Table of Contents
- Meaning of Consumer Goods
- Types of Consumer goods
- What does a consumer goods market consist of?
- Classification of Consumer Goods
- Characteristics of Consumer Goods
Meaning of Consumer Goods
Those goods, which are directly consumed or used by the buyers without any commercial processing, are known as consumer goods.
Examples of Consumer Goods
Examples for consumer goods are soap, toothpaste, hair-oil, radio, television, fridge, motorcycle, car and so on.
Types of Consumer goods
Consumer goods may be basically of two types:
- Single-use goods and
- Durable-use goods.
Single-use goods are those which get exhausted in one use, e.g., chocolate, biscuit, ice-cream etc. On the other hand, durable-use goods are long lasting, e.g., television, fridge, motorcycle, car, etc.
Consumer goods are bought for the consumption of the ultimate buyer himself or any of his family members, friends or relatives.
What does a consumer goods market consist of?
The market for consumer goods consists of people who have the necessary purchasing power. Such people must have a need for a particular product. In a competitive market, various brands of the same product are available. Of these various brands, one particular brand alone is capable of satisfying the buyer’s wants, which he buys.
Luxury model cars are being marketed in India. Such cars do have a potential market here. There are consumers with the capacity to buy these. Ford Ikon, Honda City, Mitsubishi Lancer, Toyota Qualis, Hyundai Accent are examples. One may show preference for Ford Ikon and another may prefer Toyota Qualis. But all these cars are in demand.
Classification of Consumer Goods
Consumer goods are classified into three categories:
- Convenience goods.
- Shopping goods, and
- Specialty goods.
1. Convenience Goods
Goods that are purchased by the consumers as a matter of daily routine are called convenience goods. Buying such goods requires minimum or no shopping efforts.
Example: Soap, detergent powder, toothpaste, toothbrush, shaving cream, hair-oil, etc.
All these products are, in fact, made available at the place of living of the buyers. The buyers of such goods have perfect knowledge of the goods and also the various substitutes available in the market.
Convenience goods are non-durable in nature and therefore, the buyers need to buy them frequently. The unit price of the convenience goods is less. These goods are not bulky in nature. There are a number of brands of soaps, face powder, toothpaste, etc., available in the market. Often, buyers show preference for a particular brand.
Characteristics of Convenience Goods
The characteristics of convenience goods may be stated as follows:
1. Convenience goods are purchased frequently.
2. No special skill is required to buy such goods.
3. The unit value of the product is less.
4. There are a number of brands of such goods available in the market.
5. The buyers often have preference for a particular brand.
The manufacturers of convenience goods must make these available in every nook and corner of the village, town or city. These goods must be sold through all retail outlets.
The manufacturers must also ensure their uninterrupted supply in the market. This is necessary because, if a particular brand of toothpaste or shaving blade is not available, the buyer may not hesitate to buy some other brand.
2. Shopping Goods
Goods that are not purchased frequently by the buyers are called shipping goods. The unit value of shopping goods is high. The buyer, often, does not have complete knowledge of the product.
There are a number of models of shopping goods available in the market. The buyer makes a comparison between the various models before taking the purchase decision.
Examples of Shopping Goods
Examples of Shopping goods are Jewellery, furniture, travel bags, suitcases, leather belts, pouches, shoes, etc.
Brand name is not as important for shopping goods as it is for convenience goods. The name shopping goods is given to these mainly because the buyer shops around to find out the best. Shopping goods are semi-durable in nature.
Characteristics of Shopping Goods
The characteristics of shopping goods may be mentioned as follows:
1. Shopping goods are not purchased frequently like convenience goods.
2. The buyer does not have perfect knowledge of the goods.
3. He shops around to find out the best.
4. Brand name may not be an important criterion in buying shopping goods.
5. Shopping goods are semi-durable in nature.
The manufacturers of shopping goods can market the goods through a selected number of retail outlets. Unlike convenience goods, which are to be made available in every place, shopping goods may be made available in certain prominent places. This is mainly because of the tendency of the buyer to shop around to find the product of his choice.
3. Specialty Goods
Goods that have a high commercial as well as utility value are called specialty goods. Such goods possess certain special characteristics that attract the buyers. The purchase of specialty goods calls for special buying efforts.
Examples of Specialty Goods
Examples of Specialty goods are certain models of color televisions like the big screen or the home theater model, double-door refrigerators, personal computers, compact disc players, cars, etc.
Most of these are luxury goods. Trade name as well as brand name are important considerations in the purchase of specialty goods.
Characteristics of specialty Goods
The characteristics of specialty goods may be stated as follows:
1. Specialty goods are very high value goods.
2. Such goods possess certain special features.
3. Special buying efforts are necessary.
4. Specialty goods are long lasting.
5. Trade name and brand name are important considerations.
The specialty goods. are generally marketed by the manufacturers themselves. Even if there are dealers, the number has to be restricted to just one or two in a town or city. The reputation of the dealer is also important. Normally, the manufacturers and the dealers undertake joint advertising.
Characteristics of Consumer Goods
1. The production of consumer goods is undertaken on a large-scale. Such a large-scale production is necessary for two reasons — one, the number of buyers is very large and the second, most of these goods get exhausted soon, e.g., soap, toothpaste, hair-oil, etc.
2. In the market for consumer goods, one finds a large number of buyers and sellers.
3. Each product has a number of perfect or close substitutes.
4. There will be variations in the price of the various substitutes available.
5. The buyers are found everywhere.
6. Most of the consumer goods have elasticity in demand. When the price of one brand of soap goes up, the demand for it may fall and the buyer may shift to a substitute.
7. The quantity purchased each time is less.
8. The unit value of most consumer products is less.
9. There is hectic competition in the market for consumer goods. Each marketer strives hard to show that his product is superior.
10. From the marketer’s point of view, intensive promotional efforts are necessary to survive.
11. Consumer goods are susceptible to frequent changes in fashion and style. The marketers, therefore, need to constantly update their products in tune with the latest technology.
12. Buying is mostly influenced by emotions. Factors such as status, prestige, etc., influence buying decisions more than the utility of the product.
13. Consumer goods are not generally technically complicated. That is, one does not require intricate technical knowledge to use the goods.
14. There are a number of middlemen, like wholesalers, retailers, etc., for consumer goods.
15. The marketers of consumer goods may have to rely on several promotional methods, like sales promotion, advertising, personal selling, etc., to maximize sales and profits.
16. Brand image plays a crucial role in determining the demand for the product.
17. Product packing is also vital in consumer goods marketing.
18. Often, the buyers of consumer goods expect inducements from the sellers like discounts, free gifts, etc.
19. After sale service is important in the case of consumer durables.
20. The sellers of most consumer goods have their place of business in residential areas so that they can serve their customers better.