AN EXPLORATORY STUDY OF GENERIC AND NEO-GENERIC PRODUCTS IN SINGAPORE : THE SUPERMARKET RETAILERS' VIEW

Abstract

A generic product is a good that does not possess any brand name and presents itself in plain coloured packaging bearing simply the content of the product on its label. With the reappearance of generic products on supermarket shelves in Singapore around June 1993, there has been a renewed interest in research regarding the retailers' reasons behind their reappearance and the ability of these products to sustain themselves in the competitive and evolving grocery markets. This dearth in research, however, has not as yet been met. With its debut on 1 April 1976, the appeal of generics recorded a peak in 1982 but began to wane in less than a decade of appearance. The unfortunate shrink in sales has indirectly pathed the way for neo-generic products. Neo-generics bear similar characteristics as generics with the exception of having a brand name. The first objective of this thesis is to provide a profile of the generic brand grocery buyer using the literature from the United States and Europe. Through the use of literature review, some comparisons are made vis a vis the local profile generated in 1984. These profiles, obtained through various interviews and questionnaires, were classified using three main characteristics: demographics, psychographics and perceptual variables. Given the important relationship between consumer demand and retailer supply, and coupled with the sparsity of research from the retailers' side, the second objective of the paper seeks to overcome the dearth of literature from the retailers' point of view in the local context. In-depth personal interviews were conducted to seek the opinions of large local retailers towards generic and neo-generic products. This extends the literature by exploring the effects of these products on the company itself, the consumers and their competitors as well as the prospects of these products in the future. From the study, retailers were found to retail these products for varying reasons -- from reaping a better profit margin to attaining a greater flexibility in product decision making. On the whole, the future of these products is highly dependent on retailers' efforts, consumers' perceptions and competitors' reactions. This thesis concludes by making recommendations as to how generics and neo-generics could be marketed in the future, and suggesting new avenues for research.