Why do products from larger companies cost more than those from smaller companies?
Question by Marisol: Why do products from larger companies cost more than those from smaller companies?
For example: an ipod shuffle costs more than another lesser-known mp3 player that has the shuffle feature as well.
Or
A Dell laptop with similar specs (if not slightly lower) as an Ibuypower laptop, but costs 200-300 dollars more.
Best answer:
Answer by Thedrip
Advertising is part of it.
Add your own answer in the comments!
The answer to your question is Brand Value.
Bigger companies have established their brand and place a premium on their brand value. That’s the reason Apple is more costly than those of lesser companies.
As for the consumers they get into the loop of branding. So you would trust Apple more than other smaller companies for better performance and reliability and style statements.
Also due to the advertising of the bigger companies a layman would be better able to recall those bigger company ( called the Recall Set) while as his recall set for smaller companies would not exists. So before purchasing nething the recall subconsciously goads the consumer to buy from company that’s well known. And that’s allows the well known companies to place a premium on the product.