Friday, December 10, 2004

Trust and Brand 

This study might seem obvious but it verifies what I was writing in the paper, "Trust, Reason and Relations." It was an examination at MIT of 10,000 internet shoppers over a year searching for books. MIT learned that 51% of the shoppers were willing to pay more to purchase the same book from a better-known vendor whom they can trust. Price was not the determining factor.

The study affirmed that there is something to brands after all -- at least in the online world. The issue of trust is obvious. In an environment of uncertainty, shoppers prefer to deal with sellers who have established a reputation for fair dealing.

Does this mean that where there is certainty or a perception that all are the same, branding breaks down and price rules? This would be a neat corollary but humans are not rational economic creatures, so I'm not sure the opposite is true. If it is, then many companies are wasting money trying to project brand images in marketplaces where consumers don't distinguish one from another all that much. Perhaps that is why Wal-Mart is doing so well with its focus on low prices. Consumers have come to expect that much of modern living is a staple to be purchased rationally and if it is this toothpaste rather than that one and this mouthwash instead of that, who cares?


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