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What is a Generic Brand?

Generic cake mix.
There may be generic brands for different prescription medications available for over the counter purchase.
Generic brands originally often referred to canned goods.
Generic branding may be found on household items like laundry detergent.
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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 23 August 2014
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A generic brand is a product that is not marketed and sold under some type of name brand. The term was first coined to identify consumer projects sold in supermarkets during the latter part of the 1970’s. Since that time, the designation of generic brand has come to include any brands sold exclusively under a particular retailer name, and includes prescription medication as well as supermarket goods. In some cases, generic products are sold at a much lower price than any brand name product.

The first generic products developed in the 1970’s normally sported packaging that was free of any type of package name or design. Instead, the packaging was a simple white body with black lettering that identified the contents of the package. These generic brand products were introduced in parts of Europe, the United Kingdom, and the United States and quickly attracted the attention of consumers who were looking for ways to save on food and other household consumer products.

One of the main advantages to the generic products was the cost. For producers, the savings in packaging were often significant, allowing them to continue to generate profit from the sales of the products. Consumers benefited from the low unit price, which was sometimes drastically lower than even the most inexpensive of name brands.

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While generic branding originally focused on such staples as canned goods, cake mixes and fruit juices, enterprising entrepreneurs quickly expanded the line to include household items like dishwashing detergent, laundry detergent, and floor cleaning products. At the height of the no-name brand fad, there were even some distributors that were selling generic beer.

Eventually, the concept of generic branding came to include the introduction of store brands. While many retailers carried lesser known signature brands that were only available in selected chain stores, the idea of putting the name of the retailer on the package led to a new way of marketing a generic product. While the packaging still tended to be very simple in appearance, the name of the chain store selling the product was now prominently displayed. During this phase, frozen vegetables and fruits joined the ranks of generic products that were sold in supermarkets across the world.

Over time, the idea of a generic brand has also become popular with the development of a line of prescription medications. The generic drugs are composed of the same ingredients as name brand medication, but is sold at a considerably lower price. Touted to be just as effective as any name brand medication, generic drugs are now found at most major drugstore chains as well as locally owned pharmacies. In some cases, health insurance coverage requires that if a generic brand drug is available, the drug coverage will only apply to the generic product.

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Discuss this Article

anon313647
Post 4

@anon302074: Each can of soda only costs a few cents to make. This include the big brand name sodas too. It's just for the fact that they've been around for many years, and that they have a well-known reputation, and they're able to sell it for a much higher cost.

Essentially, a lot of brand names don't differ from their generic counterparts. Buy the cheaper, generic kind.

anon302074
Post 3

I have a question: is generic brand pop better than name brand pop?

Sunny27
Post 2

Subway11-You know generic brand food is actually more profitable for the retailer than the brand name food.

Like the consumer the retail chain has to pay more for the item than if there was a private label version of that item.

This is why most stores offer private or store brand name generic labels. For examples, if you buy the Staples brand ink and toner, or paper you will be able to buy the products at a cheaper price and the store increases its gross margin profit because sales on these types of items are pure profit for the retailer.

This is really a win-win situation for the customer and the retailer.

subway11
Post 1

Brand name and generic name differ in price. Most generic items are very similar to their brand name counterparts but cost substantially less.

For example, many over the counter medicines like Tylenol and Night Quill for example also have generic brands that offer the exact same ingredients and are a lot cheaper.

Wal-dryl is the generic version of Night Quill and is sold for a few dollars cheaper. Sometimes the generic brand is just as good as the name brand and it is cheaper because the generic brand has no advertising costs associated with it.

Other times the generic equivalent may not be as good. For example, when buying paper towels I always feel that the generic brand comparison does not compare to the name brand because the generic brand is lighter than and not quite as absorbent as the brand name paper towels.

I found that the same hold true for bathroom tissue as well.

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