Generic products: who buys them and how do they perform relative to each other?

Branding has traditionally been viewed as an essential tool for marketers to establish an identity for their products. Even products among the commodity range make use of branding to establish a position for themselves in the market. Recent times, however, have seen the emergence of unbranded or “generic” products. These products, which are usually sold at a price which is lower than their branded equivalents, are most often found in the area of low‐involvement grocery items. Previous studies of consumer perceptions suggest that while consumers see generics as being less expensive than their national branded equivalents, they are also seen as being inferior in quality. This research goes beyond comparing generic products to their national brand equivalents by comparing generic products to one another, in order to ascertain whether the “low price‐low quality” perception is more applicable to some generic products than others. A mail survey of 1,000 New Zealanders revealed that, in contrast to previous studies, generic consumers tend to be older and on a lower household income. The more standardized generics (such as rice) received more favourable ratings than the more processed generics such as coffee and shampoo, although there were significant differences in the respondents’ perceptions across different demographic groups. The results suggest that it is unwise for marketers to draw sweeping conclusions about consumer perceptions of generic products in general. Rather, each generic product, when compared with other generic products, has its own consumer perception and, therefore, each generic product requires different attention from different elements of the marketing mix.