Neural imprints of national brands versus own-label brands

Abstract

Purpose This paper aims to explore brain-based differences in national and own-label brands perceptions. Because price is a differentiating characteristic, able to discriminate between national and own-label brands, its influence is also studied. Design/methodology/approach The study uses the Save Holdings Or Purchase (SHOP) task with functional magnetic resonance imaging to explore the differences in brain functioning for national versus own-label branded products. Findings For the same product, the higher priced national brands and the lower priced own-label brands lead to more buying decisions. It is also found that there are brain structures that are more active/deactive for national than for own-label brands, both marked with real market prices. Price is a powerful driver of buying decisions and has its neural correlates. Parietal regions activate when brand information is subtracted from brand-plus-price information. The most surprising finding is that visual and visual associative areas are involved in the contrasts between branded products marked with switched prices and marked with real market prices. Originality/value The activation/deactivation brain patterns suggest that accepted models of brain functioning are not suitable for explaining brand decisions. Also, to our knowledge, this is the first time that a study directly addresses the brain’s functioning when subjects are stimulated with national versus own-label brands. It paves the way for a new approach to understanding how such brand categories are perceived, revealing the neural origins of the associated psychological processes.