Know-How Exchange : Student Questions

I get the bottom line is that brands will only be able to charge what we will pay for them!
If you have a great brand, and its supported by premium quality, or premium customer service etc, then it is worth paying more for (a premium price).

I know what your trying to suggest, and I guess we will all find instances of brand that are worth less than they are charging, but consumers are getting more savvy, and will vote with their feet.

Depends on the brand! Some brands trade on being premium, first class products that you'll pay more for, others trade on being good value, 'cheap and cheerful' solutions. Porsche, VW, Kia, Daewoo... They're ALL brands! What your question addresses is brands that position themselves as premium products, that you would pay more for. Whether or not you pay a premium for a branded Asprin product, (for example), or buy the generic pharmacutical product with exactly the same active ingredient for a fifth of the price is all down to the perceived 'brand value'. I don't know about India, but in the UK a huge amount of people would buy the branded product! I know many people who consider themselves 'immune' to branding, but will always buy Hienz baked beans over any other purely because of (as you have identified), confidence in the brand.

I agree with your point that the only difference between a generic product and a premium brand is often only in the mind of the customer, but it's HOW it gets into the mind of the customer that concerns us! How do we create that desire for a product that costs more? That's what marketing, and more specifically advertising is all about! Remember too that product that charge more for there brands have usually spent huge amounts on market research, product development, packaging and advertising to ensure that they have those premium brands.

Check out the Interbrand website www.interbrand.com for detailed information on how brands add value.