Are Brand-Name OTC Firms Driving Private Label Sales?

Article excerpt

The acceleration of private-label products has been spurred, in large part, by both the retailer and the consumer. But without conscious knowledge, the OTC brand-name drugmaker may also be subtly pushing consumers toward private label, contended Lisa Mason, director of marketing, Three Rivers, SmithKline Beecham Consumer Brands. She was speaking in New York City at a seminar on over-the-counter drugs sponsored by the Institute for International Research.

The manufacturer of brand-name drugs often "creates loyalty to the bargain, not the brand," Mason explained. This is done through price wars among the drugmakers themselves, as well as by excessive coupon offers to consumers. "These factors make the consumer extremely bargain-conscious," and private label represents a bargain, she said.

From the retailer standpoint, the development of private-label products is advantageous. "Private-label products enable the retailer to make more absolute profit per unit and provide a way for a retail store to build its own brand image," Mason added.

The consumer of the '90s, in particular, is influencing the growth of private label, Mason continued. …