Re:The Advertising Bubble
by bad_user on Monday November 16, 2015 @12:34PM
(#10575731)
Not sure what research you're talking about, but it's all about the paradox of choice. People hate making choices, so when in a supermarket or at a restaurant, confronted with the choice on "getting something to drink" for example, you often end up going for the familiar and seeing a brand on TV counts as familiar. This is also why the taste of Coca-Cola does not change or why Coca-Cola continuously does brand advertising, even though most people are already familiar with it - the brand advertising for Coca-Cola is not targeting the 30 or the 40 year olds, but rather the preadolescents and the adolescents that don't have a sense of familiarity yet.
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This research: http://www.jstor.org/stable/1059217
"...advertising was positively linked to brand prices in manufactured food products. Prices of weakly advertised manufacturer brands, private labels and generic products were substantially lower than the prices of leading brands, especially highly advertised leading brands. Since the products selected for analysis were relatively homogenous, real quality and cost differences do not appear to account for the price differences across brands."
This may or may not be a result of the paradox of choice. That would be an interesting paper: "brand advertising increases prices when there are fewer than five choices of brands" would be a testable hypothesis, but I haven't been able to find that paper.