Generic Product - Definition & Meaning
What is Generic Product?
A generic product is something that is sold on the name of the product i.e. what it actually is, rather than having a brand name. Such products generally have the name of the local shop which is selling the product or a lesser known name, but sometimes they don’t have any brand name on them.
Generic products are also termed as generic brands. These are less expensive than the branded products and do not have a widely recognised name or logo on them. Generic products can be made by smaller companies or sometimes by the same companies that make branded products. These products normally do not have any kind of advertisements or promotions. They are brought by customers when they find them in the shelves in stores.
A variation of generic products or generic brands is ‘private labelling’ which exists in the US. In this mechanism, supermarkets often name their own products by a different name than the name of the store. These products are normally value for money and are offered to entice the customers into coming back to the store and buying their products on repeat purchases. Generic products are bought by the customers more than usual in recessionary times because the consumers’ buying power is low.
Generic brands have gained popularity in the recent years and may consumers claim that these products are as good as the branded or expensive ones. People prefer generic products because they save a lot of money. Many generic products these days are packaged as good as the branded ones instead of the traditional plain and simple packaging. A few of them also imitate well-known brand names. When people shop for products like baking products, medicines, cereals, etc., they normally look for the product rather than brand name. For example, someone would look for a Citrizine for cold, instead of a particular brand name like Cipla since the regulation requires that generic medicines have the same ingredients as the branded ones. Although, buying a generic medicine might have issues with respect to safety unlike eggs or fruits which are an easy choice.
Examples: Many OTC medicines are generic products. Supermarkets and local grocery shops have products wither with the name of the shop or without any kind of name printed on their labels. Fruits and vegetables sold by the vendors on streets or markets and not labelled in supermarkets are also generic products.
Hence, this concludes the definition of Generic Product along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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