brand-name products and increase investment in technology and advertising of brand-name products, making them evergreen in the market. We often see that in the market, the price of a brand-name clothing is several times, or even dozens of times, of ordinary clothing, and once consumers recognize brand-name products, most of them will be willing to pay a higher price.

Because of the huge input cost, in order to get a hundredfold return, in the market economy, enterprises will focus on building their own brands. Branding is the most effective way for consumers to ensure that they are buying high-quality goods, because it makes it easier for consumers to judge the quality of products and also enables businesses to maintain their brand reputation.

For example, in many daily department stores, there are not only drinks such as Coca-Cola, but also many unknown drinks. Unknown beverages are usually less expensive than Coca-Cola, and in this case, most people still choose Coca-Cola. Because an unknown beverage has never been drunk, consumers have no way of knowing what its quality is. Correspondingly, Coca-Cola is a world-renowned brand, and its quality can be judged by its brand.

Price differences tend to be overlooked for safety reasons, and that's where Coca-Cola's potential benefits come in. Because consumers believe that the brand of Coca-Cola can guarantee the quality of the company's products. If a customer falls ill from drinking Coca-Cola, it can escalate the reputation that Coca-Cola has built up over the years with high advertising costs.

Correspondingly, if a consumer falls ill from drinking an inferior beverage produced by a small company, the cost of resolution is correspondingly lower. Even if these small companies had to close their doors, they wouldn't have much to lose. Therefore, Coca-Cola has a greater incentive to ensure the safety of its beverages, and low-quality products will cause huge losses to Coca-Cola, which makes Coca-Cola Company must strictly control the quality, and the quality of its products is worthy of consumer trust.

For example, if a consumer likes a certain brand's products, he feels that the design of the brand's products can reflect his own taste, and can represent his own lifestyle, life attitude and consumption outlook. In addition, it can also make oneself feel the corresponding identity, status, honor and self-confidence, so as to obtain a certain psychological satisfaction and experience, and improve the consumption utility. This is a kind of value and cultural identity of consumers to the brand, and consumers finally find a sense of belonging in this brand. So, even if the price of this item is high, he will choose this brand of item.

Ms. Wang met Ms. Li on her way to work, and Ms. Li greeted Ms. Wang from a long distance, and even walked abnormally. Ms. Wang thought to herself, what's wrong with Lao Li, why is his walking action so exaggerated? Looking closely, it turned out that she had an LV bag in her hand. Ms. Wang now understood, it turned out that she was showing herself her LV bag!

An LV bag brings Ms. Li spiritual enjoyment, which cannot be measured by money. That's why consumers choose brands.

It can be seen that when the brand is promoted to a certain height, it transcends the boundaries of the product and becomes an intangible asset, which has nothing to do with the life cycle of the product. In other words, as long as that product is mentioned, consumers are willing to pay for it.

This is the secret of economics behind the brand.