Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 2
Most people don’t have their personal sense of identity tied up in what soda they drink or brand of razor they use.

I couldn't disagree with this more. When Pepsi did its blind taste tests 60% preferred Pepsi. When they put the brands on the table 60% preferred Coke. "They're drinking the brand!" on Pepsi manager exclaimed. Coke used to poke fun at Pepsi by claiming that people bought Pepsi but poured it in the kitchen, out of sight of guests, while they brought the Coke bottles into the living room.

And don't let anyone tell Bill Durant that people don't identify with the brand of car they choose. Tide vs All? Maybe not so much, but "Choosy Mothers Choose Jif" about sunk Skippy, because who wants to be an ordinary Mom? (Michelin used the same tactic with the baby riding on the Michelin tire because "So much is riding on your tires." Anybody want to guess how Budweiser became #1?

The "search brand costs" have been with us since I was a kid. The IGA had store brands and brand brands, and my mother chose on the basis of price, except oops, often the brand brand was better, and that's what she bought. It's not different now, just a bit more refined. I do trust Costco's Kirkland, but then I don't buy all my groceries there, and I will *never* buy Kirkland cola, will you? (Yes, some people buy Sam's Cola, which is sort of the point. There is always a market for off brands at price, there always has been and always will be.)

Building a brand is harder now because of fragmentation of market and media, but it's still going on. Ever heard of Tesla? Prius? Skinny Pop popcorn? Planet Fitness? Sketchers? Spotify? Venmo? Aldi? Airbnb? Uber?

But what if a new way of reducing search costs is developed?

The same thing that happened last time. Product differentiation. Price point. Branding. Segmentation. It is *never* going to be the case that everyone will decide "generic is good enough for me." Some will. Most won't, especially as wealth multiplies.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.