When is a generic brand good enough?

A ques­tion often asked to CAPLINQ in par­tic­u­lar or among peers in gen­er­al is, “When is a gener­ic mate­r­i­al (such as Poly­imide Tape vs. Kap­ton Tape or Vol­ume-Con­duc­tive Lin­q­s­tat™ Film vs. Velo­stat™) good enough?” The answer of course is sim­ple, it is when the cus­tomer says it is.

Com­pa­nies large and small spend both time and cash resources to devel­op inno­v­a­tive prod­ucts that the mar­ket wants to buy. Intel­lec­tu­al prop­er­ty is gained and patents are filed in a rush to pro­tect the best ideas and inno­va­tions. This is all good, and com­pa­nies that devel­op these mate­ri­als should be able to ben­e­fit from first mover advan­tage and a con­tin­ued slight­ly high­er mar­ket price.

Gener­ic Prod­ucts are good enough only when cus­tomers say they are.

The prob­lem as CAPLINQ sees it how­ev­er is that many of the com­pa­nies that devel­op these tech­nolo­gies don’t build in mar­ket­ing and pric­ing strate­gies to account for today’s fast pace of inno­va­tion. Prod­ucts that were once unique become com­modi­ties and the com­pa­nies that mar­ket them stick to high­er prices despite the mar­ket real­i­ties that low­er-cost options become avail­able. Smart com­pa­nies like Apple devel­op incred­i­bly inno­v­a­tive prod­ucts and build in mar­ket­ing strate­gies to can­ni­bi­lize their own busi­ness by reduc­ing prices and intro­duc­ing new­er prod­ucts and obso­let­ing old­er ones. In the case of iPods and iPhones, “old” is a rel­a­tive term that recent­ly is mea­sured in months if not weeks.

So get­ting back to the ques­tion, gener­ic brands of prod­ucts are good enough when sup­pli­ers say they are to their cus­tomers and cus­tomers trust their sup­pli­ers enough to believe them. CAPLINQ works hard with its man­u­fac­tur­ing part­ners to devel­op prod­ucts that meet or exceed the expec­ta­tions of its cus­tomers while keep­ing the prices of these prod­ucts far below those of its competitors.

So when CAPLINQ offers its cus­tomers Poly­imide Tape instead of Kap­ton® Film or Vol­ume-Con­duc­tive Lin­q­s­tat™ Film vs. Velo­stat™, its cus­tomers can be sure that the qual­i­ty of the prod­uct is high, while the price offers sig­nif­i­cant incen­tive to switch from the bet­ter-known brand names.

About Chris Perabo

Chris is an energetic and enthusiastic engineer and entrepreneur. He is always interested in taking highly technical subjects and distilling these to their essence so that even the layman can understand. He loves to get into the technical details of an issue and then understand how it can be useful for specific customers and applications. Chris is currently the Director of Business Development at CAPLINQ.

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