Chapter 3, Problem 22AA

To determine

To explain the reason for the preference of people for brand name and store label products.

Answer to Problem 22AA

Different people with different perspectives go for the variation that is the store label or the brand name. It all depends on their choices and priorities to spend more or less, to get a brand tag or not, etc which shifts people to the desired products of their preferences.

Explanation of Solution

A store label product might be very similar to a competing product which has a brand name. This can be well explained with the help of considering an example.

For example: consider soft drinks- the generic one (say) C, is not any brand name like P. Moreover this generic soft drink, ’C’ is less expensive than P. Although their prices differ but both the products are very similar to each other. And as there is not much difference and still they are in easy reach with comparatively less price, they are really in demand of the people.

On the other hand, Choosing brand labels provides with the quality, the incentives involved in the brand name products, even the satisfaction is increased as the quality is provided as per the expectations of the people, which creates the trust and image about the brand and the products which persuade people to buy brand name products.

Economics Concept Introduction

Introduction:

Store label products are those which do not have any national reach but are recognized by their local brand or store name in some particular area. These goods are comparatively less expensive than the products with the national brand acceptability and nowadays are really competitive.

 Brand name products have wide reach because It has the brand image nationally as people know about the brand, whereas the store labels are of particular area existence which is not popular and not known by everyone and so considered of low quality as well as comparison to the brand name products.