Consumer goods and Industrial goods
(1) Consumer Goods
Products which are for direct consumption or which require no further processing are known as consumer goods. These goods are offered to household and ultimate consumer e.g., shirts, cars, watches etc. Consumer products can be further classified into following categories.
A. On the Basis of Durability:
(i) Durable Products: The goods which are used for a longer period of time are known as durable goods. These goods are generally of high price and require after sale service and promotion tools for sale.
(ii) Non-Durable Products: Goods which are consumed in short period of time are called non-durable goods. These products are generally sold at low price and with fewer profit margins.
(iii) Services: Services refer to benefits or satisfactions which are offered for sale.
Main features of services are:
1. Services are intangible in nature.
2. It is inseparable from its source.
3. It cannot be stored.
4. These are heterogeneous in nature i.e., services are highly variable as the quality and type of service vary from person to person who performs it.
B. Classification Based on Consumer’s Buying Behaviour and Attitude
Under this classification there are three types of goods:
(i) Convenient Goods: Which are bought by consumers with minimum shopping efforts i. c., the goods which are easily available everywhere for example, salt, match box, bread, etc.
Features of Convenient Goods:
1. These can be purchased with minimum shopping efforts.
2. These products have regular and continuous demand.
3. These units are generally of low prices.
4. These have standardised price.
5. There is high competition in these goods.
6. Sales promotion incentives are generally used to increase the sale of these products.
(ii) Shopping Goods: The goods or services which are bought after some shopping efforts i.e., search or comparison of goods on the basis of price, quality, suitability, etc. e.g., TV, furniture, car, etc.
Features of Shopping Products:
1. These are generally durable goods.
2. Prices of such goods are generally high.
3. Customers generally compare these goods and then buy such goods.
4. Retailers play an important role in selling shopping goods.
5. People plan the buying of such goods.
(iii) Speciality Goods: These are the goods of unique nature and hold special importance for customers. The buyer puts special efforts in obtaining these goods. These can be low priced or high priced for example, designer, clothes, and cars such as Mercedes etc.
Features of Speciality Products:
1. Demands for such products are limited.
2. These products are of high price.
3. These products are available at few selected places only.
4. These products are sold as a result of aggressive promotion techniques.
5. After sale service is very important in these products.
Industrial products are used as input or raw material to produce consumer goods for example, tools, machinery, etc.
Features of Industrial Product are:
1. Number of Buyers: Numbers of buyers of industrial products limited as compared to consumer products.
2. Channel of Distribution: Shorter channel of distribution is used for sale of industrial products as there are limited buyers.
3. Geographical Concentration : Generally the demand for industrial products is not scattered but is concentrated at a fixed geographical location.
4. Derived Demand: Industrial products are demanded to produce consumer products that is why it is called derived demand, as demand of sugarcane depends upon the demand of sugar in the country.
5. Technical Consideration : Industrial products are produced as a result of complex process so there is more technical consideration of these products.
6. Reciprocal Buying: Some industries buy product from a company with intention of selling the finished goods to the same company. For example the Maruti Co. may buy tyres from MRF Company and tyre Company may in turn buy car from Maruti Co.
7. Leasing: Nowadays instead of buying industrialists prefer to take fixed assets on lease, because of high prices of these products.
