Saturday, July 16, 2011

The Case for Generics

Everyone probably thinks of drugs when hearing generics versus brand names, but it certainly applies to other products.  When going down the pharmaceutical aisle, though, it is easy to see the discrepancy in price between generic drugs and brand name drugs, even though they are the same compounds in the same quantities.  Are brand name products really worth the price?

The answer really depends on your comfort with the company.  For some people, brand name products may be worth the extra price if that company has established a good reputation with the customer.  If you don't have confidence in the quality of a generic producer, it may make sense to pay for brand names.

However, what most people pay for when they purchase a brand name product is the prestige which comes with being able to show that you are wealthy enough to pay the premium.  In my marketing class last semester, we learned that most people buy brand names for products they use in public (probably everyone is familiar with this in the fashion industry, but do you really need to spend $60 for jeans? or a few hundred in some cases?).  But for products consumed at home, like some pharmaceutical products, people are more likely to buy the generic version.  I believe some people may still buy brand name drugs if they are concerned with safety of generic brands, but on an overall level, if you are using it privately, most people don't see the sense in paying extra for brand names.

Obviously, the big brands are still thriving so people do think brands are important.  For the more cost-conscious consumer, it may be beneficial to at least give generics a chance.  For example, at the grocery store in the cereal aisle, I noticed a company called Malt-o-Meal which sold generic cereal brands.  On the front, they literally had "Compare this to *insert brand name*" for frosted flakes, raising bran, and honey bunches of oats.  Yet, each box was $1.50 instead of $4.  The cereal tastes the same for me, so I'd rather spend the difference on the rest of my shopping list.

Generics are definitely a big opportunity for people trying to fit within a budget to cut down their expenses for everyday items.  The next time you going shopping, try looking next to the brand name products to see how much you can save by dropping the pricey name.

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