Economics Today and Tomorrow, Student Edition
Economics Today and Tomorrow, Student Edition
1st Edition
ISBN: 9780078747663
Author: McGraw-Hill
Publisher: Glencoe/McGraw-Hill School Pub Co
Question
Book Icon
Chapter 3, Problem 22AA
To determine

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

Expert Solution & Answer
Check Mark

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.

Knowledge Booster
Background pattern image
Recommended textbooks for you
Text book image
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:9780190931919
Author:NEWNAN
Publisher:Oxford University Press
Text book image
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Text book image
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Text book image
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Text book image
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education