Fast-moving consumer goods ( FMCG ), also known as consumer packaged goods ( CPG ) or convenience goods , are products that are sold quickly and at a relatively low cost . Examples include non-durable household goods such as packaged foods , beverages , toiletries , candies , cosmetics , over-the-counter drugs , dry goods , and other consumables .
21-402: Fast-moving consumer goods have a high inventory turnover and are contrasted with specialty items, which have lower sales and higher carrying charges. Many retailers carry only FMCGs, particularly hypermarkets , big box stores , and warehouse club stores. Small convenience stores also stock fast-moving goods; the limited shelf space is filled with higher-turnover items. The following are
42-462: 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, It then goes on to list eight additional specific exclusions and further details. Final goods can be classified into the following categories: Consumer durable goods usually have
63-515: A large part in the economy, as they are inelastic products that touch every part of consumer life. Businesses that supply FMCGs to rural communities can help provide employment opportunities and reduce the cost of such products in those rural areas. For instance, FMCGs represent the fourth-largest sector in the Indian economy and generate employment for more than three million people in downstream activities. The retail market for FMCGs includes businesses in
84-446: A long period of useful life, and which are replaced rarely. While yellow goods are sold in low volumes, they have high profit margins. Yellow goods have a higher unit value than convenience goods and people buy them less often; as such consumers spend more time comparison shopping for yellow goods than for red goods. As well, there is a much greater role for personal selling (from salespeople) for yellow goods than for red goods, and there
105-601: A lot of selection and comparison based on various parameters such as cost, brand, style, comfort etc., before buying an item. Shopping goods are costlier than convenience goods and are durable in nature. Consumer goods companies usually try to set up their shops and show rooms in active shopping areas to attract customer attention and their main focus is to do much advertising and promotion to attract more customers. Examples include clothing items, televisions, radios, footwear, home furnishings, etc. Specialty goods are unique in nature; these are unusual and luxurious items available in
126-502: A significant lifespan , which tends to be at least one year, based on the guarantee or warranty period. The maximum life depends upon the durability of the product or goods. Examples include tools, cars, and boats. On the other hand, capital goods , which are tangible in nature, such as machinery or building or any other equipment that can be used in manufacturing of final product, are durable goods with limited lifespans that are determined by manufacturers before their sale. The longevity and
147-399: A total value of around US$ 5,835 billion. 2007 was the year with the largest value (US$ 4,888 billion) followed by a steep slump in 2009 (-70.9%). After the first wave in 2007, now is the second big M&A wave in the consumer products sector, and a decline is expected. Yellow, red and orange goods Yellow, red and orange goods are a three-part classification for consumer goods which
168-575: Is a final good. When used in measures of national income and output , the term "final goods" includes only new goods. For example, gross domestic product (GDP) excludes items counted in an earlier year to prevent double counting based on resale of items. In that context, the economic definition of goods also includes what are commonly known as services . Manufactured goods are goods that have been processed in any way. They are distinct from raw materials , but include both intermediate goods and final goods. There are legal definitions. For example,
189-561: Is based on consumer buying habits, the durability of the goods, and the ways that the goods are sold. The classifications are for yellow goods, red goods, and orange goods, with orange goods being goods that have a mix of yellow and red characteristics. The classification of goods into yellow, red, and orange categories is roughly equivalent to the categories of shopping goods, convenience goods, and specialty goods. Yellow goods (also called "shopping goods" or " white goods ") are durable consumer items such as large household appliances that have
210-437: Is more selective distribution of yellow goods. Yellow goods often need to be adjusted or customized by the store before they are delivered to the customer. The consumer goods term "yellow goods" is different from the construction and agricultural industry term of the same name , which refers to bulldozers, tractors, and similar equipment. Red goods (also called "convenience goods") such as food are consumed completely when
231-539: The yellow, red and orange goods classification system. Convenience goods are regularly consumed and easily available. Generally, convenience goods come in the category of nondurable goods such as fast foods, cigarettes and tobacco with low value. Convenience goods are sold mostly by wholesalers or retailers to make them available to the consumers in goods or large volume. Convenience goods can further be divided into staple convenience consumer goods and impulse convenience consumer goods. Staple convenience consumer goods are
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#1732887018514252-488: The United States' Consumer Product Safety Act has an extensive definition of consumer product , which begins: CONSUMER PRODUCT.--The term ‘‘consumer product’’ means any article, or component 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
273-415: The average cost can range from $ 100 per item per store to significantly higher amounts. Well-known CPG manufacturing companies include: Consumers in rural areas typically purchase goods from nearby towns and villages. A recent shift in consumer purchase behavior toward purchasing locally has prompted the need for better local promotional efforts to generate brand awareness in small towns. FMCGs play
294-488: The basic necessities of the consumer. These goods are easily available and in large quantity: milk, bread, sugar, etc. Impulse convenience consumer goods do not belong to the priority list of the consumer. They are purchased without any prior planning, just on the basis of the impulse : potato wafers, candies, ice creams, cold drinks, etc. Shopping consumer goods are the goods which take lot of time and proper planning before making purchase decision; in this case consumer does
315-489: The consumer but still give satisfaction to the consumer. They are also inseparable and variable in nature: they are thus produced and consumed simultaneously. Examples are haircuts, medical treatments, auto repairs and landscaping. Final goods can be classified into the following categories, which are determined by consumers' buying habits: Convenience goods, shopping goods, and specialty goods are also known as "red goods", "yellow goods", and "orange goods", respectively, under
336-794: The consumer uses them; as a result, they are replaced frequently and sold in high volumes. Red goods have low profit margins. Red goods need heavy advertising and competitive pricing, along with a well-developed selling organization to manage the widespread and numerous points of sale. As red goods are widely available through a wide distribution network, consumers do not have to spend much time searching for them. Orange goods (also called "specialty goods") are moderately durable goods that wear out with regular use and have to be replaced, such as clothing. Orange goods are unique, so consumers need to make more effort to acquire these items; as such exclusive distributor arrangements and franchises are often used to sell them. This article related to microeconomics
357-402: The following International Standard Industrial Classification (ISIC) (Revision 3) categories: Supplier industries for FMCGs include: Consumer goods A final good or consumer good is a final product ready for sale that is used by the consumer to satisfy current wants or needs, unlike an intermediate good , which is used to produce other goods. A microwave oven or a bicycle
378-412: The main characteristics of FMCGs: Between 2009 and 2023, shelf space in the U.S. supercenters and supermarkets decreased by 5 and 3.3 percent, respectively. This reduction has intensified competition for shelf space among brands, as the number of products available has increased. Retailers often charge slotting fees to brands for product placement. While some well-established brands may avoid these fees,
399-591: The market. Specialty goods are mostly purchased by the upper classes of society as they are expensive in nature and difficult to afford for the middle and lower classes. Companies advertise their goods targeting the upper class. These goods do not fall under the category of necessity; rather they are purchased on the basis personal preference or desire. Brand name, uniqueness, and special features of an item are major attributes which attract customers and make them buy such products. Examples include antiques, jewelry, wedding dresses, cars, etc. Unsought goods belong to neither
420-468: The necessity group of consumer goods list nor to specialty goods. They are always available in the market but are purchased by very few consumers, either based on their interest or their need for some specific reasons. The general public does not purchase such goods often. Examples include snowshoes , fire extinguishers , flood insurance , etc. In the consumer product sector, there have been 107,891 deals announced between 1985 and 2018, which cumulates to
441-562: The often-higher cost of durable goods usually cause consumers to postpone expenditures on them, which makes durables the most volatile (or cost-dependent) component of consumption. Consumer nondurable goods are purchased for immediate use or for use very soon. Generally, the lifespan of nondurable goods is from a few minutes to up to three years: food, beverages, clothing, shoes and gasoline are examples. In everyday language, nondurable goods get consumed or "used up". Consumer services are intangible in nature. They cannot be seen, felt or tasted by
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