Branding and Pricing effects on Consumer Behavior

The New York Times talks about recession diets, people cutting down on brand name goods for cheaper alternatives.

Holly Levitsky, a 56-year-old supermarket cashier in Cleveland, buys a brand of steak sauce called Briargate for 85 cents and surreptitiously pours it into an A1 steak sauce bottle she keeps at home.

“My husband can’t even tell the difference,” she said.

The packaging and the marketing has obviously trained her husband to associate the taste and the experience to the brand name A1 even if there is no clear link (as Ms. Levitsky’s experiment demonstrates).

On a more scientific level, Business Week reports a study done by Stanford and CalTech researchers on the same consumer behavior on wine pricing.

“The marketing industry has done a good job convincing people about their free will and that they are making logical, well-thought-out decisions about the things that they buy,” Linn said. “Studies like this suggest that, in fact, there are lots of things that influence our responses to marketing and our choices of products that are completely irrational that we might not be aware of.”