Sunday, April 19, 2009

Brand names and advertising

This last week we took one of our periodic trips to Costco. In the entrance to the store, they had two shopping baskets overflowing with various items. On one side they had "brand name" products, and on the other side, the Costco "house brands." The point of the display was to show the "savings" achieved from purchasing the Costco brands versus the nationally recognized name brands. First of all, this comparison is entirely fictitious. Remember the one important detail not set out on the comparison lists; Costco sets the prices. It is extremely easy for Costco, or any other retailer for that matter, to give a price advantage to their own house brands, all they need to do is set the price lower, often only by a few cents, than the national brands.

Here are three questions to ask yourself before you automatically purchase either a national brand or house brand, based on the price in the store:

1. What is the comparison price to other stores? Just because the generic breakfast cereal is cheaper than the name brand in any particular store does not mean that the price is good compared to those same items in another store.

2. How do the two products, name brand versus house brand, compare in ingredients, size of container and the amount of product in the container? A can or jar containing an ounce or two less per container is not a fair comparison.

3. Does the house brand have the same taste, quality or consistency as the national brand? You may actually prefer the house brand to the national brand, in fact, they may be exactly the same product with merely a different label.

One thing that happens with purchases at warehouse stores like Costco and Sam's Club, is that both the house brands and the national brands come in significantly larger quantities. This may or may not be an advantage. If you only eat one container of a product a year, having two large ones with a limited shelf life may not be a savings at all, but may be a waste of money and shelf space in your own home.

Buy wise and shop sanely.

1 comment:

Tiffany said...

Good advice!

Of course an additional point about name brands is that an aware shopper can use sales and coupons to their advantage. Sometimes the name brand really is preferable and you can readily get it on sale for an equivalent price or less than the store brands. (I'm thinking breakfast cereal.) This, obviously, varies by product.