The Influence of Brand Names on Consumer Decisions

Just a symbol, such as the Nike swoosh, can attract consumers' attention.
Just a symbol, such as the Nike swoosh, can attract consumers' attention. (Image: Marc Serota/Getty Images Sport/Getty Images)

Brand names are words, images, slogans or symbols used to distinguish a product from its competitors in the market. The legally protected brands (those that can't be copied without the explicit permission of the owner) are called trademarks and are one of the most important elements of modern marketing. This is because, according to the "The Socio-Cultural Meaning of Brands" research published by the Oxford University Press, "the power of a brand to influence perceptions can transform the experience of using the product."

Psychological Effect

Brand names have a psychological effect on consumers, urging them to choose one product over the other based on their perception of it, rather than hard facts. According to a joint study by Tanya Chartrand and Joel Huber from Duke University, Baba Shiv from Stanford University and Robin Tanner from the University of Wisconsin, as reported by Science Daily, "brands can automatically activate purchase goals in individuals ... without their awareness or conscious intent."

Promise of Performance

Brand names offer assurance to customers that since products are provided by renown manufacturers, they are a safe choice. This is what the "The Socio-Cultural Meaning of Brands" research presents as the "functional" role of brands. Brand names are especially influential during costly purchases, such as shoes, electronic appliances and cars, when consumers cannot afford to test a new, unknown product and replace it if they don't eventually like it. Previous satisfaction from the brand is yet another reason to choose the product.

Conspicuous Consumption

The term "conspicuous consumption" was first coined by economist Thorstein Veblen back in 1899 to refer to purchases not made because of necessity, such as buying food because you're hungry or getting shoes to protect your feet, but to display wealth. When this happens, it is not the qualities of the product that matter, but people's perception of it. Therefore, if conspicuous consumers consider a certain clothing brand prestigious, they choose it over an unknown brand, even if those two are equal in terms of quality.

Brand Loyalty

According to brand management consultant Bill Nissim, citing researchers Bloemer and Kasper's definition, brand loyalty is the state when consumers "bind themselves to products or services as a result of a deep-seated commitment." This commitment can be based on the psychological factors discussed above, constant satisfaction by a product or on loyalty programs, such as awarding gifts or shopping credits. Brand loyalty can affect consumers' behavior by making them think twice before moving on to a new product.

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