Consumer Products

Refers to all products purchased by an individual or a household for personal use

Consumer products include all products bought by an average consumer, also known as final goods or consumer goods. These are typically purchased by an individual or a household for personal use.

The term ''consumer product'' means any article, or part thereof, produced or distributed (i) for sale to a consumer for use in or around a permanent or temporary household or residence, a school, in recreation, or otherwise, or (ii) for the personal use, consumption or enjoyment of a consumer in or around a permanent or temporary household or residence, a school, in recreation, or otherwise; but such term does not include- (A) any article which is not customarily produced or distributed for sale to, or use or consumption by, or enjoyment of, a consumer,

Such goods result from multiple production cycles and are sold to the final consumer.

Unlike intermediate goods, these are not meant for further production or resale.

Entrepreneurs and firms use capital goods (like machinery), labor, raw materials, and intermediate goods to produce them for consumption by their final users. As a result, most consumer products can be found on shelves in retail or online stores.

Classification based on the lifespan

From an economic standpoint, three primary consumer goods are classified based on lifespan. 

1. Durable goods

These goods include all consumer goods with a lifespan longer than three years. They are infrequently bought by consumers, primarily due to their high cost and longer lifespan. Therefore, they are the most volatile or cost-dependent part of consumption.

They give utility over time, as they can be used multiple times over their lifespan. Therefore, an increase in the consumption of durable consumer goods in an economy reflects positive growth. 

This is because the volume and quality of durable goods tell investors what to expect from the manufacturing sector. 

Examples include refrigerators, boats, bicycles, and microwaves. 

2. Non-durable goods

Another name for non-durable goods is consumables. These goods have a short lifespan, usually ranging from a few minutes to 3 years. 

They are purchased for immediate consumption or consumption shortly. As a result, they get 'used up and can only give utility with one use. Examples include foods, drinks, toothpaste, cigarettes, etc.

3. Services

They are intangible. Despite their lack of physical form, they give satisfaction or utility to consumers.

The quality of the service varies in nature. These services do not have a lifespan as they are inseparable from the producers. They are produced and consumed at the same time. 

In 2020, the service sector in the United States contributed $975.1 billion to the national GDP.

Examples include financial services and medical treatments.

Classification based on consumer habits

Based on consumer habits and frequency of buying, there are four types of consumer products.

1. Convenience products

These goods are regularly consumed and bought frequently by consumers. As a result, they attract a large market base. For instance, in 2021, the global convenience store market was valued at USD 2.12 trillion.

They have a widespread distribution system to make these goods readily available in large volumes. They are offered through a network of wholesalers and retailers and are sold in convenient locations where consumers can easily buy them.

Consumers buy these products to satisfy their wants and are indifferent to where they buy them. Therefore, they are typically low-priced and non-differentiated from other similar products.

These goods can be further classified as staple goods or impulse goods. Staple goods like milk and bread fulfill necessities and are available in large quantities.
Impulse goods, or non-priority goods like cigarettes, candies, and ice creams, are bought without planning to fulfill a consumer's wants or impulses.

For example, goods like candies are readily available at numerous stores and gas stations. They are low priced, and consumers are usually indifferent to where they would buy the product. 

Additionally, they rarely compare a particular candy with another in terms of price, packaging, or quality. Other examples include detergent, foods, beverages, cleaning supplies, toothpaste, sugar, and salt.

2. Shopping for products​​

These products are priced higher than convenience goods. They are also more durable and have a longer lifespan. As a result, they are bought less frequently by consumers.

Buying such goods involves significant planning and thought. Consumers often compare these goods to other alternatives based on price, quality, and style.

These goods are selectively distributed and are available at fewer locations than convenience products.

Typical examples are clothing, television, furniture, home appliances, home furnishings, airline tickets, and electronics.

3. Specialty products

These goods are unusual or luxuries that are scarce in the market. In addition, they usually involve brand identification and unique brand perception. As a result, these goods are rarely bought by consumers.

These goods are high-priced and can only be bought by certain members of society.

Consumers purchase them according to their personal preferences and desires. They are loyal to the brand.

These goods are not seldom compared to other alternatives. Instead, brand, uniqueness, and unique characteristics are what attract consumers. These goods are only sold at select specialty stores and cater to the upper class.

Examples include fur, fine jewelry, antiques, luxury cars, wedding dresses, exotic perfumes, watches, and famous paintings. 

4. Unsought products

These goods are always available in the market but are rarely bought by the general public. This is because they usually serve a specific need.

Under normal circumstances, an average consumer would not buy these products. Consumers do not consider purchasing them until the need arises. The prices of such goods vary greatly, and there are limited sellers in the market.

Examples include life insurance, funeral services, defense lawyers, diamond rings, etc. 

Understanding each type of product is important from a marketing view. This is because each of these goods requires different marketing tactics.

Convenience goods having a large consumer base require mass promotion. On the other hand, staple goods like milk, bread, and sugar need less advertising. Typical means of mass advertising include public newspapers and television.

Specialty products require brand-specific promotions targeting a particular group of high-end consumers to increase consumer confidence-for example, a promotional event by Ferrari for the launch of a new car.

Shopping products require personal selling and advertising since they are bought less frequently than convenience products. Therefore, salespeople and agents are effective in increasing sales.

Unsought products require aggressive marketing and advertising efforts to increase consumer awareness about products. 

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Researched and authored by Manya Bhardwaj | LinkedIn

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