What's in a brand name? Quality, sometimes. But it pays to determine if a label is worth the added cost.
Ever since manufacturers began slapping their names on products, certain names have created consumer magic. Say "Rolls-Royce" or "Macintosh" or "Rolex" and everybody forms an image. Good brands aren't always pricey. Shopping at Target suggests good quality at a great price, brand experts say.
But names aren't always the consumer's best guide. Sometimes, they're just confusing.
For example, guess who makes the following dishwashers. Sure, some are easy: GE Profile (General Electric) and Frigidaire Gallery (Frigidaire). But how about Hotpoint, Magic Chef, KitchenAid, and Kenmore? (Answers: General Electric; Maytag; Whirlpool; General Electric; and Whirlpool. Doesn't Westinghouse make White-Westinghouse dishwashers? Nope. It's Frigidaire's low-end line.
That's the problem with brand-name shopping these days. So many products, so many claims. Everybody knows that well-recognized companies don't always deliver the best value.
But how do you find out about that hidden gem from a lesser-known company? And even if you know how, who has the time to sort it all out?
Answer: You do. Just jump on the Internet.
A few simple steps into cyberspace can give you a pretty good idea of when a brand name deserves its reputation and when it doesn't. Watch out, though. Just as the Internet can tear down a company's reputation, it's also breeding its own class of brands that don't always offer the best value.
"A brand name is sometimes a good shorthand for quality. The trouble is that brands aren't absolutely constant," says David Heim, managing editor of Consumer Reports, the monthly magazine published in Yonkers, N.Y. "Companies are bought and sold. Things change. Even brands that are more consistent than most [can] make a mistake with a particular product."
A few years ago, he recalls, Thomson Consumer Electronics came out with a flawed design for a line of its RCA TV sets. Consumer Reports readers who owned the sets complained and the brand name suffered. "It will take Thomson several years to get through all this," Mr. Heim says.
Eventually, a company with a good reputation has to fix the problem or its brand name will suffer, marketing experts say.
"If the product is really not that good and the brand is strong, in the long run, it's not going to succeed," says Deepak Sirdeshmukh, a marketing professor at Case Western Reserve University in Cleveland. "There are a lot of terrible products being put out by great brand names, except we call it 'test marketing.' "
For example, in late 1992 Pepsi introduced a clear soft drink called Pepsi Crystal with great fanfare. Within a few months, it disappeared from stores. The problem wasn't the product itself so much as its fit with the Pepsi brand, Professor Sirdeshmukh says. Customers expected the new drink to taste like a Pepsi. When it didn't, they abandoned the product.
Sometimes, companies face the opposite problem: Their products rate better than their brand name.
Take running shoes. Although Nike dominates the market, other lesser-known companies - such as Etonic and Asics - have rated better in Consumer Reports.
Which bottled water would you rather drink: Perrier, Poland Spring, or Von's Natural Spring Water? In a four-year study released last year, the Natural Resources Defense Council found that the first two, well-known brand names, contained contaminants. Von's, a store brand, did not.
How about this choice in plastic garbage bags for the kitchen: American Fare (sold at Kmart) at 4 cents apiece or Glad Handle-Tie bags at 15 cents? When Consumer Reports tested both a year ago, it found the Kmart bags were not only cheaper, they were also more durable.
Clothing poses a special challenge. "The same company will produce designer couture ... at several levels," says Susan Cowell, vice president of Union of Needletrades, Industrial & Textile Employees, based in New York. "The designer-level clothing - the stuff you see on the runway - is very high quality and generally made in this country. [But] you see designer labels on fairly cheap goods a lot of the time."
Often, they're assembled in the same Asian and Latin American factories that produce cheaper store brands. And sometimes the same product is produced under widely different conditions.
When labor activist Charlie Kernaghan traveled to Nicaragua earlier this month, he took about 50 pairs of jeans, including two pairs with the Gloria Vanderbilt label. One pair was made in Israel, where workers were paid roughly $6.50 an hour, he says. When told of that fact, Nicaraguan workers who made the other pair got angry. They only earned - with "bonuses" - 48 cents an hour.
Companies "want you to think about the image," complains Mr. Kernaghan. "They don't want you to think about the women locked in factories 12 hours a day." In any case, the wage differential didn't make any difference in the price at the store. Kernaghan bought both pairs from Macy's for $34.
Of course, consumers don't buy solely on the basis of quality. "In the fashion area, the fact that a garment has Ralph Lauren's name on it may mean a whole lot more" than its actual quality, says Tom Healey, a partner dealing with media and marketing practices at J.D. Power and Associates, a global marketing-information-services firm headquartered in the Los Angeles area. "You're buying cachet, you're buying fashionability, you're buying permission."
Sometimes, though, you're just buying trouble. When Consumer Reports tested knit shirts three years ago, it found that a $7 shirt from Target outlasted the $49 Ralph Lauren Polo shirt, which faded after several washings.
Consumers can filter out the marketing hype. In the old days, that meant scouring magazines and asking friends. The Internet speeds up that research.
Some observers believe brands will become less important as consumers become more empowered with easily available price and quality data online.
"It seems branding is becoming much more honest," says Mike Speiser, cofounder of Epinions.com, a consumer-products review site based in Brisbane, Calif. "Over time, performance and brand will be synonymous."
Other experts disagree. "The Tides of the world, because of what they've done and their history and their brand equity, do not have to worry as much," says Paddy Padmanabhan, a marketing professor at Washington University in St. Louis. "The problem is that the No. 3 [and] No. 4 brands find it increasingly hard to [keep up]."
And the Internet is creating brands of its own. For example, among computer users, Amazon.com has the second highest brand power online after Microsoft, according to Greenfield Online, an Internet market-research company in Wilton, Conn. But when Michael Smith and Erik Brynjolfsson, professors at the Massachusetts Institute of Technology, studied Amazon, they found the site charged an average of 7 to 12 percent more than lesser-known sites, such as Books.com (now owned by Barnes & Noble).
Maybe that's because Amazon has a better site or service. Maybe it's because, even online, branding still works.
"When people get some value from a brand, they keep coming back, even if they know they can get it cheaper from somewhere else," says Kathy Micken, a marketing professor at Roger Williams University in Bristol, R.I. "By finding a brand that works for us ... that simplifies life. That's one less decision to make."
(c) Copyright 2000. The Christian Science Publishing Society