Recession is the hot topic of discussion these days. It has directly or indirectly affected everyone’s life. We have already lost loads of value in the stock markets. Economy’s growth rate has also deteriorated. Jobs are being lost. The change has been on macro as well as on micro level.

In this changing scenario, we also need to make changes in our spending budget (either voluntarily or by default). While making these changes, we cut down on wants & prioritize on our needs. Another place where we can cut down our expenditure is on branded goods. But in the first place we have to decide whether these branded products are our needs or wants????

In my opinion they are plain wants to maintain a status in the society….

Brands do bring in quality but along with that they also carry a big price tag. Don’t compromise on quality but see to it that you get the worth of what you are paying for….!!!

We all are familiar with brands like Raymond’s, Pantaloons etc….

But Let us first understand the word brand?
Too often even marketing professionals don’t have an answer, and too many have their ‘own’ answer. Which makes life very confusing….!!! I’ve trawled through my resources to find some of the best definitions:
The Dictionary of Business and Management defines a brand as: “a name, sign or symbol used to identify items or services of the seller(s) and to differentiate them from goods of competitors.” Signs and symbols are part of what a brand is, but to us this is a very incomplete definition.
“A brand is a collection of perceptions in the mind of the consumer”

It is based on the proposition that consumers buy not only a product (commodity), but also the image associations of the product, such as power, wealth, sophistication, and most importantly identification and association with other users of the brand.

Why we spend so much on brands….?
People, aside from having the capacity to be just plain dumb sometimes, have several reasons for buying brand-name products over other, more economical ones.
The first reason is, of course, an overwhelming desire to be socially accepted. Most of us have experienced the invariable feeling of needing on some level to avoid becoming a reject or a social outcast. In fact, psychologists have said that people are generally more afraid of things like public speaking than they are of dying. So, how does this relate to the purchasing of brand-name products? I think it’s evident enough to say that that is simply another manifestation of wanting to be socially accepted. It’s easy enough for people to see that everyone’s buying terribly bland and depersonalized clothing that the cool people wear, and so, they take the risk of sacrificing their individualism in order to fit in.
The second reason people tend toward buying these brand name products is because of the media. Although I generally think people inflate the idea that media is this unstoppable influential force, I do think that it has some effect on people in at least the subconscious level, especially younger people. Younger people tend to not know “who they are” and so they’re probably ten times more likely than the average adult to listen to ads telling them who they want to be.

I think that people subconsciously decide when they see cool kids wearing brand-name clothing or media advertisements throwing the idea in their face that they have no reason not to buy anything else. So, once they’re in the store or at the mall, they just sort of walk into Pantaloons because they KNOW it better than anything else. They also KNOW that they’re not going to be rejected. I think that if people advertised more products that weren’t necessarily brand-name clothing, fewer people would submit to all the social forces being exerted on them

I would like you to know advertising budgets of some of the well known brands of India:

Pantaloon: Rs 118.28 crore (as on 06/2008)
Grasim : Rs 334.2 crore (as on 03/2008)
Titan : Rs 151.55 crore (as on 03/2008)

Who pays to cover such huge advertising expenses….????
It is you and me. Advertising expenses add on to the cost of the product, hence we end up paying more even if the product is not worth it.

The products of our daily use like LUX, REXONA, SURF EXCEL etc. belong to the brand Hindustan Unilever. Can you estimate its advertising costs????

It’s a whopping Rs. 1, 436 crore (as on 12/2007) which is around 12% of its total expenses. Think about it! You are paying 12% more not for the quality but just for the sake of advertisements. There are many other similar quality products which would satisfy our needs, but may not be advertised that well. Thus we ignore them thinking they are NOT BRANDED.

Another point peculiar about us, Indian consumers, is that we like to buy imported products. We like to show it off to our neighbors.
For e.g. If we want to buy a car we would go for Hyundai Santro rather than going for Tata Indica. The major reason here is a foreign brand rather than comfort. It is imperative to inculcate the habit of buying Indian goods, which will in a way benefit our country as well as benefit our wallets.

Our children as well as many of us are addicted to Pepsi & Coke. These are also not Indian brands. The margins they earn are unimaginable. Hence we end up paying much much more than it is actually worth. I would say they are not at all worth as they are harmful to our health. Instead why not go for natural juices.
Or drink water because wohi bujaye pyaas baki sab bakwaas!

These days multiplex culture has also gripped us. Multiplex brands like Fame Adlabs, BIG Cinemas or PVR are the “in thing”. It seems down market to watch a movie in a single screen theatre. We pay almost double for the same movie and even for the same popcorn.

What options does one have apart from Brands?

If we take example of Warren Buffet, one of the richest people of the world, we can see that he gives more importance to comfort rather than Brands.

I have already hinted options for cars & beverages above. Let’s see a few for other products.
For example, instead of buying a branded shirt you can go for a stitched one. Here you have the freedom of deciding on the quality of the cloth plus have it tailor made as per your comfort. In this way quality remains intact & you can get 2 shirts for the same price.

Similarly in case of PCs you can go for assembled ones instead of branded computers. Your cost will cut down substantially.

Depending on the item you purchase, size and needs of your family, and availability of funds, spending only for the value rather than for the brand could amount to great savings for your monthly budget.

BRANDS DO GIVE YOU STATUS BUT THEY TAKE AWAY A LOT MORE INSTEAD….!!!!

email2friend

This entry was posted on Monday, March 2nd, 2009 at 2:26 am and is filed under Mukesh Dedhia's published articles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.