Industry News / Categories / News / Research and Awards / OTC/Healthcare

New Study Sheds Light On Private Label OTC Purchases

A new study by Market Strategies International, “CPG Qualitative Research: Exploring Private Label vs. Branded OTC” April 2013, finds consumers are strongly aware of specific national brands as well as private label brands in all OTC categories studied in the report.

Most consumers have experience and are comfortable with private label, but will purchase national brands if they are in unfamiliar territory or when they are not willing to risk poor efficacy or onset of action (e.g., for conditions such as diarrhea or a cold).

The study also found that many believe private label is made by national brand manufacturers. While respondents aren’t certain, a main school of thought is that OTC medications are made by the same manufacturer regardless of national brand or private label distinction; another belief is that private label is made outside the US (which creates skepticism around quality), or by “generic manufacturers” that just make the same thing for all private label medication.

The study found consumers tend to identify national brand with being eye-catching, expensive and reliable, and identify private label with simplicity, being functional, and cost saving. Private label is generally believed to be as efficacious as national brand, particularly for those who believe the same manufacturer is producing both private label and national brand.

However, there are exceptions, including Cold and Flu and Excedrin Migraine (of which shoppers are extremely loyal to).

Some individuals acknowledge that they believe national brand and private label likely are the same but still believe national brand will produce better results; there is also a segment of buyers who are brand loyal and suspect private label efficacy.

How private labels perform across categories is important as well, the study finds. Once someone has tried a private label product of any type and has had a positive experience they are more comfortable purchasing private label in the future and in other categories; efficacy is perceived as equivalent.

Social media and informal referrals are also important in creating trust in a product.

While saving money is a strong driver of purchasing private label OTC products, green shoppers and moms are the drivers of spending more.

The study shows consumers are sometimes willing to pay a premium for products that are socially responsible and environmentally friendly, while moms who pay close attention to ingredients are willing to buy whatever they think is best for their kids, regardless of price.

As to where consumers are shopping, the study found convenience is key. A major driver for buying private label is the proximity of the store to either home or work. If consumers have a regular shopping list and regular destinations (Target, Sam’s Club), they will shop for OTC meds used routinely, such as pain medication. Buying private label is often acceptable or preferred when preventing an additional shopping trip or when saving money on OTC that is used in bulk, such as allergy medications.

However, there are certain stores consumers avoid for both national brand and private label alike. These stores include discount stores, particularly dollar stores.

Product recalls have also influenced purchase behavior out of necessity. Consumers are forced to purchase something else when their national brand is pulled from the shelves. In some cases, recalls have not damaged a brand’s reputation, particularly if consumers feel they are being given information and being told the truth about the recall.

In other cases, product recalls have lasting effects. For example, many remember when capsules were tampered with and the contents replaced with poison. Despite acknowledging safety innovations and sealed packaging, most still do not purchase capsule-form OTCs at all.

There is also a perception that national brands are the only ones who have issues that require a recall. This will aid in private label’s growth, the study suggests.

Market Strategies International conducted in-person focus groups March 20-21 to complete this study. Qualified participants fell between the ages of 22-80, bought pain relief, cold and flu or digestive relief products for themselves or others, and had personally purchased private label OTC items in the past six months.

Did you enjoy this article? Click here to subscribe to Private Label Buyer.

Recent Articles by Jamie Grill-Goodman

You must login or register in order to post a comment.



Image Galleries

November 2014 New Food Products

This month's new food products are Flours, crepes, lollipops, several candy items, pancakes, dip, fish, raisins, pizza, almond milk, peanut butter, and a breakfast bowl.


Coming with a clear, comprehensive plan was the key to success for Longo Brothers Fruit Markets when the grocer decided to roll out a two-tier private label strategy, Jenny Longo and Robert Koss tell PLBuyer editor Chris Freeman in this podcast.

More Podcasts

Private Label Buyer Magazine

PLB November 2014 cover

November 2014

The November 2014 issue of Private Label Buyer - its last issue - includes articles about the retailer as manufacturer and OTC/healthcare items, as well as category insights on pizza and household goods. Check it out today!

Table Of Contents Subscribe

Private Label Segments

Which segment of private label will see the biggest growth over the next year?
View Results Poll Archive

Clear Seas Research

Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications,Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.


facebook_40px twitter_40px  youtube_40pxlinkedin_40pxgoogle+ icon 40px

PLB Marketplace