What Are Consumer Goods?
Definition: Consumer goods are the products that an average user purchases for self-consumption. They are also popularly known as final goods or consumer products because, in the life-cycle of a product, the last stage comes when the goods-consumer consumes it.
Consumer Goods vs Intermediate Goods
Consumer goods are not to be confused with intermediate goods. The intermediate good is those good whose life span is still incomplete.
These intermediate goods are used further down the line to manufacture final goods.
For example, copper is an intermediate good as it is utilized to manufacture bowls and trays which are final products.
What do you mean by consumers?
The business entities who purchase goods and services to satisfy their demand in exchange for money are known as consumers.
The final consumers never re-sell the product that they have purchased; instead, they consume the product. As a result, this ends the life span of the product. The consumers are the kings of the marketplace.
All the products and services are designed specifically keeping in mind the needs and wants of the consumers. “Consumer’s delight” is the ultimate goal of all the producers and the manufacturers.
Consumer goods vs Capital Goods
Capital goods are such products bought by a business entity to use that good to produce another good, and it is not meant for final consumption.
Whenever an average user purchases a good for self-consumption, it is known as consumer goods. They are also popularly known as final goods.
Types of Consumer Goods
There are four significant types of consumer goods in the market. These goods have unique characteristics that distinguish them from each other.
These four types of consumer goods are Convenience, Specialty, Shopping, and Unsought goods.
1. Convenience goods
The word convenience is self-explanatory as it means that little to no efforts are put to acquire the goods from the market.
These goods are easily accessible in the market, and the rate of purchase is quite frequent. For instance, Toothpaste, toilet paper, drinks, food, and deodorants, etc. The highlighting characteristics are as follows:
- Not durable
- Easy availability
- The rate of purchase is frequent
- Relatively low priced
2. Shopping products
The purchase rate in the case of shopping products is not as frequent as in the case of convenience goods. They are also not readily available in the market. S
o, as a result, consumers take time to conclude whether to go ahead with the purchase or not. For instance, Clothing, Mobile phones, and sofa sets are all shopping goods. The highlighting characteristics are as follows:
- They are durable
- Comparable to related goods
- The rate of purchase is infrequent
- Opportunity cost is high
- Less availability
3. Speciality goods
The consumers’ decision time during the purchase of specialty goods is minimum. Since specialty goods have rare features and unique designs and they don’t have homogenous products.
For instance, designer clothing, high specification laptop, sports car, rare ornaments, etc. The brand image in the market is the USP of these products like Ferrari, Gucci, etc. The highlighting characteristics are as follows:
- Goods are durable
- They are rare to find
- The purchase rate is infrequent
- They are extravagantly priced
4. Unsought goods
These kinds of products can be ranking from old, outdated goods to the new innovative prototype. Consumers don’t remember these products at the top of their heads, and they are very infrequently bought from the market.
The unique property of this good is that the benefits are not instantly derived from the product. For instance, Life Insurance is the most popular unsought good in the market. The highlighting characteristics are as follows:
- The rate of purchase is infrequent
- The consumers are unaware of the features of the product
- Lack of desire
- Bought to avoid an undesirable outcome
Durable and Nondurable goods
Consumer goods can also further be divided into durable and non durable goods.
Durable goods are those goods that can be consumed by the user for more extended periods. On the contrary, non durable goods cannot be consumed after the first consumption.
For instance, Mobile phones can be used for many years, whereas bread cannot be used again after the consumer has eaten it.
Fast Moving Consumer Goods
They are one of the most considerable sections of consumer goods that are available in the market.
Non durable goods such as drinks and foods are comprised under this section. The most outstanding feature of this segment is that the movement of goods from producers to distributors and retailers to the final consumers is very rapid.
This is the most lucrative section of consumer goods available in the market. The retailers and producers adore this segment as it has high shelf space turnover, and the rate of purchase is relatively high.
Consumer Goods examples
The critical point to keep in mind is that consumer goods are meant for final consumption, and no business entity is allowed to use consumer goods for further production of goods. Some of the top consumer goods examples include-
This is a classic example of convenience consumer goods.
The purchase rate for this product is very high, and the availability of this product from a local store is very high.
The doughnuts’ other characteristics are that it is a low priced product, and it falls under the category of non-durable goods.
The Ferrari sports car is an excellent example of specialty goods.
The Ferrari sports car is expensive, unique, durable, and the purchase rate is significantly low compared to convenient consumer goods.
It also doesn’t fall under the category of shopping goods as it is not a homogenous product. On the contrary, it is a heterogeneous product, and it cannot be matched with other sports cars as it has unique features.
3. Gucci Handbags
On similar lines with Ferrari Gucci is one of the top examples of specialty goods.
As the unique features of the handbag are not comparable with any other handbag on offer in the market. The handbag has unique designs that the other handbag brands cannot provide.
Hence, when a consumer likes that particular design from Gucci, then it will not switch loyalties.
On the flip side, convenient goods such as bread, butter, basic mobile phones are almost indistinguishable.
Laptops can be an example of either shopping goods or specialty goods depending on the price at which they are available and the specifications that they provide.
Laptops falling under the category of High-end laptops such as Google’s Pixelbook and Apple MacBook Pro are speciality goods. This is because they have one of a kind design and specifications that are not comparable to any laptops at the same price point.
The brand Apple has its operating system that is not available on other brand’s laptops. Hence, making it a speciality product.
On the contrary, low-end laptops can be put under the category of shopping goods since there is a wide range of products available at a lower price point with very few distinguishable features.
5. Prepaid Funeral
This is one of the excellent examples of unsought consumer goods. This is because consumers usually don’t buy these products with full-hearted willingness and desire.
They pay for the product as they are reluctant to face the adverse consequences that can occur.
For instance, a father pays for his funeral service in advance, fearing that his children might not be able to cover the expenses of their father’s funeral. So, the father pays for the service while he is alive.
So, we can say it makes it an unsought good as no immediate benefits are derived.
On the concluding note, we hope you would have understood that consumer goods are the end result of production and manufacturing.
The consumer can see these goods stocked on the store shelf.
What are the basic consumer goods that you need in your day to day life?