In economics, consumer goods are defined as tangible products purchased by individuals for personal consumption. These items are usually used daily and include everything from food and clothing to electronics and furniture. Many people also consider services such as haircuts and car repairs to be consumer goods since they are regularly purchased.
There are three main types of consumer goods: durable goods, nondurable goods, and services. Durable goods are items that we can use for an extended period of time, such as appliances or furniture. Nondurable goods are consumed quickly and have a shorter lifespan, such as food or clothing. Services are intangible products purchased for personal use, such as haircuts or car repairs.
What are Consumers Goods?
The term “consumer goods” is often used interchangeably with “final goods.” Final goods are defined as products purchased for personal consumption and are not used in the production of other goods. In other words, final goods are not resold or used as inputs in the manufacturing process.
This article defines the primary types of consumer products, identifies some of their characteristics, and offers examples of each kind of good.
Types of Consumer Goods
There are four consumer goods types: convenience products, shopping products, specialty products, and unsought products. Let’s briefly look into each of these consumer goods in detail.
Convenience products are those consumer goods that the consumers regularly consume, and they do not need too much effort or time to decide whether to buy them or not. Convenience products are classified into three types: convenience goods, staples, and impulse items.
Convenience goods are those consumer products that the consumers frequently purchase without too many comparisons or shopping around. For example, toothpaste, soaps, shampoos, cigarettes, etc. These products are also known as convenience services.
Staples are those consumer goods that the consumers purchase regularly but not as frequently as convenience goods—for example, sugar, tea, wheat, cooking oil, etc.
Impulse items are those consumer goods that consumers suddenly purchase without pre-planning—for example, chocolates, ice-creams, soft drinks, etc.
Characteristics of Convenience Products
Convenience products are those consumer products that the consumers purchase frequently and without too many comparisons or shopping around. Some of the essential characteristics of convenience products are as follows:
- Convenience products are those products that are generally low priced, and the consumers do not need too much time or effort to decide whether to buy them.
- Convenience products are usually available at all retail outlets. Consumers can purchase them as and when they need them.
- Generally, convenience products do not need too much marketing or promotion. Consumers are already aware of them and know where to find them.
- Usually, convenience products have a concise shelf life. They get consumed quickly by the consumers – for example, cigarettes, chocolates, etc.
Examples of Convenience Products
Some of the common examples of convenience products are as follows:
- Food items such as candy, soft drinks, and fast food.
- Household items such as paper towels, cleaning supplies, and laundry detergent.
- Personal care items such as shampoo, toothpaste, and deodorant.
- Office supplies such as pens, paper, and staples.
- Technology products such as cell phone chargers and USB cables.
- Retail products such as clothing, books, and magazines.
Thus, we see that convenience products are those consumer goods that the consumers purchase frequently and without too many comparisons or shopping around. Convenience products are generally low priced, and they are available at all retail outlets. Usually, convenience products do not need too much marketing or promotion. Consumers are already aware of them and know where to find them.
Shopping products are those consumer goods that the consumers purchase infrequently and after comparing various brands. Shopping products are also known as comparison shopping products.
Characteristics of Shopping Products
Some of the essential characteristics of shopping products are as follows:
- Shopping products are those consumer products that the consumers purchase infrequently. They take their time to decide which brand or product to buy.
- Shopping products are generally expensive. Consumers need to compare various brands before making a purchase decision.
- Shopping products need heavy promotion and marketing as the consumers are not aware of them.
- Shopping products generally have a longer shelf life.
- Usually, there are few substitutes available for shopping products.
Examples of Shopping Products
Some of the common examples of shopping products are as follows:
- Washing machine
- Air conditioner etc.
Thus, we see that shopping products are those consumer goods that the consumers purchase infrequently and after comparing various brands. Shopping products are generally expensive, and they need heavy promotion and marketing. Usually, there are few substitutes available for them.
Specialty products are items that are not essential but are desired by consumers. They often have unique features or brand associations that differentiate them from similar products. Consumers are willing to pay more for specialty products because they offer something not essential but desired.
Characteristics of Specialty Products:
- Unique features or brand associations
- Not essential, but desired by consumers
- Consumers are willing to pay more for specialty products
Some examples of specialty products include:
- Luxury items such as jewellery or designer clothing
- Collectible items
- Sporting goods
Unsought products are those that the customer does not know about or does not think about purchasing. They are usually expensive items that require a significant investment. Customers are typically reluctant to buy them without doing extensive research first. Because of this, companies selling unsought products must use aggressive marketing techniques to raise awareness and interest in their products.
Some characteristics of unsought products include:
- They are expensive items that require a significant investment
- Customers are reluctant to buy them without doing extensive research first
- They are usually not well-known or thought about by potential customers
- Companies selling unsought products must use aggressive marketing techniques to awareness and interest in their products.
Some examples of unsought products include:
- Luxury items like jewellery and designer clothes
- Big-ticket items like cars and houses
- Services like insurance and investment plans
- Technical products like computers and software
Examples of Consumer Goods
There are many different types of consumer goods that people use every day. Here are some examples:
- Food and drinks: This includes everything from groceries to restaurants.
- Clothing: This can consist of everything from everyday wear to high-end fashion.
- Electronics: This covers many items, including phones, laptops, and TVs.
- Home goods: This can include furniture, appliances, and décor items.
- Other: This can consist of anything else people might buy, such as books, toys, and sports equipment.
Durable and Non-durable Consumer Goods
Durable consumer goods are defined as items with a life expectancy of three years or more.
These goods include automobiles, appliances, furniture, and electronics.
Non-durable consumer goods are defined as items that have a life expectancy of fewer than three years.
Examples of non-durable consumer goods include food, clothing, and fuel.
Investment in durable goods usually requires a large amount of money because these items are expected to last long. Non-durable goods, on the other hand, are less expensive and can be replaced more frequently.
Durable and non-durable goods both play an essential role in our lives. Understanding the difference between the two can help us make more informed decisions about our spending.
Which type of consumer good do you think is more important? Why? Let us know in the comments below!
Capital Goods vs. Consumer Goods
Capital goods are used to produce other goods and services. In contrast, consumer goods are end products purchased by consumers.
Capital goods include machinery, tools, equipment, and buildings. These goods are used to produce other products and services. For example, a factory that makes cars uses capital goods such as machines, tools, and assembly line equipment.
On the other hand, consumer goods are the finished products that are purchased by consumers. These include items such as food, clothing, electronics, and automobiles. Consumer goods make up a large portion of GDP in developed economies.
There is a close relationship between capital goods and economic growth. A country with a large number of capital goods will tend to have a higher economic growth rate than a country with fewer capital goods. This is because capital goods are used to produce other goods and services, which leads to more economic activity and higher incomes.