less famous brands vs famous brands

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The branding philosophy focuses on making brands more meaningful and different so that customers can better differentiate their products from those of rivals in order to promote improved sales and brand loyalty. The concept has contributed to the growth of well-known and less well-known labels, with popular brands comprising well-established brands on the market, and over time, with consumers starting to combine high-quality and higher value brands. Less popular labels, on the other hand, consist mostly of new competitors seeking to capture market share. The debate that surrounds famous and less famous brands is that people are more willing to purchase famous brands rather than less famous brands, despite the fact that the less famous brands offer the same properties to the customers. The research paper sought to examine the debate and established that the conception is faulty since brand choice is not only influenced by the extent to which a brand is famous but also by such factors as the consumer’s level of income, product preferences, and the aspect of perceptions, including perceived value, price, quality, value, and risk. The research paper provides an overview of the concept of branding and brands, and the key factors that influence brand choice and purchase decisions.

Keywords: Brand, Branding, Perceptions, Price, Quality, Value, Risk, Product

Famous Brands versus Less Famous Brands


A brand refers to a unique symbol, sign, words or a combination of the three elements that firms utilize to build an image that defines and differentiates their products from those of competitors. The image is intended to make customers associate a particular product with such elements as the level of satisfaction, quality, and credibility in their mind over time. Hence, in complex and crowded market places, brands play a crucial role in influencing purchase decisions since they reflect certain value and benefits allowing customers to easily select particular products over others. A brand represents the face of a firm; hence, brands are regarded as the most valuable assets in firms. Many researchers have argued that customers often associate famous brands with quality, credibility, and high levels of satisfaction, explaining the customers’ preference to pay a higher price for a famous brand rather than a less famous brand despite the fact that both brands could be sharing the same qualities. This paper seeks to establish whether the argument that people are more willing to pay for a famous brand than for a less famous brand that offers similar properties is true.

Literature Review

A brand is defined as a set of images and perceptions representing a product, company, or service. Brands involve more that a company’s or product’s logo since they also present the promise of what a product or company will deliver to the customers or the expected customer experience (Ind, 2005). Companies develop brands over time through such measures as advertising using consistent messages, customer interactions with a company, recommendations from colleagues, family, or friends, and real-life experiences with a service or product. Once brands are developed, they provide an umbrella under which diverse products can be offered to the market; hence offering a company a tremendous strategic advantage in creating awareness of a firm’s offering in the market and economic leverage.

The process of branding, therefore, focuses on giving meaning to a firm’s products through creating and shaping a brand in the minds of consumers by employing such measures as advertising campaigns with consistent themes (Ind, 2005). Hence, the concept of branding is crucial in helping customers to quickly identify a firm’s products as well as giving customers a reason to choose a firm’s products over those offered by the competitors since it clarifies to the customers the expected value and level of satisfaction that they will derive from using the products. Good and strong brands build trust with their customers, and after several good experiences with a product, customers tend to try other products from the same company, a phenomenon referred to as brand loyalty.

Bhatti and Latif (2014) postulate that several factors influence customers’ decision to purchase a particular product, including such physical factors as price and brand. The factors that influence purchase decisions may be product related factors or non-product related factors. The product factors that influence purchase decisions are those factors that are directly linked to a product itself, and they may include such factors as color and the materials used to make the product. On the other hand, non-product factors are elements that are not directly related to a product, yet they play a crucial role in influencing customer purchase decisions. There are five key non-product factors that influence purchase decisions, including brand name, product packaging, reputation, product placement, and pricing.

Bhatti and Latif (2014) note that price is often interpreted as one of the factors that determine quality. Customers tend to trust price more than other cues that reflect quality since it is measurable and concrete. However, the authors argue that high prices have a significant effect on customer preferences since in some cases, higher prices reflect higher quality, while on the other hand, high prices may reflect extra expenses thus making a product less desirable. According to the authors, the tendency to rely on price to measure quality is culturally influenced; hence it varies from one culture to another. However, the effects that price has on the customer’s quality perception are overshadowed by the effects that a brand name possesses.

Product placement is considered as an important factor in influencing customer decisions since the location of a product determines how many customers can access the product. Products that are located on busy streets or easily accessible shelves are more likely to be purchased compared to products that are located on bottom shelves or streets and stores that are accessed by few people. Although location is not directly related to the product itself, it influences purchase decisions since customers prefer purchasing products that are easy to locate (Fitzpatrick, 2013). On the other hand, packaging influences purchase decisions through three key aspects. First, packaging grabs the attention of customers through standing out amongst the product alternatives. Secondly, packaging encourages purchase through conveying a relevant and unique value proposition. Finally, packaging influences purchase by blending with a firm’s brand’s positioning and remaining authentic to a firm’s overall stance.

Hence, well-packaged products encourage more purchases compared to poorly-packaged products since they effectively grab the attention of customers and positively influence decisions to purchase a product. Moreover, brand reputation influences purchase decisions, whereby customers tend to prefer products that have a positive brand reputation over a product with a negative brand reputation. According to Fitzpatrick (2013), customers no longer give much weight to the messages that sellers give while marketing their products, rather, customers consider what other customers feel and say about a product in making a purchase decision. Currently, customers search for product reviews through social media platforms as well as word of mouth and make purchase decisions by comparing what different people say regarding the different competing products.

Gázquez-Abad, Martínez-López., Esteban-Millat, and Mondéjar-Jiménez (2014) categorize brand among the most crucial non-sensory factors that influence customers’ choice decisions. The authors argue that customers perceive a brand as a guarantee, promise, or contract with the manufacturer as well as a symbol of quality. Hence, although a product may be expensive, customers are often more willing to pay the high price since they tend to associate the high price with high quality. Smith (2012) establishes that the final product price is fixed between the buyer’s product valuation and the seller’s valuation of the product. Smith argues that the subjectivity of the value of a product is crucial to allow products to be bought and sold since if products have an objective value that both the buyer and seller are aware of, their valuation would never overlap. The lack of an overlapping valuation would, therefore, indicate that a sale would never occur since sellers would never sell their product at a price that is below the product’s objective worth and buyers would be unwilling to buy a product whose price that is higher than the product’s objective price.

Khraim (2011) postulates that customers tend to prefer famous brands names since they are in a position to disseminate product benefits and enable customers to remember the advertised product benefits more easily when compared to less famous brands. Further, the author argues that although there are many substitute products available in the market, customers opt to trust famous brands to deliver value and quality. As a result, famous brands and the images that they portray attract customers to purchase the brand as well as encourage repeat purchasing behavior among the customers, eventually minimizing the price-related switching behaviors. Khraim (2011) further argues that customers see products from an overall perspective, including the association with the brand name and all the product attributes, as well as the satisfaction derived from the purchase and use of a commodity.

According to Hollis (2013), although the complexity of the landscape of marketing has increased, the fundamental goal of effective marketing, which involves creating strong brands that customers find valuable, remains unchanged. Creating strong brands plays a crucial role in creating value for the companies that own the brands. Hollis postulates that good marketing helps in ensuring that the customers’ mental associations with a particular brand are more interesting, more outstanding, and more compelling than those of alternative products. Hollis further notes that presently, brands have become more valuable in influencing customer purchasing decisions than before. The key approaches that Hollis highlights for creating more value for a brand include encouraging more customers to purchase a brand, encouraging customers to buy the brand at a higher price than that of the alternative brands, encouraging repeat purchase for the brand, and encouraging customers to purchase the brand in new categories or for new occasionally.

In the marketing practice, brands represent a well-defined distinction point between products and services from different business firms (Mullarkey, 2001). In some industries, such as the fashion industry, brands act as a sign of product quality to customers; hence, brands act as a balance between the different brands when customers are making a purchase decision. Mullarkey further argues that customers are likely to go for famous brands rather than the less famous brands because although a product from a famous brand may be expensive, it could be rich in symbolic meaning. Conversely, less famous brands are less desirable among customers since although they could of be of good quality, durable, and fairly priced, they have little to offer customers regarding brand image experience (Mullarkey, 2001). Therefore, Mullarkey postulates that brands are not only essential for creating value for companies but also for consumers.

Brands serve a number of roles for consumers, including serving as indicators of authenticity and quality. When consumers develop familiarity with a particular brand and the expected value and quality of the brand, they tend to develop lasting relationships with the manufacturers. Additionally, if a product provides value through function and form, consumers tend to feel comfortable to repurchase the product as well as other products from the same company (Kapferer, 2008). Hence, successful companies build their competitive advantage in the marketplace by understanding brands and the consumer brand relationships. In this sense, brands become important market-based assets that are capable of improving a firm’s resale value.

Hollis (2013) postulates that brands become most crucial whenever customers need to choose between alternatives; choosing between alternatives is the point at which the influence of marketing has the strongest effect. Hollis notes that effective marketing ensures that the most motivating, differentiating, and relevant impression comes to the customer’s mind readily whenever the customer encounters a purchase decision. The faster a positive representation of a brand forms in the customer’s mind in relation to the customer’s need, the higher the probability that the customer will select the brand for purchase. In his analysis of the factors that make a brand meaningfully different, Hollis notes that successful brands are both different and meaningful. A meaningful difference is founded on the benefits that a brand intends to offer, and the difference equips a brand with a meaning that most likely influences a customer’s brand choice (Clifton, Simmons & Ahmad, 2003). A meaningful difference can be either an emotive, functional or a tangible benefit. In instances when a meaningful difference is absent, customers consider the cheapest brand as the best choice since the lack of differentiation converts brands into commodities while marketing messages are equated to white noise.

Moreover, Hollis (2013) posits that brand value refers to the difference that a brand is capable of commanding against an equivalent generic product. Hollis’ study demonstrates that on average, meaningfully different brands command a price premium that is 13% higher compared to the alternative brands. Hollis notes that the premium seeks to ensure that customers consider the brand as distinct from the alternative brands. A brand is perceived as distinct if it is considered to be a trend setter for its product category, particularly based on the product’s functional advantage or due to the brand setting itself apart through the creation of perceptions of difference that are founded on the brand’s values, tone of voice, personality, or the causes that the brand promotes. Mullarkey (2001) maintains that the rational factors that influence brand choice are the price-related and the economic elements of purchasing. Price is regarded as the most rational factor that influences brand choice since in most cases, customers consider price as a sign of the basic product features. However, for some customer groups, there is a trade-off between quality and price and customers are often comfortable paying a higher price if they consider a brand to be of sufficient quality.

According to Yoon, Oh, Song, Kim, and Kim (2014), most people tend to think that higher priced products are of a better quality than products with a lower price tag. The authors further argue that the majority of customers lack access to all the available information regarding a product to enable them to effectively make purchase decisions; hence, they majorly rely on common sense and other informal means that explain product prices to make purchase decisions. Shirai (2015) postulates that the majority of people reason that highly priced products are of a higher quality since they cost more to make compared to the lower-priced products. However, Shirai notes that high prices do not always denote high-quality products; rather, marketing is responsible for influencing customers towards believing whether a product is of good quality or whether a product is too expensive. For instance, customers are always willing to pay a premium for Apple products since they believe that they are of good quality and they give them value for their money. Hence, despite the growing competition, Apple has refused to lower its product prices since the company believes that doing so would hurt the reputation of its products.

Shirai (2014) argues that there are several factors that influence customers to buy famous brands despite the fact they are relatively expensive compared to the less famous brands. The first factor involves confidence in experience; customers often but products with the hope that they offer a quality experience. In most cases, customers rely on the opinion of others and previous experience when making decisions regarding the brand to buy. Famous brands have traditionally demonstrated consistency in product quality, which has eventually contributed to the brand evolution. Hence, customers opt to purchase famous brands since they are almost certain that they are assured of a quality experience. The second factor that influences people to purchase famous brands is social acceptance since people have a traditional desire of fitting in certain social circles. Social acceptance particularly applies to luxury products, which are often considered to be trendy, high class, or fashionable. Therefore, individuals tend to purchase famous brands since they believe that such brands contribute towards their social acceptance in the social circles.

The third factor that influences the purchase of famous brands is loyalty, whereby after consuming a particular product for a long time, consumers become loyal to the brand, especially if the product provides a high-quality experience and consistency in product quality. Brand loyalty often influences customers to pay a high price for a particular product rather than opting for a cheaper product (Ma’arif, 2008). Companies build customer loyalty by developing strong company brands through ensuring consistency in the quality of the products that they offer. Finally, people purchase famous brands to preserve their personal image. For instance, individuals who regard themselves as sophisticated professionals are likely to purchase Armani suits and highly-priced vehicles to portray their desired high-class image.


The term ‘brand’ is one of the most broadly used words, although it is also unevenly understood. A brand refers to the elements that prospects think of whenever they hear a particular brand name (Ma’arif, 2008). Brand names exist objectively since they are fixed, and people can see them; however, a brand only exists in a person’s mind since it comprises of the total value, relevance, price, and quality impression created in a customer’s mind through the processes of branding and marketing. Branding plays a crucial role in creating additional value for a product by fostering loyalty and preference, which further leads to repeat purchases.

Shirai (2015) postulates that although the majority of customers consider famous brands as high-quality brands, it is important to note that famous brands are not always better than the less famous brands. Shirai argues that the key reason that famous brands price their products highly is to maintain the status of their respected and famous brands by maintaining high standards. However, Shirai notes that with the emergence of social media, which gives customers an ideal platform to express their feelings about products, famous brands are striving to deliver the quality that they imply through their products. Further, Shirai argues that the conception that cheaper brands do not deliver quality is faulty since cheaper brands may be of higher quality standards but they are low-priced to enable them to penetrate the market. In most cases, unknown brands use a low-pricing strategy to enter competitive markets since customers may be skeptical about purchasing highly priced products from unknown brands because the products have not been previously tried to assure one of their quality and the value that they provide to the consumers.

Moreover, less famous brands may employ a low-pricing strategy because they have employed cheaper ways of delivering the same level of quality delivered by the famous brands or a superior quality level to that offered by the famous brands. According to Gázquez-Abad, Martínez-López, Esteban-Millat, and Mondéjar-Jiménez (2014), premium pricing is an effective strategy that famous brands use to generate additional revenue since the majority of buyers are convinced that expensive products have an added value in comparison with the competitors. However, the concept of premium pricing majorly applies to niche customers, who tend to associate the price of a product with quality. The customers are majorly individuals who use the things that they own to define their social status. Such customers are often obsessed with the premium-priced products, and they are often less concerned about the core value of the product as well as the actual product quality. Additionally, such niche customers mainly aim at expressing themselves through the idea that the product that they purchased cannot be owned by everyone.

Famous brands are more attractive to customers than less famous brands since they have successfully created an image of their ability to deliver high product quality and value in the minds of consumers, unlike the less famous brands. Customers extensively rely on the aspects of perceived quality, perceived value, perceived price, and perceived risk to make purchase decisions. Perceived value refers to the worth of a service or product the consumer’s mind. According to Bhatti and Latif (2014), the majority of consumers do not know the actual cost of production for the products that they purchase; hence, they rely on their internal feelings to determine the worth of products in meeting their needs.

A customer’s perceived value of a product influences the price that one is willing to pay for the product. Unlike the actual product value, which is determined by the true costs of production and the costs relating to the sale of the product, perceived value is influenced by a customer’s opinion on a product. Perceived value is theoretical, and it reflects a product’s ability to provide satisfaction or utility while fulfilling a need (Ind, 2005). Hence, brands that are perceived to deliver more value are more desirable among consumers even in cases where they are highly priced than products that are perceived to deliver less value.

On the other hand, the perceived quality focuses on the customer evaluation of a product based on particular attributes that influence customers towards determining whether a product is of high or low quality. Customers evaluate the quality of a product by examining the extrinsic and intrinsic uses of a product. The intrinsic cues that customers use to evaluate the quality of a product include the product’s physical characteristics, which may comprise of such elements as aroma, flavor, size, and color among others. Conversely, the extrinsic cues that consumers use to determine the value of a product include such attributes as packaging, peer pressure, advertising, and price (Yoon, Oh, Song, Kim & Kim, 2014). Customers are more familiar with the extrinsic cues, and therefore, they extensively rely on the extrinsic cues to evaluate the quality of products. Hence, customers regard high prices as a sign of better quality since they consider highly priced products to have additional value to that offered by the cheap brands. In addition, customers tend to establish a relationship between quality and price and self-esteems. Hence, whenever the economic situation is good for all the customers, the majority of customers prefer high-quality products, which are mostly provided by the famous brands.

Perceived risk, on the other hand, expresses the customer’s doubt regarding their purchase decisions. The degree of a customer’s perceived risk influences his or her purchasing decision; in most cases, customers prefer purchasing familiar brands to lower their purchasing risk since the value, and the quality of the product is predictable unlike for brands that a customer has never consumed (Fitzpatrick, 2013). In most cases, consumers regard cheap brands as low quality brands, therefore impacting on their attitude towards products when making a purchase. Hence, to avoid the risk of purchasing a cheap low-quality product, the majority of consumers opt for expensive famous brands. The types of risks that consumers expose themselves to when making a purchase include financial risks, social risks, functional risks, and physical risks. Financial risks comprise of the monetary losses that emanate from a poor purchase choice; for instance purchasing an unfamiliar brand that is of low quality. Physical risks, on the other hand, relate to the risk of a product harming a consumer’s physical health. Functional risks relate to the uncertainty of a product failing to meet a consumer’s expectations while social risks are associated with a customer’s status or image.

Finally, the concept of perceived price refers to the customer’s belief of the product price in relation to the product quality. Price refers to the amount of money that customers sacrifice in exchange for a product. Price can be objective or perceived whereby objective price refers to the actual product price. Different consumers perceive price differently, which is largely attributed to the differences in economic capabilities between customers. Kapferer (2008) notes that low income consumers, are majorly price sensitive, hence they opt for cheaper brands. Conversely, consumers who associate low prices with low quality and they possess the economic ability to purchase the highly-priced products opt for the expensive brands. Furthermore, such events as economic recession influence customers’ buying behavior since a decline in income causes customers to become more price conscious and as a result, they shift their preferences towards cheaper brands rather than the expensive brands.

Based on the arguments presented by the different authors, the conception that people are more willing to pay for a famous brand than for a cheaper product that offers the same properties by a less famous brand is not entirely true. On one hand, the conception is true because the majority of customers tend to make purchase decisions by relating brands with quality, while on the other hand, customers are rational and they opt for the cheaper alternative when presented with two items whose quality is identical, unless in cases of luxury goods or instances when customers use items to define their social status.

Brand names tend to alter the aspects of perceived value and perceived quality, where companies use various marketing techniques to create images of high quality and highly valuable products in the minds of customers to facilitate repeat purchases. Whenever customers use a given product for a long time, and they achieve their desired level of satisfaction, they develop brand loyalty, and thus, they always prefer the particular brand, even if it is more expensive that the competing products (Khraim, 2011). Further, customers examine the relationship between the perceived price and the perceived quality before making a purchase decision; customers derive satisfaction from products if the perceived quality matched the perceived price.

However, in cases where a product fails to satisfy the customer’s expected quality level, the customer perceives risk, which presents a negative purchase decision. The price-quality relationship is expressed through five key factors, including, brand reputation is more relevant than the price in influencing purchase decisions for customers who acquire all the information regarding a product through advertisements. Secondly, customers who are not informed about the price of a product use other factors rather than price to make purchase decisions. Thirdly, customers who possess less knowledge regarding the quality of a product utilize such extrinsic factors as a brand name, packaging, and price to make a purchase decision. Moreover, some customers utilize price to make a purchase decision if they consider price as an indicator of quality (Smith, 2012). However, in cases where there are price variations on competing products yet the difference in quality is negligible, most consumers opt for products with the lesser price.

Hollis (2013) maintains that although the majority of consumers are willing to opt for a famous brand rather than a less famous brand, it is crucial to note that other elements, apart from a brand name, play a crucial role in influencing purchase decisions. From his perspective, Hollis maintains that brand names are not solely responsible for influencing purchases; rather, in addition to a brand name, customers assess such elements as the price in relation to quality, product quality, the value that a product offers, and the risks involved by purchasing a particular product before making a decision to buy a product. Further, Mullarkey (2001) argues that customers only purchase brands that they consider meaningful, whereby meaningful brands offer three forms of value, including personal benefits, marketplace benefits, and collective benefits. Market benefits refer to the value that a brand’s products deliver. Personal benefits, on the other hand, involve the functions that a brand performs for the individual customers, while collective benefits relate to the functions that a brand plays for the society as a whole.

Therefore, customers rely on famous brand names to make purchase decisions whenever they perceive a high risk of purchasing alternative brands that are less famous since they are not certain about the quality of the products or the level of satisfaction that they will derive from consuming the cheaper alternative. Further, Clifton, Simmons, and Ahmad (2003) postulate that customers opt for a famous brand over a less famous brand when they perceive high quality and value in consuming a famous brand over a less famous brand. In addition, customers prefer famous brands over less famous brands if they use products to communicate their social status; for instance, individuals who consider themselves as techno-savvy often go for Apple products rather than products from the competitors, since Apple communicate an elevated social status, particularly due to their high prices. On the other hand, customers who purchase luxury goods, such as vehicles, watches, jewelry, among others opt for famous brands, since the highly priced brands communicate quality to a great extent.

However, in other cases, when rational customers are presented with two brands that offer the same properties or products that are closely related regarding quality, they opt for the low-priced products, which in most cases, are less famous brands. Price is regarded as one of the key rational factors that influences purchase decisions with regard to brands (Neves, 2012). Customers majorly rely on the perceived price to determine the best product to purchase, where the perceived price is determined by examining the price of a product against the perceived quality of the product. If the perceived price matches the perceived quality, a customer is much likely to make a purchase decision. Hence, in most cases, customers are only willing to sacrifice an amount of money that matches their perceived product quality, unless in cases of luxury goods or when customers need to uphold their social status.

Moreover, the majority of consumers, particularly the middle-income and low-income earners are price sensitive; hence, the customers opt for the cheaper products from less famous brands as long as their perception of quality matches their needs. On the other hand, whenever economies face an economic recession, most buyers shift their preferences towards the cheaper brands that grant them equal value to that offered by the expensive brands (Shirai, 2014). Hence, the willingness to pay for a famous brand than for an equitable less famous brand depends on the economic status of the customers and the society in general, as well as the value that the customers expect to derive from a particular product. Famous brands are more expensive than less famous brands, indicating that price-sensitive customers would rather go for a cheaper brand that gives them the same level of satisfaction as the highly-priced famous brands.


Several authors hold that people are more willing to pay for famous brands than the less famous brands that offer the same properties. However, although the argument applies in some cases, it is not always the case given the nature of customers and their diverse pre

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