It is believed that there are close to a million companies manufacturing consumer goods and marketing them under different names. There are several things which play a crucial role while the consumers choose the products.
One of the major assumptions in the study of the economic behavior of man is the fact that man is rational. Other than the price, there are numerous other things which one will look at while selecting a brand from amongst a wide range of other homogenous products. One of the contributing factors for this choice is the personal preferences and tastes. This however is a temporary phenomenon and is very susceptible to change. The more compelling of the factors is the knowledge about the brand of a product. There have been numerous theories on conspicuous consumption and international demonstration effect which try to explain the human mentality to overlook the more basic factor of price while selecting products which are more expensive than other homogenous products.
Most marketing experts and business tycoons simply refer to this as the effect of branding. The effect and the consequences of branding have become so deep rooted that they are even able to overlook some of the more time tested concepts like comparative advantage. With the number of sweat shops continuing to rise in spite of more brands entering into the market, one can just imagine the effect that branding has on the mindset of an average consumer. It is believed that for any product line to succeed, it is necessary to either use an already existing brand name or create a brand with the use of something which is as powerful as a celebrity. With the number of product lines coming out with the names of celebrities, it is easy to see how people around the world are still open to newer brands based on their present interests.