A piece of consumer’s mind – how important is it really?

Warren Buffett had mentioned that when a company’s product and service owns a piece of e consumer’s mind, it may likely have an economic moat that can potentially translate to long term, sustainable earnings.

When we think of fast food, brand names such as Mac Donald probably come to mind. How about soft drinks, we likely think Coke or Pepsi. For these businesses, the results are obvious and we can see it being translated to consistent earnings. But all things got to be put into perspective.

Just some time back, my wife and I wanted to develop some photos for our gynae after the delivery of our 3rd child. So we went to the photo development booth that is situated in City Square Mall’s NTUC. After we processed the order at the self service machine and chose the pictures we wanted for our SD card, we passed the receipt to the person at the counter and waited. While we were waiting, I continued to browse the products at the photo booth while my wife was checking her Iphone.

Then something caught my eyes and I asked my wife this question, “do you know the brand of the photo booth we are at?”

Without thinking twice, she answered “it is xxxxxxx brand” Make a guess, what was her answer?

Well, she answered “Kodak”. That was what I thought so as well. But no, we were not at a Kodak booth, we were at a …..

 

Drum roll please….

HP booth!

What is my point of sharing this story? The idea of a business owning a consumer’s mind does not necessary mean it is a strong business.

Granted it has a strong brand, but most people (at least myself) don’t really care where we develop our photos as long as it is convienant. Just like I don’t really care which petrol brand it is as long as it is the cheapest. These are businesses that has products that cannot really be differentiated anyway. And when we are able to find one who, we think has a piece if the consumer’s mind, we got to test it’s track records.

That is how investors make their wealth compound.

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To your dreams,

Mind Kinesis Research Team

 

 

 

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