The power of a having a respected brand
Well-respected brands can charge extra for their products. Ever since there have been mass media, that has been true. That’s why Coca-Cola costs more than a store brand. That’s why Nike sneakers cost so much. Any business, even yours, that makes a name for itself can use its good reputation to charge higher prices.
This can go to extremes. Some of the biggest names can charge premium prices that seem to be exorbitant, but they can keep on selling at these prices, anyway.
Foster Kamer has looked at this phenomenon, particularly in regard to Apple’s ability to charge prices that defy logic, in a recent article on Medium: Why People Buy $30 Power Cords Against All Reason.
There are a number of factors that go into their decision to overspend:
► Laziness/ time pressures keep them from doing much price comparison
► Fear of getting inferior products
► Habit
► Expense accounts that let them charge it to the company despite the high cost
► And several more.
The curmudgeon who writes this column hates to overspend. That keeps him away from Apple and most other prestige brands, and he doesn’t seem to be the loser for that decision.
But, the other side of the coin is that if you build a reputation for quality, like Apple, you can charge higher prices, but probably not to the astronomical level Apple achieves.
The Medium article is an interesting and quick read. Check it out.
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