Generic brand

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 where they are sold or a lesser-known brand name which may not be aggressively advertised to the public. 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

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'. Many name brand companies are thought to have better quality products than generic brand products.

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").^[1]

In addition to price and nutrition, evidence suggests that quality is equal to, if not better than, established brands. In the 2007 Whisky Bible several supermarket single malts were rated higher than top-brand distilleries, with Tesco having the highest rating own-brand.^[2]

Premium and value generic brands

Rather than offering a single own-brand alternative, supermarkets have in recent years introduced 'premium'^[3] and '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

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

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. Examples of genericization include Band-Aid, Vaseline and Kleenex.^[7]

Trends

Due to the lack of promotion, generic brands are priced lower than branded products.^[8] They are preferred by customers for whom price or value-for-money is the priority.^[9] 57% of consumers agreed with the statement “Brand names are not better quality.” More recently, the figure inched up to 64%.

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

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

A generic brand skin care product may 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 existing cost advantage (due to lack of promotion) 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.

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

• White label
• White-label product
• Private label

Companies

• Acme Corporation
• No Name (brand)
• Muji

Legal

• Generic trademark
• Research exemption

References