Generic brand

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Generic brands of consumer products (often supermarket goods) are distinguished by the absence of a brand name. It is often inaccurate to describe these products as "lacking a brand name", as they usually are branded, although with either the brand of the store in which they are sold or a lesser-known brand name which may not be aggressively advertised to the public.[citation needed] They are identified more by product characteristics.

They may be manufactured by less prominent companies, or manufactured on the same production line as a 'named' brand. Generic brands are usually priced below those products sold by supermarkets under their own brand (frequently referred to as "store brands" or "own brands"). Generally they imitate these more expensive brands, competing on price. Generic brand products are often of equal quality as a branded product; however, the quality may change suddenly in either direction with no change in the packaging if the supplier for the product changes.

Comparison with store brands[edit]

At their initial introduction, generics were packaged in mostly white packaging with black lettering. Today, such stark package design is rarely used. Lower priced products today usually bear the name of the store or supermarket where it is sold, or the name of the distribution company that supplies that store. A variation on this that is common in the United States is private labeling: brand names owned by the store that sells the product, that are not the same as the name of the store. For example, supermarket chain Safeway, Inc. sells dairy products under the Lucerne brand, while the Kroger's line of supermarkets sells products under several names, ranging from the top quality Private Selection down to the budget-driven line Kroger Value.

Membership-based "warehouse club" stores have begun their own contract-packed brands. The Wal-Mart owned Sam's Club sells products under the name Member's Mark, Costco sells products under the name Kirkland Signature (a reference to former corporate home office location, Kirkland, Washington), and BJ's Wholesale Club sells products branded Berkley & Jensen (a store self-reference - "B & J").

'Generic branded food', as well as being cheaper than branded food products, may be a healthier alternative with independent research finding supermarket own-brand cereals containing less salt, and saturated fat than the branded equivalent.[1] In addition to price and nutrition, evidence suggests that quality is equal to, if not better than established brands and in the 2007 Whisky Bible several supermarket single malts were rated higher than top-brand distilleries with Tesco the highest rating own-brand.[2]

Premium and value generic brands[edit]

Rather than offering a single own-brand alternative, supermarkets have in recent years introduced 'premium' and[3] 'value' ranges offering varying quality and price. Some supermarkets advertise the quality of their premium own-brands for example Sainsbury's television commercial featuring celebrity chef Jamie Oliver.[4] Value supermarket brands are sold at considerably less than known brands, sometimes even below cost price, to entice the shopper into the store.[5] Despite perceived lower quality, supermarket own-brands continue to sell and a trading standards investigation found that there was little nutritional or taste difference between value and regular products.[6]

Generic drugs[edit]

Main article: Generic drug

When patent protection expires on a drug, a bioequivalent version may be sold as a "generic" version of the brand name drug, typically at a significant discount below the brand name. The utility of these products is considered to be the same as that of the original brand name.

Genericization[edit]

Main article: Generic trademark

When a brand name is associated with every manufacturer’s product in the category it is said to have become genericized. These brand names are still legally protected, but from the point of view of the consumer, the name is synonymous with the product. Some examples of genericization include Band-aid, Aspirin and Dry Ice. [7]

Trends[edit]

Due to the lack of promotional effort, generic brands are priced lower than branded products.[8] They thus have a low "brand tax".[9] They are preferred by customers for whom price or value-for-money is the priority.

Cost-conscious consumers may find the tax to be paid for a brand or slight variation in quality unjustified, causing the brand item to have lower value-for-money. They may tend to pick cheaper substitute when they are nearby. The same consumers, however, may be willing to pay brand tax for a distinct category of products about which they are particular.

Generic products are generally more popular in recessionary times, when consumers' purchasing power is lower, putting them on the lookout for value-for-money products. Generic brands are more readily available for goods such as aluminium foil, CD/DVD, hand tools, paper products and small appliances.[10]

Issues[edit]

Consumer perceptions about generic brands differ widely. While purchasing generic drugs, there may be a perceived risk of the effectiveness and safety of the drug.

A generic brand skin care product may also have a consumer unsure about its ‘health and safety’ quotient. This implies that there are certain product categories more aligned to generic brands. Examples include over the counter medications, cereal and gasoline among others. [11]

Some generic products may try to leverage their already existing cost advantage (due to lack of promotional effort) further by using inferior ingredients for production. This can damage the reputation and lead to customers avoiding future purchase. Prevalence of such acts necessitates the customer crosschecking the crimp for list of ingredients and verifying that it is comparable to a name-brand.

Since customers may be unwilling to expend to extra effort required for price comparison or ingredient list matching, it is a good idea to buy generic brands for products with fewer ingredients. Eggs, fruits and vegetables are an easy choice.

Due to cultivation of a name brand mindset, customers might believe that a name branded product (say, cereal) tastes better than a generic one. In many cases, this may not be true. Misconceptions can be clarified by a blind test or by storing the product in clear glass containers.[12]

See also[edit]

Companies[edit]

Legal[edit]

References[edit]

  1. ^ "Expensive brand cereals loaded with more fat and sugar than cheap own-brand supermarket rivals — Mirror Online". Mirror.co.uk. 2010-10-10. Retrieved 2012-10-22. 
  2. ^ Published on Thursday 25 January 2007 00:37 (2007-01-25). "Whisky guide toasts finer taste of supermarket own-brand malts — News — Scotsman.com". Business.scotsman.com. Retrieved 2012-10-22. 
  3. ^ Shannon, Sarah (2010-09-22). "Sainsbury Expands Premium Own-Label Line After Asda Overhaul". Bloomberg. Retrieved 2012-10-22. 
  4. ^ Interactive: Wm. Ferguson, Aviva Michaelov, Zach Wise. (2009-10-11). "The Ups and Downs of Jamie Oliver, a Celebrity Chef — Interactive Feature". NYTimes.com. Retrieved 2012-10-22. 
  5. ^ "(EDM)". Edms.org.uk. 1969-12-31. Retrieved 2012-10-22. 
  6. ^ "'Value' supermarket brands as good as standard – study". Moneysavingexpert.com. Retrieved 2012-10-22. 
  7. ^ "When a Brand Name Becomes Generic — Genericized Trademarks". Inventors.about.com. Retrieved 2012-10-22. 
  8. ^ "Generic Brand Definition". Investopedia. 2010-12-13. Retrieved 2012-10-22. 
  9. ^ "Marketing Brand Vs Generic Products". Essortment.com. 1986-05-16. Retrieved 2012-10-22. 
  10. ^ "What is generic brand? definition and meaning". Businessdictionary.com. Retrieved 2012-10-22. 
  11. ^ Crowe, Aaron. "10 products to always buy generic". DailyFinance. Retrieved 2012-10-22. 
  12. ^ "Best Ways to Shop Generic Brands — ABC News". Abcnews.go.com. 2012-07-30. Retrieved 2012-10-22.