WHY DO WE CHOOSE TO GO TO
WHEN THERE ARE A THOUSAND OTHER RESTAURANTS
Why is it that when you are hungry the first restaurant that comes to your mind is McDonald's or when you want coffee Starbucks pops up in your mind? Because these companies have an identity, a personality.
Just like people brands build a reputation over time. The better the reputation the more valuable the brand. In Naked Economics they mention how, because of branding, the brand becomes more valuable than the product itself. For example, people don't go to McDonald's because their burger or nuggets taste like no other, they go there because it's McDonald's. In the book, Charles also gives an example about fashion that I can connect to very well. Girls my age think that just because they are wearing Prada cloths or Ray-Ban glasses they are more style and better dressed.
Branding can be a +positive+ tool but it can also be considered negative, if used in the wrong way. On one side consumers no longer face the dilemma of not knowing where to eat, companies choose for them. The better the identity of the company the more costumers they will have. Remember the more value you add to your company the more costumers that will be attracted. Additionally consumers no longer have to try out new foods that they might like or dislike. They already know what is good. We choose McDonald's because we know it's good! Why risk it going somewhere else?
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On the other hand branding can also have a -negative- effect on consumers. Branding controls and manipulates consumers to buy things they don't need. By creating advertisements and very good MARKETING they are able to persuade buyers to buy their products Thus branding is considered a very profitable strategy. Investing in branding is short- term loss, because of all the money put into, but a long-term success.