Buying Generic Products Instead Of Brand Names Can Lead To Less Pay

generic brandingThriftiness is a great virtue today for most Americans, 42 percent of whom are living paycheck-to-paycheck. Brand names are an excess fat that many cut first, opting instead for supermarket generics or dollar store fare. But choosing generic products to improve your finances might actually be self-defeating. According to a new study, using generics instead of brand names can lower a person's self-esteem, leading them to feel less worthy of a high salary.

In one experiment conducted by researchers Wen-Bin Chiou and Ying-Hsien Cha, job applicants wrote up their resumes using Mac computers, some with an Apple brand keyboard and mouse, and others with generic varieties. The participants who used generics reported their salary expectations as 10 percent lower than applicants who used accessories with the Apple logo.

If those expectations translate into an actual salary, then a person who would otherwise make $50,000 a year, would take home $45,000 thanks to savvily scrimping on brand name products. Unless those generics added up to over $5,000 of annual savings, all that frugality was for naught.

Jumping Away From A Snake

Past research has shown the impact that brands can have on other people's perception of you. One study found that people considered a man wearing a shirt with a designer logo more qualified for a job and deserving of a higher salary than the same man in just a plain shirt. But the fact that a brand can affect your own perception of yourself hints at something even more radical.

This phenomenon has been documented before. In a 2008 study, researchers at Duke University's Fuqua School of Business and Canada's University of Waterloo flashed over 300 students -- for just 1/30th of a second -- Apple's old rainbow symbol or the stripy IBM logo. Then they asked them to think up creative uses for a brick. Amazingly, even though the two logos weren't even consciously detected, the Apple-primed participants came up with more creative ideas: sinking something, a doorstop, a paperweight, breaking a window.

The experiment demonstrated the power that even a subliminal brand suggestion can have on the workings of a person's mind. It seems that all the logos and slogans we see everyday, which bundle notions of prestige, fun, freedom, sex, happiness -- or lack thereof -- tug our neurons in different directions, without us even knowing it's happening.

"Those associations are essentially hardwired into the mind," explains Gavan Fitzsimons, professor of marketing and psychology at Duke University. "They're the modern day equivalent of the hardwired reaction to jump away from a snake."

While many generic products, like over-the-counter medications, cereal, flour, sugar and baby formula, are almost identical in quality to their branded cousins, the impact that they have on our self-image might not be the same.

The Black Magic of McDonalds

In another experiment, Chiou and Cha had 96 single men call a person who their database had said was an excellent romantic match. The young men then ranked how much they had impressed the person on a seven-point scale. Before the call, they had to replace the phone's batteries. The men who used branded batteries gave themselves an 4.56 on average, while the generic users ranked themselves as 3.70.

No only might brands affect how people perceive you, how you perceive yourself, and how you perceive how others perceive yourself, they also could profoundly affect behavior. A study last year found that exposing people very briefly to fast food logos made them more inclined toward instant gratification and less inclined to save.

In a different experiment, researchers tested 85 female students on their product preferences. Then they randomly told them that they preferred authentic or counterfeit products, and gave them "authentic" or "counterfeit" sunglasses to wear accordingly (though all of them were authentic $300 designer shades). When the students then had to report their performance on various tasks, the "counterfeit" kids were 137 percent more likely to lie.

These results have serious class implications: People from lower socio-economic backgrounds might be more likely to eat at McDonalds and choose generic, and less likely to buy MacBooks and designer sunglasses. They might also be more vulnerable to subconscious cues to expect less, save less and cheat more.

Awareness could be one way to overcome these insidious effects. You can walk past McDonalds, for example, and breathe slowly, resisting the impatience it's trying to trigger. But ultimately, the average American consumer is exposed to between 3,000 and 10,000 brands a day, according to Fitzsimons. "It's just impossible to feasibly be aware of all of them."

Conscious resistance can also lead to far in the opposite direction. Fitzsimons and his colleagues performed an experiment subliminally encouraging participants to floss more. The participants starting flossing an average of seven times a week, as opposed to the usual five. But when the participants were told that they were being manipulated in this way, they responded by flossing once a week.

"They were like 'Ha! I'll teach you! I'm actually going to harm my dental hygiene to stop you influencing me!'"

Don't Fight It

Fitzsimons recommends that we instead embrace brands, and all their various associations. If Apple triggers creativity in our minds, but you can't afford an iPhone, he suggests that you simply tape a picture of the Mac logo and the tagline "think different" by your desk. At first, you might be embarrassed, he admits, and it probably won't work. But two weeks later, you won't even notice it in your conscious environment, and it will simply be activating these positive hardwired reactions.

"Don't be afraid of brands," Fitzsimons advises. "Take back control, and rearrange your physical environment to take advantage of all these associations."

If your kitchen is mostly crammed with generic goods, hide those in the back of the cupboard, and put the branded goods or fancy appliances out on prominent display. It doesn't even have to be brands, he says. Perhaps you have your mother's old scarf, and your mother always inspired you. Make that scarf the first thing you see in your closet, he says.

"But if you have a bad relationship with you mom, by all means avoid putting that scarf up."

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