Brand Preferences and Frugality

I’m going to start out by saying something that might get some feathers in a ruffle: everyone in the first world has brand preferences. Simply by seeing a particular label on something, we draw some basic conclusions about the product itself. It might be driven by our own experiences, it might be driven by data, or it might be driven by pure marketing.

I certainly do this. For video games, I have a more positive reaction to Nintendo than I do to Microsoft. For cars, I have a more positive reaction to Toyota than to Volkswagen.

Here’s the interesting part, though. You can pretty quickly tell a frugal person from a non-frugal person by their brand preferences. Not because of the specific brands they prefer, but for their reasons for liking that brand.

I like Toyotas because they deliver a lot of bang for the buck. I’ve owned or been closely related to someone who has owned three different Toyotas in my lifetime, and they’ve all been really reliable and had great gas mileage. Toyotas also generally mark very well in comparison studies for reliability, fuel efficiency, and other categories.

I like Nintendo because their consoles are usually relatively inexpensive compared to the competition and usually feature a number of titles with a ton of replayability. Plus, I know many other people who also own Nintendo consoles, making it easy for us to trade games and not empty out our wallet on them.

On the other hand, I recently asked a friend what their favorite kind of car was. The immediate reply was a Porsche. Why? Because they’re beautiful. If he could own any car in the world, he’d want to own a Porsche, because, in his eyes, they’re the best of the best.

What is that backed up by? The best information he could give me is that they’re beautiful, they go fast, and they’re “awesome.”

Another friend of mine buys several video games a month. Yes, a month. I asked him what he considered the best game console and he immediately pointed out the XBox 360. Why? “The games are awesome.”

What’s the difference? My brand preferences usually involve the value for the dollar I’m getting. I usually have some sort of concrete data to back it up – price points, value per use, and so forth.

Others tend to have brand preferences that don’t involve cost at all. Quite often, the criteria doesn’t even involve anything tangible – the response is emotional.

Here’s a real gut check for yourself. Whenever you see a brand represented anywhere – and it’s pretty hard to avoid them – ask yourself what your opinion of that brand is. Then ask yourself why. If it’s only based on emotion – “that brand is awesome” or “that brand is awful” – without anything concrete to back it up, you might want to step back and do some evaluation.

After all, frugality is about finding value. If you’re making buying decisions based on pure emotion, you’re not seeking value.

Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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