Worth of Stuff, Part II: What Really is the "Best"?

Countless number of times I hear people go on and on to justify why they buy only brand-name "XXX," or go to this or that restaurant. Most of the reasons revolve around the "best." People buy certain brands of cars because they are "safer" or "more reliable." They buy certain types of brand-name foods because they "taste better," without even venturing out to try the store brands or private labels. Sometimes such decisions are worth it, but many times they are not—this week we will focus on the "they are not" portion.

To illustrate our point this week, take a moment and watch this short video. Be warned, there is some strong language placed here and there, but overall the main point takes a look at how people interpret the expense of items (and a marketing department's power of suggestion).

If you decided to skip the video it basically analyzed consumer's perceptions of what is considered to be the best, which is often in the mind. Confounding evidence in the video could have shown that people didn't want to look uncultured in such a "cultured" restaurant, but that's not a reason to overpay for crap concentrate.

When I was a student at Georgia Tech, we ran an investment club and I performed an experiment where people were given name brand soda, and cookies compared to the Kroger store brand version and had them rate the products based on taste. (Our budget was somewhat low, so we worked with what we had). Most chose the private label (store) brand over the national brand or had no preference toward the name brand. Yet, few could be convinced that buying private labels is worth the financial savings.

Now don't get me wrong—some brand names deserve their respect. Take cookouts for instance. I can definitely tell the difference on something like aluminum foil—Reynolds's Wrap tends to be a more superior product versus er.."Wrap-It" Foil. You can usually tell when you get to the grill and the integrity of the foil fails under heat. However, there is no real difference between condiments, relish, plastic utensils and cups, etc. Buying brand names for such products when having a large event can definitively dent your budget if you're not careful. The purpose is not to be "cheap," but to know a quality product when you see it and to know if it's worth your money.

Next week, we conclude our analysis of the "Worth of Stuff" by analyzing why people think that store brands are usually better, and we suggest ways to choose store brands and private labels designed to save you money without losing quality. See you next week.