Why do people willingly pay more for national brands when they could save a bundle buying cheaper generics products instead?
Simple. A long-term study reported by Bloomberg shows that the more you know — the better informed you are — the more likely you’ll select less expensive generic products over more expensive big brands. Take aspirin, for instance. Researchers found that pharmacists, knowledgeable about the ingredients in pharmacy products — are more likely to buy cheaper store brand aspirin than more expensive big brand names like Bayer. All health care specialists do the same with other pharmacy items such as cold remedies, bandages, vitamins and contact-lens solution, choosing less costly store name products over more famous national brands.
And when it comes to buying food staples like sugar, baking soda and salt, chefs, who know their way around kitchens, usually scorn costly national brands in favor of economical store name items.
Comparing purchases on 77 million transactions over seven years, the researchers correlated consumer choices with their knowledge and professions. The study shows that consumers ignorant of product information helped fuel the sales of national brands. Usually lacking a college education, these consumers ended up paying the most for products though they could least afford it.
The study claims if consumers bought cheaper store brands whenever possible they’d save a whopping $44 billion bucks. That’s a pile of money that could end up in their own pockets rather than bloated, big brand corporate ones.
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